Term 1: Contracts, Property, and Business Law, Quizzes of Business and Labour Law

Download Term 1: Contracts, Property, and Business Law and more Quizzes Business and Labour Law in PDF only on Docsity! TERM 1 Privity Contract DEFINITION 1 Direct connectionThe relationship that was required to exist in old common law between a manufacturer of a product and the consumer of a productCurrently, end consumers have privity of contract with beginning manufacturers because they never have direct contact with each other TERM 2 Product Liability Law DEFINITION 2 Manufacturers have a civic duty to make products that are safe and do not do harm to othersCompensatory and punitive damages TERM 3 Suing Manufacturers DEFINITION 3 In order to successfully sue the manufacturer, these 4 things must be present in the case: Manufacturerowed a duty of careto the plaintiff Manufacturerbreachedthe duty of care The breach was theproximate causeof the plaintiff's injury Plaintiff suffered anactual, compensable injuries Also must prove... The defendant knew or should have known that the product would be dangerous for its ordinary use or foreseeable use TERM 4 Foreseeable Use DEFINITION 4 The uses that the reasonable person could have predicted the product would be used for TERM 5 Warning Subsequent Users DEFINITION 5 The manufacturer must not only warn the initial purchaser, but also any subsequent user or purchaser TERM 6 Negligent Failure to Warn - Cosmetic/OTC Drug Cases DEFINITION 6 Plaintiff must prove... An appreciable number of people would have a reaction to some ingredient in the product The defendant knew or should have known in the exercise of ordinary care that there could be reactions to the product The plaintiff's reaction to product was foreseeable as a group member Only applicable if the plaintiff was otherwise in good health and not an exception to the norm, and if the medication was intended to treat a condition the plaintiff had TERM 7 Prescription vs OTC Drug Warnings DEFINITION 7 OTC manufacturers must warn end users, however, duty to warn for prescription drug manufacturers is to warn the physicianThis is because of expertiseEnd users are not capable of understanding the potential ramifications, so it is the doctor's duty to explain them to the consumer TERM 8 Negligent Design DEFINITION 8 Manufacturer's "duty to design" a product which is not inherently dangerousIn order to win suit, the plaintiff must prove ONE of the following: Product is inherently dangerous Contains insufficient safety devices Consists of materials that do not satisfy standards acceptable in the trade TERM 9 Negligence Per Se DEFINITION 9 A manufacturer is sometimes required by law to create products in a specific mannerIf the law determines something is in effect negligent, then the only remaining issue is to determine the amount of damages TERM 10 Statute of Limitations DEFINITION 10 Limitation on the amount of time a plaintiff has to file their lawsuit after an injury occursMust file a products liability lawsuit within three years after the injuryDelay in filing suit makes it much more difficult to obtain the necessary evidence TERM 21 Real Property DEFINITION 21 Land or pieces of ground and the things affixed to the land (buildings) and the things below the land and above the landgold mine, trees, crops, airspace above property, property to the center of a lake, etc...Mobile home is not affixed and therefore not real property until it is affixed on concrete blocks and intended for permanent purposesAnything affixed to the inside of the house is real property TERM 22 When a fixture can be removed DEFINITION 22 When there is a written agreement allowing removal when, as part of a business lease, property is affixed, but is a trade fixture Trade fixture may be removed at the end of tenancy of business. on or attached to real property but is used for business TERM 23 Estate in Land DEFINITION 23 Ownership interest in land that is a present interest (exists now) or future interest (will become an ownership interest) TERM 24 Interest in Land DEFINITION 24 From least control to greatest: Easement Leasehold Estate Life Estate Conditional Estate Fee Simple Absolute TERM 25 Easement DEFINITION 25 Irrevocable right to some control over someone else's propertyLimited property rightsAllows someone to enter property owned by someone else for a limited purposeParty holding the easement has a right to use the property, do something on the property, or take something from the propertyProfit - easement to take something away from the property TERM 26 Leasehold Estate DEFINITION 26 Rental"Temporary" but could be for a very long period of time TERM 27 Life Estate DEFINITION 27 Until deathFixed by reference to the life or lives of particular individualsex: owner leaves house to a person until they die, then to their children once they die.Receiver may make full use of the property until death, other than sell or damage it TERM 28 Conditional Estate DEFINITION 28 Until some event occursA right to possess, sell or devise (leave in will), but subject to a specific condition or set of conditions in perpetuityCould require that an action happens or does not happen, e.g. donating land for a library, then the library sells the building to another business TERM 29 Fee Simple Absolute DEFINITION 29 right to possess, devise or sell outright"Fee" means that the owner of the property has the right to leave the property as part of an inheritance, so fee simple aboslute is the most complete control over propertyRight to possess and use right now, sell outright, or devise (leave in a will), right to use property as is or change it TERM 30 Reversion DEFINITION 30 The estate that remains in the original ownerIf it is gifted to someone, then they die, the property is reverted back to the original owner TERM 31 Remainder DEFINITION 31 A future interest in an estateGiven to his son, and then once the son dies given to his daughter and her heirsDaughter and heirs have a "vested remainder" interest because at some point they will receive title to the propertyVested means that the inheritance will happen when the prior estate ceases TERM 32 Contingent Remainder Interest DEFINITION 32 the estate only vests in a person if an event occurs"if" statements TERM 33 Tenancies DEFINITION 33 Property interests that a property owner shares with other ownersTenancy in Common - most frequent type of tenancy. Multiple owners own together. can be unequal or equal ownership.If there is no written agreement otherwise, each owner may sell or devise their share without consent of other owners/tenants TERM 34 Joint Tenancy DEFINITION 34 Co-ownership where each owner owns an undivided part of the propertyOn the death of one tenant, the other tenant automatically acquires all of the deceased owner's ownership rightsThe joint tenants can together agree to sell, but the property cannot be devised by a joint owner in their willCreditors may take action to obtain a joint tenant's share TERM 35 Tenancy by the Entirety DEFINITION 35 Estate/ownership interest meant only for married couplesSurviving spouse inherits the entire property automaticallyThe couple may decide to sell the property together, but one may not sell the property without the agreement of the other spouseCreditors of one spouse may not attach property if the other spouse does not owe the creditor under the debt TERM 46 Trademark DEFINITION 46 A distinctive mark, word, design, and/or picture causing the purchaser to identify a product with a producerCommon law protection, as well as federal and state protectionsUsed by a manufacturer to identify their goods and to distinguish them from those produced or sold by othersTrademark has value distinct from the products with which it is associated TERM 47 Trade Secret DEFINITION 47 Process, product, or method of operation or compilation of information that gives a business an advantageBased on state lawTo recover damages or enjoin use owner must show - Trade secret actually existed It was taken through unlawful means Defendant used it without permission TERM 48 Trade Dress DEFINITION 48 The overall appearance of a productStyle of a product's packageSame protection as a trademark protection TERM 49 Agency DEFINITION 49 The description of the relationship that exists between a principal and their agent. Agent has whatever powers the principal assigns to themPrincipal is a person, partnership, corporation or other entity which can be represented in their business/personal dealings by other persons or entitiesAn agent is a person, partnership, corporation, or other entity chosen by the principal to do business or take an action of behalf of the principal TERM 50 Fiduciary DEFINITION 50 Agent that is given the trust and confidence of the principalPledged to act with scrupulous good faith and candor on behalf of the principalBreach of a fiduciary relationship is akin to betrayal and results in severe penalties TERM 51 Principal-Agent Agency DEFINITION 51 Agent does the bidding of principal - restricted to express mission assigned by the principalAgent is expressly delegated an amount or quantity of authority by the principal to undertake specific tasks on behalf of the principalNo agreement which the agent brokers is final until the principal approves the action TERM 52 Employer-Employee DEFINITION 52 Agent is under the physical control and direction of the principalMost basic, most common, and most direct agency relationshipEmployer: Hires the employee Physically controls the employee Expressly grants duties to the employee @ time of hire Implies that the employee has duties that usually come with the position they were hired to perform. Duties are customarily given to an agent in that profession, unless otherwise stated TERM 53 Employer-Independent Contractor DEFINITION 53 Agent has broad discretion.Least control in an agency relationship. Contract sets forth goals and/or objectives as well as agency powers, but not the specifics of accomplishmentEmployer contracts with the independent contractor to act as agent in specified situations, but does not physically control the agentAgent has wide latitude in accomplishing the goals of the agency TERM 54 Responsibilities of the Principal DEFINITION 54 When the principal has broad control over the agent's responsibilities, the agent is by law an employeeAn employer has the duty to pay their employees: Worker's compensation premiums Unemployment compensation taxes/contributions Social Security Taxes TERM 55 Independent Contractor Status DEFINITION 55 Not under direct control of the principalHave their own office, equipment, pay their own insurance, taxesIndividually liable for their own actionsInsulates the principal from liability for the wrongful acts committed by the agentUsually much less expensive for the principal TERM 56 Respondeat Superior DEFINITION 56 Theory by which the principal was responsible for any actions undertaken by the servant within the scope of the agent's employmentThe superior was bound by and responsible for the actions of their agent TERM 57 Agency Liability DEFINITION 57 Principal is generally held liable for the acts of their agentDisclosed, partially disclosed, and undisclosed principal:Disclosed - third party knows that the agent is representing someone else's interests and who the principal is - principal is liable Partially Disclosed - third party knows the agent is acting on someone else's behalf, does not know who the principal is - principal is liableUndisclosed Principal - Third party has no idea that the agent is acting on behalf of the principal - agent is liable TERM 58 Agency Tort Liability DEFINITION 58 Principal is liable to a third party for torts of their agent if the tort was committed within the scope of the agency relationshipEither.... Agent was acting on behalf of the principal Agent was authorized to be in a particular place due to the agency relationship TERM 59 Criminal Liability DEFINITION 59 Principals are generally not liable for the criminal acts of their agentsExceptions: Principal directly participated in the illegal conduct Principal knew or should have known that the expectations of the agency expected or condoned the conduct that could be illegal TERM 60 Expressed Agency DEFINITION 60 One created by written or oral agreementMedical power of Attorney - agency grants to the agent the authority to make medical decisions for the principal if the principal is unable to do soDecisions regarding medication or other treatments are given to another person who is more competent TERM 71 Limited Partnerships DEFINITION 71 some partners can be protected from liabilityLike general partnerships,Different size shares of partnerships may exist,Profits are the income of each partner and are not income of the partnership, and each partner is taxed according to their share of incomeUnlike general, limited partners are protected and only liable up to the amount of their investment in the company, as long as they had no management role TERM 72 Limited Liability Partnerships must... DEFINITION 72 Register with the state as LLP Have LLP as part of the name on cards, stationary, etc If one partner is found liable for tort, that partner must pay, but the other partners are protected TERM 73 Terminating Partnerships DEFINITION 73 Dissolution is the end of business, dissolve at common law when: Partners leave Death Merger Bankruptcy Winding up happens when the partnership ends- Pay debts Distributes its profits Distributes any assets that remain TERM 74 Dissociation DEFINITION 74 Change in partners where a partner leaves but partnership continuesPartners buy interest of departing partner TERM 75 Corporate Advantages DEFINITION 75 Limited Liability for shareholders, not management Ability to obtain capital Disadvantages: double taxation. corp and shareholders taxed on their earnings TERM 76 Closely Held Corporation DEFINITION 76 Created by families or friendsStock is not publicly tradedShareholders could possibly be sued TERM 77 Internal Revenue Code DEFINITION 77 Fed law that sets tax rates and laws governing the collection of taxes from individuals and other entities"Subchapter" refers to the parts of the tax codeSub-chapter S is the particular subchapter of the code providing for the treatment of certain types of corporations TERM 78 Sub-chapter S Corporation DEFINITION 78 Is domestic Limited to a max of 100 shareholders All shareholders must be US citizens or resident aliens Has only one class of stock Shareholders cannot be partnerships or corporations Hybrid btwn partnership and corp.Avoids double taxation TERM 79 Limited Liability Company LLC DEFINITION 79 Hybrid of partnership and corporation created by state law Separate legal person under state law Owners are called members Advantageous for small partnerships Individual members pay taxes and not the LLC Participate in management without losing limited liability Corps and partnerships can invest, as well as foreign investor No personal liability to members TERM 80 Professional Corporations DEFINITION 80 Creation of state law that serves specified professionsCorporate name must identify the type of professionTax and organizational advantages, such as tax free 401k depositsNot limited liabilityNo personal liability of the shareholders for corporation debts or other shareholder malpractice TERM 81 Creating a corporation DEFINITION 81 Article of Incorporation is a form that states: Name of corp Address Resident agent's name and address Purpose of corp Classes of stock Number of shared in IPO Value of IPO Names and addresses of initial incorporators TERM 82 Notes, Bonds, Debentures DEFINITION 82 Notes - high int rate, short term, unsecuredBonds - Lower rates, secured by an interestDebentures - LT, unsecured, higher interest rate b/c risk of default