Business Law
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What is the law?
a. Use your common sense
i. Take a step back and evaluate
b. Def: Enforceable rules that govern 2 types of relationships
i. Among individuals
ii. Between individuals in society – affects everyone
Legal Philosophy
a. What philosophers think about where law comes from (3)
i. Naturalist – moral and ethical principles are inherent in human nature
1. Ex- crimes against humanity
2. Problem- we don’t have the same ethics and morals
a. Ex- lottery ticket of dead roommate
ii. Positivist- the law is created by a particular society at a particular point in time
1. Rule follower all the time whether they agree or disagree
a. Murder is okay if (ABC) – you put all feelings aside
iii. Realist – focuses on judges - judges are influenced in 3 ways
1. Own beliefs and attitudes
a. Can’t be totally objective
2. Precedent should be followed if appropriate
a. Precedent – to follow prior cases
i. Stare decisis - stand on decisions
3. Extra legal outside sources should be consulted when making a decision (consult physician in
medical malpractice)
Sources of American Law – Common law
a. Case law
b. Judge made law
i. Judicial system relies heavily on common law
ii. A trend in judges decisions about a particular event or action
Other sources of American law
a. Constitution
i. Us
ii. State
b. International treaties
c. Statutes and ordinances (don’t come from judges but from legislature)
i. Speed limit, curfew, legal age
d. Administrative law – agency law
i. OSHA, SEC
e. Common law codes
i. UCC, UCCC
Classifications of law
a. Substantive (substance/stuff)
i. Laws that create, define, or describes rights
b. Procedural (how-to)
i. How to enforce substantive rights
1. (where, how, how much to sue)
c. Public/Criminal
i. Governs relationships among individuals and society
1. Plaintiff always government
d. Private law- civil law
i. Governs relationships between individuals
Equity- fair
a. Suing because it is unfair or unjust
b. Additional source of law
i. Injunction- order from the court to “stop it”
ii. Rescission- undo an agreement (contracts)
iii. Specific performance- ordered by judge to do what you promised to do (contract)
CONSTITUTIONAL LAW
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Basic concepts
a. Federalism - basic structure of government is Federalist
i. States form a union and power is divided between Federal and State, neither is more powerful than other
1. Constitution tells federal government what they can do
b. Supremacy clause
i. Federal government trumps states if there is a direct conflict
ii. Preemption 0 federal takes over a whole section of law
c. Judicial review
i. Courts decide if a government action is constitutional
1. Lower courts
2. Executive actions
3. Legislation
d. Separation of powers
i. 3 branches
1. Legislative – senate
2. Executive – president
3. Judicial – judges
e. State action
i. In order for the constitution to come into play, the government must be involved
Powers of the Federal government – comes from the constitution
a. Commerce clause
i. Congress has power of all commerce
ii. Affects business more than any other clause
b. Federal fiscal powers
i. Taxation
1. Only limit is that it must be geographically uniform -> same tax rate from state to state
ii. Spending power
1. Dispose on tax revenue
2. Rarely challenged
a. Standing – you must have a legal stake in the controversy
b. Added: must show an immediate and direct injury
iii. Borrowing and coining money
1. National banking system
2. Federal reserve system
3. Federal lending programs
iv. Eminent domain/ condemnation proceedings
1. Power of government to take private property for public use upon the payment of just
compensation
Broad limits
a. The contract clause
i. Prohibits federal government from retroactively modifying a contract
1. Change terms not legality
b. First amendment
i. Its not an absolute right
1. The government can regulate time, place, and manner of a speech as long as they don’t show
favoritism
2. Look at the courts
a. Commercial (ad) v. noncommercial (pure speech -> afforded more protection)
3. Defamation
a. False communication that injures a reputation
c. Due process
i. No person should be deprived of life, liberty, or property without due process
ii. Two parts
1. Substantive – stuff, focuses on content
a. Law cannot be arbitrary or unreasonable
2. Procedural – how to, must be done fairly
a. Notice and an opportunity to be heard
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Equal protection (5th and 14th amendments)
i. Government may not deny
ii. Laws cannot be discriminatory
1. Brown v. board of education
ADMINISTRATIVE LAW
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General Background
a. Most agencies are part of the executive branch
i. President (make rules, defend rules, and adjudication)
b. Independent federal agencies
i. Have more power because they don’t answer to the president
Creation of agencies
a. By Congress -> ONLY
i. Designate independent or executive
ii. Passes enabling legislation – new federal agency
1. Must cover 3 areas
a. The name of agency
b. Broad powers
c. Composition- this many people with this background
Operation of Administrative Agency
a. 3 functions
i. Rule making
1. Concentrated power
a. Types of rules the agency can pass is limited by the Constitution
b. Must justify
2. Two types of rules (binding/statute/law)
a. Interpretive- ask an agency to interpret a rule or regulation
i. sometimes
ii. Unique to agencies
b. Procedural- how that specific agency operated
i. always
ii. What’s allowed
ii. Enforcement
1. Includes investigating
a. They have broad investigative powers
i. If an agency is investigating you bus:
1. 4th amendment
a. Must be relevant
b. Protects from unreasonable searches
i. Must have a warrant- order from the judge
ii. Probable cause of a crime
iii. Probable cause he committed it
c. Stay within the limits of warrant
d. Exceptions:
i. Search on arrest
ii. Emergency
iii. Plain view
iv. Can we look around?- consent
2. 5th amendment
a. Right to remain silent
i. Only individual not businesses
iii. Adjudication (decision, final determination
1. Administrative law judge
Control over agencies
a. Administrative procedures act (APA)
i. Sets broad guidelines that all agencies must follow
b. Executive branch
i. Appoint and remove members of agencies
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ii. Veto the enabling legislation
Congress (legislative branch)
i. They can create or abolish or limit the powers of an agency
Judicial review
i. Courts determine whether the agent is acting constitutional
ii. Start from square one
DISPUTE SETTLEMENT
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Jurisdiction
a. Power of a court to hear and decide a case
b. In general, a court is limited to its boundary
i. One exceptions: Long Arm Jursidiction
c. 3 types of jurisdiction
i. In personam
1. Court has jurisdiction of a person because they live in a certain place
ii. In rem
1. Court has jurisdiction over property
iii. Long Arm
1. Court has jurisdiction over a non-resident
a. If you commit a torte (civil case)
b. If you commit a crime
c. Marriage
d. Transacting business
iv. Subject matter jurisdiction (ALWAYS)
1. Courts with general jurisdiction hear anything that is not limited subject matter jurisdiction
d. Court must have subject matter jurisdiction and either 1, 2, or 3
Venue
a. If several courts have jurisdiction, who gets it?
b. Change venues
Standing
a. Before you can be involved in a lawsuit, you must have a legally protected right or interest, the controversy must
be real, not hypothetical
Typical state Court system
a. Three levels (trial, 2 appellate)
i. Trial court
1. Focuses on law and facts
ii. Appellate courts
1. Looking at procedure
a. Trial – RC Court
b. Appellate – KS courts of appeals
c. Appellate – KS Supreme Court
Federal Court System
a. Not better than the state court system
i. 3 tiers (trial, appellate)
Jurisdiction of Federal Courths
a. Limited by constitution
b. 2 types
i. Constitutional question
ii. Diversity of citizenship and amount in convtroversy is > 75,000
1. D of C -> citizens of different states, or a foreign and American citizen if both state and federal
have jurisdiction – “concurrent jurisdiction”
a. One or the other “exclusive jurisdiction”
Which cases reach the supreme court?
a. US Supreme Court
i. You do not have an absolute right to get your case heard
b. If they hear a case it is called “rit of certiorari” – order from Supreme Court to lower court that they want it
Following a case (steps of a lawsuit)
a. 4 stages
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i. Pleading stage
1. prepare a petition/complaint
a. Tells a story
b. Make sure you prove jurisdiction
2. Answer
a. Admits or denies every paragraph
ii. Discovery stage
1. Deposition: 1:1 interview to ask questions
2. Interrogatory: written questions
3. Request for documents
4. Physical/mental exams
iii. Trials
1. Choose a jury
2. Both sides give opening statements
3. Case is presented
4. Both sides give closing arguments
5. Instructions to a jury
6. Jury renders a decision
iv. Appellate stage
1. Affirm
2. Reverse – least likely
3. Remand- send back down to lower court
b. Differences between civil/criminal (4)
i. Pleading
1. Parties involved
2. Criminal- government
ii. Trial
1. Burden of proof
a. Criminal- much higher, any reasonable doubt
b. Civil- preponderance of truth
2. Punishment
a. Criminal- death, jail, fine
b. Civil- money
iii. Appellate
1. Double jeopardy – criminal defendant cannot be tried twice for same crime once they are
acquitted
a. Criminal – only defendant can appeal
b. Civil- both can appeal
Alternative Dispute Resolution – resolve disputes outside court
a. Negotiation
i. Just the parties meet
b. Mediation
i. Third party facilitates decision making
c. Arbitration
i. 3rd party makes decision
d. A mini trial
i. Most formal
ii. Neutral 3rd party listens and makes a decision
BUSINESS CRIMES
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White collar crimes
a. Nonviolent, deceit or corruption
b. Examples
i. Bribery
1. Committed as soon as bribe is offered
2. Anything of value
3. Kickback/payoff (commercial world)
ii. Money laundering
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Cash from illegal transaction
a. Dirty money look clean
b. Restraunts, massage parlor, bar (high cash businesses)
i. Federal law – must report transactions over $10,000
iii. Insider trading
1. Someone makes money buying/selling securities using information not available to the public
Corporate crime
a. Look at upper management for intent
i. Fine- punishment
b. High managerial rule
i. If there is jail time to be served, then the high people will serve it
RICO
a. Racketeer influenced and corrupt organizations act
b. Purpose: keep the organized crime out of businesses
c. Both criminal AND civil penalties
Constitutional amendment that impact criminal cases
a. 4th amendment
i. Protects from unreasonable searches and seizures
ii. Government needs warrant
b. 5th amendment
i. Double jeopardy
ii. Remain silent
iii. Due process
iv. Equal protection
c. 6th amendment
i. Trial rights
1. Right to:
a. Speedy
b. Sometimes jury
c. Public trial
d. Confront witnesses
e. Attorney (only if you’re looking at jail time)
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d. 8 amendment
i. Cruel and unusual punishment
1. Excessive fine or bail
Other defenses
a. Doesn’t come from the constitution
b. Examples
i. Self defense and defense of others
1. Was the amount of force used appropriate
a. Reasonable force
i. Deadly if reasonable
2. Defense of property
a. Reasonable
i. In majority situations -> not deadly
3. Duress
a. A threatened with immediate bodily harm
4. Entrapment
a. Induced by a law officer to commit crime
i. Undercover cop, sting
5. Mistake of fact
a. Reasonably believed they weren’t committing a crime
Intentional Tortes
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Types of tortes
a. Intentional – intended the consequences
b. Negligence – consequences aren’t intended
c. Strict liability – defendant is liable no matter the fault
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Intentional tortes against PEOPLE
a. Transferred intent
i. Look at the big picture
b. Assault
i. Intentional act that creates reasonable apprehension or fear of harmful or offensive contact
c. Battery
i. Intentional act that’s harmful or offensive
ii. Completion of assault
d. DEFENSES
i. Self-defense and defense of others
ii. Defense of property
iii. Consent
e. False imprisonment
i. Intentional confinement or restraint without justification
f. Infliction of emotional distress
i. Intentional extreme or outrageous act that causes severe emotional distress
g. Defamation
i. Intentional false communication that injures someone’s reputation
h. Invasion of privacy
i. Intentionally using someone’s name or likeness without permission to make money
1. Business defense
i. Fraud
i. Intentional misrepresentation material fact, reasonable reliance, damages
Intentional Tortes against PROPERTY
a. Property
i. Real – land and permanent attachments
1. Land and house, office building; apartment
ii. Personal- everything you can touch, movable
b. Real Property Torte
i. Trespass – no harm is required
1. Intentionally enter
2. Cause something or someone to enter
3. You remain or allow someone or something to remain on someone’s land
a. Reasonable intrusions are permitted
b. Trespassers also include guests that later ask to leave
c. Trespassers can be removed with reasonable force
c. Personal Property Torte
i. Trespass
1. Slight interference
ii. Conversion
1. Larger interference
iii. Difference between the two
1. “how big is the interference of a person’s right to enjoy their property”
Intentional Tortes against BUSINESSES
a. Wrongful interference with a contractual relationship
i. A valid contract
ii. Third party knows about it
iii. Third party intentionally causes a breach of contract
b. Wrongful interference with a business relationship
i. Competition
ii. Predatory behavior
1. Focusing on a company’s clients
c. Appropriation
i. Intentionally using a person or a business’ name or likeness without permission for commercial purposes
ii. Business cause of action that mirrors invasion of privacy
1. Must be unique
d. Disparagement of property
i. An intentional FALSE communication about a business’ product or property that causes economic injury
ii. Business form of defamation
NEGLIGENCE AND STRICT LIABILITY
Negligence
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Duty of care- set the bar
a. Reasonable person to determine whether or not a torte has occurred
i. If you have superior knowledge, you have a higher duty of care potentially
ii. Don’t have to prove intent
b. Look for a statute
i. Cited and convicted in a car wreck- negligence is presumed
Breach of care- failed to rise to the level
a. Failed to exercise reasonable care
i. Didn’t act like a reasonable person
ii. Failed to follow the statute
1. Act or omission
a. Did something or failed to do something
i. The act of starting a fire or not putting one out
Legally recognized injury
a. You must prove injury, without it there is no case for negligence
b. You can sue for compensatory and punitive damages
i. Money – punishment
c. If the plaintiff could have reasonably avoided injury and fails to do so, they recover nothing (see notes on defense)
Causation (most complicated)
a. Two parts – must address both
i. Causation in fact - connection
1. Checking to see a connection between the breech and the injury
ii. Proximate cause – foreseeability
1. Would a reasonable person have seen that the breech and injury were related
Defenses for negligence
a. Assumption of risk
i. The plaintiff knowingly and voluntarily entered into a risky situation
b. Contributory negligence
i. Both parties contribute to the injury
1. Plaintiff recovers nothing
c. Comparative negligence
i. Both parties contribute to the injury
1. Plaintiff is allowed to recover, but the plaintiff has to reduce the amount that he is at fault for.
d. The last clear chance doctrine
i. If the plaintiff could have reasonably avoided the injury and refuses to do so the plaintiff recovers nothing
Strict Liability
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The courts impose liability regardless of fault
Only if you are engaged in abnormally dangerous or exceptionally hazardous activities