Chapter 3 Dispute Resolution
Forms of Dispute Resolution
 Litigation: the process of filing claims in court and ultimately going to trial
o The structure of our court systems
o Personal jurisdiction vs. subject matter jurisdiction
o Stages of civil litigation from pleadings to trial
o Appeals
 Alternative dispute resolution (ADR): any other formal or informal process used to settle disputes without
resorting to a trial
o Negotiation
o Mediation
o Arbitration
Structure of Federal and State Courts
 If you want to go to the federal court, it must be a federal question case
& diversity case (plaintiff and defendant are from different states).
 Contract case are state law based-> going to state court.
 It’s harder to go to federal court because federal court has more power;
president appoints the justices (prestige); no capacity to deal with every type
of case.
*Case: ELIZABETH SMILES V. COASTAL INSURANCE COMPANY, INC.
Fact: Tony’s body washed ashore, his lungs filled with water. A local doctor concluded he had accidently drowned. Tony
had been partners with Beth Smiles in an environmental consulting business, Enviro-Vision. She filed an insurance claim
with the Coastal Insurance Group. Coastal is conditionally liable for $1 million. If Tony’s death is accidental, their
business receives $2 million; if it was an act of suicide, their business receives no payment. Coastal claims that Tony’s
death is an act of suicide, so they refused to pay. Beth is suing Coastal for the breach of contract in the state court; Oregon
(state) has personal jurisdiction over Coastal.
Trial Courts and Jurisdiction
 Trial courts determine the facts of a particular dispute. Facts can be determined by a judge or jury.
 Appellate court ensure the trial courts apply the correct law to the facts.
o Appeal courts generally accept the facts given to them by trial courts and review the trial record to see if
the court made errors of law.
o The party that loses at the trial court may appeal to the intermediate court of appeals. The party filing the
appeal is the appellant. The party opposing the appeal (because it won at trial) is the appellee.
 Jurisdiction refers to a court’s power to hear a case. In a state or federal court, a plaintiff may start a lawsuit only
in a court that has jurisdiction over that kind of case.
o Personal jurisdiction: legal authority to require the defendant to stand trial and pay judgments
 Personal jurisdiction exists:
 For individuals, in the state in which the defendant resides. For companies, the state(s) in
which the defendant does business.
 When a summons is served on a defendant while present in a state. A summons is the
court’s written notice that a lawsuit has been filed against the defendant. The summons
must be delivered to the defendant when she is physically within the state in which the
lawsuit is filed.
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o
When the defendant takes a formal step to defend a lawsuit. Most paper filed with a court
count as formal steps.
When a long-arm statute exists. If all else fails, a court can still obtain jurisdiction under
long-arm statutes. A long-arm statute gives a court jurisdiction over someone who
commits a tort (侵权), signs a contract, or conducts “regular business activities” in the
state.
Subject matter jurisdiction: a court’s authority to hear a particular type of case
 Subject matter jurisdiction for federal court (2 types of civil lawsuits are permitted in federal court)
 Federal question case: When a claim is based on United States Constitution, a federal
statute, or a federal treaty, then Federal courts have jurisdiction.
 Diversity jurisdiction: When a plaintiff and defendant are citizens of different states and
the amount in dispute exceeds $75,000, then Federal courts have jurisdiction.
*Case: INTERNATIONAL SHOE CO. V. STATE OF WASHINGTON
Fact: Although International Shoe manufactured footwear only in St. Louis, Missouri, it sold its products nation-wide. It
did not have offices or warehouses in Washington State, but it did send about a dozen salespeople there. The salespeople
rented space in hotels and businesses, displayed sample products, and took orders. They were not authorized to collect
payments from customers. When Washington State sought contributions to the state’s unemployment fund, International
Shoe refused to pay. Washington sued. The company argued that it was not engaged in business in the state, therefore,
Washington courts had no jurisdiction over it.
Issue: Did International Shoe have sufficient minimum contacts in Washington State to permit jurisdiction there?
Decision: The activities carried on in behalf of International Shoe were systematic and continuous throughout the years in
question. They resulted in a large volume of interstate business, in the course of which International Shoe received the
benefits and protection of the laws of the state. It is evident that these operations establish sufficient contacts or ties with
the state to justify a lawsuit there. The state may maintain the present suit to collect the tax.
Litigation: Pleadings
 Pleadings: document that begin a lawsuit, consisting of complaint, the answer, and sometimes a reply.
o Complaint: short, plain statement of the facts alleged and the legal claims made
 Summons: paper ordering the defendant to answer the complaint within 20 days
o Answer: brief reply to each of the allegations in the complaint within 20 days
 Default judgment: decision that the plaintiff wins without trial because the defendant failed to
answer in time.
o Judgment on the pleadings: a party can ask the court for a judgment based simply on the pleadings by
filing a motion to dismiss
 Motion to dismiss: a request that the court terminate a case because the law does not offer a legal
remedy for the plaintiff’s problem
Litigation: Discovery
 Interrogatories: Written questions that the opposing party must answer, in writing, under oath within 30 days
 Depositions: One party’s lawyer question the other party live and under oath
o Deponent: person being questioned
o Justin Bieber’s case
 Requests for the production of documents and things: When one side requests certain documents and other
tangible things relevant to the case from the other side
 Physical and mental examination: A party may ask the court to order an examination of the other party, if his
physical or mental condition is relevant, for example, in a case of medical malpractice.
 E-Discovery: Businesses large and small have vast amounts of data stored electronically and there is a trove of
information on social media.
Litigation: After Discovery
 After the pleadings, the parties can file various motions. Motions are requests for the judge to make certain
determinations before trial.

Motion for summary judgment: Request that the judge terminate the case because there are no material facts in
dispute and one party is entitled to judgment as a matter of law
o Ruling by the court that no trial is necessary on a particular issue because the essential facts are not in
dispute.
Case*: JONES V. CLINTON
Fact: When Clinton became president, Jones sued him, claiming that he had sexually harassed her. President Clinton
denied all of the allegations. He also filed for summary judgment, claiming that Jones had not alleged facts that justified a
trial. Jones opposed the motion for summary judgment.
Issue: Was Clinton entitled to summary judgment, or was Jones entitled to a trial?
Decision: The Court finds that a showing of a tangible job detriment or adverse employment action is an essential element
of plaintiff’s sexual harassment claim and that plaintiff has not demonstrated any tangible job detriment or adverse
employment action for her refusal to submit to the Governor’s alleged advances. The President is therefore entitled to
summary judgment on this claim.
Trial and Jury Selection
 Trial Prep: Attorneys make lists of all witnesses they will call
o Attorneys prepare each witness very carefully
o Rehearse the questions
o Takes hours and hours, for many days
 (1) Voir dire: process of selecting a jury that will be impartial
o Challenges for cause: Claiming that a juror has demonstrated probable bias
o Peremptory challenges: Right to excuse a juror for virtually any reason but not discriminatory reason
 (2) Opening statement: summarizing the proof he or she expects to offer, with the plaintiff going first
 (3) Plaintiff’s case
o Adversary system
 Putting a witness on the stand and letting both lawyers question the witness
 Direct examination: when a lawyer asks questions of her own witness
 Cross-examine: to ask questions of an opposing witness
 Re-direct examination
 Re-cross examination
 In addition to witness testimony, you present documents and other things to prove your case--evidence.
 Burden of proof in a civil case is preponderance of the evidence. It must convince the jury that its
version of the facts is at least slightly more likely than the defendant’s version.
 Motion for directed verdict: a ruling that the plaintiff has entirely failed to prove some aspect of
her case; it is permissible only if the evidence so clearly favors the defendant that reasonable
minds could not disagree on it.
 (4) Defendant’s case
 (5) Closing argument: Lawyers sum up their case to the jury explaining how they hope the jury will interpret
what they have heard
 (6) Jury instructions
o The judge instructs the jury to evaluate the case solely on the facts of the evidence presented.
o The jury comes up with a verdict.
o There are various post-verdict motions that can be filed.
 (7) Verdict: The jury deliberates informally, with all jurors entitled to voice their opinion. Some deliberations
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take two hours; some take two weeks. Many states require a unanimous (全体同意的) verdict; others require
only, for example, a 10–2 vote in civil cases.
(8) Motions after verdict: judgment non obstante veredicto (JNOV), meaning a judgment notwithstanding the
jury’s verdict. He is asking the judge to overturn the jury’s verdict.
Appeals
 An appeal is a review of the trial court's application of the law. There is no jury in an appeal, nor do the lawyers
present witnesses or, typically, other forms of evidence. The court will accept the facts as they were revealed in
the trial court, unless a factual finding is clearly against the weight of the evidence. A court of appeals can do the
following:
o Affirm: Allow the decision to stand
o Modify: Allow a decision to stand but reduce the damages
o Reverse and remand: Nullify the lower court’s decision and return the case to the lower court for a new
trial
o Reverse: Turning the loser into the winner, with no new trial
Alternative Dispute Resolution
 Alternative dispute resolution: Formal or informal process used to settle disputes without resorting to a trial
such as mediation and arbitration.
o Negotiation: Majority of disputes are resolved this way. This is the most informal way of resolving a
dispute and can occur at any time—before, during or after litigation.
o Mediation
 Mediator: attempts to guide the two disputing parties toward a voluntary settlement (nonbinding)
 Advantages: two antagonists can speak freely
 All discussions are confidential
 Offers the strongest “win-win” potential; Because the goal is voluntary settlement,
neither party needs to fear that it will end up the loser. Removing the fear of defeat often
encourages thinking and talking that are more open and realistic than negotiations held in
the midst of a lawsuit.
o Arbitration: An arbitrator presides over an informal hearing where attorneys are present. After
deliberation, the arbitrator issues a binding decision. In this form of ADR, the parties agree to bring in a
neutral third party, but with a major difference: The arbitrator has the power to impose an award. The
arbitrator allows each side equal time to present its case and, after deliberation, issues a binding decision,
generally without giving reasons. Unlike mediation, arbitration ensures that there will be a final result,
although the parties lose control of the outcome.
 Mandatory Arbitration Clauses: An arbitration clause is a clause in a contract that requires the
parties to resolve their disputes through an arbitration process.
 Courts will enforce mandatory arbitration clauses when:
1. The parties freely and knowingly agree.
2. The parties mutually promise to submit disputes to arbitration.
3. The arbitration clause provides a neutral forum to resolve disputes and
adopts fair rules for proceeding. One party cannot retain exclusive control
over the selection of arbitrators or prohibit the other party from having a
lawyer.
 Mandatory arbitration clauses have become very common in:
o Contracts for the sale of goods and services
o Employment contracts
o Automobile purchases
o Credit card, rental, and cell phone agreements
*Case: JOHN DOE V. THE COLLEGE BOARD
Fact: CB discovered compelling evidence of cheating at the suspect test sites. CB calculated that the probability of these
tests being honest was less than one in 100 million. CB then canceled the scores of hundreds of test takers without giving
them the opportunity to appeal. The plaintiffs sued to invalidate the arbitration clause, arguing that it was unenforceable
because its terms were grossly unfair (unconscionable), and it was signed by high schoolers under extreme pressure from
CB (duress). CB brought a motion to compel arbitration.
Issue: Was the arbitration clause valid and enforceable?
Decision: Plaintiffs do not offer any facts to suggest that defendant utilized “high pressured tactics” or put plaintiffs under
duress, or denied plaintiffs the opportunity to read and understand the Agreement before signing it. The terms of the
Arbitration Provision are not “grossly unreasonable” or “outrageous,” as they bind both parties equally to arbitration.
Accordingly, the Arbitration Provision is valid.
Chapter 4 Sources of Law: Common Law, Statutory Law, and Administrative Law
Common Law
 Common law is the law that is created by judges in a court of law in civil or criminal matters.
 The doctrine of stare decisis: “Let the decision stand”
o The ruling from a previous case.
o Once a court has decided a particular issue, it will generally apply the same rule in similar cases in the
future.
o The court will look to see if there is precedent: an earlier case that decided the issue
o A desire for predictability created the doctrine of stare decisis, so that people can know what is the law.
*Case: TARASOFF V. REGENTS OF THE UNIVERSITY OF CALIFORNIA
Fact: Prosenjit Poddar killed Tatiana Tarasoff. Tatiana’s parents claimed that two months earlier Poddar had confided his
intention to kill Tatiana to Dr. Lawrence Moore, a psychologist employed by the University of California at Berkeley.
They sued the university, claiming that Dr. Moore should have warned Tatiana.
Issue: Did Dr. Moore have a duty to Tatiana Tarasoff, and did he breach that duty?
Decision: Although under the common law, as a general rule, one person owed no duty to control the conduct of another,
nor to warn those endangered by such conduct, the courts have carved out an exception to this rule in cases in which the
defendant stands in some special relation- ship to either the person whose conduct needs to be controlled or in a
relationship to the foreseeable victim of that conduct. Applying this exception to the present case, we note that a
relationship of defendant therapists to either Tatiana or Poddar will suffice to establish a duty of care. Once a therapist
does in fact determine that a patient poses a serious danger of violence to others, he bears a duty to exercise reasonable
care to protect the foreseeable victim of that danger. The Tarasoffs have stated a legitimate claim against Dr. Moore.
Statutory Law
 Congress is organized into two houses, the House of Representatives and the Senate. Either house may originate a
proposed statute, which is called a bill. To become law, the bill must be voted on and approved by both houses (a
bill needs majority vote by each chamber of Congress).
o Bill: A proposed statute submitted to Congress or a state legislature based on a societal need to regulate
civil or criminal behavior. Example: The Civil Rights Act of 1964
 Once both houses pass it, they will send it to the president. If the president signs the bill, it becomes law and is
then a statute. If the president opposes the bill, he will veto it, in which case, it is not law.
o Veto: The power of the president to reject legislation passed by Congress
 Congressional Override: When the president vetoes a bill, Congress has one last chance to make it law: an
override. If both houses repass the bill, each by a two-thirds margin (2/3 vote in each chamber), it becomes law
over the president’s veto.
 Congressional Committees
o Committees exist in both the House of Representatives and in the Senate.
o Most congressional work is done in committees.
o Committees investigate the need for new legislation, hold hearings, hear testimony from experts and
common citizens, draft legislation and debate and vote on it.
 Statutory Interpretation: How do you interpret a statute?
o Plain meaning rule: when a court applies the ordinary, everyday meaning of the words in a statute.
o Legislative history and intent: When a court looks at the statute’s history, including the records of the
congressional hearings, to find the meaning of certain language.
o Public policy: When a court uses its own precedent and relies on general public policies. If the legislative
history is unclear, courts will rely on general public policies, such as reducing crime, creating equal
opportunity, and so forth.
*Case: Griggs v. Duke Power Co.
Fact: Title VII of the Civil Rights Act obviously prohibited an employer from saying to a job applicant, “We don’t hire
minorities.” In North Carolina, the Duke Power Co. required that applicants for higher-paying, promotional positions meet
two requirements: They must have a high school diploma, and they must pass a standardized written test. There was no
evidence that either requirement related to successful job performance. Blacks met the requirements in lower percentages
than whites, and consequently whites obtained a disproportionate share of the good jobs.
Issue: Did Title VII of the 1964 Civil Rights Act require that employment tests be job related?
Decision: The highest Court ruled that if a job requirement had a discriminatory impact, the employer could use that
requirement only if it was related to job performance. On the record before us, neither the high school completion
requirement nor the general intelligence test is shown to bear a demonstrable relationship to successful performance of the
jobs for which it was used.
Administrative Law
 Administrative law: the law made by agencies; example: insider trading rules by the SEC
o Courts decide individual cases; they do not regulate industries. Congress itself passes statutes, but it has
no personnel to oversee the day-to-day working of a huge industry. A new entity was needed. Congress
passed the Interstate Commerce Act, creating the Interstate Commerce Commission (ICC), the first
administrative agency.
 Classification of agencies: federal, state, and local
 Executive-Independent
o Some federal agencies are part of the executive branch while others are independent agencies. The
president has much greater control of executive agencies for the simple reason that he can fire the agency
head at any time. The president has no such removal power over independent agencies. The president
must seek approval of congress to fire the independent agency’s head.
 Enabling legislation
o Congress creates a federal agency by passing enabling legislation. The Interstate Commerce Act was the
enabling legislation that established the ICC.
o Typically, the enabling legislation describes the problems that Congress believes need regulation,
establishes an agency to do it, and defines the agency’s powers.
 Power of Agencies
o Administrative agencies use 3 kinds of power to do the work assigned to them.
 They make rules/regulations.
 2 types of rules
o Legislative rules: An agency creates law by requiring businesses or private
citizens to act in a certain way.
o Interpretive rules: Interpretive rules do not change the law. They are the
agency’s interpretation of what the law already requires.
 How rules are made
o Informal rulemaking: Proposed rule must be published, and public allowed to
comment. The public may submit any objections and arguments, with supporting
data. The agency must give a written response to the objections. It is required to
have rational reasons for the final choices it makes.
o Formal rulemaking: the proposed rule must be published, and the agency must
hold a public hearing before establishing the rule.
 They investigate.
 Agencies can issue a subpoena (传票) which is an order for the person to appear at a
particular place and time and to bring certain things relative to the investigation.
o Information must be relevant to a lawful agency investigation; must not be
unreasonably burdensome; and must not be privileged (a corporate officer
accused of criminal securities violations may not be compelled to testify about
his behavior).
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Agencies can also conduct a surprise search and seizure of an enterprise. When a
particular industry is comprehensively regulated, courts will assume that companies
know they are subject to periodic, unannounced inspections.
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o
They adjudicate (裁定)
 To adjudicate a case is to hold a hearing about an issue and then decide it.
 Most adjudications begin with a hearing before an administrative law judge (ALJ). An
ALJ is an employee of the agency but is expected to be impartial in her rulings, acting as
an impartial decision maker. There is no jury.
Limits on agency power
 Statutory: Congress can put limits in enabling legislation and control funding
 Political: President appoints agency heads, and many are cabinet-level agencies
 Judicial: Courts can strike down rules
 Informational (FOIA)
 Freedom of Information Act (FOIA)
o It is a law that requires federal administrative agencies to disclose two types of
data: data about agency expenditures and policies and data related to you.
o It does not apply to Congress, federal courts, or the President (executive staff of
the white house).
o Should be shared with the public, with a few exemptions. Some of the
exemptions include documents related to national security, personnel
information, and pending agency investigations.
 Privacy act: This 1974 statute prohibits federal agencies from giving information about
an individual to other agencies or organizations without written consent.
*Case: Fox Television v. Federal Communications Commission (FCC)
Fact: The Commission had long held that fleeting, or single and unscripted, expletives were not indecent. But after the
first two incidents, involving Cher and Richie, the Commission changed its policy, holding that even one-time use could
be a violation. It then punished NBC for Bono’s use of the F-word. Even though the Cher and Nicole Richie incidents
took place before this policy change, the Commission retroactively applied its new policy to them and found Fox to be in
violation of it. Fox challenged the Commission’s indecency regulations, claiming it did not have fair notice of what was
forbidden.
Issue: Did the Commission give broadcasters fair notice of its policies?
Decision: This history makes it apparent that the Commission policy in place at the time of the broadcasts gave no notice
to Fox that a fleeting expletive could be actionably indecent; yet Fox [was] found to be in violation. The Commission’s
standards were vague. The lack of notice and vague standards render the Commission’s policy unconstitutional. The
Commission’s orders must be set aside.

Chapter 6 Business Torts
Tort (侵权行为) is a violation of duty imposed by the civil law.
Categories of Torts
 Intentional Torts
 Negligence and Strict Liability
Intentional Torts
 Intentional torts: Do not necessarily require an intention to harm the victim, only an intention to perform the act
which caused the injury, i.e., throwing a ball. Intentional torts include business torts, which are a category of torts
perpetuated exclusively by business entities.
o If the defendant does something deliberately and it ends up injuring somebody, she is probably liable
even if she meant no harm.

Defamation (诽谤): irresponsible speech that harms another’s reputation
o Written defamation is called libel.
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o Oral defamation is called slander.
Four elements in the tort of defamation: An element is something that a plaintiff must prove to win a lawsuit.
The plaintiff in any kind of lawsuit must prove all of the elements to prevail.
o Defamatory statement: A statement of fact is made that harms another’s reputation. Because opinions
are not factual, they do not generally count as defamatory statements. Facts could be proven true or false.
o Falsity: The statement is false.
o Communicated: The statement must be communicated to at least one person other than the plaintiff. It
stands to reason: If no one else receives the defamatory message, there is no harm done. Defamation
protects against injury to reputation, not hurt feelings.
o Injury: The plaintiff must show injury resulted from the statement unless it is a verbal or written false
statement about sexual behavior, crimes, contagious diseases and professional abilities.
Exceptions to defamation
o Opinion and extreme exaggerations are not taken as statements of fact.
o Public personalities have a harder time winning a defamation case because they have to prove that the
defendant acted with actual malice. New York Times v. Sullivan. Public personalities include public
officials, politicians, and celebrities.
 Actual malice means that the defendant knew the statement was false or acted with reckless
disregard of the truth.
Case*: New York Times v. Sullivan
Fact: In 1960, civil rights leaders ran a full-page ad in the New York Times to raise funds to help civil rights leaders,
including Martin Luther King, Jr. Sixty well-known Americans signed it. The ad described what it called “an
unprecedented wave of terror” of police actions against peaceful demonstrators in Montgomery, Alabama. What it
described was mostly accurate, but some of the charges in the ad were not true. L.B. Sullivan was one of three people in
charge of police in Montgomery. He sued the New York Times for libel. The ad did not mention Sullivan’s name. But
Sullivan claimed that the ad implied his responsibility for the actions of the police. He said that the ad damaged his
reputation in the community. The Alabama court ruled in favor of Sullivan, finding that the newspaper ad falsely
represented the police department and Sullivan. The Times appealed the decision to the United States Supreme Court. The
newspaper argued that it had no intention of hurting Sullivan’s reputation and was protected under the first Amendment.
The newspaper had no reason to believe that the advertisement included false statements, so it did not check their
accuracy.
Issue: Is this defamation?
Decision: The United States Supreme Court unanimously ruled in favor of the New York Times. The court said that the
right to publish all statements is protected under the first Amendment. In order to prove libel, a public official must show
that the newspaper acted with actual malice– that is, with knowledge that it was false or with reckless disregard for truth.
Free and open debate about the conduct of public officials, the Court reasoned, was more important than occasional,
honest factual errors that might hurt or damage officials’ reputations.
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
Intentional Infliction of Emotional Distress: an intentional tort in which extreme and outrageous conduct that
causes serious emotional harm.
Tortious Interference with Contract: An intentional tort in which the defendant improperly induced a third
party to breach a contract with the plaintiff
o Tortious interference with a contract exists if the plaintiff can establish the following four elements:
 There was a contract between the plaintiff and a third party;
 The defendant knew of the contract;
 The defendant improperly induced the third party to breach the contract or made performance of
the contract impossible; and
 There was injury to the plaintiff.
o Example: Texaco v. Pennzoil
 Fact: Pennzoil (plaintiff) offers to buy 20% of Getty Oil (third party) for 112.50 a share and Getty
board approves. Texaco (defendant) appears and offers to buy all of Getty for $125 and Getty
agrees.
 Issue: Was there a binding agreement between Pennzoil and Getty? And did Texaco do anything
wrong? Yes and Yes.

 Decision: 10-billion-dollar judgment was given to Pennzoil
False Advertising
o The Lanham Act protects businesses from the unfair competition of false or misleading advertisements
intended to hurt another business.
o To be liable under the Lanham Act, a plaintiff must prove four elements:
 The defendants made false or misleading fact statements about its products or those of a
competitor.
 The statements were material and likely to influence purchasing decisions (material means
relevant and significant).
 The defendants used the statements in commercial advertising or promotion.
 The statements created the likelihood of harm.
Case*: Molson Coors Beverage Company USA LLC v. Anheuser-Busch Companies, LLC
Fact: AB and MC regularly attack each other in advertisements. During the Super Bowl, AB ran a series of commercials
mocking MC for using corn syrup in the brewing process. Molson Coors objected to the ad as misleading and illegal. It
believed the campaign wrongly implied that MC’s beers contained corn syrup. MC worried that this confusion could lead
consumers to conclude that Bud Light is healthier than MC’s beers. MC sued AB, claiming its ad campaign violated the
Lanham Act. The district court issued an injunction (禁令) prohibiting AB from using language such as “no corn syrup”
in ads and on packaging. AB appealed.
Issue: Did AB’s “no corn syrup” ad campaign violate the Lanham Act?
Decision: True, it has made statements from which some consumers doubtless infer that some corn syrup avoids
fermentation and makes it into the beer. Still, Molson Coors’s own statements yield the same inference. Many people infer
from a list of a finished product’s “ingredients” that things on the list are in the finished product. If Anheuser-Busch has
led consumers to believe this, it is hard to see why those statements can be enjoined. By choosing a word such as
“ingredients” with multiple potential meanings, Molson Coors brought this problem on itself. If Molson Coors does not
like the sneering tone of Anheuser-Busch’s ads, it can mock Bud Light in return. Litigation should not be a substitute for
competition in the market.
Damages
 A jury/judge may award damages to a plaintiff who prevails in a tort suit. Damages are awarded by a court
according to a single recovery principle where the plaintiff receives a lump sum to cover past and future expenses.
 Compensatory Damages
o Compensatory damages are intended to compensate the victim and put her in the position she would have
been prior to the incident. They can include the following economic damages:
 Past/future medical expenses
 Past/future wages/earning capacity
 Past/future emotional injury
 Past/future loss of society
 You can also recover for non-economic damages such as pain and suffering.
 Punitive Damages
o The purpose of punitive damages is to punish the Defendant or guilty party.
o It is intended for conduct that is extreme and outrageous.
o It is intended to make an example out of the Defendant.
o Should also deter the defendant and others from similar behavior.
o Sometimes punitive damages awards are huge and grossly disproportionate to the compensatory damages
and may be reduced by a judge. A large award of money should deter the defendant from repeating the
mistake and others from ever making it.
o Punitive damages should not be more than 9 times compensatory damages.
Negligence
 Negligence is the unintentional or accidental tort. To win a negligence case, a plaintiff must prove five elements:
o Duty of care: The defendant had a legal responsibility to the plaintiff.
o Breach: The defendant breached her duty of care or failed to meet her legal obligations.
o Factual cause: The defendant's conduct actually caused the injury.

o Proximate cause: It was foreseeable that conduct like the defendant's might cause this type of harm.
o Injury/Damages: The Plaintiff was hurt or suffered a measurable loss.
Duty of Care and Foreseeability
o To whom does a defendant owe a duty of care? The standard of care is what a reasonable person in the
defendant’s position would have done or not done. The standard of care depends on who you are and in
what circumstance.
o If the defendant could have foreseen injury to a particular person, she has a duty to him.
Case*: Hernandez v. Arizona Board of Regents
Fact: At the University of Arizona, the Epsilon Epsilon chapter of Delta Tau Delta fraternity gave a welcoming party for
new members. The fraternity’s officers knew that the majority of its members were under the legal drinking age, but they
permitted everyone to consume alcohol. John Rayner, who was under 21 years of age, left the party. He drove negligently
and caused a collision with an auto driven by Ruben Hernandez. The crash left Hernandez blind and paralyzed. The victim
sued all the member involved in the welcoming party. The trial court granted summary judgment for all defendants, and
the court of appeals affirmed. Hernandez appealed to the Arizona Supreme Court.
Issue: Did the fraternity and the other defendants have a duty of due care to Hernandez?
Decision: Furnishing alcohol to underaged drinkers violates numerous statutes. The conduct in question violates wellestablished common-law principles that recognize a duty to avoid furnishing dangerous items to those known to have
diminished capacity to use them safely. We join the majority of other states and conclude that as to Plaintiffs and the
public in general, Defendants had a duty of care to avoid furnishing alcohol to underage consumers. Arizona courts,
therefore, will entertain an action for damages against [one] who negligently furnishes alcohol to those under the legal
drinking age when that act is a cause of injury to a third person. [Reversed and remanded.]
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


Circumstances requiring a higher duty of care
o A property owner who knows that there is something on her property that would reasonably attract
trespassing children has a higher duty of care.
o A place of business that is open to the public has a higher duty of care to ensure that there are no open and
obvious dangers to invitees.
o Professionals of any kind have a higher duty of care when they are practicing their profession (licensees
on the job).
o Employers have a higher duty of care not to hire and retain dangerous employees.
Defenses to Negligence
o Contributory Negligence: If the Plaintiff is even slightly negligent, he/she recovers nothing. Critics
attacked this rule as unreasonable. A plaintiff who was 1 percent negligent could not recover from a
defendant who was 99 percent responsible. So most states threw out the contributory negligence rule,
replacing it with comparative negligence.
o Comparative Negligence: A Plaintiff may generally recover even if he/she is partially responsible for the
accident. Recovery for the Plaintiff is reduced by the level of negligence attributable to her.
o Assumption of risk:A person who voluntarily enters a situation that has an obvious danger cannot
complain if he/she is injured. If there is a finding of assumption of risk, the plaintiff usually recovers
nothing.
Product Liability Negligence
o In negligence cases involving goods, plaintiffs typically raise one or more of these claims:
 Negligent design: A product that is designed with unreasonable risks. The buyer claims that the
product injured her because the manufacturer designed it poorly.
 Negligent manufacture: Failure to inspect a product or some other careless conduct that causes a
dangerous product to leave the plant. The buyer claims that the design was adequate but that
failure to inspect or some other careless conduct caused a dangerous product to leave the plant.
 Failure to warn: Failure to warn purchasers/users about the dangers of normal use and also
foreseeable misuse.
Strict Liability
o There are two main areas of business that incur strict liability: ultrahazardous activities and defective
products.


Ultrahazardous activities include using harmful chemicals, operating explosives, keeping wild
animals, bringing dangerous substances onto property, oil and gas extraction and construction.
For defective products, the plaintiff must prove that
 A product has a defective condition unreasonably dangerous to the user/customer.
The defendant is liable only if the product is defective when it leaves his hands. There
must be something wrong with the goods. If they are reasonably safe and the buyer's
mishandling of the goods causes the harm, there is no strict liability.
 The seller of the product is engaged in the business of selling such product. The
seller is liable only if she normally sells this kind of product.
 It is expected and does reach the user/consumer without substantial change in the
condition in which it was sold. Obviously, if your roommate put the glass in the peanut
butter thinking it was funny, neither the manufacturer nor the store is liable.
Case*: Daniell v. Ford
Fact: Connie Daniell was severely depressed. She felt so “overburdened” she decided to end her life by locking herself
inside the trunk of her 1973 Ford LTD. While in the trunk, Daniell changed her mind. Unfortunately, at this point she had
already closed and locked the trunk. The LTD did not have an internal release latch or other emergency opening
mechanism. (And she had no cell phone.) As a result, Daniell was trapped in her car’s trunk for nine days awaiting rescue.
She did in fact make it out alive, but not without serious psychological and physical injuries. Daniell sued Ford for
damages under negligence and strict liability. She claimed Ford was negligent because it did not warn its customers that
the trunk could not be opened from the inside. She also argued that the car manufacturer was strictly liable because the
missing latch was a design defect.
Issue: Was Ford negligent in failing to warn Daniell of the missing latch? Was Ford strictly liable for a design defect?
Decision: Under strict products liability or negligence, a manufacturer has a duty to consider only those risks of injury
which are foreseeable. The plaintiff’s use of the trunk compartment as a means to attempt suicide was an unforeseeable
use. Therefore, the manufacturer had no duty to design an internal release or opening mechanism that might have
prevented this occurrence. Nor did the manufacturer have a duty to warn the plaintiff of the danger of her conduct, given
the plaintiff’s unforeseeable use of the product. The risk is obvious. There is no duty to warn of known dangers in strict
products liability or tort.
Chapter 8 Crime
Criminal Law
 Criminal law prohibits and punishes conduct that threatens public safety and welfare.
o Prosecution: Only the government can prosecute the perpetrator and send him/her to prison or impose a
fine
o Burden of proof: The government must prove its case beyond a reasonable doubt; the very high burden
of proof in a criminal trial, demanding much more certainty than required in a civil trial.
o Right to a jury: A criminal defendant has a right to a trial by jury for any charge that could result in a
sentence of six months or longer. The defendant may choose not to have a jury trial, in which case, the
judge decides the verdict.

Bench trial: There is no jury; the judge reaches a verdict (判决)
Categories of Crime
There are two categories of crime:
 Felony: A serious crime, for which a defendant can be sentenced to 1 year or more in prison; examples include

money laundering (洗黑钱), embezzlement (盗用), wire fraud (远程诈骗), and securities fraud.
Misdemeanor: A less serious crime, often punishable by less than 1 year in a county jail such as driving without
a license, possession of a small amount of marijuana.
Gathering Evidence
 The Text of the Fourth Amendment
o “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable

searches and seizures, shall not be violated, and no Warrants (搜查令) shall issue, but upon probable
cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the
persons or things to be seized.”
o The 4th Amendment prohibits the government from making illegal searches and seizures of individuals
and corporations. As a general rule, police must first obtain a warrant before conducting a search.
Warrant: Written permission from neutral official based upon a finding of probable cause—it is likely that
evidence of a crime will be found in the place to be searched.
o Even a search with a warrant can still violate the Fourth Amendment if:
 There was no probable cause to issue the warrant
 The warrant does not specify the place to be searched and the things sought
 The search extends beyond what is specified in the warrant
 The warrant was issued by a non-neutral magistrate/judge
o There are 7 circumstances under which police may search without a warrant:
 Plain view: When Rashad Walker opened his door in response to a police officer’s knock, he was
holding a marijuana joint in his hand. The court held that the police did not need a warrant to
make an arrest because evidence of the crime was in plain view.
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Stop and frisk (搜身): The police do have the right to stop and frisk, but only if they have a clear
and specific reason to suspect that criminal activity may be afoot and that the person may be
armed and dangerous.
Emergencies: If the police believe that evidence is about to be destroyed, they can search without
a warrant.
Automobiles: If police have lawfully stopped a car and then observe evidence of other crimes in
the car, such as burglary tools, they may search.
Lawful arrest: Police may always search a suspect they have arrested. The goal is to protect the
officers and preserve evidence.
Consent: Anyone lawfully living in a dwelling can allow the police to search it without a
warrant. If your roommate gives the police permission to search your house, that search is legal.
No expectation of privacy: The police have a right to search any area in which the defendant
does not have a reasonable expectation of privacy.
 Warrant is required (expectation of privacy): blood test, heat-seeking devices, cell
phones, computers, GPS tracking device.

Warrant not required (no expectation of privacy): DNA test, breath test, digital cameras,
email, websites.
*Case: Rodriguez v. United States
Fact: Dennys Rodriguez briefly swerved his SUV onto the highway’s edge. At 12:06 a.m., Officer Morgan Struble pulled
Rodriguez over for erratic driving. At 12:27 a.m., Struble returned the documents to the two men. He then asked
permission to walk his police dog around Rodriguez’s vehicle, but Rodriguez said no. On the officer’s instructions,
Rodriguez got out of the car. At 12:33 a.m., Struble led the dog twice around the SUV. During the second circuit, the dog
signaled the presence of drugs. After searching the car, Struble found methamphetamine, an illegal drug. At trial,
Rodriguez argued that, because the officer did not have a clear and specific reason to suspect criminal activity, the dog
sniff was an illegal stop and frisk.
Issue: Was the dog sniff legal?
Decision: An officer, in other words, may conduct certain unrelated checks during an otherwise lawful traffic stop. But he
may not do so in a way that prolongs the stop, absent the reasonable suspicion ordinarily demanded to justify detaining an
individual. Beyond determining whether to issue a traffic ticket, an officer’s mission includes ordinary inquiries incident
to the traffic stop. A dog sniff, by contrast, is a measure aimed at detecting evidence of criminal wrongdoing.

The Exclusionary Rule
o Under the exclusionary rule, any evidence the government acquires illegally (or any information obtained
as a result of this illegal behavior) may not be used at trial.
o Evidence obtained illegally includes the failure to secure a warrant when required or the failure to read a
suspect’s Miranda rights before obtaining a confession.
 “You have the right to remain silent. Anything you say can and will be used against you in a court
of law. You have the right to an attorney. If you cannot afford an attorney, one will be provided
for you. Do you understand the rights I have just read to you?”
 The Miranda warnings are given by police to criminal suspects undergoing custodial interrogation
as a 5th amendment procedural protection against self-incrimination.
 Custodial interrogation refers to the questioning of a detained person by the police in
connection with a criminal investigation.
o There are exceptions to the exclusionary rule and contrary to popular myth, the exclusionary rule does not
operate to free suspected criminals.
 Inevitable discovery: A court will admit any evidence that would have been discovered even
without the illegal behavior on the part of the police.
 Independent source: If the police find the tainted evidence from a different source, then they can
use it.
 Good-faith exception: Suppose the police use a search warrant believing it to be proper, but it
later proves to have been defective. The search is legal so long as the police reasonably believed
the warrant was valid.
After Arrest
 The 5th Amendment
o Protects criminal defendants—both the innocent and the guilty in several ways.
o Due process: Requires fundamental fairness at all stages of the case.
o Self-incrimination: Bars the government from forcing any person to provide evidence against himself. In
other words, the police may not use mental or physical coercion to force a confession or any other
information out of someone.
th
 The 6 Amendment
o Attorney: Guarantees a criminal defendant the right to an attorney at all important stages of the criminal
process. The government must appoint a lawyer to represent, free of charge, to any defendant who cannot
afford one.
o Speedy and impartial trial: The 6th Amendment also guarantees a criminal defendant the right to a
speedy trial by an impartial jury.
 The speedy trial guarantee means that the defendant must be brought to trial or released within a
reasonable amount of time.
o

Double jeopardy: A defendant may only be prosecuted once for a particular criminal offense. The
purpose is to prevent the government from destroying the lives of innocent citizens with repeated
prosecutions.
 Two exceptions: (1) The state and federal can charge twice separately. (2) If you appeal, you
waived the right of double jeopardy.
The Order of Criminal Procedure
o Arrest
o Indictment: The government’s formal charge that the defendant has committed a crime and must stand
trial issued after a grand jury decides that there is probable cause that the defendant committed the crime
with which she is charged.
 Once the police provide evidence to the prosecutor, he presents this evidence to a grand jury and
asks its members to indict the defendant.
 At the hearing in front of the grand jury, only the prosecutor presents evidence, not the defense
attorney.
 If the grand jury determines that there is probable cause that the defendant committed the crime
with which she is charged, an indictment is issued.
o Arraignment: A court clerk reads the formal charges of the indictment in front of the prosecution and
defense. Defendant enters a plea to the charges and bail is set. At this stage, most defendants plead not
guilty.
o Plea bargain: A plea bargain is an agreement between prosecution and defense that the defendant will
plead guilty to a reduced charge, and the prosecution will recommend to the judge a relatively lenient (仁
慈的) sentence (判决).
o Discovery: If the defendant does not plead guilty, the prosecution is obligated to hand over any evidence
favorable to the defense that the defense attorney requests. The defense has a more limited obligation to
inform the prosecution of its evidence. During the months before trial, both prosecution and defense will
prepare the most effective case possible.
o Trial and appeal: When there is no plea bargain, the case must go to trial. The mechanics of a criminal
trial and appeal are similar to those for a civil trial.
o Punishment: The Eighth Amendment prohibits cruel and unusual punishment. Courts are generally
unsympathetic to claims under this provision. For example, the Supreme Court has ruled that the death
penalty is not cruel and unusual as long as it is not imposed in an arbitrary or capricious manner.
Case*: Miranda v. Arizona
Fact: Ernesto Miranda was a mentally ill, penniless Mexican immigrant. After a rape victim identified him as her attacker,
two police officers interrogated him without first telling him that he had a right to a lawyer. After two hours, Miranda
signed a typed confession that stated that it had been voluntarily given “with full knowledge of my legal rights,
understanding any statement I make may be used against me.” The trial judge admitted this written confession into
evidence. Miranda was convicted and sentenced to 20 to 30 years imprisonment. On appeal, the Supreme Court of
Arizona affirmed the conviction because Miranda had not specifically requested a lawyer. The Supreme Court of the
United States granted certiorari (复审令).
Issue: Was Miranda’s confession admissible at trial? Should his conviction be upheld?
Decision: Miranda was not in any way apprised of his right to consult with an attorney and to have one present during the
interrogation, nor was his right not to be compelled to incriminate himself effectively protected in any other manner.
Without these warnings, the statements were inadmissible. The mere fact that he signed a statement which contained a
typed-in clause stating that he had “full knowledge” of his “legal rights” does not approach the knowing and intelligent
waiver required to relinquish constitutional rights (violates 5th amendment).
Crimes that Harm Business and Stakeholders
 Larceny (盗窃罪): Taking personal property that is in someone else’s possession with the intent to steal it.
 Embezzlement (挪用公款): The fraudulent conversion of property already in the defendant’s possession. This
crime also involves taking something, but with one big difference: The culprit begins with legal possession.
 Fraud (诈骗): Deception for the purpose of obtaining money or property.
o
o
o
Wire fraud: The crime of wire fraud can take many forms and includes conduct using a phone or
electronic communication. Conduct such as phishing (网络钓鱼), or spam related schemes, are
prosecuted as wire fraud or internet fraud.
Mail fraud: The use of domestic US mail service (such as U.S. Postal Service, FedEx, or UPS) and
private carriers to perpetrate fraud such as sending false advertising or fraudulent financial statements.
Securities fraud: Misrepresenting information to investors about a security or engaging in insider
trading. Deceptive practice in the stock or commodities markets that induces investors to make purchase
or sale decisions on the basis of false information, frequently resulting in losses.
Crimes Committed by Business
 Money Laundering consists of taking the proceeds of certain criminal acts and either (1) using
the money to promote crime or (2) attempting to conceal the source of the money.
o Successful criminals earn enormous sums, which they must filter back into the flow of commerce in a
way that allows their crimes to go undetected.
 RICO (Racketeer Influenced and Corrupt Organizations Act)
o RICO prohibits using two or more racketeering acts to accomplish any of these goals: (1) investing in or
acquiring legitimate businesses with criminal money, (2) maintaining or acquiring businesses through
criminal activity, or (3) operating businesses through criminal activity.
o Two-step process to prove that a person or an organization has violated RICO.
 The prosecutor must show that the defendant committed two or more racketeering acts, which
are any of a long list of specified crimes: embezzlement, arson(纵火罪), mail fraud, wire fraud,
and so forth. If a stockbroker told two customers that Bronx Gold Mines was a promising stock,
when she knew that it was worthless, that would be two racketeering acts.
 The prosecutor must then show that the defendant used these racketeering acts to accomplish one
of the three purposes listed earlier. If the stockbroker gave fraudulent advice and used the
commissions to buy advertising for her firm, that would also violate RICO.
Punishment



The most common punishment for a corporation are fines and some cases, forfeiture, giving up money or property
obtained through the criminal conduct.
The Federal Sentencing Guidelines are detailed rules that judges must follow when sentencing defendants.
Corporate defendants can use compliance programs to reduce the punishment imposed.
o For a compliance program to be effective, it must involve high-level officers and the plan must be
enforced to ensure that it reasonably reduces the prospect of criminal conduct.
Chapter 10 Introduction to Contracts
A contract is a legally enforceable agreement.
Elements of a Contract: For a contract to be enforceable, seven key characteristics must be present.
 Offer: All contracts begin when a person or a company proposes a deal (offeror). It might involve buying
something, selling something, doing a job, or anything else. But only proposals made in certain ways amount to a
legally recognized offer.
 Acceptance: Once a party receives an offer, he must respond to it in a certain way (offeree).
 Consideration: There has to be bargaining that leads to an exchange between the parties. Contracts cannot be a
one-way street; both sides must receive some measurable benefit.
 Legality: The contract must be for a lawful purpose and comply with the requirements of the law. Courts will not
enforce agreements to sell cocaine, for example.
 Capacity: The legal ability to enter into a contract. The parties must be adults of sound mind.
 Consent: Certain kinds of trickery and force can prevent the formation of a contract. Fraud and Mistake may
render a contract unenforceable because of a lack of true consent.
 Writing: While verbal agreements often amount to contracts, some types of contracts must be in writing to be
enforceable.
Offer


Offer defined: An offer is an act or statement that proposes definite terms and permits another person to accept
the terms and enter into an agreement.
o Definite terms: price, quantity, date, duration
What is not an offer?
o Invitations to bargain
 Example: Suppose Soo telephones Joe and leaves a message on his voice mail, asking if Joe
would consider selling his vacation condo on Lake Michigan. Joe emails a signed letter to Soo
saying, “There is no way I could sell the condo for less than $350,000.” Soo promptly sends Joe a
cashier’s check for that amount. Does she own the condo? No. Joe’s email was not an offer. It is
merely an invitation to negotiate. Joe is indicating that he might well be happy to receive an offer
from Soo, but he is not promising to sell the condo for $350,000 or for any amount.
o Price quotes (报价)
o Advertisements
 An advertisement is generally not an offer. An advertisement is merely a request for offers. The
consumer makes the offer, whether by mail, like Mesaros, or by arriving at a retail store ready to
buy. The seller is free to reject the offer.
o Letter of intent
 A letter of intent is a document outlining the general plans of an agreement between two or more
parties before a legal agreement is finalized.
 A letter that summarizes the main points of negotiation or proposed contract.
Case*: Gabriel v. Albany College of Pharmacy and Health Services
Fact: Matthew Gabriel was a student in Professor Pumo’s immunology class. Professor Pumo’s syllabus outlined course
requirements and stated that “plagiarism will not be tolerated.” After grading the first assignment, Professor Pumo
realized that many papers had sentences copied from other sources without citations. Instead of reporting everyone for
plagiarism, Professor Pumo said she would give students a “free pass” on one copied sentence. But Gabriel’s paper
contained many plagiarized sentences, so he received a failing grade for the assignment. Gabriel sued the professor for
breach of contract. He argued that the syllabus was a contract and that the “free pass” policy broke it—because that term
was not part of their original agreement. According to Gabriel, since the professor breached the contract, he was no longer
obli- gated to refrain from plagiarizing, and so should not be punished.
Issue: Was the professor’s syllabus an offer whose acceptance formed an enforceable contract?
Decision:
Argument for Gabriel: A syllabus is a contract. On the first day of class, the professor presents the syllabus as an offer
and students agree by staying in the course. The terms in the syllabus are promises upon which students rely. Professor
Pumo unilaterally changed the written “rules of the game.” Once she broke her promise, there was no longer a “deal.”
Students should not be held to her arbitrary rules.
Argument for Professor: The syllabus is merely an announcement that provides general information about course
requirements, grading policies, and behavior guidelines. Reasonable people do not expect a syllabus to be enforceable in
court. It was not a contract—Professor Pumo had the right to change the class rules, make additional assignments, or even
kick Gabriel out at any time. Even if the syllabus were a contract, the phrase “plagiarism will not be tolerated” is too
indefinite to be a valid offer. Gabriel is not immune from the plagiarism rules.

Termination of Offers
o Termination by revocation: An offer is revoked (取消的) when the offeror “takes it back” before the
offeree accepts.
o Termination by rejection: If an offeree clearly indicates that he does not want to take the offer, then he
has terminated the offer.
o Counteroffer: A party makes a counteroffer when it responds to an offer with a new and different
proposal. This equates to terminating the original offer.
o Termination by expiration: When an offer specifies a time limit for acceptance, that period is binding.
o Termination by operation of law: If an offeror dies or becomes mentally incapacitated, the offer
terminates automatically and immediately, or destruction of the subject matter terminates the offer.
Acceptance
 Acceptance Defined: Acceptance is when the offeree says or does something to indicate the intent to be bound
by an offer. Silence does not count.
 Acceptance Online
o Clickwraps: Agreement displays the proposed terms online and requires users to open. Accept by
clicking “I AGREE.”
o Browsewraps: Online contract that seeks consent by placing a hyperlink on the web page. Users are not
required to click the link. Courts have held that browsewrap agreements are not enforceable unless the
website can prove that users at least knew the agreement existed, whether or not they read it.
o Hybridwrap: Combines elements of clickwrap and browsewrap (includes hyperlinks) and are
enforceable only if the notice is reasonably conspicuous and adjacent to “PLACE ORDER.”
 (1) The terms of the agreement are not visible, but rather accessible through a hyperlink. (2)
Adjacent to the hyperlinked terms is a click-to-consent button, usually labeled “CONTINUE” or
“PLACE YOUR ORDER.” (3) Hybridwraps include a notice informing the user that, by clicking
the button, the user is agreeing to the terms of the hyperlinked agreement.
 Communication of Acceptance
o Mirror image rule: If offeror demands acceptance in a certain way, then offeree must follow those
requirements.
 The common law mirror image rule requires that acceptance be on precisely the same terms as the
offer. If the acceptance contains terms that add or contradict the offer, even in minor ways, courts
generally consider it a counteroffer.
o If the offeror does not mention the method/procedure for acceptance, then the offeree may accept in any
reasonable manner.
Case*: Nicosia v. Amazon.com, Inc.
Fact: Dean Nicosia bought 1 Day Diet, a weight-loss supplement, on Amazon.com. When he later learned that 1 Day Diet
contained a known dangerous chemical, Nicosia brought a class action against Amazon, asserting that its sale of 1 Day
Diet was illegal. Amazon’s Conditions of Use (COU) contained an arbitration clause providing that all disputes had to be
resolved by binding, individual arbitration (no class actions allowed). Nicosia claimed that he did not know about the
COU—and these terms did not apply to him—because Amazon did not clearly and conspicuously post them on the
checkout page. The district court dismissed Nicosia’s complaint, but he appealed. Analyzing Amazon’s Web page design,
it noted that the page was cluttered, and that the hybridwrap notice was not prominent, nor was it adjacent to the “Place
your Order” button. The appeals court concluded that a reasonable consumer may not have known about the existence of
terms. However, it remanded the case back to the district court to decide whether Nicosia himself had reasonable notice of
the COU.
Issue: Did Nicosia have reasonable notice of the existence of Amazon’s COU? Was he bound to Amazon’s arbitration
provision?
Decision: