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Legl Final Study Guide

Legal 2700 Final Exam Study Guide
Chapter 1
Law - most significant and formal force, the rules established by the government, backed by
adequate enforcement (court and police)
2. Rule of law - laws are general and equally applicable to everyone
3. Property- enables individuals and businesses to use etc. private resources, right of ownership,
legal right to exclude other from resources that you originally possessed or acquired lawfully
a. Public- resources owned by government
b. Private- owned by individuals,
c. Common- resources that are owned by several people simultaneously (ex- neighborhood
Public Vs. Private Law
- public - involves regulations of society
- Constitutional
- Administrative
- Criminal
- Private - between private citizens
- Property
- Contract
- tort
Common Law System (US & UK): draws from institutionalized opinions and interpretations from judicial
authorities. Precedents.
Civil Law System (French & Louisiana): rely on written statutes and other legal codes that are constantly
The Hierarchy
Federal Law
1. Constitution
2. Legislation
3. Administrative law or regulation
State Law
1. State constitution
2. Statutes or Acts
3. Regulatory Law & State Administrative agencies
4. Local Ordinances
Judicial Decisions
1. Case Law → sets precedent for future cases including similar issues
Stare Decisis: “ to stand by things decided” “let the decision stand” → judge follows precedent, ensures certainty
and predictability
Chapter 3
Judges determine law
Juries determine facts applied to the law
Justices- At highest court level jurisdiction (appellate- reviewing court)
Petit jury- Trial jury that acts as finder of fact and returns a verdict in criminal and civil cases
Decisions must be unanimous (some states have moved away from this)
Decide guilt or innocence
Grand Jury- only are paneled to help the prosecution to see if there is enough evidence to indict the
Lawyers are counselors, advocates, and public servants
Organization of the court System
1. Supreme (in NY highest is court of appeals)
a. The supreme court is NOT always the highest court in the state
2. Appellate (court of appeals or circuit court)
3. Trial
Subject matter jurisdiction- power over the issues involved in the case; can be limited to a subject matter
or area in which parties live
Supreme Court- 7-9 justices
Intermediate (reviewing courts)- 3-5 justices
Trial court- 1 judge
1. Trial courts,, lower wants facts to apply to law
2. Appellate courts, evaluate questions of law and refere factual laws to trial court and jury
decisions ,was there an error of law? Whether law was applied correctly
GA state business court- judge walt davis, started in august 2020, complex business disputes
a. Needed this for complex business litigation
b. Like the Delaware Court of Chancery
Federal Jurisdiction
1. Questions of federal law
2. US is a party
3. State disagreements (case between states)
4. Suits between citizens of different states ($75,000 or more)
Georgia has 3 federal district courts
Power Of Judicial Review
- Judicial review: ultimate power of invalidate actions by the president or the congress
- Judicial restraint: power should not be used except in the unusual cases
- Judicial activism: power should be used when the needs of the society justify its use
Severability: if the clause in the legislation is so essential then it cannot be cut out to save the rest of the
Commerce clause-- usually always win, congress power, lead with this
Chapter 4
Standing to sue- Plaintiff establishing that he or she is entitled to have the court decide the
Personal jurisdiction- Having authority over the parties to the case on the part of the court
Long-arm statutes: provision for the service of process beyond the boundaries of the state
○ 1. Has committed a tort within the state.
○ 2. Owns property within the state that is the subject matter of the lawsuit.
○ 3. Has entered into a contract within the state or transacted the business that is
the subject matter of the lawsuit within the state
Class action suits- One or more plaintiffs file suit on their own behalf and on behalf of all other persons
who may have a similar claim
Methods to discovery
• Interrogatories: Series Of Written Questions presented to the opposing parties; cheap; and sometimes get
delivered with the complaint; have to be answered by the party receiving them within 30 days
• Request For Production Of Documents:Either party asking the other to produce specific documents
• Depositions:Lawyer Orally Asks Questions Of The possible witness; expensive but can be worth it; some people have
bigger egos that get into the way of the deposition; has to be recorded by a court reporter
• Request for admission:Requesting The Other party to admit that certain issues presented in the pleadings are no
longer in dispute.
Peremptory challenge: No cause or reason needs to be given to excuse a prospective juror
Cannot use these for racial or gender discrimination
Burden of Proof
Civil Cases: “beyond a reasonable doubt”
Criminal Cases: “preponderance of the evidence”, “clear and convincing proof” (highest level of
Deciding the Case
- Main job of the jury is to determine the facts of the case and apply the law to those facts as
instructed by the judge
- Verdict- decision by the jury announced in courtroom
- Judgement- judge deciding whether to accept the verdict or not
- JNOV- asking the judge to set aside the jury’s verdict (saying their off the rails)
- rarely ever granted
- only used in civil cases- but we don't like to circumvent the jury
- make a claim that the judge has a wack judgement of the law and they want a new trial
Res Judicata (“its decided”) : Decision of the court is final and conclusive on all issues between the parties
Chapter 6
The Constitution → 7 Articles and 27 Amendments
Seperation of Power:
- Federalism is the separation of powers between the federal and local state
- Federal govt recognizes that states and sovereignty
- State govt’s may not limit the federal govt’s exercise of power
Supremacy Clause: FED OVER STATE
1. Constitution is supreme over all laws
2. Federal law is supreme over states laws
3. Preemption → higher law displaces lower law if in conflict
4. State law is invalide is it conflicts with federal law
Commerce Law
- Provides federal government the power to regulate business
- Regulation of foreign commerce (total and exclusive)
- State and local governments may regulate such activities if they are conducted entirely
within the state’s boundaries
- Regulation of interstate commerce
- States cannot impede interstate commerce as decided by the Supreme Court
- court created a new test- if there is a huge economic effect or will create a huge economic effect
then congress can step in and take control
Contract Clause
- States cannot enact laws that impact rights and duties under existing contracts
- Does not apply to federal government
- State laws passed during emergency situations can be approved
Police powers
State and local government authority to regulate business stems from “police powers.”
Dormant commerce clause- prohibited laws to interfere with interstate commerce
Amendments and Basic Provisions
- Basic constitutional rights are not absolute
- Depends on the nature competing public policy
- Guarantees exist to protect the minority from the majority
- Constitutional rights vary from time to time
First Amendment
- Freedom of religion
- Establishment clause- congress shall make no law respecting or establishing a
country wide religion; cannot force someone to be a certain religion
- Free exercise clause- cannot ban anyone from being a certain religion
Freedom of speech- covers written and verbal communication and symbolic speech
- Unprotected Speech (from freedom of speech in constitution)
1. Fighting words
2. Obscenity
3. Defamation
4. Clear and Present Danger
5. False advertising
Commercial speech - freedom of speech protects corporations and individuals
Freedom of press
- The press is the only organized private business given explicit constitutional protection
- Construed to prohibit prior restraints on publications
- Libel is used to recover damages as a result of printed defamation of character
Second Amendment
One’s right to possess guns
Fifth Amendment: Eminent Danger (takings clause)
- Allows the government to take private property for public use after paying just compensation
Kelo v. City of New London Connecticut (2005)
- Whether corporation in taking property from private owners for the purpose of economic
development satisfies the public use requirement for the 5th amendment
- Verdict: did not violate 5th amendment, private build benefit the overall public
Fourteenth Amendment:
No state shall make or enforce any laws that
1. Abridge privileges or immunities as citizens of the US
2. Deprive any persons of life, liberty, or property without due process of law
3. Deny any person within its jurisdiction the equal protection of the laws
Equal Protection (can a law discriminate)
- Minimum scrutiny - rationally connected to a permissible or legitimate government objective
- Presumed valid: height, weight, age, testing school desegregation, veteran’s preference,
- Strict scrutiny - necessary to a compelling state interest
- Suspect Classes- race, national origin, legitimacy
- Fundamental right: to vote, to travel, to appeal
- Quasi-strict scrutiny - substantially related to an important government interest
- Quasi-suspect classes: gender
Chapter 7
Property is the legal right to exclude others from resources that are originally possessed or are acquired
without force, theft, or fraud
Property rights are absolute but not infinite (constitutional rights are not absolute)
- Absolute means that you can seek out police or legal courts to protect or you cannot
- Not infinite means uses protected by the legal fence do not go on forever
Divisions of property
1. Real Property - land and interests in land
2. Personal Property - all moveable resources
- Tangible
- Intangible - intellectual property (copyright, patent)
Property Boundaries
1. Air rights- you own the air as long as you can connect it to your property
2. Subsurface rights- landowner also owns all minerals, gasses and oils beneath the surface of the
3. Fixtures on land- an object of personal property that has become an object of real property
a. Physical attachment
b. Closely associated with the use to which the land is put (unless stated in the contract
Types of Ownership→
Fee simple: represents the maximum estate allowed under the law
- Fee simple absolute- involves no limitations or conditions attached
- Fee simple defeasible - may have a condition attached to its transfer
Life Estate: grants ownership in land for the lifetime of a specified purpose
- Present interest
- Remainder interest - future interest waiting on the present interest to expire
Leasehold Estate: property rights granted to tenants by a landlord
Concurrent ownership: more than one person can own the same property (share the entire resource)
- Tenancy in common- many people
- Joint tenancy - 50/50 , right of survivorship (the other party gets all of the property if the other
person dies)
Special Applications of Property →
Easement: right to cross over land
- Easement by reservation -sells land but reserves and easement
- Natural easement - get from land to nearest road
- Negative easement - adjoining landowner can’t negatively affect your property
- Easement by prescription - wrongfully, openly crossing land for 20+ years; earns the right to
cross the land legally after the set number of years; does NOT mean they own it
- Utility easement - areas of property for utility companies
Bailments: good placed in another's possession to be returned in the future (bailor=owner, bailee=
possessor) NOT a transfer of ownership
Burden of proof is on the bailee, law presumes that the bailee has breached duty of care when
the item is not returned in proper condition
Lost V. Mislaid Items
- Lost- unintentionally left by the owner; finder’s keepers
- Mislaid- person intentionally put something somewhere with the intent to return to it but forgot
to pick it up
Adverse Possession: provides ownership of land under state statute when possession is…
Intent is not a factor
- Open and notorious
- Contiguous
- For a prescribed period of time
- Actual and exclusive
- Wrongful
Doctrine of Confusion: illustrates importance of boundaries to the concept of property
- Occurs when (fungible) identical goods get mixed together
- Have to determine if it was innocent or nefarious
Title: Ownership represented by a physical document registered with the state for certain resources
Deed: document of title that transfers ownership of land
- Warranty deed- guarantees the grantor has a right to sell and claim
- Special Warranty deed- warrants only against anything occurred during their physical ownership
- Quitclaim deed- transfers ownership with no promises at all about owners title
Security Interests (mortgages, deeds of trust, land sales contract and secured transactions)→ Recording statutes
→ mortgages and deeds of trust must be registered in a recording office → provide notice of the security
interest to potential buyers and lenders of land
Article 9 of Uniform Commercial Code: set of laws that controls security interests
Have to attach and perfect security interest:
- Attachment- Secured party holds given value , Debtor owns the collateral, Security agreement is provided (must be in
writing, signed by debtor, and must have description of collateral)
Perfection- Arises When Security Interest Is attached and creditor has taken all proper steps required by
Article 9
Artisan’s Liens & Mechanic’s Liens - line cutters
Chapter 8
Sources of Contract Law
- Legislation: Uniform commercial code (article 2), contracts for goods
- Common law- judges’ decisions; contracts other than goods (NDA)
Classifications of Contracts
- Bilaterals and unilateral contracts
- Bilateral- two promises (mutual)
- Unilateral- one promise seeking the performance of an action
- Express and implied-in-fact
- Express- written or orally given contract
- Implied in fact- no express terms either oral or written but contract based on their
- Implied-in-law or quasi-contracts
- Neither party intended on the contract but one party was unduly benefited and the other
party can use this form of contract to get the benefit back (no actual contract)
- Ex- overpayment
Contractual Performance Terminology:
- Executed Contract -parties have performed their promises
- Executory Contract -parties have not performed their promises
Requirements for an Enforceable Contract:
1. Offer to enter a contract
2. Acceptance of the offer
3. Consideration for each promise
4. Capacity of each party to enter into a binding agreement
5. Legality of subject matter
How can you terminate an offer?
**must do before the offeree accept the offer
1. Revocation by the offeror - the offerer takes back the offer
2. Rejection by the offeree - the offeree does not accept the offer
3. Counteroffer - when a person rejects the offer, you can reoffer with different terms
4. Lapse of time - the offeree does not accept within deadline or reasonable time period
Automatic offer termination
1. Subject matter destruction- when the object of the contract is destroyed or legally eliminated
2. Offeror death or insanity- when the offeror no longer has the capacity to make the offer
3. Subject matter illegality- when a change in the law renders the agreement illegal, acceptance is no
longer possible
- Mirror Image Rule: the acceptance must match the offer exactly (if not, it's a counter offer)
- Mailbox Rule: acceptance becomes legally binding when placed in mail
- Receipt of a legal benefit of the suffering of a legal detriment
- Option contract-- firm offer (exception); in the sale of good, the offeror must keep the contract
open for no more than 3 months without any consideration
- Accord and satisfaction- if you are offered a settlement and take it, you give up the right to sue
Promissory Estoppel
- The doctrine states that a party who reasonably relies on a gratuitous promise can ask a judge to
award compensation for that reliance
Capacity- one’s ability to be bound by a contract
Minors- cannot be legally bound to contractual promises with, can disaffirm contract and legally
recover any consideration to the other party. Once 18, contracts ratify and they lose ability to
disaffirm contracts.
Intoxicated or Mentally Incompetent Persons- contracts are voidable depending on the person’s
capacity to understand the contract’s nature and purpose
Commercial speech
- Freedom of speech protects corporations and individuals
- Protects the listener and the speaker
- Not as extensive as individual rights
- Government can limit commercial speech and when a state interest is at stake
Oral contracts- generally as enforceable as written contracts if meeting the requirements for a contract
- Statute of Frauds
- Legal requirement that certain contracts be in writing
- Business contracts required in writing
- Exception to Writing Requirement:
- Part performance - creates an exception that the sale of land must be in writing,
When a buyer of land has made valuable improvements in it, or when the buyer
is in possession of it and has paid part of the purchase price, even an oral
contract to sell is enforceable
- Rules involving goods- specifically manufactured goods= buyer places custom
order over 500 and seller begins to produce than they can enforce a oral contract
- Judicial admission - If there is a judicial admission, the statute of fraud-based
defense disappears. The judge proceeds to decide whether the oral contract is
valid and enforceable
Chapter 9
Rules of Interpretation:
Handwritten terms → typed terms → preprinted terms
Parol Evidence Rule
- Prohibits testimony about the oral negotiation that results in a written contract
- Applies to evidence of oral agreements made at the time of or prior to the written contracts
- Exception allows evidence of oral agreement that explains the meaning of written terms without
changing the terms
- Duty of performance: performance required by the other party as promised in the contract
- Discharged: occurs when the party is relieved from other further responsibilities of performance
Conditions of Performance
- Condition precedent: if something must take place in the future, before a party has a duty to
- Condition subsequent: excuses contractual performance of somes future event takes place
Levels of Performance
1. Complete performance - complete payment for service
2. Substantial performance - attempt to fully perform, but has fallen short; remedies for damages
3. Material breach - performance below what has been previously promised to complete
Excuses for Nonperformance
- Impossibility of performance
- Commercial impracticability
- Waiver (party intentionally relinquishes right to performance)
- Release (party announces the other does not have to perform)
Rescission: equitable remedy which allows a contractual party to cancel the contract
- requires each party to return the consideration given the other. Often used in fraud
misrepresentation or mistake cases. May be coupled with restitution which requires a party to
compensate for something that cannot be returned
Injunction: court order for a party to do something or refrain from doing something, often employed
when a license to property or intellectual property is at issues
Efficient Breach- one party purposefully breaches the contract and pays out the monetary compensation
because they do the numbers and figure that they will be in a better position if they just breach it and pay
the remedies instead of doing what they promised
Specific performance- court ordered remedy when subject matter of the contract is unique; parties are
compelled to perform their promised actions
Third Parties rights:
- Beneficiaries
- One or more of the original parties in a contract may intend for the contract to benefit a
third party
- The beneficiary can sue for damages if they were intended to receive benefits from a
- Assignment of contracts - the transfer/ sale of rights under a contract. Assignor assigns rights of
contract to assignee
Novations - three or more parties are in the contract and agrees to relieve the obligor from liability
by substituting the assignee in their place
Chapter 10
Categories of Torts
1. Intentional - deliberate action that caused injury
2. Negligent - some sort of injury because they failed to act reasonably
3. Strict liability - did not act negligently or intentionally but some act that you took caused
damages and you are strictly liable for it
Intentional Torts:
- Assault - placing another in the immediate apprehension that they are about to be harmed
- Battery - Illegal touching without the person’s consent
- Infliction of mental illness - Battery to the emotions
Has to prove that the conduct that has happened was so extreme that it was outside of the scope
of everything and caused damages
Invasion of privacy - misappropriation of name or likeness, intrusion or physical solitude, public
disclosure of highly objectionable, private information
Defamation - something said about someone else that it meant to hurt their reputation
Invasion of Privacy: 3 types of invasion of personal interest
1. Misappropriation of name and likeness- if you use anyone’s picture or likeness or name, you MUST
have their release and consent
2. Intrusion on physical solitude- cannot search through people’s personal stuff; cannot tap into phone
calls; wire someone
3. Public disclosure of highly objectionable private information - even if it's true, can still be an invasion
of privacy
- Slander- oral defamation
- Libel- written or published over radio/television
Negligence: what's clogging up the courts
Elements you have to prove1. Duty of care- general duty on all of us to act reasonable; presumed that the ordinary, reasonable person
would act reasonably to take precautions for an event that you can foresee
2. Breach of duty - acting unreasonably behavior; you can be vicariously liable (like if your employee is on an
errand for you and they commit a crime- you are liable too)
3. Causation in fact - (actual cause) Before a person is liable to another for negligent injury, the person’s
failure to use reasonable care must actually have “caused” the injury
4. Proximate causation - (legal cause)- the proposition that those engaged in activity are legally liable only
for the foreseeable risk that they cause
Actual injury
Res Ipsa Loquitur- “the thing speaks for itself”, sponge in patients body after surgery
Defenses to Negligence: States decide this
- Contributory negligence -plaintiff contributed to injury even 1%
Comparative negligence - compares fault based on % (can be partial and pure)
Assumption of risk - plaintiff knowing and willingingly undertaking danger
Strict Liability in Tort
- Injury causing behavior that is neither intentional nor negligent
- Ex: 2 main
- Strict products liability
- Production defects - Not created to standards- mistakes in the production
- Design defects - when a product is manufactured according to the manufacturer’s
standards, but the product injures a user due to its unsafe design
- Ultrahazardous activity
- Keeping dangerous animal as a pet or explosives
Dram Shop Acts - strict liabilities on bar owners, you are responsible for damages caused by those who
you serve
Compensatory damages- compensate plaintiff for injuries suffered
Punitive Damages: awarded by courts to punish defendants
Chapter 13
Malum in se VS Malum Prohibitum
- Malum in se- evil in of itself
- Ex: murder, rape
- Malum prohibitum- unlawful based on society standards
- Ex: speeding, drugs
White‐ collar crime: Any illegal offense that occurs in a business or professional setting
Classification of Crimes
- Felonies: punishable by fine or imprisonment in a penitentiary for a period of one year or more
(commenced with a grand jury indictment)
- Misdemeanor: punishable by a fine or jail sentence of less than 1 year (commenced with the
government issuing an information)
Pleas to Criminal Cases
- Guilty
- Not guilty
- Nolo Contendere “no contest” (can’t be used in civil)
- Allows for the judge to sentence you as if you plead guilty but in civil court, the opposite
party has to build their case from the ground up and cannot use the result of the criminal
case to get damages
4th Amendment
- Protect individuals and corporations from unreasonable searches and seizures by the government
- Requires the police to obtain a search warrant
- Exceptions:
- Warrantless inspection
- Search incident to arrest
- Exigent circumstances
- Highly regulated business
Ex: RIley V. California → cell phone during an arrest is unconstitutional
5th Amendment
- protects accused from testifying against themselves
Does NOT protect
- Being required to product physical evidence
- Producing business records
- Corporations (exception sole proprietorship because they cannot separate the person from the
business entity)
Individuals cannot be tried twice in the same governmental entity, except if in two different courts like civil
and criminal or state and fed→ “double jeopardy”
Miranda rights (6th Amendment)→ mere silence is not enough!
6th Amendment
- Speedy and public trial
- Trial by jury
- Be informed of the charge against oneself
- Confront the accuser
- Subpoena witnesses in one’s favor
- Have the assistance of an attorney (only when incarceration is a possible punishment)
8th Amendment
Prohibits the federal government from imposing excessive bail, excessive fines, and cruel and
unusual punishment.
Death penalty should not be applied to anyone who was under 18 years old at the time the crime
was committed and to anyone who is mentally handicapped.
Obstruction of Justice→ destroying evidence
- Robbery - stealing with force
- Burglary -stealing in general
Embezzlement → fraudulent appropriation of property that was entrusted to you
Chapter 11
Trade Secret- any form of knowledge that is kept secret (reasonable measures taken to keep it secret- only
way to get it would be misappropriation) and has economic value
Misappropriation- when one improperly acquires or discloses secret information
- Exceptions:
- Independent creation- happened to create the exact information on their own
- Reverse engineering- have the final product and worked backwards unless it was
specifically defined in a contract not to do this
Patent law- new invention→ legal monopoly-exclusive right created by statute and conveyed by the PTO
Utility-20 yrs
Design (appearance) -15 yrs
Plant- 20 yrs
Patents have to have:
- Novelty- Something new and different from the prior art
- Nonobviousness- Ability of an invention to produce surprising or unexpected results
- Utility- must do something useful
- Challenge the validity of the patent
- can claim that the patent wasn’t valid if it does not meet these criteria:
- 1. shown by other evidence that the invention was disclosed to the public in some way
before the application for the patent
- 2. not subject matter that can be
Marks are protected by the Lanham Act of 1946
1. Trademark - any mark, word, picture or design attached to a good to indicate their source;
designated by the superscript TM and by the circle R of its registered
2. Service mark - mark that is used in advertising service; SM superscript
3. Certification mark - not used by the the owner; guarantees that the product that has this
certification is kept up to standards; meant to be used by other people
4. Collective mark - not meant to be used by other people; only can be used by particular members
of the organization
5. Trade dress - the certain total visual image that defines a good or service
*color and soundmarks also but they try not to give out a lot ot these
→ trademarks don't want to become generic because then they can lose their marks
Trademark registration
- Pto places in official gazette (tells all mark owners that you are seeking ownership)
- Registered in the principal register (then it is official)
- Trademarks have unlimited lives- have to tell the PTO every 6 years that the trademark is
still in use and every 10 years to renew
- If acquires a secondary meaning→ listed on supplemental register for five years a name or descriptive
terms can acquire full trademarks (honeybaked ham)
Trademark enforcement
infringement - civil violation of a trademark
Federal Trademark Dilution Act, 1995- Prohibits the usage of a mark same as or similar to another’s
trademark to dilute its significance, reputation, and goodwill
(only famous marks)
- Types:
Blurring ‐ When usage of a mark blurs distinctiveness of a famous mark
Tarnishment ‐ When usage of a mark creates a negative impression about the famous
- Mark is not distinctive
- Fair use: any sort of discussion (media), criticism, parodies or educational purposes
- Mark is generic
Criteria for copyright protection:
Work must be original
Must be fixed in a tangible medium of expression (books, hard drive, etc.)
Must show creative expression (mere effort isn't enough; not just an idea)
- As of January 1, 2021, anything published in 1925 or before is released to the public domain
Chapter 14
Chapter 15
Administrative Agencies- Boards, bureaus, commissions, and organizations that make up the
governmental bureaucracy
– Quasi‐ legislative- agencies have the ability to issue rules and regulations (preempt state
– Quasi‐ judicial- they make decisions like a court; binding decisions
5-7 members approved by the senate- no more than the simple majority may be of the same political
ALJ- administrative law judges
Chapter 17
Securities- Any interest or instrument that offers the right to subscribe to or purchase stock, bond, or any
certificate of interest
Securities and Exchange Commission (SEC)
Responsible for administering the federal securities laws
○ 5 commissioners appointed by the president
Consists of five commissioners
○ non-partisan
○ No more than 3 commissioners can belong to the same party
Possess quasi‐ legislative (it has adopted rules and regulations relating to financial and other
information that must be furnished to the Commission) and quasi‐ judicial powers (the SEC also
is involved in a variety of investigations)
Laws come in waves (like a roller coaster)
Securities Act of 1933
Requires the disclosure of information to the potential investors
Applies to the initial sale of the security
Documents involved:
Registration statement- detailed disclosure of financial info, essential facts, description of
properties, what do they own; info about the management of the company
Prospectus: set forth the key information contained in a company’s registration
- Pre Filing period- not registered with the SEC; prohibited to sell covered securities during
this period but allowed to engage in preliminary negotiations and agreements with
- Waiting period- after registration is filed with the SEC, the SEC is determining whether
they should admit the sale of your security; cannot sell any securities under the act but
you can seek a buyer or solicit a sale but you can’t consummate an offer yet; solicitation
takes place with tombstone ads (These ads are brief announcements identifying the
security and stating its price, by whom orders will be executed, and from whom a
prospectus may be obtained)
- Post Effective period (usually 20 days)- registration becomes effective at the end of the
waiting period; don’t want to delay the waiting period; securities can be sold
Securities Exchange Act of 1934
Section 10(b) and Rule 10b-5: Anti Fraud Provisions
- The concept of fraud under Section 10(b) encompasses not only untrue statements of
material facts but also the failure to state material facts necessary to prevent statements
actually made from being misleading. (half truths are also fraudulent)
- failure to correct a misleading impression left by statements already made, or silence
where there is a duty to speak, gives rise to a violation of Rule 10b-5 because it is a form
of aiding and abetting the deception.
Insider trading- illegal when a person trades a security when in possession
Tipper-Tippee Liability
- Tippee: the person who receives material non-public information from a tipper
- Tipper: a person who discloses material nonpublic information to another person
Private Securities Litigation Reform Act (PSLRA) of 1995
Limits frivolous lawsuits, before this law plaintiffs would file lots of securities lawsuits against
companies (fishing for suits), limits damages that plaintiffs could recover
Tried to make lawsuits a little more fair for corporations
State Blue Sky Laws- probably because they were intended to protect the potential investor from buying
“a piece of the attractive blue sky” (worthless or risky securities) without financial and other information
about what was being purchased
Uniform Securities Act, 1956- provides a model for the blue sky laws
Sarbanes-Oxley Act (SOX) of 2002
Primary purpose is to ensure the accuracy and integrity in the financial reporting of public
Create PCAOB (given oversight of accounting firms that audit public companies.)
○ requires that auditing firms refrain from conducting a variety of nonauditing services. These
services include bookkeeping, system designs and implementation, appraisals and valuations,
actuarial services, human resources functions, and investment banking
Auditing and consulting can never be in the same company
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
Up the ante on whistleblower incentives- if you whistle blow and it's right, you get a bounty
(percentage of the recovery)
Address Many Issues Of Financial Reform
Congress Authorized The Creation Of New administrative agencies to achieve the goals of
Dodd‐ Frank Act
○ Financial Stability Oversight Council (FSOC) - trying to avoid taxpayer bailout
○ Federal Insurance Office (FIO)
○ Office of Housing Counseling (HUD)
○ Office of Credit Ratings (SEC)
○ Investment Advisory Committee (SEC)
○ Office of Investor Advocate (SEC)
Jumpstart Our Business Startups (JOBS) Act of 2012
○ Ease burdensome federal regulations
○ Allow individuals to invest in start‐ ups through relaxed rules (for some IPOs)
Title II
○ Allows companies to advertise that they are seeking investments from accredited
investors (those with $1 million in assets or annual income of more than $200,000)
Title III
Allows a company to raise up to $1 million by selling securities
Crowdfunding - raise money even through non accredited investors (raise small
amounts of investment dollars from many people, using the Internet to spread the
investment opportunity)
Anne and Josie Notes From Lecture
Public law:
US constitution
State constitution
Local ordinances
Case law
Trial court- 1 judge
Court of appeals- 3-5 judges
Supreme court- 7-9
Supreme court is NOT the highest court in every state
- Ex new york the court of appeals is the highest one
Georgia has 3 federal district courts
Writ of certiorari- needs 4 scotus judges to appeal
Questions of law- appellate level
Petty jury- in both civil and criminal cases and decide the verdict
Grand jury- just criminal cases to say if there is enough evidence for a case
4 ways into the federal courts
1. Federal question
2. Diversity of citizenship
a. Cases that are $75,000 or more
3. US is a party
4. The states are fighting
Commerce clause- superpower of congress
Long arm statute- allows states to reach across states line as long as they have minimum
Government files a claim against the defendant for a criminal case
MOST cases settle before they reach actual trial
1. interrogatory - least expensive; just a list of questions
2. Dofe
3. Dhjdsj
Default judgement- if you don't show up to court or answer within 30 days; the
defendant gets their reasonable claim
Statute of limitations- limit time to file claim
Courts must always have subject matter and personal jurisdiction, plaintiff must have
JNOV- the judges make a different decision than the jury
Strikes for cause- prosecution can strike people from the jury without any reason (only
have a few per case); but can’t strike based on gender or race
Clear and convincing proof- most substantial and strictest one
Jury renders a verdict
Judge renders a judgement
Supremacy clause- federal law is supreme (federal law preempts state law)
Contract clause- only applies to states
Constitutional rights are NOT absolute
- Categories of unprotected speech
- Defamation
- False and deceptive advertising
- Inciting violence
- Fighting words
- 5th amendment: Takings clause (eminent domain)- can take your land with
- 14th amendment- equal protection clause- don’t treat people differently without a
good cause
Discrimination can be legal if it passes
strict scrutiny- race, age
- Quasi-strict scrutiny- gender
Fee simple absolute
Tenants in common
Joint tenants with rights of survivorship
Quit claim deed
Warranty deed
Life estate- present interest
Easement by prescription- just a right to traverse or access the property; Hilton Head
lady who let people openly, wrongly cross her property to get to the beach and so they
earned the right to cross it without interference
Adverse possession- , notorious, wrongly, openly be on a piece of property for a
prescribed period of time; then you legally own the land and can have your name on the
Loss vs mislaid- determined by circumstances by which it was found
- lost - who found it
- Mislaid- kept it possession of premises owner
Have to attach to the debtor and perfect the
Warrant requirement
Self incrimination- (sole proprietorship is the only business that can claim this)
Double jeopardy- cannot be tried by the same governmental entity for the same crime
Does not count if you are tried by the state and federal courts
Only have the right to attorney when incarceration is a possible punishment
Not guilty
Nolo contendere- not available everywhere, can save you if you are going to be charged
Most common way to acquire resources- idea of exchange
- Offer
- Acceptance must mirror offer exactly to be valid
- Acceptance
Bilateral- promise for promise
Unilateral- promise seeking action in return
Express- oral/written
Implied in fact- formed in conduct
Implied in law- one party has been unjustly enriched at the expense of the other party
Executed- promise has been performed
Executory- have not performed your promise yet
Condition precedent- has to be done before the promise can be done
Injunction- refrain from activities order from court
Waiver and release- after you’ve breached
Release- before the breach
Third party rights for contracts- only if they are intended third party (creditor or
- No reward if not intended
Efficient breach- you breach the contract because paying out the breached thing is better
than actually performing the promise
Oral contracts are fine as long as they meet the 5 requirements for a valid contracts
Statute of frauds- has to be written in order to be accepted by the court
Termination of a contract
Consideration- skin in the game; both people want something
Option contract- have to give them consideration (usually money) in order for them to
keep the contract open
Firm offer contract- in sale of goods; the seller has the keep the contract open for no
more than 3 months without any consideration
Promissory estoppel- michael in the office with scotts tots; agreed to do something and
the people reasonably assumed that this would occur so they relied on it; the promising
party has to follow through
Handwritten terms will trump typed words
Tort- Negligence- duty was breached, proximate cause, injury
- Most number of lawsuits
- Res se loquitur- thing speaks for itself (sponge left in body)
- Defenses: assumption of the risk,
- Contributory negligence - if the plaintiff is even 1% at fault then the
case is thrown out
- Partial - as long as the plaintiff is less than 50% negligent then the
case can occur and their percentage of guilt is subtracted off of the
- Pure - whatever % negligent the plaintiff is subtracted off the
damages against the defendant
- Intentional- intent
- Assault, battery, invasion of privacy, defamation
- Strict liability
Patents protect inventive act, has limited protection
- Lanham act of 1946
If your mark becomes generic, you lose your right to make money off of it
Closely held v publicly held businesses
Sole proprietorship
Partnership- jointly and severally liable
Corporations (domestic, foreign, alien)
S corporations- persons of a corporations are treated as partners for tax purposes
LLC- organizers form
Piercing the corporate veil- alli case, government allowed to go after their personal
accounts even though the corporation was responsible
ALJ- administrative law judges
Federal register- published with proposed orders and published orders
Exhaustion of remedies
Congress has delegated authority to administrative agencies so the courts have a very
limited scope when reviewing cases in the administrative agencies and usually rile in
favor of them
State securities blue sky laws- federal law does NOT preempt the state law in this case
Title 7- 15 or more employees
Retaliation act- just benign a witness to someone’s case and your employer messes with