TIM 301 Final Study Guide
Chapter 1: Intro to Contemporary Hospitality Law
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Delegated powers: those are powers expressly allocated to the federal government in
the constitution
Interstate commerce: business affecting more than one state, as opposed to business
done between two parties in the same state
Legislative process: process which the federal government as well as other unites of
government adopt laws
Congress: primary lawmaking body of the federal government, adopts laws
Precedent: a basis for deciding future cases
Stare decisis: gives some uniformity to law
Case decision: interpretation of the law applied by a judge to a set of facts in a given
case
Statutory law: law promulgated by the legislature and generally agreed to by the
executive
Administrative law: refers to laws that define the powers, limitations and procedures of
administrative agencies
Administrative agency: governmental subdivision charged with administering legislation
that applies to a particular industry
Tort: violation of a legal duty by one person that causes injury to another
Negligence: breach of a legal duty to act reasonably often defined as carelessness
Fraud: an intentionally untruthful statement made to induce reliance by another person
Compensatory damages: refers to money awarded to the plaintiff to compensate for
injuries
Punitive damages: also called exemplary damages, is money awarded in excess of
compensatory damages
CRIMES
o Theft of services: use of services such as a hotel room without paying and with
the intent of avoiding payment
o Assault: intentionally causing physical injury to another person
o Rape: forcible sexual intercourse against the victim’s will
Probation: system whereby criminal offenders remain out of jail but are supervised by a
probation officer
Reasoning: the basis and rationale for the decision
Chapter 2: Legal Procedures: Journey of a case through the Courts
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Claim: demand for remedy, usually money, to compensate for a perceived wrong
Parties (to a lawsuit) are individuals engaged in a conflict
Plaintiff: party who initiates the lawsuit
Defendant: party the plaintiff sues
To be successful in law… plaintiff must prove that…
o The defendant violated the law
o Plaintiff suffered an injury or loss
o The cause of plaintiff’s injury or loss was the defendant’s violation of the law
Complaint is a document issued by the plaintiff that contains allegations
Jurisdiction: the authority of a court to hear a case
Subject Matter Jurisdiction: court’s power to decide cases of a particular category
Personam jurisdiction: which means authority of a court over the defendant
Diversity of citizenship: meaning that the plaintiff and defendant are from different states
or one is from a different country and the amount of money in controversy exceeds $75,000
Basis for the claim: complaint must explain to the defendant and the court the
circumstances comprising the plaintiff’s claim. The complaint therefore needs to contain
allegations detailing the reasons why the plaintiff is suing
The claim for relief: the complaint must tell the defendant and the court what the plaintiff
wants from the defendant. Plaintiffs in civil cases customarily seek the relief in the form of
an award of money
Summons: a document ordering the defendant to appear and defend the allegations made
against him
Service of process: delivery of the summons and complaint to the defendant.
Default judgment: a court order summarily declaring the plaintiff the winner of the lawsuit
due to the defendant’s failure to defend
Motion: request to a judge for relief that is made while a lawsuit is ongoing
Pleadings: the complaint, answer and reply
Motion for summary judgment: asks judge to decide the case in favor of the moving party
without the need for a trial
Settlement: resolution of a dispute without a trial
Trial Procedure Sequence:
o 1. Selection of the jury
o 2. Opening statements
o 3. Plaintiff’s case-in-chief
o 4. Defendant’s case-in-chief
o 5. Plaintiff’s case in rebuttal
o 6. Summation
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o 7. Judge’s charge to the jury
o 8. Jury’s deliberations
o 9. Verdict
o 10. Judgment
Types of Trials:
o Jury – tried by a jury
o Bench – tried by the judge
Appellate courts: courts that hear appeals
Alternative dispute resolution (ADR) – quicker less formal and less expensive ways instead
of a trial. Types include…
o Arbitration – process in which a dispute is submitted for resolution to an arbitrator,
an objective third party who may or may not be a lawyer
o Mediation – process in which a mediator facilitates discussion and negotiations
between the parties to dispute in an informal setting
o Summary jury trials – lawyers summarize their arguments and evidence to an
informal jury without using witnesses (used primarily in fed. Courts)
Citation: reference to a legal authority such as a court decision, a statue or a treatise
Chapter 3: Civil Rights & Hospitality Businesses
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Discrimination: act of treating people different from and less favorably than others. This is
manifested under primarily 2 circumstances… access to places of public accommodation
and employment
Civil rights: personal rights that derive primarily from the constitution
Scope of civil rights act of 1964: outlaws discrimination in places of public accommodation
based on race, color, religion and national origin
Interstate commerce: business transactions between people or companies from two or
more states
Transients: people passing through a place for only a brief stay or sojourn
State civil rights laws: virtually every state has a civil rights law that in part duplicates the act
and in part expands its coverage
Americans with disabilities act: federal law passed by congress in 1991, is a far reaching
commitment to the rights of the disabled
Chapter 4: Contract Law & the Hospitality Industry
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Contract: agreement between two or more parties that is enforceable in court
o Contracts can be written, oral or implied
Capacity to contract: Valid contracts must have capacity to contract, ability both to
understand the terms of the contract and to appreciate that failure to perform its terms
can lead to legal liability including a lawsuit
Voidable contract: one that can be canceled at the option of one party
Mutuality: all parties to the contract are interested in its terms and intend to enter an
agreement which they will be legally bound
Offer: proposal to do or give something of value in exchange for something else
Invitation to negotiate: open discussions that may or may not lead to an offer
Antitrust laws: laws that restrict limitations on competition
Consideration: something of value exchanged for something else of value
Forbearance: agreeing to refrain from doing something you have a legal right to do or a
promise to forbear
Genuine assent: parties must genuinely agree to the contract terms
Fraud: unintentionally untruthful statement made for the purpose of misleading
someone, usually for the fraudulent party’s gain
Unilateral mistake: error made by only one party to the contract as to the terms of
performance expected
Mutual mistake: mistake shared by both parties
Innocent misrepresentation: untruthful statement that the speaker believes to be
accurate
Absolute conditions: must be performed or the promising party will be in breach of
contract
Compensatory damages: the sum of money necessary to cover loss incurred by the
nonbreaching party as a result of the breach
Damages for pain and suffering: compensation for physical pain, mental anguish, stress
or other similar injury resulting from breach of contract
Punitive damages: sum of money sometimes awarded to a plaintiff in excess of
compensatory damages, the purpose of which is to punish the defendant
Agreement not to compete: provision barring the seller from competing in the same
geographical area for a specified period of time
No-clause termination clause: contract provision permitting either party to terminate
the contract for any reason or for no reason at all
Chapter 5: Principles of Negligence
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Four elements of a negligence case:
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o Existence of a legal duty to act reasonably owed by the defendant to the plaintiff
o A breach of that duty
o Injury to the plaintiff
o Proximate cause
Negligence: breach of a legal duty to act reasonably that is the direct cause of injury to
another
Proximate cause of an injury refers to its direct and immediate cause
Licensee: someone who is on the premises of another by permission or acquiescence of the
owner or occupier, and not by the invitation
Trespasser: person who enters a place without the permission of the owner or occupier
To use doctrine of res ipsa loquitur, plaintiff must prove…
o Plaintiffs injury was caused by an accident that would not normally have happened
without negligence
o Thing causing injury was within the exclusive control of the defendant
o Plaintiff did not provoke the accident
Elements of attractive nuisance…
o Condition exists that is attractive to children and is likely to cause them injury
o Owner or occupier of the land knows or should know of condition
o Due to child’s immaturity, he does not appreciate the danger
Negligence per se: conduct that violates a law or ordinance designed to protect the safety
of the public
Prima facie: evidence of negligence, which means it alone is sufficient evidence if
unrebutted to support a judgment for the plaintiff
Strict liability: liability for injury caused by ultra hazardous activity without regard to fault or
wrongdoing by the party engaging in the dangerous conduct
Scope of employment: furtherance of duties performed by the employer
Respondeat superior: employer is vicariously liable for the employee’s wrongful conduct
Nondelegeable: cannot be transferred or delegated to another
Independent contractor: someone who contracts to do one or more specific projects for
someone else and maintains control of how the work is done
Good Samaritan statutes: laws that protect a person who reacts in an emergency situation
by trying to help an injured person or someone in peril
Contributory negligence: minority rule
To establish assumption of risk defendant must show plaintiff…
o Had knowledge of the risk
o Understood the risk
o Had a choice of either avoiding the risk or engaging in conduct that confronted the
risk
o Voluntarily chose to take the risk
Chapter 6: Negligence & Hospitality Practices
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Insurer: one who is generally obligated to compensate another for all losses
Many aspects in hotel rooms can cause liability including level of cleanliness, condition of
the furniture, windows, lighting, heating, bathroom appliances and the presence of insects
or animals
Electrical and heating devices must be maintained in good working order
Restaurants and hotels with restaurants have a duty to exercise reasonable care to avoid
conditions relevant to restaurants that can result in injury
Hotel is not an insurer of guests’ safety in and around the hotel pool. Hotel is only liable if it
fails to exercise reasonable care
Adequate security can eliminate liability
To avoid liability hotels must be diligent in maintaining their premises in a safe condition
If a hotel chooses to offer medical services, it must ensure that the caregiver is qualified and
has proper credentials
Chapter 7: Guests and Other Patrons
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An innkeeper owes certain duties to those who use the hotel’s facilities
To qualify as a guest, the visit must be for the primary purpose of which an inn operates –
rental of rooms suitable for overnight stay
People are not guests unless they require overnight accommodation
Banquet guests are not considered guests
People who come to shop in the lobby stores are not guests
Innkeeper-guest relationship is a contractual one – the parties exchange the exclusive use
of a guests room for money
Registration at hotel is not required for an innkeeper-guest relationship to exist
Once guests check out and pay bill termination of guest status follows closely in time
Recognize that the innkeeper has special obligations to guests
Illegal activity on the part of guests may not affect their status as guests
A tenant is not a guest
Chapter 8: Protecting Patron’s Property
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Absolute or strict liability: hotelkeepers are liable for any loss of guests’ property occurring
on hotel premises
Infra hospitium: meaning “within the inn”
Exceptions to absolute liability:
o Act of god (ex. Earthquakes, lightning, snowstorms, tornadoes, floods)
o Public enemy (ex. Wartime and terrorist activities)
o Negligence by the guest such as leaving luggage unattended in lobby
Prima facie liability: hotelkeepers are only liable for property loss only if loss occurs through
their negligence, if the innkeeper can prove that the loss resulted from some other cause.
For example, if the goods were stolen by robbers without the aid or negligence of the
innkeeper, the innkeeper is not liable
Limiting liability statutes: laws that restrict innkeepers’ liability
Limiting statutes require that the posted notice also inform guests that the hotel’s liability is
limited
Most limiting statutes do not protect an innkeeper in situations where the loss of guests’
property is due to the hotel’s negligence
Bailment: transfer of possession of personal property from one person to another with the
understanding that the property will be returned
Bailor: person transferring possession of the property
Bailee: person receiving possession
Elements of bailment:
o Personal property
o Delivery of possession
o Acceptance of possession by the bailee
o Bailment agreement
Bailment for the sole benefit of the bailor exists when the bailee receives no benefit from
the bailment
Bailment for the sole purpose of the bailee exists where the bailor lends property to the
bailee and receives nothing in return
Mutual-benefit bailment: (bailment for hire) both parties receive some benefit from the
bailment
Prima facie case: case sufficient to warrant a judgment for the plaintiff if the defendant
does not contradict it with other evidence
Constructive bailment: bailment created by law as a result of special circumstances rather
than by agreement between the parties
Chapter 9: Rights of Inkeepers
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Inkeeper’s rights include room selection, entry into guest rooms, eviction of guests and
pursuing a nonpaying guest
Trespass: legal wrong consisting of entering or remaining unlawfully on the premises
Excessive force: subjects the hotelier or restaurateur to liability
Lien: security interest in the property of someone who owes money
Refusing lodging to a would be guest: (Exceptions)
o Criminals, intoxicated, disorderly, unclean, unkempt
o Suffering from a contagious disease
o If a guest could not pay
Crime of criminal possession of stolen property: committed when a person knowingly
possesses stolen property with intent to benefit herself or someone other than the owner
False arrest: tort of intentional and unprivileged detention or restraint of another person
Forgery: unauthorized alteration, completion, or making of a written instrument such as a
credit card receipt or a check with intent to defraud or deceive
Chapter 10: Guests’ Rights
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Typically an innkeeper cannot enter a guest room except for these situations:
o Normal maintenance
o Imminent danger
o Nonpayment
o When request is made by guest
o When rental period has expired and guest has no basis to believe it has been
extended
If innkeeper finds illegal activity is happening when entering a room, they should report it to
the police
Search warrant: an order from a judge commanding a police officer to search a designated
place for evidence of criminal activity
Probable cause: consists of facts sufficient for a reasonably prudent person to believe that
evidence of a crime is located in the place the police want to search
Chapter 11: Liability and the Sale of Food
 Uniform commercial code (UCC) – set of rules designed to simplify and modernize the law
governing the sale of goods, including food
 Merchantable: goods are fit for their ordinary purpose and are at least of average quality
 Whether an object found in food constitutes a breach of warranty is determined by the
foreign/natural substance test
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Reasonable expectation test: examines whether an object found an food ought to have
been anticipated by consumer
Class action: proceeding pursued on behalf of many people who are injured by the same
cause, and whose cases raise common legal issues
To win foodborne illness cases plaintiff must prove that food purchased from defendant’s
establishment was unwholesome and was the cause of illness
To sue in strict product liability plaintiff must prove…
o The defendant sold a product in a defective condition, such as unhealthy food
o Plaintiff was injured
o Injury was caused by the defect
Kosher is a designation referring to food prepared consistent with Jewish religious
requirements
Inspect food carefully before it is served to ensure it is fit for human consumption
Be sure all claims made about food offered at a restaurant are accurate
Chapter 12: Liability and the Sale of Alcohol
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No business can sell alcohol without first obtaining a liquor license from the state
Sale of alcohol to people that are visibly intoxicated is illegal
Sale of alcohol to habitual drunks is prohibited
Dram shop acts: impose liability on a restaurant or bar for certain injuries resulting from
illegal sales
Liquor liability insurance: covers drams shop liability
Chapter 13: Travel Agents & Airlines- Rights and Liabilities
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Travel industry is composed of…
o Suppliers of travel services (ex. Hotels, resorts, airlines)
o Travel wholesalers that combine services offered into package tours
o Travel agents who sell both package tours and services of individual suppliers
o Travelers
Agency: related term that means a relationship in which one person acts for or represents
another based on authority voluntarily given by that other person
Agent: person that is authorized, one that represents or acts for the principal/agent
relationship
Independent contractors: people who contract to do work for someone else, but are
engaged in an independent business for themselves
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Tariff: rule or condition of air travel that binds the airline and passengers
Class action suit: legal device which many people who have suffered losses from the same
cause sue the defendant jointly
Warsaw convention: intentional treaty that sets limits of liability for lost, stolen, damaged,
or misdelivered baggage
Montreal convention: controls many aspects of lawsuits against airlines for damages and
injuries caused in the process of international airline travel
o Maximum recovery for damage to property in the approximate amount of $1,400
o Calculation of the amount of damages awarded for property loss based on the law of
the state or country where the action is commerced
Airlines overbook which causes them to have to bump people but to limit liability they are
well advised to assist customer in arranging alternate travel planes
Chapter 14: Employment
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Fair labor standards act (FLSA) federal law adopted in 1938 to eliminate unfair methods of
compensation and labor conditions injurious to the health and efficiency of workers
Executive employees are exempt from overtime pay if…
o If employee is compensated salary
o Employee’s primary duty must be managing the business or a department or other
business subdivision
o Employees must regularly direct the work of at least two full-time employees or
their equivalent
o Employee must have the authority to hire or fire other employees or have significant
input in those directions
Comparable worth: refers to jobs requiring different skills and responsibilities that have
equal value to the employer
At-will employment: employment contract between an employer and an employee is
indefinite in duration and can be terminated by either party for any reason or no reason at
any time without liability
VII of the Civil Rights Act of 1964: outlaws that most grounds for discrimination
Equal Employment Opportunity Commission (EEOC): federal government agency that is
charged with enforcing Title VII’s mandates
Bona fide occupational qualification (BFOQ): relieves an employer from liability for
disparate treatment (intentional) discrimination where selection of an employee based on
gender, religion, age or national origin is reasonably necessary for the normal operation of
the employer’s business
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Business necessity: means that criterion has an obvious relationship to job performance
Glass ceiling: refers to artificial barriers that have held women and minorities back from
promotion to management and decision making positions
Affirmative action: refers to employment programs designed to remedy discriminatory
practices in hiring
CHAPTER 15: Regulation and Licensing
Page 612: Application of the per se rule
Price-fixing agreements: in which competitors agree among themselves to sell goods at a
certain price and not lower
Vertical price-fixing: in which a manufacturer establishes minimum prices at which lower-level
dealers in a distribution system (for example, retailers) and sell a product
Territorial division agreements: in which competitors assign to each other a territory and agree
not to compete in others territories, thereby each obtaining a monopoly within a specified
geographical area
Group boycott: in which two or more sellers refuse to do business with a particular person or
company, intending thereby to eliminate competition or block entry to a market
Resale price-maintenance agreements: in which a manufacturer determines the price at which
retailers must sell
Price discrimination: where a seller of goods charges different prices to different buyers for the
same product (not applicable to services)
Exclusive dealing contracts: in which a seller (usually a wholesaler) forbids a buyer (usually a
retailer) from purchasing the products of the seller’s competitors
Other chapter Vocab:
Copyright: the exclusive right of an author or other copyright owner to reproduce and license
(authorize) the reproduction of literature, art, music, drama, sculpture, motion pictures,
computer software and other audiovisual works including the broadcasts of sporting events
Public Domain: meaning a word has become so commonly used that it loses trademark
protection
Trademark: any word, name, symbol or device adopted and used by a manufacturer or
merchant to identify its goods and distinguish them from products sold or manufactured by
others
Service mark: similar to a trademark but it identifies services rather than goods
To prove trademark infringement: must prove ownership of a distinctive mark or name and the
defendant’s use of a similar mark or name is likely to cause confusion as to the source of the
products or services
Per se violations: means they are always illegal
Others are subject to rule of reason: not always illegal, but sometimes are
Applications of rule of reason:
Territorial restrictions: in which a manufacturer restricts the territory in which dealers
can sell, thereby preventing other dealers from competing in a given territory
Monopoly: in which one firm controls the market for a particular products with the
intent of excluding competitors
Tying arrangements: in which a seller conditions the sale of a product on the buyer’s
agreement to purchase an additional product produced or distributed by the seller
Mergers: in which two businesses are combined into one, resulting in a reduction of
competition
Franchise: an arrangement in which the owner of a trademark, service mark, or copyright
licenses others to use the mark or copyright in the sale of goods or services
Encroachment: resulting in a considerable loss of income
Zoning: process by which local governments can restrict the ways proper towers are entitled to
use their land
Due process: the right not to be deprived of property (including a license) without a fair hearing
Variance: which is permission from the local government to deviate from the restrictions
Chapter 16: Specialized Destinations- Casinos, Theme Parks, Spas, & Condominium Hotels
Gambling commissions: resolution of disputes involving gaming debts and alleged winnings
Card counter: someone who keeps track of the cards played in blackjack
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Casino owes no duty to inform patrons of laws relevant to gambling
Casinos are not insurers of their guests safety.
False imprisonment: occurs when a person is restrained against his will without justification
Jones act: enables employees injured while on a boat to sue in a court for the full value of
their injury including pain and suffering
Indian Gaming Regulatory Act
o Compacts: written agreements between and a state and a tribe, they govern the
operation of casino gaming on Native American lands
Condominium: multi-unit building in which each separate unit is individually owned