Business Law

Card Set Information

Business Law
2011-03-08 04:26:56
Jane Mallor Indiana University

Business Law at Indiana University
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  1. negligence
    not doing something that a reasonable person would do, or doing something that a prudent and reasonable person wouldn't do (the law considers personal characteristics, ex. child-child, chef-chef, "special duties"); this is different than intentional tort because the harm done is unintended
  2. elements of a negligence claim
    • 1. the defendant owed a duty of care to the plaintiff
    • 2. the defendant committed a breach of this duty (foreseeability)
    • 3. this breach was the actual ("but-for") and proximate (causation) cause of the injury (no intervening cause)
  3. strict liability
    liability-without-fault; legal responsibility placed on an individual for the results of his actions without fault; the defendant is liable even though he did not intend to cause the harm and did not bring it about through recklessness or negligence; based on the defendant's voluntary decision to engage in a particularly risky activity; abnormally dangerous activities and the manufacture or sale of defective and unreasonably dangerous activities; ex. keepers of naturally dangerous wild animals
  4. tort reform
    aims to reduce plaintiffs' ability to prevail in tort cases and limit the amount of damages they may receive when they win such cases
  5. abnormally dangerous activities
    activities that involve a risk of harm that cannot be eliminated by the exercise of reasonable care
  6. premises liability --> invitees
    two types: "business visitor" and "public invitees". The entry however must be for the purpose for which the property is held open. a possessor of property must excercise reasonable care for the safety of his invitees. he must take appropriate steps to protect an invitee against dangerous on-premises conditions that he knows about, or reasonably should discover, and that the invitee is unlikely to discover.
  7. premises liability --> licensees
    enters the property for her own purpose, not for a purpose connected with the possessor's business. she does however enter with the possessor's consent (the consent is implied). the possessor usually is obligated only to warn licensees of dangerous on-premises conditions that they are unlikely to discover.
  8. premises liability --> trespassers
    enters without its possessor's consent and without any other privilege. traditionally, a possessor of land owed them no duty to exercise reasonable care for their safety and only had a duty not to willfully and wantonly injure trespassers, this is kind of changed though like a higher level of care of often required as to trespassers who are known to regularly enter the land
  9. negligence per se
    the defendant's violation of such laws (statutes, ordinances, regulations) may create a breach of duty and may allow the plaintiff to win a case if the plaintiff was within the class of persons intended to be protected by the statute or other law and suffered harm of a sort that the statute or other law intended to protect against; the courts use the statutes and other laws to determine how a reasonable person would behave
  10. res ipsa loquitur
    • "the thing speaks for itself"; applies when
    • 1. the defendant has exclusive control of the instumentality of harm (and therefor probable knowledge of, and responsibility for, the cause of the harm)
    • 2. the harm that occurred would not ordinarily occur in the absence of negligence
    • 3. the plaintiff was in no way responsible for his own injury
    • -in this case, negligence may be difficult t prove because the defendant has superior knowledge of the circumstances surrounding the plaintiff's injury and it may not be in the defendant's best interest to disclose those circumstances if they point to liability on his part so the court requires the defendant to show that he was not at fault
  11. contributory negligence
    type of negligence defense; the plaintiff fails to exercise reasonable care for her own safety; this is a complete defense for the defendant if it was a substantial factor in producing the plaintiff's injury; ex. if someone steps out in front of a car without looking both ways and is hit he will be denied recovery
  12. comparative negligence/comparative fault
    type of negligence defense; courts seek to determine the relative negligence of the parties and award damages in proportion to the degrees of negligence determined. Plaintiffs recovery=defendant's percentage share of the negligence causing the injury x plaintiff's proven damages
  13. (implied) assumption of risk
    the plaintiff's voluntary consent to a known danger,
  14. exculpatory clauses
    a plaintiff expressly assumes the risk of injury by entering into a contract which relieves the defendant of a duty of care he would otherwise owe to the plaintiff.
  15. standardized form contracts
    contracts that are preprinted by one party and presented to the other party for signing; usually the person who drafts and presents the contract has the most bargaining power, and usually the terms are nonnegotiable, the other party sometimes will not know what they are signing
  16. elements of a contract
    negotiation --> agreement(offer and acceptance) --> volunatry --> consideration --> capacity --> legality --> contract!
  17. unilateral contracts
    only one party makes a promise in exchange for a specific act ex. frequent buyer cards
  18. bilateral contracts
    both parties exchange promises and the contract is formed as soon as the promises are exchanged; this contract is formed at that point-even before the parties begin performing any of the acts that they promised to do
  19. valid contract
    one that meets all of the legal requirements for a binding contract, therefor they are enforceable in court
  20. unenforceable contract
    one that meets the basic legal requirements for a contract but may not be enforceable because of some other legal issue ex. a contract that is required to be in writing but is not
  21. voidable contracts
    those is which one or more of the parties have the legal right to cancel their obligations under the contract; the injured party has the right to cancel the contract if he chooses
  22. void contract
    agreements that create no legal obligations and for which no remedy will be given ex. contracts to pay someone for killing someone
  23. express contract
    the parties have directly states the terms of their contract orally or in writing at the time the contract was formed
  24. implied contract
    the surrounding facts and circumstances indicate that an agreement has been reached ex. going to the doctor and you will pay after your visit
  25. executed contract
    all of the parties have fully performed their contractual duties
  26. executory contracts
    duties are not yet fully preformed
  27. quasi contract
    also called unjust enrichment or contract implied in law; as a matter of law a promise by the benefited party to pay the reasonable value of the benefits he received; imposed when one party confers a benefit on another who knowingly accepts it and retains it under circumstances that make it unjust to do so without paying for it; ex. someone paints the wrong house and the owner knows he is painting the wrong house and lets him; example of "noncontract" obligations
  28. promissory estoppel
    a promise that the promisor should foresee is likely to induce reliance, reliance on the promise by the promisee, and injustice as a result of the reliance; one person may rely on a promise made by another even though the promise and surrounding circumstances are not sufficient to justify the conclusion that a contract has been created; consideration substitute
  29. requirements of an "offer" to form a contract
    • 1. intent to offer (if a reasonable person familiar with all the circumstances [words and acts] would be justified in believing that the offeror intended to contract, a court would say there was intent, even if the offeror himself says he did not intend to contract)
    • 2. defiteness of terms (a proposal that fails to state specifically what the offeror is willing to do and hat he asks in return for his performance is unlikely to be considered an offer; definiteness tends to indicate intent to contract while indefiniteness tends to indicate the parties are still negotiating and have not yet reached an agreement; courts also needs to know the terms in order to calculate a remedy if one breaches contract)
    • 3. communication to offeree (objectively indicates an intent to be bound to those terms)
  30. special offer problem area --> advertisements
    advertisements for the sale of goods at specified prices are not considered to be offer. a customer is making an offer, which the retailer is free to accept or reject; specificity precludes the possibility that the offeror could become contractually bound to an infinite number of offerees
  31. special offer problem area --> rewards
    advertisements offering rewards for lost property, for information, or for the capture of criminals are generally treated as offers for unilateral contracts
  32. special offer problem area --> auctions
    sellers at an auction are generally treated as making an invitation to offer. those who bid on offered goods are treated as making offers that the owner of the goods may accept or reject
  33. special offer problem area --> bids
    advertisements for bids are generally treated as invitations to offer. those who submit bids are treated as offerors. according to general contract principles, bidders can withdraw their bids at any time prior to acceptance by the offeree inviting the bids and the offeree is free to accept of reject any bid
  34. option
    a separate contract in which an offeror agrees not to revoke her offer for a stated time in exchange for some valuable consideration; a contract in which an offeror sells her right to revoke her offer; ex. A gives B $5,000 to wait 3 months for B to decide to sign the contract or not.
  35. firm offer
    irrevocable for a period of time. does not require consideration to be given in exchange for the offeror's promise to keep the offer open; the offer must be made my an offeror who is a merchant, be constrained in a signed writing, and give assurances that the offer will be kept open
  36. requirements of an "acceptance" to form a contract
    • 1. the offeree intended to enter the contract (objectively indicate a present intent to contract on the terms of the offer)
    • 2. the offeree accepted on the terms proposed by the offeror
    • 3. the offeree communicated his acceptance to the offeror
  37. stipulation
    specify the precise time, place, and manner in which acceptance must be communicated and the offeree must follow respond in this way to form a valid acceptance; if offeree deviates there no contract formed unless offeror indicates willingness to be bound by the deviating acceptance
  38. mailbox rule
    properly addressed and dispatched acceptances can become effective when they are dispatched even if they are lost and never received by the offeror; the offeror can minimize the risk of being bound to terms they never received by stipulating in the offer that she must actually receive the acceptance for it to be affective (also maximizes time to revoke offer)
  39. consideration
    legal value, bargained for and given in exchange for an act or promise; agreements/promises are unenforceable if they are not supported by this; requiring this tends to limit the scope of a promisor's liability for his promises because he is not liable for gratuitous promises and there is not liability on reliance on his promise; often produces unfair results; illusory (not real) promises do not meet requirements; preexisting public duties like being paid to not burn someones house down does not count; ex. doing something or promising to do something that you had no preexisting duty to do, paying part of a liquidated debt prior to the date the debt is due or paying a liquidated debt in a different medium of exchange than originally agreed to, agreeing to settle an unliquidated debt, agreeing not to file suit when you have a good faith belief in your claim's validity
  40. not consideration...
    ex. doing something or promising to do something that you had preexisting duty to do, nominal consideration (unless actually bargained for), paying part of a liquidated debt at or after the date the debt is due, making an illusory promise, past consideration (an act or other benefit given in the past that was not given in exchange for the promise in question), preexisting moral obligation (ex. food and lodging or emergency care; absence of the bargain element)
  41. legal value
    if in exchange for the promisor's promise, the promisee does, or agrees to do, something he had no prior legal duty to do, that provides legal value; if in exchange for the promisor's promise, the promisee refrains from doing something she has the legal right to do, that also provides legal value. ex. grandpa told grandson he would give him $5,000 if he refrained from drugs and alcohol for 5 years=consideration because he had a legal right and he refrained because of the promise; performing or agreeing to preform a preexisting duty does not count because it is just a gratuitous promise since she was already entitled to the promisee's performance
  42. adequacy of consideration
    the courts do not ask whether that act or promise was worth what the promisor gave, or promised to give in return; laissez faire assumption (hands off); the court cannot consider this which promotes certainty and predictability in transactions because the agreement will be enforceable even though what the promisee gave is worth substantially less than what the promisor promised in return, as long as there is legal value.
  43. liquidated debt
    debt that is both due and certain; the parties have no good faith dispute about either the existence or the amount of the original debt; ex. Connor borrows $10,000 from bank payable in one year, in one year he pays $9,000 and says payment in full, bank cashes connors check thus impliedly promising to accept it as full payment and later sues connor for $1,000 which he must pay because connor has no consideration to support the banks implied promise to accept $9,000. However, if connor would have done something he has no preexisting duty to do in exchange for the banks promise to settle for $9,000 like pay early or pay $4,000 and with a $5,000 car then he would not have to pay and would have given consideration for the banks promise to accept early or different payment as full payment.
  44. unliquidated debt
    a good faith dispute about either the existence or the amount of debt
  45. accord and satisfaction
    settlement of an unliquidated debt; the creditor cannot maintain an action to recover the remainder or debt he alleges is due
  46. composition agreements
    agreements between a debtor and two or more creditors who agree to accept as full payment a stated percentage of their liquidated claims against the debtor at or after the date on which the claims are payable; they do this in fear of forcing the debtor into bankruptcy which would give them even less of a return
  47. forbearance to sue
    an agreement by a promisee to refrain, or forbear, from pursuing legal claim against a promisor can be valid consideration to support a return promise-usually to pay a sum of money-by a promisor; the promisee has agreed to not file suit even though she has a legal right to in exchange for the promisor's promise