Business Law Test 3 Review

iSearchNotes is a FREE service that allows College Students to
Search and Share Class Notes.

By: Rockout101 233
November 10, 2009 | Business Law - Elzweig

.doc

603
views

Test 3 BLAW Review

Chapter 11- 12

Uniform commercial code

Article 2 of the UCC covers contracts for the sale of goods.
Goods are, tangible, movable property that have a physical existence and that can be moved from place to place. Services, real property, intangible property, intellectual property, and stocks and bonds are examples of things that are not covered.
- A court would use the predominant-factor test to decide. If the contract is predominantly for the sale of goods, then it would apply, if it was primarily for the sale of services then it would not. (ie You enter into a contract for a new air conditioner (a good). As part of the contract, the seller will install the air conditioning unit (a service). The court would probably rule that since the predominant factor of why the contract was entered into was to get a new air conditioner, the installation was ancillary to that and therefore the UCC would apply).

Under the U.C.C., many contract terms can be open.

Price Term- If not specified, payment is due at the time and the place that the buyer receives the goods and court can affix a reasonable price.
Delivery term- If not specified, the buyer will take delivery at the seller’s place of business. If not specified, the seller will deliver within a reasonable period of time.
Quantity term- Usually will invalidate contract unless if one of the two following types of contracts:
i.Requirements Contract - An agreement by which the buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires (I will sell you all of the chocolate that you request for the next three months)
ii. Output Contract - An agreement by which the seller agrees to sell all or up to a stated amount of what the seller produces (ie I will buy all of the chocolate that you can produce in the next three months)

If the contract is a shipment contract (a contract for the sale of goods which requires the seller to ship the goods to the buyer via carrier) the seller is relieved of liability for the goods once they have been delivered to the carrier (ie as soon as they are given to Fedex).
If the contract is a destination contract (a contract for the sale of goods which requires the seller to ship the goods via carrier to a particular destination), the seller is relieved of liability only when the goods have been delivered to the designated destination.

Sellers:

Seller “delivers” by making goods available at Seller’s place of business unless otherwise specified.
Tender of goods must be at a reasonable time in a reasonable manner.
Goods must be delivered in a single delivery unless otherwise agreed.

Buyers:

Seasonably give notice of rejection otherwise, the goods are deemed accepted
Pay for goods upon delivery

Chapter 13

Express Warranties

A seller’s or leaser’s oral or written promise in connection with a sales or lease agreement, as to the quality, description, or performance of the goods being sold or leased.
Opinions doesn’t count

Implied Warranties

A warranty imposed by law or by implication or inference from the nature of the transaction or the relative bargaining positions or circumstances of the parties.
Good title, no liens (no holds), fitness for purpose
Merchant sellers – Merchantability (fit for normal use), No infringements

Disclaimers of Warranties – Must be clear and conspicuous

Strict Product Liability

Requirements -- Plaintiff must show:

– Product was defective, and unreasonably dangerous to the consumer

– Defendant is in the business of selling product

– The defect existed when it left the defendants possession

– Proximate cause

– Damages

– Goods were not changed between the time that they were sold and when injury occurs

Defenses

– Product Misuse

– Assumption of the Risk

– Commonly known dangers

Deceptive Trade Practices Act (DTPA)

Deceptive Trade Practices Act (DTPA)

– Deceptive Advertising- occurs when a reasonable consumer would be misled by the ad

– “Bait and Switch” advertising

(fails to show the advertised item, fails to have sufficient quantity, fails to reasonably deliver, or discourages salespeople from selling

Mail Order Sales

Mail order sales- must ship orders within time specified in catalog and notify if they cannot

Truth in lending Act

Chapter 17

Agency

Relationship between two parties in which one party (agent) agrees to represent or act on behalf of another party (principal)
A fiduciary relationship that results when principal authorizes or consents to allow an agent to act on his or her behalf.

Formation of Agency:

Written Agreement
Oral Agreement (if performable in one year)
Implied by conduct
Estoppel - “apparent authority”
actions of principal must imply authority
(not actions of agent)
reasonable person must believe agency exists.
Implied by operation of law
By ratification

Employee

One who works for, and receives payment from, an employer.
Whose working conditions and methods are controlled by the employer.
For whose acts and omissions occurring in the scope of employment the employer is liable.

Independent Contractor

One who does work for, and receives payment from, an employer.
Whose working conditions and methods are not controlled by the employer.
For whose acts and omissions the employer is not liable.

Determine whether an employee or independent contractor by the following:

Direction and control the employer exercises over the details of work
Who supplies tools used at workplace
Degree of skill is required of the worker
Duration of employment
Method of payment

Agent Duties

Performance
Notification
Loyalty
Obedience
Accounting

Principal duties

Compensation
Reimbursement
Indemnification
Cooperation
Safe Working Conditions

Liabilities in agency

Respondeat Superior -- the doctrine by which an employer or other principal is liable, along with the agent or employee, for any tort committed by the agent or employee while acting within the scope of their agency or employment.
Does not apply if agent is on a “frolic” of his own
Not a small detour
Principal not liable for most criminal acts unless criminal activity was directed by principal (but are liable for intentional torts committed in scope of employment)
Principal is liable for agent’s contracts, if agency is disclosed
Principal is liable for agent’s torts if agent in “course and scope of employment”

Termination of Agency

Lapse of Time
Purpose Achieved
Occurrence of Event
Mutual Agreement
Revocation (unless coupled with interest)

Chapter 18

Employment Law

Common law doctrine under which either party may terminate employment relationship at any time for any reason (or no reason).

Exceptions in the case of:

Employment contracts
Public policy such as whistleblower protection

Minimum wage

FEMLA

Federal law requiring employers with 50 + employees to provide up to 12 weeks of family or medical leave during any twelve-month period.
During leave, employer must continue to provide benefits to the employee but is not required to pay the employee while on leave.

COBRA

COBRA prohibits the discontinuance of insurance benefits of workers who have voluntarily or involuntarily been separated from work, unless the involuntary separation was on the basis of gross misconduct.
Employers must comply if they have more than 20 employees.

Workers’ Compensation Laws

State laws establishing administrative procedure for compensating workers for workplace injuries in the course of employment, regardless of fault.
Payments for medical expenses and a portion of lost wages.
No compensation for pain and suffering

Employment discrimination

– Treating employees or job applicants unequally on the basis of race, color, national origin, religion, gender, age, or disability.

Prima Fascia case

The presentation of sufficient evidence by a civil claimant to support the legal claim (a prima facie case), or a piece of evidence itself (prima facie evidence).

Disparate-Treatment Discrimination

– Intentional discrimination against members of a protected class; or

Disparate Impact Discrimination

– Discrimination resulting from practices or procedures which, although not facially discriminatory, have the effect of discriminating against members of a protected class

Age discrimination, Must be 40 or over

Age Discrimination in Employment Act (“ADEA”)

– Federal law prohibiting (i) employment discrimination on the basis of age against persons 40 years of age and older, and (ii) mandatory retirement for non-managerial employees.

Americans with Disabilities Act (“ADA”)

– Federal law prohibiting discrimination in hiring, promotion, and discharge against persons with disabilities.

Equal Pay Act

Federal law prohibits gender-based differences in wages paid for equal work on jobs whose performance requires equal skill, effort, and responsibility under similar conditions.

Chapter 19

Sole Proprietor – easy to create

Owned by a single person or family.
Owner reports business income and expenses on personal income tax return.
Owner is legally responsible for all debts and obligations without limitation.

Partnerships

Agreement by two or more parties.
Purpose is for profit.
Not necessarily in writing.
Partnership informational tax return - taxes assumed by partners directly.
Partners have unlimited liability.

Limited Partnerships

Separate, artificial legal entity
At least one General Partner and at least one Limited Partner.
Tax liability and benefits assumed by partners directly.
General Partner has unlimited liability.
Limited Partner has limited liability.

Corporation - Hard to create

Separate, artificial legal entity.
Formed in compliance with law.
Managed by Directors & Officers.
Shareholders have limited liability.
Taxed as a separate legal entity (unless an S corporation)

Limited Liability Company

Separate, artificial legal entity.
Formed in compliance with law.
Shareholders have limited liability.
Taxed as a partnership.
No limits as to who can be shareholders.

Limited Liability Partnership

General Partnership designed for professionals (lawyers, accountants, etc.)
Formed in compliance with law.
Partners have limited liability for other than their own professional malpractice.
Taxed as a partnership.

Uniform partnership Act

Pg 594 – 595

Ease of creation, tax liabilities, risk liabilities, How easy or hard to generate capital

Franchisor