Chapter 1 Flashcards
Negligence
Part of the body of law we call tort law - th law of torts addresses the allocation of losses arising out of human activity
Conduct which causes an unreasonable risk of harm to others
A person fails to exercise ordinary care, when, without intending to do any harm, he or she does something or fails to do something under circumstances in which a reasonable person would foresee that by his or her action or failure to act, he or she will subject a person to an unreasonable risk of injury or damage
Liability for damage caused by dog
The owner of a dog is liable for the full amount of damages caused by the dog inuring or causing injury to a person, domestic animal, or property
Intentional torts
Torts caused by deliberate action
Assault, libel, slander, etc.
Criminal negliengence
example: homicide by negligent operation of a motor vehicle
Accident (active) negligence
Driving negligently
Injury (passive) negligence
Failure to wear a seatbelt or helmet
Elements (what you must prove to prevail in a negligence lawsuit)
- Duty of care
- Breach of the duty of care
- Standard of conduct
Duty of care
There must be a duty of care owed by the deendent to the plaintiff
Foreseeability of risk test = a duty is owed to the plaintiff if the consequences resulting from the defendant’s negligient conduct ought to have been reasonbly foreseeable by the defendant
Breach of the duty of care
If there is a duty of care owed, then you must show that this duty of care was breached (act of negligence)
Standard of conduct
What was the degree of carefulness that a reasonable person would have exercised in a given situation
Based on our society’s expectations as to how people should act in relation to each other
Trespassers
Anyone on the property without consent
Licenses
Anyone on the property to servie his or her own purposes but with consent
- property owner is responsible to the licensee to warn of hidden dangers of which the owner knows
Invitees
Anyone on the property as a right because it is a public place or a business - property owner is responsible to the invitee to exercise reasonable care in providing a safe place
Recreational contact sports activities
Did the participant who caused the injury act recklessly or with an intent to cause injury?
Recklessness - acting without intent to inflict the particular harm but in a manner which is so unreasonably dangerous that the person knows that it is highly probabl that harm will result
Person is only liable if acted recklessly or with intent
“Baseball Rule”
Person hit with flyng baseball cant make a claim because she knowingly exposes herself to the inherent risks
“But for” test
Would the event not have occured but for the defendant’s conduct?
“Substantial factor” test (wisconsin)
was the defendant’s conduct a substantial factor in causing the event
Wisconsin public policy considerations in determining whether there is proximate cause
Inury too remote
Injury out of proportion to negligent act
In retrospect, it appears extraordinary that negligence caused the harm
Unreasonable burden on defendant
Lead to fraudulent claims
No sensible or just stopping point if claim is allowed
Safety statute
a legislative enactment designed to protect a specified class of persons from a particular type of harm
Negligence per se
Negligence as a matter of law
Res ipsa loquitur
Elements which permit you to infer from the accident itself and the surrounding circumstances that the defendant was negligent unless the defendant offers a satisfactory explanation otherwise
necessary elements:
- defendant had control over the circumstances surrounding the event
- event would not have occurred in the absence of negligence
- no other reasonable explanation for the evetnt offered by defendant which shifts the blame to some other person
Judge jobs
Duty, proximate cause and whether a compensable injury was suffered by the plaintiff
Jury jobs
Breach of duty, actual cause, allocation of negligence, complensation for injury — a verdict agreed to by 5/6 of the jurors shall be the verdict of the jury
Wisconsin is a “blindfold” state
Judges do not instruct jurors on the effect of special verdict answers
other states are “sunshine”
Comparative negligence
The jury is asked to assign 100% blame for the event to the defendant (s) and the plaintiff (s) - various approaches taken by the states
- any contributory negligence of the plaintiff prevents recovery by the plaintiff (very few states)
- Pure comparison - recovery strictly governed by percentages of fault assigned by the jury
- Modified comparison - plaitiff does not recover if plaintiff’s negligence exceeds that of the defendant but is otherwise governed by percentages of fault assigned by the jury - probably followed by a majority of states
Several liability
Plaintiff’s recovery against a defendant is limited to the percentage of fault assigned to that defendant
Joint and several
Each defendant can be held liable for all losses suffered by the plaintiff (but the plaintiff cannot collect more than the amount of the verdict)
Tort reform
A modification of joint and several - a defendant can only be held liable for the full amount owed to the plaintiff if the defendant’s liability exceeds a certain percentage
Tort Reform
Legislative tinkering with traditional tort principles
Damage caps
Limitations on what a jury can award a plaintiff for certain types of damages
Minority rule
Any contributory neglgience as a complete bar to plaintiff’s recovery (all or nothing rule)
Majority rule
Comparative negligence of the plaintiff - compare negligence of plaintiff and defendant (s) - results in proportional responsibility for damages based on jury’s allocation of fault
Assumption of risk
Did the paintiff voluntarily and knowingly assume the risk associated with the potential of negligent conduct on the part of the defendant?
Statutes of limitations (or repose)
A statute exists that requires a plaintiff to start the lawsuit within a certain period of time and the plaintiff waits too long and misses the deadline
The following actions shall be commenced within 3 years or be barred:
(injury to the person)
- An action to recover damages for injuries to the person
- An action brought to recover damages for death caused by the wrongful act, neglect or default of another
Wisconsin rule of comparative negligence
Only defendants who are 51% or more liable can be jointly and severally liable
Facts + Law = Outcome
Facts (relevancy)
+ Law (applicability)
= outcome
Rules of law and our legal system create:
our property rights and protect our personal interests/rights
2 types of alternative dispute resolution
Mediation
Arbitration
Alternative dispute resolution (ADR)
Disputing parties agree to use mediation or arbitration to settle their dispute rather than suing each other and using the court system
Mediation
A voluntary effort to settle the dispute
“non binding”
Arbitration
A non-juridical mechanism to settle the dispute that is binding on the parties
Each party to the arbitration shall pay one-half of the costs of the arbitrator(s) but shall be solely responsible for attorney fees and other costs
binding
“like a verdict”
No right answers necessarily, why?
- A sound legal argument may be availble to each of the competing parties supporting their respective positions
- Rules of law can be interpreted differently by reasonable people
Costs associated with our system of jurisprudence
- Economic cost - legal fees and expenses
- Emotional cost
- Cost of time
- Risk/reward costs
Perjury
While under oath orally makes a false material statement which the person does not believe to be true
Class D felony
Financial leverage
If you have what the other side wants, you are in a sronger bargaining position
Restatements
Recitations of majority rules of law with regard to certain seleced topics
Are not rules of law, recite rules of law
Necessary characteristics of law
- Certainty - presumption of stability of legal principles
- flexibility.elascity - adaptable to different situations
- knowability
- reasonablenss
Burden of proof
The evidentiary burden imposed on the party who wants the answer of a question to be “yes”
Ordinary civil actions
To a reasonable certainity by the greater weight of the credible evidence
Criminal cases
Beyond a reasonable doubt
It is not enough to conlcude the defendant is “probably” guilty
fewer jury trials
- Lawyers have learned which casses will likely be profitable
- clients are more sophisticated
3. many legal theories so results are predictable
4. more reliance on alternative dispute resolutions
- electornic discovery has increased cost of litigation
- media portrays juries as irrational
2 general categories of law
civil and criminal law
Types of duties
- Tort (civil) - a violation of a duty imposed by civil law
- criminal - a violation of a duty imposed by a criminal statute
- contract (civil) - a violation of a duty undertaken by agreement (voluntarily)
Typical legal theories
- Tort
- Breach of contract
- equitable remedy
- a statutory right of recovery
Negligence
Conduct which causes an unreasonable risk of harm to others
Most common tort
Negligence
Intentional torts
Torts caused by deliberate action
ex. assault, liberal, slander
Criminal negligence
High degree of negligence
Ex. homicide by negligent operation of a motor vehicle
Many claims of negligence occur in the context of _____________
employer/employee relationship
injury (passive) negligence
Failure to wear a seat belt or helmet
Duty of care
There must be a duty of care owed by the defendant to the plaintiff
foreseeability of risk test
Foreseeability of risk test
A duty is owed to the plaintiff if the consequences resulting from the defendant’s negligent conduct were reasonably foreseeable
Breach of the duty of care
If you conclude there is a duty of care owed, then you must show this duty of care was breached
To avoid liability for negligence, a person must confirm his or her conduct to that of a reasonable person
Standard of conduct
Was the degree of carefulness that a reasonable person would have exercised in a given situation?
Trespasers
Anyone on the property without consent - property owner is liable to the trespasser only for intentional acts (exception for children and attractive nuisance situations)
Licensees
Anyone on the property to serve his or her own purposes but iwht consent
property owner is responsible to the licensee to warn of hidden dangers of which the owner knows
Invitees
Anyone on the property as a right because it is a public place or business
Property owner is responsible to the invitee to exercise reasonable care in providing a safe place
ex. warn of dangers that are not self-evident
Negligence of a manufacturer goods
It is the duty of a manufacturer to exercise ordinary care in the design, construction, and manufacture of its product so as to render its product safe of its intended use
Recreational contact sports activities
Did the participant act recklessly or with an intent to cause injury?
recklessness- unreasonably dangerous
Baseball rule
The court held that the nature of the game and the common knowledge of frequest foul balls necessarily showed contribuory negligence sufficient to bar recovery
Immunity statutes
Statute you cannot be used even though you may have been negligent
Recreational immunity
Limits liability of propety owners who use their property owners for recreational activities under circumstances in which the onwer does not derive more than a minimal benefit
Equine immunity
Provides immunity to persons participate in equine activties for injuries caused as a result of activities inherent risks
Civil liability exemption
Any person who renders emergency care at the scene of an emergency or accident in good faith shall be immune from civil liability
Castle doctrine
reasonably believed that the force was necessary to prevent imminent death or bodily harm to himself or herself or to another person
Two tests for proximate cause
- “But for” test - would the event not have occurred but for the defendant’s conduct?
- “sustantual factor” test (wisconsin) - was the defendant’s conduct a substantial factor in causing the event?
General test for proximate cause
Foresseability- if a defendant has breached the standard of care, then the defendant is liable for all the foreseeable consequences that flow from the negligent acts, either immediatley or thereafter, not necessarily a conscious foreseesabiltiy but rather a reasonably expected foreseeability
Negligence per se
“Negligence as a matter of law”
- a statute exists and it was violated by the defendant
- the statute is intended to protect against the harm that occurred (a “safety” statute)
- The plaintiff was within intended protected class
Res ipsa loquitur (the thing speaks for itself)
Elements which permit you to infer from the accident itself and the surrounding circumstances that the defendant was negligent unless the defendant offers a satisfactory explanation otherwise
- defendant had control over the circumstances surrounding the event
- event would not have occurred in the absence of negligence
- no other reasonable explation for the event offered by defendant which shifts the blame to some other person
res ipsa does not apply when:
an unexplained accident may be attributable to one of several causes
It is the duty of the ________ to prove negligence affirmately
plaintiff
Jobs of Judge
Duty, proximate cause and whether a compensable injury was suffered by the plaintiff
Jobs of Jury
Breach of duty, actual cause, allocation of neglignece (fault) and compensation for injury (amount of damages
A verdict agreed to by five-sixths of the jurors shall be the verdict of the jury
Blindfold state
Judges do not instruct jurors on the effect of special verdict answers
Wisconsin is a blindfold state
Sunshine approach
Whereby jurors are instructed on the leagal consequences of their special verdict answers
Comparative negligence
The jury is asked to assign 100% of the blame for the event to the defendants and plaintiffs
Comparative negligence
- any contributory negligence of the plaintiff prevents recovery by the plaintiff (very few states)
- Pure comparisson - recovery strictly governed by percentages of fault assigned by the jury - not followed by a majority of states
- modified comparision - plaintiff does not recover if plaintiff’s negligence exceeds that of the defendant - probably followed bya majority of states
Several liability
plaintiff’s recovery against a defendant is limited to the percentage of fault assigned to that defendant
Joint and several liability
Each defendant can be held liable for all losses suffered by the plaintiff (but the plaintiff cannot collect more than the amount of the verdict)
Tort reform
A modification of joint and several - a defendant can only be held liable for the full amount owed to the plaintiff if the defendant’s liability exceeds a certain percentage
Tort Reform
Legislative tinkering with traditional tort principles
A defendant who is less than 51% liable =>
Is not jointly and severally liable with other defendants, but rather is liable for only its percentage share (as established by jury)
Damage caps
Can only be awarded certain amounts
CAPS for decreased minor and adult
500,000 for minor
350,000 for adult
Exposure period
10 years immediately following the date of substantial completion of the improvement of real property
Defenses to Negligence
A. Defendant shows that the plaintiff cannot prove the elements of a negligence cause of action
B. The contributory negligence of the plaintiff as compared to that of the defendant(s) - did plaintiffs own negligence contribute to the plaintiffs loss
C. assumption of risk
Minority rule
Any contributory neglgience of plaintiff as a complete bar to plaintiff’s recovery (all or nothing rule)
applicable in a handful of states
Majority rule
Comparative negligence of the plaintiff - compare negligence of plaintiff and defendant(s) - results in proportional responsibility for damages based on jury’s allocation of fault, but a plaintiff can never recover from a defendant if that defendant’s allocation of fault is less than that allocated to the plaintiff
Assumption of risk
Did the plaintiff voluntarily and knowingly assume the risk associated with the potential of negligent conduct on the part of the defendant?
Intangible Personal Property
Generally stated, your ideas
Intellectual property
Property interests that are deserving of protection against infringement, or unauthorized use, by a person other than the owner
Significant investment is made in intellectual property by business
significant value of business can be intellectual property
state and federal laws
issue: protection of intellectual property rights vs. assuring creativity/completion in the marketplace
Trade secrets
A commercially valuable business secret that is not common knowledge - Uniform Trade Secrets Act
Improper means
Espionage, theft, bribery, misrepresentation and breach or inducement of a breach of duty to maintain secrecy
Readily ascertainable
Information does not include information accessbiel through a license agreement or by an employee under a condientiality agreement with his or her employer
“Trade secret”
Means information, including a formula, pattern, compilation, program, device, method, technique or process to which all apply:
- The information derives independent economic value, from not being readily ascertaininable by proper means, by, others who can obtain economic value from its disclosure
- the information is the subject of efforts to maintain its secrecy that are reasonable under the circumstances
Misappropriation
No person, including the state, may misapproriate or threaten misapproriate a trade secret by doing the following:
- acquiring the trade secret of another by means which the person knows or has reason to know constitute improper means
Disclosing or using without express or implied consent a trade secret of another if the person did any of the following:
- used improper means to acquirire knoweldge of the secret
At the time of disclosure or use, knew or had reason to know that he or she obtained knowledge of the trade secret through any of the following means:
a. deriving it from or through a person who utilized impromper means to acquire it
b. acquiring it under circumstances giving rise to a duty to maintain its secrecy or limit its use
c. deriving it from a or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use
d. acquiring it by accident or mistake
If a violate of a sub (2) is willful and malicious =>
the court may award punitive damages in an amount not exceeding twice any award under par
If a claim that sub (2) is willful and deliberate =>
the court may award reasonable attorney fees to the prevailing party
Definition (elements) - business related information
a
a. which derives independent economic value from not being generally known - absolute secrecy not required
b. which is not readily asecertainable by proper means
3. which is subject to reasonable efforts to maintian its secrecy
Examples of trade secrets
Customer lists, vendor lists, formulas, processes, pricing policies blue prints, designs
Compliation of trade secrets
A trade secret may consist of seperate pieces of readily ascertainable raw data which when compiled and taken together constitutes a unique compilation creating a distinctive competitive advantage
Ownership of trade secret
A trade secret that is the product of an employee’s assigned duties is owned by the employer even when the trade secret results from the application of the employee’s personal knowledge or skill
Examples of “reasonable efforts” to maintain the secrecy of trade secrets
a. physical security and limiting access to the trade secret
b. Develop a document handling policy
c. executive education - advise employees as to confidentialy nature of info
d. non disclosure and confidentiality agreements
e. implement appropriate hiring and firing procedures regarding trade secrets
f. restrictions regarding computer-stored trade secrets
Mere intent that info remain secret =>
not sufficient to qualify information for trade secret protection
However, the fact that the plaintiff may not have employed the fullest range of protective techniques available will not defeat claims of trade secret provide techniques were reasonable
Misappropriation
Wrongful taking or using another’s trade secret
Acquisition
acquriign a trade secret by “improper means”
ex. industrial espionage, theft, bribery of an employee to disclosure employer’s trade secrets
Disclosure - disclosing or using without cosent
ex. you disclose a trade secret even tho you signed a Confidentiality Agreement
You disclose or use a trade secret you acquired by mistake or accident of the trade secret owner
Examples of “proper means” for obtaining another’s trade secret
a. published literature
b. reverese engineering
c. public use/disclosure by owner
d. independent invention/discovery by another
A former employee is obligated to not disclosure or use the confidential information acquired during his or her employment
a. utilization of personal knowledge is appropriate unless there is a contract provision which prohibits such use
b. trade secrets which obviously cannot be used by the former employee
c. confidentialy information of the employer (but not a trade secret)
d. general business information (typically not protected unless there is a confiedntialy agreement)
Remedies for misapproriation
Injunctive relief (stopping the wrongful use of another’s trade secret)
damages
Theft or a trade secret is a state crime
also a federal crime
Trade symbols
Form of identification used to identify and distinguish goods or services
examples:
trademark - distintctive mark, word, letter, etc.
b. service mark - used to identify and distinguish services
Trade symbols importance to business
Goods and services are identified in the marketplace and distinguished from others- source identification an important form of business advertisement and promotion
To have legal protection immeditatley =>
mark must be inherently distinctive (as opposed to acquired distinctiveness, which is referred to as “secondary meaning”
The distinctive continuum
a. fanciful (strongest)
b. arbitrary
c. suggestive
d. descriptive (weakest)
A trademark that is merely descriptive
Cannot be protected as trademark until it acquires “secondary meaning”
How to acquire secondary meaning - you must demonstrate
a. long and exclusive use (5 years)
b. extensive sales and promotion
c. customer survey evidence
d. other convincing evidence
Secondary meaning examples
Trim - nail clippers
colors green gold - press pad in dry cleaners
color pink - owens-corning building insulation
Genearl marks
Not protectable as trade marks
ex. computer or automobile
How to avoid “genericizing” a mark
- never use as a noun or verb
- distinguish the mark
- monitor third-party usage
examples of loss of protection
cola, aspririn, thermos, and windows
Trademarks in jeopoardy
Kleenex, band aid, xerox
“what are you”
the mark is generic
Who are you?
the mark is valid
Trademark laws intended to:
- protect the investment in, and goodwill associated with a mark
- prevent confusion as to the origin of the goods/services
Benefits of trademark registration
- constructive noticed deemed given (people assume to know the trademark is yours)
- Use of R (TM stands for an unregistered trademark)
- customs bureau protection against importaion of goods bering marks that infringe (knockoffs)
- prima facie (presumed) evidence of right to use mark
- right to use federal courts to encorce mark
- after five years of use, mark becombes incontestable
- 10 year term - can be renewed without lmitation
Trademark dilution
The lessening of the capacity of a famous mark to identify and distinguish goods and services regardless of the presence or absence of actual or likely confusion, or competition, or actual economic injury
2 requirements fame and distinctiveness (inherent or acquired)
- blurring - when the defendant’s use of the mark causes the public to no longer think of the plaintiff’s product upon seeing the famous mark
- tarnishment - using a mark in an unwholesome manner or for a low quality product which could create a negative association with the product
Factors to consider in determining whether a mark is famous
- the duration, extent, and geographic reach of advertising and publicity or the mark
- the amount, volume, and geographic extent of sales of goods or services offered under the mark
- the extent of actual recognition of the mark
- whether the mark was registered
Primary grounds for refusing to register a mark by USPTO
- likely to confuse with a mark already registered
- merely decepitve (no secondary meaning)
- dilutes a famous mark
- deceptive, immoral or scandulous
- functionality doctrine - (trademark law cannot be used to control a useful product feature)
ex. beach towel round - name, portait or signature of a living person (without his or her consent)
- opposition by members of the pulbic
Must continue to use the mark to protect it
- in use at time of registration or
- you have a bonafide intention to use within six months
- between the 5th and 6th anniversaries of registration, the owner must submit an addavit or declaration of continued use of the mark - failure to do so results in cancellation of registration
A mark is abandonded:
discontinued with intent to not resume such use
nonuse for 3 consecutive years is abandonment
Superior common law rights
Another person owns the mark but has not registered it
Cyberlaw perspective
The Trademark Dilution Revision Act referred to above and the Cyberpriracy Prevention Act are used to unseat cybersquatters
Factors regarding liklihood of confusion (actual confusion does not have to be proven)
- simiarlity between the marks in appearence and suggestion
- similarity of products
- area and manner of concurrent use
- area and manner of concurrent use
- degree of care likley to be exercised by consumers
- actual confusion
- intent of the defendant to “palm off” his product as that of another”
When attempting to determine if 2 marks are similar =>
the comparsion should be made in light of what happens in the marketplace
fair use defense
Use of a trademark in a news report, legilstiave proceeding, comparative advertising, parody, criticism or commentary
Tradenames
A name used to identify business, vocation or occupation - may also be a trademark
Copyrights
Form of protection provided by the Federal Copyright Act - protection extends to an original expression of an idea (does not protect idea)
Some of th exclusive rights of an owner of a copyrighted work
- reproduce copies
- prepare derivative works
- distribute copies of the work
- perofrm or display publicly the work
Requirements to have copyright
a. original works - indepdendntly created and possesses some minimal degree of creativity
b. the original work must be fixed in tangible form
c. you must be the “owner” of the original work
1. creator of the work
2. employer of the employee who created the work
3. works for hire
Copyrightable
Literary works
musical works
dramatic works
pantomies and choreographic works
pictorial , graphic and sculptural works
motion pictures
sound recordings
architectual works
computer programs
Not copyrightable
Works not fixed in tangilbe work
Titles, names, short phrases
familiar symbols or designs
lettering or coloring
recipes
ideas, procedures, methods
processes, concepts, devices
information that is common property
type face designs
Copyright registration not necessary
copyright protection exists regardless
however registration provides:
- allow for certain remedies otherwise not available
- a prerequisite to filing a infringement action
- prima facie evidence of ownership and validity of the copyright
Copyright protection
Lasts the duraiton of author’s life plus 70 years
If created by employee or if a work for hire - 95 years from first publication or 120 years from date of creation, whichever occurs first
Computer software
- source and object codes may be copyrighted
- a program’s structure and organization may be copyrightd
- a program’s look and feel may not be copyrighted
Infringement
Occurs when any of the copyright owner’s exclusive rights are violated - essentially copying for your own benefit
Independent creation is not infringement
ex. write a similar book with no knowledge of that book
Two-step test to establish “copying” which constitutes infringement
- similarity of ideas - objective test
- similarilty of expression - subjective test
Plaigairism
Infringement is copying without autorization and these two wrongs (plaigairsm and infingement) can occur simultaneously
First sale doctrine
This doctrine allows the purchaser of copyrighted work to transfer the work - as long as no additoinal copies are made
Fair use exception
To infringment claim
when copying of a copyrighted work would not be considered infringement - factors considered and examples
Effect of use upon the potential market for the copyrighted work
If the use adversely affects the market for the copyrighted work, it is unlikely that the fiar use defense will work
Examples of fair use:
- quotation for review or criticism, or in a scholarly or technical work
- use in a parody or stature
- brief qutation in a new report
- reproduction by a teacher or student of a small part of the work to illustrate a lesson
- incidental reproduction of a work in a newsreal or brodacast event being reported
- reproduction in a legislative or judicial proceeding
Digital Millenium Copyright Act
Act provides that:
- it is illegal to delete copyright information or to distribute false copyright information
- it is illegal to circumvent encryption or scrambling devices that protect copyrighted digital works and thereby access such works
- it is illegal to manufacture and distribute technologies, products, or services primarily designed for the purpose of circumventing wrappers or encryption protection
Patents
Protected property right to make, use or sell an invention to the absolute exclusion of others for the period of the patent (20 years)
First to file patent system
used in determining which of 2 or more inventors will be entiitled to patent
The invention must (for patent)
a. have utility - be useful (not enough to be merely interesting)
b. be novel (new)
c. be non-obvious
Be novel (new) the invention must not have been
- known or used by others in the U.S.
- patented or described in any printed publication anywhere in the world
- invented by another in the U.S. who has not abandoned or concealed the invention
- already described in a U.S. patent application which results in issuance of a patent
One-year rule (statutory prohibition) - inventor is barred from obtaining a patent if more than one year before the application is filed, the invention was:
- patented or described in a printed publication anywhere in the world
- in public use in the US
- on sale in the US
- subject to patent application by another inventor in another country which resulted in a patent being issued before the U.S. patent application was filed
Patent application
a. application is kept confidential until patent is issued
2. applicant has absolute duty to disclose “material” information
c. granting of patent is no guarantee that your invention does not, in fact, nfringe on another patent
d. maintence fees payable to maintain a patent at 3.5, 7.5 and 11.5 years after issuance
Provisional patent application
Abbreviated application process with a few formalities
Problems in the United States Patent Office
Backlog and controversal patents granted
Patent infringement and remedies
a. infringement - making using or selling a patented invention without permission
b. remedies - injuctive relief, damages, treble damages, attorneys fees in exceptional cases and costs
What is a Contract?
An enforceable agreement to act or refrain from acting in a specified manner
Contract creates the legal right to “trust” another person
A contract creates the “reasonable and legitimate expectations of performance by another”
Desirable characteristics of contracts they can be freely made and effectively sanctioned if breached
Elements Necessary to Have an Enforceable Contract
A. offer/acceptance - the parties must reach an agreement with respect to the subject matter of the contract - essentially what each party is to do under the terms of the contract
B. competent parties
c. consideration
d. legal subject matter or subject
Express contracts
Terms of the contract manifested through use of words
written or spoken
Implied in fact (implied) contracts
Implied - terms of the contract manifested through actions of parties
Automated transactions
Computers communicating with computers
Quasi contract (implied in law contract) not a type of contract at all
- an equitable remedy
- to avoid an unjust enrichment (in situations where a breach of contract is not the basis for the enrichment at the expense of another)
- law infers a contract-like promise on a party to compensate another party for a benefit received even though there exists no contract obligation to do so
Elements of a Quasi Contract
- A benefit was conferred by one party to another
- appreciation or knowledge of benefit by person receiving benefit
- acceptance or retention of benefit under the circumstances would be unjust
Void contract
No contract
example: a contract the subject matter of which is illegal is regarded as a void contract
Voidable contract
Where one or both parties may avoid legal duties created by the contract
ex. a contract that was entered into as a result of one party’s fraud is said to be voidable at the option of the other party
Bilateral contract
Where the consideration for the contract is the exchange of promises by the parties
ex. your lease involves the exchange of your promise is to pay rent for the landlord’s promise to permit you to occupy an apartment
Unilateral contract
Where the consideration for the contract is teh exchange of a promise by one party in exchange for an act, or forebarance to act, by the other party
ex. find my lost dog and ill give you $20
Executed contract
a fully-performed contract
ex. after your lease term expires and you move out, the lease is an executed contract
Executory contract
partially or entirelly unperformed by one or more of the contracting parties
ex. during the term of your lease, it is said to be an executory contract
Contract interpretation dispute
the parties concede they have a contact but disagree as to what the contract requires them to do
Plain meaning rule
When a written contract is clear and unequivocal, a court will enforce it according to its obvious terms and the court will not consider extrinsic evidence
Unclear or ambiguous terms
Extrinsic evidence will be admitted to clarify the meaning of the contract
- court will then be required to interpret the ambiguous terms consistent with the parties intent as expressed in their contrac (certain rules of interpretation govern this process)
A contract is ambiguous if:
a reasonable person could understand in differently
terms are suceptible to more than one reasonable interpretation
Performance duties
One party claims that the other is in breach of contract for failing to do what the contract requires
Importance of:
due diligence before entering into a contract
What is the subject matter of the contract?
This tells you what body of law applies to the contract
If there is a combination of different subject matters:
what is the predominant purpose of the contract?
Mutual assent
Offer and acceptance
The terms of the offer and acceptance can be:
expressed or implied
“Vending Machine” Contracts
No negotiations/no documents
“Handshake” Contracts:
Negotiations/some or no documents
“Internet/Amazon/Dell/Automoated” Contracts:
Telephonic/internet communications/computer communications/ standardized terms
“Standardized Forms” Contracts:
Some or no negotiations/one-sided forms
lease
“Lawyer-Involved” Contracts:
Negotiations/custom documents
When do contract disputes arise?
When one desires the contract and the other does not, then the technical rules of contract formation become paramount
Offer
Proposal to Contract
Offeror makes the offer to the offeree
Must manifest contractual intent (equal to “I offer”) - factors to consider
- words used
- actions taken - do the actions of a party manifest an intent to be bound to a contract
- circumstances - claims that a contract was formed in a formal business setting vs claims that a contract was formed in a bar where intoxication happened
- how definite and certain - the more thorough the parties are in defining their contractual obligations, the more likely a finding of contractual intent
Must be definite and certain enough - how definite and certain?
- must deal with major matters - identification of parties, subject matter, time issues, price
- importance of being thorough - avoid leaving gaps
- gap filling - “unless otherwise agreed” - but the court will not make a contract where the parties were too indefinite and uncertain
To gap fill under the common law (general law of contracts) you must show that:
- the parties intended to be bound to each other contractually and
- there is a reasonably certain basis for filling the gap
*the terms of a contract are reasonably certain if they provide a basis for determinig the existence of a breach and for giving an appropriate remedy
Article 2 applies to:
transactions in goods
Formation in General Article 2
- A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract
- an agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined
- Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy
2-204 (3) above
the UCC gap filling rule
Examples of specific gap-filling provisions
- 2-305 (price ) - reasonable price
- 2-308 (place for delivery) => unless otherwise stated, seller
- 2-309 (time) reasonable time
- 2-310 (time for payment )- cash if not stated
Guidance for filling gaps
- course of dealing - historical dealings between the parties
- usage of trade- customs in the industry or business segment
- course or performance - how were earlier performance installments of a contract handled by the parties?
Effect of vaguness
A confusing term v absence - a failure to include a term (easier to gap fill for absence than deal with vaguness)
Output and requirements contracts 2-306
No quantity specified in absolute terms
Quantity cannot be unreasonably disproportionate
to an estimate - if one was included in the contract or if no estimate was included, to the quantity of a similar prior period of time
Agreements to agree (letters of intent)
No contract is formed as except as to matters expressly provided for in the letter of intent
Fine print situations
Are you bound by the “fine print” in an offer if you accept it?
generally yes
Unauthorized acceptance
An offer that is “accepted” by one who is not authorized to accept it
generally no contract would be formed
Acceptance - Manifestation of Assent to Terms of Offer
a. can be given by offerree only (perosn to whom the offer was communicated)
b. must be unequivocal (must be equivalent of “I accept”
c. must be unconditional (cannot be “I accept provided
d. must be a mirror image of the offer
Must be a mirror image of the offer
- the acceptance cannot change the offer
- if the communication is not a mirror image - the attempted acceptance is really a counteroffer which is an implied rejection of the offer (which terminates the offer - offer cannot thereafter be accepted)
- UCC 2-207 exception to mirror image rule - under certain circumstances, a contract is formed even tho acceptance adds or changes terms
UCC 2-207 exception to mirror-image rule
a. is there a contract? - was the acceptance made expressly conditional
b. if there is a contract based on your analysis under subsection 1 - what are its terms
2-207 (3) no contract technically exists because writings do not form one
but parties act as if the contract exists - parties will be bound contractually because of their actions
Are both parties merchants?
No - additonal terms are proposals for additions
yes - additional terms are automatically part of contract unless excluded
“Knock out” rule
the conflicting terms are not included and you gap fill
- majority rule (that is the rule we will adpot for purposes of class)
Offferor’s term
The different term in the offer - is binding
A “price” counteroffer
will likely always be considered a counteroffer regardless of whether words of condition were used
The additional terms are to be construed as proposals for addition to the contract (between merchants such terms become part of the contract unless:
- the offer expressly limits acceptance to the terms of the offer
- they materially alter it
- notification of objection to them has already been given or is given within a reasonable time after notice of them is received
Merchant
Means a person who deals in good of the kind or otherwise by his occupation holds himself as having knoweldge or skill peculiar to the practice or goods involved
Does the contract involve the sale of goods?
if yes - article 2 and 2-207 apply
if no - article 2 does not apply and the rules related to common law counter offers would apply
if yes, does the acceptance include different or additonal terms than were in the offer
if no, then 20207 is not applicable and a contract is formed
If no, the acceptance is not expressly conditional
then a contract is formed
If both seller and buyer are merchants, then the additonal terms automatically become part of the contract unless:
the offer provided that additional terms included in the acceptance would not be binding on the offeror
- the additional terms materially alter the contract
- the offeror objects to teh additional terms within a reasonable period of time
