Exam 4 Flashcards
Uniform Commercial Code (UCC)
model code aiming to simplify and modernize the law overseeing commercial transactions, common rules for commercial law, provides gap fillers when contracts are ambiguous/not in writing, adopts common law of contracts
Commercial Transactions
transactions regarding personal property: sales, commercial papers, bank deposits, letters of credit, bulk transfers, warehouse receipts, bills of lading, documents of title, investment securities, secured transactions
Article 6 (UCC)
governs bulk transfers, doesn’t address agriculture - only those who manufacture what they sell
Article 2 (UCC)
governs sales, addresses farm transactions
Merchant
whan a farmer is familiar with the marketing practices in the industry: length of time goods sold, business knowledge, farm market knowledge
Contract
legally binding promise or set of promises between two or more parties, both legally obligated to perform, each can go to court for non-performance
Elements of a Contract
legally competent parties, legal or proper subject matter, offer, acceptance, consideration
Legally Competent Party
no lack of maturity or mental capacity to exercise good judgement, ex: children, insane, mentally retarded
Voidable Contract
contract which may be either affirmed or disaffirmed at the option of one or more of the contracting parties, ex: emancipated minors
Disaffirmance
avoids/destroys the legal relationship
Affirmance
ratifies and makes enforceable
Illegal Agreement
ex: creation of monopoly or illegal gambling contracts
Adhesion Contract
“take it or leave it”, weaker party at mercy of stronger, eliminates bargaining power: numerous terms, drafted by one party to the contract, contracting is routine for drafting party and not for adherent, signed by adherent, adherent’s key obligation is money
Unconscionable Contract
problem in substance and formation of contract, lopsided obligations and rights, bargaining power unequal
Offer
promise or commitment to do some act, intentionally not do some act, or promise some return performance, good for a time period or “resonable” period of time, must be received to be legally effective
Elements of Offer
a manifestation of words or acts to make a contract, definite in terms, communicated to offeree
Lucy vs Zehmer
Zehmers sold to Lucy for $50,000, wrote up contract while drunk, lost farm - definite in terms
Acceptance
made to a specific person (cannot be accepted by another), effective as soon as the offer leaves offeree’s possesion
Meeting of the Minds (MOM)
both members understand what they’re contracting to, reached through process of offer and acceptance-counter offers, changing conditions
Qualified or Conditional Acceptance
counter-offer, rejection of original
Consideration
something given in exchange for a promise, benefit to one party, detriment to other, something of value
Unilateral (Contracts)
one party makes a promise and the other party does or does not do an act, promise for act
Bilateral (Contracts)
promises made on both sides, promise for promise
Express (Contracts)
contracts definitely set out in words, oral or written
Implied (Contracts)
contracts worked out or inferred from the acts and conduct of parties, implied in fact or implied in law
Implied in Fact
based on conduct, no mention of a contract, no written or spoken words, ex: wrong barn gets painted and owner sits and watches
Implied in Law
facts lead court to claim that regardless of parties wishes, they will be treated as though they made a contract, ex: barn painted by mistake while owner on vacation, owner may have to pay for paint
Statute of Frauds
certain contracts must be in writing to be enforced, include contracts taking over one year to perform, involving transfer of real estate, for sale of goods $500 or more
Partial Performance
enforcement of oral contracts, conduct by a party that is sufficient enough for courts to remove a contact from Statute of Frauds
Straatmann vs Straatmann
son receives farm equipment/land
Promissory Estoppel
a promise reasonably expected to induce action and does, ex: aunt offers to pay for neice to live in nunnery
3 Excuses of Contractual Performance
substantial performance, impossibility of performance, frustration of purpose
Substantial Performance
allows a partial or substantially similar performance to stand in for the performance specified in the contract
Impossibility of Performance
item’s destruction is no fault of contracting parties
Frustration of Purpose
supervening event destroys bargained for performance
Parol Evidence Rule
in written contracts, parties to the contract are nor allowed to offer extrinsic oral declarations to alter the meaning of the contract (written contracts speak for themselves)
Remedies for Breach of Contract
damages, specific performance, recision and restitution
Specific Performance
requires a party to perform a specific act, usually what is stated in a contract
Rescission and Restitution
terminates liability and requires parties to return whatever benefit he/she recieved
Warranty
promise that a certain statement of fact is true, generally centered on product liability, express or implied
Implied Warranty of Merchantability
goods must reasonably conform to an ordinary buyer’s expectations
Implied Warranty of Fitness for a Particular Purpose
implied when a buyer relies upon the seller to select the goods to fit a specific request, ex: snow tires
Disclaimers
denial or renunciation of responsibility, happens in sales, not in torts
Hold Harmless Agreement
contractual agreement transfers liability from one party to another, invalid if illegal, immoral, against public policy, created fraudulently, will not cover negligence
Indemnitee
party responsible for damages or liability
Indemnitor
party agreeing to hold indemnitee harmless
Sole Proprietorship
least costly, most widely used, simple decision making, owner responsible for debts and obligations and third party injuries, lack of continuity in death/illness, growth limited to personal energy, difficulty of transfer, personal affairs easily mixed with business
Partnership
association of two or more persons to carry on as co-owners of a business (Uniform Partnership Act), implies voluntary act of two or more ppl, must have legal capacity, can also include corporations, sharing of profits, joint control, sharing of profit/losses, personally responsible for debts and obligations, can be formed by oral agreement
Joint Venture
single business transaction for a short period of time
Elements of Partnership Agreement
type of business, amount invested by partners, division of profit/loss, compensation for partners, distribution of assets on dissolution, duration of partnership, provisions for dissolving, provisions for withdrawls/admission of partners, dispute settlement clause, restrictions of authority-expenditures, settlement in case of death
Terminating a Partnership
term of partnership agreement expires, decision by one of partners, expulsion of partner, unlawful acts, death of partner, bankruptcy
Advantages of Partnership
additional sources of venture capital, two heads, flexible, easy to form
Disadvantages
unlimited personal liability, death, withdrawl or bankruptcy of one partner, difficult to lose a bad partner, hazy line of authority
Taxes (Partnership)
income and losses taxed on partner’s interest in business
Types of Partnership
general, limited, limited liability
General Partnership
partners personally liable for debts and obligations, more options for financing
Limited Partnership
1 general partner, others limited, partners not personally liable for debts and obligations, only to extent of investment, limited partners don’t participate in management of partnership
Limited Liability Partnership
hybrid btwn general and limited, liability for your own misconduct, not others’
Corporation
legal entity existing under the authority of state legislature, for purpose of carrying on a business for profit, concept of legal separateness, recognized as artificial person (due process under 5th/14th amendment, can engage in business transactions, hold property, contract, sue or be sued)
Elements of Corporation Registration
corporate name, address, shares authorized to issue, preemptive rights to shareholders, purpose, powers of board/execs, mgmt of business, personal liability for shareholders, par value and classes of shares
Ownership of Corporations
shareholders elect board of directors (governing body)
Dissolution of Corporations
voluntary process by board of director vote or approval of stockholders, involuntary process by failure to follow law or file reports
Advantages of Corporation
limited liability for stockholders, continuity, transfer of shares easily, change of ownership need not affect mgmt, easier to resuse capital
Disadvantages of Corporation
heavier taxes (corporate and shareholder income taxed), power limited by charter, less freedom of activity, significant legal formality, expensive to launch
S Corporations
small business, taxation is key factor–not affected by corporate income taxes, treated as partnership for taxation purposes, must be: domestic entity, one class of stock, individuals and estates only as holders, can’t be part of another org, max number shareholders allowed, no nonresident alien shareholders
Limited Liability Company
business hybrid authorized by the state, combines elements of sole proprietorship, partnership, corporations, liability limited to amount contributed, generally member-managed according to percent of interest, profits/losses allocated according to operation agreement or articles of organization
Dissolution of LLC
as specified in operation agreement or articles of organization, occurance of specific events, written consent of all members, LLC ceases to have members, order of a court, company continues only to carry out neccessary business and liquidate affairs, distributes assets to creditors, then members w liability, then members in proportion to interest
Protected Disability Categories
race, color, religion, naitonal origin, sex, age, handicap or disability, marital status, sickle cell trait, pregnancy, abortion, childbirth related conditions, disabled veterans
Rehabilitation Act of 1973
protects qualified individuals with disabilities–physical or mental impairment substantially limiting one or more major life activity, reasonable accommodation for employees with disabilities; program accessibility; effective communication with people who have hearing or vision disabilities; and accessible new construction and alterations
Americans with Disabilities Act of 1990 (ADA)
unlawful to discriminate against a qualified individual with a disability, no discrimination in state and local gvmt services, public accomodations, transportation and telecommunications, employers must make “reasonable accomodations” unless it poses an undue hardship
Americans with Disabilities Act Amendments 2008
broader definition of disability: “major life activities” include major bodily functions: immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, reproductive functions
1990 “Major Life Activities”
walking, speaking, breathing, learning, standing, lifting, reading
Title 1 (ADA)
prohibits employer form discriminating against qualified individual with disability who with or without reasonable accomodation can perform the essential functions of a job unless it creates an undue hardship on the business operations
Examples of ADA Accommodations
accessible facilities, modified work schedules, acquiring/modifying equipment or devices, adjusting/modifiying exams, training material, policies, providing qualified readers or interpreters
Undue Hardship (ADA)
excessively costly, extensive, substantial, or disruptive, or would fundamentally alter the nature/operation of the business, significant difficulty or expense in relation to the employer size
Workplace Drug and Alcohol Use
prior to employment - no testing, offer made and accepted - testing, employed - testing
Disability Remedies
compensatory and punitive damages, back pay, restored benefits, attorney’s fees, reasonable accommodation, reinstatement, job offers
Sexual Harrassment
prohibited under Title VII of Civil Rights Act of 1964, applies to all employers of 15+ employees, unwelcomed sexual advances, requests for sexual favors, other verbal/physical conduct of a sexual nature
Terms of Sexual Harassment
submission is made either explicitly or implicitly a term or condition of the individual’s employment, rejection used as the basis of employment decisions affecting the individual, unreasonably interfering with the individual’s performance or creating an intimidating, hostile or offensive work environment
Ellison vs Brady
sexual harassment cases the facts must be judged from the perspective of a “reasonable woman”, attempting to bridge the gap between male and female perceptions of what conduct constitutes workplace sexual harassment
Quid pro quo
“this for that”, sexual harassment in which favors are exchanged for job benefits over which the supervisor has some control or influence over the employer
Hostile Environment
sexual harassment creates an intimidating, hostile, or offensive work environment or unreasonably interferes with an individual’s job performance
Meritor Savings Bank vs Vinson
endorsed the concept of a hostile environment
Harris vs Forklift Systems, Inc
clarified what constituted a hostile environment
Nash vs Electrospace System Inc
prompt investigation completed in one week of sexual harassment case
