EXAM II

Question 1

6 bundle of rights of property

Answer 1

Property - general concepts

1. Liberty to use (use the property in any way you want, so long as your use of it doesn’t violate someone else’s rights)
2. Right to exclude (to determine who else can and cannot use the property, so long as you are not violating anti-discrimination laws in a business open to the public)
3. Power to transfer (to sell or give the property to someone else, except that laws regulate some contractual relationships )
4. Power to devise or bequeath (to leave it to someone in your will, except that you must pay estate taxes and some states require that a surviving spouse gets some property)
5. Immunity from damage (to not have your property damaged by others except that some things others do may impact the value of your property and yet be permitted)
6. Immunity from expropriation (to prevent others from taking it from you against your will except that the government can take a property in some instances by paying just compensation)

Question 2

Personal/Real Property

Answer 2

Property - general concepts

Real - The earth’s crust and all things firmly attached to it

Personal - everything else (running shoes, stocks, art)

Question 3

Tangible/Intangible Property

Answer 3

Property - general concepts

Tangible - Has a physical existence (Hammers, cars, bracelets, soda cans, iphones)

Intangible - Has no physical existence. The value lies in the rights that go with the property. (Rights under a patent or copyright. Stocks. Right to sue on a contract).

Question 4

Public/Private Property

Answer 4

Property - general concepts

Public - Owned by the government, or some unit of the government.

Private - Owned by an individual, a group of individuals, a corporation or other business organization.

Question 5

Abandoned Property

Answer 5

Personal Property

The owner intentionally placed the property out of his possession with the intent to relinquish ownership of it.

Finder becomes the owner. This means the finder has better rights to the property than anyone else in the world – including the original owner.

*Purple couch example

Question 6

Lost Property

Answer 6

Personal Property

The owner did not intend to part with possession of the property.

Original owner has better rights than the finder; the finder has better rights than anyone else (other than the original owner).

In some states, if the finder knows who the true owner is, he is required to return it.

*Jayhawk sweater example

Question 7

Mislaid Property

Answer 7

Personal Property

The owner intentionally placed property somewhere but then accidentally left it there, not intending to relinquish ownership.

Finder has no rights in the property.

The person in possession of the real property on which the personal property was mislaid has better rights to it than anyone other than the original owner.

In most states, the owner of the real property holds onto the property for the true owner until some amount of time has passed and the owner has not returned to pick it up.

*golf club example

Question 8

Gift

Answer 8

Personal Property

Voluntary transfer of property to the donee from the donor.

Question 9

Elements to transfer title by gift

Answer 9

Personal Property

1. The donor must intend to make the gift.
2. The donor must make the delivery of the gift.
3. The donee must accept the gift.

A promise to make a gift in the future generally is not enforceable

Question 10

Bailment

Answer 10

Personal Property

One party holding property of someone else, for a while, but with a duty to return it to the owner. Must express or implied contract that the bailee (the person holding the property) has control of the property and a duty to return it to the bailor (the person who owns the property).

*Bike example - storage lockers - warehouse - borrowing tools etc

Question 11

Donor

Answer 11

Personal Property

Person who gives the gift.

Question 12

Donee

Answer 12

Personal Property

Person who receives the gift

Question 13

Testamentary gift

Answer 13

Personal Property

A gift made through a will

Question 14

Bailor

Answer 14

Personal Property

The person who owns the propery

Question 15

Bailee

Answer 15

Personal Property

The person holding the property

Question 16

Bailee’s duty of care

Answer 16

Personal Property

1. For benefit of bailor - If the bailment is “for the benefit of the bailor” (for the benefit of the owner), then the standard of care for the bailee is relatively low.
2. For benefit of bailee - If the bailment is “for the benefit of the bailee,” then the standard of care for the bailee is much higher. Bailee is very likely in breach of the duty of care if she cannot return the object to the bailor in proper condition.
3. For mutual benefit - Many bailments are for the mutual benefit of both parties (like a rental agreement). Bailee has a duty to return the object and to take “reasonable care” of it.

Question 17

Real Property

Answer 17

Real Property

Real Property is not just land…

• Land
• Buildings
• Trees, crops, and other vegetation
• Water and groundwater
• Minerals below – but there are limitations..
• “Law of Capture” in many states
• Airspace above – but only to the extent you can use it

Question 18

Airspace

Answer 18

Real Property

You own the airspace above your property only to the extent you can use it

Question 19

Minerals - the rule of capture

Answer 19

Real Property

Rule of capture states that the first person to capture a natural resource owns that resource

Question 20

Adverse possession & the 3 ways it occurs

Answer 20

Real Property

If someone is continuously trespassing on your land and you fail to put a stop to it – eventually that trespasser will own the land.

Adverse possession occurs when:

1. A person wrongfully (without permission of the owner) occupies land in an open and notorious manner;
2. In a way that is actual, exclusive, and continuous (can do this with a fence or constructing something on it or just stay there continuously)
3. Possession must be continuous for a prescribed period of time (10-20 years, depending on the state).

True owner must take steps within a statutory time limit to eject possessor from the land or forever lose the right to eject the possessor.
Easier solution: Just give them permission to be there

Question 21

Fixture - what it is and why it matters?

Answer 21

Real Property

A permanent fixture is a personal property that has become attached to or connected to real property in such a way that it ceases being personal property and becomes part of the real property.

Fixtures belong to the owner of the real property.

Negotiating when selling a house

Question 22

Easements

Answer 22

Real Property

the right to make a certain use of another person’s property - often the right to go across the land

1. By necessity - someone must be allowed to use land he does not own out of necessity (e.g. there is no other way to get to the land that person does own);
2. By grant - written grant that says the property owner that says the other person has the right to use some part of the land in some way, either because of a gift of a sale
3. By reservation - owner sells the land but reserves some use of a part of it for himself
4. By prescription - someone conducts an open and continuous use of another person’s land over a long period of time and the owner fails to stop that use

Question 23

Concurrent ownership

Answer 23

Real Property

Each person’s ownership is UNDIVIDED.
No one person owns a specific piece or portion of the property – instead all the concurrent owners own the whole thing together.

1. Joint tenants - all own equal shares; if one person dies, they have the right of survivorship & can take the third parties portion
2. Tenants in common - can own difference shares & do not have the right to survivorship
3. Action to partition - Owners, or creditors of an owner, can force a division of the property through an “action to partition”

Question 24

Writing Required

Answer 24

Real Property

Agreements dealing with real property generally must be written (unlike most other contracts).

Question 25

Deeds - recording

Answer 25

Real Property States have systems for recording deeds – it is important to follow those systems to be sure you are getting good title. Transfer of the title is what transfers possession of the land.

Question 26

4 kinds of intellectual property

Answer 26

Intellectual Property 1. Patents - inventions 2. Trademarks - logos, brand names etc. 3. Copyright - book, paintings, music, movies, software code 4. Trade Secrets - know-hows, customer lists, recipes

Question 27

Patent & it's 6 aspects

Answer 27

Intellectual Property 1. Application - an agreement between the inventor and the federal government that gives the inventor a monopoly for a limited period of time. 2. Monopoly - The patent holder has the exclusive right to exclude others from the making, using or selling of the invention for 20 years. 3. Requirements - useful, novel (new), nonobvious 4. Abstract idea & rule of nature - including mathematical and scientific concepts, are not patentable. Laws of nature and natural phenomena are not patentable. These aren't enforceable 5. First to file rule - First person to file a patent gets the patent, even if he was not first to invent, so long as that person independently developed the patent. 6. Infringement - What you sue over

Question 28

Trade Secrets & its 4 aspects

Answer 28

Intellectual Property any secret formula, pattern, process, program, device, method, technique, or database used in the owner’s business that offers a competitive advantage 1. Reasonable measures - A firm must take reasonable measures to maintain secrecy - NDAs with employees, customers, potential business partners who will have access to the information 2. Misappropriation - Misappropriation of a trade secret occurs when a person discloses OR uses the secret information after acquiring the secret by improper means. What you sue over *improper - theft, trespass, through another party who is known or should have been known to have obtained the secret by improper means, breaching of a duty of confidentiality 3. Reverse Engineering - Reverse engineering is not misappropriation of a trade secret. If you figure out how to do the same thing without unlawfully taking the trade secret…then I can’t do anything about that 4. Remedies for Misappropriation - Damages – amount of actual loss to the trade secret owner or unjust enrichment to the trade secret misappropriator; Sometimes punitive damages; Sometimes injunction.

Question 29

Copyright & its 7 aspects

Answer 29

Intellectual Property Gives some exclusive rights to creators of original works of authorship. The copyright owner can exclude others from using and copying their work, subject to some limits. 1. How it is obtained - Copyright comes into existence AUTOMATICALLY upon the creation and fixing of the work. 2. Registration - Creator can register with the US Copyright office, but doesn’t have to. 3. © - A form of notice - It is permitted but not required for creation of copyright. Federal law authorizes use of the © with the year of first publication and the name of the copyright owner to give notice. Eliminates the “innocent infringement” defense. 4. Work for hire - An employee creates a copyrightable work within the scope of her employment duties. Employer is the author and copyright holder. 5. Ownership Rights - Exclusive rights to reproduce the work, prepare derivative works and distribute copies for sale or otherwise. Copyrights are transferable and licensable – you can sell (transfer) your copyright or give someone else a limited right to use (license) your work. 6. Infringement - Normally requires establishing that (1) The defendant had access to the copyrighted work; (2) Defendant engaged in enough copying (whether deliberate or subconscious) that the resemblance between the to be two versions does not seem coincidental; and (3) There is a substantial similarity between the two works (more than just expressing the same themes, but it does not have to be copied verbatim to be considered infringement) **Merely crediting the work (citing the author) is not a defense to copyright infringement. 7. Fair use exception - criticism/comment, news, teching, research

Question 30

Trademark & its 5 aspects

Answer 30

Intellectual Property 1. Purpose - Distinctive mark, motto, device, or emblem that a manufacturer or service provider stamps, prints, or affixes to products it produces or services it performs to distinguish products or services from those of competitors 2. Registration - Registration with government recommended, but not required. Can use ™ without registering. Must register to use ® 3. Distinctive - the more distinct a trademark, the more protection *citibank thank case 4. Abandonment - you can lose trademark protection through abandonment 5. Infringement - Someone uses the mark without the owner’s consent, in connection with the sale of goods or services, such that consumers are likely to be confused about the source of the goods or services.

Question 31

Credit

Answer 31

Secured Transactions & Bankruptcy Credit - transactions in which goods are sold, services are rendered, or money is loaned in exchange for a promise to repay the debt at some future date 1. Secured credit - In a secured credit transaction, the creditor makes some contract to give the creditor some security that the debt will actually be repaid. A debt is “secured” if it is backed either: by a pledge of another person (in addition to the debtor) to pay or by a contract giving the creditor an interest in the property (collateral) that helps ensure financial confidence. 2. Unsecured credit - a service was rendered or good sold and the consumer or debtor promises to pay for the service or good later (upon receiving a bill). Many transactions are unsecured - dining out Send notices to pay. If that doesn’t work… Sue the debtor for breach of contract and get a court judgment that says the debtor really does owe the creditor the money. then can go for garnishment or attachment

Question 32

Security Interest

Answer 32

Secured Transactions & Bankruptcy 1. Surety/Guarantor - a person who agrees to be liable for the debt of someone else. (i.e. the guarantor will pay the debt if the debtor fails to pay it) Sureties and guaranty contracts must be written (not oral). 2. Lien - A lien is a security interest in personal property available to businesses and individuals by statute and common law. 3. Mortgage - A mortgage is a security interest in real property given by the owner (mortgagor) as security for a debt owed to the creditor (mortgagee). If the debtor does not pay, the bank can use a judicial process to foreclose on the property and sell it to satisfy the debt.

Question 33

Garnishment

Answer 33

Secured Transactions & Bankruptcy make the employer pay creditor part of debtor’s wages

Question 34

Attachment

Answer 34

Secured Transactions & Bankruptcy seize debtor’s stuff – assets, bank accounts

Question 35

Artisan's Lien (possessory lien) & 2 essential elements

Answer 35

Secured Transactions & Bankruptcy if you fixed something for a customer, and your customer didn’t pay the bill, you can hold onto that thing you fixed until the customer pays. Two essential elements of: 1. possession by improver/provider of services of goods that they improved/provided services concerning; 2. a debt created by the improvement to goods or provision of services concerning the goods

Question 36

Collateral

Answer 36

Secured Transactions & Bankruptcy the property/assets that secure the loan.

Question 37

Attachment & three requirements

Answer 37

Secured Transactions & Bankruptcy Seize debtor’s stuff – assets, bank accounts. So the lien is enforceable against the debtor Requires: 1. An agreement signed by the debtor that grants the debtor a security interest in the collateral (must describe the collateral), 2. Value from the creditor to the debtor, and 3. Debtor owns the collateral

Question 38

Perfection

Answer 38

Secured Transactions & Bankruptcy So the lien gets in line ahead of other creditors who may take an interest in the collateral. Usual way – file a financing statement with the Secretary of State

Question 39

Mechanics' Liens

Answer 39

Secured Transactions & Bankruptcy Statutory systems permit one who furnishes labor or materials to improve real estate to claim a lien on the real estate until they are paid.

Question 40

Real estate mortgage

Answer 40

Secured Transactions & Bankruptcy 1. Foreclosure - foreclose on the property (cut off the debtor’s property rights in the property) & and then sell the property to satisfy the debt 2. Right of redemption - The debtorcan pay the full amount of the debt/interests/costs within a certain period of time to get the property back.

Question 41

Bankruptcy Petition

Answer 41

Secured Transactions & Bankruptcy An organized judicial procedure for insolvent debtors and their creditors to sort things out.

Question 42

Bankruptcy automatic stay

Answer 42

Secured Transactions & Bankruptcy an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.

Question 43

Bankruptcy Proof of Claim

Answer 43

Secured Transactions & Bankruptcy A document filed with the Court so as to register a claim against the assets of the bankruptcy estate.

Question 44

Discharge from bankruptcy

Answer 44

Secured Transactions & Bankruptcy The desired result of a bankruptcy case. A court order in your bankruptcy case that removes your debts

Question 45

Chapter 7 Bankruptcy vs. Chapter 11 Bankruptcy

Answer 45

Secured Transactions & Bankruptcy 1. Ch. 7 - liquidation 2. Ch. 11 - reorganizing

Question 46

3 types of property

Answer 46

1. Real vs. Personal 2. Tangible vs. Intangible 3. Public vs. Private

Question 47

4 Ways to Acquire Property

Answer 47

1. Production 2. Exchange 3. Possession of unowned property under appropriate circumstances 4. Gift

Question 48

3 things a court will consider with a fixture

Answer 48

1. Attachment - If firmly attached to real property so it cannot be removed without damaging property, the item is likely to be a fixture 2. Adaptation - When an item would be of little value except for use with real property, item likely to be a fixture 3. Intent - Judged objectively -- by what the circumstances indicate was intended (not by the person’s subjective intent)

Question 49

How long does copyright last?

Answer 49

Works created in 1978 or later: Life of the creator plus 70 years. Works for hire: 95 years from first use or 120 years from creation, whichever comes first.