Final Review Flashcards
preformation contract
any contract before the entity is formed
novation
document declaring an entity is taking over a contract, usually a preformation contract
Who usually forms LLPs?
professionals (doctors, lawyers, accountants)
Malpractice
when a professional commits negligence, makes an error, or is reckless
What can members of an LLC lose if they are liable?
their initial investment
What are the two types of compensatory damages?
special and general
special compensation
for quantifiable numbers (ex: hospital bill, time lost at work, etc)
general compensation
for pain and suffering (ex: loss of an arm) non quantifiable
punitive damages
extra damages to make a point/punishment (not compesatory)
puffery
making something seem really good, flattery, selling it
NOT a mistatement of fact
What allows congress to create an administrative agency?
enabling legislation
notice-and-comment rulemaking
process for administrative agencies to make rules
1. post the proposed rule in the federal register
2. comment period for the public
3. post the final rule in the federal register
Do courts usually defer to the decisions of administrative agencies?
yes this is called defferance
principle of comity
one nation will defer and give effect to the laws and rulings of another country if that countries laws and judicial decrees are in line with their own
expropriation
when a foreign country takes the property of a U.S. citizen for a public reason and payed a fair price (this means the country is immune under act of state doctrine)
confiscation
when a foreign country takes a U.S. citizen’s property for no good reason and without paying a fair price (this means they can be sued because the act of state doctrine doesn’t apply)
act of state doctrine
the U.S. will not examine the validity of public acts by other country within it’s own territory UNLESS the country confiscated property
Direct exporting
when a business in the US deals directly with a foreign business
Indirect exporting
involves an agent/distributor in a foreign country (who is not a part of the full deal)
distribution agreement
A U.S. firm may wish to appoint a distributor located in a foreign country when it represents a substantial market (better for bigger markets)
the company that distributes the product is not the end user
license
an entity can pay a flat fee to use another’s technology, patent, method, etc
franchise
allow people to use your business name/concept but you still maintain full control (and get royalty/percentage of sales)
How can governments restrict exports?
quotas, technology limits, banning
tarriff
tax on imports
quota
certain limit on imports/exports
dumping
when a foreign business bring in product to the US at less than the fair market value to gain a larger share of the market
anti-dumping taxes
a tax of the foreign items to bring their price up to fair market value
How can the president limit or control administrative agencies?
executive agencies: president can select and fire the director
What are the two types of administrative agencies?
executive and independent
Where do administrative agencies get the power to exist
congress + enabling legislation
enabling legislation
creates administrative agencies and details their powers
The rules of administrative agencies cannot be ______
arbitrary and capricious
arbitrary and capricious
they can’t make rules that have no basis in research, are random, or consider irrelevant facts
If you have a dispute with an administrative agency you have to go through ______
administrative courts
the exhaustion doctrine
says that you have to go through administrative courts before you can appeal outside of their system
Administrative courts have the power to issue _____
subpoenas and warrants
two types of subpoenas
subpoena to come testify
subpoena documents
warrants
allow them to come search your property
What are the types of torts
assault, battery, false imprisonment, negligence, defamation, invasion of privacy, interference with contract, interference with business relationship, fraud, trespassing
What are the elements of negligence?
duty, breach, causation, damages
duty
defendant owed plaintiff a duty of care
breach
defendant breached their duty of care
causation
defendant’s breach caused injury
damages
plaintiff suffered legal injury
proximate cause
how foreseeable were the damages from the breach
How is promixmate cause determined?
reasonable person standard
reasonable professional standard
contributory negligence
if the plaintiff contributed tot he damages they don’t get any recovery
comparative negligence
you deduct the plaintiff’s percent liability (if they are responsible for 30% of the damages they get 70% recovery)
The 50% rule
if the plaintiff is responsible for 50%+ of the damages, they are barred from recovery
transferred intent
when you intend to harm one person but you harm another the intent gets transferred (still an intentional tort)
defamation
a false statement of fact meant to damage someone’s reuptation
libel
write, recorded, or posted defamation
slander
spoken defamation
What are the defenses to defamation?
truth, absence of malice
invasion of privacy
- disclosure of private information
- intrusion in an individual’s affairs
- publication of information that puts them into a false light
ex: using someones name/icutre
interference with contract
interference with business relationship
trying to destroy a business relationship in order to gain your own
what are the elements of fraud?
to lie about something specific you rely on
- misrepresentation of material facts
- intent
- relies on misrepresentation
-causation
- damages
trespass to property
coming on someone’s property without permission
overstaying on someone’s property
causing something to be put on the property (ex: rocks)
taking someone’s property without permission which becomes theft or conversion if you keep it
What are the defenses to torts
signing a waiver or release
self defense
truth (for defamation)
Advantages of a Sole Proprietorship
no legal formality
taxed on personal income tax statement
Disadvantages of a Sole Proprietorship
personal assets at risk
limited ability to raise capital
business dies when owner dies
difficult to get investors
limited to personal funds and loans
partnership
Arises from an agreement between two or more persons to carry on a business for a profit
Partners are co-owners of the business who have joint control over its operation and the right to share in its profits
partnership agreement
identifies the rights and obligations of partners and the partnership
The Uniform Partnership Act
governs the partnership in the absence of a partnership agreement
What are the rights of partners in a partnership?
Management Rights
Interest in the partnership
Compensation
Inspection of the Books
Assets/Profits
Property Rights
fiduciary duties
duty of care and duty of loyalty
Duty of care
duty of care is limited to refraining from “grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law”
Partner is not liable for simple negligence or honest errors in judgment in conducting partnership business.
duty of loyalty
requires a partner to account to the partnership for “any property, profit, or benefit: derived by the partner in the conduct of the partnership’s business or from the use of its property
liabilities of partnerships
partners are personally liable for the debts of the partnership
joint and several liability (partnership)
Third party has the option of suing all of the partner together (jointly, so they can use partnership assets to satisfy judgment) or one or more of the partners separately (severally)
liability of incoming partners
a new partner is not liable for an partnership obligations incurred before they became partner (ex: debt)
Partnership taxation
pass through entity (each partner pays taxes on their personal tax return)
Events that cause dissociation
voluntary notice
triggering event (violating contract)
unanimous vote
court/arbitrator order (wrongful conduct)
bankruptcy
Buyouts
contact that determines how remaining partners will buy out partner interest in advance
Ways of partnership termination
dissolution
dissociation
winding up and distribution of assets
partnership buy-sell agreements
LLC owners are called ____ and their ownership is called _____
members, interest
Advantages of an LLC
limited liability of members
flexibility in taxation
Flexibility in taxation (LLC)
two or more members can choose to be taxed as a partnership (pass through) or corporation (double tax)
Disadvantages of an LLC
lack of uniformity with state laws (difficult for businesses that operate in multiple states)
- investors typically dont invest in LLCs
Alter ego doctrine
courts may hold the owners of a business personally liable for its debts (pierce the corporate veil) to achieve justice
How does a court decide jurisdiction for an LLC?
citizenship of its members
LLP
hybrid form of business for professional who normally do business as partners in a partnership
taxation (LLP)
pass through entity, but limits personal liability
Formation of an LLP
formed in compliance with state statutes
certificate of limited partnership
file with state agency
name including LLP
Liability (LLP)
- avoid personal liability for the malpractice of other partners
- partners are still liable for their own wrongful acts
- partners who supervised someone who committed a wrongful act are also liable
general parter (LLP)
assumes management responsibility for the partnership and all it’s debts
- EXCEPT in states that allow a corporation to be the general partner
limited partner (LLP)
contributes cash or other property and owns an interest in the firm BUT is not involve in management or liable for debts beyond their investment
rights and duties (LLP)
right to participate in management (general only)
right to inspect the books
owe duty of care and loyalty
corporation
a legal entity created and recognized by state law
Advantages of Corporation
- best for seeking investors
- best for growth
- best for limited liability
Corporation owners are called ____ and their ownership is called _____
shareholders, shares
taxation (corporation)
double taxation
what is the management of a corporation called?
the board of directors
assault
any intention and unexcused threat of immediate harmful or offensive contact
battery
the completion of assault (directly by the defendant or set in motion by the defendant)
defenses to assault and battery
consent, self-defense, defense of others, defense of property
false imprisonment
intentional confinement of another person
- through barriers, restraint, or threat of physical force
Intentional Infliction of Emotional Distress
An intentional act that amount to extreme and outrageous conduct resulting in severe emotional distress to another
What must the plaintiff do in order to sue for slander
prove economic loss
duty of landowners
landowners must exercise reasonable care to protect persons on their property from harm
good samaritan statues
protect someone who renders aid to an injured person from being sued for negligence
assumption of risk
when the plaintiff assumes the risk and cannot collect recovery
What must an administrative agency have in order to conduct an investigation?
- legitimate purpose
- relevant to what their regulating
- specific in the testimony and documents they require
when can an agency conduct a warrantless search?
- highly regulated industries (firearms/liquor)
- hazardous situations
- emergency situations
adjudication
after conducting investigation or rule violation an agency my take administrative action
