Beruflich Dokumente
Kultur Dokumente
LEB 320 F
Compliance???
Can WaterClear sue SunBright? Managers like Rick. Trapped in middle? Wasnt Rick doing a pretty good job? Where does globalism come into picture? What if you were a member of WaterClear?
Ethics or Morality
Whats the Difference???
Is one of them tougher than the other?
Ethics
Ethical Absolutes or Ethical Relativism
Sources of Ethics
Mom and Pop Family School Community Culture Religion And you keep right on learning
Socrates
The Myth of the Cave. Realism v. Appearance. The Sun illuminates everything but itself. The Light, Absolute, Logos.
Plato
Socratic Dialogues. Women, as well as men, could hold high office. In The Laws, he described men as
Gold philosopher kings Silver soldiers Bronze- artisans and laborers Iron aggies and the like
TriPartide Self
Plato Chariot driven by Reason drawn by one Noble & one headstrong Spirit Marx Natural Self, Alienated Self, and, in time, a Species Self. Freud Ego/rationality principle, SuperEgo (conscience and ego ideal), and Id (aggression, power, dominance).
Sparta
Spartan King Leonitus saved Athens from Persians at Thermoplilea Sparta defeated Athens in Pelopenesian War In defeat, Socrates and Plato introduced the forms and philosopher kings British philosopher Bertrand Russell during Battle of Britain described Plato as fashistic
Aristotle
Happiness - a life of virtuous activity in accordance with reason. Virtue neither excess nor deficiency. Where do you get that virtue?
Utilitarianism
Greatest Good Greatest Number
A quantitative measure
BenthamPleasure/Pain Calculus
Stuffed - University of London.
Go Figure
By keeping her promise to Margot, Alexis can create 500 units of utility. By breaking that promise, Alexis can create 5000 units of utility with Nicole. Alexis wants to know what to do?
Neitzsche
God is Dead!
Do something with your freedom; create your own values free of superstition. Selfstrength/fulfillment. Whatever doesnt kill me makes me stronger. Live it with such love for life, that youd do it again, and again, forever, throughout eternity.
Will to Power!
Pragmatism
Truth look at consequences. Use rules, principles, utility, virtue. If it doesnt work well, change it. This does NOT mean anything goes. If theory does not account for facts, change the theory.
Theory of Justice
The Original Position
In the Original Position, behind a Veil of Ignorance, Rawls imagines that rational, self-interested persons who know they will live in the society they create, but do not know their race, sex, abilities, religion, interests, life plan, social position, income or other particular attributes will choose fair and impartial rules, such as the following:
Theory of Justice
John Rawls Equality Principle: Each person has maximum basic liberty compatible with others Contracts free of force, fraud, deception. Difference Principle: Social/economic inequalities should be arranged so
All offices/positions are open to everyone under conditions of fair equality of opportunity, Greatest benefit goes to least advantaged.
Business Ethics
1. 2. 3. 4. Checklist Facts Issues Stakeholders includes
stockholders but also covers everyone who impacts or is impacted by the corporation.
PERSPECTIVES
A. Legality. B. Headline News. C. Consequences (utility). D. The Right thing to do--moral rights. E. The Golden Rule--respect for others. F. Justice Fairness. G. Procedural justice. H. Character/virtue.
ENRON
Enron
Respect As opposed to entrapment of 401-K employees Integrity As opposed to greed, deceitfulness, fraud Communication As opposed to stonewalling by taking the 5th amendment Excellence As opposed to fair-to-middling
ENRON
Largest U.S. bankruptcy until WorldCom. Complex off-shore partnerships kept liabilities off Enrons books. Energy trading completely legal, but not self-dealing.
Arthur Andersen
Lets dont talk about Arthur Andersen.
It gave Professor Shaw an all expense paid trip to their Business Ethics seminar in Chicago.
Over 3 years, it spent $5,000,000
WorldCom
Overstated earnings by $3.8 million Laid off 17,000 employees Stock dropped from $64.50 to 0.83 Former CEO received $366 million in low interest loans
TYCO
CEO Dennis Kozlowski charged with evading $1 million in taxes and is accused with destroying documents. Kozlowski and other executives bought art work, and one executive bought a home. In other words, they looted the firm (also Adelphia) for personal gain. Tax avoidance with offshore incorporation.
ImClone Systems
CEO Samuel Waksal sold stock after learning the FDA denied certification of cancer treatment drug. Inside trading.
Martha Stewart
Martha Stewart (a director of NYSE) allegedly sold stock on inside information provided by Merrill Lynch. Stock in Stewarts Omnimedia declined 40%. (see Chpt. 16) M-L broker, Peter Bacanovic, allegedly warned her of illegality.
Chainsaw Al
Al Dunlap built his reputation on Wall Street as a CEO who could turn around failing corporations. He did it, allegedly, by an employee census and more efficient operations. The SEC now believes the turnaround at Sunbeam was engineered by financial fraud. An Arthur Andersen audit partner certified the results.
Harken Energy
In 1992, while George W. Bush was a member of Harkens audit committee, the SEC forced Harken to correct an overstatement of profit. Bush sold 212,140 sh. @ $4 prior to a restatement of profit. U.T. Poly. Science Prof. Bruce Buchanan [S]imilarity to Enron style of accounting.
Executive Compensation
How Much Are They Worth? NYSE position is that all listed companies be required to expense stock options. If options reward employees, why arent they treated expensed as other forms of compensation?
Chapter 2
Introduction to Law
Power
Plato In The Laws, Plato would establish
Philosopher-Kings, and place these Men of Gold as governors over Men of Silver (warriors) and Men of Bronz (citizens, workers). Women were treated equally, and private property abolished.
Power
Hobbes life without civil government
[The Leviathan] is solitary, poor, brutish,
INTRODUCTION
Administrative Law, e.g., EPA regs Remember the Rick Wagner hypothetical in your syllabus. Treaties: 2/3 Senate + President (supreme law of the land).
Classifications of Law
1. Criminal - Justice Department 2. Civil fines S.E.C. 3. Substantive (rights) v. Procedural (rules). 4. Public (legislation) v. Private (lawsuits)
Element of a Crime
1. Statutory violation no common law
crime. 2. Intent (mens rea or guilty mind). (a) Deliberate conduct. (b) Recklessness conscious disregard of substantial risk of harm. 3. Proof beyond reasonable doubt.
CyberCrime
Federal Law on CyberCrime.
Cyber Defamation
Defamation in Cyberspace Civil Lawsuit, Not Criminal
Chatroom Bulletin Board
Cyber Stalking
Several state laws (not Texas) have laws prohibiting cyber stalking. Laws require either credible threat or an intention to harass, threaten, or alarm.
Cyber Theft
Access classified government info. Access info of financial institutions. Access govt. department file to affect use. Access files to defraud or obtain value. Sending viruses by hacking. Fraudulent access to government passwords Threat to cause damage to computer to extort something of value
JurisprudenceLegal Wisdom
Legal Positivism look to Letter of the Law Natural Law look to the Source Legal Realism look to the Enforcer Legal Pragmatism finding a workable legal solution roughly in accord with the Constitution, statutes, and cases
Examples of Tort
Osborne v. Stages Music Hall, Inc.
Did Music Hall owe a duty?
Closing Arguments
Refresh your memory - Scan the slides chapter review. Examine problems at end of chapter. Ask a bunch of questions.
Chapter Three
Dispute Resolution
Arbitration
Private award (secret), quicker, cheaper compared to litigation. However, no class actions, no discovery procedure. No appeal unless arbitrator is corrupt.
Enforcement of Arbitration
Meehan v. Nassau Community College
Professor assigned to teach course; he had no proper credentials. 647 N.Y.S 2d 865 (1996)
Awards wont be enforced if they contravene strong public policy or corruption. An error of judgment is not sufficient.
AND
Venue
Venue designates the proper court within a state to file a lawsuit. Assuming the court has jurisdiction over the case, venue will be proper . . .
In the county where the tort happened, In the home county of the defendant, If the suit involves real estate, in the county where the property is located.
Federal Jurisdiction
Federal Jurisdiction: Diversity & Federal Question. Exclusive federal jurisdiction -bankruptcy, patent-copyright law, federal crime. Original and Exclusive. Original Louisiana v. Texas.
Diversity Jurisdiction
Federal Diversity jurisdiction requires:
(a) Complete diversity of parties, AND (b) Amount in controversy $75,000
Non-residents
Out of State Motorists Out of State Corporations
Pleadings
Plaintiff initiates suit by filing a petition in a court with jurisdiction. The petition alerts the defendant in plain language of the facts the lawsuit is based on. This is in compliance with our notion of due process. Its based on fairness.
Summons
A summons is served on the defendant with a copy of the petition by a court-authorized agent. The summons will notify the defendant of when and where to appear to answer the petition.
Normally the defendant will have an attorney answer the petition and appear on defendants behalf. Failure to appear will result in the defendants losing the the lawsuit by default.
Answer
Answer tells why defendant is
not responsible.
Answer
Answer may respond challenging the courts jurisdiction. Answer may respond that statute of limitations has expired. Answer may respond that driving while blonde in not a civil wrong. Answer may say that plaintiff hasnt alleged elements of tort or breach of contract.
Judgment of Pleadings
Court doesnt have jurisdiction, Statute of limitations expired, State doesnt give legal relief for plaintiffs claim.
Motion to Dismiss
U.S. District Court dismissed fat suit v. McDonalds. Parents had reason to know that fast food produced weight gain. Ads McChicken Everyday and Big N Tasty Everyday were mere puffery.
Class Action
If there is commonality of fact and law among plaintiffs, the judge may certify a class. Class members will be notified and may opt-out. Caesar Barber, 510 272#, represents a class v. McDonalds, Ky.Fried, Wendys, and Yum on failure to warn on cholesterol, obesity, diabetes, heart disease, high blood.
Pre-trial Discovery
Interrogatories Depositions Documents Medical Exams Admissions.
Klupt v. Krongard
Klupt, according to trial court, grossly abused the discovery process. Krongards motion to dismiss counter-claim was granted and affirmed on appeal. Abuses: Klupt routinely objected to dates for depositions; changed lawyers causing delay; lied about conflicts; managed further 6 mo. delay; destroyed tapes.
Summary Judgment
Undisputed facts. Outcome is a matter of law.
Jones v. Clinton
Summary judgment for Clinton because Jones did not show tangible job detriment or adverse employment action. Other issues trial was postponed. Settled out of court.
Burden of Proof
Preponderance evidence: Civil actions the 51-49% rule applies.
Beyond reasonable doubt: Criminal actions.
Jury Instructions
If jury cannot decide whether death was accidental or suicide, there is a legal presumption that death was accidental. Is this a proper instruction?
Ponce v. Sandoval
Judgment NOV (against weight of evidence) and New Trial (error of law). Ponce v. Sandoval-Sandoval received $1600 jury verdict for medical expenses. Trial judge granted her NOV motion. Appellate court reversed NOV and reinstated jury verdict. Appellate court may affirm, modify, reverse and remand, or outright reverse.
Closing Arguments
Review Chapter ending problems
Chapter 4
Common, Statutory, & Administrative Law
Common,Statutes,Administrative
Common Bystanders Statutory Civil Rights Act Administrative
Chevron v. U.S. bubble concept was a
reasonable approach even though it may not have been superior to another strategy.
Per Se Negligence
1) DEFENDANT WITHIN CLASS OF PERSONS INTENDED, 2) TYPE OF HARM STATUTE INTENDED TO PREVENT, 3) BREACH OF STATUTE CAUSES INJURY.
Rescue
Union Pac--duty to rescue trespasser. Cappier laborer suffered heat stroke. Osterlind v. Hill canoe renter drowned. Soldano v. ODaniels Happy Jacks.
Psychiatrist
Tarasoff v. Californiaspecial relation with Poddar who confided intent to kill; the victim was foreseeable. Is psychiatrist responsible? Psychiatrist is an agent of the University of California. Special relationship.
Almonte v. Ingram
DeMasi, a psychiatrist, confided to Ingram, a child psychiatrist, that he was a pedophile. Ingram told no one; 4 months later DeMasi molested Denny Almonte. DeMasi served 5 yrs in prison. When released he violated parole and returned to prison. When released in 1995 he disappeared. Almonte experienced emotional legal & problems and was confined to institutions himself.
Almonte v. Ingram
Patients in therapy say all sorts of troubling things. In fact, its the therapists job to encourage patients to reveal deep-seated feelings. No reason to think patient would act on all of them. Therapist shouldnt breach confidentiality each time patient says something bizarre that would cause patients to avoid therapist in the first place.
Rescue in Texas
Dr. Thapar began treating Lilly in 1995; he knew about Lillys paranoia and delusional attitude toward Zezulka, his stepfather. Lilly was treated with psychotherapy and drugs; on 6 occasions he was hospitalized. Thapar testified that Lilly felt like killing Zezulka. Within a month after release, Lilly killed Zezulka. Thapar is sued by Zezulkas wife.
Thapar v. Zezulka (Texas 1999)
Rescue in Vermont
A person who knows that another is exposed to grave physical harm and can render aid without peril to himself or diminished duty to dependants must give reasonable aid if not provided by others. Reasonable assistance relieves one of civil damages unless
gross negligence (slight care), or expects remuneration.
Does not affect physicians in ordinary practice. Fine - $100. 23 Vermont Code sec. 519
Adulterous Affair
Employees of Helena Labs began having an affair. Their spouses later discovered the liaison, and sued Helena Labs for carelessly failing to prevent it. Outcome?
Helena Laboratories v. Snyder, Texas 1995.
Statutory Interpretation
Statutory interpretation:
(a) plain meaning, (b) legislative intent, (c) public policy.
Administrative Law
Agencies may be executive or independent. Agencies gain power through a delegation from the legislature. Independent - SEC, FCC, FTC, NLRB. Executive IRS, FBI, NRC, EPA. Separation of powers. Formal and Informal Rules.
Judicial Review
Holly Farms v. NLRB The S.C. found that the Boards interpretation, while not the only one possible, was reasonable, therefore the Board was affirmed. Majority Ruth Bader Ginsberg Minority Sandra Day OConnor
Chapter Five
Constitutional Law
Constitutional Law
Separation of Powers - checks and balances. Art. I - Grant of powers to Congress. Especially important is the Commerce and the Necessary and Proper clauses.
Commerce Power
Wickard v. Filburn, 317 US. 111 (1942)The Depression Era. U.S. v. Lopez, 514 U.S. 115 (1995) The Rehnquist Court.
Dormant Clause
10th Amendment
Maine tried to use10th amendment tax power to deprive Camps of property tax exemption. Camps attendees were 95% out-of-state. Can Camps be penalized in comparison to in-state? What is the dormant aspect of the commerce clause?
Camps Newfoundland/Owatana v. Maine
Judicial Supremacy
The Case of the Midnight Judges Marbury v. MadisonChief Justice John Marshall saw a judicial veto in the Constitution. Where did he get that idea?
Judicial Supremacy
Article III -- One Supreme Court and other courts as Congress may establish. Article VI Supreme Law of the Land:
The Constitution. Laws in Pursuance of Constitution. Treaties under Authority of U.S. Treaties are made by President and 2/3 of Senate.
Executive Powers
Art. II--President is commander in chief and chief executive officer. Youngstown Sheet and Tube v. SawyerDid President Truman exceed his powers as Chief Executive? What about President Nixon fixing prices?
Fourteenth Amendment
Establishes citizenship if born or naturalized in U.S. States cannot deny life, liberty, or property to ANY PERSON without due process of law. States cannot deny any person within its jurisdiction equal protection of law.
Pledge of Allegiance
. . . Under God . . . Do these two words in the Pledge of Allegiance violate the Establishment Clause of the First Amendment? Two religious clauses: Establishment and Free Exercise. Why is this applied to states . . . ?
Ethnicity
Due process clause of 14th A. applies the Bill of Rights to the states. Massachusetts passed statute forbidding discrimination on basis of ethnicity. Porcaros awarded $1.5 million - permit for developing real estate denied on grounds that were not held against other groups. All you Italians are a bunch of thieves.
Symbolic Speech
Amendment I--Texas v. Johnson
Symbolic Speech
U.S. v. Eichman U.S statute - flag burning Barnes v. Glen Theater non-obscene nude dancing R.A.V. v. St. Paul hate-crime ordinance penalized burning crosses the Klan Wisconsin v. Mitchell child beaten on account of race - symbolic speech?
Political Speech
Political speech receives highest protection. However, it may be criminalized if intended and likely to create imminent lawless action.
Justice Holmes
The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent. It is a matter of proximity and degree.
Schenck v. U.S., 249U.S 47, 52 (1919).
Justice Holmes
The most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre and causing a panic. The [Act] punishes conspiracies as well as actual obstruction. No grounds for saying that success alone makes an action a crime.
Schenck v. U.S.
Justice Holmes
[The] ultimate good desired is better reached by free trade in ideas that the best test of truth is the power of that thought to get itself accepted in the competition of the market . . . . That at any rate is the theory of our constitution.
Abrams v. U.S., 250 U.S 616, 627-28 (1919) Dissenting Opinion
Freedom of Religion
Engle v. Vitale School Prayer. Can it acknowledge an Almighty Being. Pledge of Allegiance 10th Circuit. One Nation Under God.
Watchtower v. Stratton
Village ordinance required registration and permit to engage in door-to-door advocacy. Ordinance covered religious proselytizing, anonymous political speech, and distribution of handbills. Violation of First Amendment??
Watchtower v. Stratton, 122 S.Ct. 2080 (2002). 8 1 split
Yard Signs
A city ordinance prohibited yard signs of any kind. It was designed to foster an aesthetically pleasing visual environment. Could you be prosecuted if your sign supported or opposed the war on terrorism.
Nude Dancing
Was law prohibiting nudity a valid exercise of 10th amendment power to control health, safety, morals. Was law an unconstitutional suppression of expressive conduct.
Barnes v. Glen Theater, 501 U.S. 560 (1991)
Obscenity
Would AVERAGE person applying CONTEMPORARY community standards find the work as a whole appeal to PRURIENT interest. Depicts in PATENTLY OFFENSIVE way sexual conduct defined by state law. Does work as a whole lacks serious literary, artistic, political, or scientific.
Obscenity
Prurient excites lustful or lascivious thoghts. Court must distinguish between normal and shameful interest. Look to local community standards, not state or national.
Brockett v Spokane, 472 U.S. 491 (1985).
Commercial Speech
Commercial speech may be prohibited if false or misleading. Regulations must be reasonable and must directly advance a legitimate goal.
Fane v. Florida Institute of CPA.
(see problem #2, p. 123)
LiquorMart
LiquorMart v. Rhode Island--statute prohibited truthful, non-misleading price advertising. R.I. did not show that regulation would materially advance state interest without impairing an important component of free speech. Further, it ignored easy alternatives.
LiquorMart v. Rhode Island, 517 US 484.
UNCONSTITUTIONAL!
Execution of Juveniles
S.C. Justices Stevens, Ginsberg, and Beyer dissented from majority which denied a stay of execution for Texas inmate, Toronto Patterson, who was 17 when he murdered his 3 year old cousin. An issue for the court to examine within the next few terms. WHAT DO YOU THINK? CONSTITUTIONAL!
Reproductive Rights
Amendment IX--Enumeration of rights in Constitution not deny those reserved to people. Roe v. Wade right of privacy. Fathers, husbands, boyfriends have no right to veto a womans right to have an abortion.
Drug Testing
Supreme Court approved school district policy requiring random drug testing (urinalysis) of high school students in band, glee club, etc.
Interest of educators in keeping drugs out of school outweighs privacy interests. Board - Education v. Earls, 122 S.Ct. 2559 (2002).
Peyote
In 1991 the S.C. held that use of peyote in a Native American church was not protected from enforcement of Oregon criminal law. Congress passed the Religious Freedom Restoration Act forbidding government from enforcing law that substantially burdened religion without compelling need and in least restrictive manner.
Peyote
In City of Boerne v. Flores (1997) the S.C. affirmed its earlier holding. Religious Freedom Restoration Act unconstitutional. The 14th Amendment, section 5, only gives Congress the power to enforce Freedom of Religion, not to define terms. S.C. had already said Oregon criminal law did not violate the Constitution.
Due Process
Procedural due process. How much process is due? Depends on importance of liberty or property affected. Judge must be neutral.
Hearings
Attachment hearing before attachment Garnishment hearing before attachments In Texas - garnishment for child support and student loans only
Secret Settlements
Secret settlements between the parties to a lawsuit may in fact do justice. They also clear court dockets quickly, and thats a plus. But secrecy also keeps the settlement from the public. Think what might be different today if the misdeeds of Catholic priests had been revealed a long, long time ago. Secrecy in the asbestos and textile industries, most likely, cost many lives.
Taking
In 1986, Lucas paid $1 million for two lots on the Isle of Palms in S.C. Two years later the state passed the Beachfront Management Act. It prohibited building homes on the property. The barrier islands protect shoreline from erosion. Is this a taking, or a regulatory measure?
Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992).
Strict Scrutiny
The statute (or the means) must be necessary to promote a compelling interest. Compelling Interests - Fundamental Rights Examples: speech, voting, travel, racial discrimination, privacy
Minimal Scrutiny
Practically always the courts can find some reasonable connection between means and ends. NYC Transit Authority v. Beazer methadone users excluded from jobs that were not safety sensitive.
Intermediate
The statute (the means) must have a substantial relationship to an important government objective (the end). Gender based discrimination. Legitimacy.
Strict Scrutiny
Government restriction must be necessary to compelling interest. Abortion - women under a certain age; parents must be given notice. Adults no notice to natural father or husband.
Helmet Law
Motorcyclist challenged law as violation of Equal Protection (14th). Law upheld. It was presumptive valid; this means rationally related to legitimate end. Not unconstitutionally vague, created no suspects classification, and violated no fundamental rights.
Robotham v. State, 488 NW2d 533
Examples
Plessy v. Ferguson Brown v. Board of Education Bolling v. Sharp Sweatt v. Painter Hopwood v. University of Texas
Tort Law
Torts are civil wrongs, other than breach of contract, that law grants compensation to injured party.
Intentional Torts Chapter 6 Negligent Torts Chapter 7
Intentional Torts
Intentionally negative Theater reviews, Movie reviews, Book reviews.
What about . . . Restaurant reviews such as . . . yellow death on duck.
Statute of Limitations
Reminder!!!
Attached to every legal cause of action, there is a period of time in which a lawsuit tort or contract must be filed in a court of proper jurisdiction. Plaintiffs action in tort and in contract based on defendants negligent misrepresentation of contract terms. For plaintiff couldnt discover her claim existed until after statute of limitations expired.
Elements of Tort
Fault breach of duty Causation
A) chain of dominos causation (actual cause) AND B) foreseeability
Defamation
DEFAMATION--intentional false statement of fact, not opinion, harmful to reputation and communicated to a third person.
Third person may be secretary receiving dictation or someone who overhears defamatory statement.
Publication
Sixty-eight year old Christine Melton was stopped by security guard and accused loudly in parking lot. Shoppers stopped and heard: nothing was found in purse. No witnesses produced by Melton. For Melton based on reasonable inference that other heard accusation of crime.
Defamation per se
Accusation of serious crime Incompetence in profession Having a sexually transmitted disease Being and unchaste woman Per se Whats that????
Damages
Slander oral defamation.
Plaintiff must show actual money damages
Opinion
Yeagle v. Collegiate Times--opinion or defamation (libel) per se???
Actual Malice
Public figures must show actual malice.
Actual Malice
Actual malice--knowledge of falsity or reckless disregard for truth. Communication majors proceed with caution.
Libel in Cyberspace
Varian Medical Systems and two executives won libel suit against former employees for posting 14,000 defamatory messages, some vulgar, on 100 internet messages boards. Defendants alleged extramarital affairs, danger to children, videotaping office bathrooms, chronic lying , and hallucinating.
http://www.law.com
Oprah
Texas cattle ranchers sued on basis of False Disparagement of Perishable Food Products Act. Statements must have basis in reasonable and reliable scientific inquire, facts or data. Statute covers agri- and aqua-culture only. Dismissed: No cause of action in Texas. Source: Texas A&M.
Privilege
Absolute privilege
Witness in court Legislative debate
Qualified privilege
Legitimate need to know
QUALIFIED PRIVILEGE
Texas Qualified Privilege Texas employer who discloses information about a current or former employee is immune from liability unless proven by clear and convincing evidence that employer spoke with actual malice. Clear and convincing evidence. Huh???
False Imprisonment
False Imprisonment--intentional restraint without reasonable cause or consent. Sixty-eight year old Christine Melton stopped by security guard and accused of shoplifting. This is not in itself false imprisonment. That depends on the basis for accusation; nothing was found in purse.
Ruditys v J.C.Penny
Woman waiting in car for two shopping companions when asked by security guard to return to store for questioning. All charged with theft and acquitted. Awarded $250,000 for false imprisonment and malicious prosecution.
Ruditys v. J.C.Penny, Co.
No. 02-4114 Delaware (2003.
Cook v. Chrysler
Cook was induced to test spaciousness of trunk in new car she was shopping for. Salesman slammed down the trunk and gathered others to witness. When Cook emerged, salesmen were highfiving. For being 1st, salesman won $100.
Emotional Distress
Conduct - extreme & outrageous?? Was this appropriate for summary judgment?
Roe v. Lynn Mills
Assault
Assault--an act that places victim in fear of immediate battery. Western Union Telegraph V. Hill (Ala. 1933). Danny Devito???
Battery
Unwanted or offensive Intentional touching Cattle Prod
Caudel v. Betts, 512 So.2d 389 (1984)
Intentional Torts
Trespass intentionally entering anothers land without permission, or refusing to leave after permission expires. Trespass to property hiding roommates book before final. Conversion--civil action that is equivalent of theft.
Fraud
Intentional misrepresentation of material fact on which someone relies and suffers damage. Accountants liability for fraud.
Those who hired the accountant Limited to known and intended beneficiaries Reasonably foreseeable
Damages
Nominal
Small amount to vindicate right
Compensatory
Amount of money to compensate victim
Punitive
Some multiple of compensatory
Punitive Damages
Punitive damages--damages over and above compensation designed to punish defendant for conduct that is extreme and outrageous.
Grubbs Nissan v. Bien, 881 SW2d 843 (1994)
Business Torts
Tortious interference with contract: Texaco v. Pennzoil.
Tortious interference with prospective advantage: The Barber Shop case.
Privacy
a) Intrusion, b) Private Facts, c) False light, d) Commercial Exploitation.
Lanham Act
Lanham Act--a) False, misleading, b) Commercial context, c) Likelihood-harm Coors v. Anheuser Busch. Natural Lite, a beer brewed by A-B on the East Coast, was being outsold by Coors. It televised a parody of Pure Rocky Mountain Spring Water. Coors wasnt amused.
Defamation Review
A. B. Elements--falsity, harm, communication to a third person. Defamation per se: (1) Accusation of serious crime, (2) Sexually transmitted disease, (3) Incompetence in profession, (4) Unchastity in women. Actual Malice--knowledge of falsity or reckless disregard for truth. Privilege: (a) Absolute--sworn testimony in court, (b) Qualified--good faith communication of information to recipient who needs to know.
C. D.
Intentional Torts
False Imprisonment--reasonable basis for suspicion and reasonable detention. Intentional infliction of emotional distress Grubbs Nissan v. Bien. Damages--nominal, compensatory, punitive. Tortious interference with contract
Texaco v. Pennzoil.
Intentional Torts
Privacy and Publicity:
Intrusion. Disclosure of embarrassing facts. False Light. Commercial Exploitation.
Defenses
Plaintiff fails to prove elements of tort. Written waiver of liability. Privilege: Absolute Conditional. Self defense. Statute of Limitations
Segue
A Southwest Texas student secretly video taped intercourse with a U.T. coed. Then he circulated the tape to friends, and the tape made its way to both campuses. She was outraged by this betrayal; her suit was based on negligent infliction of emotional harm. Negligence?
Boyles v. Kerr, 855 SW2d 593 (1993).
Negligent Torts
Chapter 7
Negligent Torts
TORTS--Fault + Causation + Injury. Fault --Duty of care + breach Causation -factual chain of causation and foreseeability or proximate cause Injury.
Jenny Jones
Scott Amedure was killed after revealing a same sex crush on Jonathan Schmitz. Schmitz was convicted of murder. Amedures parents claimed tha Jenny Jones ambushed Schmitz by not telling him subject matter of program. Jury - $25 million for plaintiffs.
Proximate Cause
Both mean the same thing.
Joy Riders
Garage (Breisig) left keys in ignition. Before owner came, teenagers took it. Left it parked on street overnight. Next day a friend drove and injured the plaintiff, George. Defendant negligent? Proximate cause?
Brown v. P.C.O.M.
Yvette gave birth to daughter who tested positive for syphilis. Husband was confronted, and admitted an affair. Later, husband and baby retested negative. Stress - husband physically abusive. Wife chased him outside with her police revolver; shot, missed, both arrested.
760 A.2d 863 (2000)
Negligent Retention
$2.5 million for N.Y. woman sexually assaulted. Apple Tours employed supervisor with record of assaulting another woman years earlier. $1 million for psychological injury and $1.5 in punitive damages.
Horse Hockey
A young woman and her employees were guests of the circus owner. A dancing horse evacuated in her lap. Everyone laughed. She was mortified, and sued the the circus owner.
AIDS
Jennifer Lawson, 12, contracted HIV in a blood transfusion in 1985. Her doctor, affiliated with UCLA, knew this and informed the donor, but not Jennifer though he treated her for next 5 years. Three years later she had sex with Reisner, and in 1990 Jennifer died of AIDS. Reisner tested HIV+ and sued UCLA. Outcome??
Waiver
S.C. Connecticut held that waiver signed by snowtube renter not preclude liability for damages. Ms. Hyson released White Water Mountain from inherent risks, but not negligence. Colorado law controls this issue.
Waiver
Plaintiff rented Honda ATV and signed agreement with clause that waived liability of defendant for harm caused directly or indirectly by use of ATV. Release valid if
Not contravene public policy Relates to private conduct Freely bargained, no adhesion
Landowners duty
Trespasser--landowners only duty is not to intentionally injure.
Licensee--guest on land with consent; social host must warn of hidden dangers that are known about.
Invitee--person on property because open to public. For example, a business customer-- owner has duty of reasonable care to invitee.
Components
Negligence Per Se minimum standard of care to protect certain groups; violation of statute that injures group member is per se negligence. Factual cause--chain of dominoes. Foreseeability--can general type of harm be reasonably anticipated? Superseding cause--entirely unforeseeable; highly unusual, extraordinary, bizarre.
Coca Cola
Waitresss hand badly damaged as she was loading Cokes into cooler. Presumption of defective bottle or excessive pressure prevailed. Coke employee testified that he had seen/heard explosions in warehouse, 150 P2d 436 (1944). What about a roach in a coke bottle???
Repo Man
Should summary judgment for Repo Man be reversed and remanded for trial?
SECURITY INTEREST:
COVERAGE
The vehicle and all parts or goods installed in it; All money or goods received (proceeds) for the vehicle; All insurance . . . or other contracts we finance for you; and All proceeds from all insurance . . . or other contracts we finance for you.
Affirm or Reverse??
Plaintiffs argument. Valley owed duty to everyone. Foreseeable because repo involves hostility. Darkness and car alarm evidences negl. Harrision Ford fantasy. Defendants argument. Irresponsible owner at fault; not repo man. Nighttime repo was as safe as possible. Alternative: Knock on door? Negl use of gun caused injury;not repo.
Bystanders
Negligent infliction of emotional harm to bystander. Example: mom sees injury to child.
Elements
Plaintiff near scene Distress from contemporaneous sight of accident Plaintiff is close relative of victim
Child Molestation
Friends of owners/operators of an Austin daycare center knew of child abuse and failed to report it. Does the Texas Family Code which criminalizes the conduct of the perpetrators also impose per se tort liability on bystanders?
Contributory v. Comparative
Contributory Negligencea small degree of negligence can prohibit plaintiff from collecting any damages. Comparative Negligencea jury will assess percentage of damages attributable to each party. If damages are $1000, and defendant is 80% negligent, plaintiff can recover $800. Texas, if plaintiff is 51% negligent, no recovery.
Comparative Negligence
Texas Rule Multiple Defendants Damages $100,000 Plaintiffs fault = 10% D-1 = 30% (judgment for $30,000) D-2 = 60% (judgment for $60,000) If plaintiff over 50%, no recovery.
Ultrahazardous Activity
Strict liability. Comparative or contributory negligence is irrelevant even if victim is negligent or reckless.
Old Island Fumigation v. Barbee
Product Liabil/ity
Ford Pinto, Mustang, and Side Saddle Pickup Product liability--If manufacturer puts a product in chain of commerce that comes into possession of consumer and is used in normal way, manufacturer is liable for harm for personal injury and property loss caused by product that is defective and unreasonably dangerous.
Rollover
$15.5 Million
Pennsylvania jury awarded Hutchinson $15.5 million v. Freightliner. While negotiating a curve on on-ramp, driver struck guiderail and rolled over embankment; he lost an arm and wears a prosthetic. Cab not crashworthy; cruise control poorly designed; failed to disengage while braking.
Assumption of Risk
Plaintiff/spectator sued Chicago Cubs for injury pursuing a foul ball. Cubs claimed she was negligent for not moving her season ticket seat to a protected area of the park.
Held: For Plaintiff.
Comparative negligence abolished assumption of risk.
Duran v. Cubs, 1989 U.S. Dist. LEXIS 10969.
Injury
1. Physical 2. Economic 3. Pain and Suffering 4. Emotional
Contracts
Introduction
Chapter 8
Introduction to Contracts
Must Jerusalem deliver steel to Hardbody?
Does Nicole have a job with Hardbody? Must Nicole purchase Jaspers house? Do Cassandra and Jasper have a contract?
Introduction to Contracts
Contracts--legally enforceable promises.
Predictability Flexibility
Elements
Agreement Consideration Capacity Legal object. Some MUST be in writing--Statute of Frauds.
Introduction to Contracts
Types of contracts:
Bilateral-Unilateral Express-Implied Executed-Executory Valid, Voidable, Void, Unenforceable
Employment at Will???
Federal Express v Dutschmann Employment at will was confirmed by signature of plaintiff. It is enforced instead of the Hearing Policy stated in employment manual.
Promissory Estoppel
Promise is made with knowledge that it will be relied upon. Actual reliance and change of position.
Injustice unless promise is enforced.
Hoffman v. Red Owl Food Store
Quasi Contract
Vortt Exploration v. Chevron
a) Benefit conferred on defendant, b) Defendant knows of plaintiffs reasonable expectation to be paid, c) Unjust enrichment.
Pyeatte v. Pyeatte
o Margrethe agreed to support husbands law school education if he, in turn, would support her for a graduate degree. o Charles got his degree and divorced Margrethe. She sued, and Charles, a newly minted attorney, defended saying No contract.
661 P2d 196 (1983)
Chapter 9
Agreement
Agreement
Offer and Acceptance Meeting of the Minds Offer - intent, terms, communication Intent--objective v. subjective Invitations - Quotes, Advertisements, Auctions
Offer
An offer shows an intent to enter a contract. It names reasonably definite terms. It is communicated to offeree.
Newspaper Ad
SATURDAY 9 a.m. Sharp 1 Black Lapin Stole Beautiful Worth $139.50 FIRST COME, FIRST SERVED
Duration of Offer
An offer lasts for the specified period of time. If no time specified, lasts a reasonable time. It lasts until revoked or rejected. It expires by-operation-of-law when offeror dies. If offeror dies after acceptance, what then??
Auctions
UCC 2-328
Sufficient Terms?
Terms have to be clear enough for a court to know what to enforce. Or else . . . What?
Lemming v. Morgan
Gateway
Agreement to a ShrinkWrap/ClickWrap express warranty with arbitration term? P sued in N.Y D made motion to dismiss. Arbitration, but . . .
You must pay a $4000 arbitration fee, You must go to Chicago, International C.C. rules to govern process.
Brower v. Gateway, N.Y. Appellate Division (1998)
Specht v. Netscape
Netscape offered free software SmartDownLoad with click of mouse. Specht downloaded and now sues for violation of 2 federal statutes. Netscape moved to compel arbitration term of license that became binding when Specht downloaded.
150 F.Supp. 2d 585 (2001)
Termination of Offers
Revoke effective when received. Reject effective when received. Expiration terminated at end of time limit. Operation of Law death of offeror.
EXCEPTION . . .
REVOCABILITY RULE Firm Offers UCC 2-205 Common law option contracts
UCC 2-207
Sub-part 1: Must be sale of goods.
Goods are tangible-movable things
Leadertex v. Morganton
Sub-part 1: Offer may be accepted with
added or different terms.
UNLESS:
(1) Offer forbids changes, (2) Material Alteration, (3) Objection
Mailbox Rule
Time of acceptance governed by Mailbox Rule--acceptance effective as soon as offeree relinquishes control Offers, revocations, rejections must be communicated (made known to addressee) to be effective
What happens if .
1. Offeror specifies mode of acceptance? 2. Offeror requires receipt of acceptance? 3. Acceptance is sent by authorized means, then offeree calls offeror to reject. 4. Rejection sent by mail, as authorized, then offeree mails acceptance letter. 5. Revocation is on the way, when acceptance is sent.
Promissory Estoppel
1. Serious promise knowing promissee would rely 2. Actual reliance by promissee 3. Enforce promise to avoid injustice
Agreement
(1) Invitations--similar to typical auction with
reserve. (2) Price quotes--Levitons price quote to Litton not specific enough to be and offer, therefore limitation on liability in Levitons quote is not part of contract. (3) Advertisements and Auctions typically are not offers.
Agreement
5. Agreement must be specific enough for judge to know what terms to enforce. 4. Open Terms & Gap Fillers.
A. B. C. D. Open price, 2-305. Output & Requirement Contracts, 2-306. Delivery, Time, Payment: UCC 2-208, 209, 210. Warranties.
Agreement
Firm Offers: UCC 2-205. Acceptance: Mirror Image v. 2-207.
UCC 2-207
Leadertex v. Morganton: Morganton, the defendant/offeree, included a new term, arbitration in its acceptance. Is new term binding on Leadertex? Was arbitration term a material alteration. Did arbitration term inflict surprise or hardship?
Chapter 10
Consideration
Consideration
Bargained-for exchange The price each pays for other partys promise or performance Kelsoe v. International Wood Products
Unilateral Contracts
Hamer v. Sidway Nephew (15) promises Uncle he wont smoke, drink, swear, play cards or pool for money for 6 years. Uncle promises $5,000 for restraint. Outcome? Dahl v. HEM Pharmaceuticals Clinical trial for Ampligen. Dahl signed consent form; could withdraw and was warned of side effects. HEM didnt pay off.
Texas
Coin Toss
Adequacy v. Illusion
Adequacy of consideration.
Alaska gold mine
Illusory promise.
Culbertson v. Brodsky
Past Consideration
Past consideration = no consideration. Dementas v. Estate of Tallas. What about Kelsoe v. International Wood Products, Inc.?
Promissory Estoppel
1. Serious promise knowing promisee would rely 2. Actual reliance by promisee 3. Enforce promise to avoid injustice
UCC 2-209
An agreement modifying a contract for the sale of goods needs no consideration to be binding. Modification must be in writing if original written contract so specifies.
Liquidated v. Unliquidated
Liquidated--creditors promise to settle for less is not binding Unliquidated--agreement to settle disputed debt is binding Accord and Satisfaction-agreement is settle unliquidated debt + actual payment
Review
Consideration--a bargained-for exchange of promises or the price you pay for someone elses promise or performance. Kelsoe case--gratuitous promise, no bargain, not enforceable. Adequacy--courts allow the parties to decide what is adequate, but there must be some commitment (no illusory promises). You be the Judge, p. 276--For Culbertson v. Brody. Output-Requirement contracts: Must show good faith, 2-306.
Review
Past consideration = no consideration. Such promises are not enforceable, Dementas v. Estate of Tallas. Promissory Estoppel--Job offer, Pittsburgh Pirates, G.M. Performance of a contract that one was already under an obligation to perform is not consideration for a promise to pay extra unless a) additional work or b) unforeseen circumstances. It is possible to rescind old contract and enter new under common law, or modify old contract without consideration under UCC 2-209.
Legality
Wagers Licensing Usury Noncompete Exculpatory Unconscionable
Wagers
Gambling
Illegal unless permitted by state law. California law makes gambling-oncredit contracts void as public policy. Whatever happened to Full Faith & Credit Clause of the Constitution
Texas in Toss
Ryno was shopping for a BMW $125,000. Tyra Ft. Worth: Double or nothing. Ryno won he got car, title, keys for $0.00. Tyra repossessed BMW. A gift, a gag, gambling, or conversion?
Ryno v. Tyra, 752 SW2d 148 (1988).
Wagers
Investments
Betting on the rise and fall of stock price is illegal. Future
Derivatives are futures--the value depends on some underlying reference, e.g., exchange rate, prime rate, $bl$ of oil, weather.
Wagers
Insurance
Insurable interest. Jiminez v. Protective Life Bright-line test.
Pepsi v. Coke
Coke sued Pepsi for violation of a court order that prohibited lotteries. Lotteries:
Prize Chance Consideration
S.C. response to House-Rep concluded that promotional contests for prizes/money that did not require consideration were legal.
License
If calculated to protect public interest, fee for professional work without a license cannot be enforced. Cevern Inc. v. Furbish--contractor not licensed when agreement was signed. Later he became licensed. Result?
Bremmeyer v. Kiewit
Kiewit held road building contract from state and sub-contracted with Bremmeyer, an unlicensed firm to remove timber. Kiewit lost state contract; settled with state for $1,729,050. Offered Bremmeyer $38. Public protection statute not undercut by allowing Bremmeyer to sue Kiewit.
License
If licenses are issued as revenue-making measure for government, contracts by unlicensed person are still enforceable.
Non-Compete
Non-compete clauses--ancillary to legitimate bargain.
a. Sale of a business--ancillary clause must be reasonable in time, distance, scope. b. Employment--enforced to protect trade screts, confidential information, customer lists.
Exculpatory
Exculpatory clauses must be clearly written and visible. Exculpatory clauses not generally valid
(a) for intentional conduct or gross negligence, (b) for a needed public service, or (c) unequal bargaining power.
Exculpatory
Clause not valid where
(a) business suitable for public regulation, (b) business important/necessary to public, (c) business open to public, (d) party seeking exculpation holds advantage of bargaining power.
Bailments
Bailment relinquishes possession and control. Exculpatory provision frequently valid because it involves property not persons.
a) Self-storage--exculpatory clause valid for mildew. b) Auto parking lot liable for theft of car?
Stolen Cars
Plaintiff used Houston parking garage. Ticket said on back, READ CAREFULLY. WE CLOSE AT 6 p.m. It went on to limit to limit to $100 liability for theft occasioned by negligence. A notice was also posted on wall, and greater rates available with higher fee.
Schroeder v. Allright, 551 SW2d 745 (1977)
Adhesion
Adhesion Contract - Take it or leave it. WorldWide Ins. V. Klopp Was arbitration clause unconscionable? Bias favors of WorldWide:
low awards couldnt be appealed, only insurance appeals high awards.
Unconscionability
Court determines fairness. Criteria:
a) oppression, b) surprise.
EDS v. Chubb
Unconscionability (UCC 2-302). Limitation of liability (UCC 2-719). Electronic Data Systems v. Chubb.
Minors Contracts
Contracts of minors (defined: 18 or under) are voidable - minor can disaffirm, but adult cannot. Minor must return the thing that has been purchased (or what remains) to get refund. Ratification--after becoming 18, a person may ratify a contract made during minority by
a) express ratification, or b) by words/action that expresses an intention to be bound.
Misrepresentation
Minor may lie about age and induce adult to enter contract. TEXAS does not allow rescission because of the fraud.
Necessaries
Food, clothing, housing, medical care
No contract because minor is incapable of creating a contract. Minors are bound in quasi contract for reasonable value of product or service.
Mental Impairment
Insanity--mental impairment whereby person cannot understand nature or consequences of transaction. Parties presumed sane. Contract is voidable - it will be void if a court had declared insanity. Restitution must be made by insane person if that condition NOT known or apparent to the other party. But, if incapacity is known . . . Hauer v. Bank.
Mental Impairment
Hauer v. Union Bank--banker was in bad faith because he knew of Hauers condition. A reasonable banker would have plenty of notice that Hauer could not understand nature or consequences of the transaction.
Fraud
Law an intentional tort Ethics
Aristotle character, integrity Kant categorical imperative Bentham & Mill utility Neitzsche you must be willing to live this life over and over again throughout eternity
Fraud
Innocent misrepresentation-speaker believes statement is true. Fraudulent misrepresentation-speaker has knowledge of falsity. Either of the above justifies rescission by injured party. Fraud permits plaintiff to pursue rescission and damages.
Fraud:
Fraud
Misstatement must be of fact, not opinion. Fraud if person intends to induce while knowing statement was false or statement is spoken with reckless
Silence as Fraud
a) Correct a previous statement later found to be untrue: Nonrecourse loan. b) Correct a basic mistaken assumption: Haunted House. c) Latent defect - seller knew but buyer didnt. Strawn v. Canuso.
Mistake
Mistake-assumptions not in
accord with facts.
#1. The sell of old records to X not realizing they had been lost in a fire. #2. A miscalculated construction bid accepted by X who relies on it.
Release
Plaintiff Hoggatt was injured when he lost control of his motorcycle while passing Jorgensens car. The parties settled financially, and Hoggatt signed a release. Hoggatt then realized the full extent of his spinal injuries can he set aside the release based on mutual mistake of fact? What is the single recovery rule?
Bidding
Success, Inc., bids on job to prime contractor, Arango. Arango is awarded the main bid with X. Success wants to withdraw because of error in bid. Can Success use mistake to justify withdrawal?
Arango v. Success Roofing, 730 P2d 720 (1996).
Duress
Duress--voidable if wrongful threat impairs free choice and victim had no reasonable alternative. However, a threat to do something you have a legal right to do is not duress. Economic Duress: Ponder v. Lincoln National Sales-most economic duress plaintiffs lose, and so did Ponder. Lincoln had option NOT to renew. Undue influence:
a) Relationship of trust/confidence & b) improper persuasion.
Bonds v. Bonds
Undue influence:
a) Relationship of trust/confidence & b) improper persuasion.
Statute of Frauds
Certain Contracts MUST be in writing to be enforceable even though there is an agreement, consideration, legal object, and competent parties.
Statute of Frauds
Unenforceable unless in writing:
a) Land, b) Debt of another, c) Long duration, d) Executors promise, e) Marriage promise.
Statute of Frauds
Contracts that are required to be in writing, e.g., contracts for the sale of interest in land, will be unenforceable if made orally. These contracts are not void because, once they are executed or performed, neither party can demand a rescission. Contracts for the sale of any interest in land-any legal right regarding land--must be in writing to be enforceable.
Exceptions
Exceptions:
a) Full performance by seller b) Part performance by buyer c) Promissory estoppel
Year + 1 day
Contracts that cannot be fully performed w/i one year from time they are made must be in writing. Example: Contract to work for one month beginning 2 years from now must be in writing. Wior v. Anchor--Wiors employment contract was for 20 plus years, until he retired. Should have been in writing since that cannot possibly be performed within one year. For Anchor. Lifetime employment--oral contract is enforceable since a person can die within first year.
Debts of Another
Promise to pay debt of another has to be in writing because, while you are normally responsible for your own debts, its unusual to require you to pay the debt of a 3rd person. Same rule, requiring writing, if executor promises to pay debt of estate. Leading Object Rule--If promise to pay debt of 3rd is mainly for promisors benefit, i.e., self-interest, then an oral promise is enforceable. Farm Credit promised to pay Perrys debt to Sunrise so Perry could feed hogs and repay loan to Farm Credit. Sunrise v. Farm Credit--held for whom?
UCC 2-201
Sufficiency of the written agreement: a) names of both, b) subject matter, c) essential terms,+SIGNED BY DEFENDANT. Contracts for sale of goods priced $500 or more must be written, must specify the quantity of goods, and must be signed by defendant.
Merchants Exception
UCC 2-201 (2)
Parol Evidence
UCC 2-202. Parol Evidence Rule. A contract intended to be final and complete cannot be changed by parol (oral) evidence. But, if it is ambiguous, the ambiguity may be explained by parol evidence. Cheyenne v. Thompson - contract unclear on payment for unused vacation. Outcome?
Introduction to Sales
Harold and Maude
Introduction to Sales
Art. 2 of the UCC always has something to do with transations in goods (tangible, movable things). If goods and services are mixed (e.g., If hardware store sells and installs washing machine), the UCC controls the transaction if goods predominate. See, Perma Sash v. Scandinavian House. Merchants, UCC 2-103, deal in particular kinds of goods, e.g. a clothing merchant or an auto parts merchant.
Insul-Mark v. Kor-It
Kor-It (distributors) supplied defendant with nails to be rust proofed. Defendant repacked nails and shipped back to Kor-It, who then sold to contractors. The coating did not work and Kor-It lost customers and profit. Kor-It sued for breach of warranty. UCC supplies warranty; common law does not. Outcome?
Introduction to Sales
Good faith, UCC 104, = honesty (if a merchant, honesty + reasonable commercial standards. Unconscionability: UCC 2-302--court need not enforce if contract is shockingly unfair and lop-sided. Colorado-Kansas Grain v. Reifschneider-Farmer didnt respond to letter of confirmation within ten days, is he bound on the confirmation even though he didnt sign it.
Modifications
Contract modifications need no consideration, but get it in writing!!! Tennis Club v. T.J. International Oral modifications may be forbidden. Between merchants, the contract may require all modifications to be in writing and signed. Roof collapsed 25 years later. Outcome?
Auto Purchase
HOW THIS CONTRACT CAN BE CHANGED:
This contract contains the entire agreement between you and us relating to this contract. Any change to this contract must be in writing, and both you and we must sign it. No oral changes to this contract are binding. This provision must be separately signed by the buyer.
Negotiable Instruments
Detective Tony Jenkins Waterston - partner Sergent Letitia Malloy Lamour Haverstock - payee deceased
Negotiable Instruments
Checks and Notes
FUNDAMENTAL RULE
Possessor - unconditional right to
payment Paper is Negotiable Paper is in the hands of a Holder Holder is Holder in Due Course There are no Real defenses.
NEGOTIABLE INSTRUMENTS
Two types of negotiable instruments:
Notes--two party instruments and promises to pay
Purchase of auto from G.M.
Non-negotiable
Legal and enforceable. Subject to same defenses you studied in chapters on Agreement, Consideration, Legal Object, and Competent Parties. May be assigned, but not if contract is for special expertise, e.g., surgeon, architect.
NEGOTIABLE INSTRUMENTS
Formal requirements of negotiability:
a) WRITTEN b) SIGNED by maker or drawer
Trade Acceptance
Check You draw a check on Hometown Bank payable to order of U.T. (tuition) Note You make note payable to order of Cowtown Ford for a new car. Trade Acceptance Sasha (seller) draws Trade Acceptance on Circle S (buyer/drawee) payable to order of herself or to one of her creditors, e.g.,Citizens Bank (payee). Circle S accepts by signing.
BOARDWALK
Estimated time of payment not sufficient for negotiability Must be payable on demand or at definite time
Ambiguities
a) Words control figures, b) Handwriting controls typed or printed terms, c) Typed terms controls printed.
INDORSEMENTS
Blank Indorsers name only Negotiated by Delivery. Changes Order Paper into Bearer Paper if its the last or only indorsement.
Special Indorsement
Special indorsement names indorsee
Pay to Kristen, (signed) Lily Changes bearer paper into order paper if its the last or only indorsement. Order paper needs indorsement plus delivery for negotiation.
Restrictive Indorsement
Amy, drawer, issues check payable to order of Lindsey, payee: (a) Lindsey, payee, indorses For deposit, (signed) Lindsey, and deposits check into her account in Houston 1st Fed.Bk. (b) Lindseys bank credits her account and sends check through bank channels to drawee Hometown Bank for collection. (c) Drawee debits Amys checking account. (d) Drawee may refuse payment if NSF or stop order.
Indorser Liability
Indorser liability is secondary. For an indorser to become liable, the holder must
Present the instrument to the primary party, The primary party must dishonor by refusing payment, The indorser must be given notice of dishonor.
Qualified Indorsement
Indorsement without recourse means not liable as an indorser. Qualified indorsers make transfer warranties.
Transferor is a holder, All signatures are genuine, No material alterations, No defense is good against transferor, and No knowledge of issurers insolvency.
NEGOTIABLE INSTRUMENTS
Notice of the following prevents holder from becoming a HDC: a) Overdue, b) Dishonor, c) Alteration, Forgery, Incompleteness, and d) Notice of a defense. Hartford Ins. Co. (Avon) v. American Express-Dishonest employee (Skalkos) wrote company checks to pay personal debts, but disguised payees name. American Express was in good faith (HDC).
Defenses
Real defenses essentially this means no contract or that the law forbids enforcement. Personal defenses there is a contract but something is defective about it.
FTC Rule
Background: Far too many consumer credit transactions were for defective goods, but consumers note would be negotiated to HDC. This led FTC to ban HDC in consumer transactions.
FTC Rule
NOTICE: Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder.
SECURITIES
Inside Trading
Securities
Firms that have issued publicly traded stock must make current information available continuously.
Proxies
o SEC Act sec. 14--Proxies needed for business meeting quorum, and for info on officers, candidates, issues. If you dont vote your proxy, the firm will vote for its own slate of directors.
INSIDE TRADING
SEC Act sec. 10(b)--prohibits fraud in connection with purchase or sale of any security whether or not registered under the 1934 Act.
INSIDE TRADING
FUNDAMENTALLY UNFAIR-marked cards or a stacked deck. DESTROYS CONFIDENCE IN PUBLIC SECURITIES MARKET--the insider will always win (right up until indictment).
INSIDE TRADING
Insider is someone who has fiduciary duty to company whose stock he has traded. Fiduciary must not trade company stock while in possession of material, nonpublic information.
Tippers Liability
Tippers who pass on inside info are liable if they know the info is confidential and they expect some personal gain. Paul ThayerDeputy Secretary of Defense.
INSIDE TRADING
Tippees, having no fiduciary duty, are liable if
(a) they know the info is confidential, (b) know the insider is violating a duty, and (c) the insider expects some personal gain.
Tipper - Tippee
SEC v. Dirks (1983) Dirks was a stock analyst of insurance companies. He heard and investigated fraud at Equity Funding. The he reported to clients who sold their Equity Funding stock. Tippees liability for trades is derivative liable only if tipper is liable. Outcome???
INSIDE TRADING
SEC Rule 14-e. Prohibits inside trading during tender offer if trader knows info came from bidder or target. Misappropriation--liability for profitable trades using inside information if breach of duty is to source of information.
INSIDE TRADING
Carpenter v. U.S.--Wall Street Journal. Foster Winans, writer of Heard on the Street, in WSJ bought of X-Corp. before he wrote/published good things about X-Corporation. Stock price +++ Then he sold X and made profit. LEGAL???
Constructive Insiders
U.S. v. OHagenOHagens harm to securities market was the same as in typical inside trading case.
Misappropriation liability: Fraud on the source. The source was his law firm.
Constructive Insider
Constructive and Temporary Insiders are treated the same way. Herbst prepared press releases for X-Corp and traded its stock depending on the news and before the news became public.
Chapter 18
Environmental Law
$$$$$ v. $$$$$
Energy Efficiency--Paper v. Paperless East Texas lumber to paper mill to U.of T. Strip mined lignite to power plant to U.of T. Energy Efficient v. Wealth Transfer.
Environmental Law
CLEAN AIR ACT--National Uniform Ambient Air Quality Standards. PRIMARY STANDARDS--Protect public health w/o regard to cost + adequate margin of safety (3 yrs). SECONDARY STANDARDS--Protect public welfare within reasonable period of time.
Environmental Law
STATE IMPLEMENTATION PLANS-states were to identify polluters and issue air pollution permits. CITIZEN SUITS--citizen may sue polluter for violating permit or sue the state or EPA for failing to enforce.
Environmental Law
CENTRAL ARIZONA WATER CONSERVATION DISTRICT V. EPA.
A Citizen Suit spurred EPA into action v. Navaho Generating Station. Was the EPA order arbitrary and capricious, i.e., a waste of money in relation to air quality improvement?
P.S.D.
PREVENTION OF SIGNIFICANT DETERIORATION
NEW SOURCES: The CAA protects and enhances air quality, so new sources that cause major increases in pollution must get a permit. Under the PSD program, a permit will be granted only if (a) emissions wont cause an overall decline in air quality, and (b) the applicant installs BACT -- Best Available Control Tech
ACID RAIN
ALTERNATIVE TECHNOLOGIES
Scrubbers. Low Sulfur Coal. Use alternative fuels (e.g., gas). Trade emission allowances.
AUTOMOBILE EMISSIONS
GM built catalytic converter (1975). Auto travel quadrupled, 1970-2000. Oil companies must produce cleaner fuel. Auto companies must produce lowemission vehicles. Highly polluted cities must arrange for car pools.
AIR TOXICS
1990 Amendments to CAA requires EPA to set standards for 189 pollutants based on MACT (Maximum Achievable Control Technology).
INTERNATIONAL LAW
Export Controls: Export Administration Act: protects national security and conserves resources. Secretary of Commerce approves/denies license. Arms Export Control Act: President controls list of military weaponry.
INTERNATIONAL LAW
Import Controls: Average duty on goods entering U.S., 1997, was between 3-4%. Marubeni Corp. v. US (1994)Nissan Pathfinder (SUV) initially classified for transport of goods reduced on appeal to transport of persons. Tariff reduced from 25% to 2.5%. Dumping, Subsidizing: Sales in US by a foreign firm at less than fair value triggers a dumping duty by the Secretary of Commerce. Goods that are subsidized by a foreign government will draw a countervailing duty.
INTERNATIONAL LAW
Nontariff Barriers: Quotas and Import Bans. B-West Imports v. US (1996) presidents authority to control arms imports under Arms Export Control Act empowers ban on imports from China because of human rights abuses.
GATT
General Agreement on Tariffs and Trade
Between 1947 & 1994, GATT reduced tariffs worldwide by 35%. This is expected to boost world trade by $500 billion by 2005. WTO resolves trade disputes; US can opt-out if 3 unprincipled decisions are rendered against it in a 5 yr. Period. Environmental and child labor problems are exacerbated with global free trade. Intellectual property is granted new protection. Regional Pacts: EU, NAFTA, ASEAN, Mercosur.
INTERNATIONAL LAW
International Sales Agreements: A. Direct Sales: UCC and CISG are similar, but note differences.
1) CISG does not require written contracts (see UCC 2-201). 2) CISGsome offers irrevocable even if not written (see UCC 2-205). 3) CISGacceptances must be mirror images (see UCC 2-207). 4) CISG authorizes specific performance in some cases but not the UCC.
INTERNATIONAL LAW
International Sales Agreements: Parties may choose which forum (which national court system) will hear the case. Also, which language will be official and which currency to use.
INTERNATIONAL LAW
International Sales Agreements:
Letter of Credit: Buyer (account party) arranges with its
bank, for a fee, to issue a letter of credit to seller (beneficiary). This obligates the buyers bank to pay the seller on the basis of certain documents (bills of lading) that will be issued by the carrier when the goods are deposited with the airline or other freight company. If the letter of credit is confirmed, sellers bank, for a fee, will guarantee the soundness of buyers bank and pay the sellers draft (bill of exchange similar to a check) when the bills of lading are presented to it. The confirming, sellers bank will then collect its money under the letter of credit from the buyers bank, and the buyers bank will debit the buyers account.
INTERNATIONAL LAW
International Sales Agreements:
Centrifugal Casting Machine, Co. v. American Bank (1992)the buyer of Centrifugals goods was an agency of the Iraqi government, and Iraqis assets in the US had been frozen because of the Kuwait invasion. The Central Bank of Iraqi issued an irrevocable letter of credit (LOC), and it was confirmed by the defendant bank. CCM is entitled to payment despite Iraqis assets being frozen because the obligation to pay is on the defendant, not the Iraqi government.
INTERNATIONAL LAW
International Sales Agreements:
Indirect Sales via Distributor:
Exclusive distributorships in the EU must account for Art. 85, Treaty of Rome, forbidding agreements that distort competition. The Sherman Antitrust Act will allow a domestic firm to sue foreign firms for anti-competitive agreements that are made overseas if they intend to affect the US market and the harm is direct and substantial.
INTERNATIONAL LAW
International Sales Agreements: Indirect Sales via Distributor:
Hartford Fire Insurance v. California (1993) plaintiffs sued insurance companies based in Britain for conduct legal in Britain. The defendant companies, acting in conjunction, pressured/forced US firms to change the terms of their policies in the US. The changes were favorable to the British firms but not to US policyholders. The US Supreme Court allowed the suits to go forward. There was no requirement or compulsion under British law for the firms to take this action, even though it was permitted. Since there was no compulsion or conflict with US law, comity, which would prevent US legal proceedings, was not applicable.
INTERNATIONAL LAW
International Sales Agreements:
Licensing a Foreign Manufacturer: Patents and trademarks get protection under GATT, but other antitrust issues may arise in US or EU as discussed above.
INTERNATIONAL LAW
Investing Abroad: A. Repatriation of ProfitsUS investors in foreign countries may have difficulty getting their profits back home in the absence of treaty guarantees. B. ExpropriationNot considered to be illegal if just compensation is paid (eminent domain). C. Sovereign ImmunityThe courts of each nation lack to power/jurisdiction to hear suits v. a foreign nation unless the foreign nation has waived the immunity or the suit involves some commercial activity
INTERNATIONAL LAW
Investing Abroad: D. Act of State Doctrine. Lawsuits v. foreign nations not permitted if they interfere with right of the President or Congress to manage foreign affairs. E. Overseas Private Investment Corp.US investors may insure against political violence, expropriation and the like.
Bribery
D. Foreign Corrupt Practices ActCriminalizes gifts (anything of value) from US citizen to a foreign official to influence commercial transactions.
1. Illegal for US firm to bribe foreign officials to gain, or maintain, business. 2. All publicly traded companies must keep detailed records to document legal/illegal transactions.
Student Law
University of Texas
At
Austin
Bill Shaw and Anna Kylie Clark, napping in the lazy boy. December 1998