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Business Law 1 - Lecture notes all
Business Law I (ACCT 3201)
Brooklyn College
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Unit 1: Chapter 1 Natural Law vs Positive Law: the influence they have on our American law Natural Law: the law should reflect the moral codes inherent in human the rights come from a divine source Positivist Law: law is superior of a particular time and place, and it is the supreme will of the state, in which rights and ethics are not universal and morality is irrelevant focus on natural rights existing). Just laws are rooted in natural laws, reflecting the laws on nature Unalienable rights: rights that cannot be taken away from us Even though born with certain natural rights, if in an environment that protect these rights, then they go away. Sources of American Law 1. The U. Constitution: sets forth the fundamental rights of people living in the U. and gives power to the government. The U. Constitution is the supreme law of the any law, federal or state, passed and then challenged for violating the constitution, will be deemed unconstitutional and NO ONE can enforce that law. 2. Statutory Laws: laws enacted congress or the legislature of a given state, and includes ordinances. 3. Administrative Laws: rules, decisions, of an administrative agency (ex: FDA, IRS, SEC). They can be local, federal, or state. 4. Common Law: the coolest thing the English has given us. known as case law and judge made law. A body of judicial decisions that interpret and enforce any of the other that evolved over time. Legal principles come from these decisions. A decision becomes part of this body of law. The job of a judge is to interpret and apply the laws to a case before not to make to apply the law already in place. The judge makes law, since once a judge renders a decision it becomes the law. Remedies: a legal means to enforce a right and redress a wrong. This gives a party the right to get a remedy. Court of law use to only give you monetary compensation in the form of damages (money). Money is not always the adequate remedy in all cases, so a person can ask for an equitable remedy, they may look for 1) specific performance, is proper for items that are real estate, pets or 2) injunctive relief an injunction, to force someone to do them from doing something (ex: money cannot fix a broken wall due to construction, you need an action, and you need them to stop) they are harder to get than money. The rules of equity are built on a series of principles dealing with justice Courts of equity deals with non monetary relief You could go to court and ask for both legal remedy and equitable remedy Ex: going to court after Brooklyn college breaks your wall and making an injunction as well as monetary relief to pay for the damage Equitable maxim: a power to provide equitable relief and a power to grant it. hard to get injunctive relief because one the other side defend themselves. If seeking an equitable remedy 2 years after something is done, laches, or lazy. If a problem, you have to act on it quickly and be vigilant, or you risk having your claim barred (stopped) laches. is a defense to an action seeking an equitable The court care more about your rights than you do. You have an inexcusable delay when exerting your rights. The connection between an act and an injury can weaken overtime. Stare Decisis: on decided the doctrine which obligates judges to follow precedent, or the authority afforded to a prior judicial decision judges from subsequent disputes of similar facts. So, the judges are obligated looks at other decisions. Decisions act as precedent. A judge base his decision based on personal angst, a rule covered Stare Decisis. Judges come into the courtroom with their own feelings, beliefs, biases, etc. but bound precedent. or false: never depart from is a false statement, since they do sometimes because of social and political Ex: Brown v Board of Ed., where precedent had been departed from. Case from First Impression: where no precedent exists IRAC: the method used judges in coming to to cases. Through Issues, Rules, Application, and Conclusion. This is the way we argue the case through legal reasoning, which says a judge is a person with beliefs that can influence their stare decisis acts as a checks and balances for the law and a power. The job of the judge in IRAC is really Application, to interpret and apply the (statutory) law correctly. Chapter 2 Role in Government and Society The court (judiciary) determines if a law congress in constitutional. Judicial Review was established Marbury v Madison, and is the authority given to the US Supreme Court to review and determine the constitutionality of anything. Jurisdiction: before the court has the power to render any decision over a case, it must have jurisdiction, meaning speak the TB vs. MM: if Marky Mark punches To in the face, she needs 1) Personal Jurisdiction, or jurisdiction over the defendant. NY has jurisdiction to bring Marky Mark back to NY based on The Long Arm Statute: which brings a defendant back to the state if the event occured in the state. She also needs 2) Subject Matter Jurisdiction: jurisdiction over the type of case (Ex: you bring a probate action over a family court judge) TB v MM: TB wants but MM will appeal the judgement and argue that not fair. The Appellate court has the authority to review and can change the lower decision. The Appellate Court could only limit the review to questions of law, NOT questions of fact. Meaning: the way to win on appeal is to say the trial court, or lower court, interpreted or applied the rule of law incorrectly. Asks: the ruling Chapter 3 Deals with all the details of lawsuits TB v Cyndee, Management Company, and Abercrombie and Fitch: Cyndee pushed To and she breaks her ankle, so To visits an attorney. The first discussion have is how get paid. Ways to get paid: 1) Contingency fee, which is contingent upon the lawyer winning something: either a settlement or a judgement, which is normally around 2) Fixed fee, which is based on the performance 3) Hourly fees: can go from per hour Complaint has the basics of the lawsuit, complaint, and the relief. The plaintiff files a summons a complaint, and the defendant is filing an answer, which would include affirmative defenses, may include self defense If sued back, then you receive a counterclaim, or a lawsuit against the plaintiff the plaintiff and the answer the defendant all together the Discovery information that has before the trial. Discovery is needed to know the other side and know what bring to court. Both sides get all the information to prepare for trial. want a sworn testimony, or a deposition, where your attorney will ask Cyndee questions about her past involvement with Abercrombie. You can also ask interrogatories where she gets a list with questions and has to swear that her questions are truthful. You can also ask for a request for production, to see the camera footage, but they could claim that lost. If you claim that you got hurt, they can tell you to go to their doctor, or ask for your records to know there was no incident prior. TB can ask for their latest catalog, but not relevant. You ask for everything in discovery, you could ask for specific things, like if Cyndee has ever committed a crime, etc. Constitution The most influential legal document. called a living document, since still in effect, but the founders made it with the ability to change overtime. flexibility imbued in the constitution. 229 years old, but still considered a living document. There were only 27 changes within all those years. To ensure changes, we have amendments. The first 10 amendments is referred as the Bill of Rights. The founders (most were lawyers) created a document to help govern their children. There are arguments over the interpretation, as the constitution is constantly argued over. The word Democracy does not appear anywhere in the constitution Real constitution in not in Washington, it was moved to Fort Knox after the bombing of Pearl Harbor Some proposed amendments include: renaming our country to the United States of The Earth, finding divorce illegal, limiting a wealth to a million dollars, proposition to prohibit inebriation in the US. Supremacy Clause: says the Constitution is the Supreme Law of the land, and Federal takes over the state law. Marijuana is not legal under Federal Law, but allows the states to determine laws including restrictions. NO ONE CAN ENFORCE A LAW DEEMED UNCONSTITUTIONAL! Federalism: power is shared between the Federal Government and the States. The people of the the States. The states give power delegated power to the federal government, but reserved some power to themselves. True or false: federal government delegates all powers to the state is FALSE Police Powers: state regulatory powers. (Ex): JAYWalking is prohibited everywhere, but more strictly enforced in CA, as opposed to NY. Laws change state, and could change from county to county. Judicial: interpret and apply the law. Executive: to enforce the law. Legislative: make the law. To make sure none of these branches have too much power, Checks and Balances were made to limit the powers of each other. Clause: government has the right to regulate commerce . Interstate the states the government is free to regulate. Now, Congress is free to regulate all business between the intrastate commerce. Included in Gibbons v Ogden and Heart of Atlanta Motel v US. Marijuana affects interstate AND intrastate. Strict constructionist interpret words narrowly vs Loose constructionists, which interpret things broadly. Congress will see if state laws substantially affect commerce. If it does, then Congress preempts it and gets to regulate it. If it affect business, then not However, everything affects business, so Congress feels like they can regulate everything. Bill of Rights: protects individual rights and protects us from government intrusion. NOT you say whatever you want. First amendment: freedom of speech, press, religion, right to assemble peacefully and petition the government. Symbolic Speech is protected. Hate Speech and Obscene Speech are not protected. The Westborough church stands controversially in this category. Obscenity: what is obscene be agreed on. One obscenity is a niter art. The only thing agreed upon the court as obscene is child pornography. a court decides something is obscene and you distribute it, then committed a crime. NOT a right to interact with obscene Another tort can be regarding intentional infliction of emotional distress, that amounts to extreme and outrageous conduct. Example: a father handcuffing and threatening to kill a man that has consensual sexual relations with his 19 year old daughter. The man would be able to sue the father. Another example, publicly embarrassing Jivan on a daily basis is consistent, public, and exceeds the bounds of decency and is considered intentional infliction and emotional distress. The court will want to see physical manifestations of the threat, like therapy visits, etc. If you have intent from a tort, then proof of injury needed to punish the tortfeasor. A defense to a tort would be Self 1) if someone kicks a phone aiming toward them, self defense. If, instead, the person defends themselves taking out a gun and shooting it, then not okay. The response must be reasonable and necessary in any given situation 2) If a burglar is running away from your house with a TV, you shoot not a defense of life. However, you can you reasonable force. 3) If a burglar goes into someones house, reasonable to believe the person in the house will be threatened You cannot use deadly force in the defense of property. Scenario: Wendy Williams commits defamation through saying TB will give an A in the class to anyone giving her chocolate and money. If WW says it to TB in a closed room, then not defamation. Defamation: someone other than the party overhears a true statement, injuring a good reputation. is an absolute defense to based on a factual statement. If defamation is committed against Kylie, Kylie must show actual malice, or that the person that made the publication knew it was whether it was false or not. A public figure must prove actual malice, and they get less protection since they make money and put themselves in the public eye, and interested in them. They have a higher burden. Regular individuals, like TB, just have to prove that false. The Invasion of Privacy Torts: 1) a professor decides to go into another venture since not making enough money and creates a product and puts a picture of Beyonce on it, misappropriation. Appropriation: using a picture, name, or likeness for commercial purposes without their authorization or consent 2) Intrusion into a individual affairs. Scenario: If a person buys ba products from Target, Target send ads for products catering to her previous purchases. 3) False Light 4) Public Disclosure of Personal Facts: if a nurse reveals a medical records. Trespassing: going on, over, or under property not your own without their permission. If Oran extends his stay at house even though Meir asks him to leave, then Oran is a trespasser. You need to take reasonable, necessary action to remove them because you have rights. Trespass to personal property: borrowing a pen without their permission and putting it back When you purchase stolen goods and know stolen, then committed the tort of conversion Criminal side of Ex: borrowing shirt and never returning it is conversion. Defense to trespass: if you have to in order to save life, or if invited, like mailmen. If the police come onto your property and have a warrant, you can say please get off my Obscenity, fighting words, and defamation are NOT protected under the constitution. Unintentional is what fills up our court system. The tortfeasor does not intend to commit the consequences of their act, but their conduct falls below a standard established law for the protection of others. The tortfeasor created a risk someone fails to exercise the standard of care that a reasonable person would exercise. an injury requirement to negligence. 4 Elements of Negligence: 1) Duty: the defendant owed a duty of care to the plaintiff. 2) Breach: the defendant breached the duty owed to the plaintiff 3) Causation: the breach caused the injury 4) Damage: an actual injury The plaintiff has a duty to show these four elements. Negligence can come off as an act or an omission. Ex: leaving a live wire behind at a construction site. The reasonable person standard: how a person should act under the circumstances, and can change depending on the person. The duty of professionals: professionals are held to a higher standard. A lawyer is held to the reasonable lawyer standard. Breach: Someone breaching their professional Causation: 2 types, and both are necessary. Causation in fact: if not for the the defendant, the plaintiff would not ne injured, decided through the test. Proximate cause: foreseeability, meaning it was foreseeable that someone would get injured in such a situation. If it was unforeseeable, then we do not have causation. Ex: if you leave a box in front of your office and someone trips and falls, foreseeable negligence. Once a court finds a breach, say anything is foreseeable. If you breach your duty of care, your liability is limitless. Once you do something that fails to meet your standard of care, anything is possible. case: a man in a hurry to catch the train is helped a worker to get on the train and drops his bag of fireworks on the railroad tracks in the process, injuring Ms. Palsgraf. the case that established cause. The workers breached their duty helping the passenger on and breached their duty to Ms. Palsgraf. A Remedies are a legal means to enforce a right and redress a wrong. Know legal and equity remedies What is the doctrine of the english and American legal system: is stare decisis, influences how judges rule cases before them. Ordinances are statutory law Know the 4 sources of American law: administrative law, statutory law, case law, constitution. CIvil law may best be described as law of relations between people If answers sound odd and never heard them before, FALSE! If wrong false Judicial Review gives the court the power to decide the constitutionality of a law. Personal and Subject Matter Jurisdiction are needed Federal Jurisdiction: Federal Question and Diversity of Citizenship Dif. between jurisdiction, and venue, and standing. The Long Arm statute allows one state to bring a defendant back to the state. If Griffin sells shampoo in Nebraska, he could be brought under this statute Venue: one location is prefered over another since its the most appropriate place for a trial. Joe and Christa have a dispute and want help without a third Know the dif. Between 3 dif. Of ADR litigation, mediation(third party), negotiation, arbitration. Know in the complaint summons. The defense is found in the answer. Know the pleadings. What is a counterclaim: when the defendant sues the plaintiff back in their answer. Lawsuit brought the defendant in their answer. Commerce Clause authorizes Congress to regulate commerce, as well as it inter and intra state Supremacy Clause: federal law trumps state law. No one can enforce a law deemed unconstitutional, since the US Constitution is the law of the land. First 10 of Rights Speech symbolic speech. Unprotected obscenity, fighting words, hate speech, defamation. False statement that harms Public figure has to show actual malice Basic purpose of tort law: provide remedies for invasion of protected interest Know intentional torts, intent required, and unintentional Assault, battery, false imprisonment, trespass Needed to bring a claim over an intentional tort: Duty, Breach, Causation, Damage needed for negligence. Asserting a claim for negligence per breaking a law aware of. If a statute in place violated. an omission. Sam threatens Jill with a knife, a threat of immediate harm, which is an adult. If there was contact, it was a battery. False confined without justification Defame someone is injuring their reputation Actual malice: the knowledge of its falsity and reckless disregard for the truth. Celebrities get less protection under defamation, they have a higher burden of proof and must show actual malice. Torts against libel and slander. Conversion: buying stolen goods. Appropriation: using name and likeness without consent for commercial purposes. Conversion is the tort side of theft. Anytime someone enters your property your land without consent, its trespassing Negligence Diff between conversion and trespass to personal property Negligence can be accidental harm Duty of care: reasonable person standard. We conduct ourselves under the way a reasonable person would under the similar circumstances given. Palsgraf case, only case need to know Defense to negligence: assumption of risk Best defense to a negligence claim: no damages or injuries Dif. between negligence and intentional torts Not negligent if not hurt Self defense: defense to intentional tort Consider the plaintiffs negligence: comparative negligence Under tort doctrine of strict liability (not based on fault) From the book Chapter 1: (Foreseeability: proximate but causation in fact is also needed.) Primary sources of American Law Common Law Law vs Equity and courts of law and equity Legal and equitable What a remedy is Equitable Maxim: only defense is latches Stare Decisis: precedent Dif. between civil and criminal law Chapter 2 Dif. between plaintiff and defendant, attendant and attendee IRAC Judicial Review, Jurisdiction, Personal and Subject Matter, Jurisdiction of the Federal Courts In Personam and Personal Jurisdiction are the same thing Venue and Standing to sue Appellate court and their decisions ADR (negotiation, mediation, arbitration) and the dif. Between litigation Pleadings and what the summons and complaint and defendants answer 2. Consideration: something of value given or promised to convince a party of a deal. Not necessarily monetary vale. Each party must give something to convince the other party of a deal. 3. Capacity: both parties must have the mental capacity needed to enter into an ex: deals with age. 4. Legality: the subject must be for a legal purpose. Each party must voluntarily consent to this The court uses Objective Theory of Contracts to understand the intention of a person while entering into a contract. Similar to the reasonable person NOT subjective. what an objective person would consider. A valid contact meets all the criteria. Different Types of Contracts: exchanging promises. A promise for a promise. Ex: if Dory promises to paint garage for a bilateral contract. It have to be money. If you tell someone to forget about a contract, breaching it. Contract: a promise in exchange for a performance of an act. Ex: a mother promises to take her daughter to the movie if she does the dishes. time a contact is created is important to know to determine a breach. CONTRACTS ARE BILATERAL, NOT Most contacts do not need to be written to be enforceable. Unilateral Contract: getting onto a bus is entering a contract, since the MTA is supposed to get you to a certain destination. If they kick you off the bus without giving you a ticket for another bus, the MTA have breached their contract. Expressed Contract: forming a contract with However, not all contracts have to be expressed. Either written, verbal, or orally are expressed. Implied in Fact Contract: a contract formed the conduct of the parties. Scenario: Making a coffee in the cafeteria and walking away without paying for it. Problem: an implication that pay for it before you walk out. required for an implied in fact contract 1) The plaintiff reasonably expects to be payed and the defendant should have known to be paid. 2) The defendant has to have rejected the service. Ex: if To falls asleep at a hair salon and they decide to do Keratin on her hair, then To never had the chance to reject. A Void contract: no enforcement, not required the law A Voidable Contract: a valid agreement in which either party can legally away from. Ex: entering into an agreement with a minor is a voidable contract. An Unenforceable Agreement: when a valid agreement but one party cannot enforce the agreement because of a legal defense. A Quasi Contract: contracts that are implied verbal contract is worth the paper written Read: nature and terminology and the first 2 chapters on contracts. Page 232 Common Law vs UCC Commercial Code The UCC governs that involve objects ie purchasing a car and also governs contracts between merchants. Common law governs transactions regarding real estate, insurance, When learning a contracts, assume a common law Quasi Contract: a fictional contract applied law. It can only be applied when no actual contract between the parties. Used to avoid unjust enrichment. Scenario: you have cows the fence for your cows breaks, so Farmer John fixes the fence in order to save the cows from leaving, since at the rodeo. Farmer John spends for the lumber to fix the fence and expects you to pay him back, and you want to pay him back since you have an agreement. Farmer John sues him for the money and time of the activity (1 hour worth of work). The rancher says there was no contract, but the judge says he called you to ask to put up the fence and save your cows, you would have said so considered a Quasi Contract. If the farmer wants because of the lumber and worth of the cows that would have escaped. A person can only recover as much as they deserve according to quantum meruit. An unenforceable agreement is having the elements of a contract but the part enforce the agreement because not in writing and it should have been. a fully performed contract, where both sides have fulfilled their duties. a contract that has not yet been fully performed. The Plain Meaning Rule: when a contract is clear, a court will enforce it according to its plane terms. Ex: an ambiguous term, like parka, can have many explanations. So the rules of interpretation goes as follows: terms are given precedence over standardized terms terms take precedence (over boilerplate terms) Handwritten terms are held be construed against the person drafting the agreement. An offer is when the offeror and offeree agree to terms of the contract, and have an offer and acceptance, but what does an offer need? A statement of desire is NOT an offer. thinking of selling this is NOT an offer. will give this damn car to anyone that gives me is NOT an because you have to have a serious statement of intent when making an offer, and have anger, or expressions of opinion. If To finds dog and Paris made a reward of on social media that To know about, Paris is not obligated to give her the reward. You can only accept an offer that you know about. The offer must have communicated to the offeree and the offeree must have knowledge of the offer in order to accept it. advertisement, under Common Law, is NOT an offer, considered an invitation to If To makes an ad to sell her phone, and Ashira and Ashley come to buy it, THEY are the ones that are making the offers, not To. If Target accidentally puts up stroller instead of then Target is required to sell it. offeror is the master of the offer and gets to decide how to accept want for a necklace is a bilateral offer. want is a unilateral offer. want If the acceptance is too far off from the original offer, then not the actual acceptance. Lapse of time, meaning you wanted to accept but were too late, and wanting the necklace but the subject matter (necklace) is destroyed PRIOR to acceptance, then terminated. If To offers to see me her diet supplements with cocaine and other illegal substances in it, aka rendering the subject matter, illegal and considered an invalid offer. cannot constitute because the offeree has to have an opportunity to reject the offer. Finish chapter and next chapter of consideration. Page 248 Acceptance: required in an offer At common law, the acceptance has to mirror the offer. If the acceptance deviates too much from the offer, the a counter offer. Acceptance is affected when communicated the offeree to the offeror. If To makes a job acceptance and signs on the 1st of January, mails on the 2nd, and gets received to her future boss on the 4th, then the mailbox rule is implemented and the acceptance is technically on the 2nd (only when no specificity of authorization unless the contract stipulates how authorized). Once is the mailbox, considered deposited acceptance. Electronic Signatures: acceptance is when you sent it prove it was mailed from you (unless they say is when I get an email, since the offeror makes all the terms of agreement). Consideration is the value given in return for promise, and must have 1) Sufficient which can mean (1) a promise to do something that you have no legal obligation to do, ex: a) paint garage door or b) mom promises to give him if he gets an A in Business Law. Her promise is adequate consideration on both ends since not required to pay him and not required to get an A, and if he does get an A then she must pay him. It always mean money, but most of the time it comes in forms of money. 2) for ex: if Dory, being OCD, helps To clean her office (in the case that both friends and To is NOT her professor) and To promises to take her to a Kanye West concert, and then To says to forget about it, To does NOT have to take To to the concert since past consideration (considered NO act was doen tin the past and she do it in exchange for the promise. A promise enough. A promise made after a kind act was done is NOT consideration. This is what distinguishes agreements from gifts. Consideration provides the basis for the bargain, and not necessarily monetary value. In the eyes Consideration (legal sufficiency) Requires 1) Promise, to do something you have no legal obligation to do 2) Performance, of an action that not obligated to do 3) Forbearance, or refraining from doing something you otherwise have a legal right to do, ex: Joel stops gambling via deal is adequate consideration. Hamer v. Sidway Case: an uncle offers to pay his nephew to stop and he quit, but the state attorney questions him and says, should we pay him? doing so much If Brandon promises not to do something that he have the legal right to do it (like promising to stop smoking marijuana) not sufficient. Refraining from smoking cigarettes is forbearance and legally sufficient. Ex: To offers to give you extra points if you start wearing a helmet when you get on a bike is a legit offer. not legally required to wear one, but To asks us to perform this act not legally required, which is legal sufficient consideration. If Joel steals post it notes and comes late to work everyday, and to offers to give her a bonus if she not doing something not allowed to do, To have to keep her end of the bargain doing something you have a contractual obligation to do IS NOT adequate consideration. If Mandy paints garage door for and says in the process going to need another 20 grand to finish an element of preexisting legal duty. Construction contracts that add money is not enforceable, meant to prevent extortion. An exception: Ordinary business issues ARE NOT unforeseen. If you do something not legally obligated to do, that promise is sufficient. If Robert cleans office and is nice to her, so she wants to give him The has to be in response to an offer, it be out of nowhere, and NOT CONSIDERATION. A promise to reward an act that was already done is NOT consideration. Past consideration is no consideration. Ex: If someone says great aunt promised to leave me her and then gave it to someone else, then considered a gift. Under the law, if you promise to give someone a gift and no detrimental reliance, then not enforceable. only enforceable if a valid agreement is found. If you have a preexisting duty, then the promise to do something is NOt legal consideration. Ex: if you have a contract with a set time to come in to work and the person always comes in at 9:30 even though he comes in 9:45 and the person starts coming in on time for a bonus, he is not entitled to that bonus since he had a preexisting duty the promise to do it is insufficient consideration. Unforeseen difficulties: if something outrageous, like if the transit unit goes on strike, which is the exception to the preexisting duty rule. If To promises to give a bonus if she thinks someone is doing a good job, since she wants to, an illusory promise, which is not a promise at all since no really committed to something. The promisor gave something noncommittal. If someone says want different than need ratification (spoken or written). Implied ratification: once a minor reaches the age of majority, he must abide a contract. Exceptions: if Key Shawn takes his friends to Applebees and orders a lot of food worth liable for necessaries, or necessities. Key Shawn is liable for the reasonable value of the necessaries, and will have to pay. Misrepresentation of Age: commiting fraud. if a spoiled rich minor lies about her age and buys a car, she can make a legal purchase and CAN disaffirm and say she want the car. However, she has to make up the difference. If the value of the product is diminished, she has to pay in full. They have to return the goods upon disaffirmance Once a minor disaffirms, everyone requires the terms of the consideration and the adults are put in the position they were prior the contract. put in restitution, or the position they were in before entering the contract, and making them whole again. Ex: if they lost money, they have to be given that money back. Parents are only responsible into contracts unless they cosign. However, parents are responsible for torts made their children. DIsaffirmance: a minor can walk away from their legal obligation and 2 avoidance Capacity: falls under 1) Minors 2) Mentally incompetent people Mentally Incompetent: a person lacks the mental capability to understand the nature of what doing. A contract entered could be void, voidable, or valid. Ex: if To has multiple personalities and had a moment where she buys an expensive maserati to kill darth vader, and goes back to the dealer and wants to disaffirm the contract, she have capacity and was mentally incompetent at the time of the contract, and had a guardian. The contract is then void. If To can prove she was mentally incompetent at the time of the entering into the contract but have a no court order declaring them mentally incompetent, the its deemed voidable. If To has mental incompetence but at the time of the contract is knew what they were doing, then the contract is valid. A valid person understands the nature of the contract. The person was not declared mentally incompetent. Theory of the court looks at the circumstances and see if someone is taking advantage of someone mentally incompetent. Intoxication: a condition which a normal capacity to it affected alcohol or some other drug. If Joe can take 5 shots and still be sober, and sells his car to To and then wants to disaffirm, he cannot since he was fully wrote the agreement, the license plate, etc. You have to look at the time and the circumstances. The Objective theory of contracts is used to look at these circumstances. Understanding the nature and consequences of your act Everything is based on the ability to consent If someone lacks capacity under alcohol or drugs, then they really give consent. The law says they understand the nature of the agreement and consequences. An intoxicated person could disaffirm or perform restitution. Just because someone lacks capacity, mean they could walk away. Judges always sympathetic on the intoxicated. viewed on a case case basis Minors are free to disaffirm, others must prove mental incompetence and they understand the of their actions. Legality The subject matter of the contract has to be legal in nature. The final requirement for a contract. Ex: If To tell Dory to sell cannabis for and Dory sells it for and then wants her To can say about because no honor among thieves and no agreement, even if signed or videotaped. The subject matter of the contract is not legal and the contract is unenforceable. The contract is then void. If To pays Dory to beat up Sadar, a void, illegal contract because asking Dory to commit a tort. A contract that calls for a tortious act is illegal, void, and unenforceable. A contract to commit a crime is illegal. Usury: a statute that sets the maximum rate of interest for certain transactions. If higher, then usury. If someone has a loan and the legal max is then Judge To could lower the interest rate. The judge could change the terms of the reformation: taking an unfair term and make it legally enforceable agreement. Judge To can say obscene and keep the contract in place via reformation. If Professor To wants to make more money injecting people through Booty Bar, and I agree to pay her a problem since not licensed. Members of certain profession requires a license. A contract with an unlicensed individual is unenforceable. If To represents Robert in a California, the agreement would be unenforceable since she have a California license. Ignorance an excuse for not following the law. You must follow a different laws if in them. Contracts Contrary to Public Policy: ex to commit an immoral act, like selling a child, or a contract that prohibits marriage. Business contracts may also be against public policy. Contracts of Restraint of Trade: to reduce competition. Signing agreements with employers not to work for their competition. If Victor signs an agreement that says he work for any competition in the US for 25 years, not valid since unreasonable in length and duration. unreasonable Usually years. Reasonable during period of location. If Bagel becomes really popular and Phillip wants to buy it, then you have to make sure Birnbaum open up another store a block away. You need a covenant not to open another store. up another store would be unreasonable based on the length of time and The reasonableness of the provision (clause in a contract) is in most contracts to prevent the buyer from the unreasonable action. It must be reasonable in nature. READ BEFORE YOU SIGN
Business Law 1 - Lecture notes all
Course: Business Law I (ACCT 3201)
University: Brooklyn College
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