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“REVIEW MAGAZINE” Dashia Crittle

Unit A: Basics of the Law Objective 01.01 Understand the origins of law. EVOLUTION OF THE LAW • Evolution of American Law: • Laws are rules of conduct established by the government of a society to maintain stability and justice in that society. • American law, like its people, is a blending of changing ideas and diverse cultures.

Judeo-Christian Influences • Circa 1200 BC until 1st century AD • – The Ten Commandments • • Set of Jewish laws • – The Bible • • Old and New Testament religious rules of conduct • – Christianity influenced American law

• In other countries, laws are based on moral and • religious rules. • – Islam: Middle Eastern countries including Saudi • Arabia, Iran, Iraq, Kuwait, practice the Muslim faith. • – Hinduism: India studies the Mahabharata for rules of • living. • – Buddhism: Southeast Asia and Japan follow the • teachings of Buddha.

Greek Legal System • Philosophers debated ideals of justice • • Circa 620 BC Draco, the Greek lawgiver, • classified law into four areas: tort, family, • public and procedural laws • • “Rule of Law” should govern man, not • other men • • First legal system using a jury • • Included laws of commerce and property

Roman Empire • 560 AD • • Emperor Justinian • • “Corpus Juris Civilis” means body of civil • law • • Laws applied to Holy Roman Empire which • spread over Western Europe

The Magna Carta • 1215 AD • • Established English constitutional liberties • • Basic human rights • • Protection from abuse by government

English Common Law • Developed in 12th Century England • • Unwritten law based on local customs

Napoleonic Law • Influenced by Roman Civil Law • • Established by Emperor Napoleon of France • • Transported to French Colonies • – Quebec Province, Canada • – Louisiana, USA

• Legal systems following Napoleonic Code • – Modern day Quebec, Canada • – Modern day Louisiana, USA • – Did not accept the entire Uniform Commercial • Code (UCC) • – Louisiana has modified many state laws to • correspond with 49 other states for uniformity

Constitutions • A document which spells out the principles • by which a government rules and the • fundamental laws that govern a society • • American constitutions • – US Constitution (1787) • – Each state has a constitution

Unit A: Basics of the Law Objective 01.01 Understand the origins of law. SOURCES OF AMERICAN LAW • English Common Law: • The King’s court of judges traveled in • circuits around the countryside deciding cases. • • Decisions were based on local customs and • traditions. • • The judges shared decisions with other judges so justice was served equally or “in common.” • Colonists brought English Common Law doctrines with them to America. • • Primary basis of American legal system

Ethics and Structure Objective 1.02 • Ethics: deciding what is a right or wrong action in • a reasoned, impartial manner • Morality: involves the values that govern • society’s attitude toward right and wrong • Ethics are based around the following basics: • Feelings and Opinions • The Greatest Good • The Golden Rule • Consequential Reasoning • Rule-based reasoning

• Ethics are viewed as how a person feels • about a certain situation • Ethics may also be based on what opinions • are expressed about certain situations

The Greatest Good • The idea is that must people will base their • opinion of ethics based on how a certain • situation affects the greatest amount of • people • The more good that result, the more ethical • the action taken • The more bad the result, the less ethical the • action taken

The Golden Rule • Do unto others as you would have them do • unto you • The heart of the golden rule is empathy • Empathy: putting yourself in the other • person’s position

Consequential Reasoning • Takes a look at the consequences of the • action before making a decision on what • way to act • Looks at alternative actions and it gives the • final outcome of each action

Rule-based Reasoning • Makes a decision based on majority vote • Sometimes it is not the most ethical • decision • Based around the U.S. Constitution

3.01 Acceptance • Requirements of Acceptance • Unconditional Acceptance – Mirror Image Rule (IMPORTANT) • Acceptance must “mirror” offer • Any change means there is no acceptance – Counteroffer • Offeree makes an offer • Offeror becomes offeree

Methods of Acceptance • Contract accepted when sent, if same • method of communication used • Contract accepted when received, if different method of communication is used • If method is stated in offer, it MUST be used • Action=Acceptance • Silence cannot be a method of acceptance

Termination of Offer • Revocation – Taking back of an offer by offeror • Rejection – Refusal by the offeree • Counteroffer – Any change in the terms of the offer • Expiration of Time – If the offer puts a time limit on the offer and it has passed • Death – Offeror dies • Insanity – Offeror is declared insane

Capacity to Contract • Capacity – legal ability to enter a contract • Majority – age of legal adulthood • Minor – not yet reached legal age (minority) • NC Age of Majority = 18 years old • Voidable Contracts – minors may disaffirm • or avoid their contracts if they so choose • Infancy = minority = minor = under 18 yrs • old

• Returning Merchandise – must be returned • if disaffirming a contract • Tender – offer to return • Misrepresenting Age – fraud • - if contract disaffirmed, you may be sued • for fraud

Ratification of Contracts with Minors • Ratify – approve contract • - after reaching majority age, a minor can ratify a • contract made while he or she was a minor • - ratification ends all rights given to a minor • Contracts for Necessaries – necessities – food, • clothing, shelter, and medical care • - responsible for the fair value of item

• Special Statutory Rules – minors have • capacity to buy car/life insurance • - married = adult • - limited capacity if you own a business • - renting apartment is a necessity

• Mentally impaired persons – if declared insane: • Prior to guardian being appointed – Contract is • voidable • After guardian appointed - all contracts are void • Intoxicated person – must not understand the • purpose, nature, or effect of the transaction • - fair value of necessities

• Convicts have certain limitations • Aliens – people who live in U.S. but own • allegiance to a different country • - limited capacity • ex: war

GENUINE AGREEMENT MISTAKE Unilateral Mistake • An error on the part of one of the parties • Cannot get out of contract • Types: • Nature of the Agreement • Signing a contract you don’t understand or have not read This applies to signing a contract in a language you don’t understand • Identity of a Party • Bound by contract with face to face meetings • May be able to void a contract made NOT face to face

Bilateral Mistake (Mutual Mistake) • Both parties are mistaken • Types: • Possibility of Performance • Contract is impossible to perform Either party can void contract • Subject Matter • Either party can void contract

DURESS • Overcoming a person’s will by use of force or by • threat of force or bodily harm • Economic Duress • Threats to a person’s business or income • Actual physical harm will void the contract • Threat of physical harm will make contract voidable • A threat of exercising one’s legal right is NOT duress Ex Threatening to sue someone and you have right to sue, is NOT duress

Legality Agreements that Violate Statutes Civil & Criminal Statutes – Agreements to commit a crime/tort are illegal • Usury Statutes – State sets a max interest rate • Interest – Fee the borrower pays to the lender for using the money • Usury – Charging too high of an interest rate

Goal 7/8

Unit C Objective 07.01 • AGENCY • Relationship in which one person, • called an agent, represents another • person, called a principal, in some sort • of business transaction with a third • party. In most cases a binding • contractual agreement is formed. • Principal -> Agent -> Third Party • – Example: You picked up and paid for a • pizza ordered by a family member.

TYPES OF AGENTS • General Agent-given authority to perform • any act within the scope of a business. • Special Agent-employed to accomplish a • specific purpose or to do a particular job. • Subagents-appointed by another agent. • Agent’s Agent-has no power to appoint a • subagent but does so anyway. • Co-agents-two ore more agents hired by the • principal.

RELATIONSHIPS ARE CREATED • By agreement (contract) • By law (circumstantial or specific) • By statute (special interest of a state)

Contiuned… • Partially Disclosed Agent: principal’s • existence but not identity is known to • the third party. • Fiduciary: relationship is based on trust. • Actual Authority: real power the • principal gives to an agent to act on his or her behalf

• Apparent Authority: agency by • estoppel • Third Party: must be notified if an • agency has been terminated • Consensual: both parties of a • principal/agent relationship agree or • consent to relationship

• Agent is obligated to act in good faith • (within the scope of the principal’s • needs and wants). Therefore, a • principal is not liable for criminal acts. • When an agency is created by statute (law), the agent is known as a statutory agent.

• If unauthorized agent works on your • behalf, you have two options: • 1. Charge agent with fraud (agent is liable • to the third party) • 2. Accept actions of agent (ratify)

PRINCIPAL’S DUTIES TO AGENT • Compensation-payment for services • Reimbursement-repayment for own • money spent • Indemnification-repayment for amount lost • Cooperation-working togeth

Goal 5/6

BASIC BUSINESS LAW • Characteristics of Sole Proprietorship • Requirements for Organizing - none • Legal Status – owner is the business and it is • not a separate entity. • Liability - unlimited • Management – owner makes the decisions

005.01 Principal Form of Business Organization-Sole Proprietorship, continued • Characteristics of Sole Proprietorship • Dissolution – owner decides and the business • terminates upon the owner‟s death • Ease of formation – just do it! • Duration – death or disinterest of owner • Ability to attract professional managers - poor

• Requirements for Organizing – agreement of • the parties. • Legal Status – not a separate entity in many • states • Liability – unlimited liability (except limited • partnership • Management – partners have equal say in • management unless otherwise specified in • agreement.

• Dissolution – terminates by agreement of • partners or • upon a partner’s death, withdrawal, bankruptcy. • Ease of Formation – moderately difficult • Duration – death, bankruptcy, or withdrawal of • any partner • Ability to attract professional managers – • moderate.

• Signature on the back of a negotiable instrument • Allow payee to cash, deposit or transfer payment • of the check to someone else • Proof that the payee cashed or transferred • payment of the check to someone else • Endorser is responsible for payment of the check • if the new owner cannot collect payment • Endorse should sign the check the way it is on the • front of the check and if the name is misspelled, • correct the signature directly up under the first • endorsement

• Federal Fair Credit Billing Act• Creditors must mail bills at least 14 days before due date • Creditors must acknowledge billing inquiries within 30 days • Creditors must settle complaints within 90 days • Creditors may not send repeated letters demanding payment • until disputes over billing are settled • Credit cardholders may withhold payment for items defective • without being liable for entire amount owed (purchases of • $50 or more and 100 miles from home

• Collateral – Property that is the subject of the loan • 2. Cosigner – Helps protect a loan when a borrower’s • credit rating is poor • 3. Secured Party – Lender or seller who holds • secured interest • 4. Repossession – Property is returned because of • non-payment • No Collateral • 2. Creditors make sure that debtor is reliable and able • to pay back loan • 3. Example (Credit Cards)

Types of Loans • Promissory Note - Written promise to repay with • interest • Installment Loan - Paid in regular payments

Goal 9 • Dashia • Crittle

Bailment • An agreement created by the temporary delivery • of personal property by the owner to someone • who is not the owner for a specific purpose. • Both parties agree that the property will be returned to the bailor. • Bailee - has in their temporary possession property that belongs to someone else. • • Bailor – owner of property who gives up possession to someone else temporarily.

Examples • Leather jacket left at a dry cleaners • Vehicle delivered to parking valet • Goods transported by common carrier Truck taken to dealership for service check • Diamond ring taken to jeweler for cleaning or repair • Leaving your clothes in dressing room while trying on new sweater • Goods delivered to a consignment shop

Mutual Benefit Bailments • Implied by law, a customer must give up • possession of property. • – Example: When you rent skates and leave • your own shoes while you skate • – Example: When you leave your clothes • temporarily in the dressing room while you try • on a new outfit

• Rights: • – To hold a Mechanic’s Lien -the right to retain • property of another, if not paid for service • rendered • – To expect payment for services rendered • • Duties: • – Of reasonable care and protection of goods • while in custody of bailee • – To comply with terms of bailmen

Rights and Duties of Bailor • Rights • – to have goods protected • – to receive service as agreed upon • – to have goods returned in timely manner • • Duties • – to pay for service provided • – to warn of dangers or special care required • – to pick up goods in a reasonable time

Tortious Bailee • What is a tortious bailee? • – A party who wrongfully retains lost property or stolen property • – A party who wrongfully uses a bailed article for a purpose other than that agreed upon by the parties • • Examples: • – Student who finds necklace and knows who it • belongs to but does not return it to the rightful owner • – Parking valet who takes your hot car on a joy ride • – Dry cleaner’s employee who wears your leather jacke

Review Magazine 1-9  
Review Magazine 1-9  

Business law goals 1-9