Objective 1.02
ETHICS AND STRUCTURE
EVOLUTION OF AMERICAN LAW Laws are rules of conduct established by the government of a society to maintain stability and justice in that society. ďƒ’ American law, like its people, is a blending of changing ideas and diverse cultures. ďƒ’
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
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
SOURCES OF AMERICAN LAW Common Law Law of Precedent Statutory Law Federal and State Constitutions Administrative Law
COMMON LAW • Unwritten laws • Based on customs and traditions of people in a society • Colonists brought English Common Law doctrines with them to America. • Primary basis of American legal system Adopted by US legal system • Common law developed into a legal system modeled by nations around the world
LAW OF PRECEDENT •
Judges referred to decisions in previous common law cases. • Judges applied that decision to a new but similar case. • Thus, Law of Precedent established
STATUTES
• Statutory law is enacted (passed, created, ratified) by a governing body for a specific purpose. – Federal legislature • Creates statutes, acts – State legislature • Creates statutes – Municipal (city/town) government • Creates local ordinances and bylaws
STATUTORY LAW
• All statutes– Are subject to review by judicial system – Must be constitutional cannot conflict with the United States Constitution
JUDICIAL REVIEW Precedent set by Marbury vs. Madison, 1803, gave court system the right to: – Review Lower Court Decisions – Review Statutory laws – Review Executive Branch
CONSTITUTIONAL LAW
• The US Constitution is the supreme
law of land. – Any state or local law that conflicts with the US Constitution is unconstitutional. – If unconstitutional, then law is null and void. • The Supremacy Clause, US Constitution Article VIWho has supremacy
RIGHTS OF CITIZENS • US Constitution guarantees rights to citizens – Bill of Rights – Individual rights – Rights of Representation – Arrest/Trial Rights – Suffrage (Voting) Rights – States Rights – Right to amend Constitution
DUTIES OF CITIZENS • Duty of Citizens – #1 Allegiance to country • Breach of Duty – Treason-disloyalty to country – Expatriation-the act of abandoning one’s country
ADMINISTRATIVE LAW • Administrative law is the regulations, orders, rules and decisions of administrative agencies. • Legislators create an administrative or regulatory agency. • Purpose is to regulate certain activities for the benefit of the public.
• HAVE THE POWER TO:
– Make rules – Enforce rules – Investigate violations – Decide guilt or innocence of violators – Penalize those convicted – Order actions to sto
ADMINISTRATIVE AGENCIES
• Are set up when expert knowledge is needed • Have a limited scope of power • Are subject to judicial review by the court system
ADMINISTRATIVE (REGULATORY) AGENCIES
GOAL 2.0 NOTES
CRIME ďƒ’ An act against the public NOTE: Each statute that defines a crime must specifically explain the conduct that is forbidden by that statute. ď ą No act can be considered a crime unless it is prohibited by the law of the place where it is committed and unless the law provides for the punishment of offenders.
good
4 PUNISHMENTS FOR A CRIME? Imprisonment Fine Probation Community Service Combination of the above
PARTICIPANTS OF A TRIAL Plaintiff? (2) -Government -Prosecutor Defendant (1) -Person accused of the crime
ACCORDING TO SERIOUSNESS
ELEMENTS OF A CRIME
What is the most serious? Felony Imprisonment or death What is less serious? Misdemeanor Fine and/or probation
Criminal Act -Must violate a statute Required state of mind -Depends on crimes definition Motive is NOT required
CLASSIFYING A CRIME
TYPES OF CRIMES Crimes Against People Social Crimes Crimes Against Property Business crimes (White Collar)
CRIMES AGAINST PEOPLE Murder Malice aforethought? 1st degree—aggravated (premeditated, cruelty, torture, rape, robbery, kidnapping) 2nd degree—non of the above conditions apply Manslaughter Voluntary? Intentional Involuntary Occurs while committing an unlawful or reckless act
CRIMES AGAINST PEOPLE-CONTINUED Assault - Attempt (pointing or shooting at someone) Aggravated (Usually felony)-using deadly weapon with intent Simple (misdemeanor) Battery Hitting Kidnapping Unlawful removal against person’s will Sex offenses Statutory rape Date rape (acquaintance rape)
SOCIAL CRIMES Federal/State governments have the right to regulate health, safety, welfare, and morals of the people. Drug Use illegal and harmful substances Addiction-inability to function normally Alcohol Use Domestic Violence Physical or mental abuse
PUNISHMENT Fines-payment of specified amount of money as penalty for committing crime. Imprisonment –indefinite or indeterminate sentences Mandatory Sentencing What is the only thing a judge cannot do? Not allow you to see a family member.
ASSIGNMENT FOR THE ATTORNEYS You are hereby assigned the following responsibilities: Write a narrative (1 page minimum) summarizing what you learned from the unit on Criminal Law and its impact on your life. Take a posttest on the objective to measure what you should know about the subject matter. Discuss results with teacher and prepare to retest if the need occurs. Court is dismissed!
GOAL 3.0
ACCEPTANCE ďƒ’
Unqualified willingness to go along with the offer
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 offe
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
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
LICENSING STATUTES License - legal document stating that the holder has permission from the proper authorities to carry a certain trade or profession • (Example) - If license is only to raise revenue (not to show competence) contracts made are valid not void (Person w/out license subject to arrest )
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
4.0
METHODS TO TERMINATE A CONTRACT
DISCHARGE BY PERFORMANCE • Complete • All terms have been carried out properly and completely. • Time • Court will honor time request, if it is deemed “of the essence.” • If not mentioned in contract, then a reasonable time will be assumed.
DISCHARGE BY AGREEMENT Mutual Release • Each side releases the other side from the contract. • Accord and Satisfaction • Substitute one contract for another.
DISCHARGE BY IMPOSSIBILITY OF PERFORMANCE • Death or Illness in a Personal Service Contract • Only allowed in Personal service contracts. • What is personal service? • Photographer • Artist • Any other contract must be completed.
DISCHARGE BY OPERATION OF LAW • Wrongful Alteration • Any altering or changing of a contract will discharge parties to the agreement. • Statute of Limitations • Individual states have a time limit on lawsuits to be filed. • What is the only crime/tort that doesn’t have a time limit?
ASSIGNMENT • Legally transferring your RIGHTS in a contract. • Assignor – party who transfers the right. • Assignee – party to whom the right is transferred. • No consideration needed. • Must not change the obligations in the contract. • Must be a RIGHT not a DUTY. • Assignor is responsible for contract fulfillment
DELEGATION • Transfer a duty. • Delegating party is still responsible for the contract being fulfilled. • Contracts that CANNOT be delegated: • Promise to perform service personally. • Exercise of personal skill or judgment. • Contract prohibiting delegation.
CHARACTERISTICS OF A CONTRACT • Valid – Legally good • Void – No legal force • Voidable – Not void, but may be voided by one party • Unenforceable – Some rule of law can not be enforced by the cour
EXPRESS VS. IMPLIED • Express – Stated in words – Written or spoken • Implied – Based on actions (not words)
BILATERAL VS.. UNILATERAL • Bilateral – Contains two promises • Unilateral – Contains one promise
ORAL VS.. WRITTEN • Oral – Spoken words • Written – Write out exact terms
05.01 Understand the Types of Ownership
UNDERSTAND THE TYPES OF OWNERSHIP
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
● 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
TYPES OF CORPORATIONS ● Domestic-chartered in a specific state ● Foreign-chartered in one state but doing business in another state ● Alien-chartered in another nation but doing business in a state
6.01
TYPES OF NEGOTIABLE INSTRUMENTS
ENDORSEMENTS ■ 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
BLANK ENDORSEMENTS Signed with endorser’s name only ■ Can be cashed by anyone who has a check with a blank endorsement
SPECIAL OR FULL ENDORSEMENTS ■ Transfer payment to someone else ■ Can make a payment on a debt with this endorsement ■ Payee signs the check over to another person to receive payment
RESTRICTIVE ENDORSEMENTS ■ Limits use of check ■ Safest type of endorsement ■ Can not be cashed by someone who has stolen the check ■ Safest way to send a check through the mail
SETTING MAXIMUM INTEREST RATES
Usually apply to loans of money Some states govern charges imposed on credit purchases of goods/services “on time”
DISCLOSURE OF TERMS
Full disclosure of interest and finance charges Does not limit percentage amount True annual percentage rate (APR) Does not apply to first mortgages
LAWS PROTECTING DEBTORS
LAWS PROTECTING DEBTORS 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)
07.01
AGENCY LAW
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. Coagents-two ore more agents hired by the principal.
AGENCY RELATIONSHIPS Gratuitous Agent: agent works for free (no contract) Master: has the right to control the conduct of his or her servant Independent Contractor: agent is hired by the other party, but not controlled
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
TYPES OF AUTHORITY Actual-real power given to agent Express-all orders, commands, or directions given to agent when relationship created Implied-understood acts or powers implied from express terms
AGENT’S DUTIES TO PRINCIPAL Obedience-obey reasonable orders Good faith-deal honestly Loyalty-faithfulness or acting in best interest Duty to account-accountable for all money entrusted to him/her
PRINCIPAL’S DUTIES TO AGENT Compensation-payment for services Reimbursement-repayment for own money spent Indemnification-repayment for amount lost Cooperation-working together
TERMINATION OF RELATIONSHIP
By operation of law – Death of principal or agent – Bankruptcy – Impossibility of performance – Agent’s objective becomes illegal
Termination of acts – Performance – Mutual agreement – Agent’s withdrawal – Agent’s discharge
FEDERAL ENERGY REGULATORY COMMISSION (FERC) Manages the wholesale price of natural gas and electricity sold for interstate commerce use. Answers questions about increase in prices State Utility agencies regulate prices Manages transportation of electricity and natural gas Ensures that regulated energy companies are following guidelines set by the law
U.S. DEPARTMENT OF ENERGY Protects National Security Applies advanced science and nuclear technology Protects economic security Promotes supply and delivery of reliable, affordable, and environmentally sound energy
ENERGY REORGANIZATION ACT Energy Reorganization Act created the NRC Controls licensing, constructing, and creation of nuclear reactors Manages possession, use, transportation, and disposal of nuclear material Controls all nuclear activities
ENVIRONMENTAL PROTECTION AGENCY (EPA) Responsible for environmental protection Implements the Environmental Policy Act Governs the environmental laws for air, water, solid waste, toxic substances, and noise pollution Controls executive orders
NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) Fights Pollution and cleans the environment Explains consequences for environmental violation Prevents or eliminates damage to the environment Requires federal agencies to integrate environmental values by creating Environmental Impact Statements each week that are posted every Friday on the website
NUCLEAR REGULATORY COMMISSION (NRC) Consists of a five member commission One member is appointed by the President Generates safety policies and regulations for nuclear reactors and materials and allows the Executive Director for Operations (EDO) to handle policies and decisions of the commission Issues licenses Handles legal matters Directs the activities of the program EDO ensures safety of commercial use of nuclear materials in the US Offices handle inspections, enforcement of laws, and emergency response programs licensees
CLEAN AIR ACT Established to protect public health and the environment Was created by the US Environmental National Ambient Air Quality Standards (NAAQS) to assist in the creations of law to protect the environment Handles problems such as acid rain, ground-level ozone, and air toxics
CLEAN WATER ACT Protects water quality Does not handle ground water Helps to reduce pollution in waterways, wastewater treatment plants, and control runoff pollution Protects the fish, shell fish, and wildlife in water
TOXIC SUBSTANCE CONTROL ACT Tracks industrial chemicals produced and imported into the US Handled by the EPA Screens, tests, and reports chemicals that pose a threat to the environment EPA can prohibit the manufacture or import of chemicals thought to be hazardous
Objective 8.01
DOMESTIC RELATIONS LAWS
RIGHTS RELATING TO THE MARRIAGE CONTRACT The right to support, either emotional or financial, by one’s spouse when necessary The right to inheritance from one’s deceased spouse The right to property if the marriage fails The right to file a joint income tax return The right to compensation to continue one’s standard of living, if the marriage ends. The right to the division of community prop
DUTIES RELATING TO THE MARRIAGE CONTRACT The duty of faithfulness to one’s spouse The duty to provide support, either emotional or financial, to one’s spouse when necessary The duty to refrain from bodily harm to those with whom they live The duty to support their children, if there are any
PREMARITAL AGREEMENTS A premarital agreement is an agreement between two people considering marriage Each party in the agreement must be honest about every aspect of the agreement Not every marriage contract includes a premarital agreement A premarital agreement must be in writing and signed by each party Also called prenuptial agreement
CEREMONIAL MARRIAGES Ceremonial marriages are typically used to make a marriage official (solemnize) ďƒ’ Ceremonial marriages must be administered by someone who has authority (judge, ordained minister, sea captain, and in some states notary public) ďƒ’
COMMON LAW MARRIAGES Common Law marriages require no witnesses or ceremony by anyone authorized Common Law marriages do not require a ceremony but is typically considered when a man and a woman share common residence for an extended period of time (different by state, typically 10 years) Under Common Law, a published notice of an upcoming marriage was called a marriage bann
PROXY MARRIAGES One or both of the parties to a marriage are absent and are represented by an agent who acts on their behalf Absent due to military duty or serious illness Historically due to travel and distance issues on arranged marriages
PROHIBITED MARRIAGES Prohibited marriages include, in most states, marriage between close relatives, marriage between those related by blood (consanguinity), or marriages related by marriage (affinity) The Uniform Marriage and Divorce Act prohibits marriage between parent/grandparent, child/grandchild, brother/sister, uncle/niece, or aunt/nephew Bigamy (two spouses at one time) and Polygamy (more than two spouses at one time) are prohibited
GROUNDS FOR ENDING A MARRIAGE Marriages can end either by: Death Annulment Divorce
ANNULMENT The grounds for annulment include either spouse lying about: Pregnancy Freedom from disease Willingness to have a child Past Marriage Age
DIVORCE
The grounds for divorce vary from stateto-state but can include: No-fault (the breakdown of the domestic relationship) Adultery Physical or mental cruelty Desertion Alcoholism or drug addiction Nonsupport Conviction of a felony A few states have allowed for divorce based on incompatibility Impotency
ALIMONY An allowance made to a divorced person by his or her former spouse for support Set during the court settlement The judgment of the court
SUPPORT AND CUSTODY OF CHILDREN
The welfare of the child is the main concern of the courts Many factors are considered when determining custody: Parents’ wishes Childs’ wishes Child’s relationship with parents, siblings, and any other person who may affect the child’s welfare Child’s adjustment to home, school, and community Physical and mental health of all involved
Joint custody may be awarded If one parent receives custody, the court will then set child support payments for the other parent. If child support is not paid, a parent locator service is then used to help collect the unpaid child support payments
Objective 08.02
INTRODUCTION TO INSURANCE
NATURE OF INSURANCE • The concept of insurance involves risk pooling or spreading losses over a greater number of people. • An insurance company collects and pools premiums from many individuals or businesses for the payment of future claims.
RISK MANAGEMENT • All people take risks every day. • Risk management is the process of managing one’s exposure to risk. – Examples • Using a seat belt • Installing smoke detectors • Driving a vehicle • Playing sports • Purchasing an insurance policy
ADHESION CONTRACT • An adhesion contract is a standard form contract that is written primarily by one party • Insurance policies are adhesion contracts • Policyholder (buyer) cannot usually change: – Policy language – Perils covered • Policyholder can change: – The dollar limit of coverage • Example- $200,000 coverage on homeowner’s structure – Specific items to be covered • Example- 1 carat diamond ring, valued at $3000 • Some adhesions contracts are found by courts to be unconscionable if they take advantage of one party
INSURANCE • Planned protection provided by sharing economic losses • Insurance does NOT stop the loss from happening • Insurance companies provide a risk management service to consumers • Insurance does indemnify or financially repay the insured a portion of the loss • All insurance policies have a specified limit of coverage
INSURABLE INTEREST A financial interest in property or a person’s life that permits someone to buy insurance to protect against the financial loss of that property or person’s life • Examples: – You can insure cars owned or leased by you, but not a car belonging to another person – You can purchase life insurance on someone whose death would be a financial loss to you, ie spouse, business partner, parent, child
NON-PAYMENT OF PREMIUM
The amount of money the policyholder must pay for insurance coverage • An insurance underwriter determines the cost of the policy using risk factors and statistical data • An agent represents the company to the consumer • Equals consideration in the insurance contract
PREMIUM
If the premium is not paid, the policy may lapse or cancel, voiding the contract • If claims are made after a lapse, the claim is denied • Some policies have a grace period – Late premiums are received and – Policies are reinstated
CLAIMS The request for payment from an insurance company to cover the financial losses • Examples: – Automobile-car accident – Medical-doctor’s appointment – Life-covered person dies – Disability-out of work for health reasons – Unemployment-laid off from job
DEDUCTIBLES Most policies have a self-insured portion of the cost of the claim that is paid by the insured. – The insured chooses the amount of risk retained by choosing the deductible amount – Deductible • On auto coverage, the amount the insured pays before the insurer pays collision or comprehensive damage claims • On health coverage, the amount the patient pays before the insurance company pays any covered medical expenses – The higher the deductible chosen by the insured, the lower the premium for the coverage. – 100% self insurance = 100% risk retention • means no insurance is purchased
AUTO CLAIMS The at fault driver of a vehicle that damages other property or injures other people is liable for the cost of repairs. • North Carolina financial responsibility laws mandate that drivers carry bodily injury and property liability insurance coverage. ďƒ’
PROPERTY DAMAGE LIABILITY – Property Damage Liability protects the insured person from liability claims for damage to property of others, such as: • Personal property including vehicles, animals • Business property including telephone poles and other utility structures • Government property such as bridges and other road structures • Real property – Does NOT cover the insured person’s propertyOptional
LIFE INSURANCE Provides income to dependents or other named beneficiaries in the event of the insured person’s death. • Face value- the amount of protection stated in the policy – Example: Marla buys a $100,000 face value life insurance policy. Marla dies. Marla’ s beneficiaries will get $100,000 in proceeds
BENEFICIARIES The policyholder names a beneficiary • Can be an individual or business • Beneficiary receives proceeds from a life insurance claim. • Proceeds is the money paid to a survivor by a life insurance policy. • Contingent beneficiaries named in the policy are second in line if the beneficiary is deceased.
LIFE INSURANCE ADVANTAGES • Face amount is paid as proceeds to beneficiary • Proceeds are NOT taxable by income, estate or inheritance tax laws. • Proceeds are paid direct to beneficiaries. • Proceeds avoid probate.
TERM LIFE INSURANCE • Term life is temporary insurance. – Only pays if insured dies during policy period – Purchased for a specific term (one year or multiple years) – Usually renewable for another term – Least expensive premium for most coverage – Pure insurance, no savings add up
09.02
REAL AND PERSONAL PROPERTY
• 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
BAILMENT
Examples of Bailments • 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 • Invokes the duty of ordinary care on the bailee • Results from a contract (for service, repair, storage, rental) with consideration exchanged • Both bailor and bailee receive benefit • A pledge as security for a loan is also a mutual benefit bailment Most bailments are mutual benefit
RIGHTS AND DUTIES OF BAILEE • 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 bailment
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 jacket
REAL PROPERTY • Land and anything permanently attached, including: – Buildings, structures, fixtures – Water, water rights – Minerals on and below the surface of the earth. – Trees & crops – Air space above the surface
PERSONAL PROPERTY • Anything other than real property, including: – Clothing, jewelry, furniture, appliances in a home – Automobiles, ATVs, lawnmowers – Equipment & machinery used in business – Copyrights, patents, trademarks – Software, stocks, loans, mutual funds • Must be delivered in order to transfer ownership. • May be tangible or intangible.
RIGHTS OF OWNERSHIP • Possess, use and enjoy the property • Dispose of, sell, consume, modify, insure or destroy the property • Give the property away by will after death • Lease the property to a tenant
INTELLECTUAL PROPERTY • Includes copyrights, patents, trademarks and trade secrets • Is an original work fixed in a tangible medium of expression. • Examples: literature, computer software, musical scores and lyrics, choreography, dramatic works, unique product or process, symbols or word that identify a product, commercially valuable information that is kept secret
METHODS TO ACQUIRE PROPERTY • Purchase contract – earn money and use it to buy • Gift – includes intent, delivery and acceptance • Intellectual labor – creation of property • Inheritance – wills and trusts • Accession – farm animals naturally increase • Found property – lost or mislaid • Occupancy – possession of property that belongs to no one else
REAL PROPERTY TRANSFERS
Grantor
- conveys a deed to real property • Grantee – receives the deed
TYPES OF DEED • Quitclaim – Transfers a seller’s interest in a property but doesn’t warrant that the seller owns any interest • General Warranty Deed – Warrants the title – Most desirable for the buyer • Bargain and Sale Deed – Transfers title to property without giving warrant
PERSONAL PROPERTY TRANSFERS • Transfer of title (ownership) to property • Not all transfers require written titles – Purchases of goods from a retail store • Certain transfers have formal titles-Vehicles – Are registered with the state – MUST BE NOTARIZED – Require odometer reading disclosure statements – Require damage disclosure statements
LIMITS ON USE OF PROPERTY • Police powers by government • Nuisance ordinances enacted by cities • Zoning ordinances enacted by cities to regulate • Health and public safety issues • Certain physical rights • Eminant domain • Deed restrictions • Easements
PROPERTY RIGHTS • Physical rights apply to: – Surface (the right to occupy the land, and develop it with buildings, etc.) – Subterranean Minerals or Water (rights to remove or conserve) – Air (right extends into upper atmosphere-but cannot exclude aircraft from flying over property)
EMINENT DOMAIN • Right to make private property into public if it is for the public good. • When highways are widened, private property is taken by eminent domain. • Owners are paid the fair market value of the property, but they cannot refuse to release property
LIMITS ON USE OF PROPERTY • Restrictive Covenants – Deed restrictions – Example- a homeowners association restricts parking cars in the street • Easements for limited use – Example- Gas lines end at my driveway but a neighbor wants to build a new home on an adjacent lot. I can sign an easement release so the utility company can continue the line to his new home by crossing my property.
RELATIONSHIP BETWEEN LANDLORDS AND TENANTS • Parties to the contract to lease or rent – Lessor/Landlord – Lessee/Tenant • Tenant - Wants possession and occupancy free from interference or annoyance • Landlord – Wants rent money and property in good condition at the end of rental term
RIGHTS AND DUTIES: COVENANTS OF THE CONTRACT • Covenant = Promise • Affect both the landlord and the tenant • May be express or implied • Number and type vary depending on type of property
QUIET ENJOYMENT • Tenants have a right to: – expect the undisturbed possession of the property called quiet enjoyment. – expect exclusive use of the property free from interference or annoyances. • State laws vary and the landlord may or may not have the right to enter the premise without prior notice. – Add covenant to lease to address entry issue
IMPLIED COVENANTS • Implied warranty of habitability by landlord – May be enforced by city housing codes – Health and safety of citizens is considered – Duty of landlord to provide property free of defective conditions • Waste - The landlord expects reasonable wear and tear by tenant, but unreasonable damage is called waste and tenant can be required to pay the cost to repair waste.
ASSIGNMENT AND SUBLETTING • Assignment and subletting – When a tenant transfers the remaining period of time on a lease to another party • May or may not be allowed by landlord • May have to get prior approval by landlord
RENEWALS OF LEASE • Tenancy ends at the expiration of stated time • Lease may have renewal clause making provisions for renewal by the parties to contract • Agreement usually requires either party to give advance notice of their intent to nonrenew the lease
SECURITY DEPOSITS • A money deposit as security for payment of rent due or repairs for damages done by the tenant • Most landlords require one or two month’s rent in advance as security deposit • When lease expires, if all rent is paid in full and there is no waste, the security deposit is returned to tenant by landlord.
PAYMENT OF RENT • A critical issue to both parties. Be sure contract is clear on: – What is cost of monthly rent/lease? – When is payment due? – Is there a late fee if payment is late? – What constitutes “late”? – Is late payment grounds for breach of contract and termination of tenant rights?
TERMINATION OF LEASE • If the contract has a specified term, it is a tenancy for years. • Leases can be terminated prior to the end of the term by either party, but penalty clauses may apply. • Breach of contract exists if the tenant chooses to vacate and the property cannot be leased to new tenant in a timely manner. • Landlord may sue for monetary damages. Landlord must attempt to lease property and mitigate any damages from loss of rents
ANTI-DISCRIMINATION • Anti-discrimination laws such as the Civil Rights Act bind landlords in the selection of tenants. • Special emphasis is given on human rights and needs. • Law forbids discrimination on basis of race, religion, color, national origin, sex, age, ancestry, marital status, blindness, military service or future plans to have children.
TORT LIABILITY • Applies to both landlord and tenant • May require responsibility for injuries occurring on the premise • Landlord is usually responsible for common areas where landlord is in control • Tenant is usually responsible for injury caused by defects in the portion of the premise over which he/she has control
FIXTURES • Fixtures are items of personal property attached to real property. • The addition of fixtures by the tenant causes problems when tenant prepares to vacate the premise. – Who owns fixtures that become real property? – What damage will be caused if item is removed? – Will tenant be reimbursed for improvement to premise?
BREACH OF LEASE AND REMEDIES • Eviction – The landlord has the right to deprive the tenant of physical possession of the premises but landlord – Must obtain a court order allowing removal of tenant – Must provide just cause, such as: • Nonpayment of rent • Damage to property • Violations of lease provision • Lien may also be attached to tenant’s property to pay back rent or costs of repair due to waste