Business Law

Chapter One: You and
the Law
Debate Topics:
1.
Stem Cell Research
2.
Abortion Rights
3.
Same Sex Marriage
4.
Womens Rights
5.
Flag Burning
6.
Dr. Kevorkian Right to Die
7.
2nd Amendment Rights
What is the origin of US Law?

Morality and Ethics >>> Create Laws
Morality is right and wrong. It is the values an individual is raised with that is accepted by
society. South states, the Middle East, the North all have different value sets.
Ethics is the values of right and wrong derived from ones morals.
Does morality and ethics ever come in conflict? Yes, abortion rights, right to die, etc. This
creates laws.
Moral Person: An individual who believes in and accepts the values of society.
Immoral Person: A person who does not abide or with intent (malice) deliberately goes
against societal morals.
Amoral Person: Sociopath, A person who is out of touch with morality in general and has
no regard for it.
Law: Set of legal principles or guidelines set forth by government that promotes the general
welfare of society.
How do we make ethical decisions?
Feelings and opinions
The greatest good
The Golden Rule
Homework: Ch. 1 Online Read: Language of Law-Vocab

1.
unconstitutional
2.
law
3.
precedent
4.
morality
5.
constitution
6.
statute
7.
ethics
8.
legislature
9.
common law
10.
administrative law
September 20th, 2012

Aim: What are the sources of todays laws?
Common Law
Derived from feudal times. Traveling judges based court decisions on customs and
traditions. This was an attempt by the King to centralize power. Judges shared decisions,
creating Common Law.
Federal and State Constitutions
1.
US Constitution (Federal): broad, basic foundation of laws. Describes structure and

function of government and fundamental rights of citizens. Part 1 Articles to the
Constitution and Part 2 Bill of Rights.
A.
Article 1: Legislative, Article 2 Executive, Article 2 Judicial Branch
B.
Article 4: Relations among states.
C.
Article 5: Amending process.
D.
Article 6: Supremacy Clause. No one can create own government, US govt

supreme.
E.
Article 7: Provided for steps for ratification of the Constitution.
F.
Bill of Right Amendments 1-10. Protect fundamental rights of citizens. Today

there are 26 amendments.
i.
Freedom of speech, religion, etc.
ii.
Right to bear arms.
iii.
Quartering soldiers.
iv.
Search and seizure.

a.
Plain sight rule-probable cause when in plain sight.
b.
Cannot enter vehicle without cause.
c.
Look suspicious cant result in a search
v.
Right against self-incrimination and due process

a.
Must be arraigned and a judge and grand jury must decide to

go to trial. District Attorney must also agree to take the case.
b.
If not dismissed, presented with an indictment.
c.
Military courts handle military trials.
d.
Cannot be tried for same offence twice.
e.
Arraignment mus be within 48 hrs.
f.
Private property may not be taken without just compensationeminent domain.
vi.
Right to a speedy and public trial.

a.
Public broadcasting at the discretion of the judge.
b.
Open flow of witness testimony.
c.
Right to a public defender.
vii.
Civil trials
a.
viii.
Can sue in court for a minimum of $20.

Excessive bail shall not be required, nor cruel and unusual
punishments.
ix.
Enumeration in the Constitution will not deny others retained by the

people
a.
x.
Should not cause a conflict with your own rights.

Reserved Powers
2.
3.
4.
Statutes
Court Decisions (Case Law)
Administrative Law
Chapter Two:
Criminal Law
Crime: An act against the public good, punishable by a fine or imprisonment.
A. Classifications of Crimes:
I. Prosecutor: the state or federal government representing the public.
II. Defendant: the person who is accused of a crime.
III. Felonies: a major crime punishable by imprisonment or death.
IV. Misdemeanors: a less serious crime with a less severe penalty. In some states this is
called a petty offense.
B. Elements of a Crime:
I. Criminal Act
II. Required State of Mind
III. Motive??? No.
IV. Criminal Act: statutes that define a crime explains the conduct that is forbidden. In order
for something to be considered a criminal act, there must be a statute that defines the act
as criminal (Penal Code).
C. Particular Crimes
A.
Crimes against people

i.
Homicide: Taking of the life of another human. Genocide, suicide,

fratricide, insecticide, etc.
ii.
Murder: Killing of another individual with malice aforethought (evil

intent).
iii.
Manslaughter: Killing of an individual involuntarily or by ones

negligence.
iv.
Assault and Battery: Both considered a crime and a civil offense.

a.
Battery: the unlawful touching of another with the intent to

cause harm.
b.
Assault: An attempt to commit battery. Also considered

harassment.
c.
Aggravated assault and battery: some sort of deadly weapon

involved.
B.
Crimes against business interests white-collar crimes, involve a level of

fraud and deliberate deceit. (Larceny by false pretenses)
i.
Forgery: False making or changing of a writing with the intent to

deceive and monetarily gain from.
ii.
Bribery: To pay to influence an individuals actions. The individual must

be a public official.
iii.
Extortion: The acceptance of a bribe.
C.
Crimes against property

i.
Burglary: Breaking and entering of a dwelling house at night with the

intent to commit larceny. Daytime breakins
ii.
Robbery: the unlawful taking of property accompanied by violence or

threats.
iii.
Larceny: stealing, the unlawful taking of ones property.

a.
Petty: Nationally: $300. In NY: A misdemeanor
b.
Grand: Nationally more than $300. NY: 1. >1,000,000 B Felony

2. >50,000 C Felony 3. >3,000 D Felony 4. >1,000 E Felony
iv.
Embezzlement: The unlawful taking of anothers property that has

been entrusted to you. Ex. Bank teller, stock broker, etc.
v.
Defenses to Crimes
Arson: The willful and malicious burning of property/dwelling
1.
Insanity
A.
American Law Institute
B.
McNowghten Test
2.
Entrapment
A.
When an individual is influenced to commit a crime by a public official that he

or she would not have normally commited.
3.
Self Defense
4.
Defense of family members
Chapter 4: The Law

of Torts
Abandoned home: Trespassing Intentional
Doctor: Malpractice Negligence
Setauket gas leak: Strict Liability accidental
Tort: An act against an individuals rights to be free from bodily harm, right to enjoy a good
reputation, right to conduct business without interference, proper medical care.
Three classifications of Torts:
1.
Intentional Torts: Ex. Trespassing. Doing something you know is a tort. A wrong
occurs when a person knows and desires the consequences.
A.
Trespass: Intentionally violating ones right to property
B.
Assault and Battery: Threatening/intimidating affects you and your rights,

then it is assault and battery.
C.
Interference w/ contractual relationships: Business or marital relationships
D.
Deceit and fraud: When someone intentionally misleads you seeking profit or
gain.
E.
Defamation:
i.
Slander: Said
ii.
Libel: Written
F.
Emotional Suffering
G.
Invasion of privacy
2.
Negligence: Accidental or unintentional tort based on the failure to exercise the

degree of care a resonable person would have in a similar situation.
A.
Duty of care: Who
B.
Breach their duty of care
C.
Proximate cause: injury caused directly by the negligence.
D.
Actual harm: injury (i.e. not a scape)
3.
Strict Liability
4.
Nuisance: To ruin someones enjoyment of life. To interfere in ones quiet enjoyment

of life.
A.
Regular: See above
B.
Public: General publics inability to enjoy life.
C.
Attractive Nuisance: Dont take precautions to prevent nuisances. Ex.

homeowner can be sued for not putting a fence around the pool and someone gets
hurt, you can be sued.
D.
Defenses:
i.
Comparative negligence: both parties were at fault. Damages are

reduced in proportion to ones own negligence.
ii.
Contributory negligence: If the plaintiff contributes to the fault in any

way, the case is thrown out.
iii.
5.
Assumption of risk: assume the risk that is posted.
Punishments:
A.
Monetary Damages
i.
Punitive Damages: punish for fraud
ii.
Compensatory Damages: actual costs/loss
B.
Injunction: Stops the alledged act
C.
Privileged: Members in congress/elected public officals words cannot be

used in a lawsuit.
Chapter 5 Notes
Thought Question:
Includes one of the states or the country, high crimes of an official, dealing with the
Constitution. State includes crimes, etc.
Notes:
Federal Court System:
Under Article III of of the Constitution was given the authority to hear cases
based on jurisdiction.
Jurisdiction: authority to make proper judgement and due process.
Federal courts have jurisdiction over cases in which the Us or a state is a

party, cases that question the interpretation of the Constitution, diversity of
citizenship cases over $50000, and cases regarding the seas, patent-rights,
copyrights, and bankruptcy.
Three Tiers:
US District Courts
Jurisidiction to hear federal cases for the first time. Original
Jurisdiction
Considered trial courts for criminal and civil actions.
There is one district court in each state, based on population.

Total of 95 district courts.
Appellate Jurisdiction: hears a case for the second time.
Divided into 13 circuit courts that are arranged geographically.

Each circuit has one circuit court and several district ocurts.
Court of Appeals cases are heard by a panel of 3 judges. There

is no review trial.
Supreme Court: Highest court of the land.
Has both appellate and original jurisdiction in hearing cases.
Appellate function is in questioning the constitutionality of the

law in question.
Bush v. Gore: Decision Gore has a right to win this case and the
votes should be recounted, but since state law mandates a recount by a

certain time. This deadline has passed.
Original jurisdiction which include ambassadors, public officials,
and cases which involve a state.

9 justices, 4 is the majority, so a minimum of 7 justices are
necessary for a trial.

State Courts:
Local Trial Courts: Limited jurisdiction over minor matters like misdemeanors
and civil offenses. States determine what jurisdiction these courts have. Petty
offenses.
General Trial Courts: Each county has at least one general court for major civil
crimes and criminal courts. Sometimes hear appeals. General Jurisdiction. Also
known as county courts.
Special Courts: Established to try special cases. Designed to hear specific
cases.
Ex. juvenile courts: over juvenile deliquents, deceased issues courts
(probate courts), etc.

Intermediate Appellate Courts
Based on the law, not fact. Generally have appellate jurisdiction from
states lower court system, sometimes special cases may be heard for the first
time.
Only hear oral arguments from the lawyers. Usually only if evidence
that a judge or jury has been prejudiced in some way.
State Supreme Courts
NY does not have a State Supreme Court.
Chapter 6
1. Arrest of the Defendant When does this occur
May occur anytime by a police officer with a warrant.
May occur without a warrant if officer has good reason (probable cause) or witnessed
a felony or a misdemeanor that involves a breach of the peace.
2. Rights of the Defendant Miranda Rights
Knowledge of the Charge
Names of Police Officers
Telephone Call
Bail
Remain Silent-5th Amendment (self incrimination)
An Attorney Provided
Right to Speedy Trial-due process
3. Search and Seizure-When are they allowed?
Permission or search warrant
Reason to believe there is a hidden weapon
An arrest in the accused home
Search of car if there is reason to believe illegal items contained in vehicle
Police have the right to impound car until warrant is issued
School officials have th eright to search students without a warrant.
4. The Arraignment Process: Steps before the trial

The Judges Review
A defendant must be brought before a judge immediately after the arrest.
Judge briefs accused on his rights.
The judge will determine if there is cause to continue or dismiss teh case. If
there is acause, the judge will refer the case to a prosecuting attorney.
Formal charges are drawn up

Grand Jury
A group of citizens called together to determine whether there is enough

evidence to justify accusing the individual of the crime.
An indictment will be handed down if the grand jury finds enough
justification to proceed with the case.
Not all crimes are sent to a grand jury.
Petty offenses such as misdemeanors are heard by a Petit Jury.
Petit Jury determines the innocence of an individual. A grand jury meets in

secret on major felonies to rule on possible indictments.
The Arraignment
After the indictment the accused must submit a plea of guilty or not guilty.
No guilty sends the case to trial.
Bail is set by the judge.
Civil Trial
Pleadings
A complaint must be followed by the plaintiff
Complaint must be filed with the court
Court will issue a sumons or notice to the defendant.

Answer
The defendant must file an answer to the summon or risk loosing the case by
default.
The answer from the defendant must admit or deny the allegations in the
complaint. May file motion to dismiss to the courts-that is the answer. Goes to the
courts and they have a hearing to dismiss the lawsuit. Can also file counter lawsuit.
Methods of Discovery
All faxcts must be brought forward before a trial will takes place.
Both parties must present all evidence.
Most cases are settled after the discovery phase: settled our of court
If the case can not be settled the clerk will out the case on the court calendar.
Pretrial Hearings
Informal hearings in the judges quarters where the people meet.
The judge will outline what the reality of the lawsuit is according to the law.
Final attempt to achieve an out-of-court settlement.
Jury Selection
Jurors purpose is to determine facts and apply the facts to the law.
Attorneys question jurors prior to trial and to determine and bias or prejudice
that might effect judgement.
Jurors can be dismissed if their judgement is in question.
Attorneys will try to select jurors who might fit the case profile.
Opening Statements
An introduction to the case where both attorneys in an attempt to establish

their parties intent or rationale in the case.
Attorneys will describe to the jury how they intend to present their rationale
of the case.
Introduction of Evidence
Legal Documents: sales, etc.
Actual
Witnesses
Expert Witnesses: paid to appear.

Cross Examinations
Defense cross examination of plaintiffs witnesses and presentation of any

new evidence.
Plaintiff cross examination and new evidence.
Both parties must rest their case.
Closing arguments. Plaintiffs attorney goes first. Summarize the events of the trial
and use the witnesses and all evidence to support their original rationale.
Judge will instruct the jury on the legal procedure and laws that pertain to the case
to produce an accurate verdict.
Verdict: A majority decision of the jurors: fault or no fault.
Jugement: what the judge hands down.
Chapter 7 Notes
1.
Contract: An agreement between two parties or more that is enforceable by law.

A.
Offer and Acceptance

i.
Offer: A proposal by one party to another party to enter into a contract.

a.
Offeror: makes the offer
b.
Offeree: accepts the offer
c.
Requirements of an offer:
a.
serious intent
b.
definite and certain
c.
communicated to the offeree
d.
Acceptance: the willingness to go along with an offer according to the terms.

Unconditional acceptance or mirror image rule
a.
B.
Counter offer: Response to an original offer with changes
Genuine Agreement
i.
C.
Everyone agrees. Was there misrepresentation?

Consideration
i.
The things of value that are actually exchanged. This mutual exchange binds the parties
together.
D.
Capacity
i.
Everyone has the ability to contract within the agreement. Minors are generally excused
as are mentally incompetent and drugged or drunk individuals.
E.
Legality
i.
Parties are not allowed to enforce contracts that involve doing something illegal. i.e.
committing a crime, stuff made illegal by statutory law.
2.
Characteristics of Contracts
A.
Valid, void, voidable, unenforceable

i.
Voidable can be voided or continue to exist at the offerees/offerors discretion
ii.
Unenforeable is when a contract becomes void due to the changing of laws.
B.
Express/Implied
i.
Implied: Going to the grocery store.
ii.
All terms are expressed clearly either orally or written.
C.
Bilateral or Unilateral
i.
Bilateral: Two people agree to exchange things
ii.
Unilateral: After something has been performed (ex. shoveling driveway, cutting lawn)
D.
Oral or Written
3.
Terminating an offer
A.
Revocation
i.
To take back offer before it is accepted.
B.
Rejection
i.
Offeree declies the offer
C.
Counter offer
i.
To amend an original offer by the offeree
D.
Expiration of time
i.
When time for offer is stated, offer is terminated after that time.
E.
Death or Insanity
i.
Based on the ability to contract
Worksheet Answers:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Key Points
1.
serious intent, definite and certain, communicated to the offeree
2.
Revocation, rejection, counter offer, expiration of time, death/insanity
3.
4.
valid, void, voidable, unenforceable; express, implied; bilateral, unilateral; written,

oral
Chapter 8 Notes
Genuine Agreement:
1.
Mistake: An error or misrepresentation in a contract due to one party or both.

Mistakes will break genuine agreement.
A.
Unilateral: An error made by one party. The party bound to the terms and
cannot void the contract.
i.
Mistake as to the Nature of the Agreement: If one party

misunderstands the terms to an agreement they cannot avoid it if they made a
mistake.
ii.
Mistake as to the Identity of the Party: Wrong person got the

agreement.
B.
Bilateral mistake:
i.
Possibility of Performance: If the contract cant be performed. Both

parties can void the contract. It is voidable. If the subject matter can suddenly
not perform the terms, both parties may avoid the contract.
ii.
Mistake as to the subject matter: If both parties make a mistake as to

what the subject matter is, it is voidable.
2.
Fraud: A deliberate deception to secure an unfair or unlawful gain.

A.
Proof of Fraud
i.
False representation of a fact

a.
Material: something you relied upon to make the decision.
b.
Concealment: deliberately hiding something. Also known as

nondisclosure
ii.
Representation was known to be false
iii.
Misrepresentation intended to be relied upon
iv.
It was relied upon
B.
Must be a loss
C.
VOID
3.
Innocent Misrepresentation
A.
A statement of a supposed fact that turns out to be false.
B.
Injured party may rescind the contract
C.
Any damages that are above and beyond the actual contract can not be sued
for.
4.
Duress
A.
Influencing an individual by use of force or by threat or bodily harm.

i.
5.
Economic: threats based on employment or income
Undue Influence
A.
Unfair and improper persuasive pressure exercised by one to force another

into an agreement or contract
B.
Voidable
1. misrepresentation
2. fraud
3. unilateral mistake
4. duress
5. concealment
6. undue influence
7. economic duress
8. bilateral mistake
9. rescind
10. material fact
1. A unilateral mistake is made by only one party. A bilateral mistake is made by both
parties.
2. Possibility of Performance and mistake as to the identity. Both parties can void.
3. Intentional deception to secure gain.
4. Concealment is deliberately hiding something.
5. Misrepresentation is something innocent.
6. Duress is a threat or physical harm.
Chapter 9
1.
Contracts of minors
A.
Minority: before the age of majority. In most states this age is 18.
B.
Majority: The age at which a person gains all of the rights associated with
adulthood.
2.
Voidable Contracts
A.
Returning the Merchandise

i.
Minnors can return merchandise at any time.
B.
Misrepresenting Age
i.
Treated as fraud. Can be taken to court and proven if all the elements
of fraud are proven. Though, a minor may still disaffirm it.
C.
Disaffirming the Whole Contract

i.
Minors must disaffirm or affirm the whole contract
D.
Disaffirming Contracts Made With Other Minors

i.
Both minors have the right to disaffirm it.
E.
Ratification of Minors Contracts

i.
Minors can ratify contracts after they reach the age of majority, which
means that they loose all of their rights as minors.
a.
you turn 18
b.
continue to make payments
F.
Contracts for Necessaries

i.
Minors are held accountable for paying the fair value of necessaries:
food, drink, clothing, etc.
a.
G.
Fair value rule:

Special Statutory Rules
i.
Special laws that allow minors to enter into contracts. Ex. car
insurance.
3.
Other Contractual Capacity Rules

A.
Mentally impaired persons cannot contract for the same reasons persons
below the age of majority cannot contract. They are seen as legally unable to enter
into a contract.
i.
Non Guardian: viodable
ii.
Guardian: viod
B.
Intoxicated persons cannot contract if they are so intoxicated by alcohol or

drugs that they cannot understand the terms of the contract.
C.
Other capacity limitations include aliens, who have no legal rights in the
country they enter. Also, assets can be frozen to prevent an aliens ability to contract.
Chapter 10:
Consideration
Why is consideration an essential element in contracts?
Consideration: is the exchange of benefits and detriments in a contract. A valid contract
must have each party receive a benefit and suffer a detriment.
Benefit
Detriment
1.
Types of detriments
A.
Giving up something you have a legal right or title to.
B.
The promise to do something (service)
C.
Forbearance: giving up your legal right to something that is owed to you.

Postponed.
2.
Agreements without consideration

A.
Promise to make a gift. It lacks benefits and detriments, but still involves a
transfer of ownership.
B.
Promise to obey the law.: not valid.
C.
Preexisting duties/job: not valid.
D.
Past Consideration: all consideration must be approved and acknowledged. An

individual cannot seek consideration for something done in the past or unapproved.
E.
Illusory Promise: What appears at first to be valid consideration is not. Ex.

purchasing seasonal crops.
F.
Promise to attend a social engagement is not valid. You cannot sue someone
for changing their minds. Engagement ring has legal ramifications
G.
Adequacy of consideration: the courts will not hear cases involving the
fairness of the consideration.
i.
3.
except when it is unconscionable Gross inadequacy
Special application for consideration:
4.
A.
Partial payment of a debt on a past due debt, the owed party can still seek
the balance of the payment.
B.
On a current contract, if the owed party agrees to partial payment, as final

payment, the owed party cannot seek balance of payment and the contract is
complete.
C.
Extension of time: if there is no new benefits and detriments to the

agreement, the owed party is not bound by the extension of time.
5.
Agreements that are enforceable that lack consideration:
6.
A.
Pledges (charity) are legally binding
B.
Promissory estoppal: based on a Promise

i.
When a promise leads an individual to incur an expense, the promise

becomes enforceable.
Chapter 11
What makes a contract legal?
Legality: final requirement of a contract that ensures that an agreement has legal purpose.
Contracts are illegal if their purpose or manner in which they are carried out; 1. violate a
statute or 2. contrary to Public Policy.
1.
Agreements that violate a statute: considered void.

A.
Contracts that violate criminal and civil law
B.
Violates usury statutes: maximum one can contract for regarding interest.
About 28-30%
C.
Gambling statutes:
Chapter 11: Legality

What makes a contract legal?
Legality: final requirement of a contract that ensures that an agreement has legal purpose.
Contracts are illegal if their purpose or manner in which they are carried out; 1. violate a
statute or 2. contrary to Public Policy.
1.
Agreements that violate a statute: considered void.

A.
Contracts that violate criminal and civil law
B.
Violates usury statutes: maximum one can contract for regarding interest.
About 28-30%
C.
Gambling statutes:
Legality- contracts MUST have a legal purpose and abide by current statutes and do not
violate public policy.
1. Agreements that violate statutes: (laws)

a) Civil and Criminal laws considered VOID/unenforable.
b) Usury Statues- state and federal government sets the maximum amount an individual a
company can charge someone in interest.
c) Gambling Statutes- State licensed gambling. NYS- Horse Racing and Lotto (scratch off)
d)Sunday Statutes-(blue laws) based on the region of the US, certain contractual
restrictions are mandated on contracts that occur on sunday.
1. Goodwill
You cannot enter into a contract that restrains trade.
2) Price Fixing- when competitors agree on a certain price range for their products to be
sold.
3) Competition Bidding- When competitors must submit an offer or a bid on a project, bids
are secrets, lowest will win the bid. IF the competitors conspire together and set the Bid
price whereby all benefit, this such agreement is illegal, unenforcable, void.
Restrictive Covenents
Agrements that obstruct Justice.
Purjery-lies, hiding evidence, bribes.
Any contract that deliberately intereferes with justice is illegal.
Agreement that interfere with marriage
-anyy agreement that interrupts or interferes with the responsibilities of the marriage
contract is illegal.
1. Goodwill
2. Price Fixing
3. license
4. usary
5. restrictive covenent
6. Bid
7. lottery
8. interest
9. Restrictive Trade
10. Preventive Bidding
1. She needs to be licensed
2. Illegal. Obssesived interest
3. Illegal
4. Illegal
5. Legal
6. illegal
7. illegal
8. illegal-non-enforcable
Chapter 13
How do contracts come to an end?
Contracts may be terminated by:
1.
Performance:
A.
Time
i.
If tie is not mentioned in a contract the court will consider completion

in a reasonable time suitable.
ii.
If time is essential to the contract the courts will limit the amount
of reasonable time (food, etc.)
iii.
If a time limit is mentioned in a contract and time is not essential, the

courts will still allow additional time for completion.
iv.
If a contract clearly states, time of the essence, the time period

stated will be enforced by the courts.
B.
Satisfaction
i.
Services must be performed in a satisfactory manner.
ii.
Court will use the reasonable person test.

a.
Would the job be considered satisfactory by a reasonable

person
b.
The judge and jury would decide this in court.
iii.
Contacts which state, to the other parties satisfaction: must perform

to the satisfaction of the other party to be bound.
C.
Substantial
i.
General rule: in most contracts if the terms are not fully completed or
completed to performance, the party suing will win.
a.
Exception: The Doctrine of Substantial Performance states that

if a contract is slightly less than complete and the major requirements of the
contract have been fulfilled the party performing can recover agreed upon
amount of contract. The performing party is responsible for the amount of the
work not completed.
b.
The courts could consider it unfair to deny payment due to

minor incompletions.
D.
Tender
i.
Terms of a contract can be fulfilled by performing and paying. Making

tender of payment or performance.
a.
Tender: an offer to do what has been agreed upon in a

contract. This is called making tender.
a.
Tender of performance: fulfilling an act to a contract
b.
Tender of payment: fulfilling payment to a contract
ii.
If tender of performance is rejected: that party will be excused from

fulfilling the contract.
iii.
If tender of payment is rejected: the party is not excused from paying

the debt.
2.
Agreement: Contracts are created mutually and can be terminated mutually at any
time.
A.
Mutual release
i.
Both parties agree to end a contract, thus each party agrees to give up
their consideration.
B.
Accord and Satisfaction

i.
One party ends a contract due to unforeseen circumstances. The one

party offers new consideration. The second party accepts in what is called an
accord and the carrying out of the promise is the satisfaction.
3.
Impossibility of Performance:
A.
Death or illness
i.
Unless the party assigns contract to another person
B.
Destruction of Exact Subject Matter
C.
Illegality
4.
Operation of the Law:

A.
Wrongful Alteration: Any intentional, fraudulent alteration of a contract will

terminate the contract under the law.
B.
Statute of Limitations: The legal time for an individual to bring a lawsuit on a

contract. After that time limit has expired, the contract is considered discharged or
terminated and legal action against the contract is not possible.
i.
State driven
ii.
Generally an individual has four years if they are bringing a failure to

perform contract.
iii.
There will be a time out when a creditor is a minor or mentally ill.
iv.
When a debtor renews an expired contract a new time period may be

established.
C.
Bankruptcy: FEDERAL
i.
Filing for bankruptcy prevents any individual from being sued for
failure to pay. English Common Law would sentence an individual to prison for his
failure to pay.
ii.
Certain debts cant be discharged:

a.
Student loans
b.
taxes
c.
alimony
d.
child support
Language of the Law & Review Questions:

1.
substantial performance
2.
accord and satisfaction
3.
reasonable time
4.
mutual release
5.
Complete performance
6.
discharged
7.
statute of limitations
8.
tender
9.
performance
10.
legal tender
1.
If it in a reasonable amount of time.
2.
Time is of these essence
3.
Reasonable time is enforced
4.
Reasonable person test
5.
Cant hold back payment if the performance is substantially complete.
6.
Law changes, death or illness
7.
Limit on how long someone has to bring a lawsuit.
Chapter 14
1.
Breach of contract: The failure to fulfill one parties obligations to a contract

agreement.
A.
Remedies to a breach of contract:

i.
money damages
ii.
accept the breach
iii.
Specific performance
2.
Damages:
A.
Actual damages: money giver for damages directly attributed to another

partys breach of contract
B.
Compensatory damages: An award of an amount of money that compensates

a party for the injuries suffered and nothing more.
C.
Consequential damages: Damage, loss or injury that does not flow directly
and immediately from the act of the party but from the consequences of such an act.
D.
Incidental damages: Reasonable expenses that indirectly result from a breach

of contract.
E.
Liquidated Damages: the amount of anticipated damages, agreed to by both

parties.
F.
Nominal Damages: Damages awarded by a court when a successful plaintiff

has proven a legal injury but no actual resulting damages. Usually $1.
G.
Punitive Damages: Damages in excess of losses suffered by the plaintiff as a

measure of punishment of the defendants wrongful acts. Also called exemplary
damages.
H.
Speculative Damages: damages not founded by fact but on the expectations

that a party may have hoped for from a contract that has been breached.
3.
Minimizing Damages:
A.
4.
Mitigation of damages: You mitigate before you litigate.

Rights: The transfer of ones rights is assignment.
A.
Assignor: Party that assigns
B.
Assignee: party that receives assignors rights.
5.
No new consideration is needed to transfer rights.
6.
It should be in writing to prove the assignment
7.
What rights can be transferred:
A.
Most rights can be transferred, unless they drastically change the obligations
of a contract (Personal services)
B.
8.
Payments are the most common types of assignment.

Delegation: The transfer of duties or responsibilities in a contract to a third party.
Subcontracting
A.
The original party is responsible for the duties of the contract, regardless of
how many subcontractors he hires.
9.
Personal services, talents, unique skills can not be delegated in a contract
10.
Novation: complete transfer
11.
Third Parties: Privity of Contract

A.
Except in third party beneficiary rights.
Chapter 16
1.
2.
C gaurantee
3.
A express warranty
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Language of the Law

1. limited warranty
2. warranty
3. express warranty
4. warranty of title
5. Merchantable
6. Full warranty
7. Implied Warranty
8. warranty of fitness for a particular reason
9. guarantee
10. warrant of merchantability
Warranty- a guarantee by the seller or manufacturer that the good is not defective. This
strategy is used to promote sales by creating consumer confidence. The Uniform
Commercial Code classifies warranties into two categories.
Implied Warranty
Express Warranty
Manufacturers of good pass on product warranties to retailers who then offer it to their
customers. Manufacturers ussual offer expres warranties to their customers to create
customer confidence.
1. Express Warranties are warranties that are clearly stated orally or in writing by a
manufacturer or seller. They are created in any of these ways:
1. A statement of fact or promise made by the seller
A. Statement of fact or promise made by the seller- any oral or written statement or
promise made by the seller constitutes an express warranty.
1. The words warranty or guarantee need not be spoken or appear in any written
documents to create an express warranty.
2. May be an statement of an existing fact or a promise of something that may happen.
3. Written warranties should be in clear understandable terminology.
4. Any oral statements should be put into writing prior to entering into contract (parol
evidence rule)
5. Opinions of the seller regarding a good is now considered a warranty. This called
puffery or sales talk.
2. Description of the good- when a description is made as a part of the transaction, an

express warranty is created. This warranties that the good will be the same as
described.
3. Demonstration through the use of a sample or model.- when a sample or model is
used in the sale of a good an express warranty is created. The good must be the same
as shown in simple.
4. Express Warranty Protection for Consumers- without proper clarification consumers
might think the guarantee or warranty mentioned with products cover the entire
product. The FTC has guidelines to prevent consumer abuse,
1. Guarantee- is a promise or assurance of the quality or life of a product )another name
for an express warranty)
2. The Magnusion- Moss Warranty- Act of 1975 gave authority to The FTC to set
guidelines for warranties. Advertised guaranties must disclose :
product or part being guaranteed
time limit of the guarantee
how to make a claim under the guarantee
how claims will be settled
the identification of the persons who make the offer.
2. Written expressed warrantes on products costing more than $10 most indicate
whether they are full or limited warranty.
a. Full warranty- defective products will be fixed or replaced in a reasonable time without
any costs incurred by the consumer. The period for the warranty will be stated on the
warranty cerificate and is valid regardless of who owns the item.
b. Limited Warranty- provides restrictions and limitations to the warranty of a product.
Federal law requires items that have a limited warranty must be clearly labeled with
warranty info.
3. The Magnuson- Moss Warranty Act states that warranties on consumer products
costing $15 or more must:
be disclosed to customers prior to the purchase

disclose all terms and conditions of the warranty is simple, easily understandable
language.
Implied Warranties- a warranty or guarantee that is ordered by Federal law. Both
merchants and nonmerchants are responsible for implied warranties on goods sold.
Federal Law requires that goods, not contracts for services, must meet certain quality
standards which are considered implied warranties at the time of purchase. Since
implied warranties are ordered by law, no written documentation is required.
1. Warranty of fitness for a particular purpose- when a buyer relies on the seller
knowledge of performance and purpose of a good, the seller has created an implied
warranty based on giving correct info in the buyer. If the seller gave misinformation on a
good, he/she has violated the required implied warranty. This is valid for both merchants
and nonmerchants.
2. Warranty of Merchantability- only givien by a merchant which states that a good is
merhantable. Merchantable means to be sellable by a merchant and includes.:
the good must be what it is in the contract description.
the good must be fit for the ordinary purpose for which it is used.
the good must be adequately contained, packaged, and labeled.
the good must conform to statements, facts, or promises made on the package.
III. Warranty of Title- since a buyer of good has no previous knwledge of the ownership
of a good, the seller warrants the title to the good. The buyer is warranted that the item
is free of anny financial items or previous title. This principle was developed to protect
the consumer from any innocent misrepresentation by the seller.
1. Stolen goods, however, sold to an innocent buyer must be returned to the true owner.
The buyer would now have the opportunity to sue the seller for breach of warranty of
title.
IV. Privity of Contract Not Required- in warranty law, individuals who are directly
involved in a contract are not the only individual who can bring a law suit against
merchant based on breach of warranty.
V. Exclusions of Warranties- a merchant may exclude implied warranties from a sale by

simply putting it in writing prior to the sale. To exclude implied warranties on goods the
merchant must include words or expressions such as as is or with all faults
VI. Duty to Notify- a buyer has the responsibility to notify a seller of any defect in order
to revocer any money damages of breach of warranty. This notifications must be given
with a reasonable time period.
VII. Remedies for Breach of Warranty- when a defects is found in a good the seller will
usually:
1) arrange to repair the defect
2) exchange the good
3) refund the buyer
If the buyer does not receive any satisfaction from a seller, the buyer may file a claim for
damages.
Chapter 17
I. Historical Perspective
Early part of the century consumer protection laws were nonexistent. Caveat Emptor let
the buyer beware, was common phrase used by many consumers of the time due to the
lack of protection laws. People who were injured from a defective product had no recourse.
The phrase Caveat Venditor means let the seller beware, and is what we say now due to
all the laws that have been passed to protect the consumer.
The Federal Trade Commission Act- passed in which outlined federal guidelines that sellers
had to abide by. Individual states have adopted their owe statutes regulating commerce
since the FTC was passed.
II. What is meant by Consumer Protection?
Consumer Protection- Laws created to protect consumers from faulty merchandise and
dangerous merchandise (laws of negligence), fraud, deceptive practices, false advertising,
mail order fraud, and the enforcement of express and implied warranties
III. Unfair and Deceptive Practices
Deceptive Pricing
sellers who raises the price of an item with the intention of lowering the price later and
claiming the lower price is a bargain
A seller must not claim that prices are wholesale or are factor prices when it is not ture.
It is a deceptive practice to offer a two-for-one sale and claim the consumer is getting a
bargain
Referral Schemes
Seller promises to give a cash rebate if buyer can supply a list of friends who might be
interested in the product
Deceptive Services Estimates
Understating the cost of repair services or to charge for repairs that were not authorized by
the customer
Door-to-Door Sales
due to the pressure door-to-door salespeople can put on consumers the FTC rule states that
the consumer has 3 business days to change his/her mind and cancel the order. Cooling-off
rule
The salesperson must inform you of your cancellation rights at the time of the agreement.
You must also receive a canellation for from the salesperson in the event that you canel the
order
Under the FTC rule the seller must do the following within 10 days:
Cancel and return any papers you signed
Refund your money
Tell you wheter any product left with you will picked up
Return any trade-in
Cooling-off rule does not apply to: Sales made totally by mail or telephone, real estate
insurance, securities, emergency home repairs
Fraudulent Misrepresentations:
a. false statements made by the seller that deceives the buyer. Making false statements
about the construction, durability, reliability, safety, strength, condition, or life expectancy of
a product is deceptive practice.
b. The consumer has the choice of voiding the contract or suing in tort for money damages
IV. False Advertising: The FTC regulates false advertising on the national level and has the
power to issue cease and desist orders (orders to stop) to anyone using advertising that
wold mislead the public
A. Advertising of Guarantees- a promise or assurance of the quality or life of a product (also
known as an express warranty, given by the seller or merchant of a product) Under the TCs
guidelines, an advertising guarantee must disclose:
The product or part of the product that is guaranteed
The specific charactersitics of the product that are covered by the guarantee
The time limit of the guarantee. (lifetime guarantee, 60 day guarantee..)
What someone must do to make a claim on a guarantee
How claims will be settled
The identity of the person making the guarantee, the manufacturer or retailer
B. Advertising of Consumer Credit: No-money down, or No payments til 1998
Is an alluring but insincere invitation to customers to buy a product or service that the
advertiser does not really want to sell. Usually the seller wants the customer to purchase a
more expensive product. This is a FTC violation.
refusal to show product advertised
Attempts to discourage customer from advertised product
Claims that the product is out of stock
V. Shopping by mail
*Seller must ship merchandise within time period stated, if no time state, product must be
received within 30 days. Buyer has the right to cancel their order if these time limits are not
met.
A. Unordered Merchandise
Under both federal and state law, consumers can consider such unordered merchandise as a
gift. They do not have to pay for them
There are only two kinds of products that can be sent legally without consent:
Product free samples
Charities
VI. Product Liability
Manufacturers and sellers are accountable or responsible for the products that they market
The manufacturer or seller are responsible for injuries caused by a product even if:
The manufacturer or seller was not negligent in the care and preparation of the product
The user of the product was not the one who bought it.
The buyer must prove:
The manufacturer or seller sold the product in a defective condition
The product was reasonably dangerous to the user
The defective condition was the cause of the injury
The defective condition existed when the product left the manufacturer
The consumer sustained physical harm or propery damage

A. Consumer Product Safety Act of 1972
This states that a manufacturer or seller who places an item on the market must follwoing
guidelines set by the government in order to ensure safety of an item
Violators of this safety act face up to $500,000 in civil fines and $50,000 in criminal fines,
along with all the individual tort suits that can be filed
B. Food, Drug and Consmetic Act
*Prohibits the manufacture and shipment in interstate commerce of any food, drug,
cosmetic, or device for health purposes that is
injurious contains substance that may harm you
adulterated food or drug that contains any substance mixed in to reduce the quality or
strength below minimum standards
Misbranded- labeling or packaging a product in a false manner
VII. Consumer Protection assistance
How do you report consumer abuse?
*State and local government have set up various consumer protection agencies that will
take a full report of your claim and investigate it to determine if the manufacturer or seller
was involved in any form of deception or product liability
Language of the Law:
1. Cooling off Rule
2. Caveat Venditor
3. Consumer
4. Cease and desist order
5. adulterated
6. unfair and deceptive practice
7. caveat emptor
8. product liability
9. fraudulent misrepresentation
10. bait and switch
Review Questions:
1. Four situations in which federal law protects consumers are 1. Deceptive Pricing 2.
Referral Schemes 3. Deceptive Service Estimates 4.Fraudulent Misrepresentation
2. Three examples of deceptive pricing are 1. raising and then lowering prices later to look
like a sale 2. claiming prices are wholesale factory price when it is untrue 3. two-for-one
sale and claim a bargain.
3. A person may cancel a sale made from a door-to-door agreement within 3 days. The
rights to the nature of the agreement must be stated.
4. Businesses use bait and switch to deceive customers by telling them one thing tobait
them in and then telling the consumer that the item is no longer available and will try to sell
something better and more expensive the switch
5. Consumers have the following protection when they buy things from the mail: consumer
may return items by specified date or by 30 days after purchase.
6. The rights of a person who receives unwanted goods through mail
7. A manufacturer or a seller under strict/product liability are liable when someone is injured
by using their goods, regardless if its a primary or secondary consumer.
8. Consumer Product Safety Act makes manufacturers abide by the following: 1. Quality of
the product/Fitness 2. Product is safe 3. Capability to recall product 4. Take action on any
complaints
9. A person may receive consumer protection assistance through their local consumer
protection bureau usually located in ones county.
I. Historical Perspective: Caveat Emptor: let the seller beware & Caveat Venditor: let
the seller beware
Federal Trade Commission Act (FTC): regulates commerce according to statutes

II. What is meant by Consumer Protection?
Consumer Protection: laws created to protect consumers from faulty merchandise and
dangerous merchandise (laws of negligence)
Bylsma v. Burger King
A burger king employee spit in a cops food during making the burger. The cop saw it, and
filed a suit against burger king. Although there were no physical damage, he suffered
emotional damages. Burger king lost the case
I. Historical Perspective
Early part of the century consumer protection laws were nonexistent. Caveat Emptor let
the buyer beware, was common phrase used by many consumers of the time due to the
lack of protection laws. People who were injured from a defective product had no recourse.
The phrase Caveat Venditor means let the seller beware, and is what we say now due to
all the laws that have been passed to protect the consumer.
The Federal Trade Commission Act- passed in which outlined federal guidelines that sellers
had to abide by. Individual states have adopted their owe statutes regulating commerce
since the FTC was passed. II. What is meant by Consumer Protection?
Consumer Protection- Laws created to protect consumers from faulty merchandise and
dangerous merchandise (laws of negligence), fraud, deceptive practices, false advertising,
mail order fraud, and the enforcement of express and implied warranties
III. Unfair and Deceptive Practices
Deceptive Pricing
sellers who raises the price of an item with the intention of lowering the price later and
claiming the lower price is a bargain A seller must not claim that prices are wholesale or are
factor prices when it is not ture. It is a deceptive practice to offer a two-for-one sale and
claim the consumer is getting a bargain Referral Schemes
Seller promises to give a cash rebate if buyer can supply a list of friends who might be
interested in the product Deceptive Services Estimates
Understating the cost of repair services or to charge for repairs that were not authorized by
the customer Door-to-Door Sales
due to the pressure door-to-door salespeople can put on consumers the FTC rule states that
the consumer has 3 business days to change his/her mind and cancel the order. Cooling-off
rule The salesperson must inform you of your cancellation rights at the time of the
agreement. You must also receive a canellation for from the salesperson in the event that
you canel the order Under the FTC rule the seller must do the following within 10 days:
Cancel and return any papers you signed Refund your money Tell you wheter any product
left with you will picked up Return any trade-in Cooling-off rule does not apply to: Sales
made totally by mail or telephone, real estate insurance, securities, emergency home
repairs Fraudulent Misrepresentations:
a. false statements made by the seller that deceives the buyer. Making false statements
about the construction, durability, reliability, safety, strength, condition, or life expectancy of
a product is deceptive practice.
b. The consumer has the choice of voiding the contract or suing in tort for money damages
IV. False Advertising: The FTC regulates false advertising on the national level and has the
power to issue cease and desist orders (orders to stop) to anyone using advertising that
wold mislead the public
A. Advertising of Guarantees- a promise or assurance of the quality or life of a product (also
known as an express warranty, given by the seller or merchant of a product) Under the TCs
guidelines, an advertising guarantee must disclose:
The product or part of the product that is guaranteed The specific charactersitics of the
product that are covered by the guarantee The time limit of the guarantee. (lifetime
guarantee, 60 day guarantee..) What someone must do to make a claim on a guarantee
How claims will be settled The identity of the person making the guarantee, the
manufacturer or retailer B. Advertising of Consumer Credit: No-money down, or No
payments til 1998
Is an alluring but insincere invitation to customers to buy a product or service that the
advertiser does not really want to sell. Usually the seller wants the customer to purchase a
more expensive product. This is a FTC violation.
refusal to show product advertised Attempts to discourage customer from advertised
product Claims that the product is out of stock V. Shopping by mail
*Seller must ship merchandise within time period stated, if no time state, product must be
received within 30 days. Buyer has the right to cancel their order if these time limits are not
met.
A. Unordered Merchandise
Under both federal and state law, consumers can consider such unordered merchandise as a
gift. They do not have to pay for them
There are only two kinds of products that can be sent legally without consent:
Product free samples Charities VI. Product Liability
Manufacturers and sellers are accountable or responsible for the products that they market
The manufacturer or seller are responsible for injuries caused by a product even if:
The manufacturer or seller was not negligent in the care and preparation of the product The
user of the product was not the one who bought it. The buyer must prove:
The manufacturer or seller sold the product in a defective condition The product was
reasonably dangerous to the user The defective condition was the cause of the injury The
defective condition existed when the product left the manufacturer The consumer sustained
physical harm or propery damage A. Consumer Product Safety Act of 1972
This states that a manufacturer or seller who places an item on the market must follwoing
guidelines set by the government in order to ensure safety of an item Violators of this safety
act face up to $500,000 in civil fines and $50,000 in criminal fines, along with all the
individual tort suits that can be filed B. Food, Drug and Consmetic Act
*Prohibits the manufacture and shipment in interstate commerce of any food, drug,
consmetic, or device for health purposes that is
Injurious- contains substance that may harm you Adulterated- food or drug that contains
any substance mixed in to reduce the quality or strength below minimum standards
Misbranded- labeling or packaging a product in a false manner VII. Consumer Protection
Assistence
How do you report consumer abuse?
*State and local government have set up various consumer protection agencies that will
take a full report of your claim and investigate it to determine if the manufacturer or seller
was invovled in any form of deception or product liability
(Ex: Better Business Bureau)
Language of the Law:
1. Cooling off Rule
2. Caveat Venditor
3. Consumer
4. Cease and desist order
5. adulterated
6. unfair and deceptive practice
7. caveat emptor
8. product liability
9. fraudulent misrepresentation
10. bait and switch
Review Questions:
1. Four situtations in which federal law protects consumers are 1. Deceptive Pricing 2.
Referral Schemes 3. Deceptive Service Estimates 4.Fraudulent Misrepresentation
2. Three examples of deceptive pricing are 1. raising and then lowering prices later to look
like a sale 2. claiming prices are wholesaleor factory price when it is untrue 3. two-for-one
sale and claim a bargain.
3. A person may cancel a sale made from a door-to-door agreement within 3 days. The
rights to the nature of the agreement must be stated.
4. Businesses use bait and switch to decieve customers by telling them one thing tobait
them in and then telling the consumer that the item is no longer available and will try to sell
something better and more expensive the switch
5. Consumers have the following protection when they buy things from the mail: consumer
may return items by specified date or by 30 days after purchase.
6. The rights of a person who recieves unwanted goods through mail
7. A manufacturer or a seller under strict/product liability are liable when someone is injured
by using their goods, regardless if its a primary or secondary consumer.
8. Consumer Product Safety Act makes manufacturers abide by the following: 1. Quality of
the product/Fitness 2. Product is safe 3. Capability to recall product 4. Take action on any
complaints
9. A person may recieve consumer protection asssistance through their local consumer
protection bureau usually located in ones county.
Chapter 19
PERSONAL PROPERTY
Personal Property: Anything that can be owned other than real estate
The two types of personal property are:
1) Tangible Personal Property: Property that has substance and can be touched (Examples:
Clothing, Books, Automobiles and Food).
The law of sales governs the sale of goods, which is Tangible Personal Property
2) Intangible Personal Property: Property that has no substance and cannot be touched
(Example: If someone owes you money, the right to receive the money is Intangible
Personal Property)
GIFTS OF PERSONAL PROPERTY
When people make gifts of personal property, the gift is completed and cannot be taken
back after three requirements have been met. The requirements of a completed gift are the
following:
1) The donor (the one making the gift) must intend to make the gift
2) The gift must be delivered
3) The donee (the one receiving the gift) must accept the gift
LOST PROPERTY
The finder of lost property has a legal duty to return the property to the owner if that
person can be found. If the owner cannot be found, the person who found the property may
keep it
LOCAL LAWS
Example: Say you found a watch lying on the sidewalk while walking and you picked it up
and took it home with you. You have the duty to try and find the true owner, but you can
use the watch as your own until the true owner is found
Some states and cities provide for special handling of lost articles. These laws differ
considerably, but their general purpose is to help restore the lost article to its true owner
Local laws may have you advertise for the true owner or to deposit the article with a certain
public official. Persons who have lost things would then have to go to that official
REWARDS AND REIMBURSEMENT
Finders of lost property are entitled to any reward offered if they knew about the award
when they surrender the property to its owner
If the finder learns about the reward after returning the lost article, they may not legally
enforce the payment of the reward
If a reward has not been offered, the finder is nevertheless entitled to be reimbursed for
any expenses incurred in returning the property to its rightful owner
MISPLACED PROPERTY
If the lost property is found on the counter of a store, or on a table in a restaurant or hotel,
or on a chair in a washroom, or in some similar public or semipublic place, it is considered
not to be lost but to have been misplaced
It is reasonable to suppose that the owner will recall where it was left and will return for it
and for that reason, the finder may not keep the article in his or her possession but must
leave it with the proprietor or manager to hold for the owner
If the property is found in a corridor or in any other place that would indicate that it was not
placed there intentionally, the finder may keep the article since it is not likely that the owner
would recall where it was lost
INTELLECTUAL PROPERTY
Intellectual Property: An original work fixed in a tangible medium of expression
Intellectual Property includes patents, copyrights, and trademarks
PATENTS
Patent: An exclusive right granted by the federal government to make, use, or sell an
invention
Patents are obtained by investors and manufacturers to prevent their original machines or
processes from being copied or manufactured by someone else
The owner of a patent has exclusive rights to the invention for a period of 17 years
To be patented, a device must consist of some new principle or idea not known before and
The device must be useful and not obvious to people with ordinary skill in the field
The device may consist of a process, an article of manufacture, or a composition of matter,
such as human-made bacterium
Patents are issued by the U.S. Patent and Trademark Office in Washington, D.C.
COPYRIGHTS
Copyright: A right granted to an author, composer, photographer, or artist to exclusively
publish and sell an artistic or literary work
Copyrighted works are protected for the life of the author plus 50 years
A copyright may be registered with the U.S. Copyright Office in Washington, D.C.
In 1989, the use of the copyright notice was made optional
Copyrighted material may not be reproduced without the express written permission of the
holder of the copyright
Fair Use Doctrine: Under this, copyrighted material may be reproduced without permission
in certain cases
The amount and use of the material must be reasonable and not harmful to the copyright
owner
Copying items for such purposes as literary criticism, comment, news reporting, teaching,
scholarship, and research is allowed
TRADEMARKS
Trademark: A distinctive mark, symbol, or slogan used by a business to identify goods and
to distinguish them from products sold by others
It may consist of a word, name, symbol, or other device
Owners of trademarks have the exclusive right to use the particular word, name, or symbol
that they have adopted as their trademark
Once a trademark is established, others cannot use it
Trademarks may be established by usage, by state trademark laws, and by being registered
with the U.S. Patent and Trademark Office.
A trademark that is registered with the U.S. Patent and Trademark Office continues for 10
years and may be renewed for additional 10-year periods
BAILMENTS OF PERSONAL PROPERTY
People often place their property in the possession of others, like a camera is left in a shop
for repairs. A situation like this is known as bailment
Bailment: An agreement created by the delivery of personal property by the owner to
someone who is not the owner for a specific purpose
Bailee: You possess something that belongs to someone else
Bailor: You are this when someone else has some of your belongings in his or her
possession
A bailment exists any time personal property is in the possession of and under the control of
someone who is not the owner
The law of bailments defines the rights and duties related to property not in the control of
the owner. The law protects the rights of the owner without placing undue burdens on the
person holding the property
A bailment is one of the most common business and personal transactions
PRINCIPAL TYPES OF BAILMENTS
Most bailments in business transactions are based on contracts
Many bailments in personal relationships are not based on contracts
If a bailment agreement is supported by consideration, a contract probably exists

If no consideration is present, there can be no contract
Sometimes there may be a bailment even when there is no agreement at all
MUTUAL-BENEFIT BAILMENTS
Mutual-Benefit Bailment: One in which both the bailor and the bailee receive some benefit
It is the result of a contract in which each party receives and gives some consideration
Mutual-Benefit Bailments occur when people leave items with others:
1) To be serviced or repaired
2) To be stored
3) As security for a loan
4) Out of necessity
5) Because of a rental or lease agreement
SERVICE OR REPAIR
Whenever someone leaves an item of personal property with another person to be repaired
or serviced, a mutual-benefit bailment takes place
Mutual-benefit bailment takes place when you leave a car at a garage to be serviced
STORAGE
People leave their property with someone else who holds it for them until they want it back
PARKING A CAR IN A PARKING LOT
People park cars sometimes in parking garages
If the transaction was a bailment, the burden is on the bailee to prove that he or she was
not negligent
If the transaction was just a rental, the burden is on the owner of the car to prove
negligence on the part of the parking lot owner to recover for a loss
Bailments occur when:
1) The car owner surrenders the car keys to a parking lot attendant
2) The car owner must pass through a gate where an attendant stops and checks all cars
leaving the premises
A bailment does not occur if the owner of the parking lot has no control over the automobile
that is parked there
SECURITY FOR A LOAN
The goods of the borrower in such a bailment are turned over to the lender to hold as
security for the loan
Pledge or Pawn: Property left as security
Pledgor or Bailor: The borrower
Pledgee or Bailee: The lender (Can be a bank, a loan company, a credit union, a pawn
broker, or another person)
RENTING GOODS FROM OTHERS
Paying for the use of anothers goods is another type of mutual-benefit bailment
BAILMENTS BY NECESSITY
Bailment By Necessity: Occurs when a customer must give up possession of property for the
benefit of both parties (e.g. Occurs when someone goes to a barber shop or hair shop and
gives up possession of a hat or other item of apparel so that the services can be performed)
GRATUTITOUS BAILMENTS
Gratuitous Bailment: One that is free of charge

Two types of gratuitous bailments are:
1) The bailor lends the goods to the bailee for use without charge (Known as the sole
benefit of the bailee)
2) The bailee takes possession of the goods for the bailor and keeps them safely without
charge (Known as the sole benefit of the bailor)
EXTRA NOTES
Bailment for the sole benefit of the bailee: Use great care and was responsible for slight
negligence
Bailment for the sole benefit of the bailor: Use of slight care and gross negligence
Mutual-Benefit Bailment: Ordinary care and ordinary negligence
Lien: A right to hold goods or property until charges or debts are paid
Tortuous Bailee: One who wrongfully retains possession of the lost property of another or is
knowingly in possession of stolen property
REVIEW
1) There are two kinds or personal property-tangible, which can be touched, and intangible,
which cannot be touched
2) Lost property must be returned to the owner if the owner can be found. Misplaced
property must be turned over to the proprietor or manager of the place where it is found
3) A gift is completed after three requirements are met: the donor must intend to make a
gift, the gift must be delivered, and the donee must accept the gift
4) A patent is an exclusive right to make, use, or sell an invention for 17 years. A copyright
is a right granted to exclusively publish and sell an artistic or literary work for the life of the
author plus 50 years. A trademark is a renewable distinctive mark, symbol, or slogan used
to identify and distinguish goods for 20 years. Patents, copyrights, and trademarks are
intellectual property
5) A bailment is an agreement created by the delivery of personal property, by the owner, to
someone who is not the owner, for a specific purpose
6) The principal types of bailments are mutual-benefit bailments and gratuitous bailments. A
mutual-benefit bailment is one in which both the bailor and the bailee receive some benefit.
A gratuitous bailment is for the sole benefit of either the bailor or the bailee
7) Bailors have the right to (a) receive the services or money that was contracted for, (b)
have the goods protected from harm by the use of reasonable care, and (c) have the goods
returned when the job is done and payment is tendered
8) Many courts place the burden of proof of reasonable care on the bailee. The bailee must
comply strictly with the terms of the bailment. If the bailee cannot prove the exercise of
reasonable care, the bailee must pay for the loss (LAST SENTENCE FOR THE SECTION
BURDEN OF PROOF)
LANGUAGE OF THE LAW
1) Gratuitous Bailment
2) Donee
3) Intangible Personal Property
4) Mutual-Benefit Bailment
5) Bailment
6) Bailee
7) Donor
9) Bailor
10) Tangible Personal Property

CHAPTER 9 WORKSHEET REVIEW
Legal Terms
1)A(n) mutual-benefit bailment is a bailment in which both parties receive some benefit.
2) If someone else owns property that is in your possession, you are a(n) bailee.
3) A(n) bailment exists any time personal property is in the possession of someone who is
not the actual owner.
4) If someone else has possession of some of your belongings, you are a(n) bailor.
5) Property that has no substance and cannot be touched is intangible personal property.
6) A(n) donor is one who gives a gift.
7) Clothing, books, and automobiles are examples of tangible personal property.
8) A(n) gratitous bailment is a bailment that is free of charge.
9) One who receives the gift is a(n) donee.
10) Patents, copyrights, and trademarks are often referred to as intellectual property.
Key Points in Your Reading (True or False Questions)
1) If someone owes you money, the right to receive the money is intangible personal
property. TRUE
2) The finder of a watch has a right to use the watch until the true owner is found. TRUE
3) If lost property is found on a restaurant table or chair, the finder may take the article
home. FALSE
4) A gift may be taken back if the done has not yet received the gift. TRUE
5) The owner of a patent has exclusive rights to the invention for a period of seven years.
FALSE
6) Computer programs are not protected by copyright laws. FALSE
7) A bailment agreement supported by consideration is probably a contract. TRUE
8) When a customer hangs a coat on a hook in a restaurant, a bailment usually comes
about. TRUE
9) If bailees give up possession of the goods, they keep the right to a mechanics lien. TRUE
10) If a bailee cannot prove the exercise of reasonable care, the bailee will be responsible
for a loss. TRUE
MORE TRUE OR FALSE QUESTIONS
1) A bailee is a person whose personal property is in anothers possession. FALSE
2) A bailee is absolutely responsible for any damage to goods in his or her possession. TRUE
3) A registered trademark continues for 20 years, and it may be renewed for additional 20
year periods. FALSE
4) Consumers should be wary of work-at-home advertisements. TRUE
5) Consumers who order goods by mail are protected by state statutes. FALSE
6) Misplaced property must be returned to the owner if the owner can be found. FALSE
7) The federal government has no control over goods manufactured and sold only within the
boundaries of a state. TRUE
8) With exceptions, copyrighted material may not be reproduced without the written
permission of the holder of the copyright. TRUE
PERSONAL PROPERTY
Personal Property: Anything that can be owned other than real estate
The two types of personal property are:

1) Tangible Personal Property: Property that has substance and can be touched (Examples:
Clothing, Books, Automobiles and Food).
The law of sales governs the sale of goods, which is Tangible Personal Property
2) Intangible Personal Property: Property that has no substance and cannot be touched
(Example: If someone owes you money, the right to receive the money is Intangible
Personal Property)
GIFTS OF PERSONAL PROPERTY
When people make gifts of personal property, the gift is completed and cannot be taken
back after three requirements have been met. The requirements of a completed gift are the
following:
1) The donor (the one making the gift) must intend to make the gift
2) The gift must be delivered
3) The donee (the one receiving the gift) must accept the gift
LOST PROPERTY
The finder of lost property has a legal duty to return the property to the owner if that
person can be found. If the owner cannot be found, the person who found the property may
keep it
LOCAL LAWS
Example: Say you found a watch lying on the sidewalk while walking and you picked it up
and took it home with you. You have the duty to try and find the true owner, but you can
use the watch as your own until the true owner is found
Some states and cities provide for special handling of lost articles. These laws differ
considerably, but their general purpose is to help restore the lost article to its true owner
Local laws may have you advertise for the true owner or to deposit the article with a certain
public official. Persons who have lost things would then have to go to that official
REWARDS AND REIMBURSEMENT
Finders of lost property are entitled to any reward offered if they knew about the award
when they surrender the property to its owner
If the finder learns about the reward after returning the lost article, they may not legally
enforce the payment of the reward
If a reward has not been offered, the finder is nevertheless entitled to be reimbursed for
any expenses incurred in returning the property to its rightful owner
MISPLACED PROPERTY
If the lost property is found on the counter of a store, or on a table in a restaurant or hotel,
or on a chair in a washroom, or in some similar public or semipublic place, it is considered
not to be lost but to have been misplaced
It is reasonable to suppose that the owner will recall where it was left and will return for it
and for that reason, the finder may not keep the article in his or her possession but must
leave it with the proprietor or manager to hold for the owner
If the property is found in a corridor or in any other place that would indicate that it was not
placed there intentionally, the finder may keep the article since it is not likely that the owner
would recall where it was lost
INTELLECTUAL PROPERTY
Intellectual Property: An original work fixed in a tangible medium of expression
Intellectual Property includes patents, copyrights, and trademarks
PATENTS
Patent: An exclusive right granted by the federal government to make, use, or sell an
invention
Patents are obtained by investors and manufacturers to prevent their original machines or
processes from being copied or manufactured by someone else
The owner of a patent has exclusive rights to the invention for a period of 17 years
To be patented, a device must consist of some new principle or idea not known before and
the device must be useful and not obvious to people with ordinary skill in the field
The device may consist of a process, an article of manufacture, or a composition of matter,
such as human-made bacterium
Patents are issued by the U.S. Patent and Trademark Office in Washington, D.C.
COPYRIGHTS
Copyright: A right granted to an author, composer, photographer, or artist to exclusively
publish and sell an artistic or literary work
Copyrighted works are protected for the life of the author plus 50 years
A copyright may be registered with the U.S. Copyright Office in Washington, D.C.
In 1989, the use of the copyright notice was made optional
Copyrighted material may not be reproduced without the express written permission of the
holder of the copyright
Fair Use Doctrine: Under this, copyrighted material may be reproduced without permission
in certain cases
The amount and use of the material must be reasonable and not harmful to the copyright
owner
Copying items for such purposes as literary criticism, comment, news reporting, teaching,
scholarship, and research is allowed
TRADEMARKS
Trademark: A distinctive mark, symbol, or slogan used by a business to identify goods and
to distinguish them from products sold by others
It may consist of a word, name, symbol, or other device
Owners of trademarks have the exclusive right to use the particular word, name, or symbol
that they have adopted as their trademark
Once a trademark is established, others cannot use it
Trademarks may be established by usage, by state trademark laws, and by being registered
with the U.S. Patent and Trademark Office.
A trademark that is registered with the U.S. Patent and Trademark Office continues for 10
years and may be renewed for additional 10-year periods
BAILMENTS OF PERSONAL PROPERTY
People often place their property in the possession of others, like a camera is left in a shop
for repairs. A situation like this is known as bailment
Bailment: An agreement created by the delivery of personal property by the owner to
someone who is not the owner for a specific purpose
Bailee: You possess something that belongs to someone else
Bailor: You are this when someone else has some of your belongings in his or her
possession
A bailment exists any time personal property is in the possession of and under the control of
someone who is not the owner
The law of bailments defines the rights and duties related to property not in the control of
the owner. The law protects the rights of the owner without placing undue burdens on the
person holding the property
A bailment is one of the most common business and personal transactions
PRINCIPAL TYPES OF BAILMENTS
Most bailments in business transactions are based on contracts

Many bailments in personal relationships are not based on contracts
If a bailment agreement is supported by consideration, a contract probably exists
If no consideration is present, there can be no contract
Sometimes there may be a bailment even when there is no agreement at all
MUTUAL-BENEFIT BAILMENTS
Mutual-Benefit Bailment: One in which both the bailor and the bailee receive some benefit
It is the result of a contract in which each party receives and gives some consideration
Mutual-Benefit Bailments occur when people leave items with others:
1) To be serviced or repaired
2) To be stored
3) As security for a loan
4) Out of necessity
5) Because of a rental or lease agreement
SERVICE OR REPAIR
Whenever someone leaves an item of personal property with another person to be repaired
or serviced, a mutual-benefit bailment takes place
Mutual-benefit bailment takes place when you leave a car at a garage to be serviced
STORAGE
People leave their property with someone else who holds it for them until they want it back
PARKING A CAR IN A PARKING LOT
People park cars sometimes in parking garages

If the transaction was a bailment, the burden is on the bailee to prove that he or she was
not negligent
If the transaction was just a rental, the burden is on the owner of the car to prove
negligence on the part of the parking lot owner to recover for a loss
Bailments occur when:
1) The car owner surrenders the car keys to a parking lot attendant
2) The car owner must pass through a gate where an attendant stops and checks all cars
leaving the premises
A bailment does not occur if the owner of the parking lot has no control over the automobile
that is parked there
SECURITY FOR A LOAN
The goods of the borrower in such a bailment are turned over to the lender to hold as
security for the loan
Pledge or Pawn: Property left as security
Pledgor or Bailor: The borrower
Pledgee or Bailee: The lender (Can be a bank, a loan company, a credit union, a pawn
broker, or another person)
RENTING GOODS FROM OTHERS
Paying for the use of anothers goods is another type of mutual-benefit bailment
BAILMENTS BY NECESSITY
Bailment By Necessity: Occurs when a customer must give up possession of property for the
benefit of both parties (e.g. Occurs when someone goes to a barber shop or hair shop and
gives up possession of a hat or other item of apparel so that the services can be performed)
GRATUTITOUS BAILMENTS
Gratuitous Bailment: One that is free of charge
Two types of gratuitous bailments are:
1) The bailor lends the goods to the bailee for use without charge (Known as the sole
benefit of the bailee)
2) The bailee takes possession of the goods for the bailor and keeps them safely without
charge (Known as the sole benefit of the bailor)
EXTRA NOTES
Bailment for the sole benefit of the bailee: Use great care and was responsible for slight
negligence
Bailment for the sole benefit of the bailor: Use of slight care and gross negligence
Mutual-Benefit Bailment: Ordinary care and ordinary negligence
Lien: A right to hold goods or property until charges or debts are paid
Tortuous Bailee: One who wrongfully retains possession of the lost property of another or is
knowingly in possession of stolen property
THREE DEGREES OF CARE
1) Great Degree of Care
2) Ordinary Degree of Care
3) Slight Degree of Care
REVIEW
1) There are two kinds or personal property-tangible, which can be touched, and intangible,
which cannot be touched
2) Lost property must be returned to the owner if the owner can be found. Misplaced
property must be turned over to the proprietor or manager of the place where it is found
3) A gift is completed after three requirements are met: the donor must intend to make a
gift, the gift must be delivered, and the donee must accept the gift
4) A patent is an exclusive right to make, use, or sell an invention for 17 years. A copyright
is a right granted to exclusively publish and sell an artistic or literary work for the life of the
author plus 50 years. A trademark is a renewable distinctive mark, symbol, or slogan used
to identify and distinguish goods for 20 years. Patents, copyrights, and trademarks are
intellectual property
5) A bailment is an agreement created by the delivery of personal property, by the owner, to
someone who is not the owner, for a specific purpose
6) The principal types of bailments are mutual-benefit bailments and gratuitous bailments. A
mutual-benefit bailment is one in which both the bailor and the bailee receive some benefit.
A gratuitous bailment is for the sole benefit of either the bailor or the bailee
7) Bailors have the right to (a) receive the services or money that was contracted for, (b)
have the goods protected from harm by the use of reasonable care, and (c) have the goods
returned when the job is done and payment is tendered
8) Many courts place the burden of proof of reasonable care on the bailee. The bailee must
comply strictly with the terms of the bailment. If the bailee cannot prove the exercise of
reasonable care, the bailee must pay for the loss (LAST SENTENCE FOR THE SECTION
BURDEN OF PROOF)
LANGUAGE OF THE LAW
1) Gratuitous Bailment
2) Donee
3) Intangible Personal Property
5) Bailment
6) Bailee
7) Donor
9) Bailor
10) Tangible Personal Property
CHAPTER 9 WORKSHEET REVIEW
Legal Terms
1)A(n) mutual-benefit bailment is a bailment in which both parties receive some benefit.
2) If someone else owns property that is in your possession, you are a(n) bailee.
3) A(n) bailment exists any time personal property is in the possession of someone who is
not the actual owner.
4) If someone else has possession of some of your belongings, you are a(n) bailor.
5) Property that has no substance and cannot be touched is intangible personal property.
6) A(n) donor is one who gives a gift.
7) Clothing, books, and automobiles are examples of tangible personal property.
8) A(n) gratitous bailment is a bailment that is free of charge.
9) One who receives the gift is a(n) donee.
10) Patents, copyrights, and trademarks are often referred to as intellectual property.
Key Points in Your Reading (True or False Questions)
1) If someone owes you money, the right to receive the money is intangible personal
property. TRUE
2) The finder of a watch has a right to use the watch until the true owner is found. TRUE
3) If lost property is found on a restaurant table or chair, the finder may take the article
home. FALSE
4) A gift may be taken back if the done has not yet received the gift. TRUE
5) The owner of a patent has exclusive rights to the invention for a period of seven years.
FALSE
6) Computer programs are not protected by copyright laws. FALSE
7) A bailment agreement supported by consideration is probably a contract. TRUE
8) When a customer hangs a coat on a hook in a restaurant, a bailment usually comes
about. TRUE
9) If bailees give up possession of the goods, they keep the right to a mechanics lien. TRUE
10) If a bailee cannot prove the exercise of reasonable care, the bailee will be responsible
for a loss. TRUE
MORE TRUE OR FALSE QUESTIONS
1) A bailee is a person whose personal property is in anothers possession. FALSE
2) A bailee is absolutely responsible for any damage to goods in his or her possession. TRUE
3) A registered trademark continues for 20 years, and it may be renewed for additional 20
year periods. FALSE
4) Consumers should be wary of work-at-home advertisements. TRUE
5) Consumers who order goods by mail are protected by state statutes. FALSE
6) Misplaced property must be returned to the owner if the owner can be found. FALSE
7) The federal government has no control over goods manufactured and sold only within the
boundaries of a state. TRUE
8) With exceptions, copyrighted material may not be reproduced without the written
permission of the holder of the copyright. TRUE
Chapter 23:
Employment Laws
1.
How are employment relationships started?

A.
Oral agreements
B.
Written employment agreements
C.
Union contracts
2.
Who regulates employment laws

A.
Federal and State Statutes

i.
Wages and hours
ii.
Anti-discrimination laws
iii.
Safe working conditions (OSHA)
iv.
Disability/unemployment insurance
v.
Minimum Retirement Benefits (Social Security)
3.
Labor Management Relations (Unions):

A.
An organization of employees formed to promote the welfare of its members.

Union employees have negotiated contracts called collective bargaining agreements.
i.
Working conditions
ii.
wages
iii.
benefits
iv.
job security
v.
layoffs
vi.
B.
firing policies
Grievance: a complaint against an employer stating that the contract was
violated
C.
When is a contract not helpful?

i.
layoffs
ii.
plant closing
D.
4.
Impasse
Professional Employment Contracts: in demand executives, celebrities, and any other
employee with specific skills.

A.
5.
All terms will be negotiated by the potential candidate and the employer.
Terminating the Employment Relationship
A.
Doctrine of Employment at Will
i.
B.
6.
Employment can be terminated at anytime

Under the Taylor Law, it is illegal for unions to strike.
WHAT CAN BE NEGOTIATED? wages, hours, benefits, job security, and the firing
process (how do you get fired?)
7.
GRIEVANCE PROCEDURE dispute between labor and management regarding the

terms of the union contract. Mediator will be called to settle dispute.
8.
PROFESSIONAL EMPLOYMENT CONTRACTS professionals, athletes, executives,

musicians, who are in demand can regulate their own terms through a professional
contract. If professional is termination prior to the conclusion of the contract, the
employer MUST BUY OUT the professional.
V. TERMINATING AN EMPLOYEE CONTRACT:

A. DOCTRINE OF EMPLOYMENT AT WILL an employee or employer may terminate their
employment at any time for any reason, except discrimination.
EXCEPTIONS TO EMPLOYMENT AT WILL TO PREVENT
UNJUST DISMISSAL the following are exceptions:
1. PUBLIC POLICY DISMISSAL BASED ON AN EMPLOYEE OBEYING THE LAW. THIS
INCLUDES ANY DISCRIMINATION.
2. IMPLIED CONTRACT PROMISSORY ESTOPPEL If the employer promises something to
you and you relied upon that promise, was fired, you can claim this.
3. IMPLIED COVENANT Prove lack of fairness, depriving rights, poor treatment this can
be claimed.
RESTRICTIVE EMPLOYMENT CONTRACT a legal contract between employee/employer that
restricts the employee from working in similar trades.
TRADE SECRET inside information on a product or process that is protected by the
company.
NLRA National Labor Relations Act of 1935/ WAGNER ACT: Legalized collective bargaining.
1.
To encourage and enforce fair labor practices.
2.
Legalized collective bargaining.
3.
Created standards for hours, wages, and working conditions.
TAFT HARTLEY ACT Labor Movement Relations (LMRA) of 1947:

1.
60 day cooling off period. The President has the authority to order union
employees back to work for 60 days when public welfare is at stake. (air traffic
controllers, trains, buses, etc)
2.
Closed shops were illegal.
3.
Union shop employees had 30 days to decide.Outlawed featherbedding

Featherbedding is when ten people are doing the job of one person.
4.
Federal mediators could be provided to solve the problems
* LANDREM GRIFFIN ACT (LABOR MANAGEMENT REPORTING AND DISCLOSURE ACT OF

1959) Required all unions to submit financial reports to the federal government for review.
Federal Child Labor Law of 1938 Provided for guidelines for child labor abuse.
Chapter 27
Lease: Legal agreement between lessee (renter) and lessor (person leasing). I. Types of
Tenancies
A. What is Tenancy? Interest in the use of ones real property .
Tenancy for Years: Right to occupy a property for a certain number of years. Only up to 99
years. Periodic Tenancy: Tenancy continues until one party terminates the agreement.
Traditionally month to month. Tenancy at Will: Tenancy that continues for undefined period
of time into the future. To terminate, must be written and with 30 days notice. Have
tenancy at will for us. Tenancy at Sufferance: When a tenant wrongfully remains in the
dwelling after he should have left.
B. The Lease Agreement
Covenants in a Lease: General agreements about the term of a lease. They are the
promises, agreements, and terms General Covenants: Wants possession and is free from
undue nuisances and annoyance. Place, address, rent amount, dates, etc. Decoration and
Repairs: The landlord has no obligation to decorate or make repairs unless they are
necessary to maintain the livability of the space. WASTE is anything above wear and tear.
Assignment and Subletting: This information must be in the contract. Allows tenant to rent
out the apartment. Uncommon in residential rent agreements.
Security and Deposit: Held for repairs, usually two months rent Renewals Destruction
by Fire: if destroyed by fire the Termination of the Lease: Terminated when the specified
period is over
Eviction: legal process for the landlord to remove a tenant by the sheriff.
Constructive Eviction: tenants remedy to get out of an agreement
C. Breach of Lease and Remedies
Eviction: If the tenant breaks any of the terms of the lease agreement then the landlord
has a right to terminate the agreement. Constructive EvictionLaws Affecting Landlords
and Tenants Habitability: Property must be fit for a human to live in it. Rent Control:
Limits on the maximum rent that can be charged Antidiscrimination: Landlords cannot
discriminate.
E. Tort Liability
Who is liable for injuries or damages in a rental agreement? Both parties.
F. Removal of Fixtures by Tenant
Fixtures: Fixtures are an issue and there are no clear guidelines. Courts look at if they can
be removed without damaging the property, intent, etc. Trade Fixtures: Fixtures necessary
for a business to operate. Remain personal property.
LANGUAGE OF THE LAW
1) quiet enjoyment
2) tenancy of years
3) periodic tenancy
4) tenancy at will
5) lessee
6) sublease
7) fixture.
8) tenancy at sufferance
9) lessor
10)constructive eviction
QUESTIONS FOR REVIEW
1) Tenancy for years is the right to occupy property for a fixed period of time, periodic
tenancy is a tenancy that automatically continues for successive fixed periods until
canceled by either the landlord or the tenant and tenancy at will is an interest in real
property that continues for an indefinite period of time.
2) A tenant becomes a tenant of sufferance when a tenant wrongfully remains in
possession of the premises after the tenancy has expired. The landlord could force the
person off the property by legal means or can still accept rent for the duration the tenant is
still at the landlords property.
3) Assigning a lease occurs when a tenant transfers the remaining period of time that a
lease has to run to someone else while subletting occurs when a tenant transfers part of
the term of his or her lease, but not the remainder of it, to someone else.
4) An implied warranty of habitability affects the landlord because he/she must make
repairs necessary to keep the premises fit to live in. The tenant does not have the obligation
to decorate or maintain the premises unless it is so provided in the lease, or by statute or
local ordinance. The tenant basically owns the property for the stated period and has the
obligation to maintain the premises and make repairs that are not the obligation of the
landlord.
5) A lease may be terminated when tenancy for years comes to an end at the termination
of the specified term. For example, this usually occurs with military personnel when changes
in assignment occurs.
6) A landlord could evict a tenant if the tenant does not pay the landlord, if the tenant
commits waste, or if the tenant violates the provisions made of the lease. An eviction
happens when the landlord receives a court order to remove the tenant. The law does not
give the landlord the right to self help-that is, the right to remove the tenant by himself or
herself. The court will usually appoint a sheriff or other authorized officer to carry out the
order of getting rid of the tenant.
7) Laws involving habitability have been passed, which makes sure that properties are
relatively clean, properly heated, furnished with utilities, and safe. In some states, the
tenant may pay rent to the court, instead of to the landlord, if the premises are violate
sanitary code. Also, rent control laws have been passed to place a maximum charge on
what landlords can charge their tenants. Also, antidiscrimination laws have been passed
to make it illegal for a landlord to refuse to rent of lease property to any person because of
race, religion, color, nation origin, sex, age, ancestry, or marital status. it also relates to
veterans, people in armed forces, a blind person, or a person that may have children in the
future.
8) The landlord is liable when someone is injured due to a defect in an apartment house
stairway because of negligence.
9) The factors that should be considered over a dispute over ownership of a fixture is: (1)
whether or not the property can be removed without damage to the building, (2) whether or
not the property was specifically made to fit the particular building, and (3) the intention of
the parties at the time the attachment was made.
Chapter 28
Banks Needs: Applying for the Mortgage
Prequalify: 28%/36% Rule
A.
Mortgage payment cannot exceed 28% of your gross income
B.
Debt to income ratio cannot exceed 36% of your gross income
Factors to be considered
A.
Monthly income and expenses
B.
Credit history
C.
Employment history
D.
Source of down payment
E.
Value of the property
CLOSING COSTS
1. Original Fee (Commission of 1%)
2. Appraisal Fee $500 to 1,000
3. Credit Report Joint Report $500
4. Engineers Report $1,000
5. Attorneys Fees sellers, buyers, and the banks probably $3,000 for an attorney
6. Title Insurance (checks history of ownership) $3,500
7. Termite Inspection $500
8. Surveyor new map of property
9. Supply at least 1 year of homeowners insurance $2,000
TYPES OF MORTGAGES
1. Conventional Fixed Rate

400,000 up to 30 years
6% stays for 30 years
2. Variable Rate Loan ARM ADJUSTABLE RATE MORTGAGE
3/1 5/1 10/1 every 3 years, it adjusts one time 5/1 it stays at 3% for 5 years and changes
after the fifth year.
3. BALLOON LOAN MORTGAGE 10 year balloon, means you finance a portion then the total
amount is due in full at the end of the balloon.
Escrow account third party bank account set up to disperse funds to each party.
Tuesday is closing day where you meet with the bank, on Monday, have to do a walk
through, make sure everything with the house is the way it should be, make sure its the
right house, etc. If damage, on Wednesday, bank will hold $1,000 of sellers money in third
party account until damage is fixed.
2. Property taxes escrow is set up to hold tax funds.
Taking title of the deed to real property
1. Tenancy in Common ownership passes to persons heirs (family) in the event something
happens to them.
2. Joint tenancy goes all to the partner.
3. Tenancy by entirety married couples

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Chapter One: You and

Stem Cell Research

Same Sex Marriage

Dr. Kevorkian Right to Die

2nd Amendment Rights

What is the origin of US Law?

How do we make ethical decisions?

Feelings and opinions

The greatest good

The Golden Rule

Homework: Ch. 1 Online Read: Language of Law-Vocab

September 20th, 2012

Federal and State Constitutions

US Constitution (Federal): broad, basic foundation of laws. Describes structure and

Article 1: Legislative, Article 2 Executive, Article 2 Judicial Branch

Article 4: Relations among states.

Article 5: Amending process.

Article 6: Supremacy Clause. No one can create own government, US govt

Article 7: Provided for steps for ratification of the Constitution.

Bill of Right Amendments 1-10. Protect fundamental rights of citizens. Today

Freedom of speech, religion, etc.

Right to bear arms.

Search and seizure.

Plain sight rule-probable cause when in plain sight.

Cannot enter vehicle without cause.

Look suspicious cant result in a search

Right against self-incrimination and due process

Must be arraigned and a judge and grand jury must decide to

If not dismissed, presented with an indictment.

Military courts handle military trials.

Cannot be tried for same offence twice.

Arraignment mus be within 48 hrs.

Private property may not be taken without just compensationeminent domain.

Right to a speedy and public trial.

Public broadcasting at the discretion of the judge.

Open flow of witness testimony.

Right to a public defender.

Can sue in court for a minimum of $20.

Enumeration in the Constitution will not deny others retained by the

Should not cause a conflict with your own rights.

Court Decisions (Case Law)

Crimes against people

Homicide: Taking of the life of another human. Genocide, suicide,

Murder: Killing of another individual with malice aforethought (evil

Manslaughter: Killing of an individual involuntarily or by ones

Assault and Battery: Both considered a crime and a civil offense.

Battery: the unlawful touching of another with the intent to

Assault: An attempt to commit battery. Also considered

Aggravated assault and battery: some sort of deadly weapon

Crimes against business interests white-collar crimes, involve a level of

Forgery: False making or changing of a writing with the intent to

Bribery: To pay to influence an individuals actions. The individual must

Extortion: The acceptance of a bribe.

Crimes against property

Burglary: Breaking and entering of a dwelling house at night with the

Robbery: the unlawful taking of property accompanied by violence or

Larceny: stealing, the unlawful taking of ones property.

Petty: Nationally: $300. In NY: A misdemeanor

Grand: Nationally more than $300. NY: 1. >1,000,000 B Felony

Embezzlement: The unlawful taking of anothers property that has

Arson: The willful and malicious burning of property/dwelling

American Law Institute

When an individual is influenced to commit a crime by a public official that he

Defense of family members