0 Ethics: deciding what is a right or wrong action in a reasoned, impartial manner

0 Morality: involves the values that govern society’s attitude toward right and wrong

0 Empathy: putting yourself in the other person’s position

0 Rule-based Reasoning

0 Makes a decision based on majority vote

0 The Golden Rule 0 Do unto others as you would have

them do unto you 0 Consequential Reasoning

0 Takes a look at the consequences of the action before making a decision on what way to act

0 Judicial: Led by the Supreme Court. The Supreme Court decides if

0 the law being made is constitutionally correct.

0 Legislative: Led by Congress. Congress is made up of the Senate and the House of Representatives. The Senate consists of two members from every state. The House of Representatives consists of members based on their population.

0 Executive: Led by the President. Elected by vote of the people

Goal 1

0 Laws are rules of conduct established by the government of a society to maintain stability and justice in that society.

0 American law is constantly changing as our society changes.

0 Common Law-Unwritten laws

0 English Common Law-The King’s court of judges traveled in circuits around the countryside deciding cases.

0 Law of Precedent-Judges referred to decisions in previous common law cases.

0 Statutory Law-Common law was eventually written down Legislative bodies adopted common laws Common law became statutes.

0 Statutes 0 All statutes-Are subject to review

by judicial system Must be constitutional - cannot conflict with the United States Constitution

0 Administrative law is the regulations, orders, rules and decisions of administrative agencies.

0 4 Punishments for a Crime? 0 Imprisonment 0 Fine 0 Probation 0 Community

Service 0 Combination of

the above 0 Types of Crimes

0 Crimes Against People

0 Social Crimes 0 Crimes Against

Property 0 Business crimes

(White Collar)

0 Computer Laws-The National Information Infrastructure Protection Act of 1996 was enacted as part of Public Law 104-294.

0 Telecommunication Law or Cyber Law-Telecommunication law or Cyber law governs the legal issues of cyberspace.

0 Jurisdiction-Authority to hear a case and make a decision

Goal 2

0 Complaint – Legal document containing a short and plain statement of the plaintiff ’s claim against defendant, first pleading filed in civil cases

0 Pretrial Hearing 0 Informal hearing to

simplify issues and discuss matters

0 Arrest – Action take when a person is deprived of his or her freedom

0 Bail – Money or property that is left with the court to

assure the court that the person will return to stand a trial. Money is forfeited if person does not appear in court 0 Contempt of Court – An

action that hinders the administration of justice in the court

0 Diversity of Citizenship – When a resident in one state

sues a resident in another state for more than $50,000

0 Steps to a Trial 0 Select a jury 0 Opening statements

0 Plaintiff presents evidence 0 Real evidence is photographs, actual

objects, etc. 0 Witnesses testify 0 Failure to appear will result in a

contempt of court order

0 Defense presents evidence 0 Civil Trial Procedures17 0 Closing Arguments

0 Same order 0 Instructions to Jury

0 Statement made by the judge 0 Verdict 0 Judgment 0 Execution of Judgment

0 Grand Jury – A jury of Inquiry 0 Precedent – When judge is required to follow an

earlier court decision when deciding a case with similar circumstances 0 Prosecutor – Party that accuses the person of a crime 0 Statutes – Laws enacted by state or federal

legislatures 0 Statue of Limitations – State laws setting time limit for bringing a lawsuit

0 What is a tort? 0 One person’s

interference with another person’s rights, either through intent, negligence, or strict liability.

0 Based on 4 rights: 0 Right to:

0 – Be free of bodily harm

0 – Enjoy a good reputation

0 – Conduct business without interference

0 – Have property free from damage or trespass

Intentional vs. Unintentional ■ Intentional – know and desire the consequences of your act ■ Unintentional – lacks the determination of mind.

Goal 3 0 Mirror Image Rule

0 Acceptance must “mirror” offer 0 Counteroffer

0 Offeree makes an offer 0 Offeror becomes offeree

0 Methods of Acceptance 0 Contract accepted when sent, if

same method of communication used

0 Contract accepted when received, if different method of communication is used

0 Revocation – Taking back of an offer by offeror

0 Rejection – Refusal by the offeree

0 Counteroffer – Any change in the terms of the offer

0 Expiration of Time – If the offer puts a time limit on the offer and it has passed

0 Death – Offeror dies 0 Insanity – Offeror is

declared insane

0 Capacity – legal ability to enter a contract 0 Majority – age of legal adulthood 0 Minor – not yet reached legal age (minority) 0 NC Age of Majority = 18 years old 0 Voidable Contracts – minors may disaffirm or avoid their contracts if they so

choose 0 Infancy = minority = minor = under 18 yrs. Old 0 Returning Merchandise – must be returned if disaffirming a contract 0 Tender – offer to return 0 Misrepresenting Age – fraud- if contract disaffirmed, you may be sued for

fraud 0 Contracts for Necessaries – necessities – food, clothing, shelter, and medical

care 0 Special Statutory Rules – minors have capacity to buy car/life insurance

0 - married = adult 0 - limited capacity if you own a business 0 - renting apartment is a necessity

Gratuitous Contracts: The law does not enforce any contracts that are gratuitous Gratuitous contracts are free agreements Consideration: Exchange of benefits and detriments by the parties to an agreements Benefits Something that a party was not previously entitled to receive Detriments Any loss suffered

0 Special Applications: 0 Partial Payment of Debt 0 Must have new consideration in order to relieve entire

debt 0 Settlement of Disputed Claims 0 Extension of Time 0 To extend time, one party must offer new consideration

0 MISTAKE: 0 Unilateral Mistake

0 An error on the part of one of the parties 0 Cannot get out of contract

0 Types: 0 Nature of the Agreement

0 Signing a contract you don’t understand or have not read 0 This applies to signing a contract in a language you don’t understand

0 Identity of a Party 0 Bound by contract with face to face meetings 0 May be able to void a contract made NOT face to face •

0 Bilateral Mistake (Mutual Mistake) 0 Both parties are mistaken 0 Types:

0 Possibility of Performance 0 Contract is impossible to perform Either party can void contract

0 Subject Matter 0 Either party can void contract

0 FRAUD: Deliberate deception for an unfair or unlawful gain 0 INNOCENT MISREPRESENTATION

0 Make an innocent statement of supposed fact that turns out to be false

0 DURESS 0 Overcoming a person’s will by use of force or by threat of

force or bodily harm 0 UNDUE INFLUENCE

0 Unfair and improper persuasive pressure within a relationship of trust

Agreements that Violate Statutes: 0 Civil & Criminal Statutes

0 – Agreements to commit a crime/tort are illegal 0 Usury Statutes

0 – State sets a max interest rate 0 Interest

0 Fee the borrower pays to the lender for using the money 0 Usury

0 Charging too high of an interest rate • 0 Truth in Lending Act

0 Lender is required to make clear the annual percentage rate (APR). 0 Gambling Statutes

0 Discuss state laws 0 Lottery vs. Poker

0 Sunday Statutes 0 Illegal to perform certain contracts on Sunday

Contract Law- 6 Elements

0 Offer 0 Proposal by one party to another with intent to create a legal

binding agreement 0 Acceptance

0 An unqualified willingness to go along with the offer 0 Genuine Agreement

0 If a valid offer is met by a valid acceptance then a genuine agreement exists

0 Can be destroyed by fraud, misrepresentation, duress, or undue influence

0 Capacity 0 Legal ability to enter into a contract

0 Consideration 0 Must exchange something of value in order to create a bond

0 Legality 0 Must be permitted by law 0 Courts will not enforce an illegal contract

3 Requirements of an Offer 0 Serious Intent

0 Must intend to make the offer 0 Advertisements?

0 ❘ No serious intent 0 ❘ Known as an invitation to negotiate

0 Definite and Certain 0 Must use definite words

0 Communicate to the Offeree 0 Phone, fax, Internet, letter, etc

Goal 4 Characteristics of a Contract: 0 Valid

0 Legally good 0 Void

0 No legal force 0 Voidable

0 Not void, but may be voided by one party 0 Unenforceable

0 Some rule of law can not be enforced by the court. Express vs. Implied: 0 Express

0 Stated in words 0 Written or spoken

0 Implied 0 Based on actions (not words)

Oral 0 Spoken words Written 0 Write out exact terms

Discharge by Performance: 0 Complete

0 All terms have been carried out properly and completely. 0 Time

0 Court will honor time request, if it is deemed “of the essence.” 0 If not mentioned in contract, then a reasonable time will be

assumed. 0 Satisfactory

0 Law requires that services be completed in a satisfactory manner. 0 Reasonable person test

0 Substantial 0 Slightly less than full performance

0 Must meet the following rules: 0 Acted in Good Faith 0 Completed Major Components of Contract 0 Only Minor Details Incomplete.

Types of Discharges

Types of Discharges Cont. 0 Tender – Offer to Perform Discharge By Agreement: 0 Mutual Release

0 Each side releases the other side from the contract. 0 Accord and Satisfaction

0 Substitute one contract for another Discharge By Impossibility of Performance: 0 Death or Illness in a Personal Service Contract

0 Only allowed in Personal service contracts. 0 What is personal service?

0 Photographer 0 Artist

0 Any other contract must be completed. 0 Destruction of the Exact Subject Matter

0 If the subject matter is essential to the contract then it will be discharged. 0 Illegality

0 Any illegal contract is void.

Types of Discharges Cont. Discharge by Operation of Law: 0 Wrongful Alteration

0 Any altering or changing of a contract will discharge parties to the agreement.

0 Statute of Limitations 0 Individual states have a time limit on lawsuits to be

filed. 0 Bankruptcy

0 Debtors can be discharged from contracts after filing for bankruptcy.

Third Parties

0 Privacy of Contract 0 Determines who can sue who over a breach of contract.

0 Third-Party Beneficiary 0 A person who is not a party to a contract but benefits

from it. 0 Has the right to sue over breach of contract.

Breach of Contract: 0 Wrongful failure to perform one or more

promises in a contract. 0 Anticipatory Breach

0 Notified that a party to the contract will not fulfill their part of the contract prior to the required time of fulfillment.

0 Lawsuit may be filed early in this case. Exception to the rules:

0 Refusal to pay money owed at a future date.

0 Money Damages 0 Actual – Damages DIRECTLY related to breach. 0 Compensatory – Award only for injuries suffered nothing

more. 0 Consequential – Damages that DO NOT flow directly from

breach. 0 Incidental – Reasonable expenses that INDIRECTLY from

breach of contract. 0 Liquidated – Anticipated damages agreed prior to contract

being signed. 0 Nominal – Award to proved legal injury but no actual damages

caused. 0 Punitive – Damages in excess of losses suffered in order to

punish party for breach. 0 Speculative – Damages awarded not on fact but on

expectations from contract fulfillment. 0 Specific Damages

0 Ask court to order the other party to do what they agreed to do.

0 Subject matter must be unique in nature.

Goal 5 Characteristics of Sole Proprietorship: 0 Requirements for Organizing - none 0 Legal Status – owner is the business and it is not a separate

entity. 0 Liability - unlimited 0 Management – owner makes the decisions Requirements for Organizing – agreement of the parties: 0 Legal Status – not a separate entity in many 0 states 0 Liability – unlimited liability (except limited partnership) 0 Management – partners have equal say in management

unless otherwise specified in agreement.

Types of Corporations: 0 Domestic-chartered in a specific state 0 Foreign-chartered in one state but doing business in

another state 0 Alien-chartered in another nation but doing business

in a state

Goal 6. Endorsements: 0 Signature on the back of a negotiable instrument 0 Allow payee to cash, deposit or transfer payment of the check to

someone else 0 Proof that the payee cashed or transferred payment of the check to

someone else 0 Endorser is responsible for payment of the check if the new owner

cannot collect payment 0 Endorse should sign the check the way it is on the front of the check

and if the name is misspelled, correct the signature directly up under the first endorsement

Special Or Full Endorsements: 0 Transfer payment to someone else 0 Can make a payment on a debt with this endorsement 0 Payee signs the check over to another person to receive payment Restrictive Endorsements: 0 Limits use of check 0 Safest type of endorsement 0 Can not be cashed by someone who has stolen the check 0 Safest way to send a check through the mail

Challenging Unconscionable Contracts: 0 Unfair and oppressive 0 Judge decides if conscionable

0 Refuse to enforce contract 0 Remove unfair clause and enforce contract 0 Limit clause’s application so no longer unfair

Prohibiting Abuse in the Credit System: 0 Federal Equal Credit Opportunity Act

0 May not refuse due to sex or marital status 0 May not ask marital status if applying for unsecured separate

account 0 May not prohibit a married female from opening/maintaining

account in maiden name 0 May not request information about birth control practices or

intentions 0 Married persons with joint accounts have right to have credit

information reported in both names

Federal Fair Credit Billing Act: 0 Creditors must mail bills at least 14 days before due date 0 Creditors must acknowledge billing inquiries within 30 days 0 Creditors must settle complaints within 90 days 0 Creditors may not send repeated letters demanding payment until

disputes over billing are settled 0 Credit cardholders may withhold payment for items defective without

being liable for entire amount owed (purchases of $50 or more and 100 miles from home)

Types of Drafts: 0 Sight Draft – A draft payable as soon as it is presented to drawee for

payment 0 Time Draft – Not payable until the lapse of a particular time period stated

on a draft 0 Trade Acceptance – Used by a seller of goods to receive payment or to

extend credit 0 Check – Draft drawn on a bank and payable on demand, can be called a

demand draft 0 Honor – Pay when due 0 Dishonor – Refuse to pay when due 0 Stop Payment – Instruction for bank not to pay check

Types of Checks 0 Certified Check – A personal check that has been accepted by a bank before

payment 0 Cashier’s Check – A check the bank draws on itself 0 Money Order – Draft issued by a post office, bank, express company, or

telegraph company for use in paying or transferring funds for the purchaser 0 Traveler’s Checks – Draft drawn by a well-known financial institution on itself

or its agent, used when traveling 0 Teller’s Check – Draft drawn by a bank on funds that it has on deposit at

another bank Types of Notes: 0 Demand Note – Payable whenever the payee demands payment 0 Time Note – Payable at a future date that is written on the face of the note 0 Installment Note – Paid in a series of payments Installment Plans 0 Secured – Collateral used to secure loan 0 Pledge – Creditor obtains possession of collateral by written or oral

agreement 0 Security agreement – Contract where debtor retains possession of collateral

under a written contract 0 Repossession – Taking back of items used to secure loan when payment is not

made 0 Unsecured – No collateral used

Goal 7 TYPES OF AGENTS 0 General Agent-given authority to perform any act within the scope of a business. 0 Special Agent-employed to accomplish a specific purpose or to do a particular job. 0 Subagents-appointed by another agent. 0 Agent’s Agent-has no power to appoint a subagent but does so anyway. 0 Co agents-two ore more agents hired by the principal. AGENCY RELATIONSHIPS 0 Gratuitous Agent: agent works for free (no contract) 0 Master: has the right to control the conduct of his or her servant 0 Independent Contractor: agent is hired by the other party, but not controlled 0 Partially Disclosed Agent: principal’s existence but not identity is known to the third party. 0 Fiduciary: relationship is based on trust. 0 Actual Authority: real power the principal gives to an agent to act on his or her behalf 0 Apparent Authority: agency by estoppel 0 Third Party: must be notified if an agency has been terminated 0 Consensual: both parties of a principal/agent relationship agree or consent to relationship 0 Agent is obligated to act in good faith (within the scope of the principal’s needs and wants).

Therefore, a principal is not liable for criminal acts. 0 When an agency is created by statute (law), the agent is known as a statutory agent. 0 If unauthorized agent works on your behalf, you have two options:

0 1. Charge agent with fraud (agent is liable to the third party) 0 2. Accept actions of agent (ratify)

Laws: 0 Wagner Act (National Labor Relations Act)

0 First federal law dealing with collective bargaining 0 Encourage collective bargaining, discouraged unfair labor practices

0 Taft-Hartley 0 Prevents labor union from requiring an employer to retain

employees who are no longer need 0 Fair Labor Standards Act of 1938

0 Restricted child labor 0 Landrum-Griffin Act

0 Unions must register with Sec. of Labor and submit year financial reports.

Types of Shops: 0 Agency- receive union benefits without belonging to union 0 Closed- must join prior to employment 0 Union- must join with 1 year of employment

Goal 8 Risk Management: 0 Options for people to manage risk include

0 – Transfer part of risk of financial loss to an insurance company 0 Auto, life, health, disability, property insurances

0 – Retain (keep) the risk of financial loss using high deductible 0 – Abstain or choose not to participate in risky activities

0 Do not drive car, buy home, play sports, etc. Property Damage Liability: 0 Property Damage Liability protects the insured person from liability

claims for damage to property of others, such as: 0 • Personal property including vehicles, animals 0 • Business property including telephone poles and other utility

structures 0 • Government property such as bridges and other road structures 0 • Real property

Factors Affecting Cost of Auto Insurance 0 Type of coverage 0 $ Limit of coverage 0 Risk retention -Deductible amount 0 Experience rating – how long driver has been licensed

(AGE IS NOT A FACTOR!!) 0 At fault Accidents (Points) 0 Tickets (Points) 0 Type of Vehicle - Value, reparability, engine size, style 0 Geographic area- Urban, suburban, rural 0 Use of Vehicle - Distance driven and purpose 0 Company

Goal 9 Other Bailments 0 Gratuitous Bailment

0 –Free of charge (lend something to a friend). 0 Only one party benefits

0 Extraordinary bailment 0 A common carrier or hotel is strictly liable for damage to bailed goods

Rights and Duties of Bailee: 0 Rights:

0 To hold a Mechanic’s Lien -the right to retain property of another, if not paid for service rendered 0 To expect payment for services rendered

0 • Duties: 0 Of reasonable care and protection of goods while in custody of bailee 0 To comply with terms of bailment

Rights and Duties of Bailor: 0 Rights

0 to have goods protected 0 to receive service as agreed upon 0 to have goods returned in timely manner

0 • Duties 0 to pay for service provided 0 to warn of dangers or special care required 0 to pick up goods in a reasonable time

Types of Deed: 0 Quitclaim

0 Transfers a seller’s interest in a property but doesn’t warrant that the seller owns any interest

0 General Warranty Deed 0 Warrants the title 0 Most desirable for the buyer

0 Bargain and Sale Deed 0 Transfers title to property without giving warranties