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What is the definition of a contract?

A promise that the law will enforce

Describe the various types of contracts?

*Bilateral Contract
*Unilateral Contract
*Express Contract
*Implied Contract
*Executory Contract
*Executed Contract
*Valid Contract

Bilateral Contract

Both parties make a promise

Unilateral Contract

One party makes a promise that the other party can accept only by doing something.

Express Contract

The two parties explicitly state all important terms of their agreement

Implied Contract

The words and conduct of the parties indicate that they intended on the agreement.

Executory Contract

When one or more parties has not fulfilled its obligations

Executed Contract

When all parties has fulfilled their obligations

Valid Contract

Is one that satisfies all of the laws requirements

Identify and describe the theories of recovery in contract law.

Express contract: The parties intend to contract and agree on explicit terms.
Implied Contract: The parties do not formally agree, but their words and conduct indicate an intention to create a contract.
Promissory Estoppel: Even when there is no contract, a plaintiff may us promissory estoppel to enforce the defendants promise if he can show that.
-the defendant made a promise knowing that the plaintiff would likely rely on it.
-the plaintiff did rely on the promise, the the only way to avoid injustice is to enforce the promise.
Quasi Contract: There is no intention to contract, but the plaintiff gives some benefits to the defendant, who knows that the plaintiff expects compensation; it would be unjust not to award the plaintiff damages.

What conditions would constitute a discharge of contract.

Full performance & Agreement
*A party is discharged when she has no more duties under a contract.
*Most contracts are discharged by full performance.
*Sometimes the parties discharge a contract by agreement.
*At times a court may discharge a party who has not performed.

Describe the conditions for a discharge of a contractual obligation.

Full Performance: The parties do what they promise.
Agreement: Termination by mutual agreement.

Describe types of acceptable performance of a contract.

Strict Performance: Requires one party to perform its duties perfectly.
Substantial Performance: Generally sufficient to entitle the promisor the contract price, minus the cost of defects in the work.

What constitutes a breach of contract?

An unjustifiable failure to perform all or some part of a contractual duty with out a valid excuse.

What is the definition of remedies?

Methods the court use to compensate an injured party.

Describe the various types of remedies in contracts.

Expectation Interest: What the injured party reasonable though they would get from the contract. This places the injured party in the position they would have been in if both sides had fully performed their obligations.
Reliance Interest: The injured party may be unable to demonstrate expectation damages, perhaps because it is unclear he would have profited.
Restitution Interest: The injured party may be unable to show expectation interest or reliance but perhaps she has conferred a "benefit" to the other party. Here, the objective is to restore to the injured party the benefit she has provided.
Equitable Interest: In some cases money damages will not suffice to help the injured party. Something is needed such as the transfer of property to the injured party (specific performance) or an order forcing once party to stop doing something (an Injunction).

What is the point at which a legal agreement is said to have occurred.

Intend to contract.

What is the difference between an enforceable, unenforceable, express and implied contract?

Enforceable: Is one for which a legal remedy is offered in the event that the contract is not fulfilled.
Unenforceable: When certain statutory requirements have not been met.
Express: Which may be written or oral, are contracts in which the terms of the agreements made are explicitly stated-When a valid offer is accepted, an express contract has been created.
Implied: Usually referred to as "implied in fact", are contracts that are formed by the behavior of the parties in the absence of directly negotiating the specifics of the transaction.

If there is a breach of contract, what remedies are available?

Injunction: An order forcing someone to do something or refrain from doing something.
Expectation Damages/Restitution: Money required to put on party in the position she would have been had the other side performed the contract.
Specific Performance: In cases of rare property court ordered to complete the deal.
Reformation: Court will rewrite the contract.

Breach of contracts.

*Material Breach
*Minor Breach
*Anticipatory Breach
*Mutual Rescission
*Accord/Satisfaction

Material Breach

One that substantially harms the innocent party and for which it would be hard to compensate with out discharging the contract (particularly in contracts involving services)

Anticipatory Breach

By making it unmistakably clear that it will not honor that contract.

Statue of Limitations

Begins to run at the time of injury and will limit the time within the injured party may file suit.

Remedies for breach of contracts.

*Compensatory Damages (Expectation Interest)
*Consequential Damages (Special Damages)
*Incidental Damages (Relatively Minor)

What are the Sherman and Clayton Antitrust Acts?

Sherman Act: Regulate competition, standard oil company dissolved, all had to compete. Section 2- illegal to monopolize or attempt to monopolize.
Clayton Antitrust Act: Prohibits mergers that are anticompetitive, companies with substantial assets must notify the FTC before merger.

Describe the key provisions of the Sherman and Clayton Antitrust Acts.

*Section 1 of the Sherman act prohibits all agreements "in restraint of trade". In restraint of trade means anything that impedes trade, transport and related activities. monopolies, price fixing and other tactics used to inhibit competition are also examples.
*Section 2 of the Sherman act bans monopolization: the wrongful acquisition of a monopoly.
*Clayton act prohibits anticompetitive mergers, tying arrangements, and exclusive dealing agreements.
*The Robinson-Patman act bans price discrimination that reduces competition.

Describe the variety of aggressive business actions that are illegal as violations of antitrust regulations.

*Monopolization: under the section 2 of the act, it is illegal to monopolize or attempt to monopolize a market.
*Predatory Pricing: occurs when a company lowers its prices below cost to drive competitors out of business.
*Tying Arrangements: is an agreement to sell a product on the condition that the buyer also purchases a different product.
*Controlling Distributors and Retailers: It is difficult to compete in a market if you are forclosed from the best distribution channels.
*Resale Price Maintenance

What is the role of the Federal Trade Commission?

Created to regulate business, although its original focus was on antitrust law, it now regulates a wide range of business activities that affect consumers, everything from advertising to consumer loans to warranties to debt collection practices.

Describe prohibited sales activities under the FTC act.

DECEPTIVE ACTS OF PRACTICES: Under the FTC act, an advertisement is deceptive it is contains and important misrepresentation or omission that is likely to mislead a reasonable consumer.
UNFAIR PRACTICES: it causes a substantial consumer injury, the harm of the injury outweighs any countervailing benefit, the consumer could not reasonably avoid the injury.
BAIT AND SWITCH: FTC rules prohibit bait and switch advertisements a merchant may not advertise a product and then diparage it to consumers in an effort to sell a different item

How is consumer credit regulated.

Truth in lending act, Fair credit billing act.

What is the Magnusson-Moss Warranty Act.

An act put into place which requires any supplier that offers a written warranty on a product that costs more than $15.00 to disclose the terms of the warranty in simple, understandable language before sales.

What government regulations apply to consumer product safety.

The consumer product safety act of 1972 was put in place to regulate products and develop safety standards to prevent injury.

What is the role of the Environmental Protection Agency.

To consolidate environmental regulation under one roof. When congress passes a new environmental law, the EPA issues regulations to implement it.

Describe the requirements of the Clean Air act?

States that the EPA must establish national ambient air quality standards for both primary (affects health) and secondary (doesnt necessarily affect your health) pollution. States must produce implementation to meet quality air standards citizens can sue people for not following the clean air act and companies can share emission allowances.

Describe requirements of the Clean Water act.

Prohibits any single producer from discharging pollution into water with out a permit from the EPA. Requires EPA to measure water quality broadly to determine if the permit system is working. Until clean water standards are met, every point source is held to the same standard, whether it is discharging into clean ocean that can handle more pollution or a stagnant lake that cannot.

Identify regulations regarding waste disposal that business must follow.

*Anyone who owns property with an underground storage tank must notify the EPA and comply with
regulations leak detectors.
*Anyone who creates, stores, transports, treats or disposes of a certain amount of hazardous waste must be tracked and have to be disposed of at a certain facility. Any company that generates more than 100 kg of hazardous waste must obtain an ID# for its waste. When it ships its waste disposal facility it must send a multi copy manifest that identifies the waste, the transporter and destination. The company must notify the EPA if it does not receive a receipt from the disposal site indicating that the waste has been received.

What are common types of antitrust violations?

*Horizontal Strategies: market division, price fixing, bid-rigging, refusal to deal.
*Vertical Cooperative Strategies: Reciprocal dealing, price discrimination.

What is the Sherman Antitrust Act of 1890?

First national legislation in the world against monopoly; prohibited trusts, restraints of trade, and monopolization, but the law was vague and ineffective; tycoons found a way to get out.

Describe the Clayton Antitrust Act of 1914.

Prohibits anti competitive mergers, tying arrangements, and exclusive dealing agreements. Passed partly because courts were not enforcing Sherman act strictly as intended. Purpose- clarify Sherman statute. As result, the 2 laws overlap significantly.

What is the role of the Federal Trade Commission?

The FTC enforces the antitrust laws and protects consumers. The FTC can bring civil injunctions and administrative remedies.

What requirements were specified by the Federal Trade Commission Act of 1914?

Voluntary compliance, administrative hearings and appeals, penalties.

What requirements are set forth by the environmental Protection Agency?

1970: to consolidate environmental regulation. Can bring administrative enforcement action against violators. Agency judge hears actions. Parties can appeal to U.S. appeals supreme court violators liable for civil damages. Some statutes offer criminal penalties, prison.

Describe alternative dispute resolution techniques.

*Negotiation: in most cases the parties negotiate, whether personally or through lawyers. Fortunately, the great majority of disputes are resolved this way.
*Mediation: mediation is the fastest growing method of dispute resolution in the united states. Here, a neutral person, called a mediator, attempts to coax the two disputing parties toward of voluntary settlement.
*Arbitration: In this form of ADR, the parties agree to bring in a neutral third party, but with a major difference-the arbitrator has the power to impose an award. The arbitrator allows each side equal time to present its case and, after deliberation, issues a binding decision, generally without giving reasons.

List the advantages and disadvantages of the various alternative dispute resolution options.

*Negotiation: party to party no one in between.
*Mediation: between parties with someone in between, usually they voluntarily enter mediation.
*Arbitration: parties agree to bring someone in, catch is they can choose who is right or wrong.

Dispute Resolutions - General

Different methods to resolve disputes between individuals with out involving courts.

Mediation

A faster, cheaper and less adversarial alternative to arbitration or litigation: means of dispute resolutions, may involve personal mediators.

Arbitration

The parties select a neutral 3rd person or persons, who render a binding decision after hearing arguments and reviewing evidence. The decision of the arbitrator is generally binding on the parties involved in the dispute. Usually takes less time and cheaper.

Types of Courts

*Trial Court
*Appellate Court
*Court of Appeals
*Federal Court

Describe the family and Medical Leave Act, COBRA

This statute provides that former employees must be allowed to continue their health insurance for 18 months after leaving their job.

What are actions which would constitute wrongful discharge of an employee?

*Public Policy: Prohibits an employer from firing a worker fro a reason that violates basic social rights, duties, or responsibilities.
*Exercising a Legal Right: exercising a legal right if that right supports public policy.
*Performing a Legal Duty: For serving on a jury.

What are workplace safety requirements under OSHA?

*Employers must comply with specific health and safety standards.
*Employers are under a general obligation to keep their workplace "free from recognizing hazards that are causing or are likely to cause death or serious physical harm" to employees.
*Employers must keep records of all workplace injuries and accidents.
*OSHA (Occupational Safety & Health Act) may inspect workplace to ensure that they are safe. OSHA may assess files for violations and order employers to correct unsafe conditions.

What rights to employees have to privacy in the workplace?

*Off Duty Conduct: More than half the states have passes laws that protect the rights of employees to smoke cigarettes while off duty. Some of these statutes permit any lawful activity when off duty. Including drinking socially, having high cholesteral, being overweight, or engaging in dangerous hobbies.
*Alcohol & Drug Testing: Government employees can be tested for drug and alcohol use only if they show signs of use or if they are in a job where this type of abuse endangers the public. Most states permit private employers to administer alcohol and drug tests.
*Lie Detector Tests: Under the employee polygraph protection acts of 1988, employers may not require, or even suggest, that an employee or job candidate submit to lie detector test, except as part of an
"on-going investigation" into crimes that have occurred.
*Electric Monitoring of the Workplace: Technological advances in communications have raised a host of new privacy issues.

What actions by an employer constitute employment discrimination?

*Equal pay act of 1963: An employee may not be paid at a lesser rate than employees of the opposite sex for equal work.
*Title VII: Title VII of the civil rights act of 1964 prohibits employers from discriminating on the basis of race, color, religion, sex, or national origin.
*Age Discrimination: the age discrimination in employment act (ADEA) of 1967 prohibits age discrimination against employees or job applicants who are at least 40 years old.
*Amendments with Disabilities Act: Passed in 1990, the Americans with disabilities act (ADA0 prohibits employers from discriminating on the basis of disability.

Describe the process of union formation.

*National Labor Relations Act (NLRA): most important of all labor laws. To establish and maintenance of industrial peace, to preserve the flow of commerce ensures the right of workers to form unions.
*Section 7: guarantees employees the right to organize and join unions, bargain collectively through representatives of their own choosing, and engage in other concerted activities.
*Section 8: Makes it an unfair labor practice (ULP) for an employer:
- To interfere with union organizing efforts.
-To dominate or interfere with any union
-To discriminate against a union member
-To refuse to bargain collectively with a union.
*National Labor Relations Board (NLRB): established by the NLRA to administer and interpret the statute and to adjudicate labor cases.
*NLRB has 2 primary tasks:
- Representation: the board decides whether a particular union is entitled to represent a group of employees.
- Unfair Labor Practices: the board adjudicates claims by either the employer or workers that the other side has committed ULP.
*Section 8b makes it an unfair labor practice for a union:
- To interfere with employees who are exercising their labor rights under 7.
- To encourage an employer to discriminate against a particular employee because of a union dispute.
- To refuse to bargain collectively.
- To engage in an illegal strike or boycott, particularly secondary boycotts.

Describe the National Labor Relations Act of 1935, the Family and Medical Leave Act of 1993, the Consolidated Omnibus Budget Reconciliation Act (COBRA) or 1985 and the Fair Labor Standards Act of 1938, List the Main components of each of the acts.

*National Labor Relations act of 1935: Also know as wagnar act.
-Created NLR board to enforce labor laws
-Prohibits employers from penalizing workers who engage in union activity.
-Requires employers to bargain "I good faith" with unions.
*Family and Medical Leave Act of 1993: Guarantees both men and women up to 12 weeks of unpaid leave each year for child birth, adoption, or medical emergencies for themselves or a family member. Or an equivelent job with the same pay and benefits.
*Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA): Statute provides that former employees be allowed to continue health insurance for 18 months after leaving there job.
*Fair Labor Standards Act of 1938: the fair labor standards act (FLSA) regulates wages and limits child labor.
-Minimum Wage
-Overtime Pay: worker must be paid time and a half for any hours over 40 a week.
-Child Labor: the FLSA prohibits "oppressive child labor" which means that children under 14 may work only in agriculture and entertainment. Ages 14-15 are permitted to work limited hours after school in nonhazardous jobs. Ages 16-17 may work unlimited hours in nonhazardous jobs.

Describe what constitutes wrongful discharge under the law.

Wrongful discharge prohibits an employer from firing a worker for a bad reason. They fall into three categories:
-Public Policy: prohibits employer from firing someone for a reason that violates basic social rights, duties, and responsibilities.
-Contract Law: written or oral promises made during the hiring process can be enforceable. Employee hand book creates a contract.
-Tort Law: giving a false or unfavorable reference about a former employee, or "intentional inflication of emotional distress: employers who codone cruel treatment of their employees face liability under tort of intentional inflication of emotional distress

Explain the responsibilities of Occupational Safety and Health Administration (OSHA)

Holds employers to a workplace "free from recognized hazardous that are causing or likely to cause death or serious injury to employees. Inspects workplace to insure that they are safe.

What is an express warranty?

Is an affirmation of fact or promise made by the seller to the buyer or description that is the basis of the bargain statements of value or opinion are not express warranties.

What is an implied warranty?

When a merchant sells a good he warranties the good is fit for ordinary purpose at the time of the sale. No warranty to apparent defects if opportunity to examine.

What is a disclaimer?

Is a statement that a particular warranty does not apply.

What are the limitations on remedies for breach of warranty and product liability?

Limitation remedy clause, by which the parties may limit or exclude the normal remedies permitted under the code.

What is negligence and how does that concept apply to a manufacturer?

How does negligence apply to a manufacturer: Negligent design, Negligent manufacturer, Failure to warn.

What is negligence?

We might call negligence the "unintentional" tort because it concerns harm that arises by accident. A person, or perhaps an organization, does some act, neither intending nor expecting to hurt anyone, yet someone is harmed.

What is strict liability?

Some activities are so naturally dangerous that the law places an especially high burden on anyone who engages in them. This higher burden is strict liability.

What are the defenses available to an action for negligence, or an action for strict liability?

None: a defendant engaging in an ultra hazardous activity is virtually always liable for any harm that results.

Types of Warranties.

Implied, Express, Implied warranty of fitness warranty, Warranty of merchantiability.

What are the basic provisions of the Sarbanes-Oxley Act?

*Rights of shareholders
*Right to information
*Right to vote

What are the rights of shareholders?

As a shareholder you have neither the right nor the obligation to manage the day to day business of the enterprise.
*To Vote
*Must have at least one annual shareholders meeting
*Elect Directors
*Inspect the corporate books and records
*Dissenters rights
*Net distribution of assets upon dissolution.

What recourse do shareholders have against corporations if shareholder rights are violated?

*Derivative Lawsuit: Shareholders can sue but all proceeds go to corporation. In turn, shareholders stocks go up.
*Direct Lawsuit: Only if own shareholders rights are harmed, such as denying any rights of the shareholders. Shareholders keep damages.
*Class Action: More than one shareholder files suit at the same time, reduces cost of lawsuit since they all share it.

What are key provisions of the Securities Act of 1933?

Before offering or selling securities, the issuer must register the securities with the SEC, unless the securities qualify for an exemption.

What are the disclosure requirements of the Securities Act of 1933?

Required a one time disclosure when the company sells stock to the public. In 1934 the amendment to this law required a quarterly and yearly report showing all financial statements, and disclosing all significant developments in the company such as bankruptcy, change of directors, etc.

How did Sarbanes-Oxley change the disclosure requirements of the Securities Act of 1933?

Added to the 1934 securities act by requiring CEO and CFO to certify that:
*The information in the quarterly and annual reports are true
*The company has effective internal controls
*The officers have informed the company's audit committee and it auditors of any concerns that they have about the internal control system.

Corporate Governance.

The system of governing an organization so the interests of corporate owners are protected.

How would you define "business ethics"?

Being ethical and being honest, being like how a true person should be not a crook. The study of how people should act.

What is involved in developing an ethical culture in an organization?

Managers setting the example and training.

What are three benefits to business of a clear ethical framework?

*Investor Loyalty
*Customer Satisfaction
*Profits

List the steps involved in implementing a stakeholder perspective in business ethics.

Which stakeholders are primary? Implement the appropriate corporate governance mechanisms.

What are the components of a comprehensive framework for ethical decision making in business?

Ethical issue intensity, individual factors, organizational factors, opportunity business ethics evaluations and intentions, ethical or unethical behavior.

How can knowledge about ethical decision making be used to improve ethical leadership?

Sometimes in the heat of the moment your view about something might be skewed because of others peoples influence. But if you already have the knowledge about ethics then you shouldn't even have to think twice about making a decision. You already know right from wrong.

What are leadership styles and habit that promote an ethical culture?

Coercive leader, authoritative leader, affiliative leader, democratic leader, pacesetting leader, coaching leader.

How do moral philosophies and values influence group ethical decision making in business?

If you get caught in a situation where you are following all rules and codes, but you know of some kind of odd that could be catastrophic, what do you do, do you tell?

What are the stages of cognitive moral development, and how do those relate to ethical development?

1) Punishment and obedience
2) Individual purpose and exchange
3) Mutual interpersonal expectation relationships
4) Prior rights, social contract, or utility
5) Poor rights, social contract, or utility
6) Universal ethical principal

How does white collar crime relate to moral philosophies, values, and corporate culture?

White collar crimes always seem to get justified in the act. If people will set values for themselves and then just stick to their values then they wouldn't get caught in these types of situations where they get in trouble.

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