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LEGAL EXAM III
Terms in this set (73)
what is a tort?
not necessarily a crime, you've been harmed/wronged/injured
where does tort law come from?
mostly from common law
are intentional torts civil or criminal ?
can be both
what's the eggshell rule?
it makes you responsible for any harm that occurs even if you didn't intentionally try to hurt someone
putting someone in immediate apprehension of their safety
touching someone without their permission
Infliction of Emotional Distress
must be wrongful, someone would think it's "messed up"
Misappropriation of a Person's Name
for commercial gain, right of publicity without their consent
Public Disclosure of Highly Objectionable Info
deals with important records that must be kept from public
holding someone without permission or justification
if you overstay your welcome
only for personal property, the civil equivalent of theft/robbery
must be an untrue statement it involves financial injury
mouth to mouth gossip
gossip published or broadcasted
Defenses for Defamation
1) it's a true statement
2) public figure
What must public figure people prove in order to win a defamation case?
that the media intentionally published something false- they knew it was untrue and posted it anyway
What are the two business torts?
Injurious Falsehood & Intentional Interference w/ Contractual Relations
you lie about the quality or safety of your competitor's products
Intentional Interference w/ Contractual Relations
A & B's contract is broken because C convinced A to break it
What is the most common unintentional tort?
5 things plaintiff must prove to win a negligence case
1) Duty of Care
2) Breach of Duty
3) Causation in Fact
4) Proximate Causation
What are defenses for Negligence?
Contributory/ Comparative & Assumption of Risk
What are Strict Liability Torts?
under certain circumstances you are automatically liable
Strict Products Liability
product is defective : design (all items) OR manufacturing (1)
Abnormally Dangerous Activities
1) high degree of risk
2) no way to make it 100% safe
3) not commonly performed in that area
Dram Shop Acts
makes tavern owners responsible for third party injuries if intoxicated patron harmed the third party
What is the point of compensatory damages?
to make the victim whole again, includes past & present
Are punitive damages common?
no they're extremely rare, aimed to be exemplar damages to raise awareness
When will punitive damages be rewarded?
willful & wanton negligence, also intentional torts
Factors to consider when creating a business
1) ease of creation
2) managerial control
in continuity, if owner dies then business entity may dissolve legally
Are businesses locked into what kind of business they are?
no may change over time
What must you file in order to create a corporation?
Article of Incorporation- at state level (domestic corp.)
can be filed against majority if they acted illegally - possible compensatory damages
Officers of a corp. owe what to shareholders?
Fiduciary Duty: duty of loyalty (in corp.'s best interest) & duty of care (make reasonable decisions)
If you get sued for failing your fiduciary duty, your defense would be ...
business judgement rule: acted in good faith
When will a court hold you liable for a corp.'s debt? VERY RARE
if you pierced the corporate veil: you had a unity of interest & there is obvious fraud/injustice
What's the difference with a traditional corp. and a S corp?
S corp. is taxed like a partnership, will never be on the stock exchange, can only have up to 100 shareholders
What's the difference with a S corp. and LLC?
LLC has unlimited number of owners (can be business entities also)
Why were securities regulations created?
to protect shareholders and investors
What is a security?
any investment activity
How does the Supreme Court define a security?
The investment is in a common business activity, made with the expectation of making a profit, and those profits are being made through the efforts of others
What does the Securities Act of 1933 deal with?
the initial sale
Who's an underwriter?
investment banks that help companies sell stocks, they lead the process
What is the required documentation when selling securities?
registration statement & prospectus
Who are you allowed to talk to in the pre-filling period?
How long is the waiting period?
20 days, you can also start advertising
What are the defenses from an issuer's perspective?
2) Statute of Limitations
3) Due Diligence
What must you file to fulfill the Securities Act of '34? (each year)
10-K, lets investors know what has happened in the previous period
Who's considered an insider?
officers, directors, anyone owning 10% or more of stocks
insiders can't make decisions that will give them a large profit within 6 months
What is insider trading?
using confidential information to trade for the intentions of making a profit
Could external employees be insider traders?
Yes, called tippees
If you get caught as an insider trader, what are the damages?
TRIPLE damages always
State Blue Sky Laws
State regulations regarding securities laws
What is the PCAOB & what does it do
regulates accounting firms that deal w/ publicly traded companies, also says firms can't account & consult for same company
Does Sarbanes-Oxley deal with mark-to-mark accounting?
Under '33, what are the criminal penalties
fined up to 20 years in jail, corps. can be sued 25 million per offense
What is Antitrust Law?
it ensures that companies compete
Section I of Sherman Act
regulates when companies work together
competitors agree on a price, it doesn't matter how reasonable it is for customers - it's illegal
Does price fixing have to be direct?
No, (indirectly too) if there's a pattern showing suspicion you can get in serious trouble
Territory Allocation Agreements
competitors take areas to take over, "you have the north, I have the south"
Per se illegality
Rule of Reason
balancing test, weigh pros and cons
Horizontal vs. Vertical agreements
Horizontal - same thing in same chain
Vertical - not competing but enter in agreements
Vertical price fixing
telling distributor how much to charge, MSRP isn't illegal
What makes a monopoly illegal?
You have monopoly power in a relevant market & you're performing exclusionary conduct
sells at super low price to run others out of business, then raises price when you're the only one left
selling a certain product at a different price to different people, this is only at the wholesale level & DOES NOT include services
when a company says in order to get this, you must also buy this - the more similar the goods are the more courts will allow
Mergers & Acquisitions
if value of companies are over $78 million in assets, they must notify the gov't & wait for permission
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