1. CONTRACTUAL CAPACITY
a. Contractual Capacity: The minimum mental capacity required by law for a
party who enters into a contract to be bound by it. Certain persons are
generally not considered to have sufficient capacity to be bound by their
1. INTELLECTUAL PROPERTY
a. Intellectual Property: Any property resulting from intellectual, creative
processes the product of one or more individuals mind.
a.i. The framers of the U.S. Constitution recognized the need to protect and
1. TYPES OF MONETARY DAMAGES
a. A breach of contract entitles the non-breaching party to sue for money damages,
a.i. Compensatory Damages: Damages that compensate the non-breaching
party for the injuries or losses actually sustained as a result
FEDERAL ANTITRUST LAW: OVERVIEW
The Sherman Antitrust Act prohibits
contracts, combinations, and conspiracies in restraint of interstate trade or
actual or attempted monopolization of interstate trade or commerce by one or
1. TORTS: AN INTRODUCTION
a. Tort: A civil wrong, not arising from a breach of contract or other agreement. A
breach of a legal duty that proximately causes another person harm or injury.
The duty that is violated by the tortfeasor (i.e., the wrongdo
September 14, 2009
Chapter 3 Case Analysis
Cruz vs. Fagor America, Inc
California Court of Appeal, Fourth District, Division 1, 2007
146 Cal.App.4th 488.
Facts After receiving a pressure cooker fro
1. DISCHARGE AND PERFORMANCE
a. Discharge: The termination of a partys obligations arising under a contract.
Discharge occurs either when:
a.i. both parties have fully performed their contractual obligations; or
a.ii. events, conduct of the parties, or op
a. Agreement: A meeting of two or more minds in regard to the terms of a contract,
through offer and acceptance.
a.i. Offer: A promise or commitment to perform or refrain from performing
some specified future act made by the offeror.
a. Consideration: Value given in return for a promise. Consideration must be
(1) legally sufficient and (2) bargained for by the party receiving it.
a.i. Legally sufficient consideration may take the form of:
promising to do someth
a. Mistake: The parties entered into a contract with different understandings of one
or more material facts relating to the subject matter of the contract.
a.i. Mutual (Bilateral) Mistake of Fact: A mistake on the part of both
1. Natural Law and Positive Law
a. Law: a body of enforceable rules governing relationships among individuals and
between individuals and their society
a.i. Natural Law: A system of universal moral and ethical principles that are
inherent in human nature
1. STATUTES OF FRAUDS
a. Statute of Frauds: A statute that requires certain types of contracts to be
evidenced by a writing in order to be enforceable. The following types of
contracts generally must be evidenced by a writing to be enforceable:
1. CONTRACT VS. PROMISE
a. Promise: A persons declaration that something will or will not happen in the
a.i. Promisor: The person making the promise.
a.ii. Promisee: The person to whom the promisor made the promise.
b. Contract: An agreement betwe
1. CLASSIFICATION OF CRIMES
a. Crime: A wrong against society, defined in a statute and punishable by fines,
imprisonment, or in rare cases death.
b. Depending on their degree of seriousness, crimes are classified as
1. JUDICIAL REVIEW
a. Judicial Review: The process by which a court decides the constitutionality of
legislative enactments and actions by the executive branch.
a.i. While the U.S. Constitution makes no mention of the power of judicial
review, Alexander H
1. Pre-suit Considerations
a. Consulting with an Attorney: The first step to take when contemplating a
lawsuit, as well as when facing a lawsuit, is to consult with a qualified attorney.
b. Legal Fees: The anticipated expenses of investigating and prosecu
a. Federal Government: A form of government where states form a union and the
sovereign power is divided between the national government and the various states.
b. The Privileges and Immunities Clause: Article IV of the U.S. Constitution pro
1. NEGLIGENCE: BASIC PRINCIPLES
a. Negligence: Failing to exercise the standard of care that a reasonable person would exercise in
a.i. In contrast to intentional torts, negligence requires no intent on the part of the tortfeasor,
1. BUSINESS ETHICS: AN INTRODUCTION
a. Ethics: Moral principles and values applied to social behavior.
b. Business Ethics: Moral principles and values applied to situations that arise in a business
b.i. A particular challenge facing businesses is
1. PRIVITY OF CONTRACT
a. As a general rule, only the parties to a contract the promisor and the promisee
owe any duties and enjoy any rights arising from the contract. Common law
recognizes three exceptions:
a.i. Assignment (of Rights): A transaction wh
BUSINESS START-UP ISSUES
Locating and Retaining Competent Legal Counsel: Counsel will assist an entrepreneur
with legal obstacles to getting a business started and can provide advice on organization,
management, and operational issues.
Selecting a Busines
Deceptive Advertising: Advertising that misleads consumers, either by making
unjustified claims regarding a products composition, qualities, sponsorship, or
performance or by omitting a material fact concerning the products compositi
An offer to form a contract electronically should include:
a description of what action on the part of the offeree will constitute acceptance,
a provision specifying acceptable forms of
International Law: The body of written and unwritten
laws, including treaties, governing the relations between
and among nations and between nations and the citizens of
one or more other sovereign nations (e.g., the Geneva
1. AGENCY RELATIONSHIPS
a. Agency: A fiduciary relationship that results when one person (the principal) manifests her
consent that another person (the agent) will act on her behalf and subject to her control and
the agent manifests his consent to so act.
1. ACTUAL AUTHORITY
a. Express Authority: Authority declared in clear, direct, and definite terms, orally
or in writing.
a.i. Equal Dignity Rule: If a contract being executed by an agent on the
principals behalf is written, most states require that the ag
1. EMPLOYMENT AT WILL
a. Absent a contrary provision in a written agreement between the employer and
employee, employment is presumed to be at will meaning that the employer may
terminate the employee at any time, for any reason, or for no reason at all.
1. EMPLOYMENT DISCRIMINATION
a. Equal Employment Opportunity Commission (EEOC): The federal agency charged with
enforcing Title VII of the Civil Rights Act of 1964 and other federal statutes and regulations
prohibiting employment discrimination.