WGU C713 Business Law Complete Study Set

buyer invests money in a common enterprise and expects profit from others work - Security Government securities, bank securities, short term notes, non profit issues, insurance policy, annuity contracts - Exempt Securities Federal agency that enforces securities laws. - SEC (Securities and Exchange Commission) Bring cease and desist order against those who violate the law and can levy fines or confiscate profits from illegal transactions. - Functions of SEC Criminal action for SEC violations are referred to _____ - Justice Department Before offering or selling securities issuer must register the securities with the SEC unless the securities qualify for exemption. Does not evaluate or investigate quality of offerings. - Securities Act of 1933 Issuer is not required to register securities that are offered or sold by residents of the state in which the issuer is incorporated or does business - SEC Rule 147 "Safe Harbor" Most popular route for private offerings; allows smaller companies to sell securities without registered with the SEC; broken up into Rules 504-506 - Reg D Accredited (net worth of $1mill or income $200K+ per year), Sophisticated investors (have risk assessment knowledge), restricted stock (buyer cannot resell within 1 year) - 3 types of investors for Reg D Instead of going through Wall Street, a company trying to raise capital for the first time can sell stock to the public itself through ______ - DPO (Direct Public Offering) Cheaper & Faster; effective marketing tool since shareholders become loyal customers. - Advantages of DPO Limit to how much $$ a company can raise this way; Limited knowledge of company officers regarding securities; Each investor must receive disclosure info about company...costs $$; Setting up system to permit trades can be tricky & time consuming. - Disadvantages of DPO Company wants to raise a large sum of capital from a large number of people. - Public Offerings (IPO) For a public offering, firms hire investment bank to serve as ______; they will purchase unsold shares. - Underwriter Underwriter buys stock from issuer and resells it to the public. Underwriter bears risk that stock may sell for lower than purchase price. - Firm Commitment Underwriter Acts as company's agent in selling stock. Company suffers loss if stock for sells for low cost. - Best Efforts Underdwriter Issuer with annual gross revenues of less than $1Bill. When it undertakes IPO, it only has to include 2 years of audited financials, can require SEC to keep registration statement secret until 21 days before the road show begins. - Emerging Growth Companies (EGC) Stock purchased in a private offering (Reg D). If issuer is private, stock cannot be sold within 1 year of purchase. Once company goes public, stock can be sold after 6 months of purchase date. - Restricted security Stock held by shareholder who owns more than 10% of class of stock OR by any officer or director of company. In any 3 month period, the inside can sell only an amount of stock equal to average weekly trading volume for the prior 4 weeks. - Control Security Maintains integrity of secondhand market (stock that is resold after initial public offering) - Securities Exchange Act of 1934 anyone who reveals non public information in violation of his fiduciary duty - Tipper Those who receive tips without a fiduciary duty and who use this information for insider trading - Tippee laws regulating the sale of securities, intended to protect the public from fraud. - Blue Sky Laws Under this Act, states may no longer regulate securities that are traded on a national exchange, exempt under rule 506, or sold to qualified purchasers. - NSMIA (National Securities Markets Improvement Act) to charge with a crime by the finding or presentment of a jury - indictment Let the decision stand; precedence - stare decisis on lower courts not the Supreme Court - precedent is binding only law created by Agencies - regulations an agreement or arrangement made by negotiation - Treaty paid by the government, brings the case to court. - district attorney pass laws directly at the ballot box - voter referendum. was designed to curb illegal immigration into the state by eliminating social spending for undocumented aliens. - Proposition 187 Legal positivism, Natural law, Legal realism - Three theories of jurisprudence are Law is what the sovereign says, regardless of ethics - Legal Positivism An unjust law is no law at all. - Natural Law Who enforces the law counts more than what is in writing. - Legal Realism stocks, property, and other financial assets in someone's possession. - holding the rules and decisions made by federal and state administrative agencies - Administrative law You have no duty to assist someone in peril unless you created the danger. - bystander's obligations You must assist someone in peril when there is some special relationship - Tarasoff exception Plain Meaning Rule. Legislative History and Intent, Public Policy - There are three primary steps in a court's statutory interpretation: regulates freight and passenger transportation over the growing rail system - Interstate Commerce Commission (ICC), Like federal agencies but are not a part of the executive branch and cannot be controlled by the president. - Independent Agencies describes the problems that Congress believes need regulation, establishes an agency to do it, and defines the agency's powers. - the enabling legislation They make rules, they investigate, and they adjudicate. - Administrative agencies use three kinds of power to do the work Legislative and Interpretive - Types of Agency Rules are the most important agency rules, and they are much like statutes. - Legislative rules do not change the law. They are the agency's interpretation of what the law already requires. - Interpretive rules Informal Rulemaking and Formal Rulemaking - Agency Rule Making Methods "notice and comment"; The agency must publish a proposed rule in advance. - Informal Rulemaking A trial-like, on-the-record proceedings conducted by agencies when making rules - Formal Rulemaking requires the person to appear and bring specified documents. - subpoena duces tecum Must be relevant to a lawful agency investigation, Must not be unreasonably burdensome and Must not be privileged. - Conditions for requesting a subpoena Occupational Safety and Health Administration - OSHA An agency employee who acts as an impartial decision maker. (adjudications begin with a hearing before this judge) - administrative law judge statutory, political, judicial, and informational. - Limits on Agency Power The president's influence is greatest with executive agencies. Further, Congress may decide to defund an agency as a cost-cutting measure. - Political Control over Agency Power An individual or corporation directly harmed by an administrative rule, investigation, or adjudication may generally have that action reviewed in federal court.. The party seeking review, for example, a corporation, must have suffered direct harm; the courts will not listen to theoretical complaints about an agency action, and that party must first have taken all possible appeals within the agency itself. - Judicial Review over Agency Power It is designed to give all of us, citizens, businesses, and organizations alike, access to the information federal agencies are using. - Freedom of Information Act This 1974 statute prohibits federal agencies from giving information about an individual to other agencies or organizations without written consent. - Privacy Act Agencies have broad investigatory powers and may use subpoenas and, in some cases, warrantless searches to obtain information. - Investigation (agencies) When agencies hold hearings and decide issues. Adjudication generally begins with a hearing before an administrative law judge and may involve an appeal to the full agency or ultimately to federal court. - Adjudication (agencies) security against hurt, loss, or damage - indemnity Determine the facts of a particular dispute and apply to those facts the law given by earlier appellate court decisions - Trial courts A trial court determines facts, while an appeals court ensures that the lower court correctly applied the law to those facts. - Trial and Appeals court A court's authority to bind the defendant to its decisions. Require the defendant to stand trial, pay judgments, and the like. - personal jurisdiction Subject matter jurisdiction and personal jurisdiction. - Court jurisdiction requirements A statute that gives a court jurisdiction over someone who commits a tort, signs a contract, or conducts "regular business activities" in the state - long-arm statute Because of this, the appeals court may require a new trial. - error of law The party filing the appeal - appellant The party opposing the appeal - appellee federal question cases and diversity cases. - two kinds of civil lawsuits are permitted in federal court A case in which the claim is based on the United States Constitution, a federal statute, or a federal treaty - federal question case Applies when (1) the plaintiff and defendant are citizens of different states and (2) the amount in dispute exceeds $75,000. - diversity jurisdiction case primary trial court in the federal system. - District Court The president of the United States nominates must be confirmed by the Senate. - Federal Judges circuits - intermediate courts of appeals are divided into A petition asking the Supreme Court to hear a case; four out of nine justices must approve hearing the case - writ of certiorari The documents that begin a lawsuit, consisting of the complaint, the answer, and sometimes a reply - pleadings A short, plain statement of the facts alleged and the legal claims made - Complaint A decision that the plaintiff wins without trial because the defendant failed to answer in time - default judgment Allows opposing lawyers to see the documents of the other - discovery Interrogatories, Depositions, Production of Documents and Things, Physical and Mental Examination - forms of discovery These are written questions that the opposing party must answer, in writing, under oath. - Interrogatories The person being questioned in a deposition - deponent Each side may ask the other side to produce relevant documents for inspection and copying - Production of Documents and Things Request that the court limit discovery (This will help put a cap on the lawyer fees that will occur when a lawyer make a discovery request). - motion for a protective order a formal request that the defendent supply more complete answers (can occur when the answers to interrogatories are vague) - motion to compel answers to interrogatories the judge views the requested documents alone, with no lawyers present, and decides whether the other side is entitled to view them. - in camera inspection out-of-court testimony made under oath and recorded by an authorized officer for later use in court; allows one lawyer to question the other party - deposition A tort, in common law jurisdictions, is a civil wrong that unfairly causes someone else to suffer loss or harm resulting in legal liability for the person who commits the tortious act. Compensatory damages generally the norm in these cases - Tort Law One who commits a tort - tortfeasor A ruling by the court that no trial is necessary because there are no essential facts in dispute. - Summary judgment The process of selecting a jury, "to speak the truth" - voir dire A claim that a juror has demonstrated probable bias. - challenges for cause The right to excuse a juror for virtually any reason - peremptory challenges A term of an insurance policy by which the insurance company promises to pay the insured or the beneficiary twice the amount of coverage if loss occurs due to a particular cause or set of circumstances. - Double Indemnity To ask questions of an opposing witness - cross-examine determines what questions a lawyer may ask and how the questions are to be phrased, what answers a witness may give, and what documents may be introduced. - law of evidence permissible only if the evidence so clearly favors the defendant that reasonable minds could not disagree on it. - directed verdict A judgment notwithstanding (not including) the jury's verdict - judgment non obstante veredicto affirm, modify, reverse and remand, or simply reverse - Powers of appeals court To nullify the lower decision and return the case for reconsideration or retrial - reverse and remand a neutral person, attempts to guide the two disputing parties toward a voluntary settlement. - mediator allows each side equal time to present its case and, after deliberation, issues a binding decision, generally without giving reasons. - arbitrator any formal or informal process to settle disputes without a trial. Mediation, arbitration, and other forms of ADR have grown in popularity. - Alternative Dispute Resolution (ADR) offer, acceptance, consideration, legality, capacity, consent and writing. - Seven Key Elements of an Enforceable Contract A contract in which one party agrees not to compete with another - noncompetition agreement A promise made in exchange for another promise. - bilateral contract one party makes a promise that the other party can accept only by actually doing something. - unilateral contract An agreement in which one or more parties has not yet fulfilled its obligations - executory An agreement in which all parties have fulfilled their obligations - executed one that satisfies all of the law's requirements. - valid contract occurs when the parties intend to form a valid bargain, but a court declares that some rule of law prevents enforcing it. - unenforceable agreement An agreement that may be terminated by one of the parties - voidable contract A contract that neither party can enforce, because the bargain is illegal or one of the parties had no legal authority to make it - void agreement An agreement with all the important terms explicitly stated - express contract the words and conduct of the parties indicate that they intended an agreement. - implied contract "As much as he deserves"—the damages awarded in a quasi-contract case - quantum meruit an instrument of investment in the form of a document (as a stock certificate or bond) providing evidence of its ownership - securities A claim of promissory estoppel requires that the defendant made a promise knowing that the plaintiff would likely rely, and the plaintiff did so. It would be wrong to deny recovery. A claim of quasi-contract requires that the defendant received a benefit, knowing that the plaintiff would expect compensation, and it would be unjust not to grant it. - OTHER REMEDIES If there is no contract, are there other reasons to give the plaintiff damages? If a contract is for the sale of goods, the UCC is the relevant body of law. For anything else, the common law governs. If a contract involves both goods and services, a court will determine the agreement's primary purpose. - SOURCES OF CONTRACT LAW is the legal ability to enter into a contract (an adult of sound mind) - Capacity voidable contract - Because a minor lacks legal capacity, she normally can create only a A void contract is illegal from the beginning and may not be enforced by either party. A voidable contract is legal but permits one party to escape, if she so wishes. - Void vs voidable To give notice of refusal to be bound by an agreement. Can be done by minors. - disaffirm Restoring an injured party to its original position. Ex. a minor giving back a car after stating he no longer wants it. - restitution Words or actions indicating an intention to be bound by a contract - Ratification is something essential to a minor's life and welfare. Food, clothing, housing, and medical care are necessaries. - Necessaries: Exception for disaffirming The rules change somewhat if a minor lies about his age. - Misrepresentation of Age: Exception for disaffirming creates only a voidable contract - A party suffering a mental impairment usually means that a judge has made a formal finding that a person is mentally incompetent and has assigned the person a guardian by court order. - Adjudicated incompetent: Contract made voidable When one party is so intoxicated that he cannot understand the nature and consequences of the transaction - Intoxication: Contract made voidable fraud, mistake, duress, and undue influence. - four claims that parties make in an effort to rescind a contract: 1. Intentional or Reckless Misrepresentation of Fact 2. Materiality 3. Justifiable Reliance - Elements of Fraud having real importance or great consequences - Material