MGT 145 GGU Constitutional Law Questions

BUSINESS LAWJohn M. Harding, Esq.
COURSE REVIEW NOTES
(Cheeseman, Ch 1-21, 29-30, 34, 36)
CONSTITUTION (Chapter 4)
The supreme law of the land
Enumerated Powers
Commerce Clause (federal law)
Dormant Commerce Clause (state)
Standards of review:
substantial effect test
(no) undue burden test
1st Amendment / Speech:
Full protection (political)
Limited protection (offensive/ads)
No protection (injurious)
Standards of review:
CGI + NT
SGI + RF (or IGO + RR)
none
1st Amendment / Religion:
Establishment Clause
Free Exercise Clause
Concerning:
a mandatory law
a prohibitive law
14th Amendment / Equal Protection:
Race / national origin
Gender
Other
Standards of review:
strict scrutiny (CGI + NT)
intermediate scrutiny (SGI + RF)
rational basis test
14th Amendment / Due Process:
Substantive DP
Procedural DP
Concerning:
vagueness + ambiguity
notice + hearing
COURTS (Chapters 2-3)
Jurisdiction = the power of the court
A court needs:
A pending action
A plaintiff with standing
Subject matter jurisdiction (SMJ)
Personal jurisdiction (PJ)
Requirements:
federal question OR diversity
FQ exclusive or concurrent
DJ = diversity + $75K
notice AND minimum contacts
1
TORTS and CRIMES (Chapters 5, 6 + 8)
Tort = actus reus + mens rea (intentional, negligent, strict)
Intentional Torts
Assault (threat)
Battery (contact)
Conversion (theft)
Defamation
False imprisonment
Fraud
IIED (outrage)
Misappropriation (image)
Privacy
Trespass
Intentional Crimes
Arson
Bribery
Burglary
Conspiracy
Embezzlement
Forgery
Larceny
Murder
Receiving stolen property
Theft
Negligent Torts / ELEMENTS:
DUTY
BREACH
CAUSE
Both actual (“but for”) AND proximate (“foreseeable”)
HARM
Also: NIED (bystanders)
Negligence per se
Res ipsa loquitur
Defenses:
Intervening event
Assumption of risk
Contributory – bars all liability
Comparative – bars some liability
Strict Liability Torts (Product liability)
Product defect:
Manufacture defect
Design defect
Warning defect
Defenses:
Generally known dangers
Assumption of the risk
Misuse of product
Supervening event
Contributory negligence or comparative fault
Statutes of Limitation (and statutes of repose)
2
INTELLECTUAL PROPERTY (Chapter 7)
IP = intangible property
Kinds of protection:
Trade secret (CA law)
Patent
(federal law) file at USPTO
Copyright
(federal law) register at USCO
Trademark (federal law) file at USPTO
Trade Secret / CA Civil Code §§ 3426 – 3426.11 (CUTSA)
Trade secret = value from secrecy AND reasonable security
Misappropriation = disclosure or use without consent AND
by person who used “improper means”
by person who derived it from one using “improper means”
by person who derived it from one owing duty of secrecy
Patent Law / 35 USC § 1 etc.
Patent covers functional inventions (things + processes) and designs
ELEMENTS:
Novel (not known or used by others)
Useful (utility patent) OR ornamental (design patent)
Non-obvious (ordinary skill in the art)
Correct patent seeker (first to file)
Term: 20 years (utility patents) / 14 years (design patents)
Copyright Law / 17 USC § 101 etc.
Copyright covers works of authorship (not inventions or designs)
ELEMENTS:
Original
Work of authorship (inc. computer programs)
Fixed in a tangible medium of expression
Term:
life + 70 years (person)
1st publication + 95 years OR creation + 120 years (business)
Federal Trademark Law (Lanham Act) / 15 USC 1114 etc.
Trademark covers identifying marks
Trademark identifies goods
Service mark identifies services
Term: 10 years (renewable)
3
CONTRACT (Chapters 9-16)
K = enforceable agreement
Terminology:
• Offeror / Offeree
• Unilateral / Bilateral
• Actual: Express (written/oral) or Implied in Fact (conduct)
• Quasi: Implied in Law
• Executed / Executory
• Valid / Void / Voidable / Unenforceable
A. FORMATION
1. Agreement
1. Good Offer:
Objective intent (reasonable third party)
Definite terms
Effective communication
2. Live Offer:
Revocation (effective on receipt)
Rejection / counteroffer (effective on receipt)
Operation of law:
Death of a party
Insanity of a party
Subject matter destruction
Lapse of time (stated or reasonable)
Supervening illegality
3. Acceptance:
Unequivocal
Mirror image rule
Mailbox rule (effective on sending)
2. Consideration (= legal value + bargained-for exchange)
No consideration:
• gift promise
• illegal consideration
• illusory promise
• preexisting duty
• past consideration
Quasi-consideration: promissory estoppel
Promise
Reliance
Detriment
4
3. Capacity (= mental capacity)
Insane:
Adjudged
Not adjudged but insane
Not adjudged and lucid
Effect:
Void
Voidable by the insane
Valid
Minors (right of disaffirmance):
Restoration
Restitution
Ratification
Effect:
Full restoration
Partial (intentional/ reckless)
Valid
Lawful object (= contrary to law/policy)
Void
B. AFFIRMATIVE DEFENSES (“Yes, but . . .”)
1. Assent
Mistake
Mutual/Fact
Mutual/Value
Unilateral/No Knowledge
Unilateral/Knowledge
Effect:
Void
Valid
Valid
Voidable
Fraud
Inception
Inducement
Void
Voidable
Duress (physical)
Voidable
Undue influence
Voidable
2. Statute of Frauds (SOF)
SLYMES):
Stops, does not void K
Surety/guarantee
Land
Year
Marriage
Estate
Sales/leases (goods)
Exceptions: Specially manufactured goods
Judicial admissions
Partial performance
Merchant’s Written Confirmation Rule (MWCR)
5
C. THIRD PARTIES
1. Third party beneficiaries (TPB)
Intended have rights
Incidental have none
2. Assigns (assignment of rights / delegation of duties)
Assignments usually effective, except:
Anti-assignment clause
Personal services contract
Future rights
Material change of risks
D. CONDITIONS
Precedent (before)
Concurrent (during)
Subsequent (after)
E. DISCHARGE (by performance or excuse)
Mutual Agreement
Impossibility
Operation of Law (BK, SOL, etc.)
F. BREACH
Material (permits rescission)
Minor
G. REMEDIES
Damages:
• Compensatory = “benefit of the bargain”
• Consequential (“special” damages for foreseeable damages)
• Liquidated
• Nominal
• Punitive
Equitable Remedies:
• Rescission
• Restitution
• Specific performance
• Injunction
• Declaratory judgment
• Reformation
6
UNIFORM COMMERCIAL CODE (UCC) (Chapters 18-21)
Abbreviations: Buyer = B, Seller = S, MB = merchant B, MS = merchant S
A. APPLICATION
Sales and leases of “goods” (tangible, movable property)
Not goods: land, services, IP, other intangible property
If mixed (goods + not goods), then “predominant purpose”
B. DIFFERENCES (from Common Law)
Good Offer: indefinite terms (parol evidence, gap-filling, quantity)
Live Offer: merchant’s firm offer rule (MFOR) AND counteroffer
Acceptance: no mirror image in fully merchant transaction
Parol evidence:
1. Course of Performance (CP): same parties/same K
2. Course of Dealing (CD): same parties/different K
3. Usage of Trade (UT): different parties/similar K
C. ADDITIONS (to Common Law)
Risk of Loss (ROL)
Carrier
Shipment K:
Destination K:
Noncarrier
Merchant Seller:
Non-merchant Seller:
S passes ROL to B by delivery to carrier
S passes ROL to B by delivery to destination
S passes ROL to B by delivery to B
S passes ROL to B by tender of delivery to B
Title
Theft (thief steals goods and has void title)
Purchase Rule (con artist buys goods with fraud and has voidable title):
• S gives good title to Good Faith Purchaser for Value (GFPV)
Entrustment Rule (merchant entrusted with goods has voidable title):
• S gives good title to Buyer in Ordinary Course of Business (BOCB)
Performance
Perfect Tender Rule:
If S tenders delivery of conforming goods (CG), then B must accept + pay
If S tenders delivery of nonconforming goods (NCG), then B may:
• Accept whole
• Reject whole
• Reject nonconforming part
7
Seller’s Right of Cure:
If S tenders delivery of NCG, then S may cure (repair/replace with notice) IF
Within time for performance
Within a reasonable time if reasonable belief NCG would be accepted
Remedies
S remedies
Withhold delivery
Stop goods in transit
Reclaim goods
Dispose of goods
Recover purchase price
Recover damages (breach of K)
Cancel K
Warranty
Express (EW):
B remedies
Reject NCG
Recover goods from insolvent S
Recover goods from S if no cover
Specific performance (SP)
Cover (substitute goods)
Recover damages (breach of K)
Cancel K
Factual affirmation or promise
From S to B
Relating to goods
“Basis of the bargain” (reliance)
Implied (IW):
Merchantability
MS
Goods fit for ordinary purpose
Fitness for a Particular Purpose
B identifies purpose
S identifies goods
B relies
S know of B reliance
Statutory (SW):
Title
Infringement
Disclaimers:
EW needs express disclaimer
IW/M must say “merchantability”
IW/F must be a conspicuous writing
SW needs extreme clarity
Breach:
B gets compensatory damages
Warranty Damages (WD) =
Value as warranted (Vw) – Actual value (Va)
8
AGENCY (Chapters 29-30)
Abbreviations: Agent = A, Principal = P, Third Party = TP
A. Formation:
Express agency
Implied agency (inc. incidental authority and apparent authority)
Agency by ratification
B. Duties to each other
P’s duties
To compensate
To reimburse
To indemnify
To cooperate
A’s duties
To perform
To notify (communicate)
To account
Of loyalty
C. Duties to TP / K
Full disclosure
Partial disclosure
Undisclosed
No agency
P liable?
Y
Y
Y
N
A liable?
N
Y
Y
Y
P liable?
Y if Respondeat Superior
Y if Respondeat Superior
A liable?
Y
Y
C. Duties to TP / T
Intentional T
Negligent T
D. Termination:
Mutual Agreement
Impossibility (SMD, Intervening illegality)
Operation of Law (Death, Insanity, BK, Lapse of Time, War)
9
BUSINESS ORGANIZATIONS (Chapters 34, 36)
General
Partnership
2 general
partners
C Corporation
S Corporation
1 shareholder
1 shareholder
None
None
100
shareholders
Oral / written
contract
Articles of
Incorporation
Statement of
Partnership
(GP-1)
$70
$100
$100
$100
Organization
Oral / written
contract
Written
bylaws
Written
bylaws
Written
bylaws
Management
GPs equal
rights unless K
otherwise
GPs are
agents
Shareholders
→D→O
Shareholders
→D→O
Officers are
agents
Officers are
agents
Officers are
agents
Liability
Joint +
several
Capital
Partners’
contributions
GP may
dissociate
No
shareholder
liability
Shareholders’
contributions
+ VC
Independent
existence
No
shareholder
liability
Shareholders’
contributions
Continuity
No
shareholder
liability
Shareholders’
contributions
+ VC
Independent
existence
Termination
At-will, by
vote
Flow-through
tax treatment
Yes
No fixed
term, unless
in Articles
No
No fixed
term, unless
in Articles
Yes
No fixed
term, unless
in Articles
No
Minimum
number of
owners
Maximum
number of
owners
Formation:
required
Formation:
optional
Formation:
fees
Agency
10
Close
Corporation
1 shareholder
35
shareholders
(California)
Articles of
Articles of
Incorporation; Incorporation
IRS Form 2553
Independent
existence
Question 1
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Constitutional Law. Adam Whitman (Don’s half-brother) has arrived in Gotham,
eager to sell “Babylonian Snake Oil” as an anti-depressant. He wants to advertise in
the local newspaper, but unfortunately local authorities have directed him not to do
so. Adam challenges the constitutionality of this direction under the 1st
Amendment. What standard of review?
Select one:
a.
Fully protected speech
b.
Limited protected speech
c.
Unprotected speech
d.
None: no speech
Clear my choice
Question 2
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Constitutional Law. Don’s daughter Sally is a teenager enrolled at Gotham
High School (a public school) and wants to join the women’s synchronized
swim team, but is denied pursuant to a school policy that bars left-handed
students from the team on the grounds that other-handedness interferes
with synchronicity. Sally challenges the constitutionality of this policy
under the 14th Amendment. What standard of review?
Select one:
a.
Equal Protection Clause / strict scrutiny
b.
Equal Protection Clause / intermediate scrutiny
c.
Equal Protection Clause / rational basis
d.
Equal Protection Clause / other
Clear my choice
Question 3
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Civil Procedure. Betty is the owner of Bicycle Fish, a retail store. She has
been marketing “Gang of Four Select” black tea, but Big Tea, Inc. is trying
to drive her out of business. If Betty sues Big Tea for antitrust violations,
can she file her action in federal court?
Select one:
a.
Yes, she must file in federal court
b.
Yes, she may file in either federal or state court
c.
Only if her alleged damages ≥ $75,000
d.
No
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Question 4
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Civil Procedure. Assume the same facts as in Question 3, above. If Betty
serves Big Tea with process, can she sue Big Tea in California court?
Select one:
a.
Yes, if Betty does substantial business in California
b.
Yes, if Big Tea does substantial business in California
c.
Yes, if either Betty or Big Tea does business in California
d.
No
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Question 5
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Torts. Betty suspects Don of cheating on her with Miss Menken, and so
Betty has been hiding in the bushes outside Miss Menken’s house and
smoking a cigarette as she watches the door. She carelessly tosses the lit
cigarette away, and Miss Menken’s house catches fire. It’s a windy night
and the fire jumps to another house, and from there to another, and
eventually Pete’s house burns down, even though he lives more than one
mile away. Pete sues Betty for negligence. Who wins?
Select one:
a.
Betty: no duty
b.
Betty: no breach
c.
Betty: no cause
d.
Pete
Question 6
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Crimes/Criminal Procedure. Pete and Harry work as strippers at the
Tarzan Club and they are really stressed out. So they plan a “getaway.” By
mutual agreement, Pete raids the club’s petty cash drawer (he has a key)
and Harry steals the club limousine, and together they drive to Las Vegas.
Sadly, they soon end up in jail. As to Pete, what crime(s)?
Select one:
a.
Larceny
b.
Embezzlement
c.
Larceny and conspiracy
d.
Embezzlement and conspiracy
Clear my choice
Question 7
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Intellectual Property. In 2016, after a vivid acid trip involving
communication with extraterrestrials using a toaster, Roger develops an
idea for a new voice-activated toaster. In 2017, Roger files for his patent,
and in 2018, the patent is issued. When will Roger’s patent expire?
Select one:
a.
2031
b.
2032
c.
2037
d.
2038
Clear my choice
Question 8
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Contracts/Formation. Don offers to sell his Cadillac to Harry for $20,000.
Harry promptly replies, “I’ll buy it, but the price is outrageous and you are
an evil tool.” Have Don and Harry made an agreement, sufficient to
support the formation of a contract?
Select one:
a.
No: no acceptance (not unequivocal)
b.
No: no acceptance (not a mirror image)
c.
No: no acceptance (ineffective dispatch)
d.
Yes
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Question 9
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Contracts/Formation. Bert hires Pete to drive him to the Nixon
Presidential Library in Southern California. While they are on the road,
Bert tells Pete that he is extremely impressed with “the cut of his jib” (his
general look and attitude) and that he will double Pete’s pay. Later,
however, he refuses to pay more than the originally-agreed amount. Does
Pete have an action for breach of contract to recover the additional
amount promised?
Select one:
a.
No, the promise was a gift promise
b.
No, there was a preexisting duty
c.
No, there was past consideration only
d.
Yes
Clear my choice
Question 10
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Contracts/Formation. Bert has suffered a complete mental breakdown
after reading too much Ayn Rand. Bert’s family brings a proceeding in
family court which results in the court issuing a judgment that Bert is
permanently insane and appointing a guardian. Later, however, Bert
contracts with Betty for the purchase of a marble bust of Mao. Is there an
enforceable contract?
Select one:
a.
Yes, if Betty did not know of the adjudication
b.
No, the contract is void
c.
No, the contract is voidable by Bert
d.
No, the contract is voidable by either Bert or Betty
Question 11
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Contracts/Defenses. Don is cleaning out his apartment and contracts with
Peggy to sell her his country club membership for $5,000. Neither Don nor
Peggy knows what this membership is worth, but when Don later finds out
that this membership is worth more than twice as much, he refuses to
perform. Peggy sues him for breach of contract, and Don raises all
possible affirmative defenses. Who wins?
Select one:
a.
Don: unilateral mistake
b.
Don: mutual mistake
c.
Peggy: unilateral mistake
d.
Peggy: mutual mistake
Clear my choice
Question 12
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Contracts/Defenses. Assume the same facts as in Question 11, above, but
this time Peggy knows, and reasonably thinks Don does too, that this
membership is worth more than twice as much. In fact, Don does not
know this, and when he later finds out, he refuses to perform. Peggy sues
him for breach of contract, and Don raises all possible affirmative
defenses. Who wins?
Select one:
a.
Don: unilateral mistake
b.
Don: mutual mistake
c.
Peggy: unilateral mistake
d.
Peggy: mutual mistake
Clear my choice
Question 13
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Contracts/Performance. Trudy has become a celebrated artist, specializing
in paintings of cheating husbands. Don hears this and contracts with her
to paint his portrait for $5,000. However, Trudy later decides not to do the
work and assigns her rights in the contract to Peggy. The contract is silent
as to assignability. Has there been a valid assignment of rights?
Select one:
a.
Yes, contracts are generally assignable
b.
Yes, personal service contracts are generally assignable
c.
No, contracts are generally not assignable
d.
No, personal service contracts are generally not assignable
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Question 14
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Contracts/Performance. Harry has hired Joan to be his TV assistant, but
shortly before Joan is due to start, she takes another, better-paying job at
a rival advertising firm. Harry contracted with Joan for two years at a
salary of $5,000/month, but now has to hire Peggy instead, for two years
at a salary of $8,000/month. Harry sues Joan for breach of contract. What
result?
Select one:
a.
No recovery; Harry found another employee
b.
Compensatory damages of $36,000
c.
Compensatory damages of $48,000
d.
Compensatory damages of $72,000
Clear my choice
Question 15
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Contracts/UCC. Betty, the owner of a retail coffee and tea shop, gives Jiang
a written offer to sell her 100 lbs. of Mao’s Delight tea for $1,000, with
signed separate assurance the offer will remain open for 30 days. Shortly
after, however, Lane offers Betty $1,500 for the tea and Betty sells it to
him. When Jiang finds out, she makes a written acceptance and sues Betty
for breach of contract. Jiang argues that UCC Article 2 and the Merchant’s
Firm Offer Rule (MFOR) both apply. Who wins?
Select one:
a.
Jiang: the UCC and the MFOR both apply
b.
Jiang: the UCC does not apply
c.
Betty: the UCC applies, but the MFOR does not
d.
Betty: the UCC does not apply
Question 16
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Contracts/UCC. Betty sells Lane a Karl Marx commemorative gold coin and
arranges for FedEx to deliver it to Lane at his residence. Unfortunately, the
FedEx driver pockets this coin (steals it) and disappears. As between Betty
and Lane, who bears the risk of loss?
Select one:
a.
Betty
b.
Betty, if this was a shipping contract
c.
Betty, if this was a destination contract
d.
Lane
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Question 17
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Contracts/UCC. Don is an ad executive who sells his Cadillac to Peggy for
$10,000. She has told Don that she really needs the car to accelerate fast,
but Don says nothing about the acceleration. One month later, Peggy is
driving by the golf course near her home when she sees Duck lining up his
shot. She tries to race past, but the car is sluggish and Duck’s ball smashes
her windshield. Peggy sues Don for breach of express warranty (EW),
implied warranty of merchantability (IW/M) and implied warranty of
fitness for particular purpose (IW/F). Who wins?
Select one:
a.
Peggy: breach of IW/F
b.
Peggy: breach of IW/M and IW/F
c.
Peggy: breach of EW and IW/F
d.
Don: no actionable warranties
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Question 18
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Agency. Betty hires Jiang to deliver merchandise from Betty’s business to
its customers using a store van. Jiang is in the midst of delivering an
antique hookah (water-cooled smoking device) in Gotham when she hears
that Bolivarian revolutionaries have besieged the Mayor’s Office. Jiang
quickly drives the van to the Mayor’s Office to join the cause, but on the
way she negligently hits Bert. Bert sues both Jiang and Betty. What result?
Select one:
a.
Jiang is directly liable
b.
Betty is vicariously liable
c.
Both Jiang and Betty are liable
d.
Neither Jiang nor Betty is liable
Clear my choice
Question 19
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Organizations. Harry, George and Bert have formed a general partnership,
but their agreement is a little vague, with no express terms for profitsharing, tax, management or compensation. Harry is the managing
partner and contributed $10,000. George is an ordinary partner and
contributed $20,000. Bert is a “silent” partner (holding his partnership
interest as an investment only) and contributed $70,000. Harry wants to
expand the business, and calls for a vote. What will Bert’s voting share be?
Select one:
a.
0% (silent partner / no right to vote at all)
b.
0% (silent partner / no right to vote on management)
c.
33% (1 of 3 general partners)
d.
70% (proportionate to contribution)
Clear my choice
Question 20
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Organizations. Betty has formed Bicycle Fish, Inc., a California C
Corporation. Betty has issued 10,000 shares of common stock. She holds
6,000 shares, and she has sold 2,000 shares each to Bert and Roger. It’s
been a good year for the Fish, which made a profit of $200,000, and the
board declares a dividend of $5/share, the remaining profit to be retained
by the corporation. What are the tax consequences for the corporation?
Select one:
a.
No tax liability
b.
Tax liability on dividends
c.
Tax liability on retained earnings
d.
Tax liability on all earnings