Prince Mohammad bin Fahd University Business Law Worksheet

CHAPTER 3The Court System
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Why Study Law
And Court System?
Corporate
governance, in a
property – based
environment, requires
a viable court system.
3-2
Soaring Legal Costs
Qwest
TYCO
$50 MILLION
$75 MILLION
3-3
Judges And Justices
Determine
Rules of
Law for
Case
Finds Facts
If No Jury
Justices –
Deal With
Issues of Law
On Appeal
Trial Judge
Renders
Decision
Dealing With
People In
Conflict
Most Extensive
Power
3-4
Jurors

Fact-Finding Body- Petit Jury

Size


◼
Usually 12
◼
Some Provisions For Smaller
Decision
◼
Usually Unanimous
◼
No Reason Given
Current Reforms
3-5
Jury Verdicts
$1.62
Billion
Whittaker v.
Southwestern
Life
$1.28
Billion
1.013
Billion
Pickett v.
Tyson
Coffey v.
Wyeth
3-6
$
Lawyers
Duty to
Administration
Of Justice
Representation
Advocates
Counselor,
Advocate,
Public
Servant
Required in
most cases
Confidential Communications
3-7
Federal And Most
State Court Systems
Supreme Courts
Subject Matter
Jurisdiction –
Power of
Particular
Issues
Appellate Courts
Trial Courts
3-8
State CourtsSources Of Authority
 State
Constitution
 State
Legislature
 Court
Rules Of Procedure
3-9
State Courts –
Trial
&
Appellate
▪Review Questions Of



Superior Court,
Circuit Court,
District Court
Lawsuit Complaint
Filed
Determines
Law
▪Consist Of 3 – 9 Judges
▪Petition For Leave To
Appeal/Writ of Certiorari
3-10
Small Claims Court

Handles Much Litigation Between Business &
Customers

Minor Financial Issues

Benefits

◼
Informal
◼
Low Court Costs
◼
Simplified Procedures
Dollar Limitation
3-11
Federal Courts
• Article III Of Constitution
• Reviews:
• Questions of
Federal Law
• U.S. As Party
• State Disagreements
• Suits Between
Citizens Of
Different States
3-12
Federal
Jurisdiction
pop pop pop
QUIZQUIZQUIZ
The general role of an appellate court
is to:
a. Review questions of fact
b. Review questions of fact and law
c. Review questions of law
d. Review only constitutional questions
3-13
Federal Question Cases
Federal
Questions
U.S.
Constitution
Issues
Federal
Statute
Issues
3-14
No $ Limit
Diversity Of Citizenship
Diversity
Plaintiffs/
Defendants –
Citizens of
Different
States
Each
Claim
Must Be
$75,000+
3-15
Guard
Against
State Court
Bias
District Courts







Federal Trial Courts
Review Lawsuits
Receive Evidence
Evaluate Testimony
Impanel Juries
Resolve Disputes
Federal Rules Of Civil Procedure
3-16
Appellate Courts

12 U.S. Courts Of Appeals

Court Of Appeals For The Federal
Circuit- Handles Appeals From Special
Courts
◼
U.S. Claims Court
◼
Administrative Decisions
◼
Court Of Military Appeals
3-17
3-18
U.S. Supreme Court

Writ Of Certiorari- Matter Of:
◼
◼

Federal Importance- Constitutional Issue
Conflicting Decisions Of U.S. Circuit Courts
Decision Becomes “Law Of Land”- Not
Subject To Review
Courtesy
of T. Bundgaard
3-19
Judicial Review
Power To Interpret Legislation And
Determine Constitutionality
Judicial Restraint
Judicial Activism
• Courts Help Correct
•Strict Constructionism
•Change Come From
Political Process
Society Wrongs
•Value-Oriented & Policy
Directed
3-20
Nature Of Judicial Process
Case To Be Decided
Use
Existing
Statutes &
Precedent
Create Law
Where
None Exists
Refuse
To Apply
Case Law or
Find Unconstitutional
Will Ruling Provide Justice and
Sound Precedent?
3-21
think think think
TANK TANK TANK
Is the power of judicial review
important?
a. yes
b. no
3-22
CHAPTER 4
Litigation
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
Introduction
An impartial enforcement and
dispute resolution process is
essential to any system
that preserves private
property interests. To
conduct business and enforce
rights, we need a process to
resolve disputes.
4-2
Parties

Plaintiff v. Defendant

Counterclaim- Counterplaintiff v.
Counterdefendant

Appellant v. Appellee

Petitioner v. Respondent

Third-Party Defendant
4-3
Getting Into Court
Standing
Subject
Matter
Jurisdiction
Personal
Jurisdiction
Need all three
to get into court
4-4
Getting Into Court
Standing
Must involve
actual case or
controversy
•
• Plaintiff must
have personal
stake in
resolution
4-5
Getting Into Court
•Power to hear type
of case
Subject
Matter
Jurisdiction
•General or limited
jurisdiction
•E.g. probate court,
traffic court,
federal courts.
4-6
Getting Into Court
•Court’s authority
over parties to
case
Personal
Jurisdiction
•Summons/service
of process
•Long arm statute
– minimum
contacts
4-7
Class-Action Suits




Filed On Behalf Of All With Similar
Claim
Notice Given To All Members Of Class
Plaintiffs Pay Court Costs
Settlement
◼
◼
Benefits Class
Release All Claims
4-8
Procedural Rules
Pleadings
Appeal
Pretrial
Motions
Posttrial
Motions
Discovery
Trial
Pretrial
Conference
4-9
Pre-Trial Procedures


Pleadings
◼
Complaint
◼
Answer- Counterclaims
Default Order – court may order if no answer
filed.
4-10
pop pop pop
QUIZQUIZQUIZ
For any court to exercise authority in any
given case, which of the following must happen:
a. Court has jurisdiction of subject matter
b. Court can exercise personal jurisdiction of
the defendant
c. Plaintiff has standing to bring the case before
the court
d. All the above
4-11
Discovery
▪Purpose
Interrogatories
•Lawsuit Based
Request for
Production of
Documents
On Merits Of
Case
•Assist In Trial
Deposition
Preparation
•Narrow Issues
4-12
Scope of Discovery
Evidence
Discoverable
Information
Admissible
Allowable if it
At Trial
will lead to
evidence
admissible during
trial
High Cost of Discovery caused by
• time searching for information
• preparing depositions
• copying and shipping costs
• attorneys fees interpreting requests
4-13
Motions
Pretrial Determination of

Question Of Law

Statute Of Limitations

Frivolous Cases
4-14
Trial
Jury
Selection –
Voir Dire
Verdict
Jury
Instruction
Opening Statement –
Overview of
Essential Facts
Closing
Arguments
Introduction
of Evidence
Directed
Verdict
4-15
Burden Of Proof



Burden/Responsibility Of Evidence
Criminal Cases- Beyond A
Reasonable Doubt
Civil Cases
◼
◼
Preponderance Of Evidence
Clear & Convincing Proof
4-16
Civil Case Decision

Judgment- In Favor Of Party
That Won Jury’s Verdict

Judgment Notwithstanding The
Verdict- Post trial Motion,
Counter To Jury’s Verdict
4-17
Post-Trial

Appeals Procedure
◼
◼
◼


Deference To Trial Courts
Enforcement
◼
◼

Brief
Oral Argument
Judge/Justice’s Opinion
Execution
Garnishment
Doctrine Of Res Judicata
4-18
pop pop pop
QUIZQUIZQUIZ
“Directed verdict” refers to
a. Power of court over parties involved
b. Power granted to litigant to reject jurors
c. Power of court to order sworn questioning
of witnesses outside of court
d. Power of court to grant a decision in
favor of defendant when insufficient
evidence is presented at trial.
4-19
CHAPTER 5
Negotiation and
Alternative Dispute
Resolution Systems
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
General Rule
95% or more of the
lawsuits filed settle
prior to the
completion of
the litigation
process.
5-2
Conflict and Disputes
Conflict leads to disputes when
one party makes claim that
other denies.
Point of
View
CONFLICT
5-3
Point of
View
Negotiation
Definition
The process used to
persuade or coerce
someone to do what
you want them to do.
5-4
Negotiation Styles
[Insert Side bar 5.1]
5-5
Methods Of Negotiations

Positional Negotiation
◼
◼
◼
Parties State Opinions
Begins Competitively
Involves Give and Take
5-6
Positional Negotiation
High Price
Buyer’s
Resistance Point
Zone of
Agreement
Seller’s
Resistance Point
5-7
Low Price
Positional Negotiation
High Price
Seller’s
Resistance Point
No Zone of
Agreement
Buyer’s
Resistance Point
5-8
Low Price
Principled Negotiation
7 Elements
VII. Commitment
I. Communication
II. Relationship
VI. Alternatives
III. Interests
V. Legitimacy
IV. Options
5-9
Range of Alternative Dispute
Resolution Options
5-10
Reasons for Settlement without
Litigation
▪ Costs
• Attorney’s Fees
• Court Costs
▪ Personal Reasons
• Compromise Is Instinctive
• Dislike Of Trouble
• Opinion Of Others
▪ Business Reasons
• Bad For Business
• Sympathetic Juries
5-11
Arbitration




Third Party (Arbitrator) Makes Final
Decision
Mandatory v. Voluntary
Final Decision (Award)- Binding
Reasons
◼
◼
◼
Quick/Inexpensive Resolution
Ease Court Dockets
Expert Assistance
5-12
A Business Dispute

Mickey Shears and Naomi Hamilton operate a
business that manufactures personal
computers. The business name is M&N PCs.
The principal market for M&N computers has
been buyers for home use. M&N’s reputation
is based on assembling a high-quality
computer for a relatively low price. M&N’s
biggest problem has been maintaining a large
,qualified sales force while keeping the price
for its computer below the market average.
5-13
William Dalton operates a nationwide chain of
discount department stores known as Bill’s
Discount Centers. One year ago, Bill agreed to
buy from M&N a minimum of 250 computers
(with specifications Stated in the contract) per
month for six months. The agreed upon price of
each computer was $1,250.
5-14

The relationship between M&N and Bill’s
worked very well. In the fifth month of this
initial contract, Bill’s agreed to increase its
minimum purchase per month to 750
computers, and Bills committed to this
monthly purchase for a twelve month period
to begin after the sixth month of the original
contract. The price per computer was to
remain at $1,250.
5-15

M&N was delighted with the arrangement
since it allowed M&N to concentrate on
increasing its production capacity while
reducing the costs of maintaining a large
active sales force.
Unlike the success of its initial relationship
with Man Bill’s began receiving complaints
from its customers about the lack of quality of
M&N’s computers. These complaints were
traced by Bill’s customer service
representatives to the newer computers that
M&N was assembling under its expanded
production program.
5-16

Despite its knowledge of these quality-related
problems, Bill’s never informed M&n of its
findings.
The complaints continued to become more
numerous. During the fifth month of the
twelve-month period, Bill’s purchased only
350 computers from M&N. When M&N sent
an invoice for the 750 computers specified as
the monthly mini mum, Bill’s refused to pay
for any computers over the 350 actually
purchased.
5-17

In the second week of the sixth month, Bill’s
sent M&N written notice that it was canceling
the remain der of the sales contract due to
declining quality of M&N’’s computers.
M&N offered to reduce the price per
computer to $1,050, but Bill’s refused to
withdraw its termination letter.
M&N wants to sue Bills for $7,062,500. This
figure @ based on the shortfalls of 400
computers in the fifth month times
$1,250/computer plus 750 computers times 7
months times $1,250/computer.
5-18

Prior to filing suit, M&N wants to explore the
chances for a negotiated settlement in the
hope of salvaging a constructive relationship
with Bill’s.
5-19
Arbitration- Submissions



Parties Agree To ArbitrationWritten
Specific Matters Agreed To
Arbitrate
Matters For Arbitration
◼
◼
◼
Questions Of Fact
Questions Of Law
Fact & Law
5-20
Arbitrators
Chosen By Disputing Parties
AuthorityGranted By
Agreement
Beyond
Legal
Number = 1- 3
5-21
think think think
TANK TANK TANK
All of the following are advantages of
arbitration over litigation except:
a. Right to appeal
b. Takes less time
c. Nonpublic
d. Not as expensive
5-22
Arbitration- Awards
▪Disclosure of
▪Court Favors Award
Findings & Reasons & Broad Scope of
• Not Needed Unless Authority
Required By Statute
Or Agreement
•Parties Bound By
Award
5-23
▪Final On Submitted
Issues – Filed With
Court Clerk &
Enforced By Court
Federal Arbitration Act
“Role”
•Enacted 1925 & 1947
•Covers Any
Arbitration Clause
Involving Interstate
Commerce.
“Impact”
•Court Assumes Intention
•May Set Aside State
Laws Under Commerce And
Supremacy Clauses
5-24
Mandated Arbitration
▪ States Adopting
▪ Speeds Up Process
▪ Many Qualified
Arbitrators
▪ Types Of Cases
•