Summary Class notes - Business Law 1

Course
- Business Law 1
- Cameron
- 2016 - 2017
- Alma College
- Business Law
591 Flashcards & Notes
3 Students
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Summary - Class notes - Business Law 1

  • 1475704800 Business Law Ch. 3

  • Plaintiff
    someone who iniates a lawsuit
  • Judicial Review
    deciding whether laws or actions of the other 2 branches are constitutional
  • Jurisdiction
    the authority of courts to hear and decide a case
  • Personal Jurisdiction
    when a court has jurisdiction over people and businesses within a geographical area
  • In-rem Jurisdiction
    when a court has jurisdiction over a thing or property within a geographical area
  • Long Arm Statute
    having jurisdiction over residents of another state
  • Subject Matter Jurisdiction
    a limitation on the types of cases a court can hear
  • General Jurisdiction
    courts that have unlimited jurisdiction; state trial courts or federal district courts
  • Limited Jurisdiction
    Probate courts and bankruptcy courts
  • When do Federal courts have subject matter jurisdiction?
    Diversity of Citizenship- requires the plaintiff and defendant to be residents from different states and the dollar amount in controversy must exceed 75,000
    Federal Questions- a plaintiffs cause of action is based on the US constitution, a treaty, or federal law, then a federal question arises and federal courts have jurisdiction
  • Concurrent Jursidiction
    when both federal and state courts have the power to hear a case (most cases involve federal questions and diversity of citizenship)
  • Exclusive Jurisdiction
    when cases can be tried only in federal courts or only in state courts
    State- divorce and adoption cases
    Federal- federal crime, federal antitrust law, bankruptcy, suits against US
  • Venue
    the geographic district in which a legal action is tried and the jury is selected
  • Standing to Sue
    the requirement that an individual must have sufficient stake in a controversy before he or she can bring a lawsuit
  • Justiciable Controversy
    a controversy that is real and substantial, opposed to hypothetical or academic
  • State Trial Courts
    court in which trials are held and testimony is taken
  • Small Claims Court
    inferior state trial courts that hear only civil cases involving claims less than a certain amount. Suits brought in are conducted informally and lawyers are not required
  • Municipal Courts
    inferior state trial court that hears mainly traffic cases
  • State District Court
    has exclusive jurisdiction of all civil litigation up to $25,000. Handles civil infractions, criminal cases not exceeding one year in jail, eviction proceedings.
  • Magistrates
    appointed by state district judges for 6 year terms
  • Circuit Court
    the state trial court of general jurisdiction, has original jurisdiction in all civil cases involving more than 25000 and in all criminal cases where there is a felony or serious misdemeanors, and in all family cases and domestic relations cases like divorce, adoptions
  • Original Jurisdiction
    trial courts that hear cases for the first time
  • Appellate Jurisdiction
    courts having appellate jurisdiction are reviewing courts. They double check to see if the law has been applied properly and focus on questions of law.
  • Probate Courts
    a state court of limited jurisdiction that handles only matters of a person's assets and obligations after that person's death
  • Question of Fact
    in a lawsuit, an issue that involves only disputed facts, and not what the law is on a given point
  • Question of Law
    in a lawsuit, an issue involving the application or interpretation of a law
  • US District Court
    this is the trial level court of the federal system that has original jurisdiction, there are 94 federal judicial districts,
  • For a US district court to hear a case it must:
    deal with the consitution, diversity of citizenship and exceed 75000
  • US Court of Appeals or US Circuit Court of Appeals
    13 of them, hears appeals on questions of law from the federal district courts. Their decisions are final in most cases, but can be appealed to the US supreme court
  • US Supreme Court
    the highest level of the federal court system, consists of 9 justices
  • Writ of Certiorari
    an order issued by the Supreme Court to a lower court requiring that court to send the record of the case for review
  • Rule of Four
    the Supreme Court will not issue a writ unless 4 of 9 justices approve
  • Litigation
    the process of resolving a dispute through the court system
  • Pleadings
    statements by the plaintiff and defendant that detail facts, charges, and defenses of a case
  • Complaint
    the pleading made by the plaintiff pointing out the wrongdoing of the defendant. When filed with a court, the complaint initiates a lawsuit
  • Summons
    a document informing the defendant of the plaintiffs complaint and that the defendant must appear in court on a certain date to answer
  • Default Judgement
    a judgment by a court against the defendant who failed to appear in court and answer the plaintiffs complaint
  • Answer
    a defendant's response to the plaintiffs complaint
  • Counterclaim
    a claim made by the defendant against the plaintiff that denies the plaintiffs allegations and sets forth their own claim. In effect, the defendant is suing the plaintiff
  • Reply
    a plaintiff's response to a defendant's answer
  • Motion to Dismiss
    a request for the court to dismiss a case
  • When will a court grant a motion to dismiss?
    improper delivery of the complaint and summons, improper venue, and when the plaintiff fails to state a claim for which the court could grant relief
  • Motion For Judgement on the Pleadings (when is it granted?)
    a pretrial motion by either party to a lawsuit at the close of the pleadings requesting the court decide the issue solely on the pleadings without proceeding to trail. The motion will be granted if no facts are in dispute
  • Motion for Summary Judgement
    a pretrial motion requesting the court to enter judgement without a trial based on more than pleadings, such as sworn statements by parties or witnesses and other documents that relate to the case. The motion will be granted if no facts are in dispute and the sole question is a question of law
  • Discovery
    a method by which the opposing parties obtain information from each other to prepare for trial. Includes gaining access to witnesses, documents, records and other evidence
  • Deposition and Interrogatories (pretrial)
    Deposition- the testimony of a party to a lawsuit or a witness taken under oath before a trial
    Interrogatories- series of written questions for which written answers are prepared and signed under oath by only a party to a lawsuit (not witness), usually with the aid of the party's attorney. 
  • Pretrial Conference
    can be requested by either party after discovery and its purpose is to explore the possibility of a settlement without trial or to identify the matters that are in dispute and plan the course of the trial
  • Voir Dire
    the process by which a jury is selected (questions asked by attorneys about backgrounds, attitudes, and biases)
  • Peremptorily Challenge
    during voir dire when a party asks that a person not be sworn in as a juror without providing any reason
  • Challenge for Cause
    during voir dire when a party provides a reason why an individual should not be sworn in as a juror
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Enforcement of legislation.
The legislative power is vest with the Oireachtas, it is then executed by the government and finally the courts have judicial power to ensure it is withheld.

The Dail is summoned and dissolved by the President.  He will also appoint the Taoiseach and other members of the government.  Dail is composed of 158 members, known as TD's, elected by the people and the people then nominate a Toiseach.  They can sit for up to 5 years. 

Restrictions apply as there cannot be more than 1 TD for every 30,000 people.
Company Law - Case Salomon v Saloman & Co
Mr Saloman was a leather and boot manufacturer who was operating as a Sole Trader, he then set up a limited company, with his son listed as company shareholders.  He sold the company fixtures, fittings and assets for £20,000.  He informed all customers of the company formation.

Subsequently there was a decline in boot sales, the company failed and put into liquidation.   Because he was originally a sole trader the creditors argued he was liable, the courts held he had given due notice and it was a separate legal entity and Saloman was NOT liable for debts.
Advantages for setting up a company.
  1. You dont pay tax at the higher tax rate, its corporate tax rate.
  2. Shareholders will not be liable for debts.
  3. Give jobs to individuals and contribute to the economy.
  4. If a director or shareholder dies or leaves the company will still continue.
  5. Ability to raise additional finance/capital.
  6. Can set up a company very quickly and begin trading.

Disadvantages
  1. You deal business to business and some sole traders might be reluctant to deal with limited companies because if company goes bust they dont get paid.      
  2. Financial affairs are public including directors salaries.  
Limited Company
A company is registered with the CRO and you become a director of the company, it has its own legal identity.  Company is a corporate person and is liable for its own debts NOT directors/shareholders.

In other words shareholders have protection and not liable for the business debts UNLESS the courts feels the directors  behaved recklessly and may hold them liable to the creditors.  Lift the corporate veil.
Advantages and disadvantages of Partnership
  1. Share capital costs and profits
  2. Another individual to gain expertise from and share workload.
  3. Share business expenses.


Disadvantages
  1. If my partner was to leave business or die, I am left responsible for the entire amount of debt.  Joint and several liability.
Advantages and Disadvantages of being Sole trader
  1. Totally in charge.
  2. Take all the profits minus costs and taxes at high rate of income.
  3. Don't have to prepare financial statements.


Disadvantages 
  1. Also in change or supply money.
  2. Personally liable for all debts.
What are six requirements for a valid partnership?
  1. Consensual relationship between 2 or more people.
  2. Subsist between persons.
  3. Carry on a business.  However no all partners do not need to be actively carrying on the business.
  4. Will include running a farm but mere ownership of property is not a business.  A single venture may constitute a business.
  5. Intention to make a profit
  6. Work in common.
What is a Partnership?
Work with another party and share capital, costs and profits.   Can be created with limited regulation, again no requirement to register.  "The relationship which subsists between persons carrying on a business in common with a view of profit".
What is a Sole Trader?
Person in business on his own.  Unlimited personal liability, on death, the business comes to an end.  Simplest way to carry on business.  All profits belong to sole trader, but he/she is also personally liable for all debt.
What are different types of Business Organisation?
  1. Sole Traders
  2. Partnerships
    • Private Company Limited By Shares
    • Designated activity company
    • Public Limited Company
    • Company Limited by Guarantee (charities, management co's)
    • Unlimited Companies
  3. Limited Company