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BL300 Midterm Exam Questions
And Answers
State Law Sources of Law - Answer Agency, Torts, Contracts, Entities
State and Federal Law Sources of Law - Answer Criminal Law, Employment
Federal Law Sources of Law - Answer Securities Regulation, intellectual property
Personal Jurisdiction - Answer Which states have power to hear my particular legal claim? Is it fair by the constitution to force you to travel
Subject Matter Jurisdiction - Answer Which courts have power to hear these kinds of legal claims, dual legal system, state V fed
statute - Answer law passed by legislative body, state or federal
Appeals - Answer if trial goes wrong you have right to appeal and go find injustice in your trial in appeals court
Rules to personal jurisdiction - Answer 1) Defendant is a citizen of the state
Defendant consented to personal jurisdiction in this state
defendant was served in this state
Defendant met statues of long arm statue
or
- (for out of state business) state law requires a company to register before doing business in the state, and the states foreign business registration statue requires any registered company to agree to appear in-state in response to "any cause of action"
Long arm statue - Answer defendant has minimum contacts with the state and you must prove incident occurred there.
When do state courts have subject matter jurisdiction? - Answer State courts have subject matter jurisdiction when its a state law claim or when federal law claims give state law SMJ
When do federal courts have SMJ? - Answer Federal Courts have SMJ when its a federal question or when diversity jurisdiction exists
When does diversity jurisdiction exist - Answer Amount in question is >= $75,000 and all parties are citizens of different states or state law claim
Commonality - Answer exists when all class members have suffered the same legal
injury which cannot occur where there are acts of individual discretion
Class action lawsuit - Answer only valid if commonality exists between all class members
Discovery - Answer Most expensive part of the process, involves deposition which is an interview under oath, request for production of documents, interrogatory = written questions requiring written response (20 in fed court) (helps ID people to depose)
Summary Judgement - Answer A ruling by the court that no trial is necessary because some essential facts are not in dispute (motioned after discovery)
Can both parties agree to a bench trial in lieu of jury - Answer YES
Delaware Court of Chancery? - Answer No juries, Judge (chancellor) decides case
Agent - Answer An agent is a person who agrees to act on behalf of a principal
Why is an agency relationship important? - Answer 1. principal may have authority to control some actions of agent
- agent may have authority to bind principal to third party
- agent and principal have fiduciary duties that govern their conduct
Factors considered when telling if Employee or Independent contractor - Answer 1. How much control does employer exercise over work
- is worker engaged in an occupation distinct from that of employer
- is work being done under direct supervision of employer or being done without supervision
- what degree of work skill is required for job
- does employer provide tools and a place to work
- how long is worker employed
- is worker paid on basis of time or by job
- does worker offer services to the general public
California ABC test - Answer Used to distinguish employee V independent contractor:
A. Free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract and in fact;
B. performs work that is outside the usual course of the hiring entity's business; AND
C. Is customarily engaged in an independently established trade, occupation, or business of the same nature that is involved in the work performed.
S-corp - Answer 1. no more than 100 shareholders who must be us citizens
- only one class of stock
- domestic
- must file timely election
- cannot be ineligible (certain financial institutions, insurance companies, domestic international sales corps)
TAXED AS PASS THROUGH
Benefit Corp - Answer for profit, using business to solve social and environmental problems, annual benefit report, not duty to max shareholder value
LLC - Answer combines tax advantages of pass through entity with limited liability of a corporation, owners called members
LLC structure and creation - Answer File charter with secretary of state
state of corporation = state filed
create operating agreement
manager appoints officers
lots of flexibility in operating agreement
manager is persona looking into long term growth electing officers who control day to day
can amend operating agreement
no personal liability beyond capital contribution
LLC are pass through entities
Non profti - Answer 501(c)3, making money to donate, no shareholders, no profit, company tax exempt, donors get tax deduction, cannot advocate political issues
How do you incorporate? - Answer file certificate or articles of incorporation, incorporation adopts bylaws - rules governing corporation and elect board members
Alter Ego theory - Answer if a court can find no difference between you and corporation they can make you personally liable, same goes for LLCs
How can court pierce the corporate veil - Answer Commingling of assets (failing to formalize investment), absence of formalities, domination of a shareholder
Voting rights bylaws - Answer view bylaws for voting rights, will my shares even have a vote? the main source of shareholder value is vote, look at bylaws to see if company is
cumulative or straight voting
Cumulative voting - Answer see equation, allows minority shareholders to have more power, if there are 4 candidates and you have 10 votes, you get 40 votes to distribute among candidates
Straight voting - Answer always benefits majority shareholder, can only vote your share count per shareholder
Staggered (classified) board - Answer cannot remove members without cause, not all up for election at once
Declassified board - Answer all up for election at once
Proxy access - Answer not a right that exists for every shareholder/company, check bylaws, proxy access means long term and large shareholders can nominate a director which be included on companies proxy materials (up to company to determine eligibility)
Proxy contest - Answer not in bylaws, right you have with publicly traded company. send competing list of nominees to shareholders, very expensive as you must handle all communication
Public offering - Answer company selling securities to general market through IPO, IPO requires registration of securities with SEC
Private offering - Answer all other sales of securities by the company, sales must qualify for an exception to the normal regulation,
Prominent exceptions: Rule 504, 505, 506(D), crowdfunding under JOBS act (reg CF)
Promissory note - Answer a written contract with a promise to pay a supplier a specific sum of money at a definite time
Best efforts - Answer underwriter tries best to sell all shares but avoids risk of holding unsold shares
Tort law - Answer interpersonal wrongs, injured party gets to decide whether to hold his/her tortfeasor accountable
Invasion of privacy - Answer Intrusion - objectionable prying
Publication of private facts - non-newsworthy private facts that a reasonable person would find offensive. Criminal activity can be offensive as well as financial, disease, social security
Negligence - Answer Elements:
duty, breach, causation and harm
Duty of care - Answer generally a person with a legal duty to another must act like a reasonable person to avoid harming the other person
specific duties of property owners - Answer Invitee is a business guest, reasonable care to protect invitee from dangers you know about and should know about
Licensee someone allowed to enter owners property, duty to warn about known dangers
Trespasser, landowner owes no duty to trespasser
Nusiannce - Answer injunction, business stinking up yo lawn
Equitable relief - Answer injunction, forcing defendant to do something or stop doing something
Compensatory damage - Answer medical bills, etc.. you will not make money
Punitive damages - Answer to punish defendant, encourage change in behavior
Libel - Answer defamation in a perfect medium
court will presume damages, much easier to share, exists in perpetuity, most impact is in future
Breach of warranty - Answer question whether quality, characteristics and safety of product were consistent with implies or expressed representations made by seller
to prove negligence (products) - Answer defendant did not use reasonable care in designing or manufacturing its product or in providing adequate warnings
Causation/Harm of negligence - Answer defendant's breach of duty must be the actual and proximate cause of plaintiff's harm
Actual test for negligence - Answer but-for-test; but for the existence of x, would y have occured
Proximate test for negligence - Answer foreseeability test, were consequences foreseeable, was the plaintiff foreseeable(zone of danger)
Company product duty - Answer company has duty to use reasonable care to design, manufacture, and provide an adequate warning about the risks
Strict product liability elements of claim - Answer 1. plaintiff harmed by defendants product
- injury caused by a defect in the product and
- the defect existed at the time the product left the defendant and didn't change substantially along the way
false/misleading information; protecting famous marks - Answer Trademark(state/federal)
unfair competition(state/federal)
Trade secrets - Answer business or propriety information that gives a business an advantage over competitors who do not know the info
trade secrets protection - Answer protected for indefinite time as long as secret, common laws allows for it to be formula, pattern, device, compilation, etc.. even negative know how (NO PROTECTION AGAINST REVERSE ENGINEERING)
Intellectual property - Answer any product or result of a mental process that is given legal protection against unauthorized use; patents, copyrights, trademarks and trade secrets
Factors to tell if trade secret - Answer 1. extent to which info is known outside business
- extent to which measures are taken to protect info
- value of the information
- amount of money or time spent to develop the info
and 5. ease of duplicating information
How to create and protect trade secret - Answer one needs only to develop and maintain a program to protect secret, doesn't need to be unique or original just providing competitive advantage
Trade secret program - Answer 1. notification
- identification
- security
and 4. exit interviews
Misappropriation of a trade secret - Answer use or disclosure of a secret to another without consent or learns of a secret through improper means; this can be done through theft, bribery, misrepresentation, breach or inducement of breach of a duty to maintain secrecy or espionage through electronic or other means
Patent - Answer government granted right to exclude others from making, using, selling, or importing an invention
False - Answer a trade secret and patent can protect the same product
Utility patent - Answer protects function; reqs:
- novel
- useful
- non obvious
and 4. patentable as to subject matter
Non-renewable, 20 years
What is not patentable - Answer laws of nature, natural phenomenon, abstract ideas
Design patents - Answer protect any novel and ornament design, last 15 or 14 years depending on filing
Patent pending - Answer means provisional patent application filed, if not filed 12 months after provisional patent was filed then ineligible for patent
What can be copyrighted? - Answer 1. Literary works
- Musical works
- Dramatic works
- Pantomimes and choreographic works
