Business Law: Ethics, Pre-emption, and Defamation

• The following are study notes with key definitions and points

Business Ethics

• Business ethics are moral principles that guide behavior in the business world
• Ethical decisions must be legally compliant and socially responsible
• Key ethical theories include Utilitarianism (the greatest good for the greatest number), Deontology (duty-based ethics), and Virtue Ethics (focus on character)
• Corporate Social Responsibility (CSR) means businesses should contribute positively to society beyond just making profits

Pre-emption (Supremacy Clause)

• The Supremacy Clause (Article VI of the U.S. Constitution) states that federal law overrides conflicting state laws
• Pre-emption occurs when federal law is intended to fully regulate an area, leaving no room for state regulation
• Federal regulations on pharmaceuticals overriding state laws that try to impose different standards is an example of pre-emption

Defamation

• Defamation is a false statement that harms someone's reputation
• Elements of proof:
  • A false statement was made
  • The statement was published to a third party
  • The statement caused harm to the plaintiff's reputation
  • The defendant was at fault (negligence for private individuals, actual malice for public figures)
• Types of defamation:
  • Libel: Written or published defamation
  • Slander: Spoken defamation
• Plaintiff's status:
  • Public figures (celebrities, politicians) must prove "actual malice" (knowledge of falsity or reckless disregard for the truth)
  • Private individuals only need to prove negligence

Duty of Non-Breacher

• When one party breaches a contract, the non-breaching party has certain duties
• The non-breaching party must take reasonable steps to minimize damages (this is called "mitigation of damages")
• Example: If a tenant breaks a lease, the landlord must try to rent the apartment to someone else rather than just suing for the full lease amount

Strict Product Liability

• A manufacturer or seller can be held strictly liable if a defective product causes harm, even if they were not negligent
• Elements required:
  • The product was defective
  • The defect caused injury
  • The plaintiff suffered damages
• Defenses:
  • Product misuse
  • Assumption of risk (using a product despite knowing its danger)

Criminal vs. Civil Law

• Criminal Law:
  • Focuses on offenses against the state (e.g., theft, assault, murder)
  • Punishment includes jail time, fines, or community service
  • Burden of proof: "Beyond a reasonable doubt"
• Civil Law:
  • Focuses on disputes between individuals (e.g., contracts, torts)
  • Remedies usually involve compensation or injunctions
  • Burden of proof: "Preponderance of the evidence" (more likely than not)

Statute of Frauds

• The Statute of Frauds requires certain contracts to be in writing to be enforceable
• Common contracts that must be in writing:
  • Sale of land
  • Contracts lasting more than one year
  • Marriage contracts
  • Sale of goods over $500
  • Promises to pay someone else's debt
• MY LEGS:
  • Marriage
  • Year (Contracts within)
  • Land
  • Executive
  • Goods that are $500 or more
  • Surety (co-sign)
• Exceptions:
  • Partial performance
  • Admissions in court
  • Promissory estoppel (relying on a promise to one's detriment)

Legal Requirements for a Valid Contract

• A valid contract must meet the following criteria:
  • Offer and Acceptance: One party makes an offer, and the other accepts it
  • Consideration: Something of value must be exchanged (money, goods, services)
  • Capacity: Both parties must be mentally competent and of legal age
  • Legality: The contract must be for a legal purpose (e.g., no contracts for illegal activities)
  • Genuine Assent: The agreement must be free of fraud, duress, and mistakes

Assault & Battery

• Assault: The threat or attempt to cause harmful contact, creating fear in the victim, such as raising a fist as if to punch someone
• Battery: The actual physical contact that is harmful or offensive, such as punching someone
• Assault does not require physical contact, but battery does

Transferred Intent

• Occurs when someone intends to harm one person but accidentally harms another
• The law still holds the person responsible for the unintended victim
• Example: A throws a rock intending to hit B but instead hits C; A is still liable for harming C

Legal Definitions

• Statement of Subpoena: A legal document ordering someone to attend court or produce evidence
• The Possession of In-Rem: Refers to legal action directed at property rather than a person
• Jurisdictional Powers: The authority of a court to hear and decide a case, including personal and subject matter jurisdiction
• Valid Offer in Contract: An explicit proposal by one party to another, outlining the terms of an agreement
• Valid Acceptance: A clear and unconditional agreement to the terms of an offer
• Consideration: Something of value exchanged between parties to form a binding contract
• False Imprisonment: The unlawful restraint of a person without legal justification

Bill of Rights & Amendments

• Bill of Rights: The first ten amendments to the U.S. Constitution that outline fundamental rights and freedoms
• 1st Amendment: Protects freedoms of speech, religion, press, assembly, and petition
• 5th Amendment: Protects against self-incrimination, double jeopardy, and guarantees due process
• 6th Amendment: Guarantees the right to a fair trial, including a speedy trial and legal representation

State of Proof in Criminal & Civil Cases

• Criminal Cases: Proof beyond a reasonable doubt
• Civil Cases: Preponderance of the evidence or clear and convincing evidence

Elements of Proof in Negligence Cases

• Duty: A legal obligation to act with care
• Breach: Violation of that duty
• Causation: The breach directly caused harm
• Damages: Actual losses suffered by the plaintiff

Defenses to Crimes

• Self-Defense: Justification for using force to prevent harm
• Insanity: Lacking mental capacity to understand the crime
• Duress: Committing a crime due to coercion or threat

Defenses to Contract Breaches

• Fraud: Misrepresentation of material facts
• Duress: Being forced into an agreement
• Impossibility of Performance: Circumstances making contract fulfillment impossible

Torts

• Question on Negligence Torts: Cases where a party's failure to act responsibly leads to harm or loss
• Trespass: Interfering with another's personal property without permission
• Conversion: Using another's property in a way that denies the owner's rights
• Larceny (Simple Theft): Unlawfully taking someone else's property without force
• Burglary: Unlawful entry into a structure with intent to commit a crime
• Arson: Intentionally setting fire to property
• Breaking and Entering with Intent to Commit a Crime: Unauthorized entry into a structure intending to commit an illegal act
• Theft of Force (Robbery): Taking property from someone using force or intimidation
• Embezzlement: Fraudulently taking money or property entrusted to one's care