BLAW110- Business Law Final Exam Prep 3
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Questions and Answers

What constitutes real property?

  • Land, airspace, and subsurface rights (correct)
  • Land and only above-ground structures
  • Fixtures and furniture
  • Buildings only

    • Which of the following correctly describes a fee simple ownership?

  • Full and complete ownership over a parcel of property (correct)
  • Split ownership among several individuals with no right to sell
  • Temporary ownership lasting for one lifetime
  • Ownership that includes only the right to occupy the property

    • In which type of ownership arrangement is each owner allowed to transfer their interest without consent from the others?

  • Joint Tenancy
  • Life Estate
  • Leasehold Estate
  • Tenancy in Common (correct)

    • What happens to a joint tenant's share upon their death?

    <p>It dissolves, and the remaining tenants become tenants in common</p> Signup and view all the answers

    What is a life estate?

    <p>Ownership that lasts for an individual’s lifetime, ending at their death</p> Signup and view all the answers

    Which of the following is considered a trade fixture?

    <p>Office furniture in a rented space</p> Signup and view all the answers

    What characterizes a fixed term tenancy?

    <p>It is established through an express contract for a set period of time</p> Signup and view all the answers

    Which of the following actions would be considered waste in a life estate?

    <p>Intentionally damaging the property</p> Signup and view all the answers

    What is a key characteristic of tenancy 'At Will'?

    <p>Either party can terminate without notice.</p> Signup and view all the answers

    Which of the following best describes community property?

    <p>Assets acquired during marriage are split 50/50 upon dissolution.</p> Signup and view all the answers

    What occurs when a husband and wife agree to treat a community property item as separate property?

    <p>This is known as transmutation.</p> Signup and view all the answers

    What is a distinguishing feature of an easement compared to a license?

    <p>Easements are a non-possessory interest that runs with the land.</p> Signup and view all the answers

    Under which condition can a buyer terminate a sale if an encumbrance is found?

    <p>If the seller has given an option to purchase to another party.</p> Signup and view all the answers

    What is required for a person to successfully claim adverse possession?

    <p>Possession must be open, visible, and hostile for at least 5 years.</p> Signup and view all the answers

    What is the primary function of a will during the probate process?

    <p>To ensure all beneficiaries receive their assets appropriately.</p> Signup and view all the answers

    What method does not transfer real property ownership?

    <p>Negligence</p> Signup and view all the answers

    What is the consequence of failing to disclose hidden defects in a property sale?

    <p>The buyer can pursue legal action for misrepresentation.</p> Signup and view all the answers

    What happens to property that is part of a trust upon the death of the trustor?

    <p>It is distributed according to the terms of the trust without costs.</p> Signup and view all the answers

    What is a notable advantage of having a trust compared to a will?

    <p>Trusts eliminate the need for probate.</p> Signup and view all the answers

    Which of the following statements about mortgages is true?

    <p>If a homeowner defaults, the bank has the right to foreclose.</p> Signup and view all the answers

    Which of the following best defines a quit-claim deed?

    <p>It transfers interest in the property without promises about ownership.</p> Signup and view all the answers

    What distinguishes intentional torts from negligence?

    <p>Intentional torts require a voluntary and intentional act.</p> Signup and view all the answers

    What is the main requirement for copyright protection?

    <p>The work must be in a fixed medium.</p> Signup and view all the answers

    Which of the following is a characteristic of strict liability?

    <p>It imposes liability without fault.</p> Signup and view all the answers

    What is least likely to be considered a defense to intentional torts?

    <p>Unintentional harm</p> Signup and view all the answers

    What does the 'triple bottom line' in business ethics refer to?

    <p>Profits, people, planet.</p> Signup and view all the answers

    What type of negligence measures the percentage of fault?

    <p>Comparative Negligence</p> Signup and view all the answers

    In copyright law, which factor is NOT considered in the fair use exception?

    <p>The market impact on the original work.</p> Signup and view all the answers

    Which of the following is NOT a requirement for a valid contract?

    <p>Written form</p> Signup and view all the answers

    Which of the following torts involves real property?

    <p>Trespass to land</p> Signup and view all the answers

    What must a plaintiff prove in a copyright infringement case?

    <p>Substantial similarity and registration of the work</p> Signup and view all the answers

    Which tort involves harm to personal property but with minor interference?

    <p>Trespass to chattels</p> Signup and view all the answers

    What aspect is common to both negligence and intentional torts?

    <p>Both involve a breach of duty.</p> Signup and view all the answers

    Which of the following represents a duty under negligence law?

    <p>Exercising reasonable care.</p> Signup and view all the answers

    What is one function of the moral minimum in business ethics?

    <p>It establishes the baseline for legal compliance.</p> Signup and view all the answers

    What is the main characteristic of an irrevocable trust?

    <p>It becomes unchangeable after the trustors pass away.</p> Signup and view all the answers

    What happens to the property tax basis when real property is transferred into a trust?

    <p>It remains the same as when the property was purchased.</p> Signup and view all the answers

    Which of the following is an example of a financial power of attorney (POA)?

    <p>An agent handling bills and financial transactions.</p> Signup and view all the answers

    What is the purpose of a 'Pour Over' Will?

    <p>To transfer all assets to a trust and avoid probate.</p> Signup and view all the answers

    What distinguishes a revocable living trust from an irrevocable trust?

    <p>A revocable trust can be altered at any time.</p> Signup and view all the answers

    Which of these states has no state-level estate tax?

    <p>California</p> Signup and view all the answers

    What is involved in transferring real property into a trust?

    <p>A deed recorded in the County where the property is located.</p> Signup and view all the answers

    What is a key feature of the 'A-B' trust structure?

    <p>It splits the estate into separate sub-trusts upon the first spouse's death.</p> Signup and view all the answers

    Which of the following does a financial POA NOT allow an agent to do?

    <p>Make healthcare decisions.</p> Signup and view all the answers

    What is the role of a grant deed in a property transaction?

    <p>It transfers legal ownership of the property.</p> Signup and view all the answers

    How much can an individual gift per year per beneficiary without tax liability?

    <p>$15,000</p> Signup and view all the answers

    What is the legal effect of a POA after the principal passes away?

    <p>It becomes void and has no legal effect.</p> Signup and view all the answers

    What does the term 'basis' refer to in property tax assessments?

    <p>The original purchase price of the property.</p> Signup and view all the answers

    What occurs regarding debts after the passing of a surviving spouse?

    <p>Creditors have one year to open probate.</p> Signup and view all the answers

    In which scenario can an owner maintain the same tax basis when transferring property?

    <p>Transferring a primary residence from a parent to a child</p> Signup and view all the answers

    What is the duty of a landlord in relation to the habitability of a rental property?

    <p>Ensure reliable utilities such as water and heating</p> Signup and view all the answers

    What is the minimum eviction notice period a landlord must give a tenant?

    <p>3 days</p> Signup and view all the answers

    What should a landlord do if they want to increase the monthly rent?

    <p>Give written notice before the increase</p> Signup and view all the answers

    Which of the following is a reason a landlord can legally evict a tenant?

    <p>Non-payment of rent</p> Signup and view all the answers

    What is a requirement for a tenant if they wish to terminate a month-to-month lease?

    <p>Give 30 days notice</p> Signup and view all the answers

    In the case of a joint lease, what happens if one tenant moves out early?

    <p>The other tenants are responsible for the remaining rent</p> Signup and view all the answers

    What happens if a tenant does not comply with a rent increase notice?

    <p>The landlord has just cause to evict the tenant</p> Signup and view all the answers

    What is an appraisal primarily used for?

    <p>To establish a tax basis for the property</p> Signup and view all the answers

    Which of the following can be a reason a landlord refuses to return a security deposit?

    <p>Repairs needed after the tenant moves out</p> Signup and view all the answers

    Why might someone want a low appraisal value?

    <p>To reduce their tax basis</p> Signup and view all the answers

    Which is NOT a responsibility of a property owner towards invitees?

    <p>Compensating for lost items</p> Signup and view all the answers

    What does the term 'strict liability' refer to in the context of property owner obligations?

    <p>Liability regardless of negligence</p> Signup and view all the answers

    What type of notice is required if a landlord intends to enter a unit?

    <p>24 hours' notice</p> Signup and view all the answers

    What type of taxation applies to Limited Liability Companies (LLCs)?

    <p>Pass-through taxation</p> Signup and view all the answers

    Which of the following is a responsibility of agents under agency law?

    <p>To act with loyalty towards their employers</p> Signup and view all the answers

    What is one of the duties of directors in a corporation?

    <p>To set the corporate strategy</p> Signup and view all the answers

    In what scenario would an employer typically not be liable for the actions of an independent contractor?

    <p>When the contractor is acting within the scope of their work</p> Signup and view all the answers

    What is one characteristic of corporations compared to partnerships?

    <p>Separate legal entity status</p> Signup and view all the answers

    What principle protects corporate directors' decisions, even if those decisions lead to financial losses?

    <p>Business Judgment Rule</p> Signup and view all the answers

    Which of the following is NOT a right of shareholders in a corporation?

    <p>Right to manage day-to-day operations</p> Signup and view all the answers

    What is considered a violation under antitrust law?

    <p>Engaging in price fixing</p> Signup and view all the answers

    What is required for the transfer of ownership in an LLC?

    <p>Consent from all members</p> Signup and view all the answers

    Which of the following refers to a limited right to use someone else's land without ownership?

    <p>Easement</p> Signup and view all the answers

    What is the primary focus of a promissory estoppel?

    <p>Detriment to the plaintiff</p> Signup and view all the answers

    In which case can unliquidated debts typically be settled?

    <p>Debts that are disputed</p> Signup and view all the answers

    Which type of entity provides limited liability for its members?

    <p>LLC</p> Signup and view all the answers

    What is a defining characteristic of an implied contract?

    <p>Based on parties' conduct rather than explicit language</p> Signup and view all the answers

    Which of the following is true regarding conditions precedent in contracts?

    <p>Excuses performance if unmet</p> Signup and view all the answers

    What is the primary difference between intended and incidental third-party beneficiaries?

    <p>Intended beneficiaries can enforce a contract</p> Signup and view all the answers

    What type of damages compensates for harm resulting from a breach of contract?

    <p>Expectation damages</p> Signup and view all the answers

    In which situation would a court typically find an exculpatory clause valid?

    <p>In recreational agreements</p> Signup and view all the answers

    What is a key benefit of corporate structure regarding ownership?

    <p>Corporations can buy and sell shares easily</p> Signup and view all the answers

    What is the consequence of a court finding a contract void?

    <p>Neither party can enforce the contract</p> Signup and view all the answers

    What distinguishes a sole proprietorship from a corporation?

    <p>Sole proprietorships are not separate legal entities</p> Signup and view all the answers

    Which of the following best describes the business judgment rule?

    <p>Protects decisions made by directors even if they are detrimental</p> Signup and view all the answers

    What is a characteristic feature of a limited liability company (LLC)?

    <p>Pass-through taxation for members</p> Signup and view all the answers

    In agency law, what is the main responsibility of agents?

    <p>To act with loyalty and obedience</p> Signup and view all the answers

    What is the primary purpose of placing property into a trust?

    <p>To avoid court-administered probate</p> Signup and view all the answers

    Which of the following is NOT an element of consideration in a contract?

    <p>Legal capacity</p> Signup and view all the answers

    What must a plaintiff prove in a copyright infringement case?

    <p>Registration of the work</p> Signup and view all the answers

    Which type of contract is characterized by being based on the conduct of the parties involved?

    <p>Implied contracts</p> Signup and view all the answers

    What is one of the statutory damages limits for copyright infringement per incident?

    <p>$150,000</p> Signup and view all the answers

    Under the UCC, which of the following is considered a necessity for forming a contract?

    <p>Quantity</p> Signup and view all the answers

    What is the burden of proof in breach of contract cases typically placed on?

    <p>The plaintiff</p> Signup and view all the answers

    Which type of clause cannot effectively contract around gross negligence?

    <p>Exculpatory clause</p> Signup and view all the answers

    What does 'frustration of purpose' in contract law refer to?

    <p>Unexpected events that undermine the contract's value</p> Signup and view all the answers

    In what context is promissory estoppel applicable?

    <p>When a promise induces reliance to the promisee's detriment</p> Signup and view all the answers

    What does the 'Mailbox Rule' state regarding acceptance of offers?

    <p>Acceptance is effective upon dispatch</p> Signup and view all the answers

    Which of the following is a characteristic of a sole proprietorship?

    <p>Unlimited personal liability</p> Signup and view all the answers

    Which of the following is considered an exception to the general rules of consideration?

    <p>Promissory estoppel</p> Signup and view all the answers

    What must be proven for a contract to be enforceable against a third party beneficiary?

    <p>The beneficiary must be an intended beneficiary</p> Signup and view all the answers

    Study Notes

    Real Property Intro

    • Land, airspace, and subsurface rights constitute real property
    • Fixtures attached to real property become part of it and are typically included in a sale
    • Trade fixtures - items used for a business on rented land, can be removed when the lease ends

    Ownership in Real Property

    • Fee Simple: Full, unrestricted ownership of a property
      • Right to exclusive possession and transfer the property
      • Cannot commit nuisance or activities that interfere with others' enjoyment of the property
    • Life Estate: Ownership for the duration of a person's life, ending at their death
      • Life tenant cannot commit waste (damaging the property)
    • Concurrent Ownership: Multiple people own the same property jointly
      • Tenancy in Common (TIC): Each owner holds a separable interest
        • Shares don't need to be equal, and can be transferred individually
        • Passed to heirs upon death
      • Joint Tenancy (JT): Equal and undivided interest, right of survivorship
        • When a joint tenant dies, their share goes to the surviving joint tenants
        • Can be severed if a share is sold, making the remaining owners tenants in common.

    Leasehold Estates

    • Fixed Term Tenancy: Lease for a specific period of time (e.g., one year)
    • Periodic Tenancy: No set term, automatically renews with continued rent payments
    • Tenancy "At Will": Either party can terminate without notice

    Community Property

    • Property acquired during marriage is considered joint tenancy with right of survivorship
    • Assets acquired during marriage belong to the community and are split 50/50 upon dissolution
      • Exception: Separate Property: Owned before marriage or inherited
    • Property acquired during marriage is community property, even if purchased with separate property funds (e.g., lottery winnings)
    • Transmutations: A written agreement to designate community property as separate property

    Easements

    • Non-possessory interests: Right to use another person's property for a specific purpose (e.g., access, utilities)
    • Can be created by deed, by necessity, or by prescription (use without consent for a certain time)
    • License: Permission to use land that can be revoked by the owner
    • A license can be revoked, an easement can't

    Transferring Ownership

    • Real property ownership can be transferred through gift, will, sale, adverse possession, and eminent domain
    • Sales Contract: Sets the terms of the sale, including the closing date and escrow
    • Marketable Title: Seller must deliver free of encumbrances (liens, mortgages)
    • Hidden defects must be disclosed to the buyer
    • Deeds: Legal documents transferring ownership
      • Warranty Deed: Guarantees ownership, no adverse claims, and quiet enjoyment
      • Grant Deed: Fewer warranties than a warranty deed
      • Quitclaim Deed: Transferee receives whatever the grantor has, but may not own anything
    • Deeds are recorded in the county to make the transfer official
    • Mortgages: Loan used to finance real property
      • Borrowers pay principal, interest, property taxes, and title insurance
    • Mortgage Rates: Lower rates for loans with a lower loan-to-value (LTV) ratio
    • Foreclosure: Lender can repossess the property if the borrower defaults on payments

    Adverse Possession/Eminent Domain

    • Adverse Possession: Occupying a property without the owner's consent for a certain time, can result in legal ownership
      • Requirements: Physical possession, open and visible, continuous for 5 years, hostile and adverse
    • Eminent Domain: Government's right to take private property for public use
      • Requires fair compensation to the owner under the 5th Amendment

    Estate Planning

    • Probate: Judicial process for distributing an estate after someone dies
    • Trusts: Private documents that hold assets for beneficiaries
      • Revocable Living Trusts: Can be changed during the grantor's lifetime
      • Irrevocable Trusts: Cannot be changed after created
    • "I Love You" Trust: All assets go to the surviving spouse, revocable
    • "A-B" Trust: Divides the estate into sub-trusts: deceased estate, survivor's estate, and community estate
    • Pour-Over Will: Directs assets to a trust upon death
    • Powers of Attorney (POA): Legal documents granting someone authority to manage financial or medical affairs
      • Financial POA: Grants authority to make financial decisions
      • Medical POA: Grants authority to make healthcare decisions

    Estate and Gift Taxes

    • Federal estate tax applies to estates exceeding a certain threshold at a rate of 40%
    • Gift Tax Exemption: The IRS sets an annual limit for exempt gifts
    • Annual Exclusion: You can give up to $15,000 per year per beneficiary without tax liability
    • Gifts reduce the value of the estate subject to tax

    Real Estate Overview

    • Contracts concerning the sale of land are in writing to prevent fraud
    • Contracts concerning land for over one year (e.g., leases, purchase agreements) must be in writing
    • Brokers and Salespersons: Both help buy/sell real estate and require state licensure
    • Brokers can supervise salespeople and run their own businesses, requiring further licensing
    • The Department of Real Estate (DRE) issues all real estate licenses in California

    Examining the Real Estate Market

    • Mortgage: Loan secured by the house until the loan is repaid
    • Foreclosure: Lender can sell the property if the borrower defaults on payments
    • Refinancing: Negotiating a new mortgage with lower or current interest rates
    • Accessory Dwelling Units (ADUs): Separate structures on a lot that don't require rezoning

    Deed Transfers, Recordings, and Property Taxes

    • Grant Deed: Legal document transferring ownership from seller (grantor) to buyer (grantee)
    • Ownership transfer is official upon recording the deed in the county
    • Deeds contain information, such as:
      • Acknowledgement
      • Parties involved
      • Assessor's Parcel Number (APN)
      • Legal description of the property
      • Signature of the grantor (notarized)
    • Preliminary Change of Ownership Report (PCOR) accompanies deeds

    Property Tax Assessment and Reassessment

    • Assessors evaluate property value for tax purposes
    • Tax basis is set at the purchase price
    • Property taxes are due twice a year in California
    • All real property has an APN and a legal description
    • Property Tax Exemptions: Maintaining the same tax basis when transferring ownership to/from a trust, a family member, or a legal entity (e.g., LLC)
    • LLCs: Offer tax advantages and limited liability
    • Owner Liability: Landowners are responsible for injuries to licensees or invitees, not trespassers

    Landlord-Tenant Issues

    • Lease Agreement: Establishes rights and obligations between landlord and tenant
    • Landlord's responsibility includes maintaining habitability and giving 24-hour notice before entering
    • Termination: Process to end the lease (written notice is required)
      • Tenant's Right to Terminate: 30 days’ notice for month-to-month leases, no notice at the end of a lease term
      • Landlord's Right to Terminate: 60 days’ notice to a tenant or for specific breaches (non-payment, breach of covenants, nuisance, illegal acts)
    • Joint and Several Liability: Tenants are jointly responsible for rent even if another tenant leaves
    • Unlawful Detainer Action: Landlord must file a lawsuit if a tenant does not move out after proper notice
    • Rent Control: Limits rent increases for periodic tenancies (e.g., AB1482)
    • Security Deposits: Landlord collects a deposit for potential damages or rent default

    Appraisals

    • Appraisal: Independent valuation by a licensed professional
    • Factors considered: Condition, quality of materials, newness, comparable sales, amenities
    • Market Value: What a willing buyer would pay
    • Appraised Value: Estimated value as of a specific date
    • Appraisal helps establish tax basis, market value, and potential improvements
    • Factors that decrease value: Structural damage, poor condition, negative market influences, outdated features### Business Ethics & Corporate Social Responsibility (CSR)
    • Companies observe CSR by considering profits, people, and the planet.
    • The stakeholder model emphasizes responsibility to diverse stakeholders, including buyers, suppliers, customers, and shareholders.
    • Companies should train employees, enforce codes of ethics, and implement disciplinary procedures to address unethical behavior.
    • Conducting a cost-benefit analysis might reveal that unethical behavior is cheaper in the short term, resulting in fines later.
    • The moral minimum represents the bare minimum companies should adhere to ethically, acknowledging that some conduct, while unethical, may not be illegal.
    • Ethical pressures include economic, environmental, competitive, reputational, and technological influences.

    Intentional Torts

    • All torts involve violations of duties imposed by civil law.
    • A voluntary and intentional act causing real harm constitutes an intentional tort.
    • Intent can transfer to another party, even if initially intended for someone else.

    Harms to People

    • Assault, battery, false imprisonment (FI), and intentional infliction of emotional distress (IIED) are intentional torts against people.
    • Awareness of confinement is required for FI, while IIED necessitates extreme and outrageous conduct.

    Harms to Property

    • Trespass to land involves real property.
    • Trespass to chattels involves personal property with minor interference.
    • Conversion involves personal property with major interference.

    Defamation & Invasion of Privacy

    • Defamation is a false statement that harms reputation, published to at least one other person.
    • Defenses against defamation claims include truth, qualified or absolute privilege, and fair comment.
    • Invasion of privacy encompasses:
      • False light: Distorting someone's image or character.
      • Intrusion upon seclusion: Violating someone's privacy in a private space.
      • Public disclosure of a private fact: Revealing private information without consent.
      • Misappropriation of name, likeness, and identity: Unauthorized commercial use of someone's identity.

    Intentional Torts Damages & Defenses

    • Damages in intentional tort cases include compensatory and punitive damages.
    • Defenses include:
      • Consent
      • Reasonableness
      • Self-defense
      • Recovery of property
      • Necessity

    Negligence

    • Unreasonable conduct that causes actual harm is considered negligence.
    • Elements of negligence include duty, breach, causation, and damages.
    • A duty of reasonable care is generally expected in all actions.
    • Causation links the breach of duty to the plaintiff's harm, demonstrating a direct relationship.

    Strict Liability (SL)

    • SL applies to abnormally dangerous activities, imposing liability without fault.
    • A form of SL is product liability, which encompasses:
      • Design defects
      • Defective products
      • Inadequate warnings

    Privacy and Cyber Law

    • Personally Identifiable Information (PII) can be misused online, leading to privacy concerns.
    • Challenges arise when dealing with out-of-state or out-of-country defendants in cyber law cases.

    Comparative vs. Contributory Negligence

    • Comparative negligence measures the percentage of fault between parties.
    • Contributory negligence is an all-or-nothing defense, where any contribution to fault bars recovery.

    Assumption of Risk (AOR)

    • AOR is a defense where a plaintiff voluntarily assumed the risk of potential harm.

    Intellectual Property (IP)

    • IP encompasses patents, trademarks, and copyrights.
    • Patents protect inventions, formulas, and plants.
    • Trademarks safeguard logos, slogans, and short phrases.
    • Copyrights protect original works of authorship, such as books, music, movies, and plays.
    • Copyright protection only applies to the expression of an idea, not the idea itself.
    • To secure copyright protection, an owner must fix their original work in a tangible medium (originality and fixation).
    • Copyright registration is necessary to pursue infringement claims.
    • Plaintiffs must prove:
      • Registration of the work
      • Defendant's access to the copyrighted work
      • Substantial similarity or direct copying
    • Statutory damages for infringement can reach up to $150,000 per infringement.
    • Fair use is a defense to copyright infringement, covering specific categories and a four-factor test.
    • The Blurred Lines case exemplifies the complexities and potential inconsistencies in music copyright litigation.

    Contracts

    • A contract is a legally enforceable agreement establishing rights and duties among parties.
    • The burden of proof in breach of contract cases lies with the plaintiff (preponderance of the evidence).
    • Key questions to consider in contract cases include:
      • What law applies?
      • Is there a contract?
      • What does the contract mean?

    Contracts & the UCC

    • The Uniform Commercial Code (UCC) governs the sale of goods.
    • Common law applies to services.
    • The primary purpose test assesses mixed contracts to determine the governing law.

    Contract Formation

    • Contracts require mutual assent and consideration.
    • Mutual assent includes an offer (intent and definite terms) and acceptance.
    • Offer termination can occur through revocation, rejection, expiration, or operation of law.
    • The mailbox rule dictates that acceptance is effective upon dispatch, while revocation is effective upon receipt.

    Contract Interpretation

    • Contract terms can be unconscionable (unfair or oppressive).
    • UCC Rule 2-207 addresses conflicting terms when parties introduce new terms during acceptance.
    • In cases of ambiguity or vagueness, contract terms are interpreted against the drafting party.

    Contract Types & Consideration

    • Contract types include:
      • Express contracts: Written agreements
      • Implied contracts: Based on conduct
      • Promissory estoppel: Emphasizes detriment to the plaintiff
      • Restitution (Quasi Contract): Focuses on the benefit to the defendant
      • Option contracts: Allow a party to keep an offer open for a set period.
    • Consideration involves:
      • Value: An act or forbearance.
      • Bargained-for exchange: Actual promises exchanged.
    • Consideration exceptions:
      • Illusory promises
      • Past consideration
      • Pre-existing duties

    Special Consideration Cases & Defenses

    • Unliquidated debts (disputed amounts) can be settled through contracts, while liquidated debts (agreed upon amounts) cannot.
    • Non-compete clauses must be reasonable in scope and applicable between businesses.
    • Exculpatory clauses cannot eliminate liability for gross negligence or intentional torts.
    • Defenses to breach of contract include:
      • Void contracts: Unenforceable due to subject matter or diminished capacity.
      • Voidable contracts: One party can enforce or rescind (e.g., minors, fraud, undue influence, duress, or mistake).
      • Conditions precedent: Excuses performance if unmet.
    • Excuses for non-performance include:
      • Impossibility: Inability to perform the contract.
      • Impracticability: Performance becomes excessively costly or difficult.
      • Frustration of purpose: The contract loses its value.
    • Excuses are valid only for unexpected events, excluding financial difficulty.

    Third Party Beneficiaries, Assignment, & Delegation

    • Intended beneficiaries can enforce contracts, while incidental beneficiaries cannot.
    • Assignment and delegation allow for the transfer of rights and duties, except when personal performance is involved or the agreement would be substantially altered.

    UCC Special Rules

    • Acceptance in contracts can be shown through various actions.
    • Quantity is essential under the UCC, and parties can allocate risk of loss as agreed.

    Remedies in Contract Law

    • Monetary remedies include:
      • Expectation damages: Harm from breach (compensatory, consequential, incidental)
      • Reliance damages: Detriment to the plaintiff
      • Restitution: Benefit to the defendant
    • Non-monetary remedies:
      • Injunction
      • Specific performance
      • Rescission
      • Reformation
    • Special remedies rules:
      • Nominal damages: Breach without proof of harm
      • Liquidated damages: Pre-agreed damages in contract
      • No punitive damages in breach of contract actions
      • Cure provision: Opportunity for breaching party to fix mistakes
    • UCC special rules:
      • Buyers can reject non-conforming goods; sellers can cancel, stop delivery, or resell.

    Business Organizations

    • Types of entities:
      • Sole proprietorships: One person runs the entity; no separate legal existence. Unlimited personal liability. Easy to set up and shut down.
      • Partnerships: Two or more people share profits and management. Pass-through taxation. Partners have unlimited personal liability.
      • LLCs (Limited Liability Companies): Pass-through taxation; limited liability for members. Managed by members or managers. Consent is required for ownership transfer.
      • Corporations: Separate legal entity; limited liability for officers and directors. Easier to buy/sell and finance operations. Double taxation (unless S-corp election is made). Directors set strategy, officers manage day-to-day operations.

    Directors & Officers' Duties

    • Duty of care: Act as a reasonable person.
    • Duty of loyalty: No diversion of corporate opportunities.
    • Business Judgment Rule: Protects decisions even if they result in losses.

    Shareholders' Rights

    • Right to vote, transfer ownership, inspect books, and receive dividends.
    • Shareholders can sue the corporation directly or through derivative actions.

    Agency Law

    • Employees are agents of employers.
    • Agents must act with actual or implied authority.
    • Agents owe duties of performance, notification, loyalty, obedience, and accounting.
    • Employers must compensate, train, and sometimes indemnify agents.
    • Employee vs. Independent Contractor
    • Employers are liable for employees' actions within the scope of employment but not for independent contractors.
    • Employees receive W2 forms with tax withholding; independent contractors receive 1099 forms (no withholding).

    Antitrust Law

    • Unfair Competition:
      • Price fixing, horizontal/vertical restraints, monopolies, bundling, and tying
    • Secured Transactions:
      • Sales of securities require a prospectus and registration (unless exempt).
      • Violations include insider trading.

    Real Property & Employment Law

    • Real Property:
      • Involves interests in land, air, subsurface, and fixtures.
      • Ownership types include fee simple, life estate, joint tenancy, tenancy in common, and leasehold estate.
      • California Community Property: Presumes a 50/50 division of property acquired during marriage.
      • Easements: Limited right to use land without ownership.
      • Created through deed, inheritance, gift, or adverse possession.
    • Real Estate Transactions:
      • Sellers must deliver marketable title.
      • Buyers are responsible for mortgage, title insurance, and property taxes.
      • Probate: It's recommended to place property into a trust to avoid court-administered probate (costly and public).
    • Power of Attorney (POA): Can be financial or medical.
    • Estate Taxes: Federal exemption limit, with a 40% tax on amounts above the threshold. Living gifts can reduce estate tax.

    Real Estate Ownership

    • Real estate can be obtained through deed, inheritance, gift, or adverse possession.
    • Sellers must provide marketable title during real estate transactions.
    • Buyers are responsible for mortgage, title insurance, and property taxes.
    • Placing property in a trust can avoid court-administered probate, which is costly and public.

    Power of Attorney

    • Power of Attorney (POA) can be financial or medical.

    Estate Taxes

    • The federal exemption limit for estate taxes exists, with a 40% tax on amounts exceeding the threshold.
    • Living gifts can reduce estate tax liability.

    Final Exam Tips & Strategy

    • A comprehensive study guide covers major topics for the final exam.
    • The exam is broken down into 15 points for short answers (focus on contracts), 45 multiple-choice questions, and one bonus question.
    • Utilize the practice quiz on the course page for preparation.

    Time Management

    • Allocate 2-3 minutes per multiple-choice question.
    • Dedicate 40 minutes in total for short answer questions.

    Short Answer Strategy

    • Provide sufficient detail in short answers and avoid under-explaining.

    Multiple-Choice Strategy

    • Focus on the legal answer rather than factual information.
    • Begin by reading the last sentence of the question.
    • Avoid rushing and pay attention to tricky wording.

    Academic Integrity

    • The exam is open-book and open-notes but must be completed independently.

    Closing Remarks

    • Understanding contracts and negotiations is crucial for both personal and professional interactions.
    • Thank you for participating in this course, and best of luck in your future endeavors!

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    Description

    Test your knowledge of real property concepts and ownership types. This quiz covers various aspects of property law, including fee simple ownership, joint tenancy, and life estates. Challenge yourself to understand the intricacies of property rights and ownership arrangements.

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