Business Law Lecture Notes PDF

‭Lecture‬‭1‬ ‭Organization‬‭of‬‭states:‬ ‭‬ ‭Montesquieu‬‭→‬‭trias‬‭politica‬ ‭○‬ ‭A‬‭legislature‬ ‭○‬ ‭An‬‭executive‬ ‭○‬ ‭A‬‭judiciary‬ ‭ aw‬‭is‬‭needed‬‭in‬‭order‬‭to‬‭do‬‭business,‬‭people‬‭need‬‭trust,‬‭protection‬‭of‬‭their‬‭interest‬‭and‬ L ‭relianc...

‭Lecture‬‭1‬ ‭Organization‬‭of‬‭states:‬ ‭‬ ‭Montesquieu‬‭→‬‭trias‬‭politica‬ ‭○‬ ‭A‬‭legislature‬ ‭○‬ ‭An‬‭executive‬ ‭○‬ ‭A‬‭judiciary‬ ‭ aw‬‭is‬‭needed‬‭in‬‭order‬‭to‬‭do‬‭business,‬‭people‬‭need‬‭trust,‬‭protection‬‭of‬‭their‬‭interest‬‭and‬ L ‭reliance‬‭on‬‭the‬‭system.‬ ‭Open‬‭market‬‭economy‬‭is‬‭based‬‭on‬‭competition‬‭and‬‭freedom‬‭of‬‭contract:‬ ‭‬ ‭Public‬‭law‬‭→‬‭safeguard‬‭functioning‬‭of‬‭the‬‭market‬ ‭‬ ‭Competition‬‭law‬‭→‬‭forbid‬‭monopolies‬ ‭‬ ‭Private‬‭law‬‭→‬‭structure‬‭private‬‭relationships‬ ‭ arty‬‭autonomy‬‭is‬‭the‬‭right‬‭to‬‭self-govern‬‭his‬‭own‬‭legal‬‭position‬‭within‬‭the‬‭limits‬‭of‬‭the‬‭law.‬ P ‭Includes‬‭freedom‬‭of‬‭contract.‬ ‭‬ ‭Quid‬‭pro‬‭quo‬‭=‬‭idea‬‭of‬‭mutual‬‭gain‬ ‭‬ ‭French‬‭revolution‬‭abolished‬‭the‬‭medieval‬‭iustum‬‭pretium‬‭(fair‬‭price)‬‭doctrine‬ ‭ reedom‬‭of‬‭contract‬‭is‬‭not‬‭unlimited,‬‭ion‬‭some‬‭situations,‬‭we‬‭need‬‭for‬‭safeguard‬‭real‬ F ‭freedom‬‭(freedom‬‭in‬‭practice):‬ ‭1.‬ ‭Duties‬‭to‬‭inform‬‭(material‬‭freedom‬‭of‬‭contract)‬ ‭2.‬ ‭Right‬‭of‬‭withdrawal‬‭(material‬‭freedom‬‭of‬‭contract)‬ ‭3.‬ ‭Substantive‬‭contractual‬‭justice‬ ‭Difference‬‭with‬‭fair‬‭price‬‭doctrine‬‭is‬‭that‬‭a‬‭third‬‭party‬‭does‬‭not‬‭set‬‭the‬‭price‬‭up‬‭front,‬‭but‬ ‭merely‬‭intervenes‬‭when‬‭it’s‬‭too‬‭extensive.‬ ‭Socialization‬‭of‬‭contact‬‭law‬‭=‬‭make‬‭someone‬‭behave‬‭in‬‭a‬‭way‬‭that‬‭is‬‭acceptable‬‭to‬‭society.‬ ‭EU‬‭law:‬‭free‬‭movement‬‭of‬‭goods,‬‭persons,‬‭services‬‭and‬‭capital‬‭(Cassis‬‭de‬‭Dijon,‬‭1979)‬ ‭Soft‬‭law‬‭=‬‭voluntary‬‭codes‬‭of‬‭best‬‭practices/codes‬‭of‬‭conduct.‬ ‭Hierarchy‬‭of‬‭laws:‬ ‭‬ ‭Supranational‬‭law‬‭>‬‭national‬‭law‬ ‭‬ ‭Law‬‭>‬‭royal‬‭decrees‬ ‭‬ ‭Codified‬‭law‬‭>‬‭trade‬‭practices‬ ‭‬ ‭Specific‬‭rules‬‭>‬‭general‬‭rules‬ ‭ onsumer‬‭image‬‭is‬‭used‬‭as‬‭a‬‭benchmark‬‭to‬‭draft‬‭and‬‭apply‬‭consumer‬‭law.‬‭It‬‭is‬‭a‬ C ‭theoretical‬‭concept‬‭of‬‭an‬‭average‬‭consumer‬‭that‬‭is‬‭well-informed,‬‭it‬‭thrives‬‭on‬‭the‬‭idea‬‭that‬ ‭a‬‭consumer‬‭is‬‭rational‬‭.‬‭In‬‭some‬‭cases,‬‭a‬‭judge‬‭will‬‭take‬‭into‬‭account‬‭not‬‭the‬‭average‬‭of‬‭all‬ ‭consumers,‬‭but‬‭the‬‭average‬‭of‬‭a‬‭specific‬‭group‬‭of‬‭consumers.‬‭Consumers‬‭have‬‭an‬ ‭evolutionary‬‭character,‬‭meaning‬‭that‬‭they‬‭change‬‭over‬‭time.‬ I‭nformation‬‭paradigm‬‭=‬‭as‬‭long‬‭as‬‭we‬‭inform‬‭the‬‭consumer‬‭in‬‭a‬‭clear,‬‭concise‬‭and‬‭correct‬ ‭way,‬‭he‬‭will‬‭act‬‭rationally.‬ ‭ egal‬‭subjects‬‭are‬‭different‬‭from‬‭legal‬‭assets.‬‭Legal‬‭subjects‬‭are‬‭legal‬‭persons‬‭and‬‭natural‬ L ‭persons‬‭(acting‬‭for‬‭private‬‭or‬‭commercial‬‭purposes).‬‭Legal‬‭persons‬‭can‬‭have‬‭a‬‭legal‬ ‭personality‬‭or‬‭not,‬‭meaning‬‭that‬‭you‬‭can‬‭differentiate‬‭(or‬‭not)‬‭between‬‭personal‬‭and‬ ‭business‬‭assets.‬ ‭ onsumer‬‭notion‬‭=‬‭any‬‭natural‬‭person‬‭who‬‭is‬‭acting‬‭for‬‭purposes‬‭outside‬‭his‬‭business.‬ C ‭Consumer‬‭image‬‭=‬‭an‬‭average‬‭consumer‬‭who‬‭is‬‭reasonably‬‭well-informed‬‭and‬‭reasonably‬ ‭observant‬‭and‬‭circumspect.‬‭Exceptions‬‭for‬‭specific‬‭groups,‬‭for‬‭example,‬‭children.‬ ‭ nascertained‬‭goods‬‭=‬‭generic‬‭goods.‬‭At‬‭some‬‭point‬‭in‬‭time‬‭it‬‭needs‬‭to‬‭become‬‭an‬ U ‭ascertained‬‭good.‬ ‭Lecture‬‭2‬ ‭Real‬‭rights‬‭=‬‭right‬‭over‬‭identifiable‬‭(group‬‭of)‬‭assets‬ ‭Ownership‬‭versus‬‭possession‬‭versus‬‭custody:‬ ‭‬ ‭An‬‭owner‬‭has‬‭legal‬‭power‬‭over‬‭a‬‭good‬‭(and‬‭perhaps‬‭physical‬‭power)‬ ‭‬ ‭A‬‭possessor‬‭has‬‭physical‬‭power‬‭over‬‭a‬‭good‬ ‭‬ ‭A‬‭custodian‬‭only‬‭keeps‬‭the‬‭goods‬‭for‬‭someone‬‭else‬‭for‬‭a‬‭certain‬‭time‬‭(from‬‭the‬‭start‬ ‭it‬‭is‬‭clear‬‭he‬‭will‬‭have‬‭to‬‭return‬‭the‬‭goods)‬ ‭Real‬‭rights‬‭of‬‭use‬‭(easements):‬ ‭‬ ‭Ground‬‭lease‬‭(emphyteusis)‬ ‭○‬ ‭Minimum‬‭and‬‭maximum‬‭period‬‭of‬‭time‬‭during‬‭which‬‭the‬‭holder‬‭can‬‭use‬‭the‬ ‭goods‬ ‭○‬ ‭The‬‭holder‬‭has‬‭to‬‭pay‬‭lease‬‭to‬‭the‬‭owner‬ ‭‬ ‭Right‬‭of‬‭usufruct‬‭(civil‬‭law)‬ ‭○‬ ‭Separation‬‭of‬‭bare‬‭ownership‬‭from‬‭the‬‭person‬‭who‬‭has‬‭the‬‭usufruct‬ ‭○‬ ‭Person‬‭who‬‭has‬‭the‬‭usufruct‬‭can‬‭enjoy‬‭the‬‭benefits‬‭during‬‭a‬‭certain‬‭period‬‭of‬ ‭time‬ ‭○‬ ‭Bare‬‭owner‬‭will‬‭automatically‬‭become‬‭the‬‭full‬‭owner‬‭upon‬‭the‬‭death‬‭or‬ ‭liquidation‬‭of‬‭the‬‭person‬‭who‬‭has‬‭the‬‭usufruct‬ ‭ ‬‭security‬‭right‬‭is‬‭a‬‭right‬‭which‬‭a‬‭creditor‬‭can‬‭exercise‬‭only‬‭in‬‭case‬‭the‬‭debt‬‭is‬‭not‬‭repaid‬‭by‬ A ‭the‬‭debtor.‬‭A‬‭real‬‭security‬‭right‬‭is‬‭attached‬‭to‬‭an‬‭object.‬‭Its‬‭requirements‬‭are‬‭that‬‭it‬‭is‬‭created‬ ‭specifically‬‭by‬‭contract,‬‭the‬‭security‬‭right‬‭is‬‭on‬‭movable‬‭goods‬‭and‬‭it‬‭requires‬‭transfer‬‭of‬ ‭possession.‬‭However,‬‭a‬‭constructive‬‭possession‬‭is‬‭possible‬‭=‬‭pledge‬‭(collateral)‬‭via‬‭a‬‭third‬ ‭party.‬‭Intangible‬‭goods‬‭can‬‭also‬‭be‬‭pledged.‬ ‭ ien‬‭=‬‭right‬‭given‬‭to‬‭a‬‭creditor‬‭to‬‭detain‬‭goods‬‭of‬‭debtor‬‭until‬‭a‬‭debt‬‭is‬‭fully‬‭paid‬‭or‬ L ‭performance‬‭of‬‭some‬‭other‬‭obligation‬‭is‬‭done.‬‭E.g.‬‭reparation‬‭of‬‭an‬‭Ipad‬‭is‬‭not‬‭paid‬‭→‬‭store‬ ‭owner‬‭keeps‬‭the‬‭Ipad.‬ ‭ ivil‬‭law‬‭mortgage‬‭is‬‭a‬‭security‬‭right‬‭on‬‭immovable‬‭property‬‭(can‬‭also‬‭be‬‭on‬‭valuable‬ C ‭moveable‬‭property‬‭like‬‭ships).‬ ‭‬ ‭Mortgagee‬‭is‬‭not‬‭the‬‭legal‬‭owner;‬‭he‬‭only‬‭has‬‭the‬‭right‬‭on‬‭the‬‭good‬ ‭‬ ‭Possession‬‭remains‬‭with‬‭debtor‬ ‭‬ ‭Formal‬‭contract‬‭required‬ ‭ ommon‬‭law‬‭mortgage‬‭is‬‭a‬‭transfer‬‭of‬‭ownership‬‭to‬‭a‬‭creditor‬‭by‬‭way‬‭of‬‭security‬‭upon‬‭the‬ C ‭express‬‭or‬‭implied‬‭condition‬‭that‬‭the‬‭ownership‬‭will‬‭be‬‭retransferred‬‭to‬‭the‬‭mortgagor‬‭on‬ ‭repayment‬‭of‬‭debt.‬ ‭‬ ‭Mortgagee‬‭(temporarily)‬‭becomes‬‭the‬‭owner‬‭of‬‭the‬‭object‬ ‭○‬ ‭Fiduciary‬‭ownership‬‭-‬‭division‬‭between‬‭legal‬‭and‬‭economic‬‭ownership‬ ‭○‬ ‭Possible‬‭surplus‬‭value‬‭in‬‭case‬‭of‬‭foreclose‬‭also‬‭belongs‬‭to‬‭the‬‭creditor‬ ‭‬ ‭Mortgagee‬‭is‬‭entitled‬‭to‬‭possession,‬‭but‬‭mortgaged‬‭object‬‭is‬‭often‬‭left‬‭in‬‭hands‬‭of‬‭the‬ ‭mortgagor‬ ‭‬ ‭Security‬‭right‬‭on‬‭every‬‭object‬‭—‬‭movable,‬‭immovable,‬‭tangible‬‭and‬‭intangible‬ ‭Real‬‭security‬‭right‬‭–‬‭charge‬ ‭‬ ‭Fixed‬‭charge‬‭=‬‭debtor‬‭cannot‬‭dispose‬‭of‬‭asset‬‭without‬‭consent‬‭chargee,‬‭unless,‬‭by‬ ‭satisfying‬‭the‬‭debt‬ ‭‬ ‭Floating‬‭charge‬‭=‬‭debtor‬‭can‬‭freely‬‭dispose‬‭of‬‭assets‬‭if‬‭he‬‭keeps‬‭the‬‭charge‬‭floating‬ ‭(value‬‭appraised).‬‭Upon‬‭certain‬‭events;‬‭a‬‭floating‬‭charge‬‭crystallizes‬‭and‬‭becomes‬‭a‬ ‭fixed‬‭charge‬ ‭Lecture‬‭3‬ ‭ bsolute‬‭rights‬‭are‬‭enforceable‬‭to‬‭all‬‭while‬‭relative‬‭rights‬‭are‬‭claims‬‭one‬‭can‬‭have‬‭on‬ A ‭specific‬‭people.‬ ‭Legal‬‭facts‬‭=‬‭every‬‭fact‬‭to‬‭which‬‭the‬‭law‬‭accords‬‭legal‬‭consequences.‬ ‭‬ ‭Event‬‭→‬‭death‬ ‭‬ ‭Condition‬‭→‬‭insanity‬ ‭‬ ‭Act‬‭→‬‭causing‬‭an‬‭accident‬ ‭ egal‬‭acts‬‭=‬‭every‬‭action‬‭which‬‭is‬‭deliberately‬‭taken‬‭considering‬‭the‬‭consequences‬‭to‬‭it‬‭by‬ L ‭law‬ ‭‬ ‭Unilateral‬‭→‬‭an‬‭offer‬ ‭‬ ‭Multilateral‬‭→‬‭a‬‭contract‬ ‭Conditions‬‭for‬‭a‬‭valid‬‭legal‬‭act:‬ ‭‬ ‭Consent‬‭→‬‭free‬‭will‬‭or‬‭intention‬‭to‬‭be‬‭bound,‬‭determined‬‭from‬‭the‬‭surrounding‬ ‭circumstances‬‭(statements,‬‭understanding,‬‭no‬‭vices)‬ ‭○‬ ‭Misake‬‭about‬‭the‬‭core‬‭of‬‭the‬‭legal‬‭act,‬‭which‬‭is‬‭known‬‭or‬‭ought‬‭to‬‭be‬‭known‬ ‭by‬‭the‬‭other‬‭party‬‭and‬‭is‬‭excusable‬‭(=‬‭all‬‭other‬‭reasonable‬‭persons‬‭would‬ ‭have‬‭made‬‭the‬‭same‬‭mistake)‬ ‭○‬ ‭Fraud‬‭(fraudulent‬‭misrepresentation)‬‭about‬‭the‬‭core‬‭of‬‭the‬‭legal‬‭act,‬‭whether‬ ‭by‬‭word‬‭or‬‭conduct‬‭(common‬‭law)‬‭or‬‭fraudulent‬‭non-disclosure‬‭of‬‭any‬ ‭information‬‭(civil‬‭law),‬‭required‬‭fraudulent‬‭intention‬  ‭○‬ T ‭ hreats‬‭towards‬‭yourself‬‭or‬‭close‬‭relatives.‬‭The‬‭threat‬‭should‬‭be‬‭imminent‬ ‭and‬‭serious‬ ‭‬ ‭Validity‬‭→‬‭particular‬‭object‬‭is‬‭sufficiently‬‭defined‬‭or‬‭can‬‭be‬‭determined‬‭which‬‭is‬ ‭permissible‬‭on‬‭the‬‭market‬ ‭ ‬ ‭Cause‬‭(the‬‭reason‬‭why‬‭you‬‭take‬‭the‬‭legal‬‭act)‬‭→‬‭should‬‭not‬‭be‬‭contrary‬‭to‬‭public‬ ‭policy‬‭or‬‭mandatory‬‭law‬ ‭‬ ‭A‬‭party‬‭must‬‭have‬‭the‬‭ability‬‭to‬‭take‬‭legal‬‭action‬ ‭○‬ ‭Personal‬‭capacity‬‭→‬‭the‬‭ability‬‭to‬‭exercise‬‭the‬‭rights‬‭of‬‭which‬‭one‬‭is‬‭the‬ ‭holder‬ ‭○‬ ‭Legal‬‭capacity‬‭→‬‭the‬‭possibility‬‭to‬‭be‬‭the‬‭holder‬‭of‬‭subjective‬‭rights‬ ‭ oid‬‭=‬‭automatically‬‭non-existent‬ V ‭Avoided‬‭=‬‭court‬‭confirms‬‭that‬‭the‬‭contract‬‭is‬‭invalid‬ ‭Retroactive‬‭effect‬‭=‬‭the‬‭legal‬‭act‬‭never‬‭existed‬‭and‬‭everything‬‭is‬‭returned‬‭up‬‭to‬‭9‬‭years‬‭back‬ ‭ bsolute‬‭nullity‬‭can‬‭be‬‭invoked‬‭when‬‭rules‬‭of‬‭public‬‭order‬‭are‬‭violated‬‭(against‬‭the‬‭essence‬ A ‭of‬‭our‬‭society,‬‭economy,‬‭culture).‬‭Everyone‬‭can‬‭invoke‬‭the‬‭sanction‬‭at‬‭every‬‭stage‬‭of‬‭the‬ ‭dispute.‬ ‭ elative‬‭nullity‬‭sanctions‬‭acts‬‭which‬‭violate‬‭rules‬‭of‬‭mandatory‬‭law.‬‭Only‬‭protected‬‭parties‬ R ‭can‬‭invoke‬‭the‬‭sanction.‬‭They‬‭have‬‭to‬‭invoke‬‭it‬‭at‬‭the‬‭beginning‬‭of‬‭the‬‭dispute.‬‭Contrary‬‭to‬ ‭absolute‬‭nullity,‬‭the‬‭protected‬‭party‬‭can‬‭waive‬‭the‬‭vice‬‭upon‬‭the‬‭conditions‬‭that:‬ ‭‬ ‭The‬‭protected‬‭party‬‭is‬‭aware‬‭of‬‭the‬‭right‬ ‭‬ ‭It‬‭has‬‭to‬‭be‬‭expressively‬‭clear‬‭that‬‭he‬‭waives‬‭the‬‭right‬