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Business Law 3430
University of North Texas
44
Business
Undergraduate 4
07/19/2010

Additional Business Flashcards

 


 

Cards

Term
1. Define Strict Liability
Definition
Strict Liability is liability without regard to fault - negligence

Strict Liability includes Warranty and Strict Tort Product Liability claims(with certain exceptions).

Strict Liability allows a Plaintiff to recover damages without claiming fault-negligence.
Term
2. Define Warranties
Definition

Warranties are promises or assurances that goods will meet certain criteria or standards.  Goods includes food and drinks sold by  restaurants. Warranties are Express and Implied . The Law of Warranties as stated below evolved during the mid 20th century as did the Doctrine of Res Ipsa Loquitur in response to the difficulties that Plaintiffs were experiencing in attempts to recover in negligence.

The law of warranty affords a means of recovery for injuries and damages resulting from the use of goods that may be utilized in addition to or as an alternative to negligence or strict liability in tort.  Warranty rules today are the product of legislative efforts - written enactment- as manifested in the Uniform Commercial Code Article 2 which has been adopted by all of the states.

Term
3. List types of Warranties
Definition
Express Warranties



Implied Warranty of Merchantability


Implied Warranty of Fitness for a Particular Purpose
Term
4. Explain who Express Warranties can come into being.
Definition
EXPRESS WARRANTIES
2. Express Warranty claims are promises that result from
(1)statements of fact or affirmations of fact about goods made by the seller,
(2)descriptions respecting goods made by seller or
(3) models or samples of goods provided by seller.
Term

 Define the Implied Warranty of Merchantability including requisites.
Definition

 Implied Warranties arise as the result of a sale of a good. 

The implied warranty of merchantability arises on sale of a good by a merchant.  The implied warranty of merchantability provides that goods are fit for their ordinary intended use.

 

Term
Define the Implied Warranty of Fitness for a Particular Purpose including requisites.
Definition
warranty of fitness for a particular purpose. For this warranty to exist the seller must (1)know the needs of the buyer and (2) the buyer must rely on the seller.
Term

7. Explain when Implied Warranties come into existence.
Definition

 

Explain what implied warranty if any will arise where you

purchase a good at a garage sale where no conversation

occurs between a buyer and seller who have never met.

was not from a Merchant

No implied

 

warranty of merchantability will arise since the purchase  

Note: The Implied Warranty of Fitness for a Particular Purpose

can arise on a sale by ANY SELLER – merchant or not.

Goods subject to the Implied Warranty of Fitness may or may not be subject to the Implied Warranty of Merchantability.

Term
8. State the requisites of a warranty claim.
Definition

 State the Requisites for a warranty claim/s whether for breach of express or implied warranty

Plaintiff must allege:

The existence of a warranty(express or implied or both)

That product did not live up to warranty

That injuries/damages were proximately caused by the breach of warranty (Components of “proximately caused” are set forth below)

That injuries/damages were caused in fact by breach of warranty

That injuries were a foreseeable result of breach of warranty

Term

9. Explain Disclaimers of Warranties including what warranties are affected.
Definition

. Disclaimers of Warranty take away promises made by implied warranties. When a merchant in the business of selling goods sells a good, an implied warranty arises that the good is merchantable even though the merchant has no conversation with the purchaser and no writing respecting the good manifests any promises.  If the merchant does not desire for an implied warranty to exist, the merchant is required to take positive action orally or in writing to indicate that no implied warranty exists.

See p 410. All implied warranties are disclaimed by:

(1)Language such as “AS IS” or “WITH ALL FAULTS” or similar language

(2)Defects that reasonable a person would notice at time of purchase or by refusal of seller’s invitation to inspect

(3)Writing that states no implied of merchantability in conspicuous print

(4)Course of dealing, course or performance or usage of trade

Note that the above are means of disclaiming implied warranties.  Express warranties may not readily be disclaimed. Circumstances where a court will allow such are very limited.  In part the thinking is that since express warranties require conduct on the part of a seller, the seller should not have manifested such conduct if seller did not desire to make an express warranty. 

Term

10. Explain how warranties may be disclaimed.
Definition

. All implied warranties are disclaimed by:

(1)Language such as “AS IS” or “WITH ALL FAULTS” or similar language

(2)Defects that reasonable a person would notice at time of purchase or by refusal of seller’s invitation to inspect

(3)Writing that states no implied of merchantability in conspicuous print

(4)Course of dealing, course or performance or usage of trade

Note that the above are means of disclaiming implied warranties.  Express warranties may not readily be disclaimed. Circumstances where a court will allow such are very limited.  In part the thinking is that since express warranties require conduct on the part of a seller, the seller should not have manifested such conduct if seller did not desire to make an express warranty. 

Example of a Disclaimer of Warranties

10. Pat purchased a walnut chair from Furniture One that was labeled AS IS. The chair almost collapsed the first time Pat sat in the chair due to a cracked leg. Explain what warranty claims, if any, Pat may have against Furniture One.

Pat has no implied warranty claims since the chair was labeled "AS IS" which effectively disclaims all implied warranties.

Term

11. Explain when the Statute of Limitations beings running on a warranty claim.
Definition

State when the statute of limitations for a breach of warranty claim arises.

A breach of warranty occurs when goods are made available to the buyer whether the buyer knows of the breach or not unless an express warranty refers to a future date. 

The statute of limitation for warranty claims is 4 years from date of breach - See 2-725 of the UCC.

Term
12. State who can be held on a breach of warranty claim.
Definition
Plaintiff may make a claim against any party in the chain of distribution - manufacturer, wholesaler, or retailer.
Term
State who was responsible for creating warranty claims
Definition

developed by attorneys, business enterprise, legal scholars and judges during the mid 20th Century.  Thus Warranty claims are statutory - written enactment.

Term
13. List defenses against a warranty claim.
Definition

Defendant may claim

(1) Comparative negligence

(2)Assumption of risk

(3)Misuse

Misuse occurs where the plaintiff uses the product other than in accordance with instructions or for purposes other than those for which product was designed.

Term
14. List the requisites of a Strict Tort Product Liability claim.
Definition

Strict Tort Product Liability is liability without regard to fault for manufacturers and sellers of products where a product unexpectedly causes injury or damage because of defects in design, manufacture or labeling.

Why strict tort product liability evolved beginning around the mid 20th century.

Increasingly Res Ipsa Loquitur proved to be inadequate as a means of recovery. The reasons given for not relying on Negligence or Res Ipsa Loquitur to prove negligence to determine liability of a manufacturer were articulated as follows:

1)consumers are insufficiently skilled to judge the soundness of a product contained in a sealed package.

(2)manufacturers instill confidence in products by advertising and promotion.

(3)the cost of an injury and the loss of time or health may be an overwhelming misfortune to an individual plaintiff. 

(4)the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. 

(5)manufacturers can anticipate some hazards and guard against the recurrence of others.

The Law of Warranty posed difficulties because of the Statute of Limitations running from the date that goods are made available to the buyer.

 

 

Term
Explain what components of a Strict Tort Product Liability claim require allegations of fault.
Definition
Today as noted above many courts are imposing strict liability only on manufacturing defects. Claims for design and instruction/warning defects require fault concepts as provided by the words “foreseeability” and “reasonable”.


1. One engaged in the business of selling or distributing products who sells a defective product is liable for damages and injuries resulting from the defect
2. A product is defective when it contains a manufacturing defect, is defective in design or is defective because of inadequate instructions or warnings.
(a)A manufacturing defect exists when the product departs from specifications
(b)A design defect exists where the foreseeable risks of harm could have been reduced or avoided by the adoption of a reasonable alternative design
(c) A warnings or instructions defect exists where foreseeable risks of harm could have been reduced or avoided by reasonable instructions or warnings
Term
Explain who a Plaintiff can hold on a Strict Tort Product Liability claim.
Definition
Plaintiff may bring claims against any or all parties in the chain of distribution
Term

17. Explain who was responsible for the evolution of Strict Tort Product Liability claims
Definition

Appellate courts of the states are primarily responsible for strict tort product liability rules.

Term
18. List the Defenses to a Strict Tort Product Liability claim.
Definition
MISUSE , ASSUMPTION OF RISK , COMPARATIVE NEGLIGENCE
Term
MISUSE
Definition
The Defense of Misuse is applicable where plaintiff uses a product other than for its intended use such as a power mower for a hedge trimmer or blow dryer for hair to dry wet carpet. The defense is also applicable where plaintiff uses the product other than in accordance with the label.
Term
ASSUMPTION OF RISK
Definition

Applicable where plaintiff is aware or has reason to be aware of danger and uses product anyway. Ex plaintiff receives a severe electrical shock while using an electric mower with a broken power cord or where plaintiff uses a product for purposes that label says could result in serious harm or injury.

Term
COMPARATIVE NEGLIGENCE
Definition
Plaintiffs recovery is reduced by amount of plaintiffs negligence. Applicable even though defendant liable without regard to fault
Term
Explain the Statute of Repose and differentiate from the Statute of Limitations.
Definition
The statute of repose states a time from date of sale or manufacture within which a product liability action can be filed. The statute of limitations states a time period for bringing action after plaintiff knows or has reason to know of injuries or damages. Texas has a Statute of Repose that runs 15 years from date of sale of products.
Term

 State requisites of a Defamation claim
Definition

 

  Defamation Defined

Defamation occurs where (1)FALSEHOODS are

(2) PUBLISHED by defendant  to third parties that

(3) INJURE THE REPUTATION OF THE PLAINTIFF.

Term
Define Falsehoods
Definition
FALSEHOODS are untrue or deceptive
manifestations including words, pictures, signs,
film etc. concerning persons or entities.
FALSEHOODS can take the form of
libel(writings-some relatively permanent
manifestations that can be visualized) and
or slander(oral-sound manifestations).
Term
Define Publication
Definition

 

Publication is the communication of Falsehoods by

Defendant to Third Parties

Newspaper, magazine, book publishers, radio

and TV stations are liable for defamatory

statements communicated since they are edited.

Generally bookstores, libraries and Internet

Service Providers are not liable for defamatory

statements communicated since they do not

know or have reason to know of defamatory

statements.

Term
Result of Plaintiff repeating Falsehoods
Definition
Generally no defamation action exists where one repeats falsehoods to third parties that were earlier communicated directly to them in private. Persons defamed are not allowed to bring a defamation claim where no publication has occurred or increase damages by repeating defamatory statements that have been published.
Term
Result of Defendant communicating Falsehoods only to Plaintiff
Definition

As a general rule defamatory statements not published/communicated to third parties by defendant are not actionable by plaintiff. Generally defamation claims exist only where the author of defamatory manifestations communicates defamatory statements to third parties. Defamation claims are to protect the plaintiff from publication by the defendant.

Term
Liability of Internet Service Providers for Defamatory Statements
Definition
No. The Federal Communications Decency Act of 1996 provides: No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. Internet Service Providers thus join Libraries, Book and Periodical Sellers and Newstands who are not liable for falsehoods in materials offered to the public since they generally do not know or have reason to know of falsehoods
Term
Liability for communication of Opinion
Definition
GENERALLY NO ACTION EXISTS FOR COMMUNICATION OF OPINION - that not capable of being ascertained by some commonly recognized means. Restrictions on communication of opinion raises issues of limiting freedom of speech.
Term
Who are persons in the Limelight?
Definition

To facilitate free and open discussion of public affairs, defamatory statements regarding public figures - persons in the limelight are privileged if they are made without malice.   Malice occurs where defendant acts with actual knowledge of the falsity or with reckless disregard of the truth(had reason to doubt truth of statements). Proof of malice(that defamation intended) requires proving not only the requisites for defamation, but also that the defendant acted with knowledge of the falsity or with reckless disregard of the truth. Thus it is more difficult for persons in the limelight to succeed with defamatory claims.  Persons considered to be in the limelight include elected public officials as well as sports figures, entertainers and others who find themselves in the spotlight.

Term
Define Malice for purposes of a Limelight claim
Definition
Malice occurs where defendant acted with actual knowledge of falsity or with reckless disregard of the truth(had reason to doubt truth of statements).
Term
Explain what is necessary for persons in the Limelight to recover for Defamation
Definition
Requisites of a Defamation Claim for a Plaintiff in the Limelight
1. Falsehoods
2. Publication with MALICE by defendant
3. Injury to the Reputation of Plaintiff
Term
State requisites of a Product Disparagement claim
Definition

Plaintiff must allege

(1)Defendant published untrue statement respecting Plaintiff’s products, services, property, or business reputation

(2)Defendant knew statement was untrue or acted with reckless indifference

(3)Plaintiff suffered economic harm

Term
State requisites of a Compelled Self Publication claim
Definition

 

Requisites for a Compelled Self Publication Claim

1. Falsehoods

2. Communicated PRIVATELY by Defendant to Plaintiff

3. Communication of falsehoods by the PLAINTIFF UNDER

PRESSURE FROM A POTENTIAL EMPLOYER

4. The Discharging Employer who communicated the falsehoods

to the Plaintiff privately knew or had reason to know that the

discharged employee would have to repeat the falsehoods to a

prospective employer

5. The Plaintiff failed to obtain employment or obtained a lesser

job at a lesser salary

 

Term
Truth as Defense to Defamation claim
Definition
A defamation claim requires publication of a falsehood.
Publication by a defendant about the Plaintiff that is true
may harm the reputation of a plaintiff but such cannot
result in a defamation claim. THE TRUTH IS A DEFENSE.
Defamation protects against publication of falsehoods.
The objective of the law of defamation is to provide remedies
for loss of reputation due to communication of falsehoods –
not just loss of reputation. Generally the burden on proving
truth is on the defendant - not on Plaintiff to prove falsity.
Term
Explain Qualified Privilege as a Defense to a Defamation claim
Definition

 

A qualified privilege to publish what may amount to a falsehood

exists

(1)where the defendant publisher is acting in good faith

(has good reason to believe that published is fact) and

(2) where the potential harm to the public is equal to or

exceeds the potential harm to the plaintiff.

 

Term
Explain Absolute Privilege as a Defense to a Defamation claim
Definition
ABSOLUTE PRIVILEGE
11. Persons involved in judicial or legislative proceedings have a
virtual absolute privilege to publish falsehoods where incidental
to the proceedings.

The purpose is to assure free, open, unfettered communication
in the courtroom as well as in the legislative process. Such is
Important to the preservation of political and economic freedom.
Furthermore the judicial and political processes afford
opportunity for challenging less than truthful assertions.
Term
Explain when one has a claim for Interference With Business Relationships
Definition

 

The law proscribes intentional interference with parties in the

process of negotiating contracts.  To establish a claim P must show

  1. The existence of a business relation.

2. That defendant knew of the business relation.

3. That defendant intentionally interfered by improperly

inducing or causing a breach or termination of the relation.

4. That defendant's improper or unjustified

interference resulted in injury to the plaintiff.

 

Term
State obligations of property owners to Licensees and Invitees
Definition

Whether Licensee or Invitee the following is becoming the rule

15.Invitees include business customers and delivery persons. In addition users of public parks, beaches, swimming pools and libraries are licensees.  Property owners must exercise reasonable care for safety of invitees against known dangers or dangers the property owner should be aware exist. Some states classify social guests as licensees and some as invitees.  

 

Term
Define Conversion
Definition

 

TRESPASSING AND CHATTELS(PERSONAL PROPERTY) AND CONVERSION

16. Conversion is the intentional exercise of control over the personal property(chattels) of another without consent. Such includes unauthorized use of another’s personal property obtained with consent, or obtaining another’s property by fraud, theft, purchasing  stolen property, withholding property, destruction or alteration of property.   Conversions are trespasses.   Stealing property from a retail store is conversion as well as trespassing.  If taking of possession was with permission, conversion occurs with unauthorized use or failure to return.

 

Term
State Requisites for an Emotional/Mental Distress claim
Definition

 

Requisites of an Emotional/Mental Distress Claim

  Plaintiff must allege

(1)that defendant intended to inflict emotional/mental

distress or that he knew of or should have known that

emotional distress was the likely result of his conduct

(2) that the conduct was extreme and outrageous –

beyond the bounds of decency and intolerable

(3) that acts of defendant were the cause of plaintiff's distress,

(4) the emotional distress sustained by plaintiff

was severe, and such that no reasonable person

could be expected to endure

 

Term
List how Invasion of Privacy may occur
Definition
INVASION OF PRIVACY
Requisites of Invasion of Privacy Claim
1. Appropriation of a plaintiff's name or likeness
for a defendant’s purposes such as advertising/promotion .
OR
2. Unreasonable intrusion into another's home,
such as by wiretapping or persistently making
unwanted telephone calls.
OR
3. Public disclosure of private facts about a person
of an offensive nature that are not reasonable
concerns of the public.
OR
4. Publicity placing the plaintiff in a false light. (If for
example a TV news report on toxic wastes shows pictures
of a company that does not produce such wastes,
the studio would likely be liable even though it did not
claim that the company pictured was creating toxic wastes.)
Term
State employees right to privacy on employer computer networks
Definition

 

Generally employees do not have claims for Invasion of

Privacy against employers for monitoring employee e-mail

and use of employer information systems.

The law does not recognize an expectation of privacy for

Employee use of employer provided information systems.

The employer owns the computers and the employee owes

a duty of loyalty to the employer to act in the best interest

of the employer.  Use of e-mail for personal affairs is a violation

of such duty.  The duty of loyalty is also breached by sending

of e-mail that could result in claims against the employer such

as Discrimination claims for sexual, racial or religious harassment.

Respecting the freedom of speech claim, First Amendment freedom

of speech claims are not applicable to private employers.

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