Copyright © 2008 by Robert B. Carton Selected Business Law Topics

Copyright © 2008 by Robert B. Carton The Uniform Commercial Code  Merchants must be familiar with the UCC  A merchant is anyone that sells a product  Any sales contract in excess of $500 must be in writing  The UCC governs aspects of borrowing File a UCC-1 form to secure your interest in property These filings are public information and show up on credit reports  Take a business law class to learn more

Copyright © 2008 by Robert B. Carton Torts  A wrongful act against an individual  Action is between individuals, not The People  Burden of proof is based on the preponderance of evidence 51% of the jury must be convinced  Punishment is generally monetary damages Not the case in real estate or collectables  Acts may be willful or as a result of negligence  Negligence has four conditions A duty, the breach of the duty, causation from the breach, and actual injury The “reasonable person” standard applies –Different levels of care are required for invitees, licensees, and trespassers  A business owner is required to maintain reasonably safe premises  “Use at your own risk” does not always protect you, and almost never with children  Attractive nuisances

Copyright © 2008 by Robert B. Carton Types of Torts  Defamation: A malicious, unfounded attack on reputation or character  Slander is verbal while libel is written  If you can’t say something nice, don’t say anything at all  Don’t give references on past employees. Just confirm employment dates.  Assault: communicating threats of bodily harm

Copyright © 2008 by Robert B. Carton Fraud  An intent to deceive a person in order to obtain personal enrichment.  Elements of fraud  Intent  Misrepresentation of a material fact  The accused knew the representation was false  The accused intended that the plaintiff would act in reliance on the false fact  The plaintiff actually did rely on the false fact and it was reasonable to do so.  The plaintiff suffered personal or financial injury and can prove the loss  Perception of the plaintiff is critical and even if you did not intend to defraud, if your actions reasonably give rise to the plaintiff’s interpretation, you may be liable.

Copyright © 2008 by Robert B. Carton Warranties  Contractually establishes the characteristics and level of quality a purchaser can expect of goods or services  Expressed warranties are communicated to the purchaser Comments about quality, either quantifiable or relative can be interpreted as warranties, even if made casually  Implied warranties are part of the UCC Clear title to the transferred property Protection from infringement claims by third parties Merchantability: the goods are physically fit and safe for the customary purpose they are being used Fitness for purpose: the buyer can rely upon representations of the seller, as an expert, that the product is fit for their purposes

Copyright © 2008 by Robert B. Carton Product Liability  Liability exists even without a warranty  The goods or services did not meet the “due care” standard Product or service was inherently dangerous increases risk  Get advise from attorneys and insurance protection

Copyright © 2008 by Robert B. Carton Contract Law  A legally binding agreement between two or more competent parties containing promises relating to certain acts of the parties.  Offer  Acceptance  Consideration  Capacity of the parties  Legal to do A murder contract is not enforceable in law  Proper form Certain contracts must be in writing

Copyright © 2008 by Robert B. Carton Agency Law  An agent represents another person in a business transaction  Employees are agents  An agent has the power to commit the organization  Independent contractors  Not an agent unless expressly granted agency power  NOT an independent contractor if: Direct the task and the right to control how it is done Direct where the work is done Direct when the work is done

Copyright © 2008 by Robert B. Carton Bankruptcy  Chapter 11  Continue in business but restructure the debts  Chapter 7  Liquidation  Can be either voluntary or involuntary  If more than 12 creditors, three (3) must join to force a filing  If fewer than 12 creditors, one unsecured creditor owed at least $5,000 may force a filing  Both may require a receiver or trustee  You cannot discharge certain debts in bankruptcy