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

2. 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

3. 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

4. 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

5. 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.

6. 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

7. 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

8. 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

9. 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

10. 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