CORNELL ECON 4040 - Exam 2 Study Guide (6 pages)

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Exam 2 Study Guide

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Exam 2 Study Guide



Study Guide
Cornell University
Econ 4040 - Economics and the Law
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Econ 4040 1st Edition Exam 2 Study Guide Lectures 11 20 Property Law Takings Stuff 5 Amendment No person shall be be deprived of life liberty or property without due process of law nor shall private property be taken for public use without just compensation Cases Kelo v City of New London Facts City of New London is blighted To develop the place economically and improve everybody s quality of life the City of New London makes an economic development plan They want to take pieces of property with low value purchase them and resell to private developers to help with making the city overall better Kelo doesn t want to let New London take the property with just compensation SCOTUS hears the case Kelo s Argument in a Nutshell because private intermediaries get the property the property is not being taken for public use property rights of the owners really important New London s Argument in a Nutshell The economic development is for the broader public Public benefit Public Use SCOTUS New London prevails Key concepts meaning of public use Property rights of owners vs social welfare Goldstein v NY Urban Development Corporation Brooklyn Barclays Center Case Facts Goldstein lived in Brooklyn Not a particularly blighted area In Brooklyn not Connecticut Otherwise facts are the same as Kelo Key concepts Public use property rights of owners vs social welfare Pennsylvania Coal v Mahon Facts Regulators Kohler act say you can t mine coal Coal mine right holder sues Says completely devaluing the property is a taking Holmes Agrees with the argument because it amounted to a complete wipeout of the value of the property Total diminution or elimination of the value of the property interest Total diminution in value because mine rights are separated from the rest of the property rights Under state law mining rights are a separate estate or grouping of rights Holmes uses this state law Keystone v DeBenedictis Facts Very similar to the Penn case except here the law didn t say that the interests in mining were a separate property interest from the surface area th Statute that looked like Kohler Act See Penn sustained b c statute was designed to protect public and diminution in value was not as much b c subsurface interests were not separate interests NO conceptual severance Lucas v South Carolina Coastal Council Beach Access Case 100 diminution of value when coastal council eliminates owner s access to the beach Scalia s Rule here A regulation that deprives owner of all economically beneficial use is a per se taking unless the restriction could have been achieved through the common law of nuisance Contract Law Key principles Promote efficient exchange not all exchange requires a contact ex contemporaneous exchange but promises that may induce reliance should be enforceable as contracts Should not be enforced when Some funny or negative circumstances surrounding the signing Incapacity Fraud Duress Mistake outside of buyer s regret i e Sherwood cow Unconscionability i e Walker Thomas etc Something happens subsequently to the formation that renders the contract unenforceable Impossibility think Lady Gaga and the burning down of the Carrier Dome Remedies for property Injunction Damages No remedy Remedies for K breach Specific performance Damages K is voided Voided declared not valid or legally binding Specific performance prob not rewarded for 1 Personal services economically inefficient unconstitutional 2 When performance is grossly expensive Chicago Board of Realtors v City of Chicago Facts landlord wants to evict tenant for non payment of rent Defendant didn t pay bc landlord didn t maintain the room s habitability Key Concepts Warranty of habitability implicit in the contracts that the apartment would be in a certain condition People cannot possibly contract for every possible contingency if the court refuses to look past the contract you will end up with ridiculously complicated contracts Coase theory transaction costs problem Courts use the reasonably contracting parties standard to decide what to include in the contract implicit in this is the idea of TANSTAAFL Javins v First National Realty simple but important case Facts Tenants did not pay rent LL tries to evict Tenants allege LL did not meet housing code basically had constructively evicted the tenants already and the tenants didn t need to pay rent Tenants prevail Landlords have to provide for habitability Arguments Javins Realtors Housing codes are created by the law Basically all Wait a second if we have to comply with residents are renting with the expectation that the onerous codes we have to pass the law is being complied with compliance costs on to tenants like Javins Coase Theory Transaction Costs Shell Oil v Marinello Facts leasee gas station wants his lease not to be terminated but the contract is silent about it Key concepts Different contract types in regards to termination listed in order of burden levels Good cause what the leasee wants Good faith At will what the leasor wants Berry v Barbour Facts general contractors did extra work not covered by the contract and are suing to recover compensation defendant argues that the damage they cured was caused by their own negligence Key concepts Quasi contract Ask what organization would the reasonable parties have arrived at agreed to Successful plaintiffs generally have the following 1 Owner selects contractor 2 Owner has existing relationship w contractor 3 Emergency situation occurs Foisting when contractor performs services that the reasonable parties would not have agreed to and expects compensation for the work performed Sherwood v Walker Facts a contract between the two parties to purchase a cow the contract expresses the belief that the cow is barren low price Before delivery of the cow it gets pregnant Buyer has the cow seller wants it back c a replevin Court says that if both parties believed that the cow was barren then contract is void Key concepts Superior Knowledge of buyer seller Risk allocation for mistakes Allocating the risk to the party with the superior knowledge and skill will result in superior allocation of resources Simkin v Blank Facts divorcing couple husband agrees to buy out wife s half of a Madoff account pays 700 million ish they later found out that there was no money in the account it was valueless Husband said there never was an account mutual mistake Wife said they are fighting about the value of the account Court said that if we re fighting about the

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