Chapter 6 7 Tort Civil Wrong not breach of contract Intentional Tort harm caused by deliberate action o Defamation o False imprisonment o Intentional infliction of emotional distress o Battery assault o Trespass Conversion and Fraud Fraud Fraudulent Misrepresentation Affirmative Misrepresentation OR Omission Made Intentionally with Scienter Reasonably Relied on by Another To His Her Its Detriment Harm Damage Negligence Duty of care Breach of duty Damages harm Legal Remedies Money Damages Compensatory Damages Punitive Damages extra damages to o Punish a wrongdoer o Make an example of a wrongdoer For what level s of torts may punitive damages be awarded o Intentional torts libel slander o Recklessness disregard for safety Assumption of the risk Waiver Disclaimer Limitation on remedies Limited Warranty A person who voluntarily enters a situation that has an obvious danger cannot complain if she is injured Chapter 8 White Collar Crimes financially motivated nonviolent crimes committed for illegal monetary gain RICO Racketeer Influenced and Corrupt Organizations Act of 1979 Criminal RICO Civil RICO including 3x damages Federal law sets additional penalties for pattern of racketeering activity Used against business professionals not just gangsters white collar crimes Pleas Guilty Not Guilty No Contest Guilty specific admissions of what person did wrong will not need trial No Contest denial of everything and wants trial Not arguing against trial and evidence Not Guilty denial of everything and wants trial Plea Bargaining agreement in which the defendant pleads guilty to a reduced charge and prosecution recommends to the judge a relatively lenient sentence Chapter 13 Rescission Equitable remedy to undo a contract and put the parties where they were before they made the agreement When is it warranted for Unconscionability o Oppression when one party uses its superior power to force a contract on the weaker party o Surprise the weaker party did not fully understand the consequences of its agreement Void Contract Contracts that violate a criminal law statute e g serious felony Void or Voidable Contracts that violate public policy depending on the severity of the violation Contracts that violate licensing statutes If statute is regulatory then the contract is unenforceable If statute is primarily revenue raising e g collects a tax or government fee then the contract usually is enforceable Noncompetition Clauses Covenants not to Compete Enforceability depends on state law in states that enforce them the particular clause Must be limited in scope i e be reasonable Must be limited in time geography Must not act to deprive someone of making a living California law does not generally enforce noncompetition clauses in employment contracts but will enforce them in the sale of business goodwill situations Exculpatory Clause A contract provision that attempts to release one party from liability in the event the other is injured Release Waiver Limitation on Remedies Disclaimer Click Wrap Click On Agreements type of contract that is widely used with software licenses and online transactions in which a user must agree to terms and conditions prior to using the product or service Shrink Wrap Agreements purchase agreements that are attached to shipped products usually bound by shrink wrap that contains terms and conditions Chapter 17 Conditions an event that must occur before a party becomes obligated under a contract Condition Precedent event must occur before a duty arises Condition Subsequent condition must occur after a particular duty arises Concurrent Conditions both parties have a duty to perform simultaneously Excuses for Nonperformance Impossibility o Destruction of the Subject Matter o Death of the Promisor in a Personal Services Contract o Illegality Commercial Impracticability Also in Ch 22 o An event occurs that neither party anticipated and fulfilling the contract would now be extraordinarily difficult and unfair to one party Performance Strict Complete Full performance requires one party to perform its obligations precisely with no deviation from the contract terms Substantial performance occurs when one party fulfills enough of its contract obligations to warrant payment Good Faith honesty in fact implied covenant of good faith and fair dealing a UCC concept is implied into ALL contracts under the laws of California Breach of contract Failure to perform a contract duty When one party breaches a contract the other party is discharged Material breach Conforming Goods Goods that meet standards of contract Non material breach Non Conforming Goods Goods that do not meet standards of contract Effect of a material breach Courts will discharge the contract Effect of a non material breach Contract will not be discharged but will need compensation Time for performance Time is of the essence is legal language meaning that failure to perform on time is a material breach Reasonable or Seasonable Time may be implied under the UCC if the contract fails to specify a time for performance Chapter 18 Remedies for breach of contract Equity Injunction Court order that requires someone to do something or refrain from doing something Expectation damages money required to put one party in the position she would have been in had the other side performed the contract Specific performance forces both parties to complete the deal Liquidated Damages Clause Provision in the contract that declares in advance what one party will receive if the other side breaches Specific Performance Buyer s remedy Standards for Specific Performance 1 Money Damages inadequate e g Goods are unique or irreplaceable meaning Irreparable harm 2 Substantial unfairness will result without this remedy No Specific Performance for personal services Court can t compel slavery Legal remedies money damages Compensatory direct damages damages paid directly according to contract Consequential sometimes called Indirect or Special Damages Indirect damages from the breach of contract which must be reasonably foreseeable to the other party at the time of contracting Limitation s on Recovery of Damages in Breach of Contract cases Punitive Damages No right to recover punitive damages in straight breach of contract cases unless for a separate Tort e g fraud in the same case Liquidated Agreed on Damages If the clause stating them is valid these damages are the ONLY ones a non breaching party may recover To be valid a liquidated damages clause must meet ALL