Chapter Four. Sales 1
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1 Chapter Four Sales 1 Part 1: Introduction 1 A. Subject Matter of Article 2 1 I. Sale 1 II. Goods i III. Goods attached to realty 2 1. Crops 2 2. Minerals 2 3. Fixtures, 2 4. Services 2 B. Definitions 2 I. Merchants 2 II. Good Faith 3 Part 2: Formation 3 A. Offer and Acceptance 3 I. Firm Offer 3 II. Medium of Acceptance 5 1. Any Reasonable Manner 5 2. Acceptance by Shipment 5 III. Acceptance by Performance 5 IV. Battle of the Forms 5 B. Defenses 7 I. Statute of Frauds 7 1. Writing 7 2. Confirmatory Memo Rule 8 II. Unconscionability 8 III. Statute of Limitations 8 C. Parol Evidence Rule 8 D. Terms of the Contract 9 E. Modification 10 Part 3: Performance of the Contract 12 A. Performance by Seller 12 I. Shipment by Seller, 12 II. Noncarrier Cases. 12 III. Repudiation 13 B. Performance by Buyer 14
2 I. Acceptance and Payment of Goods Acceptance Payment 14 II. Right of Inspection Exercising Right of Inspection, Rejection 15 Part 4: Remedies 16 A. Seller's Prelitigation Remedies 16 I. Right to Withhold Delivery or Demand Cash Payment 16 II. Reclamation of Goods 16 III. Stoppage in Transit 17 IV. Identifying Conforming Goods 17 V. Resale 17 VI. Cancellation 17 B. Buyer's Prelitigation Remedies 18 I. Sale of Goods to Recover 18 II. Cover 18 III. Recoupment 19 C. Seller's Litigation Remedies 19 I. Action for Full Purchase Price Technical "Acceptance" by Buyer Passage to Buyer of Risk of Loss "White elephant?" goods 20 II. Action for Damages for Nonacceptance Contract-Resale Differential Contract-market Differential Lost Profits 21 D. Buyer's Litigation Remedies 22 I. Possessory Actions Replevin Specific Performance. 22 II. Action for Damages for Non-delivery Contract-cover Differential Contract-market Differential Consequential Damages Incidental Damages Deduction for Expenses Saved 24 E. Limitation of Remedies 24 I. Liquidated Damages Provision 24 IL Limitations on Damages 24 III. "Exclusive Remedy" Provision 25 II
3 Part 5: Warranties 26 A. Warranty of Title 26 B. Express Warrenties 26 I. Statement of Fact or Promise Form of warranty Sellers's Intent or Culpability Immaterial 27 II. Basis of the Bargain Time of Warranting Unread Warranties 27 C. Implied Warrenties 27 I. Warranty of Merchantability 28 II. Implied Warranty of Fitness 30 D. Disclaimer of Warranties 30 I. Disclaiming Express Warranties 30 II. Disclaiming Implied Warranties By Specific Language Disclaiming the Implied Warranty Timing the Disclaimer 31 E. Remedies For Breach of Warranty 31 I. Before Acceptance 31 II. After Acceptance Loss in Value of Goods Consequential Damages Incidental Damages 33 Further Reading 33 Chapter Five Law of Torts 34 Part 1: Law of Torts 34 A. Intentional Torts 34 I. Intent Act by the Defendant Specific and General Intent Transferred Intent 35 II. Battery Offensice contract 37 a) Definition 37 b) Criteria 37 c) Extended Personality Intent 38 III
4 3. Causation 40 a) Extent 40 b) Thin skull rule 41 III. Assault Apprehension 42 a) No hostility required 42 b) Tests for apprehension 42 c) Awareness 42 d) Imminent 43 e) Words Intent 45 IV. False Imprisonment Methods of Confinement Insufficient Forms of Confinement No Need to Resist 48 V. Intentional Infliction of Emotional Distress Extreme and Outrageous Conduct Intent and Transferred Intent 51 VI Trespass Physical Invasion Entries above the Surface Intent 53 VII. Trespass to Chattel and Conversion Trespass to Chattel Conversion 54 a) Dispossession 54 b) Destruction 54 c) Misdelivery 55 d) The Bona Fide Purchaser of Converted Goods Tresspass to Chattels and Conversion 55 B. Defenses to Intentional Torts 55 I. Consent Capacity Express Consent Implied Consent Scope and Termination of Consent Consent to Medical Treatment 57 II. Self Defense Retreat Reasonable Force 58 IV
5 III Defense of Property Standard of Reasonableness Deadly Trap Rules 60 IV. Recapture of Chattels 61 C. Intentional Torts Regarding Dignitary Injury 61 I. Defamation Defamatory language Publication Damage to Plaintiff's Reputation 62 a) Libel 62 b) Slander Defenses 63 a) Absolute Privilege 63 b) Qualified privilege 63 c) Truth 63 II. Invasion of Right to Privacy Appropriation Intrusion on Plaintiffs Seclusion False Light Public Disclosure of Private Facts 64 Part 2: Negligence 65 A. Duty of Care 66 I. Palsgraf v. Long Island Railroad Co 66 II. Custom 68 III. Statutory Standard of Care 68 IV. The Relevance of Personal "Circumstances" Disability Mental Illness Children 72 a) General 72 b) Adult activities 73 V. The Relevance of External Circumstances 74 VI. Occupiers of Land Trespassers Licensees Invitees 76 VII. Establishing Breach - Res Ipsa Loquitur 77 VIII. Causation Proximate Cause Intervening and Superseding Cause 79
6 IX. Defenses Contributory negligence Comparative negligence Assumption of Risk 82 a) Express assumption of risk 82 b) Implied assumption of risk Statute of Limitations 82 Part 3: Strict Liability 83 A. Abnormal Dangerous Activities 83 I. The Old Concept 83 II. Later Developments Explosives and high energy activities Poisons and other toxic material 85 B. Product Liability 85 I. General rule 85 II. Defective : Unavoidably unsafe products Measured by time of sale Obvious dangers 86 III. Design Defects Negligence predominates Suitability for unintended uses 87 a) Unforeseeable misuse 87 b) Foreseeable misuse 87 IV. Warning Manufacturing defect Design defect Properly manufactured and designed product Latest developments 89 Further reading 89 Chapter Six Business Associations 90 Part 1: Doing Business 90 Part 2: Sole Proprietorship 90 A. Beginning of Operation 91 B. Ownership 91 C. Continuity and Transferability, 91 VI
7 Part 3: Partnership 92 A. "General" Partnership 92 I. Applicable Law 92 II. Formation Agreement 93 a) Capacity 93 b) Formalities 94 c) Legality of Purpose Partnership by Estoppel 94 a) Liability of Person Who Is Held Out as Partner 94 b) Liability of Person Who Holds Another Out as Partner III. Relations Between Partners Participation in Management Remuneration Indemnification Contribution Fiduciary Duty Information Legal Actions between Partners 99 a) General Rule 99 b) Actions for an Accounting 99 IV. Relations of Partners to Third Parties Authority 100 a) Actual Authority 100 aa) Authorized by Agreement 100 bb) No Specific Authorization 100 b) Apparent Authority Liability 101 a) Liability of Present Partners 101 aa) Contract Liability 101 bb) Tort Liability 101 b) Liability of an Incoming Partner 102 c) Liability of a Retiring Partner 102 V. Dissolution Types of dissolution 102 a) Act of the Parties 103 b) Dissolution by Operation of Law 103 c) Dissolution by Decree Notice Business Transactions After Dissolution Distribution of Assets 104 VII
8 B. Limited Partnerships 105 I. Applicable Law 105 II. Two Types of Partners 106 III. Formation Requirements Name Contribution 107 IV. Liability of Limited Partners Exceptions of the Limitation 108 a) Limited Partner Participates in Control of Business 108 b) Limited Partner's Name Used in Partnership Name Liability Because of the Agreement 109 V. Rights of Limited Partners Voting Right Sharing of Profits and Losses Right to Information Interest Assignable Business Transactions with a Partnership Withdrawal of Limited Partner Ill 7. Right to Dissolve Ill VI. Rights and Liabilities of a General Partner Ill VII. Dissolution Ill 1, General Principles Ill 2. Distribution of Assets 112 Part 4: Law of Corporations 112 A. General principles 112 I. Characterisation Free Transferability of Ownership Interests Limited Liability Continuity of Existence Centralized Management Entity Status Taxation 113 IL Distinction Among Corporations 113 III. Applicable Law 114 B. Organization 114 I. Purpose II. Document of Incorporation Content of Filing Document Amendment of the Initial Document 115 III. Bylaws 115 VIII
9 C. Transactions by Promoters Before Incorporation 117 I. Basic Function of Promoters, 117 II. Promoter's Liability Awareness of the Promoter, Contract says that a Corporation is not Formed 118 a) Never Formed, or Immediately Defaults 118 b) Formed and Then Adopted 118 III. Liability of Corporation 119 IV. Promoter's Fiduciary Obligations 119 D. Defective Incorporation 119 I. Common law "de facto" Doctrine 119 II. Corporation by Estoppel 120 E. Piercing the Corporate Veil 120 I. Traditional Test 120 II. Individual shareholders Tort vs. contract ("voluntary creditor"), Fraud Inadequate Capitalization 121 a) Zero Capital 122 b) Siphoning Failure of Formalities 123 III. Parent/Subsidiary No Liability Generally Factors 123 IV. Brother/Sister ("Enterprise Liability") 124 F. Corporate Finance 124 I. Introduction 124 II. The Issuance of Common Shares Common Shares Par Value Price of Shares 125 III. Issuance of More Than a Single Class of Shares Preferred Shares Equivalence of Shares Within a Class or Series 126 G. Statutory Scheme of Management and Control 127 H. Directors 127 I. Number and Changes 127 II. Meetings, Quorums and Notice Notice Quorum Voting 128 IX
10 III. Compensation 128 IV. Resignation and Removal 128 V. Filling of Vacancies 129 VI. Decisions 129 VII. Duties of Care and Loyalty Insider Trading 129 a) Dealing with Noninsider Shareholders 130 b) Dealing with Corporation 130 c) Exploiting Inside Information in Market Trading Sale of Office Business Judgment Rule 132 VIII. Liabilities and Suits Against Directors and Officers Statutory Liabilities of Directors Persons who May Bring Action 135 J. Officers 137 I. Statutory Designations of Corporate Officers Traditional Statutes Flexible Modern Statutes 137 II. Authority of Officers in General Oral Representations by Officer Reliance on Officer's Title, Reliance on Certified Resolution 138 III. Duties of Officers 138 IV. Liability Express Guarantee Confusion of Roles Statutory Liability Personal Participation in Tortious Conduct Actions in Excess of Authority 140 V. Tenure of Officers and Agents Employment Contracts in General Lifetime Employment Contracts Discharge for Cause 140 K, Shareholders''Rights and Powers 141 I. Rights in Management of Corporation Not Management of Day-to-day Business Certain Methods of Control Special Provision for "Nonpublic" Corporations 142 II. Shareholders' Meetings Place of Meetings Notice Eligibility to Vote 143 X
11 III. Proxy Rules Form of Proxy Authorization Expiration of Proxy Authorization Revocability of Proxy 144 IV. Voting Rights Quorum Certain Requirements 145 a) Election of Directors, 145 b) Other Action 145 c) Cumulative Voting 145 V. Class Voting 145 VI. Voting Trusts 145 VII. Dividends Generally 147 a) Capital Tests 147 b) Nimble Dividends 147 c) Insolvency Test Liability of Directors 148 a) Bad Faith 148 b) Negligence 148 c) Creditor Suit Liability of Shareholders 148 a) Common Law 148 b) Statute 149 L. Resolution of Disputes 149 I. Dissension and Deadlock 149 II. Dissolution Kinds of Dissolution Grounds of Dissolution 150 Part 5: Limited Liability Company 151 A. Purpose 151 B. Formation 151 I. of Articles 151 II. Publication 152 III. Management 152 C. Liability of Members 152 D. Sharing Profits and Losses E. Transfers of Interest 153 F. Dissolution 153 Further reading 153 XI
12 Chapter Seven Procedural Questions 154 Part 1: Introduction 154 Part 2: Federal Courts 154 A. Structure 154 I. Supreme Court 153 II. Trial Courts 154 III. Appellate Courts 154 B. Judicial Process 156 I. An Adversarial System 156 II. Fees and Costs of Litigation 156 III. Procedural Rules for conduct of Litigation 156 C. Civil Cases 157 I. Discovery 157 Desposition 157 II. Alternative Dispute Resolution 158 III. Trial Principles of Conduct Objections Final Stage 159 D. Criminal Cases 160 I Pretrial Interrogation 160 II. Initial Apperarance 160 III. Arraignment 160 IV. Burden of Proof 161 V. Result of the Verdict: Not Guilty 161 VI. Result oft the Verdict: Guilty 161 E. The Appeals Process 162 I. Trial Court Actions that are Reviewable Interlocutory Appeals Mandamus 162 II. Grounds 163 III. Panel's Decision 163 IV. Supreme Court 163 Part 3: The Jury 164 A. Civil Trial Jury 164 I. Number of Jurors 164 XII
13 II. Unanimity 165 III. Jury Sektion Dismissal for Cause Challenges Without Cause Balanced Pool Alternates Instructions Juror Misconduct 166 B. Criminal Trial Jury 166 C. Grand Jury 166 Part 4: Jurisdiction 167 A. Personal Jurisdiction 167 I. In Personam Jurisdiction Presence Domicile Residence Consent Non-resident Motorist In-state Tortious Conduct Owners of in-state Property Conducting Business Domestic Relations Cases 172 II. In Rem Jurisdiction 172 IIL Quasi in Rem Jurisdiction 172 IV. Jurisdiction over Corporations Minimum Contacts Dealings With Residents of Forum State Product Liability Unreasonableness Class Action Plaintiffs 178 C. Subject Matter Jurisdiction 178 I. State Courts General Versus Limited Jurisdiction Exclusive Versus Concurrent Jurisdiction 179 II. Federal Courts Federal Question Jurisdiction 179 a) Interpretation of Federal Law 179 b) Claim Based on the Merits 180 c) Anticipation of Defense 180 XIII
14 2. Diversity of Citizenship 180 a) Date For Determining 180 b) Domicile 180 aa) Resident Alien 180 bb) Presence of Foreigner 180 c) Complete Diversity 181 d) Amount in Controversy 181 e) Pleading not Dispositive 181. III. Supplemental Jurisdiction 181 D. Venue 181 I. State action Residence Forum non conveniens 182 II. Venue in Federal Actions Three methods "Defendant's residence" venue "Place of events or property 11 venue No "plaintiff's residence" venue Corporation 183 Part 5: Class Action 184 A. Introduction 184 I. Jurisdiction 184 II. Binding on absentees 184 III. Defendant class 184 B. Prerequisites 184 I. Size 184 II. Typical clains 184 III. Fair representation 185 C. Binding effect 185 D. Attorneys' fees 195 Federal statute requires 185 Further reading 185 Vocabulary 187 Index 207 XIV
15 PPN: Titel: Introduction to the US American legal system / von Alexander Dörrbecker; Oliver Rothe Münster : Jur. Lehrgänge Alpmann u. Schmidt, 2005 ISBN: Bibliographischer Datensatz im SWB-Verbund
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