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95 Cards in this Set
- Front
- Back
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Functions of the Constitution |
1. Creates the three branches of government; outlines the powers allocated to each branch 2. Protects individual rights by limiting the power of government 3. Allows for modifications |
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Enumerated Powers vs. Reserved Powers |
Enumerated powers - certain powers that were delegated to the federal government by the states Reserved powers - ALL OTHER powers that the states have that they did not delegate to the federal government in the constitution |
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Article 1, Section 8 of the Constitution |
Specifies powers of Congress in the right detail: To pay the Debts and provide for the common defense and general welfare To regulate commerce with foreign Nations, the states, and with the Indian Tribes To declare War TO make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers |
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Federalism |
Enumerated Powers v. Reserved Powers Article 1, Section 8 |
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Three branches of the Government |
1. Legislative Branch (Article I) 2. Executive Branch (Article II) 3. Judicial Branch (Article III) |
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What does each branch do? |
Legislative Branch - Make the laws Executive Branch - Lists Presidential Powers & Enforces the law Judicial Branch - Interpreting the constitution, reviewing laws, and deciding cases involving states' rights |
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What checks does each branch have over the other two branches? |
Executive - President has veto power and nominates judges Judicial - Supreme Court reviews legislative and executive actions Legislative - Legislature can enact bills changing common law and can impeach the President |
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Amendments Discussed in Class |
1st - Freedom of Speech/Religion 14th - Equal Protection 5th and 14th - Due Process |
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Unprotected Speech in the 1st Amendment |
Dangerous Inciting Violence/Revolution Defamatory Child Pornography Obscene |
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Due Process |
Substantive - laws must be clear Procedural - people entitled to notice and a hearing before being deprived of life, liberty, or property |
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What are the consequences of anti-competitive behavior? |
Federal Lawsuits from the DOJ and FTC: Civil damages (including treble damages) or Criminal charges under the Sherman Act Private Party lawsuits: Civil damages (including treble damages and attorney fees) |
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What does the Sherman Act, Section 1 deal with? |
"contract, combination, or conspiracy, in restraint of trade..." |
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Types of Horizontal Restraints of Trade |
Price fixing - the maintaining of prices at a certain level by agreement between competing sellers Division of Markets - agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories Group Boycotts - a type of secondary boycott in which two or more competitors in a relevant market refuse to conduct business with a firm unless the firm agrees to cease doing business with an actual or potential competitor of the firms conducting the boycott |
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Vertical Restraints of Trade |
Resale Price Maintenance (vertical price fixing) - a manufacturer and distributors agree that the distributors will sell the manufacturer’sproduct at certain prices or the manufacturer will cut business with thedistributor |
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What does the Sherman Act, Section 2 deal with? |
Prohibition of illegal monopolies |
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What must the government prove for a monopoly to be present? |
Monopoly power - power to control prices or exclude competition and represented by market share >70% In Relevant Market - product/service market or geographic market Willful act of monopolization - restraint of trade, predatory price (Innocent/Natural monopolies are NOT illegal) |
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The Clayton Act, Section 7 prohibits mergers that... |
Will lessen competition or create a monopoly in a certain market or in a certain geographical area |
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Types of Mergers |
Horizontal Merger - 2+ companies in the same business and geographical market Vertical Merger - merger with a supplier or customer Market Extention Merger - two companies in similar fields whose sales do not overlap either by geographically or market Conglomerate Merger - anything that doesn't fit into the previous categories (i.e. firms in totally unrelated businesses); these are OK unless it would give one of the companies unfair advantage in its industry |
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Defenses to gov't attempt to block merger |
Failing Company Doctrine: no other reasonable alternative for the failing company, no other purchaser available, or assets of failing company would disappear from the market without the merger Small Company Doctrine: if they can compete with a large company more effectively |
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What does the Clayton Act, Section 3 deal with? |
Tying Arrangements: What is this? illegal to refuse to sell at item unless the purchaser also agrees to buy some other item When is it okay? okay, if there's a good reason to require they be bought together |
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What does the Clayton Act, Section 2 deal with? |
Price Discrimination: What is it? when identical or largely similar goods or services are transacted at different prices by the same provider in different markets |
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When is Price Discrimination okay? |
Cost Justification: e.g. the seller saves shipping by selling 10K items instead of 1K, so can sell for a lesser price Changing Conditions: goods are perishable or obsolete Meeting the Competition: price can be changed to match competitors |
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Antitrust Exemptions |
Statutory Exemptions - labor unions, agricultural, coops, railroads Implied Exemptions - professional baseball, airlines State Action Exemptions - economic regulations mandated by state law; (e.g. states might set rates for utility companies) |
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What do the USDA and FDA Regulate? |
Prohibits sale of adulterated food Prohibits false/misleading labeling of good Requires nutrition labeling of food |
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Other FDA Roles |
1. Regulation of testing, manufacturing, distribution, marketing, and sale of drugs 2. Regulation of cosmetics 3. Regulation of medicinal devices (e.g. pacemakers, dialysis, machines, etc.) |
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What does the CPSC (Consumer Product Safety Commission regulate? |
regulates the safety of consumer products (can force manufacturers to recall defective products or repair them) |
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What does the FTC regulate? |
Regulates a lot of stuff, including prohibiting false and deceptive advertising; misinformation/omission likely to mislead a reasonable consumer, or making an unsubstantiated claim |
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What does the CFPB (Consumer Financial Protection Bureau) regulate? |
Has VERY broad authority over lenders, bankers, insurance companies, and debt collectors |
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Acts Enforced by CFPB |
1. Truth in Lending Act (TILA) - requires disclosure of certain information to borrowers 2. Consumer Leasing Act - extends TILA's requirements to leases 3. Fair Credit Billing Act - regulates billing errors re:consumer credits 4. Fair Credit Reporting Act - regulates credit reporting agencies 5. Fair and Accurate Credit Transactions Act - allows consumers to obtain a free credit report and place fraud alerts on their files 6. Fair Debt Collection Practices Act - regulates debt collectors 7. Equal Credit Opportunity Act 8. Fair Credit and Charge Card Disclosure - Requires disclosures on credit care solicitations/applications |
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What's the EPA? |
Environmental Protection Agency; created to enforce US environmental protection laws Air Pollutions: vehicle emissions, factories, etc. Water Pollution: pollution, as well as water quality standards Land Pollution: hazardous waste |
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Important Securities Acts |
1. Securities Act of 1933 2. Securities Exchange Act of 1934 3. Sarbanes-Oxley Act of 2002 4. Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 |
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What is a security? |
an ownership or debt interest in a company |
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What are the SEC's powers? |
1. Adopts rules (AKA regulations) to interpret the Acts 2. Investigates and prosecutes (civilly) securities violations (criminal matters are investigated by SEC and prosecuted by DOJ) 3. Regulates securities brokers and advisors |
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What are reporting companies and why do we make companies report? |
Reporting companies: publicly traded companies and companies that have made registered offerings Why do we make companies report? the purpose is to give shareholders good information |
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What reports do companies have to report? |
1. Annual Report (10-K) 2. Quarterly Report (10-Q) 4. Monthly Report (8-K) (only when major events occur) |
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What is an IPO? |
Initial Public Offering is when a company sells shares to the public. A company that's never sold stock to the public before is "going public" when it IPOs, or an established publicly traded company that wants to raise capital can IPO. |
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What's the process of an IPO? |
Registration Statement - provides info on what is being offered, how the company is run, and what the money will be used for, and any risk factors Prospectus - must be filed with the registration statement; contains a lot of the same info, but presented differently; this is the document used to market the stock to the public |
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Special Offerings that don't require a full-blown registration Statement |
Reg A Offering - Non-reporting ocmpanies can sell up to $5 million of stock per year in a simplified process Small Company Offering Registration (SCOR) - SCOR enables small business to file a form (U-7, can be completed easily) with the SEC and sell up to $1 million in securities Well-Known Seasoned Issuer (WKSI) - can sell securities without as much regulation if you've sold $1 billion in the previous 3 years or have $700 million in outstanding public shares |
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Types of Exempt Securities |
1.Issued by the gov't 2. Short term notes 3. NFP securities 4. Bank securities 5. Stock dividends/splits 6. Security exchanges in corporate reorganizations |
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Types of Exempt Transactions |
1. Non-issuer exemption - when a transaction is not directly or indirectly executed for the benefit of the issuer 2. Intrastate offering exemption - securities offering that can only be purchased in the state in which it is being issued 3. Private Placement exemption - when securities are only offered to a select group of rich people 4. Small offering exemption |
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What is Insider Trading? |
Trading stock based on non-public information, or providing nonpublic information to someone who then trades the stock; it's ILLEGAL |
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Who must approve mergers and acquisitions? |
Shareholders must approve fundamental changes to a corp., including mergers/acquisitions; can lead to a proxy contest |
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Types of Mergers and Acquisitions |
Merger - acquiring company buys all the stock from the target company for cash, so that the target company shareholders have a bunch of cash, but no stock of the target company; requires recommendation of both boards and approval of both sets of shareholders Share Exchange - acquiring company buys all the shares from the target company for shares of the acquiring company, so that the target company shareholders have some shares of the acquiring company, but no stock of the target company; requires recommendation of both boards and approval of both sets of shareholders Short-Form Merger - when Corp A already owns at least 90% of the shares of Corp B; no shareholder or board approval necessary from subsidiary and no shareholder approval necessary from parent corp. Asset Purchase - allows you to buy all assets of a company, but not buy the stock; only requires board recommendation and shareholder approval of selling corp. |
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What is a tender offer? |
AKA Hostile Takeover; only requires approval of acquiring board |
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Rules of a Tender Offer |
1. Offer must stay open for at least 20 business days 2. Any change in the offer requires an additional 10 days 3. If acquirer ups the prices it's willing to pay, all previously tendered shares must receive the same price 4. If too many shares are tendered, all shares must be purchases on a pro rata basis |
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Defenses to Tender Offers |
1. Persuasion 2. Lawsuits to Delay 3. Selling a Crown Jewel 4. Poison Pill - effect that is harmless until company has been taken over and then it goes into effect and kills company 5. White Knight - someone else buying company besides acquirer 6. Reverse Tender Offer 7. Greenmail - Bribery/Blackmail Others |
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What is property? |
Property is really just a set of rights you have in relation to an object |
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Personal Property |
Everything else besides the land and the buildings on the land |
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Tangible v. Intangible |
1. Tangible – personalproperty that can be physically relocated such as furniture or office equipment 2. Intangible – copyrights,royalties, patents, personal service contracts, or partnership interests |
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How to acquire ownership in property? |
1. Purchase 2. Gift: Intent, Delivery, & Acceptance 3. Others: production, assassin, possession/capture, confusion, will/inheritance, or divorce |
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Types of Found Property |
1. Mislaid Property - Owner voluntarily places it somewhere, then forgets about it 2. Lost Property - owner negligently or inadvertently leaves it somewhere 3. Abandoned Property - owner doesn't want it |
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Who has the right to found property? |
1. Mislaid Property: Rights: 1) true owner, 2) owner of location, 3) finder; location owner has duty to keep it for the true owner 2. Lost Property: Rights: 1) true owner, 2) finder; refusal to return upon request = conversion/larceny 3. Abandoned Property: Rights: 1) finder |
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What is bailment? |
when you give your property to someone else for safe keeping; (property owner = bailor and property holder = bailee) It consists of 3 things: personal property, delivery of possession, and a bailment agreement |
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What duties doe the bailee owe? |
For the benefit of bailor: basically this is a favor and bailee only owes a duty of slight care For the benefit of bailee: bailee asks to use bailor's property and bailee owes a duty of great care Mutual Benefit: E.g. hiring movers, using a valet and bailee owes duty of reasonable care |
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Special Types of Bailment |
Warehouse Company: business of storing property for money; has a lien on the stored property Common Carrier: transportation services to the general public; strict liability for loss or damage Innkeeper: strict liability for damage (common law); innkeepers' statutes limit liability if the inn has a safe or expressly limits liability |
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What is Insurance? |
A contract (called a "policy") whereby one party agrees to indemnify another against loss/damage liability |
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Duties of an Insured person |
1. Pay Premiums 2. Notify the insurer of insured events within a reasonable time 3. Cooperate with insurer's investigation |
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Duties of an Insurance Company |
1. Duty to defend 2. Duty to pay |
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Common Insurance Clauses |
1. Deductible 2. Exclusions 3. Coinsurance 4. Incontestability |
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Types of Insurance |
1. Life: Owner, insured, beneficiary can be separate; suicide clause (2 years, usually) 2. Health/disability: unique because it's meant to be used 3. Vehicle 4. Homeowners/Renters |
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What is Real Property? |
The land and buildings on the property. |
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Surface/Subsurface/Air Rights |
1.Surface - when you buy land, you usually just buy the surface rights (Plants and trees growing on the land are considered part of the real property) 2. Subsurface - (mineral rights) may be sold separately 3. Air - Land owners generally also own the air rights, subject to FAA restrictions |
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What is an estate? |
the rights a person has to land |
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Types of Estates in Land |
1. Fee simple: "I give you Greenacre."; highest form of real property ownership; fullest bundle of rights 2. Fee Simple Defeasible: "I give you Greenacre, so long as it is never used as a dramshop"; you lose the property if the condition occurs 3. Life Estate: "I give Greenacre to John for his life, then to Jane."; John has rights while he's alive (but not absolute rights). |
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Types of Concurrent Ownership |
1. Tenants in common: easiest form of concurrent ownership; each party owns a pro rata undivided interest in the property; each party's interest is freely transferable stays with the party, even upon death; automatically becomes this unless specifically expressed otherwise 2. Joint Tenants: same as above, but upon death, that party's interest automatically transfers to the other owner(s) (called the Right of Survivorship) 3. Tenants by the Entirety: Same as Joint Tenancy, but each party's interest is not freely transferable; the parties must be married |
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Special Doctrines for Concurrent Ownership |
1. Community Property: in these states, any property acquired during a marriage is automatically jointly owned and cannot be transferred without consent; exceptions to this are gifts and inheritances 2. Condominiums: owners have a fee simple interest in their unit, and a concurrent interest in the common area (as TIC); strip malls are business condos 3. Cooperatives: a corporation owns the building and residents own shares in the corporation; each resident leases a unit under a renewable, long-term lease |
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Transfer of Real Property |
1. Warranty Deed: grantor is warranting that he/she has good title to the property, has the right to sell it, and that there are no encumbrances on it; if problems arise, grantee can seek recovery from grantor; good for buyer 2. Quitclaim Deed: grantor basically says "whatever rights I have in this property, I give them to you. But no guarantees of what those rights are."; good for seller, bad for buyer 3. Function of Title Insurance 4. Marketable Title: the property is free from encumbrances or other defects that would affect the value/ownership of the property; sellers have duty to give good title to buyers; this is what title insurance does - assures grantees that they're getting good title |
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What is adverse possession? |
If you possess someone else's property and for a period of time, it can become yours if criteria are met |
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What are the criteria for Adverse Possession? |
1. If it's long enough (usually 7-20 years)(can be by successive adverse owners) 2. If it's open, visible, and notorious 3. If it's actual and exclusive 4. If it's continuous and peaceful 5. If it's hostile and adverse |
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What is an easement? |
Non-possessory interest in land that gives you the right to use it for some purpose |
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Types of Easements |
1. Express: expressly created 2. Implied: implication & necessity 3. Prescription: same as adverse possession |
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Other non-possessory interests |
1. License - gives you the right to enter onto someone's property for a specified period of time (e.g. a movie ticket) 2. Profit: give you the right to take something from someone's property (e.g. timber, minerals, etc.) |
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Types of Leases |
1. Tenancy for years - ANY set duration, terminates automatically upon expiration 2. Periodic Tenancy - no set end date, but rent is due at certain intervals; (e.g. monthly); one period's notice required to terminate 3. Tenancy at will: may be terminated by either party at any time 4. Tenancy at sufferance: when a tenant wrongfully holds over after termination |
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Landlord Duties |
1. Deliver possession of leased premises 2. Not to interfere with tenant's quiet enjoyment of premises 3. Maintain the premises |
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Tenant Duties |
1. Pay Rent 2. Use premises for proper purposes 3. Don't commit waste (i.e. don't destroy the place) 4. Don't disturb other tenants |
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Lease Transfers |
a. If a landlord sells the premises, the lease is still enforceable against the new landlord. b. Tenant can assign a lease to someone else, but still remains liable on it unless the landlord excuses him/her c. Tenant can sublease to someone else. Main difference between sublease and assignment is that in a sublease, the sublessee doesn’t get all of the tenant’s rights under the lease (e.g. the right to renew the lease), and the original tenant is always still liable. |
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Government Zoning of Real Property |
a. Establishes land usedistricts within a municipality (e.g. residential, commercial, industrial) b. Restricts the height,size, location of buildings c. Establishes aestheticrequirements for exteriors |
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Anti-Discrimination of Gov't Regulation of Real Property |
a. Fair Housing Act of 1968 b. It is illegal to refuseto sell/rent/finance housing based on race, color, national origin, sex,religion, disability, or family status |
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Exemptions of Anti-Discrimination of Gov't Regulation of Real Property |
i. Owner of an owner-occupied building of <5 units ii. Person who leases a single-family dwelling and owns <4 single-family dwellings |
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Eminent Domain Meaning |
a. 5thAmendment: “No person shall… bedeprived of life, liberty, or property, without due process of law; nor shallprivate property be taken for public use, without just compensation.” b. Government CAN force youto give them your property (called “a taking”), but: i. You’re entitled to notice and a hearing before an impartialjudge to protest the government’s action ii. You must be paid the fair market value of the property The US Supreme Courtreversed, saying that the general benefit enjoyed by a community from economicgrowth qualifies as a permissible “public use” |
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What is international law? |
“international law”really means any agreements with other countries into which a nation hasvoluntarily entered |
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Governmental Power in International Law |
Commerce clause – a state cannot pass laws that impactforeign commerce (e.g. taxing foreign products more than homegrown products) Treaty clause – federal government has sole authority tomake agreements with other countries; treaties are law, and any conflictingstate/local law is void |
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NAFTA |
between US, Canada, & Mexico; it eliminates or greatly reduces mosttariffs and other trade barriers between the three nations |
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The UN |
purpose is to maintain peace/security in the world, promote economic/social cooperation, & protect human rights; it pretty much fails at all of these things |
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The EU |
most European countries are members of the EU, which primarily attemptsto make trade between members more open and free |
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Other multinational Organizations |
i. Association of Southeast Asian Nations ii. North Atlantic Treaty Organization iii. Organization of Petroleum Exporting Countries iv. World Trade Organization |
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What is Bankruptcy? |
Bankruptcy is a set oflaws that allow debtors to be relieved of some of their debts in order to get afresh start if they are unable to pay their debts |
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Who are the players in Bankruptcy? |
i. Bankruptcy court – a special federal court; a step below District Court ii. Bankruptcy estate – created upon filing of the petition. It automatically holds the title to all of the debtor’s assets (except for exempt property) iii. Bankruptcy trustee – responsible for marshaling up all the debtor’s assets and administering the estate |
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Procedure for filing bankruptcy? |
1. First, file a petition 2. Upon filing of the petition, two things happen automatically: the estate is created and now owns the debtor's assets, and the automatic stay becomes effective 3. Once the estate is created, creditors file claims and the trustee administers the estate 4. After the estate has been administered, all or some of the debts will be discharged |
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What are some debts that cannot be discharged through bankruptcy? |
1. STUDENT LOANS 2. Most Taxes 3. Debts for willful ormalicious injury to a person or property 4. Fraud 5. Child support/alimony 6. Others |
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Fraudulent Transfer and Exempt Property: |
i. If a debtor transfers assets within the 2-year period prior to filling the petition and either 1) doesn’t receive fair value for them, or 2) does so with the intent to avoid creditors, the court can undo the transfer and get the assets back ii. Certain assets are exempt from inclusion in the estate 1. Federal law exempts assets like a certain amount of equity in your home, some equity in a motor vehicle, and a small amount of household goods b. Different types of bankruptcy |
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Types of Bankruptcy |
1. Chapter 7: "Straight Bankruptcy" - the only chapter that liquidates the debtor's assets 2. Chapter 13: for an individual debtor with a regular income, chapter 13 allows them to keep their stuff, but have debts readjusted into a payment plan (generally 5 years) 3. Chapter 11: generally used for corporate reorganizations |
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Process of Chapter 7 Bankruptcy |
a. All the assets are marshaled by the trustee, who then sells them b. The proceeds are paid to the creditors, and the debts are discharged. c. The debtor is free from the debts. d. Liquidated property is distributed as follows: first, to secured creditors; next to unsecured creditors in this order: 1. Child support Claims 2. Feeds for administering the estate 3. Claims for wages, commissions 4. A bunch of others 5. General unsecured claims |
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Criteria for confirming a chapter 13 plan: |
a. Must be proposed in good faith b. Must be feasible in good faith c. Must give creditors at least what they would have gotten under chapter 7 d. Debtor has paid all child support obligations owed e. Debtor has filed all tax returns |
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Requirements for confirmation of Chapter 11 Bankruptcy plan |
1. In the best interest of creditors 2. Feasible 3. Each class of creditors accepts the plan: at least 50% of the creditors that represent at least 2.3 of the dollar amount of the class; if not all classes accept it, the court can confirm the plan anyway using the "cramdown" provisions |
