Professional Documents
Culture Documents
I.
The Types Of Law
A. Constitutions
1. Laws that determine the fundamental political principles of a government; use separation of powers to establish
Congress (make laws), pres (execute/enforce laws), and judiciary (interpret laws)
2. Used by both state and federal governments; recognizes states power to make laws in certain areas.
3. Have various functions
a. Set up the structure of a government by creating branches and subdivisions and laying out the powers
provided to each branch and subdivision
b. Prevent other units of government from taking certain actions or passing certain laws (I.e., the Bill of
Rights to the United States Constitution prohibits government action that restricts specific individual
rights such as freedom of speech, freedom of association, etc.)
B. Statutes
1. Laws created by elected representatives in Congress or a statute legislature; uniform acts = model statutes made
by private lawyers/scholars and becomes law after legislature enacts them
2. Some federal statutes include the Clean Water Act, the Federal First Offenders Act, and the Patriot Act
C. Common Law: judge-made law/case law
1. If a case is not governed by a statute or other type of law, judges will apply case law or common law; does not
prevail for a precedent properly distinguished (when court see diff. b/t present and past case)
2. Stare decisis: the practice where judges follow the decisions of other judges (I.e., when deciding a case
involving race discrimination, a judge might look to the U.S. Supreme Court case, Brown v. Board of Education, as
a basis for its decision)
3. Restatements- can be adopted as common law by states; stimulates changes in common law by suggesting new
rules that courts later decide to follow.
a. Collections of common law (and sometimes statutes) that cover various areas of law
b. Because they are created by the American Law Institute, and not judges, they are not binding on courts
but do provide persuasive authority
D. Equity
1. A body of law focusing on fairness rather than rigid rules
2. Equitable remedies include:were developed because remedies in common law were too few
a. Injunction: a court order forbidding or requiring a party to act (most important)
b. Specific performance: an order requiring a party to perform as promised in a contract
c. Reformation: a court rewriting of contract terms to reflect parties intentions
d. Rescission: a cancellation of a contract, returning parties to the position they were in before their
agreement
E. Administrative Regulations and Decisions
1. Laws created by administrative agencies such as the Environmental Protection Agency and U.S. Immigration and
Customs Enforcement
2. Congress gives the agencies the power to make laws through a delegation (or grant) of power; generally created
by statute specifying areas can make law and scope of powers
3. Agencies make two types of law:
a. Administrative regulations: laws published in one source such as the Code of Federal Regulations;
differ from statutes cause enacted by body not elected
b. Agency decisions: statements from internal courtlike structures
F.
Treaties
1. Agreements between the United States and foreign governments, such as the North American Free Trade
Agreement or NAFTA
2. Considered the supreme law of the land if made by the president and approved by two-thirds of the U.S. Senate
G. Ordinances: enactments by counties (i.e., Ventura County, Los Angeles County, Orange County) and municipalities, such
as zoning ordinances
H. Executive Orders: laws issued by the President of the United States or a state governor; results from legislative
delegation
II.
Priority Rules: when different types of laws conflict, courts apply the following rules
A. Federal supremacy: federal laws (Treaties, the U.S. Constitution, Federal Statutes) trump conflicting state and federal
laws
B. The federal constitution trumps other federal laws and state constitutions trump other state laws
C. When a treaty conflicts with a federal statute, the law enacted last will prevail
D. Statutes trump administrative decisions and regulations
E. Statutes and any laws derived from them trump inconsistent judge-made law
III.
Classifications of Law
A. Criminal law (government prosecutes someone for committing a crime I.e., California v. OJ Simpson) and civil law
(obligations owed by private parties to one another I.e., the lawsuit filed by the Brown and Goldman families against OJ
Simpson for wrongful death); Criminal penalties (prison/fines) differ from civil remedies ($ damages or equitable relief);
same behavior will sometimes violate both and liabilities can be claim at same time
B. Substantive law (rights and duties of individuals in society) and procedural law (controls the behavior of courts and other
government bodies); state homicide statute is substantive, criminal, and public law
C. Public law (concerns government powers and relations with private parties, such as criminal and admin) and private law
(concerns rights and duties by parties owed to one another, such as contract, property, agency)
IV.
Jurisprudence: legal philosophies
A. Legal positivism
1. Defines law as the command of a recognized political authority
2. Views legal validity as separate from moral validity; have to obey valid laws, just or not
B. Natural law: contends that some higher law or set of universal moral rules binds all human beings; unjust positive law are
not valid under this view; judges take this law view while interp. statutes
C. American Legal Realism- believe in the use of discretionary powers
1. Defines the law as the behavior of public officials as they deal with matters before the legal system; law in the
books is less important than law in action
2. Feels that modern judges are social engineers who should weigh all relevant values and consider social science
findings when deciding a case
D. Sociological Jurisprudence law is a process of social ordering refelcting societys dominant interests and values; seems to
resemble natural law cause definition include social values
1. A general labeling unit for several different approaches that look at law within the context of society; no
distinctive sociological definition of law
2. Most schools are concerned only with the fact the moral values influence the law, but do not focus on the merit of
moral values
E. Other Schools of Jurisprudence
1. Law and Economics Movement: examines legal rules by looking at economic theory and analysis; hs led to
antitrust laws
2. Critical Legal Studies: usually regards law as the result of political calculations and the biases of lawmakers
V.
The Functions of Law instrumentalist attitude is its willingness to adapt law to further the social good.
A. Peacekeeping
B. Checking government power and promoting personal freedom
C. Facilitating planning
D. Promoting economic growth
E. Promoting social justice
F.
Protecting the environment
VI.
Legal Reasoning legal rule is the major premis, the facts are minor, and the result is the product of combining the two
A. Case Law Reasoning: cases are moot if theres no longer a dispute b/t the parties; used by courts when they make and
apply common law
1. Stare decisis: Courts look to prior cases (known as precedents) for legal rules
2. If a prior case is not similar enough to the case the judge is deciding, the judge can distinguish the prior case and
then create a new law to govern the current case
B. Statutory Interpretation: there is deliberate ambguity in the language of statutes
1. If the statutes words have a clear, common, accepted meaning, courts will often apply the statute according to
the usual or plain meaning of the words
2. Courts will refuse to follow the plain meaning, however, if legislative history (such as congressional hearings)
reveal a contradictory intention or purpose; helps to promote stabilty and certainty
3. Courts occasionally interpret statutes to reflect general public purposes
4. Courts sometimes defer to prior cases and administrative decisions to interpret a statute or fill in details on a
case-to-case basis
5. Courts may apply maxims (general rules of thumb) to interpret statutes
C. Limits on Court Power Courts cannot make or interpret law in the absence of a case
1. Respect of established precedents (prior cases) and the will of the legislature
2. Fear of being overruled by a higher court
3. Politics/Fear of being removed from office
4. Requirement that parties present a real dispute, i.e., courts generally do not issue advisory opinions (decisions
regarding abstract legal questions unrelated to an actual dispute)
5. Parties must have standing to sue: a direct, tangible, and substantial stake in the result of the case
6. However, state and federal declaratory judgment statutes allow parties to determine their rights and duties
even though their dispute has not yet caused harm and required legal relief
CHAPTER 2: THE RESOLUTION OF PRIVATE DISPUTES
I.
Jurisdiction
A. Definition: A courts power to hear a case and issue a decision binding on the parties
B. Two Types
1. Subject-matter jurisdiction
a. Power to decide the type of dispute
b. Different types include:
i.
Constitutional issues
ii.
Statutory issues
iii.
A case concerning parties from different states
2. In personam and In rem jurisdiction
a. In Personam jurisdiction
i.
Power over the particular parties
ii.
Based on the residence, location, or activities of the defendant
b. In Rem jurisdiction: based on the location of the property that is the subject of the suit
II.
Court Systems: the United States has 52 court systems
A. Federal Courts = 1 system
1. District Courts
a. Lowest federal court
b. Many bases of jurisdiction, including
i.
Diversity
a) Suit is between citizens of different states
b) Amount in controversy exceeds $75,000
ii.
Federal question
a) Case arises under the Constitution, laws, or treaties of the U.S.
b) No amount in controversy requirement
2. Specialized federal courts
a. Court of Federal Claims
b. Court of International Trade
c. Bankruptcy Courts
d. Tax Court
3. Federal Courts of Appeals
2.
Two forms
a. Libel
i.
ii.
2.
2.
3.
4.
Duty of
1.
2.
Compensation may depend on the achievement of a specific result, i.e., a lawyers agreement to be paid based on
a certain percentage of recovery if a suit or settlement is successful
The principal must cooperate with the agent in achieving the desired result
A principal generally need not compensate an agent who has materially breached the agency contract or
committed a serious breach of fiduciary duty
B.
Reimbursement and Indemnity
Principal must pay an agent back for expressly or impliedly authorized expenditures
Principal must indemnify an agent for any losses incurred in carrying out the agency, unless the losses resulted
from the following and the principal did not benefit
a. Unauthorized acts
b. Losses due solely to the agents negligence or other fault
VI.
Termination of Agency
A. By Act of the Parties
1. At a time or upon the happening of an event stated in the agency agreement
2. When a specific result is accomplished, provided the agency was created to achieve the result
3. By mutual agreement of the parties, at any time
4. At the option of either party
a. Revocation: at the principals option
b. Renunciation: at the agents option
c. Parties can revoke or renounce even if they violate their agreement by doing so, but they may be liable
for damages to the other party (they have the power to terminate, but not necessarily the right)
B. By Operation of Law
1. Death of the principal
2. Death of the agent
3. Principals permanent loss of capacity, such as insanity
a. Trepanier v. Bankers Life & Casualty Co.
i.
A principal in a comatose state is deemed to be only temporarily incapacitated
ii.
Agency contracts involving temporary incapacitation are at most voidable and do not
automatically terminate
4. Agents loss of capacity to perform the agency business
5. Changes in the value of the agency property or subject matter
6. Changes in business conditions
7. The loss or destruction of the agency property or subject matter or the termination of the principals interest
therein
8. Changes in the law that make the agency business illegal
9. The principals bankruptcy
10. The agents bankruptcy (if the financial condition affects the agents ability to perform)
11. Impossibility of performance by the agent
12. Serious breach in the agents duty of loyalty
13. The outbreak of war
C. Exception: Agency coupled with an interest
1. The agent has an interest in the subject matter of the agency, independent from the principal, such as a secured
loan agreement authorizing a lender to sell property used as security if the debtor defaults
2. Not terminated by
a. The principals revocation
b. The principals or the agents loss of capacity
c. The agents death; and
d. Generally the principals death
3. Does terminate when the principal performs his or her obligation
D. Effect
1. Agents express and implied authority come to an end
2. Ex-agents may, however, still retain apparent authority, unless the termination was caused by
a. The principals death
b. The principals loss of capacity; or
c. Impossibility
3. Apparent authority also ends when the third party receives appropriate notice
a. Actual notice is required if the third party has previously dealt with the agent
i.
Direct personal statement to the third party
ii.
Writing delivered to the third party personally, to his or her place of business, or to some
other reasonable location.
b. Constructive notice (advertising the termination in a newspaper of general circulation or any other
means
likely
to
inform third parties) is sufficient for all other parties
CHAPTER 36: 3RD PARTY RELATIONS OF THE PRINCIPAL AND AGENT
I.
Contract Liability of the Principal
A. Review of Types of Authority
1. Actual Authority
a. Express Authority: created by principals words to the agent
b. Implied Authority
i.
Whatever is reasonable to assume that the principal wanted the agent to do, in light of the
principals express statements and the surrounding circumstances
ii.
Usually derives from a grant of express authority
iii.
Generally determined by the nature of the agency business, the relations between principal
and agent, customs in the trade, and other facts and circumstances
2. Apparent Authority
a. Created by
i.
Communications by the principal to the third party
ii.
That create a reasonable appearance of authority in the agent
b. Becomes important in cases where the principal has told the agent not to make certain agreements that
the agent ordinarily would have actual authority to make, but
i.
The third party knows nothing about the limitation; and
ii.
Has no reason to know about it.
c. Opp v. Wheaton Van Lines, Inc.:
i.
The court found no apparent authority because it determined that the defendant could not
reasonably conclude that the would-be principal knew the bill of lading had to be signed in
California and that the plaintiffs husband had authority to do so.
ii.
It reasoned that the would-be principal told the defendants that she wanted the full
replacement value and never designated a lawful representative on the space provided in the
estimate form.
B. Agents Notification and Knowledge
1. Proper notification by a third party to an agent with actual or apparent authority will bind the principal
2. Proper notification by the agent to the third party, in turn, is considered notification by the principal
C. Ratification
1. Binds the principal as if the agent had possessed authority to conduct an authorized act
2. Conduct amounting to ratification includes
a. Express ratification: principal communicates an intent to ratify by words, either written or oral
b. Implied ratification: principals behavior displays an intent to be bound by
i.
Part performance of a contract made by an agent;
ii.
Acceptance of benefits under the contract; or
iii.
Sometimes, silence, acquiescence, or failure to repudiate
3. Additional Requirements
a. Act must be valid at the time of performance
b. Principal must have existed at the time the agent acted
c. Agent must have indicated that he or she was acting for the principal, and not him or herself (but the
agent need not have disclosed the principals identity)
d. Principal must be legally competent at the time of ratification;
e. Principal must have knowledge of all material facts agents knowledge is not imputed to the principal
i.
The Work Connection, Inc. v. Universal Forest Products, Inc.: contract was not ratified
because the principal lacked knowledge of material facts, i.e., that the principal had to provide
workers compensation insurance
f.
Principal must ratify the entire contract
g. Principal must use the same formalities required to give the agent authority to execute the transaction
4. Principals ratification is binding even if not communicated to the third party
5. Principal may not revoke the ratification
6. Intervening events may cut off the principals power to ratify, such as
a. Third partys withdrawal from the contract;
b. Third partys death or loss of capacity;
c. Principals failure to ratify within a reasonable time; and
d. Changed circumstances, especially when a greater burden is placed on the third party
D. Contracts made by subagents: the same rules governing a principals liability for agents conduct, generally apply to
subagents
II.
Contract Liability of the Agent
A. The Nature of the Principal
1. Disclosed
a. A third party knows or has reason to know
i.
That the agent is acting for a principal; and
ii.
The principals identity
b. Agent is not liable on authorized contracts made for the principal, unless he or she agrees otherwise
2. Partially disclosed
a. The third party
i.
Knows or has reason to know that the agent is acting for a principal; but
ii.
Lacks knowledge or reason to know the principals identity
b. Agent is liable on contracts unless the parties agree otherwise
3. Undisclosed
a. The third party lacks knowledge or reason to know of both the principals existence and the principals
identity
b. Agent is liable on contracts
c. Principal may enforce a contract against a third party who refuses to perform at all
4. Nonexistent
a. Unless agreed otherwise, the agent is personally liable on contracts for a legally nonexistent principal
B. Liability of Agent by Agreement
1. Agent may be liable by expressly agreeing
a. Agent makes contract in his or her own name
b. Joins the principal as an obligor on the contract
c. Acts as a surety or guarantor for the principal
C. Implied Warranty of Authority
1. An agent may be liable if he contracts on behalf of a legally existent principal, while having no authority to do so
2. Exceptions
a. Third party actually knows the agent lacks authority
b. Principal subsequently ratifies the contract
c. Agent adequately notifies the third party that he does not warrant his authority to contract
i.
Reed v. National Foundation Life Insurance Co.:
a)
III.
IV.
V.
Although the agent stated that the contract would become effective upon signing of
documents and payment of the first premium, the documents signed indicated that the
agent had no authority to make a policy effective
Thus, the third party had imputed knowledge of the agents lack of authority, and no
implied warranty was found
b)
Tort Liability of the Principal
A. Respondeat Superior Liability
1. A principal who is an employer is liable for torts (civil wrongs) committed by agents
a. Who are employees; and
b. Who commit the tort while acting within the scope of their employment
i.
Of the kind that the employee was employed to perform
a) Millan v. Dean Witter Reynolds, Inc.: Employee greatly exceeded the scope of his
employment by stealing money from his mother
ii.
Occurred substantially within the authorized time period
iii.
Occurred substantially within the location authorized by the employer
iv.
Motivated at least in part by the purpose of serving the employer
2. Principal is liable both for intentional torts and negligence
B. Direct Liability
1. Principal is responsible for an agents tortious conduct if
a. The principal directs that conduct; and
b. Intends that it occur
2. No need to impute liability if principal himself is at fault
C. Liability for Torts of Independent Contractors
1. Principals are ordinarily not liable
2. Exceptions
a. Can be directly liable for tortious behavior connected with retention of an independent contractor, such
as negligent hiring
b. Liable for harm resulting from the independent contractors failure to perform a nondelegable duty
c. Liable for an independent contractors negligent failure to take the special precautions needed to
conduct certain highly dangerous or inherently dangerous activities
D. Liability for Agents misrepresentations
1. Directly liable for
a. Misrepresentations that the principal intended the agent to make
b. Negligently allowing the agent to make misrepresentations, in some states
2. May be liable for an agents misrepresentations if the agent had actual or apparent authority to make true
statements on the subject
3. Exculpatory clauses can shield the principal from liability as long as he or she did not intend that the agent make
false statements
Tort Liability of the Agent
A. Generally liable for own torts
B. Exceptions
1. Exercising a privilege of the principal
2. Principal who is privileged to take certain actions in defense of his person or properly may often authorize an
agent to do so
3. Agent neither knew or had reason to know of informations falsity
4. Injury resulted from defective tools or instrumentalities furnished by the principal unless the agent had actual
knowledge of the defect
Tort Suits Against Principal and Agent
A. Jointly and severally liable (can be sued together or individually)
B. If an entire judgment is obtained against one party, the other party may be required to indemnify (pay back) the paying
party