Module 4: Legal Environment

Question 1

Deontological Theories:

Answer 1

ethical obligations regardless of the consequences (principles of being human, natural rules that effect humans, consequences are not the issue, question is what is the right behavior

Question 2

John Locke’s Natural Rights,
Immanuel Kant categorical imperative

Answer 2

John Locke’s Natural Rights: rights of life, health, liberty, natural intrinsic, universal inalienable. Basis of Declaration of Independence; Immanuel Kant: categorical Imperative: ethical obligations regardless of preferences or consequences- can’t do something bad to someone as a means to a greater good

Question 3

Consequentialist theories: Utilitarianism:

Answer 3

Jeremy Bentham and John Stuart Mill
Focus on impact rather than motives
An action is justified if it does the greater good for the greatest number of people

Question 4

Conflicts of Interest

Answer 4

Concurrent Conflict: cannot simultaneously represent two sides of the same lawsuit, or two clients if the representation of one will significantly impair ability to represent another client;
Former conflict: cannot represent a client in the same or substantially similar matter if client’s interests are materially adverse to the former client, unless consent in writing; Cannot have separate business relationship with a client unless reasonable and in writing

Question 5

Shareholder Primacy versus Stakeholder/Social Entity Theory

Answer 5

Shareholder Primacy Theory: public corporations are designed to maximize shareholder value - period; Stakeholder/Social Entity Theory (more recent concept): corporations are also responsible to community, environment, well-being of their workforce, etc

Question 6

Claims/Challenges against Administrative Agencies

Answer 6

appear before Administrative Law Judges (ALJs), can appeal with their internal appellate body - then can take action to court after exhausting administrative remedies first; ALJ proceedings have more relaxed evidentiary standards

Question 7

Administrative Procedure Act

Answer 7

Federal statute that governs agencies and sets their procedures for law-making and adjudication, sets process of developing regulations

Question 8

Sherman Act

Answer 8

Designed to prevent companies from acquiring or using undue monopoly power, designed to protect consumers; law must determine whether business practices are reasonable or not: Horizontal and Vertical Agreements, Exclusive Distribution, Price Discrimination

Question 9

Horizontal Agreements (Per Se)

Answer 9

Restricted by Anti-trust law, agreements between competitors: Price Fixing, Production Quotas: limiting supply to drive up prices, Group Boycotts: nominal competitors agree to not sell to or buy from an entity to gain favorable terms, Market Division to form defacto monopolies

Question 10

Vertical Agreements

Answer 10

restricted by anti-trust law, between producer an buyer: Price-related (per se) agreements,
Tie-in Agreements

Question 11

Clayton Act

Answer 11

prohibits mergers and acquisitions that reduce competition or create monopolies, must be analyzed by FTC

Question 12

Hart-Scott-Rodino Act (now section 7a of Clayton Act)

Answer 12

companies planning to merge must notify FTC and Justice Department

Question 13

Fair Labor Standards Act

Answer 13

sets minimum wage, requires overtime pay, prevents child labor

Question 14

National Labor Relations Board

Answer 14

Enforces National Labor Relations Act, Protects collective bargaining rights to form unions, bars employers from interfering with forming and taking action via unions

Question 15

Employee Retirement Income Security Act (ERISA)

Answer 15

Regulates defined benefit contribution pension plans - guaranteed defined amount of money

Question 16

Title VII of Civil Rights Act of 1964

Answer 16

prohibits discrimination based on race, color, religion, sex, national origin; Applies to hiring, firing, compensation, promotion and retaliation for filing a discrimination complaint; prohibits workplace sexual harassment

Question 17

Employment At Will Doctrine

Answer 17

Employers can terminate for any non-discriminatory reasons and employees can quit for any reason

Question 18

Equal Employment Opportunity Commission

Answer 18

federal agency for EEO claims which you would consult first before going to court

Question 19

Product Liability: Defect Types

Answer 19

Can be Manufacturing Defect, Design Defect, Inadequate Warning Defect

Question 20

Product Liability: Theories of Liability

Answer 20

Intentional Tort (intentional release of defective product), Negligence, Strict Liability (unreasonably dangerous products provided by commercial suppliers, liable regardless of fault or intent, part of the cost of doing business)

Question 21

Federal Trade Commission, Department of Consumer Protection, Consumer Financial Protection Bureau

Answer 21

set regulations to protect consumers including deceptive advertising and more recent CFPB protection regarding financial services

Question 22

Equal Credit Opportunity Act

Answer 22

regulates against discrimination by those who give credit

Question 23

Gramm-Leach-Bliley Act

Answer 23

when financial services take your information, what they’re required to do to keep it private

Question 24

Lanham Act

Answer 24

protects consumers with trademark laws that prevent logo/company deception, as well as the company’s reputation attached to that design/logo

Question 25

International Business Treaties

Answer 25

regulate trade with other countries; supersede state laws as part of Supremacy Clause; interpreted by Int’l Court of Justice

Question 26

No Foreign Sovereign Immunity

Answer 26

companies involving US commercial activities or dealings with direct impact on US business dealings can sue foreign government in the US

Question 27

Expropriation Clause

Answer 27

international equivalent of the takings clause, companies can sue to be made whole again

Question 28

World Trade Organization and GATT

Answer 28

WTO administers General Agreement on Tariffs and Trade (GATT): Four principles: no discrimination against foreign goods, no favored nations, preference for goods from less developed countries, more transparency in setting regulations

Question 29

Convention on Int’l Sale of Goods

Answer 29

default sales contract for selling/receiving goods with foreign countries