BUSINESS LAW I
LECTURER : John V. Dowdy, Jr.
Law Office: 2401 Garden Park Court, Suite A, Arlington, TX76013
Phone No. 817/265-9000
FAX 817/460-8366
E-mail----
Course website----
UTA Office: Phone No. 817/272-3775
CLASS POLICIES
PLEASE NOTE: BE SURE TO READ ALL OF THE CLASS POLICIES. EACH STUDENT WILL BE CHARGED WITH KNOWLEDGE OF THESE POLICIES, WHETHER YOU HAVE READ THEM OR NOT.
Conferences may be arranged with lecturer by appointment. The quickest way to contact the lecturer by telephone is to call the law office rather than the UTA number.
COURSE DESCRIPTION: This course deals with basic legal concepts in the following areas: The Common Law of Contracts; Contracts for the Sale and Lease of Goods (Arts. 2 and 2A of the Uniform Commercial Code); Negotiable Instruments (Article 3 of the Uniform Commercial Code) and Secured Transactions (Article 9 of the Uniform Commercial Code).
COURSE MATERIALS: Text - Clarkson, Miller, Jentz and Cross; West’s Business Law, 12th Ed.; West. Note: Do not rely on an earlier edition.
STANDING ASSIGNMENT: Students should stay at least 40 pages ahead in reading the text material.
COURSE REQUIREMENTS: There will be three major examinations during the semester, plus the final examination, for a total of four examinations. Of the first three examinations, the low grade will be dropped, with the remaining two examinations counting 1/3 each on the student's final grade. The final exam, which is comprehensive, counts 1/3. The final exam is mandatory and cannot be dropped. The test questions will be multiple choice and will consist predominantly of a hypothetical fact situation type of format in which the student will be presented with a fact situation to analyze and a multiplicity of choices from which to choose the best answer.
SCANTRONS: Each student should begin the semester with a supply of at least fifteen scantron forms (882-E) for use on major examinations and the final exam. For each exam (major, daily and the final exam) it is best to have a spare scantron in case you change an answer and have to erase. There should be no erasures on a scantron.
TESTING POLICY: Major examinations will be announced at least one week in advance. In addition, test dates, when they are announced, will be posted on the website (address noted above). Accordingly, if you are not sure whether a test has been announced, check the website (click on the “Teaching” link). If a test has been announced, the date will be posted. Please do not send an email or make a telephone call to inquire about test dates. As noted, they will be posted on the website. No make-up tests are given, except under extraordinary circumstances. If a student misses a test, that will be the grade he or she drops, except for the final, which must be taken.
PLEASE TAKE NOTE OF THE FOLLOWING POLICIES REGARDING TESTING AND GRADING:
No extra credit work will be allowed in order to raise a grade. This policy has no exceptions, since all students will be treated equally with regard to grading criteria. So, please do not ask.
1. Exams will be given at the time and on the day they are scheduled. Only extraordinary excuses will be recognized for missing an exam (e.g., medical or family emergency). Being stressed out over having more than one test does not constitute an emergency. Plan ahead. If you know ahead of time that you will not be able to take the test on the date it is scheduled (e.g., you’re scheduled for surgery that day, your reserve unit is being activated, you have a genuine family emergency, or your employment requires you to be elsewhere), then you may contact the GTA to arrange taking the test early. Otherwise, make sure you have enough gas in your tank and leave early enough to keep from getting held up in traffic.
2. Scantrons will be returned to students after the graduate teaching assistant has scanned the Scantrons, recorded that grades, and made copies of the Scantrons for our records. Accordingly, if there is a question as to whether a Scantron has been properly scanned and the grade properly registered, the student should take it to the GTA for comparison with the copy in our records.
COVERAGE ON TESTS: Test questions will only be on material covered in class. In the event a student has a question on whether textbook content conflicts with or is inconsistent with lecture content, such question should be raised prior to a test. Since all tests will be announced at least a week ahead of time, there should be ample opportunity to deal with such questions in class.
FURTHER, all tests which are handed out (3 major examinations plus the final exam) are to be returned immediately upon completion of that exam. No tests or copies thereof are to leave the classroom. Any student who attempts to leave the classroom with an examination or copy thereof will receive a zero for that examination, and such grade will not be dropped. In addition, such further disciplinary action as University policy allows will be taken.
GRADING CRITERIA: Course grade will be determined based on the conventional numerical averages, to wit: 90-100=A; 80-89=B; 70-79=C; 60-69=D; and below 60=F. There can be a “borderline” between B and C, between C and D, and between D and F; in which case an average at the higher end of the range can be rounded up to the next letter grade in the event the student has good class attendance. However, no such borderline is recognized between B and A. In order to receive an A in the course, the student’s average has to be 90 or higher.
CLASS ATTENDANCE: Students are expected to attend all classes. Class attendance can be outcome determinative in a student's final grade. In borderline grade situations, good class attendance will result in the student receiving the higher grade.
DROP DATES: Students should be aware of and are charged with notice of the semester drop date, which is posted in the Finance/Real Estate departmental office or which can be obtained from departmental personnel.
INCOMPLETE: The grade of "incomplete" is reserved for emergency situations, such as a medical crisis, family emergency/death, etc. The grade of "incomplete" is not appropriate for a "do over" (i.e., retaking the course for a chance at a higher grade). This is university policy and cannot be altered.
Dropping a class is the student's responsibility. If you cease attending class, you should not assume that you will be dropped from the roll. It may be your intention to drop the course, but unless you follow the proper procedures, you will not be dropped. Failure to attend and take the requisite examinations will result in your receiving an "F" in the course.
NAME CHANGE: In the event your name changes during the semester, please notify the GTA of such before taking the final exam.
JOHN V. DOWDY, JR.
Attorney - Mediator - Arbitrator
2401 Garden Park Court
Arlington, Texas76013
(817) 265-9000 Metro
(817) 460-8366 FAX
TX Bar Card # 06075000
Law Practice Since 1968 Mediation Experience Since 1992
Professional: Practicing attorney, mediator and arbitrator; Senior Lecturer in business law, College of Business, University of Texas at Arlington
Law Practice Experience: Probate/Estates, Wills and Trusts, Family Law, Commercial Law/Business, Personal Injury/Torts, Trials, and Criminal Defense; Current focus in the areas of Wills and Trusts, Probate/Estates and Commercial Law/Business.
Alternative Dispute Resolution Experience: Mediation experience in probate contests, breach of contract, commercial disputes, torts, and family law; Arbitration experience in probate and commercial disputes.
Education: B.S.P.E., BaylorUniversity, 1966; Juris Doctor, BaylorLawSchool, 1968
ADR Education: American Academy of Attorney-Mediators, 40 hours, 1992; Settlement Consultants, Inc., 24 hours, Family Dynamics, 1994; Arbitration Training , Professional Attorney-Mediators, 1995; annual CLE courses in advanced mediation/dispute resolution
Professional Memberships:
State Bar of Texas;
American Bar Association;
Association of Attorney-Mediators (board of directors, 2002-Present; National President-elect, 2003-2004; National President, 2004-2005);
Tarrant County Probate Bar Association (board of directors, 2001-present)
Other Professional Activities: Seminar speaker and resource person in ADR/Mediation programs with the State Bar of Texas and local bar associations; guest lecturer on mediating probate disputes, Texas Wesleyan School of Law.
Honors:
Three-time winner of the Billy W. Turner Memorial Award for Excellence in Undergraduate Teaching, 1985-86, 1997-98, and 2002-03, University of Texas at Arlington, College of Business, Dept. of Finance and Real Estate
Named Outstanding Lecturer in UTACollege of Business for 1997-98.
Recipient of UTA Provost’s Award for Excellence in Teaching, 2005
Named as one of TarrantCounty’s Top Attorneys, 2008 and 2009, by Fort Worth Magazine
AV rating in Martindale Hubbell
Family: Wife, Sarah C. Dowdy; Children, Rebekah Dowdy Campbell and Susannah Dowdy Elizondo; four grandchildren, Logan A. Campbell, Lauren E. Campbell, Diego B. Elizondo, and Sophia Marie Elizondo
Church and Related Activities: Member First Baptist Church of Arlington; Bible teacher in Bible Study for Internationals and Married Couples’ Bible Study; Deacon; Board of Trustees, Mission Arlington
Hobbies: Scuba diving (PADI Open Water Scuba Instructor certification); outdoor activities; sports
BUSINESS LAW I OUTLINE
UNIVERSITY OF TEXAS AT ARLINGTON
Senior Lecturer: John V. Dowdy, Jr.
Textbook – West’s Business Law, Clarkson, Miller, Jentz and Cross, 12th Edition
I.INTRODUCTORY LEGAL CONCEPTS
A.Criminal law
l.Nature
2.Burden of proof
B.Civil law
1.Nature
2.Burden of proof
C.Statutory and common law
II.CONTRACTS AND E-CONTRACTS
CHAPTER 10 – Nature and Terminology
A.General concepts
1. Elements of a contract (Introduction)
2.Express and implied in fact contracts
a.No fundamental difference. Same elements.
b.Contract may be entirely expressed either orally or in writing, or a combination of both, or
c.Contract may be based on conduct of parties or a combination of conduct and expressed agreement.
3.Void, voidable and unenforceable contracts
a.Void contract is no contract because essential element missing. The only one of the four elements which can be missing without the contract being void is contractual capacity, in which case the contract is voidable.
b.Voidable contract is a good contract, but one of the parties is able to avoid liability on it. Generally, all of the elements are present, but a party is able to show grounds for avoiding liability (e.g., duress, fraud in the inducement, etc.). Exception: If the first three elements are present (assent, consideration, legality), but the fourth element (capacity) is missing, the contract is voidable at the option of the party lacking capacity.
c.Unenforceable contract is a good contract, but for some reason, the party seeking enforcement is unable to do so (e.g., expiration of statute of limitations, non-compliance with the Statute of Frauds, etc.)
4.Unilateral and bilateral contracts
a.Unilateral-Exchange of promise for an act.
b.Bilateral-Exchange of a promise for a promise.
5.Executed and executory contracts
a.Executed-Fully performed.
b.Executory-Unperformed in whole or in part on either or both sides.
6.Quasi contracts (aka constructive contracts and implied in law contracts)
a.Not really a contract because no manifestation of mutual assent.
b.Obligation based on some form of unjust enrichment.
7. Overview of the two major bodies of contract law
a. Common law
b. Uniform Commercial Code, Art. 2 and Art. 2A
8. Interpretation of contracts
a. The Plain Meaning Rule
b. Interpretation of ambiguous terms
B. Essentials of a valid contract
CHAPTER 11– Agreement
1.Manifestation of mutual assent; Agreement
a.Offer and acceptance (Offer-Definite proposal or undertaking communicated by offeror to Offeree which, by its terms, is contingent upon some return act or promise being given in exchange. Essential requirements of an offer are (i)intent to make an offer, (ii) terms that are reasonably definite and certain, and (iii) communication by the offeror to the offeree.Acceptance-Some definite manifestation by offeree of assent to terms of offer; must be mirror image of offer.)
i.Rejection or revocation of offer.
ii.Counteroffer.
iii.Death of offeror.
iv.Definiteness and certainty.
v.When is an offer not an offer? The objective test (aka "the reasonable person test" or the "reasonably prudent person test").
vi.Duration of offer.
vii.The Deposited Acceptance Rule (AKA the Mailbox Rule.
b. E-Contracts
CHAPTER 12
2.Consideration
a.Test for legal sufficiency of consideration is whether or not there is a legal detriment to the promisee or a legal benefit to the promisor.
b.Adequacy of consideration has nothing to do with its legal sufficiency.
c.Promissory estoppel. Arises where there is a promise made under circumstances in which the promisor should reasonably expect the promisee to act on the promise, the promisee does so act in reliance on the promise, and injustice can only be avoided by enforcing the promise.
CHAPTER 13 – Capacity and Legality
3.Legality
a. The effect of illegality is that where parties are in pari delicto, no remedy is available.
b. Selected categories of illegality
i. Contracts to commit crimes and torts
ii. Usury
iii. Licensing statutes
iv. Contracts in restraint of trade
v. Covenants not to compete
vi. Contracts contrary to public policy
(a) immoral Ks
(b) exculpatory clauses
vii. Exceptions to in pari delicto/no remedy rule
c. Unconscionability
4.Capacity
a. Contracts made by minors (voidable)
b. Contracts made by incapacitated adults
i. When voidable
ii. When void
FIRST TEST, COVERING CHAPTERS 10, 11, 12 AND 13
CHAPTER 14 – Mistakes, Fraud and Voluntary Consent
C. Genuineness of assent and impairments to offer and acceptance
1.Duress
(a)Victim's volition overcome by fear.
(b) Test for duress
2.Fraud and innocent misrepresentation
(a)Victim's volition overcome by deceit.
(b)Fraud in the execution (aka fraud in the inception)-contract void because no manifestation of mutual assent. Restatement (Second) of Contracts, Section 163
(c)Fraud in the inducement-contract voidable and victim has cause of action for money damages or for rescission. The elements are (1) misrepresentation of fact which is (2) material, made with (3) fraudulent intent (scienter) and upon which the victim (4) justifiably relies to his/her damage. Note that damage is not necessary if the only relief being sought is rescission. Restatement (Second) of Contracts, Section 164
3.Undue influence
(a)Victim's volition overcome by importunity.
(b)Presupposes relationship of trust and confidence, fiduciary or otherwise.
4.Mutual mistake
(a)As to essential element-Contract void. NOTE: The textbook refers to this as “bilateral mistakes of fact.”
(b)As to material existing fact-Contract voidable. NOTE: The textbook refers to this as “unilateral mistakes of fact.” Restatement (Second) of Contracts, Section 153
5.Unilateral mistake
(a)Objective test.
(b)Contract may or may not be voidable.
CHAPTER 15 – The Statute of Frauds – Writing Requirement
(Parol Evidence Rule)
1.The Statute of Frauds
a.Compliance requirements.
b.Categories
i.Promise by executor or administrator to be personnally responsible for estate debt (not mentioned in textbook).
ii.Promise of guaranty.
iii.Promise made on consideration of marriage.
iv.Promise to sell land or an interest in land.
v.Promise impossible to fully perform within one year from the date it was made.
vi.UCC Sec. 2-201-Contract for sale of goods where purchase price is $500 or more (subsec. 1). Note different compliance requirements if contract between merchants (subsec. 2). Also, note exceptions in subsec. 3.
vii. UCC Sec. 2A-201-Contract for lease of goods for $1,000 or more. Note exceptions in subsec. 4.
2.The Parol Evidence Rule
a.Presupposes integrated contract.
b.No parol (extrinsic) evidence of a prior or contemporaneous transaction is admissible to vary, change, alter or modify the terms of an integrated contract.
CHAPTER 16 – Third Party Rights
3. Assignment of contract rights
a. Only contract rights can be assigned, duties cannot be assigned
i. Rights that can and cannot be assigned.
ii. Effect of assignment.
b. However, performance of duties may be delegated unless they are delectus personae.
i. Duties that can and cannot be delegated.
ii. Effect of delegation.
4. Third party beneficiary contracts
a. Intended beneficiaries (aka direct
beneficiaries)
b. Incidental beneficiaries
CHAPTER 17 – Performance and Discharge in Traditional and E-Contracts
5.Discharge
a.Mutual rescission and substituted contract
b.Operation of law
c.Conditions
d.Performance
e.Impossibility of performance
f.Frustration of purpose rule
g.Breach of contract (material and not material)
CHAPTER 18 – Breach of Contract and Remedies
6.Remedies
a.At law
i.Nominal damages
ii.Compensatory damages
iii.Consequential damages (aka special damages
iv.Duty to mitigate
v.Liquidated damages
vi.Punitive or exemplary damages (including contract-related torts)
(a). Contract related torts
(i)Fraud (revisited)-Both actual and constructive.
(ii) Intentional interference with contractual relations (Elements: contract; 3rd party knowledge of K; 3rd party induces party to breach
(iii) Bad faith
b.In equity (presupposes inadequacy of remedy at law)
i.Injunction
ii.Specific performance
iii.Accounting, reformation, rescission
iv. Quasi contract
SECOND TEST, COVERING CHAPTERS 14, 15, 16, 17, and 18
III.Contracts for sales and leases of goods
CHAPTER 19 – The Formation of Sales and Lease Contracts
A."Goods" are tangible things that are movable at the time of their identification to the contract.
1. Sale of goods is covered by UCC Article 2.
2. Lease of goods is covered by UCC Article 2A.
3. "Mixed sale" is a sale of both goods and services
B.Formation of a contract for the sale of goods
1. Offers
a. Open terms
b. Firm offers (review of UCC Sections 2-205 and 2A-205)
2. Acceptance
a. Any reasonable manner or method of communication
b. Battle of the forms (UCC Sec. 2-207)
c. Who is a merchant?
3.Modification without consideration
4. Statute of Frauds (review of UCC Section 2-201)
5. Parol Evidence Rule
CHAPTER 20 – Title, Risk, and Insurable Interest
C.Identification and risk of loss
SALES CONTRACTS
1.Risk of loss where goods are conforming and a carrier is used. Depends on whether contract is shipment (seller's plant) or delivery (buyer's plant) contract. Passage of r/o/l occurs when seller has completed seller's obligations under the contract.
2.Risk of loss where there is a breach of contract and a carrier is used. R/o/l rules change, allowing r/o/l to be shifted to breaching party even though it would be otherwise but for the breach. Note the intent of the UCC that the breaching party's r/o/l be only to the extent of the non-breaching party's insurance deficiency.