• Most of the legal

terminology comes from Latin,

such as lawyer, civil,
delinquent, equity, legitimate,
sanction, usufruct; even, due
to the universal influence of
Latin, it is possible to find
some similarities with other
languages.

LEGAL ENGLISH AND ITS

TRANSLATION INTO SPANISH
Legal language is the language used by lawyers, judges, magistrates, attorneys... all those professionals
related to the world of law. And it is the language used in the texts that these professionals handle during the
exercise of their work. The legal language is full of its own words (because they are exclusive to this language
or because in the legal context, they acquire particular meanings), many of which come from Latin. Legal
language is archaic and conservative. Most writings are written in the third person.

Alevosía, estupro, pena, apelar,, penal, código, fallo, procesal, infracción, considerandos,
injuria, resultandos, decreto, jurisconsulto, sanción, delincuente, jurisdicción, sancionar,
delito, jurisprudencia, sdesacato, jurista, sentencia, difamación, tribunal...

Examples of legal language Habeas corpus, in dubtio pro reo, a fortiori, a minima, actio in personam, ad hominem, ad
personam, ad iuditium, bona fide...

Escrito de apelación, las partes, se señaló la vista, nulidad de las actuaciones, resoluciones
judiciales, motivo de indefensión, sentencia firme, imposición de costas, ejecución acordada,
pronunciamos, mandamos y firmamos...

Legal language is the set of terms and expressions that denote principles,
preconceptions, and rules to which human relations are subject throughout civil
society.
Language has four functions
• Describes things, reports event, communicates information (descriptive function).
• Influences people's behavior through different linguistic modalities such as orders,
advice, suggestions, prohibitions, etcetera. (Directive or descriptive function)
• Transmits emotions or feelings through grammatical figurations that refer us to
important life experiences; this is sometimes achieved through music, poetry,
which provoke a certain state of mind (expressive function).
• It changes reality through the verbal formalization of behaviors; words "do things",
through the attribution of linguistic meanings to what we do or do not do (operative
function).

Legal language is fundamentally located in the second of the above functions, since it frequently orders
things, with the objective of influencing or determining the conduct of human beings

The good use of language is especially important when creating legal

norms. Some of the most recurrent problems that lawyers face in their
professional practice have to do with poorly drafted legal norms, with gaps,
contradictions, etc.
LEGAL LANGUAGE AND ITS SPECIALIZATIONS.

Legal English is the type of English as used in legal writing. In general, a legal
language is a formalized language based on logic rules which differs from the
ordinary natural language in vocabulary, morphology, syntax, and semantics,
as well as other linguistic features, aimed to
achieve consistency, validity, completeness and soundness, while keeping the
benefits of a human-like

A specialized use of certain terms and linguistic patterns governs the teaching of legal language. Thus,
"we study legal language as a kind of second language, a specialized use of vocabulary, phrases, and
syntax that helps us to communicate more easily with each other"

Lexically, legal English occupies a unique position among specialized languages. While in most such languages new
terms appear every day to reflect developments in the field (as is the case, for example, in financial language), the
conservatism of legal English means that, in general, traditional forms are maintained to avoid misinterpretation.

Law is a linguistic system in which the way sentences are

constructed has its own logic.
The importance of legal translation

Legal translation is a system of rules. The purpose of law is to regulate conduct through social or
governmental institutions. It uses content and terms within the legal system prevailing in the country where
the source document originated

A. The Role of culture in legal languages

The importance of the cultural context of law and legal language is clearly perceptible among other
fields of research concerning law in context, such as law and politics, law and society, as well as law
and economics . Legal language is culture-dependent.

Legal terms have a socio-cultural content that is largely determined by the historical,
political and even geographical context in which they were coined. This context is the
legal system, i.e., the set of institutions and rules that govern the coexistence of a country.

The translation of legal content from two typologically and culturally different languages such as English and Spanish
implies the need to know both legal systems, as well as their background in order to understand them and then reflect
on which would be the most appropriate techniques to translate.
A. Legal language and its specialization

The legal text has a specific language and discourse, whose senders and receivers are also special, this type of
text, like the law, has its own characteristics that differentiate it significantly from other specialized texts.

Legal discourse may be interpreted broadly and include (but is not limited to): legislative discourse, courtroom
discourse (or court discourse), and judicial discourse. Bearing this in mind, we contend that any legal language
(legal English, legal Spanish etc.) should be thought of as both the language of law and the language of lawyers.

Consequently, when translating, one must consider that the social and cultural nature of the texts being
translated reflects concepts and institutions that define and regulate the social behaviors of a population and that
vary, in different ways, according to the country and its legal system, which is why it can be said that legal
language is the oldest specialized language, with the longest tradition and extensive documentation.

The difficulty in translating a legal text depends on the two legal systems referred to by the source and
target language and the nature of the target and source languages themselves
 Comparative law

In the translation of legal texts, the translator must resort to Comparative Law, since he/she will invariably be
confronted with two very different legal systems, in which the absence of equivalences often occurs, so that the
differences between the legal system of the source language and the legal system of the target language must
be known.

Comparative Law intervenes as an indispensable working tool in translation,

since every legal translation must go through a stage where the texts must be
compared.

The translation of legal texts is not a purely linguistic operation, not only words
are translated, but also a technical-conceptual, sociological and cultural
translation.

Translators must have an in-depth knowledge of the legal system of the

target country and the legal system of the source country.
 Legalese Explained
LEGAL ENGLISH KEY FEATURES https://youtu.be/7b82JVWjNfQ

Legalese, is a term associated with a traditional style of legal writing that is part of this specialized discourse of
lawyers: communication that "lay readers cannot readily comprehend". This term describes legal writing which
may be messy, wordy, indirect, and may include unnecessary technical words or phrases. Historically, legalese
is language a lawyer might use in drafting a contract or a pleading but would not use in ordinary conversation

This term describes a legal writing that is cluttered, wordy, indirect, and that includes unnecessary
technical words or phrases. Historically, legalese is language a lawyer might use in drafting a contract
or a pleading but would not use in ordinary conversation.

Need a
translator
DIFFICULTIES AND CHALLENGES OF LEGAL TRANSLATION

We must keep in mind that the translation of legal texts is not a merely linguistic operation, not only words are translated,
but also a technical-conceptual, sociological and cultural translation. Without adequate knowledge of legal
terminology, translations of legal texts are very likely to leave room for interpretation. This can easily lead to
subsequent disputes, with many potential consequences for the client's resources and reputation

SYNTAX IN THE TRANSLATION OF LEGAL TEXTS AND DOCUMENTS

The way in which texts are written and the style used in them are quite peculiar.

Contract clauses, for example, often contain very long sentences, full of subordinate and linked sentences that
make them quite difficult to read.

syntax is defines as “the arrangement of words and phrases

to create well-formed sentences in a language.”
 Sentence structure has two aspects:

• complexity (including length) and

• organization (word order).

LONG AND COMPLEX SENTENCES

• Sometimes we come across 15-line clauses in the same sentence. They are so long that you don't know
when they end. Finding their meaning requires a great effort of concentration.

• The legal language comprises of a very large number of long compound and complex sentences. There
are multiple sentences too. However, one noticeable thing is the little or minimal presence of the simple
sentences. The simple sentences appear either in the beginning of the text or at the end of it.

• Contract clauses, for example, often contain very long sentences, full of subordinate and juxtaposed
sentences that make reading them very difficult.

CAPITAL LETTERS
• The use of capital letters in some words is another characteristic of his particular style. The purpose of
this custom is to identify certain terms of special relevance in the contract.
Example

Lease contract

Section 1. Improvements by Tenant. Tenant may have prepared plans and specifications for
the construction of improvements, and, if so, such plans and specifications are attached hereto
as Exhibit "B" and incorporated herein by reference. Tenant shall obtain all certificates, permits,
licenses and other authorizations of governmental bodies or authorities which are necessary to
permit the construction of the improvements on the demised premises and shall keep the same
in full force and effect at Tenant's cost..

Nothing herein shall alter the intent of the parties that Tenant shall be fully and completely
responsible for all aspects pertaining to the construction of the improvements of the demised
premises and for the payment of all costs associated therewith. Landlord shall be under no duty
to investigate or verify Tenant's compliance with the provision herein. Moreover, neither Tenant
nor any third party may construe the permission granted Tenant hereunder to create any
responsibility on the part of the Landlord to pay for any improvements, alterations or repairs
occasioned by the Tenant. The Tenant shall keep the property free and clear of all liens and,
should the Tenant fail to do so, or to have any liens removed from the property within fourteen
(14) days of notification to do so by the Landlord , in addition to all other remedies available to
the Landlord , the Tenant shall indemnify and hold the Landlord harmless for all costs and
expenses, including attorney's fees, occasioned by the Landlord in having said lien removed
from the property; and, such costs and expenses shall be billed to the Tenant monthly and shall
be payable by the Tenant with that month's regular monthly rental as additional reimburseable
expenses to the Landlord by the Tenant.
THE PASSIVE VOICE

The passive voice relies on a be verb (most commonly was, were, and been) plus a past-tense verb
(technically past participle). All the following are in the passive voice (be verb and past-tense verb in italics):

• Mistakes were made.

• The contract was signed.
• The DNA has been collected.

Courts and attorneys generally prefer active sentences to passive sentences in legal writing. Nonetheless,
there are certain situations in which passive sentences are useful.

Examples

• In active sentences, the subject is doing the action. Take the sentence, “The court denied the
motion.” The court is the subject, and it is doing the denying.

• In passive sentences, however, the subject is inferred. A passive version of our example would
be, “The motion was denied.” The court is still the subject, but the reader only knows that from
the context, not the words.
Nonetheless, passive sentences are indispensable in legal writing when you wish to obscure the
subject of a sentence.
A classic example is Reagan’s quote, “Mistakes were made.”

• If you are appealing a bad evidentiary ruling, you might say, “Judge Gunther admitted the hearsay
evidence over trial counsel’s objection.”

• Yet, if you are appearing before Judge Gunther on a motion to reconsider his erroneous ruling, it
may be advantageous to be less aggressive in your phrasing. A passive version of the same
allegation would be, “The hearsay evidence was admitted over trial counsel’s objection.” Using the
passive voice decreases the likelihood that Judge Gunther will feel personally attacked.
 LINGUISTIC PROBLEMS IN LEGAL TRANSLATION “EQUIVALENCE AND FALSE
FRIENDS/FALSE CONGNATES”

Equivalency

Equivalence is a process of oblique translation (used when the conceptual elements of the source language
cannot be translated directly or literally without altering the meaning or the grammatical or stylistic elements of
the source language).

Translation is based on a relationship of equivalence and the translation process which consists essentially of
the search for and selection of equivalences.

Lack of equivalence is one of the most important concepts in legal

translation. Finding the functional equivalent of a translation has
become one of the most complex and essential tasks when
translating, as a translator who does not have a legal specialty will
hardly know the precise terminology to be used.

Functional equivalence consists of adapting the text in such a way that the reader conceives the
translation as a natural, an unforced text within his or her linguistic language, overcoming any
linguistic and cultural distances by finding the most natural and closest equivalent to the target text.
Functional equivalence in legal translation

Functional equivalence will be divided into three groups: near equivalence, partial equivalence, and non-
equivalence.

Near-equivalence Near-equivalence occurs when legal concepts in the source language

and the target language have common primary and incidental
characteristics or are the same.
the term ‘annual bonus’ as a source term in English. Within the law of the source country, this term means certain amount of money
awarded once a year as a reward for employees for fulfilling their responsibilities and for delivering superior services. The culturally
relevant term with the same connotation in Spanish language would be ‘aguinaldo, which in literal translation into English means ‘bonus”.

Partial Equivalence

In partial translation, some parts of the source language text are left untranslated.
Non-Equivalence

Non-equivalence happens when a few or none of the important aspects of the source and target language legal
concepts coincide or if there is no functional equivalent in the target legal system for a specific source
terminology. It is the legal translator’s challenge to descriptively paraphrase the term or phrase followed by the
original in parenthesis. This particular translating situation requires the legal translator to be closely familiar with
the law of the source and target countries, so that the paraphrased term is truly adequate.

A large number of linguistic terms lack "full equivalence" despite the fact that specialized bilingual dictionaries
say otherwise

For example, the term "daño" generally translated "damage" can also be translated as "injury", "loss",
"nuisance", "wrongdoing" in relation to the legal context. The degree of equivalence of each option is
relative to the legal subject matter in question, which is fundamental to improve the quality of legal
translations as the law evolves and its terminology increases
• (Nuisance) “La decisión del caso estableció una reducción de los perjuicios (daños)
al dueño de la propiedad”.

• “The ruling set a nuisance abatement for the property owner” (it is not feasible to
write damage here).

In this case, the term causes a change in translation since "damage" is not equivalent to
"reducción de los perjuicios".

“Wrongdoing” should apply:

• “El acusado fue responsable del daño”

• “The defendant was accountable for the wrongdoing” (a more significant semantic
choice than damages).
Common words with a special meaning.

In legal English, there are many commonly used words that have a different meaning here than
usual, which often leads to many errors and problems of interpretation. Let us look at some
examples of these common words that are used with a different meaning than usual:

• Action, understood as "judicial process".

• Serve, as "to notify".
• Instrument, as "legal document".
• “Award” In the context of court rulings, a judge
may “award damages” (condenado al pago de
daños y perjuicios)
• “Entertain” as “to give judicial consideration

In both legal languages there are many words that have a legal meaning very different from their
ordinary meanings
 • Action: is not only a physical movement but legally it is also a lawsuit;

• Aggravation: not merely something that annoys you but also a reason to sentence
someone to death according to death penalty law;

• Cooperation: is not only an act of cooperation on certain issue but also assistance in
the act of commission of a criminal offence.

• Remedy: not just a way of solving a problem but a legal means whereby breach of a
right is prevented or redress is given, e.g. damages and/or injunction

• Consideration: refers to the price paid, not ‘thought’ or ‘thinking’ in ordinary usage.

Though expressions as presented above that have a legal meaning different from their ordinary meanings are problematic for
translation of legal texts, a good translator equipped with necessary knowledge, skills and experience can translate such
expressions in an appropriate way
 False friends or false cognates

False cognates, are terms that can give rise to a lot of confusion because, although
they are terms belonging to two different languages, they are very similar in their
written form or pronunciation, but their meaning is considerably different.

We are talking about words that mean something very

different from what appears at first glance.

False cognates in legal translation are also manifestations of non-equivalence translation. It means that a word is
translated based on its literal meaning, but actually it does not mean that.

For example, the English term "demand" is not equivalent to the term "demanda" as it is used in
different geographical variants of legal Spanish, understood as the initiation of a litigation process;
"injury" is not equivalent to "injuria", and so we could go on with an extensive list of pairs.

Not knowing the correct meaning of false friends in a text is considerably more dangerous than not knowing the meaning
of unfamiliar words, since in the first case, people tend to infer the meaning of words, relating them to other familiar
words, without checking them in a dictionary.
 Distinction between ACTA and ACT, we see that both words imply different meanings

"ACTA" ACT

• is a written record of what happened, was • a particular thing that is carried out by
discussed or agreed upon at a meeting; someone
• it a certification, testimony, official record or • It is a law passed by Parliament or Congress.
record of a fact

in English, the definition ACT can be: If we focus on the second definition of ACT, we see that this word is
usually translated into Spanish, erroneously, as ACTA when, in fact, what is being referred to is a law

Phraseological units turn out to be false friends in the terminology of one branch of law, but are true cognates in the
terminology of another. It is acceptable the segmentation between the different branches of law as thematic fields
with their own contrastable lexical characteristics, for example, that the terms of "counterparty" and "contraparte"
are cognates and acceptable equivalents in the field of commercial law, where both designate the co-contracting party
in a financial transaction; On the other hand, the equivalence is only apparent in the field of Civil Litigation Law, where
the "counterparty" of a litigant is never referred to in English as "counterparty" but as "the opposing party", "the
adverse party", "the other party", etc
 Act Ley
Correct translation Wrong translation Act of God, Caso fortuito
Agent Mandatario
Execution Firma, formalización, Ejecución
perfeccionamiento, otorgamiento Alienation Enajenación

Performance, consummation Ejecución, consumación Articles of Association, Estatutos sociales

Assault Agresión
Joint and several Solidaria (responsabilidad) Conjunta y solidaria Case law Jurisprudencia
Damages Indemnización, daños y perjuicios
Article Cláusula, estipulación, condición Articulo Condition precedent Condicion suspensive
Condition subsequent Condicion resolutoria
Section Apartado Sección Expert witness Perito
Jurisprudence, Teoría del Derecho
Indemnify and hold harmless Eximir/exonerar de responsabilidad Indemnizar y exonerar
Magistrate Juez lego o voluntario
Private corporation Sociedad anonima
Exhibit Anexo, apéndice Prueba
Remedy Recurso

Copy Ejemplar Copia Salary Sueldo

Title (en firmas) Responsabilidad/cargo Titulo Securities Titulos valor

Sentence Condena
Terms and conditions Condiciones/ términos/ estipulaciones/ Plazos y condiciones Statute Ley
cláusulas Satutes or limitation Plazos de prescripción
Title Propiedad
To challenge a jury Recusar o impugner al jurado
Probate a Will Legalizar un testamento
Warrant Orden (de arresto, de allanamiento)
Writ Mandato, orden judicial (Writ of
amparo - recurso de
amparo; Court writ .- mandato
judicial; Writ of admission - auto de
admission)
Latin and French expressions

Lawyers use foreign words, especially Latin words, when writing legal texts of every kind, from statutes
to emails. Legal English also contains some French words, especially in the area of EU law. While Latin
words are more common than French words in Legal English, this was not always the case.

Per se
In itself, intrinsically, of an inherent nature.

A Priori
Based on hypothesis or theory, rather than experience.
English legal terms are full of Latin words Derived by logic, with no observed facts.
and phrases. Several of these terms are
so common, we use them today without Bona Fide
any problem or confusion. Unquestionable, in good faith

Pro Rata
Proportionally, in equal parts.

versus (vs)
“against” or “in contrast to”: .
 EXPRESIÓN DEFINICIÓNENINGLES ESPAÑOL SIGNIFICADO
Aberratio ictus The accidental harm to a Error accidental Este término se utiliza cuando el sujeto
person dirige su acción contra el objeto que se
proponía, pero ésta recae sobre un objeto
distinto.
Ab initio From the start/from the Desde el principio Término jurídico utilizado para designar
beginning. una acción que comienza.
Actus reus A guilty deed or act Acto criminal Acción hecha por alguien que está en
contra de las leyes del país o región de
que él o ella está dentro
Ad damnmum A formal and specific claim El daño Se refiere a una suma específica en
by a plaintiff for damages. una demanda civil que se supone para
reflejar la pérdida sufrida por el
demandante como resultado de las
acciones del acusado.
Ad hoc For this specific purpose Con fines En la designación de algún cargo
específicos como juez, abogado penal, abogado
civil para representar un caso en
específico.
Ad infinitum Forever; without limit; Indefinidamente En forma indefinida o inacabable.
indefinitely
Ad litem For the suit. A los efectos del Se refiere a alguien elegido por un
juicio o de un tribunal de justicia para hacer algo por
proceso judicial otra persona cuando esa persona no
puede hacerlo por sí misma.
Alibi A defense to a criminal Coartada Argumento de defensa mediante el
charge to the effect that cual el acusado prueba no haber
the accused was estado presente en el lugar del delito
elsewhere than at the en el momento en que se cometió.
scene of the alleged crime.
Not everyone knows that, even though it is distant, the Common Law contains a strong influence of
French law. After the conquest of the French in the 12th century, French was the official language in
those lands for more than two hundred years. As a result, legal English retains many terms and
expressions of French origin, such as the following

• action sur le cas (acción derivada de un ilícito civil o extracontractual)

• alibi (coartada)
• estoppel (puede referirse a un impedimento legal o a las consecuencias de la
doctrina de los actos propios)
• force majeur (fuerza mayor)
• plaintiff (demandante)
• sous pein de (bajo pena de)
• voir dire (procedimientos para la selección de jurados)
Doublets and triplets in English legal language

• One of the linguistic peculiarities of English legal language is the use of doublets and triplets.
Doublets are two synonyms used together while triplets are three synonyms used together.

• Doublets (expressions composed of two words) and triplets (composed of three words) are
characteristic expressions of legal English, consolidated over time by their continued use, and
which serve to emphasize the solemn and archaic character of the language of jurists. They are
formed by two (doublets) or three (triplets) words that are traditionally repeated in the same order
to reinforce a certain idea.

• Most commonly, the terms of which they are composed do not have different meanings, but simply
form redundant expressions as a whole
 DOUBLETS ÑOL
Able and willing Capacidad y voluntad

According to my faithful knowledge and understanding Según a su leal saber y entender

Act and deed En representaciónde
Acts and things Jurisdicción y ejecución
Agree and covenant Comprometerse
Agree and guarantee Garantía
Agreed and accepted Leído y aprobado
Agreed and declared Acordado y firmado
Aid and abet Incitar/inducir
Aid and comfort Brindar ayuda y consuelo
Acknowledge and confess Confesar
All and singular Todos y cada uno
All and sundry Todo El Mundo
Alter or change Modificar
ANNOY OR MOLEST Molestar

ANNULLED AND SET ASIDE Desestimar

ANSWERABLE AND ACCOUNTABLE Responsable
ANY AND ALL Cualquier
APPROPRIATEAND PROPER Adecuado
 Triplets
Alienate, transfer, andconvey Enajenar
Assign, transfer andset over Ceder
Build, erect or construct Construir
Business, enterprise or undertaking Empresa/compañía/consorcio
Cancel, annul, and set aside Anular
Changes, variations and modifications Modificaciones
Convey, transfer and set over Ceder
Document, paper or writing Documento escrito
Documents, instruments and writings Documentos escritos
Form, manner, and method Forma/modo/método
Free and clear of and without Libre de todo (gravamen/impuestos)
Give, devise, and bequeath Testar/dejar en herencia
Hold, possess, andenjoy Posesión y disfrute de…
Make, publish, and declare Declaro y otorgo…
Name, constitute, andappoint Otorgo poder a …
Name, place and stead En nombre y representación de…
Transition words

Legal writing uses some words that serve as links between two sentences expressing
different ideas, which are characteristic of legal English.

The most frequent transition words in legal texts are the so-called adverbial connectors, which
either introduce a condition or relate some clauses to others. Within this type of connectors,
these are some of the most common ones:

• Notwithstanding
• without prejudice to,
• subject to y
• provided that.
 •
• Legal English is one of the many forms of English that is used
in law. In other words, it is a technical language specifically
originated as a language for legal professionals such as judges,
lawyers, legal assistants, and attorneys. Legal English is not a
native language for these professionals. Therefore, they are
required to learn this language from a technical context in order
to perform well in the field of law.
LEGAL
ENGLISH

https://youtu.be/2lQ1cKVRJxY
For centuries, the legal business had its own separate language at its disposal, which was French Law. French was
an established technical language which still offers expressions for matters today where no alternatives have been
found. When lawyers exercised in Anglo-French in the English courts, they were basically speaking a variety of
French which was still in use among the nobility. But from the last centuries on, almost all legal concerns have been
completed in English, although it differs from common speech in many aspects. On the one hand, the overall
language with which lawyers operate is English. In contrast, not every term and construction of legal English would
be tolerated in ordinary English. Although, today, English plays the role of the official language in law, legal language
cannot be called official English

A lawyer’s greatest weapon is their words… (He) has

it at his or her disposal a veritable armory of skills in
the sciences of communication and persuasion and it
is expected that he or she will apply those tools in
appropriate situations“
Legal English plays a major role for communication and practicing in law firms globally. Offices involved in
international jurisdictions are reliant on this language and its use affects the outcome of processes, lawsuits
and even success rates. Several studies confirm that English as the lingua franca is a major influencing factor
in determining employment and even wage for the concerned person

The importance of English Legalese needs to be further analyzed and emphasized. For practicing lawyers
and attorneys, it may be fundamental to be aware of the impact of correct language use and this also applies
to foreign speakers as well.

A. Legal English definition

According to the Cambridge law dictionary, the term legalese,
language used by lawyers and in legal documents that
is difficult for ordinary people to understand. It is also a pejorative term
associated with a traditional style of legal writing that is part of this
specialized discourse of lawyers: communication that "lay readers cannot
readily comprehend".
Legalese is a "specialized type of language that is spread among a group of people, such as law students,
lawyers, judges whose main intention is to interact with each other for professional needs through a
powerful means of unambiguous communication"

Mostly, it is being used to draft a contract or write a special document and is barely audible in conversation.
Educating young professionals and students in legal English is a crucial part of any educational path with
the prospect of an international legal career. As globalization and internationalization increasingly influence
all aspects of business life, even lawyers need to adapt to these conditions.
Legal writing
legal professional cannot do without writing. A judge that resides over a matter, a legal practioner that
represent a client in court, a solicitor that draft legal document and a law student, legal writing is imperative to
all these categories.

Legal English has particular relevance when applied to legal writing and the drafting of written material, including:
• legal documents: contracts, licenses, etc.
• court pleadings: summonses, briefs, judgments, etc.
• laws: Acts of Parliament and subordinate legislation, case reports
• legal correspondence
When interviewing client, writing helps a lawyer to have effective interview and take down all the statement of the
client.

When filing a lawsuit in court, the attorney must draft your entire statement of claim.

The defense attorney has to draft a statement of defense showing his response to the claim files against his client.

When interrogating the client and witness in court, some lawyers write down all the pertinent questions.

.
When interrogating the client and witness in court, some lawyers write down all the pertinent questions.

Lawyers research and write up the outcomes for their own benefit and for the benefit of their clients
.
The Difference between Legal and Regular English

legal English differs greatly from standard English in several ways. The most important of these
differences are as follows:

- Use of technical terms. Legal English, like other language used by other professions uses a great deal of
technical terminology that is unfamiliar to the lay public (e.g., waiver, restraint of trade, restrictive covenant,
promissory estoppel). A considerable part of this lexicon is derived from French and Latin.

- These vocabularies include ordinary words used with special meanings. For example, the well-known term
consideration refers, in legal English, to contracts, and means, an act, forbearance or promise by one party to a
contract which constitutes the price for which the promise of the other party is purchased (Oxford Law Dictionary).
Other examples are preference, redemption, supply, retention, and discovery.

- Use of doublets and triplets. the mixture of Latin and French words used in the early legal language gave rise
to the tendency in legal English to string together two or three words to communicate what is usually a single legal
concept. Examples are null and void, fit and proper, (due) care and attention, perform and discharge, terms and
conditions, dispute, controversy or claim, and promise, agree and covenant. Although it was initially done to help
all lawyers, regardless of the vocabulary they used (English, French or Latin), it is now sometimes repeated words
used that mean exactly the same and has become a standard of style for other legal concepts (dispute,
controversy or claim, registration and forfeiture).
What Makes Legal Language Difficult?

In the ordinary English language, there are many words that confer a completely different meaning
from their traditional meaning when used in the legal context. For example, if a lawyer has attended a
traditional English course rather than a legal English course, he would find it impossible to understand
words such as sentence, consideration, minor, clean hands, etc. when used in the legal context.

A person may be completely fluent in plain English and yet have no understanding of the usage of
specialized legal terms and terminologies used by legal practitioners in the course of their work, i.e. in
drafting legal texts, which are universally applicable. In the everyday English language, there are many
words that confer a completely different meaning from their traditional significance when used in the
legal context.

Legal English has traditionally been the preserve of lawyers from English-speaking
countries (especially the U.S., the UK, Ireland, Canada, among others) which have shared common
law traditions. However, due to the spread of Legal English as the predominant language
of international business, as well as its role as a legal language within the European Union, Legal
English is now a global phenomenon. It may informally be referred to as law speak.
 LEGAL SYSTEMS AND COMPARATIVE LAW

a legal system is defined as the conception of law that traditionally governs a group of countries
and that has historical and institutional similarities. The terms Civil Law and Common Law refer to
two legal systems that, at first glance, may be considered opposites.

Three major legal systems of the world consist of civil law, common law and religious law.

Broadly speaking, Civil Law, Continental Law or Roman-Germanic Law, governs practically all of Europe (with
the exception of some territories belonging to the United Kingdom), a large part of Latin America and several
African countries. On the other hand, the legal conception that responds to the Common Law system, of
Anglo-Saxon origin, is applied in England, Wales, Ireland and most of the former colonies of the United
Kingdom, including the United States (with the exception of the state of Louisiana), Australia, New Zealand and
Canada (with the exception of the French-speaking area).

The lawyer who wants to acquire a deeper knowledge of legal English must begin by understanding the Case
Law, later called Common Law, as well as the existing differences in relation to our Civil Law .

The Origins of Common Law and Civil Law Traditions

https://youtu.be/E30qCLeKxhc
 I. COMMON LAW
Common law, also called Anglo-American law, the body of customary law, based upon
judicial decisions and embodied in reports of decided cases, that has been administered by
the common-law courts of England since the Middle Ages. From it has evolved the type of
legal system now found also in the United States and in most of the member states of
the Commonwealth (formerly the British Commonwealth of Nations).
People sometimes call common law “customary law” because judges consider the customs
(common practices) of the country when making decisions. In many countries the justice
system combines elements of civil law (private cases), which was handed down from Roman
law, and common law, which developed in England.

In a combination system, private cases are judged in civil courts; however, cases involving crimes against society
(criminal law) are tried in criminal courts, where decisions are based on precedents.

Common law, also known as case law, is a body of unwritten

laws based on legal precedents established by the courts.

Common law draws from institutionalized opinions and

interpretations from judicial authorities and public juries

Common laws sometimes prove the inspiration for new

legislation to be enacted.
 Origins of Common Law

The U.S. common-law system evolved from a British tradition that spread to North America during the
17th- and 18th-century colonial period. Common law is also practiced in Australia, Canada, Hong Kong,
India, New Zealand, and the United Kingdom (Chen, 2021).

Common law, also called "case law" dates to the Norman conquest of British territories in 1066, replacing
local law with one law for the whole of England. Since the territory was regulated by a very poorly developed
and homogeneous judicial system, the legal germ of the common law began to develop from the twelfth and
thirteenth centuries onwards.

Common law consists of the rules and other doctrine developed gradually by the judges of the English royal
courts as the foundation of their decision and added to over time by judges of those various jurisdictions
recognizing the authority of this accumulating doctrine. Law of common jurisdiction applied by these courts.
The first common law movements came from the hand of itinerant judges and were decided by means of an
analogical comparison between the different cases under examination. The previous "legal systems" existing
before the 12th century were, therefore, replaced by this "common law", common to those belonging to the
English crown

The subsequent colonization of various lands made possible the spread of the common law to other territories
which, after gaining independence from the English crown, have maintained the common law legal system to
the present day. It therefore became part of the three subsystems that make up the British legal system:
English and Welsh, Scottish and Northern Irish.
Common law or customary law, based upon judicial decisions and embodied in reports of decided cases,
that has been administered by the common-law courts of England since the Middle Ages. From it has
evolved the type of legal system now found also in the United States and in most of the member states of
the Commonwealth (formerly the British Commonwealth of Nations). In this sense common law stands in
contrast to the legal system derived from civil law, now widespread in continental Europe and elsewhere.
In another, narrower, sense, common law is contrasted to the rules applied in English and American
courts of equity and also to statute law.

Common law is generally uncodified. This means that there is no comprehensive compilation of legal
rules and statutes. While common law does rely on some scattered statutes, which are legislative
decisions, it is largely based on precedent, meaning the judicial decisions that have already been made
in similar cases. These precedents are maintained over time through the records of the courts as well as
historically documented in collections of case law known as yearbooks and reports. The precedents to
be applied in the decision of each new case are determined by the presiding judge. As a result,
judges have an enormous role in shaping American and British
 Sources of Common Law
The concept Common Law refers to the legal system created in England in the 11th century, which consists
of a legal system based primarily on the decisions adopted by the courts, in contrast to Civil Law systems,
such as ours, where the main source of law.

Jurisprudence as a source of law takes on an enormous and primary

importance, with the advantage of not leaving legislative decisions in
the hands of political opportunism, passing the responsibility of
fairness from the legislator to the judge.
Judicial Precedent Case Law:
English law is a jurisprudential law, that is, it has been formed since
ancient times by the resolution of specific cases, and the rulings of
such cases have been kept since ancient times, in the year 1260 in the
first of the annual books (yearbooks) and later in the reports.

Precedent is the basis of the common law.

The doctrine of binding precedent is known as the doctrine of “stare decisis (to stand by decided matters)”,
which is Latin meaning ‘to stand by/adhere to decided cases’, i.e. to follow precedent.
 In other words, once a principle is decided it should be followed in future cases. The doctrine refers to the fact that, within the
hierarchical structure of the English courts, the decision of a higher court will be binding on a lower court. In general terms,
this means that when judges try cases they will check to see if a similar situation has come before a court previously. If the
precedent was set by a court of equal or higher status to the court deciding the new case, then the judge in the present case
should follow the rule of law established in the earlier case. Where the precedent is from a lower court in the hierarchy, the
judge in the new case may not follow but will certainly consider it.

The ‘doctrine of precedent’ is the rule that a legal principle that has been
established by a superior court should be followed in other similar cases by
that court and other courts. The doctrine of precedent was developed to
promote consistency in decision-making by judges, on the basis that like
cases should be determined in a like manner. There are two kinds of
precedent: binding and persuasive

https://youtu.be/Xzq-x-hytJY
 Generally, there are two types of precedent

• Binding precedent. Precedent that a court must abide by • Persuasive precedent. Precedent that a court may, but is not required to,
in its adjudication of a case. For example, a lower court is rely on in deciding a case. Examples of persuasive precedent include:
bound by the decision of a higher court in the same • decisions from courts in neighboring jurisdictions; and
jurisdiction, even if the lower court judge disagrees with the • dicta in a decision by a higher court.
reasoning or outcome of that decision.

There are three essential elements to this system of precedent:

• the hierarchy of the courts
• binding precedent
• accurate law reporting.
In a case presented before a judge, he must ask himself how it has been decided in similar cases, the most
common situation is that there are already previous verdicts that clearly state the decision to be taken to dictate the
same, then this judgment of the judge becomes part of the Common Law, as a Declaratory Precedent that
continues a certain jurisprudential tradition. If the situation arises, in which there is no precedent for a new situation,
the judge will decide according to general principles of law, and his judgment will be established as an original
precedent to which judges must refer to in subsequent cases, thus a traditional law manages to adapt to new social
situations.
 The precedent consists of two parts: the ratio decidendi and the obiter dictum.

• The ratio decidendi is the statement of the law applied in the resolution of the legal
problem, the part that gives it its force and basis; from which the law arises and is
shaped. It also gives the precedent its binding character, and it is by referring to the ratio
decidendi that successive judges will decide whether or not the precedent is adapted to
a specific case.

• The Obiter Dictum are the opinions and reports that the judge includes in the judgment,
but these contributions are not determinative.

Legal reasoning is used by attorneys to argue for a particular outcome in a case and by judges when rendering decisions.
At its most basic form, legal reasoning involves first identifying the legal question, which is the issue in dispute. Then, the
rule of law that applies to that issue is identified. The rule of law may be drawn from precedent, for example. The facts of
the case are analyzed against the rule of law to reach a supportable conclusion. This method of legal reasoning is referred
to as the IRAC method, which is an acronym for issue, rule, analysis, and conclusion.
 Legislation Statutory Law :

The laws issued by the legislative branch, called Statutes, must always be interpreted in the light of the common
law tradition, which explains why these Statutes do not express everything, as they leave countless gaps that must
be filled by taking pre-existing judicial decisions as a source.

There are two forms of statutes in the common law system: those that gather in a single document a certain
position of this system and that, therefore, must be interpreted in light of it, known as statutory
codifications, and those statutes that go beyond the common law, establishing a new way of proceeding in
the face of a case, The margin of interpretation and application of the latter by the courts is narrow, since the
legislative power is superior in defining the way in which the judge can create law, which is recognized and complied
with by the courts, except when these rules violate the constitutional order.

Costumes
Judges in the application of the law are based on other similar previous rulings, which set precedents and which,
when reiterated over time, have consolidated the custom.
Customs became precedents when the old customary law (costumbre) was abandoned and play a minor role.
Custom is not considered legally binding if it does not meet the following requirements:

• Must exist uninterruptedly for a long period of time • It must be accepted as binding
• It must exist by common consent and not by the use of force. • It must have significant importance
• Must be consistent with other customs • It must be reasonable
 General Customs These are rules of behavior which developLocal Customs without
in a community
Customs being deliberately invented. There are two main types of customs:
• The basis of our common law. General customs and local customs.
• used where a person claims that he is entitled to
• the judges appointed by the kings to travel around some local right
the land making decisions in the king’s name based
at least some of their decisions on the common • a right of way or a right to use land in a particular
customs. way, because this what has always happened
locally
• This idea caused Lord Justice Coke in the 17th
century to describe these customs as being ’one of • Such customs are in exception to the general law of
the main triangles of the laws of England’. However, the land, and will only operate in that particular area
other commentators dispute this theory.
Since there were (or still are) exceptions to the general common law, the judges, from the earliest times, established a
series of rigorous tests or hurdles that had to be passed before they recognized any local customs.

These tests still exist today and are used on the rear occasions that a claim to right comes before the courts because of a
local custom. That tests are as follows:

• The customs must have existed since ‘time immemorial’

• The customs must have been exercised peaceably, openly and as of right
• The custom must be definite as to locality, nature and scope
• The customs must be reasonable.

It is very unusual for a new custom to be considered by the courts today and even rarer for the courts to decide that it
will be recognized as a valid custom, but there have been some such cases.

Although customs may develop, they are not part of the law until recognized by the courts; it is the judges who decide
which customs will be recognized as enforceable at law.
 A subsidiary source of law, but at the same time never-ending. Intended to fill legal gaps not
Reason provided by other sources of law, Reason is to seek the most sensible solution to a dispute
when there is no precedent or mandatory custom in that matter. Above all, it seeks the most
harmonious solution with the existing legal norms.

A court, unable to locate a precedent suitable to a case, may refer to legal

The Doctrine books for guidance. It is the body of opinions of jurisconsults or legal scholars. It
is not law but is invoked by the parties to the judges to support their claims. It is
also consulted by judges to support their sentences.

used by legal writers to refer to a number of early legal textbooks that are excepted
Books of authority from the rule that textbooks (and all books other than statute or law report) are not
treated as authorities by the courts of England and Wales and other common
law jurisdictions
 Custom: Judicial Precedent Case Law:
Judges in the application of the law are based on As a source of law takes on an enormous and
other similar previous rulings, which set precedents primary importance, with the advantage of not leaving
and which, when reiterated over time, have legislative decisions in the hands of political
consolidated the custom. opportunism, passing the responsibility of fairness
from the legislator to the judge.

SOURCES OF
LAW

Legislation Statutory Law:

Acts, which may be Acts of Parliament and statutory Books of authority:
provisions, and delegated legislation emanating from
central or local government, such as ministerial orders it is a secondary or derivative source of law.
and local by-laws.
Adversarial system

Court proceedings in countries that have a common law system (such as the UK, USA and Australia)
are adversarial in nature.

Common law functions as an adversarial system, a contest between two opposing parties before a
judge who moderates. A jury of ordinary people without legal training decides on the facts of the case.
The judge then determines the appropriate sentence based on the jury’s verdict.

This means that each party to the case presents argument and evidence in support of his or her version
of events to the court, and the court decides whether the party that commenced proceedings has proved
their version of events to the relevant standard (see Standard of proof in the Types of disputes section).
The court can only make decisions on the issues that the parties indicate to the court are in dispute and
decides only on the basis of the evidence and argument presented to the court by the parties. The court
does not conduct its own investigation or construct its own version of events.

The adversarial system may be contrasted with the inquisitorial system used in many European
countries. In the inquisitorial system, the judge has a much more active role in directing the case and
often makes inquiries, calls and examines witnesses and generally determines the matters that the court
will decide.
ADVANTAGES & DISADVANTAGES OF COMMON LAW

A Equity rewards the claimants better. The only remedy that common law could
Equity give was ‘damages’ – that is an order that the defendant pay a sum of money to
D the claimant by way of compensation.
V
A
decisions are based on previous judgements, it’s more convenient to follow this
N process through. The process is easier and more practical as there are no
Precedents
T fixed, lengthy rules but real situations that have already been resolved.
A
G
As there is already a basis on which the judgment will be passed, a basic
E Efficient framework so to say, the judicial process becomes so much faster.
S
D
I The downside of a judgment that has been made, it’s that it will be superseded
Perpetuation of
S again by other judges even if the decision is imperfect. .
bad decisions
A
D
V When there are no precedent, judges make decisions based on the evidence
A absence of precedent given and as far as possible come to a fair judgement, sometimes a view of
the evidence by the judge may bring about a wrong judgment.
N
T
A Need of records
Because these precedents are to be followed by all other courts or in many
cases, lengthy, detailed records have to be maintained. And to make easy the
G accessing of these cases and previous decisions, uniform indexing methods
E have to be created and followed diligently.
S
ENGLISH
LAW
 The United Kingdom does not have a single legal system because it was created by the political union of previously
independent countries.

• Article 19 of the Treaty of Union, put into effect by the Acts of Union in 1707, created
the Kingdom of Great Britain but guaranteed the continued existence of Scotland's and
England's separate legal systems.

• The Acts of Union of 1800, which joined Great Britain and Ireland into the United Kingdom
of Great Britain and Ireland, contained no equivalent provisions but preserved the principle
of different courts to be held in Ireland, of which the part called Northern Ireland continues to
follow as part of the United Kingdom

The United Kingdom is divided into three main jurisdictions (or self-contained legal
systems):
• England and Wales,
• Scotland,
• Northern Ireland.
Each jurisdiction has its own laws, court system, lawyers and judges. However:
a. Laws that apply in one jurisdiction, particularly if they are derived from legislation (Acts of Parliament and
Statutory Instruments) may apply equally, or very similarly, in other jurisdictions.

b. While the courts in each jurisdiction can decide cases differently from those in other jurisdictions, the final
appeal for all of them goes to the UK Supreme Court.

The justice system is one of the three branches of the state. The other two
branches are the executive, or the government, and the legislature, which
is the two Houses of Parliament.

In most democracies these three branches of the state are separate from each other. They have roles and functions that are defined
within written constitutions, preventing the concentration of power in any one branch and enabling each branch to serve as a check on
the other two branches. This is known as separation of powers.
Constitution
The United Kingdom, famously and almost uniquely, does not have a constitution that is contained in a written constitutional
instrument. Its constitution is to be found in the statutes passed by Parliament and in the common law, the law
developed over the centuries in the decisions of the courts.

Only two other countries, Israel and New Zealand, are like the United
Kingdom in not having a written constitutional instrument.

Lack of a written their institutions did not separate

constitution the functions and powers of the
three different branches of the
state, the executive, the
legislature, and the judiciary.

For example, the government (or executive) is made up of MPs and peers who are also members of the legislature
(the House of Commons and the House of Lords). In the United States by contrast, the President and members of
the Cabinet, (the executive), are entirely separate from the legislature, (the Senate and the House of
Representatives).
There is no formal separation of powers in the UK constitution, but it is possible to identify persons or bodies
that make up branches of the state:

The executive The legislative The judicial branch

branch branch is made up of the
is made up of the monarch, legally-
monarch, the Prime qualified judges and
Minister and other is made up of the magistrates (non-
Government monarch, the House legally-qualified
Ministers, the civil of Commons and the members of the
service and members House of Lords. public).
of the police and
armed forces.
Head of state

The head of state is the monarch (currently, King Charles III) who is unelected and who
occupies that position by virtue of birth. In practice, the role of the monarch is largely
ceremonial.

Some powers that the Government exercises are derived from the Royal Prerogative and are
exercised in the name of the monarch, although the monarch remains legally responsible for their
exercise. The Royal Prerogative is what remains of the absolute powers that were formerly
exercised by the monarch, and which have not been removed by Parliament. These powers
include matters of national security, the defense of the realm and the deployment of the
armed forces.
 System
The Supreme Court

• The Supreme Court of the United Kingdom is the highest court in the land for all criminal
and civil cases in England and Wales and Northern Ireland, and for all civil cases in Scots
law.

• The Supreme Court is also the final court (in the normal sense of the term) for interpreting
United Kingdom law. Note, however, that, unlike in some other systems (for example, the
United States),

• the Supreme Court cannot strike down statutes and its precedents can be expressly
overridden by Parliament, by virtue of the doctrine of Parliamentary sovereignty
Structure
The UK Parliament comprises two separate Houses: the House of Commons and the House of Lords.

The House of Commons The House of Lords

is a representative body, the membership of which is

elected. Certain persons are disqualified from is not elected and is not a representative body. Most
membership by profession or occupation (for example, members of the House of Lords are life peers appointed
full-time judges) or by status (for instance, persons under the Life Peerages Act 1958. Such peers are
under the age of 21). appointed by the monarch on the advice of the Prime
Minister, who receives advice on who to put forward from
The Speaker is the Chairman of the House of a non-political Appointments Commission.
Commons and carries out his or her duties impartially
such as by ruling on procedural points. By convention,
the Prime Minister is a member of the House of
Commons.
How Parliament works in nearly 60 seconds

https://youtu.be/GbLTwQwXqWc
 • England and Wales has a common law legal system, which has been established by
the subject matter heard in earlier cases and so is the law created by judges. It
originated during the reign of King Henry II (1154-89), when many local customary
laws were replaced by new national ones, which applied to all and were thus
"common to all".
Legal system
• Scotland has its own independent and, in parts, clearly different judicial system with
its own jurisdiction. The law of Scotland is not a pure common law system, but a
mixed system. This law shows many similarities to Roman-Dutch law.

At present, as a result of EU legislation, many modern laws are applicable across the whole United Kingdom of Great
Britain and Northern Ireland but there can be differences (for example, in property law where the law of Scotland
resembles civil systems more than English law).
Main sources of law
Laws may be defined as the rules that govern the behavior of human beings within a civilized society. Legal laws
are decided and declared by human beings and may be changed by further human intervention.

Sources of law may be described as primary or secondary

General court structure and hierarchy
 The Supreme Court is the final court of appeal in the UK. It hears appeals on arguable points
of law of public importance for the whole of the UK in civil cases, and for England and Wales
• The Supreme Court
and Northern Ireland in criminal cases. In Scotland, appeals can be made from the lower
courts in criminal cases to the High Court of Justiciary.

The Court of Appeal and the High Court constitute the "senior courts" of England and
• The Court of Appeal Wales. The Court of Appeal is an appellate court and is divided into two divisions, Criminal
and Civil.

• The High Court The High Court hears the more serious and complex civil and family cases at first instance. It
contains three divisions: Queen's Bench, Family and Chancery (equity).

The Queen's Bench Division is the The Chancery Division deals with England and Wales is split into six circuits or
biggest of the three High Court company law, partnership claims, distinct geographical regions for the practice of
Divisions. Included within it are a conveyancing, land law, probate, law. They are the areas around which the High
number of specialist courts: the patent and taxation cases. This Court judges travel. The six circuits are: South,
Admiralty, Commercial, Mercantile, Division has three specialist courts: Eastern, Northeastern, Midland, Northern, Wales
Technology and Construction, and the Companies Court, the Patents and Western.
Administrative Courts. Court and the Bankruptcy Court
 There are approximately 160 county courts that hear cases within their geographic catchment
The County Court area. These courts deal with civil (non-criminal and non-family) cases. The county court hears
(subject to exceptions) money claims with a value up to and including GBP100,000 and claims
for damages for personal injury with a value up to GBP50,000. Cases are ordinarily held
where the defendant resides.

The Family Court was established in 2014. It has national jurisdiction and brought all levels of
The Family Court family judiciary to sit together in the same court.

The Crown Court sits in centers around England and Wales. This deals with indictable criminal
The Crown Court cases that are transferred from the Magistrates' Courts, including serious criminal cases.
 These courts hear all criminal cases at first instance. Less serious cases and
those involving juveniles are tried in the Magistrates' Courts, as well as some
civil cases
Magistrates' Courts
Magistrates deal with three kinds of offence: summary (less serious cases);
either-way (cases that can be heard either in a Magistrates' Court or before a
judge and a jury in the Crown Court); and indictable-only (serious cases).

Tribunals These courts hear appeals from decisions on: immigration, social security, child
support, pensions, tax and lands
How are members of the judiciary typically appointed?

• Judges are appointed by the monarch on the recommendation of the Lord Chancellor. The exception is
Justices of the Peace who are recruited by Local Advisory Committees.

• The Judicial Appointments Commission, established as an independent body, selects and recommends
candidates for appointment. The Judicial Appointments Commission has a statutory duty to "encourage
diversity in the range of persons available for selection for appointments".

• Justices of the Court of Appeal are appointed by the monarch on the advice of the Prime Minister and the Lord
Chancellor, following the recommendation of an independent selection panel chaired by the Lord Chief Justice.

All potential applicants must be a citizen of the UK, the Republic of Ireland or a
Commonwealth country (or a holder of dual nationality in respect of any of the above).
Qualifications There is a statutory retirement age of 70 for judges and Justices of the Peace.
US LAW

• British and American legal systems

have a lot in common and this is no
mistake. Having been an English
colony, our own legal system is
directly descended from English
courts, especially what we know as
the “Common Law.” Also known as
case law, common law doesn’t come
from the government, but from case
decisions. If a court decides what a
law means, then the court’s
definition becomes the standard
other courts use to decide cases
 CONSTITUTION
• The U.S. Constitution is the nation's fundamental law. It codifies the core
values of the people.

• Courts have the responsibility to interpret the Constitution's meaning, as well

as the meaning of any laws passed by Congress.

• The U.S. Constitution establishes a federal system of government.

• The constitution gives specific powers to the federal (national) government. All
power not delegated to the federal government remains with the states.

• Each of the 50 states has its own state constitution, governmental

structure, legal codes, and judiciary.
 A Bill of Rights is a formal declaration or assertion of both the legal
and civil rights that citizens of any country, federation, or state enjoy

Purposes of a Bill of Rights

Its main purpose is the protection and upholding of the rights of citizens against infringement from the
government, private citizens, or public officials. It also explains to the citizens their rights, what they are to
observe in relation to their fellow country people, as well as how to ensure their rights are protected.

The most basic rights contained in any Bill of Rights include:

•Right to life.
•The freedom of speech and expression.
•Right to privacy.
•Freedom of religion, belief, opinion, and conscience.
•Freedom from servitude, slavery, and forced labor.
•Right to human dignity.
•Equality and freedom from discrimination
Relationship Between Constitution and the Bill of Rights

The constitution is the mother of all rules. It contains amendments, by-laws, and any other
constitutional changes. As such, it contains the Bill of Rights and guards them wholesomely.

Function
A Bill of Rights stipulates the rights and freedoms each citizen
A country’s constitution establishes the structures and
is entitled to from the government and other citizens.
functions of each arm of the government of the land.

The constitution limits the power of the government. Bill of Rights grants authority to the people

Position

A constitution is a stand-alone document stipulating the Bill of Rights is housed by the constitution.
rules

Limitation

The constitution governs the structures of the Bill of Rights only concerns itself with the rights of the people
governments and the whole citizenry
.
 The U.S. Constitution establishes the judicial branch of the federal government
and specifies the authority of the federal courts.

Federal courts
• have exclusive jurisdiction only over certain types of cases, such as cases involving federal laws,
controversies between states, and cases involving foreign governments.

• In certain other areas federal courts share jurisdiction with state courts.

For example, both federal and state courts may decide cases
involving parties who live in different states.
State courts

• have exclusive jurisdiction over the vast majority of the cases.

• Parties have a right to trial by jury in all criminal and most civil cases.

A jury usually consists of a panel of 12 citizens who hear the evidence and apply the law
stated by the judge to reach a decision based on the facts as the jury has determined them
from the evidence at trial. However, most legal disputes in the United States are resolved
before a case reaches a jury. They are resolved by legal motion or settlement, not by trial
 Rule of law is a legal maxim that suggests that no one is
above the law and governmental decisions must be made
only by applying known legal and moral principles. ...

The Rule of Law is meant to prevent dictatorship and to

protect the rights of the people

Rule of law is a principle under which all persons, institutions, and entities are accountable to laws that are:

Publicly Equally Independently consistent with

promulgated enforced adjudicated international human
rights principles

The courts play an integral role in maintaining the rule of law, particularly when they hear the grievances voiced
by minority groups or by those who may hold minority opinions.

In the United States, laws are made at the federal and state levels. Laws adopted by legislative
bodies - Congress and state legislatures - are called "statutes.”

The federal and state courts enforce statutes. They also create law.

https://www.ft.com/content/9ca8acf6-1cdc-11ea-97df-
cc63de1d73f4
 FEDERAL STATUTES STATE STATUTES

are laws enacted by Congress with (and in some is a formal written enactment of a legislative authority
circumstances without) the approval of the President that governs the legal entities of a city, state, or
country by way of consent.
Typically, statutes command or prohibit something,
or declare policy.
Federal statutes are published in three formats:

1. Individual slip laws.- Slip laws are individually

paginated pamphlets, each containing a single statute
2. Compilations of slip laws known as session laws.- .-
Session laws compile the slip laws enacted in a
session of Congress
3. Codified law incorporated into a code. Codes are
subject compilations of statutes in effect, as
amended.
The United States Code, U.S. Code, U.S.C., or USC)
is the official compilation and codification of the general and
permanent federal statue of the United States. It contains 53 titles wiich deal
with broad, logically organized areas of legislation. Titles may optionally be
divided into subtitles, parts, subparts, chapters, and subchapters. All titles
have sections (represented by a §), as their basic coherent units,

https://www.law.cornell.edu/uscode/text
THE COURTS
The courts enforce statutes and interpret them. They also invalidate unconstitutional statutes, and make law in
areas not covered by statutes

main roles played by our courts:

A copyright infringement suit is an example of

Enforcement court enforcement of a statute.

According to the Copyright Act, the copyright in a work created by

an employee within the scope of his or her employment is owned
Interpretation by the employer. The Copyright Act does not define the term
"employee."

Invalidation The courts invalidate unconstitutional law

The courts create the law for "common law" subject areas.
Making Law Common law covers areas not covered by statutes.
Supreme Court
At the very top of the federal court system is the U.S. Supreme Court. Its legal interpretations are The Final
Word on the law in this country.

The U.S. Supreme Court hears only a very small number of cases. To get to that level, a case must usually
work its way up through the lower tiers of a state court system and/or the federal system. The justices choose
the cases they hear every year based on a case’s implications for Americans in general or for a certain group
within society, not just the impact on the parties actually involved in the lawsuit itself.

Supreme Court cases that meet these criteria:

• Brown vs. The Board of Education of Topeka. This ruling was the beginning of the end of racial
segregation in America’s public schools.

• Roe vs. Wade. Gave all American women the right to decide for themselves, in consultation with
their doctor, whether or not to have an abortion.

• Miranda vs. Arizona. This ruling gave persons who are arrested the right to be informed of their legal
rights at the time of their arrest: “You have the right to remain silent. . . .”
The Constitution only allows certain kinds of cases to be heard by the federal courts. In general, these
courts are limited to cases that involve the following

• Issues of Constitutional law

• Certain issues between residents of different states

• Issues between U.S. citizens and foreigners

• Issues that involve both federal and state law

US legal system is based on the adversarial process, which means that fundamental to all court
procedures, regardless of the court, is the belief that all parties in a legal dispute must have an equal
opportunity to state their case to a neutral jury or judge and to poke holes in what the other side says.
Attorneys usually do most of the case-stating and hole-poking
Court system.
The United States court system is actually many court systems: a federal system and 50 state systems.
Each has its own structures and procedures. All are multi-tiered. Legal cases begin in a lower court and
sometimes work their way up to a higher court. Some cases initiated in a state court system ultimately end
up in the federal court system

The federal court system

The federal court system has three main levels: district courts (the trial court), circuit courts which are the first
level of appeal, and the Supreme Court of the United States, the final level of appeal in the federal system.

• is divided into 13 judicial circuits.

• Eleven of the circuits are numbered.
• Each of the numbered circuits contains more than one state.
• The Ninth Circuit, for example, covers California, Oregon, Washington, Idaho, Nevada,
Arizona, Alaska, and Hawaii. The 12th and 13th circuits are the District of Columbia
Circuit and the Federal Circuit.
• The Federal Circuit handles appeals in patent cases and Claims Court cases.
What are Federal and State Court Systems in the United States

https://youtu.be/U4GU1ha2Pq8
Courts in the federal system work differently in many ways than state courts.

• The primary difference for civil cases (as opposed to criminal cases) is the types
of cases that can be heard in the federal system.
• Federal courts are courts of limited jurisdiction, meaning they can only hear
original jurisdiction. cases authorized by the United States Constitution or federal statutes.
• The federal district court is the starting point for any case arising under federal
statutes, the Constitution, or treaties.

District Courts Circuit Courts

Circuit courts are the intermediate appellate courts of the

The United States district courts are the general trial courts
United States federal judiciary. The courts are divided into 13
of the United States federal judiciary. Both civil and criminal
circuits, and each hears appeals from the district court within
cases are filed in district courts, each of which is a court of
its borders, or in some instances from other designated
law, equity, and admiralty. There is a United States
federal courts and administrative agencies Appeals from the
bankruptcy court associated with each United States district
circuit courts are taken to the Supreme Court
court..
 UNITED STATES SUPREME COURT

UNITED STATES COURTS OF APPEAL

12 Regional Circuit Courts of Appeal
1 United States Court of Appeal for Federal Circuits

TRIAL COURTS

United States District Court

United States Court of United States Court of Federal
94 Judicial Districts
International Trade Claims
United States Banckruptcy Courts
JURISDICTION

One of the most fundamental questions of law is whether a given court has jurisdiction
to preside over a given case

The term jurisdiction can be best understood by being compared to "power." Any court possesses jurisdiction
over matters only to the extent granted to it by the Constitution, and/or legislation of the sovereignty on behalf
of which it functions

is the authority of a court to hear a case. Without that authority, a court's

judgement would have no legal effect.

There are three primary categories of jurisdiction necessary for a court to render an enforceable judgement
in a case.
 FEDERAL COURTS
• is a set of rules used to select which jurisdiction’s laws to apply in a lawsuit.
Choice of law
• Choice of law questions most frequently arise in lawsuits in the federal courts that are
based on diversity jurisdiction, where the plaintiff and defendant are from different
states. In these lawsuits, the courts are often confronted with the question of which
jurisdiction’s laws should apply. The choice of law rules establish a method by which
the courts can select the appropriate law.

Sometimes used interchangeably with “choice of law”, a conflict of laws arises when a lawsuit
Conflict of laws:
introduces conflicting laws of two or more jurisdictions.

Exclusive jurisdiction Concurrent jurisdiction

• power of a court to adjudicate a case to the exclusion of all when two or more different courts possess
other courts. It is the sole forum for determination of a the authority to hear and decide on the same
particular type of case. matter within the same territory.
• Exclusive jurisdiction is conferred on courts by the U.S.
constitution, various statutes or contract between the parties.

For example, the U.S. district courts have exclusive jurisdiction

on bankruptcy matters [28 USCS § 1334
 STATE COURTS
• is the authority over a person.
personal jurisdiction
• This typically means that the person lives in, or was present in a geographical
region in which the laws of the court applies.

For example, if one lives in Michigan, and sues another person from Michigan in a local court, that court is going
to have jurisdiction over both parties by virtue of where they live.

• is the court's authority to decide the issue in controversy such as a contracts

issue, or a civil rights issue.
Subject matter jurisdiction
• State courts have general jurisdiction, meaning that they can hear any
controversy except those prohibited by state law (some states, for example,
deny subject matter jurisdiction for a case that does not involve state
citizens and did not take place in the state)

For example, a family court and a felony criminal court hear different types of cases based on the laws
of the state.
in rem (property) jurisdiction • which means authority over the property that is the subject of the case.

• authority of a court to ear a case based on the fact that the

quasi in rem (property) jurisdiction. defendant owns property located in other state

COURT JURISDICTION

Personal (the defendant)

SUBJECT-MATTER
and In Rem or Quasi Rem (the defendant´s
(Type of case)
personal property)
 SUBJECT MATTER JURISDICTION

FEDERAL STATE

United States Constitution

Treaties Most other cases
Federal Law
Diversity of Citizenship*

*Diversity of Citizenship.- refers to cases where opposing parties involved in a

lawsuit are citizens of different states or countries. If one of these parties is a
corporation, they are defined as a citizen of the state where their business
operates or is incorporated.
 What is Subject Matter Jurisdiction?

https://youtu.be/gPGhmXWPPYc

What are General and Specific Personal Jurisdiction

https://youtu.be/vegNcQtNlVo
State courts
Most legal issues are resolved in state trial courts, the courts at the lowest tier in a state’s court system

Depending on the specific structure of each state’s court system, trial courts may be city or
municipal courts, justice of the peace or jp courts, county or circuit courts, or even regional
trial courts.

Most states have two levels of trial courts: trial courts with limited jurisdiction and trial courts with specific
jurisdiction. Jurisdiction simply refers to the types of cases a court can hear.

include municipal courts, magistrate courts, county courts and justice of the
trial courts of limited jurisdiction
peace courts — hear some kinds of civil cases, juvenile cases, minor criminal
cases and traffic violations. Most legal problems are resolved in this kind of trial
court.

include circuit courts, superior courts, district courts, or courts of common pleas,
Courts of general jurisdiction depending on your state. They hear lawsuits that involve greater amounts of money
or more serious types of crimes than the cases heard in trial courts of limited
jurisdiction.
 FEDERAL COURT STATE COURT FEDERAL OR STATE COURT

1. Cases involving federal laws 1. Cases involving state constitutional or 1. State law disputes where diversity of
• Civil rights state law issue citizenship exist
• Discrimination
• Social security 2. Most personal Injury 2. Certain civil rights cases
• Broadcasting • Automobile accidents
• Medical and other malpractice 3. Federal constitutional issues
2. Cases against US government • Product liability
4. Cases involving certain federal laws
3. Intellectual property (patents & 3. Real property disputes
copyrights)
4. Landlord/tenant disputes
4. Corporate security cases
5. Contract disputes
5. Disputes between sates
6. Business disputes
6. Cases involving rights under treaties
7. Family law cases
7. Admiralty cases (cases arising on
high seas) 8. Probate matters
Appellate Courts.
Appellate courts, also known as the court of appeals, are the part of the American judicial system that
is responsible for hearing and reviewing appeals from legal cases that have already been heard in a
trial-level or other lower court.

Appellate courts are present at both the state and federal levels. These courts do not include a jury.

Courts at the appellate level review the findings and evidence from the lower court and determine if there is
sufficient evidence to support the determination made by the lower court. Also, the appellate court will
determine if the trial or lower court correctly applied the law.
 Appellate jurisdiction

Refers to the power of a court to hear appeals from lower courts Appellate jurisdiction includes
the power to affirm, reverse, remand or modify the the lower court's decision.

•Reverse: This means that the Appellate Court decides that the decision of the
lower court was wrong. When this happens, the Appellate Court vacates
(cancels) the decision of the lower court.

•Remand: This means that the Appellate Court tells the lower court to hear the
case, or part of the case, again.

•Affirm: This is when the Appellate Court says the lower court made the right
decision. The decision stays the same.

•Modify: This is when the Appellate Court changes part of the lower court’s
decision. For example, the court decides that the judgment should be for $15,000
instead of $5,000.
COMMERCIAL
CONTRACTS
• We all know that contracts are an inevitable part of owning a business or working with others.
This is why just about every business owner will at some point have to learn how to manage
their contracts with employees, vendors, customers, partners or clients

• Even though some contracts are mandatory, this is not the main reason you should bother
with them. A contract is the best way to make sure that you and the other part acknowledge
and agree on the terms of a deal

• There are plenty of different types of business contracts out there that operate in different
ways. Some are simple while others are complicated; some revolve around people while others
around things
 INTERNATIONAL
SALES OF GOODS
• In international trade it is common
for parties to assume that they can
operate on the basis of the laws and
practices of the country to which they
belong. This assumption is a mistake
and often leads to serious
misunderstandings. When doing
business between different countries,
you are not only subject to the laws of
the country of origin, but also to the
laws of those countries where you are
doing business.
 The difference between a domestic and an international sale and purchase lies mainly in the fact that it
involves countries with different laws and currencies.

When the parties are from different countries, their intentions are not easily detected because they
emanate from different legal systems and commercial practices, for such reason it is essential to use an
international contract, where the rights and obligations of each party are specified in precise terms.

All of the above will allow us to avoid an unfavorable and uncertain outcome in our international
transactions.

Sales Contract

Purchase and sale of goods means a commercial activity whereby the seller is obliged to
deliver goods, transfer ownership in the goods to the buyer and receive payment; and whereby the
buyer is obliged to pay the seller, and receive delivery of and ownership in the goods in accordance
with an agreement.

A sales contract describes the terms that the buyer and seller establish for a transaction whereby
goods or services are exchanged in exchange for payment or the promise of future payment.
United States Sales Law

Transactions for the sale and leasing of goods is governed mainly by sales laws of each state.

Transactions for the sale and leasing of goods is governed mainly by sales laws of each state. Every state, with
the exception of Louisiana, has adopted Article Two of the Uniform Commercial Code (UCC) as the main body
of law regulating transactions in goods

The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial
transactions in the United States.

Fundamental principles that Article 2

Certain fundamental principles apply to the sale of all goods. Failure to adhere to the fundamental principles
may take the transaction outside of the protection of the Uniform Commercial Code. One fundamental concept
is that of good faith. Courts presume that all parties to a contract are acting in good faith

A final concept fundamental to the U.C.C. is that of a merchant. Article 2 distinguishes between merchants and
nonmerchants. In most situations, the U.C.C. holds merchants to a higher standard.

Under the UCC, sales contracts must be in writing when the amount of the transaction exceeds $500 to be
enforceable. Although the UCC is not a federal law, it serves as a model that all states have accepted and
enforced in some form.
Sales Agreement vs. Bill of Sale

Sales agreements and bills of sale have pretty similar purposes, but the major difference between them is the
amount of detail provided. While the sales contract talks about payment plans, warranties, and legal
ramifications, the bill of sale is simply a form that signifies the transfer of ownership from one party to another. In
fact, it is sometimes used as a component of a more comprehensive sales agreement to provide proof that the
goods were indeed exchanged

Essential Elements in a Contract of Sale

1. Two parties: A contract of sale is between two parties, where one party transfers goods to another party.

2. Goods: The subject of the contract must be goods. This is usually the most important element in a contract
of sale because if the goods are not described precisely, confusion could result.

3. Transfer of ownership: Ownership of the goods must be moved from the seller to the buyer, or there
should be an agreement in which the transfer of ownership is made.
4. Price: The buyer in the contract must pay a price for the goods.

5. No formalities. There is no particular form to define a valid contract of sale. A contract of sale can be made
simply by offering and accepting.
Basic points to be included in a sales contract clauses

Sales contracts must include specific information depending on the type of good or service that is the object
of the transaction. Regardless of the above, at least the following must be included:

A. Identification of the Parties

All necessary information such as names, contact details of the buyer and seller should be included.

B. Description of the Services and/or Goods

This is undoubtedly the most important aspect of the contract since it must describe in detail the
goods or services that are the object of the sale or purchase.
The description of the goods must be as detailed as indicating type, size, weight, brand, color,
quantities, etc. In the case of services, the work to be performed must also be described in detail,
and deliverables
C. Payment
The payment is usually the term of a sales contract that is most negotiated, which is why it's so
important to put it in writing as soon as you reach an agreement. Aside from the agreed-upon price,
including any adjustments or deposits, your sales contract should outline
• How and when the buyer will receive an invoice
• The timeline for payment
• Acceptable payment methods, like email transfer, bank draft, certified check, cash,
etc
• Whether payments can be made in installments or paid in one lump sum

In cases where the buyer isn't paying the full invoice right away, a promissory note is usually
added to the sales contract.

D. Delivery
Details about the delivery of the goods and/or services should also be addressed in a sales contract. This
can include things like the:

• Cost of delivery
• Method of delivery
• Place for delivery
• Time for delivery
• Liability for a failed delivery or damage
 E. Warranties
A warranty assures the buyer that the goods or services under contract conform to the specifications and
qualities agreed upon by the buyer and seller. Under the Uniform Commercial Code, there are express and
implied warranties.
• Express warranties are affirmative statements (in the words of the UCC, an "affirmation of fact
or promise") by a seller to the buyer regarding the goods being sold. Among the various
situations where these types of statements might arise are when a manufacturer sells to a
retailer or when a retailer sells to a consumer
• Implied warranties are warranties that automatically exist when goods are being sold, without
the need for any specific "affirmation."

Boilerplate / Miscellaneous Provisions

1) Governing Law: Also known as choice of law, this outlines which state law is applicable for the
interpretation and enforcement of the contract.

2) Severability: This provision is made to ensure that all other provisions are still valid and
enforceable even if part of the contract is unenforceable or invalid.

3) Confidentiality: In transactions where confidential information is shared, this provision explicitly

limits the distribution of these private details.
4. Force majeure, which is a clause that discusses the inability to deliver due to things that are
out of both parties' control, such as riots, floods, and other natural disasters

5. Breach of Contract: A breach of contract outlines what would happen if one party violates
the contract, when a contract can be terminated, and any actions a party can take to recover
their losses in the event of a breached contract.

6. Notices: This section is especially useful if both parties need to remain in communication
throughout the transaction because it describes how all communication should take place.
Aside from the mode of communication, it sometimes even outlines the days and times that
communication should occur.

7. Amendments: An amendments section addresses the steps that should be taken in the
event that the contract's terms and provisions need to be formally altered.
International Sales of Goods Contracts

By definition, International Sales of Goods Contracts imply that the sellers and buyers are located in different
countries

An international sales contract is an agreement between a buyer and a seller that

identifies the parties in the transaction, the goods or services being sold, the terms
and conditions of the sale, and the price to be paid. International sales fall under the
United Nations Convention on Contracts for the International Sale of Goods
(CISG).

United Nations Commission on International Trade Law (UNCITRAL)

The United Nations Commission on International Trade Law

(UNCITRAL) was established as a subsidiary body of the U.N.
General Assembly (UNGA) in 1966. It is the core legal body of
the U.N,'s system in the field of international trade law. The
official function of the UNCITRAL is the modernization and
harmonization of rules on international business. The
organization is responsible for helping to facilitate international
trade and investment
The United Nations Commission on International Trade Law is a United Nations agency based in Vienna,
specializing in the development of model legal instruments and conventions in the area of international trade
law. Most notable success is perhaps the so-called 1980 Vienna Convention whose official name is The
Convention of the International Sale of Goods (CISG).

the CISG applies only to contracts for the "sale of goods", i.e.
tangible goods.

Choice of Law/Opting Out of the CISG

CISG Article 1 indicates when a contract falls within the CISG. Article 1(1)(a) applies when a
contract involves a sale of goods between parties who both have their principal place of business
in countries that are parties to the CISG, while Article 1(1)(b) allows the CISG to be applied when
the forum’s choice-of-law rules lead to the application of the law of a country that is a party to the
CISG.
 Differences between the UCC and the CISG

The United Nations Convention on Contracts for the International Sale of Goods (CISG) and the United States
Uniform Commercial Code (UCC) are two different legal frameworks that govern contracts for the sale of goods.
The key differences between the two are as follows:

1. Scope of Application: The CISG applies only to contracts for the international sale of goods between parties in different
countries, while the UCC applies to contracts for the sale of goods within the United States.

2. Formation of Contracts: While both the CISG and the UCC require an offer, acceptance, and consideration for the
formation of a contract, the rules governing contract formation differ. For example, under the CISG, acceptance may be made
by any means and can be effective upon dispatch, whereas under the UCC, acceptance is effective only upon receipt unless
the offer provides otherwise.

3. Contract Terms: The CISG provides a framework for interpreting the terms of the contract based on the parties' intentions
and the commercial context of the transaction. The UCC also provides rules for interpretation, but allows for the use of trade
usage and course of dealing to interpret contract terms.

4. Remedies: The CISG and the UCC provide different remedies for breach of contract. Under the CISG, the injured party may
seek specific performance or damages, while under the UCC, the injured party may seek specific performance, damages, or
other remedies such as cancellation or restitution.

5. Liability: The CISG and the UCC also differ in the way they allocate liability between the parties in the event of breach. For
example, the CISG provides that the buyer must inspect the goods upon delivery and notify the seller of any defects within a
reasonable time, while the UCC imposes a stricter requirement for inspection and notice.
Contract formation

Contract formation under the United Nations Convention on Contracts for the International Sale of Goods
(CISG) is governed by Article 14 to Article 24. These provisions set out the requirements for offer and
acceptance, the communication of acceptance, the time and manner of acceptance, and the formation of the
contract.

• Offer and Acceptance

Article 14 of the CISG provides that a contract is formed when an offer is accepted by the offeree. An offer must be sufficiently definite and
indicate the intention of the offeror to be bound by the offer. The offer may be made in writing or orally, and may be addressed to a specific
person or to a group of persons.

Article 15 provides that an offer may be revoked at any time before acceptance, unless the offer is irrevocable by its terms or the
circumstances indicate that it is intended to be irrevocable.

Article 18 provides that a response to an offer that purports to be an acceptance but contains additional or different terms is a rejection of
the offer and constitutes a counter-offer, unless the additional or different terms do not materially alter the offer.
• Communication of Acceptance

Article 16 provides that an acceptance must be communicated to the offeror in order for the contract to be formed.
The acceptance may be made in any form that indicates the offeree's intention to be bound by the offer, and may be
made orally or in writing.

Time and Manner of Acceptance

Article 19 provides that an acceptance is effective when it reaches the offeror. If the offeror specifies a particular
time for acceptance, the acceptance must reach the offeror by that time. If no time is specified, the acceptance
must reach the offeror within a reasonable time.

Article 20 provides that if the acceptance is made by means of an instantaneous communication, such as a
phone call or fax, it is effective when it is received by the offeror.

• Formation of the Contract

Article 23 provides that a contract is formed at the moment when the acceptance of the offer is communicated to
the offeror. If the parties have agreed to a specific form for the contract, such as a written agreement, the contract
is formed when that form is used.
Provisions to be included in the contract

When drafting a contract, care should be taken to include terms and conditions recommended by the CISG
for buyers to include in their purchase orders and for sellers to include in their acceptance/confirmation
documents.

• Product. greater precision describing them reduces the potential for misunderstanding. If the product is
very complex (for example, machinery), a detailed description can be made in an annex of the contract.

• Description of goods.- It states what your goods are, what they're made of and what they're used for.
You need to provide a goods description on all shipping documents

• Quantity. May be expressed in actual terms (units, kilos, etc.) When this cannot be done at the time of
contract is drafted, a quantity range should be established.

• Price. Agreed-upon price, when buyer pays for goods, currency, taxes, offsets, and payment terms.

• Payment terms. How, when, where and in what currency is the buyer to pay for the contract goods. If other
than money, as in countertrade, is a separate contract to be referenced
• Incoterms. Incoterms rules identify what the buyer and seller are each responsible for in a shipment,
including packaging, inspection, export licenses, import clearance, inland carriage in buyer/sellers
countries, and cargo insurance. They also indicate where the risk of loss or damage transfers from seller
to buyer

The time and place of delivery should be established as clearly as possible. Incoterms Rules published by
the International Chamber of Commerce provide an excellent reference point as they are widely used
throughout the world, allocate major tasks between seller and buyer, and indicate the point where seller
responsibility for the condition of contract goods ends.

When delivery takes place on the seller´s side and the seller arranges main carriage transport
– as with the “main carriage paid” – as happens in many Incoterms (CIF, DAP o DDP) – the
mode of transport should be specified as it affects the time and place the goods the goods
actually become physically available to the buyer.

• Transfer of ownership. (When does the buyer become owner of goods? This is not the same as
Incoterms!) This should be specified in the sales contract, except for vessel shipments made under a
negotiable marine bill of lading where both ownership and possession rights reside in the original
shipment document.

The most used text is the following: “Seller and buyer agree that owner ship of the contract goods
will pas to the buyer upon payment of the price to the seller”.
• Pre-shipment inspection conducted by independent third parties.

• Post-shipment inspection and rejection. Buyers should have a certain amount of time to inspect
and determine whether goods conform to contract. If goods do not conform, what are the remedies?

• Insurance.- If any Incoterm other than CIF or CIP is used, the parties should determine outside of the
Incoterms who is responsible for providing insurance cover. Be sure to address this question of insurable
interest.

With CIP or CIF, the seller is required to insure, but the level of coverage should be determine outside the
Incoterm if minimum cover (free of particular average or London Institute “C” Clauses) is inadequate

• Government requirements.- Before drafting the contract, the following questions have to be asked: Is
the pre-shipment inspection required? Does the Administration of the buyer’s country impose additional
requirements that the seller must formalize (such as obtaining certain customs documents?

The Administration of the seller’s country imposes requirements to be formalized by the buyer (such as
obtaining an export license)
LICENSING CONTRACT
• A licensing contract, also known as a license
agreement, is a legal agreement between two parties
that grants one party the right to use or distribute the
intellectual property (IP) of the other party in exchange
for some form of consideration, such as payment of
royalties or a licensing fee.

• Intellectual property that may be licensed under a

licensing contract includes patents, trademarks,
copyrights, trade secrets, and other proprietary
information. The terms and conditions of a licensing
contract vary depending on the type of IP being licensed,
the scope of the license, and the intentions of the
parties.
Agreements include a scope of issues such as exclusivity or territorial restrictions, financial aspects, royalty
rates,

A licensing agreement is a legal contract between two parties, known as the licensor and the licensee. In a
typical licensing agreement, the licensor grants the licensee the right to produce and sell goods, apply a
brand name or trademark, or use patented technology owned by the licensor. In exchange, the licensee
usually submits to a series of conditions regarding the use of the licensor's property and agrees to make
payments known as royalties

• A licensing agreement allows one party (the licensee) to use and/or earn revenue from the property
of the owner (the licensor).

• Licensing agreements generate revenues, called royalties, earned by a company for allowing its
copyrighted or patented material to be used by another company.

• Some examples of things that may be licensed include songs, sports team logos, intellectual
property, software, and technology.

• Licensing agreements allow parties to control property and enter new markets without having to
spend the money to do so.

• Drawbacks of these deals include establishing a relationship with the wrong company and the
possibility of losing a company's reputation.
Licensing agreements delineate the terms under which one party may use property that is owned by another
party. While the properties in question can include a numerous items, including real estate holdings and
personal possessions, licensing agreements are most often used for intellectual property, such as
patents and trademarks, as well as copyrights for written materials and visual art.

One of the most important elements of a licensing agreement covers the financial arrangement.
Payments from the licensee to the licensor usually take the form of guaranteed minimum
payments and royalties on sales. Royalties typically range from 6 to 10 percent, depending on the
specific property involved and the licensee's level of experience and sophistication

The licensing agreement will also include provisions about the length of the contract, renewal
options, and termination conditions.

which party maintains control of copyrights, patents, or trademarks.

Many contracts also include a provision about territorial rights, or who manages distribution
in various parts of the country or the world.

In addition to the various clauses inserted into agreements to protect the licensor, some
licensees may add their own requirements. They may insist on a guarantee that the licensor
owns the rights to the property, for example, or they may insert a clause prohibiting the
licensor from competing directly with the licensed property in certain markets.
Licensing Revenues

Licensing revenues refer to the income that a company or individual earns from licensing intellectual property
to another party. Licensing intellectual property allows the licensee to use the intellectual property in
exchange for a royalty or other form of compensation.

Licensing revenues can come from various forms of intellectual property, including patents, trademarks,
copyrights, and trade secrets. For example, a company that owns a patent for a new invention may license the
patent to another company that wants to manufacture and sell the product. In exchange, the licensee pays a
royalty or licensing fee to the patent holder for the right to use the patent.

Licensing revenues can be an important source of income for companies and individuals who own
intellectual property but may not have the resources or expertise to manufacture and sell products
themselves. Licensing allows them to monetize their intellectual property without having to invest in the
production and marketing of products.

The amount of licensing revenue that a company or individual can generate depends on various factors, such as
the strength of the intellectual property, the market demand for the products or services, the licensing terms and
conditions, and the royalty rates. Some licensing agreements may also include minimum royalties or
performance milestones that must be met by the licensee in order to continue the license.
 CONTRACT PROVISION

• Identification of the Parties: Agreement should be made between the party who has the right to grant the
license and the party who will be exercising that license.

• Recital The recital clause also helps in the interpretation of the Agreement.

Whereas the licensor and the licensee wish to collaborate for the purposes of manufacture,
distribution and sale of certain products in relation to (include details)”

• Definition Clause: Definition clause acts as a dictionary for the Agreement.

Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:
(a) "Licensed Product" shall mean the product(s) identified in Exhibit A, which is attached hereto and incorporated
herein by reference.
(b) "Territory" shall mean the countries identified in Exhibit B, which is attached hereto and incorporated herein by
reference.
(c) "Intellectual Property" shall mean all patents, trademarks, copyrights, trade secrets, and other intellectual
property rights owned or controlled by Licensor relating to the Licensed Product.
(d) "Net Sales" shall mean the gross sales revenue received by Licensee from the sale of the Licensed Product in
the Territory, less any applicable taxes, shipping, and handling charges, and returns.
(e) "Royalty" shall mean the amount payable by Licensee to Licensor for the license granted herein, calculated as
a percentage of Net Sales as set forth in Section 3.1.
(f) "Term" shall mean the period of time during which this Agreement is in effect, as set forth in Section 5.1."
• Grant of license: This clause defines the scope of the license, including what intellectual property is being
licensed and how it can be used by the licensee. It also specifies any exclusivity or limitations on the license.
"Grant of License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a
non-exclusive, non-transferable, limited license to use the licensed Intellectual Property solely for the purpose
of manufacturing and selling the licensed products in the Territory during the term of this Agreement."

• Royalties and fees: This clause outlines the payment terms for the license, including the amount and
timing of any royalties or licensing fees that the licensee must pay to the licensor.

• Term and termination: This clause specifies the duration of the license agreement and the
circumstances under which it can be terminated, such as breach of contract by either party

• Intellectual property rights: This clause defines the ownership and protection of the intellectual
property being licensed, including any limitations on the licensor's ability to license the IP to other parties.

All Intellectual Property Rights on the licensed materials shall exclusively vest with the licensor and
nothing under this agreement shall be deemed to transfer any rights on the licensed materials from the
licensor to the licensee or any third party.

• Representations and warranties: This clause may include representations and warranties made by
both parties regarding the intellectual property and its use.
• Indemnification and liability: This clause outlines the responsibilities of the parties in the event of
any third-party claims or damages arising from the use of the intellectual property.
Boilerplate clause

1. Entire Agreement Clause: This clause states that the licensing agreement constitutes the entire agreement
between the parties and supersedes any prior agreements or understandings, whether written or oral.

2. Assignment Clause: This clause specifies whether either party may assign or transfer its rights and
obligations under the agreement without the other party's consent.

3. Governing Law and Venue Clause: This clause specifies the governing law and jurisdiction that will apply
to any disputes arising under the licensing agreement.

4. Force Majeure Clause: This clause excuses performance under the agreement in the event of unforeseeable
circumstances beyond the control of the parties, such as acts of God, natural disasters, or war.

5. Severability Clause: This clause states that if any provision of the agreement is found to be unenforceable or
invalid, the remaining provisions will remain in full force and effect.

6. Waiver Clause: This clause states that any failure by either party to enforce its rights under the agreement will
not constitute a waiver of those rights.

7. Notices Clause: This clause specifies how notices and other communications between the parties will be
delivered and received.
 Franchising vs Licensing

Franchising is a partnership in which one party allows another to borrow

its business model or brand name. This is usually done at a fee. The party
which lends its name or business model is called the franchisor, while the
party paying for the permissions is the franchisee.

Licensing is also a legal partnership between two parties. In this

type of arrangement, one party (the licenser) sells the rights for
the use of its intellectual property to the licensee. The licensee
can then manufacture the products of the licensor, while paying
royalties to the licensor.
Franchise agreements and license agreements are both legal contracts that involve the use of intellectual
property or other assets owned by one party by another party, but there are some key differences between the
two.

1. Relationship: In a franchise agreement, the parties involved usually have a closer relationship than in a license agreement.
The franchisor typically provides ongoing support, training, and guidance to the franchisee, while in a license agreement, the
licensee typically operates independently.

2. Branding: A franchise agreement typically involves the use of the franchisor's brand, trademarks, and other intellectual property
rights, while a license agreement may involve the use of the licensor's intellectual property rights, but the licensee may not be
required to use the licensor's branding.

3. Operations: In a franchise agreement, the franchisor may have more control over how the franchisee operates the business,
including specifying products or services that must be offered, standards for customer service, and requirements for marketing and
advertising. In a license agreement, the licensee has more control over how they use the licensed intellectual property.

4. Fees: Franchise agreements often involve payment of ongoing fees to the franchisor, such as royalties or advertising fees, while
a license agreement may involve payment of a one-time fee or periodic royalties.

5. Legal requirements: In some jurisdictions, franchise agreements may be subject to specific legal requirements and
regulations, such as disclosure requirements or restrictions on termination, while license agreements may not be subject to these
same requirements.

Overall, franchise agreements typically involve a closer relationship between the parties, more control by the
franchisor over the franchisee's operations, and ongoing fees, while license agreements are generally more
flexible and involve fewer ongoing obligations.
NONDISCLOSURE
AGREEMENT
• An NDA stands for "Non-Disclosure Agreement". It is
a legal contract between two or more parties that
outlines confidential information, knowledge or
material that the parties wish to share with each
other for certain purposes, but which they want to
keep confidential and not disclose to others.
The NDA aims to protect confidential or proprietary information, trade secrets, or other sensitive business
information from being disclosed or used by unauthorized third parties, which could result in significant harm to
the disclosing party's business interests.

An NDA typically defines the confidential information that is covered by the agreement, outlines the purpose of
the disclosure, and sets forth the obligations of the parties with respect to the handling of the confidential
information. The parties involved in the NDA are usually required to maintain the confidentiality of the
information disclosed and take reasonable measures to prevent unauthorized disclosure or use of the
confidential information.
Uses of Non-Disclosure Agreements

An NDA can be used in a variety of situations where confidential information needs to be shared between two or
more parties. Some common situations where an NDA may be used include:

• Business negotiations: When two companies are exploring a potential business relationship, they may
need to share confidential information with each other to evaluate the feasibility of the relationship. An NDA
can help ensure that the confidential information exchanged during the negotiation process is kept
confidential and not shared with third parties.

• Employee agreements: An NDA can be included as part of an employment agreement to protect a

company's confidential information and trade secrets from being disclosed or used by an employee, both
during and after their employment with the company.

• Intellectual property protection: Companies that develop valuable intellectual property, such as inventions,
designs, or software, may need to share confidential information with others, such as investors or potential
business partners. An NDA can help protect this intellectual property from being stolen or copied.

• Research collaborations: Researchers or academics who collaborate with others may need to share
confidential information with each other to advance their research or develop new technologies. An NDA can
help ensure that this confidential information is kept confidential and not shared with others without
permission.
An NDA (Non-Disclosure Agreement) is a legal contract that establishes a confidential relationship between
parties and typically contains a confidentiality clause or section. The confidentiality clause sets out the
terms and conditions under which confidential information can be shared between the parties and restricts
the recipient's ability to use or disclose the confidential information to third parties without the disclosing
party's prior written consent.

An NDA can be a standalone agreement or can be included as a clause in another agreement, such as a
service agreement, employment contract, or partnership agreement. In either case, the confidentiality
clause should clearly define what information is considered confidential, the obligations of the receiving party, the
duration of the agreement, exclusions and limitations, remedies for breach, and the governing law and jurisdiction.

When drafting or reviewing an NDA, it is important to ensure that the language used is clear and unambiguous,
and that the scope and duration of the agreement are appropriate for the situation. It is also advisable to seek
legal advice to ensure that the agreement meets the parties' requirements and complies with applicable laws and
regulations.

"Confidentiality. The parties agree that any information disclosed by one party to the other in
connection with this agreement, whether written or oral, that is marked or identified as
confidential, or which by its nature should reasonably be understood to be confidential, will
be kept confidential by the receiving party and will not be disclosed to any third party without
the prior written consent of the disclosing party."
While non-disclosure agreements (NDAs) can be tailored to specific situations, there are some common
items that are typically not included in an NDA:

1. Information that is already publicly available: NDAs typically only cover confidential information that is
not publicly available. If the information is already known to the public, then it is generally not subject to
confidentiality obligations under an NDA.

2. Information that is independently developed: If the recipient of the confidential information develops the
same or similar information independently, without using the confidential information provided by the
discloser, then that information is not subject to confidentiality obligations under the NDA.

3. Information that is disclosed by a third party: If the information is obtained from a third party who is not
subject to confidentiality obligations, then the information is generally not subject to confidentiality
obligations under the NDA.

4. Information that is required by law to be disclosed: If a court or government agency requires disclosure
of the confidential information, then the recipient may be required to disclose the information, despite the
confidentiality obligations under the NDA.

5. Future developments: NDAs generally only cover confidential information that is disclosed before or
during the term of the agreement. Any future developments or improvements are typically not covered,
unless specifically included in the NDA.

It is important to note that the above items are general principles and the specific terms of each NDA may vary
depending on the nature of the confidential information and the intentions of the parties.
CONTRACT PROVISIONS

1. Definition of confidential information: The NDA should clearly define what information is considered
confidential and subject to protection under the agreement.

2. Obligations of the receiving party: The NDA should outline the obligations of the recipient of the
confidential information, such as maintaining the confidentiality of the information, using it only for the specified
purpose, and not disclosing it to any third parties without prior written consent.

3. Term of the agreement: The NDA should specify the duration of the agreement and the period of time during
which the confidential information will be protected.

4. Exclusions and limitations: The NDA may contain exclusions and limitations that specify what types of
information are not covered by the agreement or that limit the scope of the confidentiality obligations.

5. Remedies for breach: The NDA should specify the remedies available to the disclosing party in the event of
a breach of the agreement, such as injunctive relief, damages, or specific performance.

It is important to note that the specific terms and conditions of an NDA may vary depending on the nature of the
confidential information and the intentions of the parties, and it is advisable to seek legal counsel when drafting or
reviewing an NDA.
EMPLOYMENT
CONTRACT
• An employment contract is a signed
agreement between an individual
employee and an employer or a labor
union. It establishes both the rights and
responsibilities of the two parties: the
worker and the company.
An employment contract is an agreement between an employer and employee regarding the employee's term
of employment. It can be implied, oral, or written, involving a lengthy physical contract that the employee signs.
The terms laid out in the contract depend on what was agreed upon when the employee confirmed that they
would take a position

Employment contracts are important for both employers and employees, as they establish the terms and
conditions of the employment relationship. Here are some of the reasons why employment contracts are
important:
• Clarity: Employment contracts provide clear and unambiguous information about the rights and
responsibilities of both employers and employees. This includes details such as job duties, compensation,
benefits, and termination policies.
• Protection: Employment contracts can protect both parties from potential disputes by outlining the terms of
the agreement. This can help prevent misunderstandings and ensure that each party understands their
obligations.
• Legal compliance: Employment contracts can ensure that employers comply with federal, state, and local
labor laws, as well as regulations specific to the industry. They can also provide protection against potential
lawsuits by demonstrating that the employer has taken steps to comply with the law.
• Recruitment and retention: Employment contracts can help attract and retain high-quality employees by
providing a sense of security and stability. This can be especially important for employees who are looking
for long-term employment opportunities.
• Flexibility: Employment contracts can be customized to meet the needs of individual employees and
employers. This can include provisions for part-time or full-time work, remote work arrangements, or
flexible scheduling.
American labor law establishes a set of legal protections and regulations that govern the relationship between
employers and employees in the United States. Some of the key aspects established by American labor law
include:

• Minimum wage: The Fair Labor Standards Act (FLSA) establishes a federal minimum wage that
employers must pay to most employees.

• Overtime pay: The FLSA also requires employers to pay overtime at a rate of one and a half times the
employee's regular rate of pay for any hours worked over 40 in a workweek.

• Workplace safety: The Occupational Safety and Health Act (OSHA) establishes workplace safety
standards and requires employers to provide a safe and healthy work environment.

• Discrimination and harassment: Federal laws such as Title VII of the Civil Rights Act and the
Americans with Disabilities Act prohibit employers from discriminating against employees on the basis of
protected characteristics such as race, sex, religion, national origin, and disability. These laws also
prohibit harassment based on these characteristics.

• Family and medical leave: The Family and Medical Leave Act (FMLA) provides eligible employees with
up to 12 weeks of unpaid leave per year for certain medical and family reasons.

• Union organizing and collective bargaining: The National Labor Relations Act (NLRA) protects the
right of employees to organize and form unions, engage in collective bargaining, and take collective
action to improve their working conditions.
Employment at will

"Employment at will" is a doctrine in the United States that allows employers to terminate employees at any time
and for any reason, as long as the reason is not prohibited by law. In other words, under employment at will,
an employer can fire an employee without cause, without warning, and without any liability.

The concept of employment at will is based on the idea that the employment relationship is a voluntary
agreement between two parties, and that both the employer and the employee should have the freedom
to terminate the relationship at any time. This doctrine is recognized by most states in the U.S. and is the
default rule in the absence of a written employment contract or collective bargaining agreement that provides
otherwise.

However, there are some important limitations to employment at will. For example, employers cannot
terminate employees for reasons that violate federal or state anti-discrimination laws, such as firing an
employee because of their race, sex, age, religion, or disability. Additionally, employers may not
terminate employees in retaliation for engaging in certain legally protected activities, such as reporting
workplace safety violations or filing a complaint about discrimination.

In summary, while employment at will gives employers broad discretion to terminate employees, it is not an
absolute right and employers must still comply with applicable laws and regulations.
Types of employment contract

A written employment contract outlines the terms and conditions of the employment. Some written contracts
are considered at will, but others are not.

The types of contracts by means of which the contractual relationship between employers and employees is
established are as follows

The most common contract is the indefinite-term contract; as in Mexico,

indefinite-term contracts guarantee workers job stability as well as benefits.
Permanent Employees hired under this regime tend to be more efficient knowing that they
Employment have job security and opportunities for professional growth.
Contracts
Fultime permanent employees work between 35 and 40 hours a week, while part
time employees with a permanent part time contract work under 35 hours

A permanent employment contract, also known as an open-ended or indefinite contract, is an agreement

between an employer and an employee that establishes an ongoing employment relationship without a
predetermined end date. It provides job security to the employee and typically includes various rights
and benefits.
Here are some key features of a permanent employment contract:

1. Duration: Unlike fixed-term contracts, permanent contracts have no specific end date. The employment
relationship continues until either the employer or the employee terminates it according to the terms and
conditions specified in the contract.

2. Job responsibilities: The contract outlines the position and job description of the employee. It typically
includes details about the roles, responsibilities, and duties associated with the job.

3. Compensation and benefits: The contract should clearly state the employee's salary or wage, as well as any
additional benefits, such as healthcare coverage, retirement plans, paid time off, and other perks provided by
the employer.
4. Working hours: The contract specifies the standard working hours, including any flexibility or variations. It may
also cover provisions for overtime, shift work, and related compensation.

5. Termination clauses: Permanent employment contracts usually include provisions for termination by either
party. This may involve notice periods that must be provided before termination, along with any severance or
compensation packages that apply.

6. Probationary period: Some permanent contracts may include a probationary period during which the
employer assesses the employee's suitability for the position. This period allows for easier termination if the
employee fails to meet the required standards.

7. Policies and obligations: The contract often refers to the employer's policies and procedures, such as codes
of conduct, non-disclosure agreements, intellectual property rights, and any other contractual obligations the
employee must adhere to.
 Fixed-term contracts, as the name implies, have a specific period of time. In the
common law system this type of contract is usually used for:

1. Specific task contracts: This type of contract is used when an employee is

hired for a specific project or task, and the contract ends once the project or task
is completed.

2. Seasonal contracts: Seasonal contracts are used when an employee is hired

Fixed-Term for a specific season, such as summer or winter, and the contract ends at the
Employment end of the season.
Contracts
1. Training contracts: A training contract is used when an employee is hired for a
specific period of time to receive training or to complete an internship.

2. Project-based contracts: A project-based contract is used when an employee

is hired for a specific project that has a set start and end date.

A fixed-term contract, also known as a temporary contract or fixed-duration contract, is an employment

agreement between an employer and an employee that has a predetermined end date. Unlike a permanent
contract, which has no specific termination date, a fixed-term contract has a specified duration or a specific
event that triggers its termination.
Here are some key features of a fixed-term contract:

1. Duration: The contract specifies the start date and the end date of the employment relationship. It may be for
a certain number of months, years, or until a specific project or event is completed.

2. Job responsibilities: The contract outlines the position and job description of the employee during the
specified term. It includes details about the roles, responsibilities, and duties associated with the job.

3. Compensation and benefits: The contract should clearly state the employee's salary or wage for the duration
of the contract. It may also include any additional benefits or entitlements that the employee is eligible for
during the term of employment.

4. Renewal and termination: Fixed-term contracts automatically terminate at the end of the agreed-upon
duration or upon the occurrence of a specific event. The contract may include provisions for renewal if both
parties agree to extend the employment. Additionally, it may outline conditions for early termination, such as a
notice period or the occurrence of certain circumstances.

5. Rights and obligations: The contract typically includes the rights and obligations of both the employer and the
employee during the fixed-term period. This may cover issues such as leave entitlements, working hours, and
other terms and conditions of employment.

6. Conversion to permanent employment: In some cases, there may be provisions in the contract or local labor
laws that allow for the conversion of a fixed-term contract to a permanent contract under certain conditions,
such as the completion of a specific project or meeting certain performance criteria.
 Part-time employment refers to a work arrangement in which an employee works fewer
Part Time hours per week compared to a full-time employee. Part-time jobs are typically ideal for
individuals who cannot commit to a full-time schedule due to various reasons such as
personal obligations, pursuing education, or seeking additional flexibility.

Here are some key aspects of part-time employment:

1. Working hours: Part-time employees work fewer hours per week compared to full-time employees. The exact
number of hours may vary depending on the employer's policies, industry norms, and local labor laws. Typically, part-
time work involves less than the standard 40 hours per week.

2. Job responsibilities: Part-time employees generally have similar job responsibilities as their full-time counterparts
but on a reduced workload. The specific duties and tasks will depend on the nature of the job and the employer's
requirements.

3. Compensation: Part-time employees are typically paid on an hourly basis or a prorated salary based on the number
of hours worked. The hourly rate or salary is often lower than that of full-time employees due to the reduced workload.
The specific compensation structure should be outlined in the employment contract or agreed upon by both parties.

4. Benefits: Depending on the country and the employer's policies, part-time employees may be entitled to certain
benefits such as pro-rated vacation time, sick leave, or access to retirement plans. However, the availability and
extent of benefits may differ from those provided to full-time employees.
 A probationary contract or period is a temporary employment arrangement
Probatory contract during which the employer evaluates an employee's performance, skills, and
suitability for a permanent position. It allows both the employer and the
employee to assess if the job is a good fit.

1. Duration: The probationary period is typically a specific length of time, such as three months, six months, or one
year, agreed upon by the employer and the employee. It serves as a trial period to assess the employee's
performance.
2. Purpose: The purpose of the probationary period is to evaluate the employee's abilities, work ethic, and
compatibility with the job and the organization. It allows the employer to determine if the employee meets the
required standards and qualifications for a permanent position.
3. Terms and conditions: The terms and conditions of the probationary contract should be clearly outlined in the
employment agreement or contract. It may specify the duration of the probationary period, the employee's job
responsibilities, compensation, and any specific performance criteria or goals that need to be achieved.
4. Evaluation and feedback: During the probationary period, the employer typically provides regular feedback and
performance evaluations to the employee. These evaluations may focus on areas for improvement, training needs,
and overall performance assessment.
5. Termination: If the employee's performance or suitability is not satisfactory during the probationary period, the
employer may choose not to continue the employment beyond the probationary period. The termination process
during this period is usually less complicated compared to terminating a permanent employee, as probationary
contracts often have shorter notice periods or may allow for immediate termination without extensive legal
procedures.
 A union contract, also known as a collective bargaining agreement (CBA), is a legally binding
Union Contract agreement between a labor union or trade union and an employer or group of employers. It
establishes the terms and conditions of employment for workers represented by the union.
Union contracts are typically negotiated through a process of collective bargaining between
the union and the employer(s).

A union contract is a contract negotiated between an employer and a union that represents its employees. It
specifies the terms and conditions of employment for the union members.
Here are some key aspects of a union contract:
1. Scope and coverage: The contract specifies which employees are covered by the agreement, typically members of the union. It may cover all
employees in a particular occupation or industry, or it may be limited to a specific department or group within the organization.

2. Wages and compensation: The contract outlines the wage structure, including minimum wage rates, pay scales, overtime rates, and any other
forms of compensation. It may also include provisions for regular wage increases based on factors such as seniority or performance.

3. Working hours and conditions: The contract includes provisions related to working hours, breaks, rest periods, and shift scheduling. It may
also address issues such as workplace safety, health benefits, vacation and sick leave, and other conditions of employment.

4. Union rights and representation: The contract outlines the rights and responsibilities of the union, including the right to represent employees
in workplace matters, access to the workplace for union representatives, and procedures for union membership and dues collection.

5. Duration and renegotiation: The contract specifies its duration, typically ranging from one to several years. It may include provisions for
renegotiating or renewing the contract at the end of the term.
Employment contract provisions
Employment contract provisions in the United States can vary depending on the employer, industry, and type of
contract. However, some common employment contract provisions in the United States include:

It is customary, although not legally required, to specify, at the beginning of the contract, the position in
The Employment
which the employee is hired.

Job duties and The contract will typically include a description of the employee's job duties and
responsibilities responsibilities.

The job description should not be too specific (to allow for changes) or too broad (so
that the employee does not end up with more responsibilities than he or she can
handle). Schedule, work shift, General responsibilities

Salary or wages The contract will typically specify the employee's salary or hourly wage, along
with any bonus or commission structure, and other forms of compensation, such
as benefits.

Term of the employment An employment contract will specify the length of time the employee agrees to work for the company.
In some cases, this might be an ongoing period of time. In other cases, it might be an agreement set
for a specific duration.
 A contract should lay out all promised benefits, including (but not limited to): health
Benefits
insurance, vacation time, and any other perks that are part of the employment.
The contract will typically specify the benefits offered to the employee, such as health
insurance, retirement plans, vacation time, and sick leave.

Death and Disability Some agreements spell out what benefits will be paid to the estate of an employee who dies during the
employment term

Non-disclosure and This provision ensures that employees maintain the confidentiality of sensitive
confidentiality company information, trade secrets, client data, or other proprietary information they
may have access to during their employment and even after they leave the company..

This provision clarifies that any work-related inventions, designs, or intellectual property
Non-compete created by the employee during their employment are the property of the employer, rather
than the employee.

Intellectual property Some contracts may include provisions that specify ownership of intellectual property
created during the employee's employment
 This provision prohibits employees from actively soliciting or poaching clients,
Non-solicitation: customers, or other employees from the company for a certain period of time after
they leave their employment.

This provision prohibits employees from making negative or derogatory statements

Non-disparagement: about the employer, its employees, or its products and services, whether during or
after their employment.

The contract will typically specify the circumstances under which the employer
Termination provisions
or employee can terminate the employment relationship, as well as any notice
requirements.

This provision specifies the jurisdiction or governing law that will apply to the
contract and any legal disputes that may arise, as well as the preferred venue
Governing law and for resolving disputes, such as arbitration or specific courts.
venue:

Amendments and modifications This provision outlines how the contract can be amended or modified
and whether any changes must be in writing and agreed upon by both
parties.
Termination of an employment contract in the United States can occur through various means, including:

At-will employment: Most employment relationships in the United States are considered "at-will," which
means that either the employer or the employee can terminate the employment relationship at any time,
with or without cause or advance notice. However, certain limitations exist, such as anti-discrimination
laws and contractual provisions that may alter the at-will nature of the employment.

Termination by the employer: The employer may choose to terminate an employee's contract for
various reasons, including poor performance, misconduct, violation of company policies, downsizing, or
other legitimate business reasons. The specific process and requirements for termination may vary
depending on state laws, employment agreements, and any applicable collective bargaining
agreements.

Termination by the employee: Employees also have the right to terminate their employment voluntarily.
Typically, employees are required to provide notice of resignation, which may vary depending on the
terms of their employment contract, company policies, or applicable state laws.
Termination with cause: Termination for cause occurs when an employee's actions or behaviors warrant
immediate termination, such as gross misconduct, theft, or serious violation of company policies.
Termination with cause generally does not entitle the employee to severance or other termination benefits.

Termination without cause: In the absence of a specific cause, an employer may choose to terminate an
employee without cause. In such cases, the employer may be required to provide notice or pay in lieu of
notice, depending on the terms of the employment contract and applicable state laws.

Compensation for termination without cause can vary depending on several factors, including state
laws, employment contracts, company policies, and any applicable collective bargaining
agreements

• Notice period:. If the employer terminates the employee without providing the required notice, they may be obligated to
provide compensation in lieu of notice.
• Severance pay: Severance pay is an additional compensation provided to employees who are terminated without cause. It is
typically a lump-sum payment or a series of payments based on factors such as length of service, salary, and company policies.
Severance pay is not mandated by federal law but may be offered by employers voluntarily or may be required under certain
state laws or employment agreements.

Continuation of benefits: In some cases, employers may provide a continuation of benefits for a specified period following
termination without cause. This may include continued health insurance coverage, pension contributions, or other fringe benefits.
The duration and extent of benefit continuation can vary depending on factors such as company policies, employment contracts,
and applicable laws.
Some important implied terms
Implied terms in an employment contract are provisions that are not explicitly stated or written down but are still
considered to be part of the agreement. These terms are typically inferred based on common understandings,
industry customs, past practices, or legal requirements. While the specific implied terms can vary depending on
jurisdiction and circumstances, here are some examples:

Duty of mutual trust and confidence: This implies that both the employer and the employee will act in good faith and
not engage in conduct that undermines the employment relationship. It includes providing a safe and respectful working
environment.

Duty to exercise reasonable care: Employers have an implied duty to take reasonable care in protecting their employees
from foreseeable risks of harm, such as providing proper training, equipment, and safety measures.

Duty of fidelity and loyalty: Employees are generally expected to act in the best interests of their employer, not disclose
confidential information, and avoid conflicts of interest.

Duty to provide a safe working environment: Employers are generally expected to provide a safe and healthy work
environment, including complying with relevant health and safety regulations.

Duty to give reasonable notice of termination: In the absence of an explicit notice period, it is often implied that a
reasonable notice of termination is required from either party, based on factors such as length of service, seniority, and industry standards.
Express terms vs implied terms

While express terms are clearly defined and agreed upon by both parties, implied terms can
be more difficult to determine and may be subject to interpretation. If there is a dispute over
an implied term, the courts may need to interpret the nature of the employment relationship
and the expectations of both parties to determine what was intended.

It is important to note that some implied terms may be overridden by express terms in the
employment contract. For example, an express term may specify that the employment
relationship is at-will, meaning that either party can terminate the relationship at any time
without cause. In this case, the implied duty to give reasonable notice before termination
would not apply.
In the United States, employment law is primarily governed by a combination of federal and state laws. Here are some
key laws that play a significant role in regulating employment:

1. Fair Labor Standards Act (FLSA): The FLSA establishes federal minimum wage, overtime pay, record-
keeping, and child labor standards for employees in both the private and public sectors.

2. Title VII of the Civil Rights Act of 1964: Title VII prohibits employment discrimination based on race, color,
religion, sex, and national origin. It applies to employers with 15 or more employees.

3. Americans with Disabilities Act (ADA): The ADA prohibits discrimination against qualified individuals with
disabilities in employment. It requires employers to provide reasonable accommodations to employees with
disabilities, where appropriate. The ADA applies to employers with 15 or more employees.

4. Age Discrimination in Employment Act (ADEA): The ADEA protects individuals who are 40 years of age or
older from age-based employment discrimination. It applies to employers with 20 or more employees.

5. Family and Medical Leave Act (FMLA): The FMLA provides eligible employees with unpaid, job-protected
leave for specific family and medical reasons. It applies to employers with 50 or more employees within a 75-
mile radius.

6. Occupational Safety and Health Act (OSHA): OSHA sets and enforces workplace safety and health standards
to ensure that employers provide a safe and healthy working environment for their employees.

7. Equal Pay Act (EPA): The EPA prohibits sex-based wage discrimination between men and women who perform
substantially equal work in the same establishment.
Contractor
Agreement
• Independent contractor contracts are
intended to protect the contracting
parties by clearly establishing the rights
and obligations of each party and
protecting them in the event of non-
compliance.
 An independent contractor is not an employee. An independent contractor is a self-employed
individual or business that provides services to a client under a contract or agreement. Unlike
employees, independent contractors have more control over their work, including the tools
they use, the methods they use to complete the work, and the hours they work

Employers are not required to provide independent contractors with benefits, pay taxes on their behalf, or withhold
taxes from their payments. Independent contractors are responsible for paying their own taxes, including self-
employment taxes, and for obtaining their own health insurance and other benefits.

On the other hand, employees are individuals who work for an employer under a contract of employment, either
express or implied. Employees typically have less control over their work than independent contractors and are
subject to the employer's direction and control. Employers are responsible for providing employees with benefits,
paying payroll taxes, and withholding taxes from their paychecks.

It is important for employers to correctly classify workers as employees or independent contractors, as

misclassification can lead to legal and financial consequences. The classification depends on several factors,
including the degree of control the employer has over the worker, the worker's level of independence, and the
nature of the work being performed.
 There is a subtle difference between an independent contractor and an employee since both are
providing a service. An employee performs based on a subordinate relationship with the employer,
where their functions, schedule and salary is established, while with an independent contractor there
is no subordination, the contractor is an independent company that provides its services voluntarily in
exchange for a consideration, once the object of the relationship the contract is terminated.

Purpose
Independent contractor contracts are intended to protect the contracting
parties by clearly establishing the rights and obligations of each party and
protecting them in the event of non-compliance.
INDEPENDENT CONTRACTOR AGREEMENT

An independent contractor agreement is a contract between a freelancer and a company or client outlining the
specifics of their work together. This legal contract usually includes information regarding the scope of the work,
payment, and deadlines. The agreement might also provide guidance regarding any confidentiality
requirements, insurance, and indemnification

It is an agreement of wills between a party called contractor who is obligated to another party called
client to perform a work or project, the latter being the one who determines the conditions and scope of
the project. It is a legally binding agreement that describes the scope of work, risks, obligations and
legal rights of both the contractor and the client.

The following are other terms to refer to the contractors' contract, although all of them regulate the relationship
between a specific type of contractor and the client.

▪ Independent contractor agreements.

▪ Subcontractor agreements.
▪ Freelance contracts.
▪ Consulting agreements.
▪ Consultant agreements.
▪ Service agreements.
▪ General contractor agreements.
There are different modalities of independent contractor arrangements, including:

• Freelancers: These are independent contractors who are hired on a project-by-project basis. They typically work
remotely and are not required to come into the client's or employer's office.

• Consultants: These are independent contractors who provide expertise and advice on a specific area, such as marketing
law or finance. They may work on a project basis or be hired for a longer-term engagement.

• Contract workers: These are independent contractors who are hired for a specific duration to provide a specific service,
such as a web developer or graphic designer.

• Outsourced workers: These are independent contractors who are hired by a company to perform a specific function,
such as IT support or customer service. They may work remotely or on-site, depending on the nature of the work.

• Gig workers: These are independent contractors who provide services through digital platforms, such as ride-sharing
services or food delivery services. They are typically paid per task or gig, and are not subject to the same employment
laws as traditional employees.

In each of these modalities, the independent contractor is responsible for their own taxes, insurance, and benefits, and is
typically not entitled to the same rights and protections as employees under labor laws. It is important for both the
independent contractor and the client or employer to have a clear understanding of the terms of the engagement, including
payment terms, scope of work, and intellectual property rights.
Independent contractors' contracts are not usually very long, and their clauses should contain the following
classic clauses, without leaving aside the boilerplate clauses that we studied

1. Scope of Work: The contract should specify the scope of work to be performed by the independent contractor, including the
specific tasks or services to be provided, the deadlines for completion, and the expected results.

2. Payment Terms: The contract should specify how the independent contractor will be paid, including the hourly rate or project fee,
the payment schedule, and any expenses that will be reimbursed.

3. Duration of Engagement: The contract should specify the length of time the independent contractor will be engaged by the client
or employer, whether it is for a fixed term or an ongoing engagement.

4. Termination: The contract should specify the circumstances under which the engagement can be terminated by either party, and
any notice period that is required.

5. Intellectual Property Rights: The contract should specify who owns the intellectual property rights to any work product created
by the independent contractor, and any restrictions on the use or disclosure of such work product.

6. Confidentiality: The contract should include provisions to protect the confidentiality of any confidential information that the
independent contractor may have access to during the engagement.

7. Indemnification: The contract should specify the extent to which the independent contractor will indemnify the client or employer
against any claims, damages, or liabilities arising out of the independent contractor's work.

8. Liability and Insurance: The contract should specify the extent to which the independent contractor will be liable for any
damages or losses incurred by the client or employer, and any insurance coverage that is required.
Construction contract modalities
There are different modalities for construction contracts, although these contract modalities also apply to other
contracts.

Many different types of contracts can be used to define specific terms and requirements for a construction
project. However, there are 4 common types of construction contracts widely used by construction and
contract managers. Construction contract types typically define the project scope, duration, technical
requirements, quality, specifications, payment method, and other important requirements

Each of the modalities has its own advantages and disadvantages, and the choice of contract will depend
on factors such as the size and complexity of the project, the client's budget and timeline, and the level of
risk that the client is willing to bear. It is important for both the client and the contractor to have a clear
understanding of the terms of the contract, including payment terms, scope of work, and dispute
resolution mechanisms.
Lump sum contracts
An Lump Sum or Fixed Price Construction Contract types, there is a fixed price that will be paid
to the contractor for all the scope of work. Contractor commits to complete the work with this
fixed price and the client commits to pay this fixed price to the contractor for the completion of
work.
Lump sum contracts may include benefits for early delivery of work and sometimes planned
costs may be lower than actual costs.

In this contract type, the contractor takes on more risks such as late delivery of work, increased
material costs, cost of unclear scope and other potential problems.

Cost-Plus contracts

Known as cost-reimbursement contracts, involve the owner paying the contractor for
the costs incurred during the project plus a set amount of money for profit, which can be
determined by a percentage of the total price of the project.

The costs covered by cost-plus contracts can involve direct costs (i.e. direct labor and
materials), indirect costs (i.e. office space, travel, and communication expenses), and profit
(i.e. the agreed upon fee or markup

these types of contracts will also include an agreed-upon amount or percentage that covers the builder’s
overhead costs and profit that the owner also pays.
Time and materials contracts

Time and materials (T&M) contracts are used in construction when the project’s scope isn’t
predetermined, making it difficult to agree on a fixed price and timeline for the contract.
Instead, time and materials contracts allow for the flexibility of an “as-we-go” agreement.

Unlike fixed-rate construction contracts where contractors get paid in predetermined

installments based on the percentage of work completed, working on a time and materials
basis allows for contractors to get paid for actual labor hours and materials or equipment
used.

Time and materials contracts define an hourly or daily rate for builders. In addition to paying this rate, owners also agree to
pay any related project costs, which are noted in the contract as direct, indirect, markup and overhead costs.
Unit Price Contract

A unit price contract is a type of construction contract in which the contractor

agrees to perform the work at a set price per unit of measurement. This type
of contract is commonly used when the scope of work is uncertain or when
the project involves a large quantity of similar items or services.

Under a unit price contract, the contractor is typically paid based on the
actual quantities of work completed, rather than a fixed price for the entire
project. For example, if the project involves the installation of a large number
of light fixtures, the contractor might be paid a set price per fixture installed.
The total payment to the contractor would depend on the actual number of
fixtures installed, rather than a fixed price for the entire project.

Unit price contracts are often used in government projects, where the
quantities of work required are uncertain or difficult to predict. They can also
be used in private sector projects, where the owner wants to incentivize the
contractor to complete the work quickly and efficiently.
DISPUTE
RESOLUTION AND
CIVIL LITIGATION
Alternative Dispute Resolution

Any method of resolving disputes without litigation. Abbreviated as ADR.

Public courts may be asked to review the validity of ADR methods, but
they will rarely overturn ADR decisions and awards if the disputing
parties formed a valid contract to abide by
them. Arbitration and mediation are the two major forms of ADR.

Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of the courtroom. ADR
typically includes early neutral evaluation, negotiation, conciliation, mediation, and arbitration. Some of these
programs are voluntary; others are mandatory.

While the two most common forms of ADR are arbitration and mediation, negotiation is almost always attempted
first to resolve a dispute. It is the preeminent mode of dispute resolution. Negotiation allows the parties to meet in
order to settle a dispute. The main advantage of this form of dispute settlement is that it allows the parties
themselves to control the process and the solution.
 Many people are turning to Alternative Dispute
Resolution (ADR) methods in order to help them
NEGOTIATION resolve their divorce and the related issues like child
custody and parenting time, child support, alimony,
and division of assets. ADR can be appealing
because it helps resolve divorces outside of the
public court system, meaning divorces are more
private, and many times can be significantly cheaper
than a traditional divorce.
MEDIATION

ARBITRATION
 Negotiation is a process where two parties in a conflict or disagreement try to reach a
resolution together. During a negotiation, the parties or their representatives (lawyers)
discuss the issues to come to a resolution.
NEGOTIATION

Mediators are individuals trained in negotiations, who bring

opposing parties together and attempt to work out a settlement or
agreement that both parties accept or reject.

Mediation is not binding.

MEDIATION
the mediator, essentially, helps parties to settle their disputes by a
process of discussion and narrowing differences. He does not
decide the dispute.

A successful mediation results in an agreement signed by the

parties
 Arbitration is more formal than Mediation and resembles a simplified version
of a trial involving limited discovery and simplified rules of evidence (ex.
hearsay is usually admissible in arbitration). Prior to the dispute occurring,
parties usually enter into a binding arbitration agreement or any other form of
agreement with an arbitration clause, that allows them to lay out major terms
for the arbitration process

ARBITRATION Arbitration is a more formal process for resolving disputes. Arbitration often
follows formal rules of procedure and the arbitrator may have legal training
that a mediator does not. The arbitrator is a neutral third party, but should have
some expertise in the area that is the subject of the dispute. The parties
should agree on who the arbitrator will be or on how he or she will be selected.

Unlike a mediator, the arbitrator has the authority to make determinations and decisions that are binding on the
parties. The arbitrator's job is to listen to both sides and then make a decision that is mutually binding on both parties.
Arbitration avoids the risk that the parties won't agree and will end up in court anyway because the arbitrator makes
the decisions, and they are legally binding. However, the disadvantage of this is that one or both parties may be more
dissatisfied with the result.
Introduction to Alternative Dispute Resolution

Arbitration Explained

https://youtu.be/tGFijuVyzyQ

https://youtu.be/9dUi_phYXrY
DIFFERENT TYPES OF DISPUTE RESOLUTION
 THE LITIGATION PROCESS
COMPLAINT
The pleading that starts a case. Essentially, a document that sets forth a jurisdictional basis for the court's
power, the plaintiff's cause of action, and a demand for judicial relief.

In Civil Law, a “complaint” is the first formal action taken to officially begin a lawsuit. This written document contains the
allegations against the defense, the specific laws violated, the facts that led to the dispute, and any demands made by
the plaintiff to restore justice

A plaintiff starts a civil action by filing a pleading called a complaint. A complaint must state all of
the plaintiff's claims against the defendant and must also specify what remedy the plaintiff wants. After
receiving the complaint, the defendant must respond with an answer.

Although some state courts model their pleading rules on the Federal Rules of Civil Procedure, other states use very
different rules. Thus, pleading standards for complaints may vary widely from state to state, or between state and
federal courts located in the same state.
 A complaint generally has the following structural elements:

lists name, address and telephone number of the filing attorney or self-representing litigant at the top of the
• Caption and Heading complaint. The case caption usually also indicates the court in which the case originates, and a brief
description of the document.

• Jurisdiction and venue this section describes why the case should be heard in the selected court rather than some other court or
forum.

identifies plaintiffs and defendants.

• Parties
optional section which defines some terms used throughout the document. The main purpose of a definition is to
• Definitions achieve clarity without needless repetition

• Statement of facts lists facts that brought the case to the court.

a numbered list of legal allegations (called "counts"), with specific details about application of the governing law
to each count. In this section the plaintiff usually cites existing Law, previous decisions of the court where the
• Cause of Action -
case is being processed, decisions of the higher appellate courts, and cases from other courts,

plaintiff explains to the judge how the actions of the defendant(s) harmed his rights
• Injury
describes the relief that plaintiff is seeking as a result of the lawsuit. The relief can include a request
• Demand for relief for declaratory judgment, a request for injunctive relief (non-monetary relief), compensatory and actual damages
(such as monetary relief), punitive damages (non-compensatory), and other relief.
 caption

parties

Cause of action/
Allegations and facts

Prayer/demand for relief

subscription
After the complaint has been filed with the court, it has to be properly served to the opposite parties, but
usually petitioners are not allowed to serve the complaint personally. The court also can issue
a summons – an official summary document which the plaintiff needs to have served together with the
complaint. The defendants have limited time to respond, depending on the State or Federal rules. A
defendant's failure to answer a complaint can result in a default judgment in favor of the petitioner.

PLAINTIFF FILES AND SERVES A

COMPLAINT

DEFENDANT RESPONDS O DEFENDANT DEFAULT

R
DISCOVERY
COMMENCES JUDGMENT ENTERED
PRETRIAL MOTIONS
(IF NEEDED)
TRIAL
(BY JUDGE OR BY JURY)

JUDGMENT ENTERED

EITHER SIDE CAN APPEAL

 Civil litigation is broken into 3 main phases: pre-trial, trial, and post-trial. Each of these phases has
certain tasks that must be completed in order to protect the rights of everyone involved in
the lawsuit.

PRE-TRIAL

TRIAL
Research

filing
Limited Scope Representation POST-TRIAL
Notice and response
Procedure
Discovery Evidence & Objections Deadlines
Practice Setting Aside Default Judgments

Enforcement
Phase 1: Pre-Trial
Preparing a legal claim includes learning whether or not you have a viable claim that can be heard
by a judge, what laws apply to the facts of your case, what facts are relevant to your claim and
what type of remedy you can ask for in court. For specific steps you should follow to prepare a
legal claim
Step 1: Research
As part of your research, investigate Alternative Dispute Resolution Even experienced attorneys
regularly settle their cases outside of court using ADR. This might be the best option

Use your research to tell you what specific information you are required to include in
your petition. A petition is the document you write that asks the court to give you a certain
Step 2: Filing outcome when filing the court clerk will stamp your to show that you are officially asking
the court for the things listed in your petition.
 After you file your petition with the court, you are required to tell the person, people or business
that could be affected by your case that you have filed. This is called giving legal notice.
The person who files the Petition is called the Petitioner or Plaintiff. The other side is usually
called the Respondent in a civil case but may be referred to as the Defendant.
To give legal notice, the court clerk issues the citation, and arrange for a process server to give
the citation to the person (or business) you’re suing.
Response: the respondent should file an Answer with the court clerk to show that they are
interested in the case and are not ignoring the court’s authority. There is generally not a fee to
Step 3: Notice and Response file an Answer.
If the respondent has their own claims against the petitioner, then the respondent can tell
the court about those claims in a Counterclaim-Petition.

In the law of common law jurisdictions, is a pre-trial procedure in a lawsuit in which each party,
through the law of civil procedure, can obtain evidence from the other party or parties by means of
discovery devices such as interrogatories, requests for production of documents, requests for
admissions and depositions.
Step 4.-Discovery
Discovery can be obtained from non-parties using subpoenas.

Discovery takes three basic forms: written discovery, document production and depositions.
What Happens in the Discovery Stage of a Lawsuit

What is Discovery: Discovery & Settlement

https://youtu.be/NueBRXAyO38

https://youtu.be/kbNemv6DKpU
Discovery is the method by which parties gather relevant information from each other or from third parties.
Research of the law, document review and organization, and witness interviews help clients and their lawyers
assess the merits of claims and defenses. The extent to which these and other steps are needed is
determined by the issues of the case.

• Discovery is usually the longest part of the case. It begins soon after a lawsuit is filed and often does
not stop until shortly before trial.

• During discovery, the parties ask each other and third parties for information about the facts and
issues of the case.

• Information is gathered formally through written questions (known as “interrogatories”),

requests for copies of documents, and requests for admission (which ask a party to admit or
deny statements of fact).

• Another key method of obtaining information is to conduct depositions, in which witnesses

are questioned under oath by the parties’ attorneys and the witnesses’ answers are recorded
by a court reporter.

• Depositions are used to learn more about the facts of a case and about what the different
witnesses contend happened.

• Depositions also may be used at trial to show inconsistencies in a witness’s story or to

question the witness’s credibility. The recorded testimony from a deposition sometimes may
also be used at trial in place of a witness who is not able to attend the trial in person.
 Often a claim or defense requires support from expert witnesses to explain
technical information or validate an argument. One or more experts might be
needed to testify about the connection between the defendant’s conduct and the
loss suffered by the plaintiff, or the existence and amount of the plaintiff’s
Expert Witnesses: damages. Expert witnesses work closely with a party’s representatives and
attorneys to prepare the party’s case.

Before trial, the parties may use motions to ask the court to rule or act. Motions
usually pertain to law or facts in the case, but sometimes they seek clarification or
Motions: resolution of procedural disputes between the parties. Some motions, such as a
motion for summary judgment, which asks the court to dismiss part or all of
a plaintiff’s case or a defendant’s defense, dispose of issues without trial.
Other motions might ask the court to order a party to produce documents or
to exclude evidence from trial.

The duration of a lawsuit depends on the issues of the case, the amount of
discovery to be conducted, and court scheduling and availability. The parties,
Timing: guided by the rules of court, usually decide the timing of discovery. Trial dates are
set by the court. Timing and scheduling differ between state and federal courts.
 https://www.millerandzois.com/sample-discovery.html
Written Discovery: Interrogatories, Requests for Admission and depositions

• Questions requiring your version of the facts and of your claims.

• Up to 25 questions can range from the broad ("What happened on April 26, 2004?") to the specific ("Is it your
Interrogatories position that the defendant was wearing sunglasses at 2:30 p.m. on April 26, 2004?").
https://www.americanbar.org/groups/litigation/committees/mass-torts/practice/2019/tips-for-drafting-your-initial-set-
of-written-discovery/

• Depositions are sworn statements, when a person will answer questions from an attorney, and a court
reporter will make a transcript of all that is said.
Depositions • Although all attorneys have their own strategies for depositions, there are basically three reasons to do them: to lock
people into their stories, to see what the other side has, and to do a "practice trial," that is, to see how a witness will
appear and conduct themselves before a judge or jury.

• are not often used, but can be a very powerful tool. They ask a party to admit or deny certain facts pertaining
Requests for
admission to the case, and they carry with them penalties for not answering, for answering falsely, or even answering
late.

• Any party has a right to see most documents that even arguably relate to a case.
Document • courts are allowing access to computer files as part of document discovery. In cases where enough is at stake to
Production justify it, courts have even allowed litigants to reconstruct deleted files (like e-mail), although that practice has not yet
become common
Ending a Case Before Trial
Ending a case before trial can also be accomplished through submitting a motion to the court. Generally, the motions that
might be used to end a case before trial include:

If the Plaintiff hasn’t shown all of his or her evidence, other than denying the
Nonsuit evidence, to the court, the Plaintiff files a Notice of Nonsuit with
the court clerk.

The court can dismiss a case if the Plaintiff didn’t file it properly or didn’t
Dismissal
follow the Rules of Civil Procedure

parties can work out an agreement and resolve part or all of a case before it
Settlement
goes to trial in a settlement agreement.

When there are no disputes about the important facts of the case and there is
Summary no evidence to support the claim or defense of the case, the judge can grant
Judgment a Motion for Summary Judgment, and decide the case before trial.
The judge can give a default judgment to the Plaintiff when
Default the Respondent has been served with citation, but does not respond to
Judgment the case or the Respondent has filed a response, but fails to appear for trial.
Phase 2: Trial
• The trial phase of the civil litigation process will be very different if your case is uncontested, meaning that both
sides agree on what the final outcome of the case should be. If your case is uncontested, the trial phase should
be very short and might be better thought of as a “hearing.”
• During the final hearing of an uncontested case, you will simply present your signed order to the
Judge, answer any questions that the Judge may have about your agreement and then file the order with
the Court Clerk once the Judge has signed it.
• If you and the other side of your case disagree about what the outcome of the case should be then
your case is contested. If your case is contested, then you will need to spend a lot of time preparing for
trial.
 "Limited Scope Representation" refers to the concept of a lawyer agreeing with a client to
handle only some part(s) of the client's legal matter.
Step 1: Limited Scope
Limited Scope Representation is linked to the Self-Represented Litigation movement,
Representation
because the flipside to a lawyer handling only some aspects of a client's larger case is that
the client will handle other aspects of their case.

Step 2: Procedure During the process parties should expected to follow Rules of Civil Procedure.

Step 3: Evidence & In addition to the Rules of Civil Procedure, Rules of Evidence define how to introduce and
Objections share important information about your case with the court.

relevance have probative value to make one of the elements of the case likelier
or not.
privilege a special benefit, exemption from a duty, or immunity from penalty, given to a particular per
son, a group or a class of people.
hearsay A statement made out of court that is offered in court as evidence to prove the truth of the m
atter asserted.
Admissibility. the concept in the law of evidence that determines whether or no
t
At trial, the parties present evidence in support of their claims or defenses to a jury and/or judge.

1. Immediately before trial, each party provides to the judge a document, called a “brief,” that outlines
the arguments and evidence to be used at trial.

2. Some trials, known as “bench trials,” do not involve a jury and are decided by the judge alone.
Other trials are jury trials. In a jury trial, both parties, question potential jurors during a selection
process known as “voir dire.”

3. Once the trial begins, each party presents its outline of the case in an opening statement. Then, the
parties present evidence.

4. Each party may call witnesses or introduce documents and exhibits in support of its arguments.
After each witness is called and questioned, the opposing party has an opportunity to cross-
examine the witness.

5. The plaintiff presents evidence first, then the defendant. Sometimes, the plaintiff is allowed to
present additional evidence, called rebuttal evidence, after the defendant has finished presenting its
case. Once all the evidence has been presented, the parties give their closing arguments.

6. After closing arguments, the court instructs the jury on the law to be applied to the evidence.

7. The jury then deliberates and reaches a decision or verdict.

Phase 3: Post-Trial
Whether parties agree or disagree with the judge’s final decision, they should pay special attention to the
deadlines that apply to post-trial action. These deadlines will tell you how long you must wait before
your judgment is no longer eligible for appeal. Appeal standards are very complex and often overwhelming for
non-attorneys.

Scenario 1: Setting Aside Default Judgments

If a party was given improper notice about a case that resulted in a default judgment against he or
she, then is it possible to have that decision set aside.

Scenario 2: Enforcement
If the one side does not comply with the court order by the deadline, the other may file a Motion to
Enforce or a similar titled document to tell the judge that the court order is not being followed.
Appeal

If you disagree with the judge’s decision then you may be able to appeal it. An appeal takes place when an appellate
court reviews what happened in the trial court. If the appellate court believes the trial court made a mistake (called
an error) and believes the mistake made a difference in the outcome of your case (harmful error), the appellate
court can change the trial court’s decision or send your case back to the trial court to be tried again.

Appeal

Following trial, a party dissatisfied with the result may appeal. During an appeal, a party asks a
higher court to review the trial court proceeding.
• The parties present their arguments in briefs, which are submitted to the appellate court
along with the record of evidence from the trial court.
• The appellate court usually reviews a case for legal error only.
• Except under unusual circumstances, the appellate court will not review factual evidence or
override a jury’s findings of fact.
• The appellate court announces its decision in a document called an opinion.
• The appellate court will affirm the verdict if it finds that there was no error in the trial court
proceeding. However, if there was an error, the appellate court can reverse the verdict or
order the trial court to conduct a new trial.
CRIMINAL
LAW
• Criminal law, the body
of law that defines
criminal offenses, regulates the
apprehension, charging, and
trial of suspected persons, and
fixes penalties and modes of
treatment applicable to
convicted offenders
A Broad Overview of Criminal Law

Federal, state and local governments enact statutes to criminalize the conduct of particular concern to them. For
example, a city may determine that it is a misdemeanor to panhandle, while the federal government decides that
it is a federal crime to lie on an immigrant visa application.

Prosecutors have some flexibility in deciding what criminal charges to bring, or whether to pursue the case at all.
A prosecution formally begins with either a grand jury indictment or the filing of a criminal complaint. If the jury
convicts, judges often follow sentencing guidelines that tell them how much weight to give to factors such as a
defendant's past criminal convictions (if any) in fashioning

The U.S. Constitution entitles people charged with crimes to numerous procedural rights,
including Miranda warnings, a speedy trial, a right to be free from unlawful searches, and
a right to confront accusers.

A defendant who wishes to challenge a conviction or sentence can file an appeal with a
higher court. There is also a separate method of appealing called petitioning for a writ of
habeas corpus, which is a way of disputing the legal basis for one's imprisonment
Principles Of Criminal Law

Offensive and harmful behavior is not illegal unless it was already prohibited
Legality
by law before it was committed

Actus reus a person must perform either an act of commission or ommission.

Causation There must be a causal relationship between an act and the harm suffered.

Harm an act must cause harm to some legally protected

Concurrence the intent and the act must be present at the same time.

there must be a provision in the law calling for punishment for those
Punishment
found guilty of breaking the law.
Substantive vs procedural Criminal Law

Criminal law doctrine is divided into two broad categories:

• substantive criminal law, which defines criminal offenses and potential defenses as well as permissible
forms, and severity, of punishment for particular offenses, and

• criminal procedure, which governs the rules that apply to the investigation and apprehension of
suspects and pretrial, trial, and post-trial criminal proceedings.

The substantive criminal law can be divided into three sub-categories:

1. the definition of criminal offenses;

2. affirmative defenses that may permit the accused to avoid a criminal conviction even if she
committed the criminal offense; and
3. limitations on permissible types of punishments or on the severity of punishments for particular
crimes.
 Criminal offense

a crime is a type of wrongdoing that is different and distinguished from a civil wrong.

A criminal offense (a crime) is a type of wrongdoing that we distinguish from a

civil wrong. Crimes are behaviors that society views as offending not just a
specific victim but also the sensibilities of society as a whole. Another way of
explaining a crime is to say that the behavior violates society's moral standards.

A civil wrong is different from a crime because it does not violate the moral standards of society to the same
degree. A civil wrong may involve misbehavior by one person toward another (for example, a breach of contract
claim or a customer who slips and falls on an icy sidewalk that was poorly maintained by a store owner).

While these claims involve “wrongs,” they are not considered to be moral failures in the same way that criminal
offenses are. Therefore, in its most broad definition, a criminal offense is a behavior that is prohibited by
law and considered to violate the moral standards of society.
Crime is an act or omission which offends against an existing law, is harmful to an individual or society as a
whole and is punishable by law. Crime is any activity that the state prohibits by law and punishes.

Definition broken down into 3 sections

• An act or omission Offends against an existing law

• Is harmful to an individual or society
• Is punishable by law

Crime is relative – it relates to or is dependent on the contemporary values of the community. Abortion was
illegal and smoking was acceptable in restaurants a generation ago but not now, their status has reversed.

The elements of crime

A. The mental element
In order to hold someone to account for a crime, the prosecutor must prove that they harbored the
required level of criminal intent (called mens rea).
Example
the prosecutor must prove that the defendant intended to wrongfully deprive the rightful owner of the
property when the defendant took control of it, In a civil case, by contrast, no criminal intent is required.
Many civil actions involve allegations that the defendant acted negligently and, as a result, harmed the
plaintiff.

Although most legal systems recognize the importance of the guilty mind, or mens rea, the statutes have not
always spelled out exactly what is meant by this concept. The Model Penal Code has attempted to clarify the
concept by reducing the variety of mental states to four.

Guilt is attributed to a person who acts :“purposely,”

“knowingly,” “recklessly,” “negligently.”
Criminal Liability
Criminal liability refers to responsibility for a crime and the penalty society imposes for the crime. Because
crimes cause harm to society as a whole (in addition to the victim(s)), a government lawyer (prosecutor)
brings charges against the offender on behalf of its citizens.

A person can be found liable for a crime if the prosecution proves that the person committed the
criminal act (such as stealing) and had the required intent to hold the person accountable (such
as intent to deprive the owner of the property).

Criminal liability for the result also requires that the harm done must have been caused by the accused.

Criminal liability may also be established on a failure to act when the accused was under a legal duty to act and was reasonably capable of
doing so. The legal duty to act may be imposed directly by statute, such as the requirement to file an income tax return, or it may arise out of
the relationship between the parties, as the obligation of parents to provide their child with food

Criminal liability may also be established on a failure to act when the accused was under a legal duty to act and was reasonably capable of
doing so. The legal duty to act may be imposed directly by statute, such as the requirement to file an income tax return, or it may arise out of
the relationship between the parties, as the obligation of parents to provide their child with food.
Vicarious or Implied Liability
Usually, criminal liability rests upon the person who directly committed the act. But, liability for a crime can
reach beyond those directly involved in a criminal act.

For example, “felony murder” laws make those involved in a felony that results in a
death liable for the death even if they did not “pull the trigger” or otherwise directly
cause the victim’s demise (such as the getaway driver who helps accomplices flee a
botched armed robbery).

Strict Liability

In both tort and criminal law, strict liability exists when a defendant is liable for committing an action,
regardless of what his/her intent or mental state was when committing the action. In criminal law,
possession crimes and statutory rape are both examples of strict liability offenses.
Possible Penalties
A person found criminally liable by being convicted of a crime may be sentenced to serve time in jail or prison, to
pay a fine, or both. In most states, felonies can be punished by a year or more in prison and misdemeanors by
less than a year in jail. In addition (or alternatively), the sentencing judge may order the person convicted to
undergo drug or alcohol treatment, anger management or other counseling, and/or to abide by terms of probation
(such as drug testing).

A person convicted of certain sex crimes might be required to register as a sex offender and abide by other terms
upon release, such as periodic reporting to local authorities and staying away from schools, playgrounds, and
other facilities where children are present.
 Criminal acts categories

Personal crimes are those that, when committed, cause

Personal Crimes:
physical or mental harm to another person.

Assault refers to the intentional creation of a reasonable apprehension of harm.

refers to the unauthorized application of force against another person’s body. This
Battery
results in offensive touching, or actual physical injury.

False refers to one person forcibly restraining another person, against their will, with a
Imprisonment: risk of being seriously injured or killed.

the carrying away or confinement of a person by force or deception, without that

Kidnapping
person’s consent.
Homicide includes crimes such as first and second degree murder, involuntary
Homicide:
manslaughter, and vehicular homicide.

Rape Rape also includes statutory rape and sexual assault.

 Property crimes are usually those that involve interference with the
B. Property Crimes: property of another person. Physical or mental harm to another
person may be an indirect result of these crimes, but primarily, they
result in depriving someone of the use and enjoyment of their
property.

Larceny refers to a type of theft in which a person takes another person’s property and carries
Theft:
it away, with the intent to permanently deprive the legal owner of their property.
is known as theft by force, and may also be considered a personal crime as it often results in
Robbery
physical and mental harm.
occurs when a person breaks and enters into a home or building, intending to commit a crime.
Burglary
This crime is generally theft, although assault or arson may also constitute burglary;

Arson is the willful and malicious burning or charring of another person’s property or structure;

refers to a combination of fraud and larceny, in which a person misrepresents in order to

False Pretenses
obtain the property of another;
Receipt of Stolen It is a crime to receive or purchase property that you know or believe to be stolen, or otherwise
Goods obtained through theft.
 Statutory crimes are those crimes, in addition to the others
C. Statutory Crimes: mentioned in this article, that are forbidden by statute. The
primary types of statutory crimes include:

Alcohol-related Crimes These are crimes like driving under the influence, open container violations, being a minor in
possession of alcohol, public intoxication, and other similar crimes.

Drug Crimes Drug crimes include involvement in either creating or distributing illegal drugs as well as possessing
and consuming those substances.

These are crimes that often involve one person deceiving another for financial gain. They include
Financial and White various types of fraud and blackmail as well as tax evasion, cybercrime, embezzlement, money
Collar Crimes laundering, and other crimes of a similar nature

Are those crimes that arise as a result of individuals driving vehicles on public roadways. This
category of crime can overlap with other crimes – for example, a DUI would be both an alcohol-
related crime and a traffic offense. Other traffic crimes include driving on a suspended or revoked
Traffic Offenses:
license, hit-and-run accidents, driving without a license, reckless driving, and other similar crimes.
Inchoate Crimes:
Inchoate crimes are those that were began but were not completed, or they are
acts that assist another person in the commission of a crime. To commit an
“inchoate crime,” one has to do more than intend or hope to commit a crime. To
commit one of these crimes, an individual must take a “substantial step” towards
completing the crime in order to be found guilty.

When a person tries to commit a crime, but is unable to complete it or

Attempt
is stopped from completing

solicitation When a person ask another to commit a crime

conspiracy When a two or more people plan to commit a crime together

Criminal offenses classification.

Manslaughter, Aggravated Assault, Theft,

Burglary, DUI with Vehicular Homicide, Drug
Possession with the Intent to Deliver/Sell
Vandalism/Criminal Mischief, Arson

DUI, Drug Possession, Reckless Driving, Simple

Assault, Resisting Arrest, Disorderly Conduct,
Burglary, Theft, Trespassing

traffic offenses, such as speeding,

parking violations, and other minor
offenses
Felonies are often divided into sub-categories in order to determine punishment, such as first- second-, or third-
degree offenses. Punishment may include imprisonment for one year to life, or life imprisonment without the
possibility of parole in some jurisdictions. Federal criminal law and many states allow imposition of the death
penalty in some murder cases.

Felonies may also be punishable by a fine, often in the thousands or tens of thousands of dollars. If a defendant
pleads guilty to a felony offense, a court may approve a period of probation, during which the defendant must
avoid further legal trouble and meet regularly with a probation officer in order to avoid serving the prison term.
 DEFENSES
The Defendant Did not Understand the Significance of the Criminal Actions
One category of defenses available to a criminal defendant argue that the defendant cannot be found guilty for
the crime because he or she did not understand what he or she was doing or that his or her actions were
wrong

The defense of insanity requires the defendant to prove, that either he or she had a mental disorder that
rendered him or her incapable of understanding right from wrong, or that it prevented him or her from
insanity. controlling his or her actions and resisting violent impulses. In some states, the defense of insanity will allow
a defendant to avoid prison but will require that the defendant be held in a psychiatric facility for treatment.

intoxication defendant cannot meet all of the elements of the crime because he or she did not understand what he or
she was doing

mistake of law/ the defendant made a fundamental mistake that negates an element of the crime. mistake of law
mistake of fact applies when a criminal defendant believed his or her actions were lawful. This defense applies in only
very limited circumstances.
The Defendant Was Justified in His or Her Actions

defenses applies when the defendant committed the crime but argues that he or she was
justified in doing so

self-defense A defendant may argue, for instance, that he did shoot an intruder but did so
in self-defense because the intruder was threatening him with a knife

the criminal defendant argues that he or she only committed the crime because he
duress or she was forced to do so by someone else. For example, a criminal defendant
may argue that a co-defendant told him that if he didn’t commit a burglary,
the co-defendant would kill him.

the criminal defendant may argue that he or she committed the crime in order to
necessity defense prevent a more significant harm. For instance, the defendant may contend that
it was necessary for him to steal a car in order to chase down another
individual who was threatening to use an explosive device.
No Crime Actually Occurred

Finally, a smaller set of defenses may be used to argue that although it appears there was a
crime, the defendant did not actually commit a criminal act.

First, the defendant may argue that no crime occurred because of the defense of consent. For
instance, the defendant may argue that although sexual intercourse occurred, it was not rape
because there was consent. Likewise, he may argue that there was no assault because the victim
consented to the harm.

Second, a criminal defendant can assert the defense of abandonment/withdrawal if he or she initially
intended to commit or participate in a crime but later had a change of heart and withdrew from
participation.

Third, the defendant may argue entrapment. Entrapment occurs when the government induces an
individual to commit the crime and then attempts to punish the person for it. The defendant may argue
that no crime would have occurred but for the government’s inducement, and he or she should therefore
not be held responsible.
TORT LAW
What is Tort Law?
CONCEPT

The word 'tort' comes indirectly from the Latin term ‘tortus’, which means crooked or twisted—in other
words, wrong.

It therefore makes sense that a ‘tort’ is a civil wrong that occurs where someone unfairly causes another
person to suffer loss or harm

Tort law is the area of law that allows people who have been injured to seek financial
compensation to pay for their medical bills, lost wages, and pain and suffering. It is an
integral part of the law, and it allows people to hold their injurers accountable for
their carelessness and negligence

A tort is an act or omission that gives rise to injury or harm to another and amounts to a civil wrong for
which courts impose liability. In the context of torts, "injury" describes the invasion of any legal right,
whereas "harm" describes a loss or detriment in fact that an individual suffers
A tort is a civil wrong. If you think about criminal law, crimes are wrongs against the “safety of the
society.” Your torts course focuses on wrongs against individuals and attempting to seek a
remedy for their injuries. Many common torts (such as battery) also have a criminal counterpart

How Tort takes place?

A tort can take place in either of the two forms: by a commission of an act or omission of an act.

What are the remedies for Tort?

Remedies for tortious acts include money damages or compensation or injunction depending upon the
case.

Tort law involves claims in an action seeking to obtain

a private civil remedy, typically money damages.
The Four Elements
Torts are made up of four elements. In order to win a personal injury case, all four of these elements must
be in place:

The presence of a duty. We all have a duty to take steps to

prevent injury from occurring to other people.

The breach of a duty. The defendant must have failed to

live up to his duty to prevent injury from occurring to you.

An injury. You were injured.

The injury resulted frTorts are made up of four elementsom

the breach. The defendant’s actions led to your injury.
OVERVIEW

• Tort law is the area of the law that covers most civil suits. Generally, every claim that arises in civil court,
with the exception of contractual disputes, falls under tort law.

• The concept of this area of law is to redress a wrong done to a person and provide relief from the
wrongful acts of others, usually by awarding monetary damages as compensation.

• The original intent of tort is to provide full compensation for proved harms.

• Tort law is that branch of the law that deals with civil law, including law suits
but excluding issues involving contracts.

KEY TAKEAWAYS • Tort law is considered to be a form of restorative justice since it seeks to
remedy losses or injury with monetary compensation.

• In general tort law falls into three categories: those complaints dealing with
negligence; intentional harm; and unintentional but non-negligent acts
known as strict liability.
Understanding Tort Law

Tort law requires those who are found to be at fault for harming others to compensate the victims.
Typical harms include the loss of past or future income, payment of medical expenses, payment
for pain and suffering, and may also include additional punitive damages that are meant to
punish the plaintiff in excess of full compensation.

Typically, a party seeking redress through tort law will ask for damages in the form of monetary
compensation. Less common remedies include injunction and restitution.

Tort law is largely based on common sense and the understanding prevalent between people in their
everyday interactions with each other. The purpose of tort law is to ensure that people reasonably
coexist with each other.
For the society to peacefully coexist, each member of the society has to fulfill some duties towards the
other people of the society. Duties to respect people’s private spaces, not to do things that unfairly
disturb others, be careful and diligent when we deal with fellow beings, etc. just as we have such
duties, others have the right to expect us to do these duties.

We have the right to things like private spaces, the right not to be unfairly disturbed etc. we have
the duty of respecting the above rights of others.

The law of torts deals with the violation of these rights

by the people. These rights are not mentioned in the
written laws generally, but these have become the
part of the legal system by common law and by the
acceptance of the masses.
 A man was walking in a garden on a bright sunny day and started
swinging the umbrella while walking in the park. Unfortunately, the
umbrella ended up smashing the other pedestrian on his nose. The person
injured was very upset with this act. So when the injured man took up this
issue with the first man, first man replied that he has the right to walk in a
public place in the manner which suits him. The second man replied to the
first man saying that the first man’s rights end where the rights of the
second man begin.

A person committing a tort is legally liable to the party injured, who is provided with a remedy in law,
such as monetary damages or an injunction to compel or prevent certain conduct. An injured party
who decides to pursue the matter in court is known as the claimant, and the person alleged to be
responsible for the damage is the defendant or tortfeasor
Legal injuries are not limited to physical injuries and may
include emotional, economic, or reputational injuries as
well as violations of privacy, property, or constitutional
rights. Torts comprise such varied topics as automobile
accidents, false imprisonment, defamation, product
liability, copyright infringement, and environmental
pollution (toxic torts).
CHARACTERISTICS

TORT IS A CIVIL WRONG.

There are two kinds of wrong – civil wrong and criminal wrong. Tort falls under civil wrongs. There is
a difference between civil wrongs and criminal wrongs.

a) In civil wrongs, the injured party or the plaintiff files civil proceedings against
the person causing injury or the defendant. The matter in a civil wrong is to be
sued by a person himself, and the remedy for the same is unliquidated
damages
b) In criminal wrongs, the sufferer or a victim of a crime is not compensated;
rather the justice is granted by punishing the wrongdoer.

The distinction becomes important because unlike in criminal law there is no punishment in civil laws and
matter is to be sued by a person himself and is not sued by the state further the compensation is granted
in for of unliquidated damages which is not the case in criminal law.
TORT IS AN INFRINGEMENT OF A RIGHT IN REM.

1. There are two types of rights – right in rem and right in persona.
• Right in rem is the right which is available to the whole world and
• Right in persona is a right available against any particular person.

A tort is a violation of a right in rem

• Such as when a person contracts with another person and one of the parties has breached that contract, then the
person of whose contract has been breached can only sue the person who has breached the contract. This is
known as Right in persona i.e. one can sue to one whom he has contracted.

• On the other side, every person has the right to the enjoyment of his own property and any person who has violated
or infringed he will be sued and liable to pay the compensation in the form of unliquidated damages. This is known
as right in rem which is available against the whole world. This way the tort law in right in rem and is available
against the whole world. on.

Right in rem is not specific to any particular individual, which is the beauty of
the Law of Torts, one can sue a person who has breached a right with no
relation at all.
TORT IS A PRIVATE WRONG.

Tort is private wrong because it breaks the legal rights of an individual or specific group of
individuals.

REMEDY FOR TORT IS UNLIQUIDATED DAMAGES.

The remedy for tort is equitable relief to the injured or unliquidated damages that are
calculated by the court in accordance with the loss caused

LAW OF TORTS IS TOTALLY BASED ON PRECEDENTS

Though precedents play an important role in the development in any law, but in the case, the
law of torts is the only source of law. There is a statute or act that specifically deals with the
Law of torts. Through this characteristic, the judgements of common law become an
important and only source that recognizes these rights as a subject of law.
LAW OF TORT IS UNCODIFIED

A tort is an uncodified law. Uncodified law is a law that does not have any written statutes
or acts and it has to rely on precedents and case law. They are originated from sources
such as court decisions, customs, and principles of jurisprudence. The law of tort is based
upon precedent and developed through different case laws.
What is Torts? And what Torts is not.

https://youtu.be/jQ6smN3lcnY
DIFFERENCES BETWEEN TORT AND BREACH OF CONTRACT

Torts are not claims for breach of contract, except in

very special and limited contexts. Torts can, but do
not have to, constitute crimes.

Tort law may be contrasted with contract law, which also provides civil remedies after breach of a
duty that arises from a contract; but whereas the contractual obligation is one agreed to by the
parties, obligations in both tort and criminal law are more fundamental and are imposed regardless of
whether the parties have a contract.

In both contract and tort, successful claimants must show that they have
suffered foreseeable loss or harm as a direct result of the breach of duty
 Occurs from the breach of a duty undertaken by the parties themselves.
Breach of contract Whereas, a tort is the result of the breach of duties that are not undertaken by
the parties but which are imposed by law.

Damages are the basic remedy for both breach of contract and tort. Damage that is
awarded in breach of contract is ‘liquidated‘ whereas, in tort ‘unliquidated‘ damages are
awarded

Contracts Each party owes its duty only to the contracting party.

On the other hand, under the law of tort, duties imposed by law are not towards a specific
individual or a specific group of an individual, but they are towards the world at large.
However, only that person is entitled to sue who suffers damage by the breach of the duty
under the tort.
DIFFERENCES BETWEEN TORT AND CRIME

Torts are distinguishable from crimes, which are wrongs against the state or society at
large. The main purpose of criminal liability is to enforce public justice. In contrast, tort law
addresses private wrongs and has a central purpose of compensating the victim rather than
punishing the wrongdoer.

Less serious wrongs are considered as private wrong and have been
labelled as civil wrongs, whereas wrongs that are more serious in
nature have been considered to be public wrong and are known as
crimes.

In tort, a suit is filed by the injured person himself whereas, in crime,

the case is brought by the state on behalf of the victim.
 A person who commits a tort is known as ‘tortfeasor‘
whereas a person who commits a crime is known as
‘criminal‘.

If at any stage injured party likes, he can compromise with the tortfeasor and withdraw the
suit filed by him. On the other hand, in crimes, settlement or compromise between the
wrongdoer and aggrieved party is possible only in exceptional cases.

Actions in tort are civil cases, as opposed to criminal cases. An example of a tort that is not
necessarily a crime is if a person were to negligently spill boiling water on another person,
causing the latter serious burn injuries, or if a person were to negligently cause another to
fall down the stairs and suffer injuries.
 Some actions are punishable under both criminal law and tort law, such as battery. In
that case, ideally tort law would provide a monetary remedy to the plaintiff, while
criminal law would provide rehabilitation for the defendant, while also providing a
benefit to society by reforming the defendant who committed assault.

Compared to criminal cases, tort lawsuits have a lower burden of proof,

namely "preponderance of evidence", rather than beyond a
reasonable doubt. Sometimes a claimant may prevail in a tort case
even if the defendant who allegedly caused harm were acquitted in an
earlier criminal trial. For example, O. J. Simpson was acquitted in
criminal court of murder but later found liable for the tort of wrongful
death.
Both tort law and criminal law may impose liability where there is:
• intentional action
• reckless behaviour
• carelessness
• product liability (without negligence) in the US & the EU
18:00

Did OJ Commit Those Murders?

https://youtu.be/iX4JVcGjfP8
https://sites.psu.edu/emberpassion/2020/01/30/the-o-j-simpson-trial-distinctions-between-criminal-and-
civil-law/
 Tipos de torts

Understand Tort Law in 17 Minutes

https://youtu.be/U1sy9wZTcVA
CATEGORIES
INTENTIONAL TORTS

Intentional torts are wrongful acts done on purpose. The person does
not need to actually mean harm, but the other person ends up hurt
anyway, such as in a prank. Or, the person can definitely mean harm,
such as domestic violence cases

Intentional torts are wrongs that the defendant knew or should have known would result through his
or her actions or omissions.

torts that were committed intentionally, there are two types of “intent.”
• The first type is when someone does something with a specific purpose. (This
is the intent people typically think of when talking about intent).

• The second type is when someone does something knowing a consequence

will occur. This type is a little more complicated because the person has to know
with substantial certainty that an event will occur if they act in a particular way. This is
a higher level than just knowing; it has to be substantially certain to occur.
Intentional Tort Example

The easiest example of an intentional tort is a punch to the face, which is referred to as "battery." In this
case:

1. The person intended to make a fist and slam it into the victim's face
2. The person also intended to harm the victim

This law can be tricky, however. Sometimes the person who performs an intentional tort did not
intend the harm. For example, if you surprise someone with an unstable heart condition, and
the fright causes that person to have a heart attack, you commit an intentional tort, even if
you did not intend to scare that person into a heart attack.
Common Intentional Torts

Intentional torts are a wrongful act that someone plans, carries out, and is fully aware of their
actions. Since many of these acts also may be charged as crimes, you may notice some similarities.
For instance, the family of a murder victim may sue the perpetrator (whether or not they are
convicted of the crime) for wrongful death. The following are some of the more common intentional
tort claims.

An assault is an attempted battery, or "confinement without legal authority."

threatening injury when no battery takes Generally, no one is allowed to restrict
place. If someone points a gun at you, causing another person's movement against her
fear of immediate danger, it could be claimed will. A major exception to this Is that
as an assault. Police generally have the authority to
detain people they reasonably suspect of
Battery is the legal term for hitting someone, crimes.
or otherwise touching them in an offensive
manner This covers a surprising range of
activities, including sending projectiles into
someone else's body, as in firing a gun.
Fraud is the legal term for lying to someone. In order to succeed in a suit for fraud, plaintiffs
generally have to prove:
• The speaker knew what they said was false
• The speaker knew the other person would believe them
• The other person would rely on that information
• The other person would be harmed by relying on this information
Fraud also may be charged as a crime.

In order to prove a claim of intentional

infliction of emotional distress, a plaintiff has Defamation is when someone
to prove that someone else engaged in knowingly says something false about
extreme or outrageous conduct, with the someone else, and that lie causes
intent of frightening someone else, and harm. It includes both written
caused severe emotional distress or bodily (traditionally, libel) and spoken
harm. These claims are very difficult to prove (traditionally, slander) words.
in court.
 The exact nature of the invasion of privacy varies by state, but there are generally four types of
invasions of privacy:
• Invasion of solitude, in which someone interferes with someone else's right to be left alone.
• Public disclosure of private facts
• False light, in which someone publishes not true, but not defamatory facts about someone else.
• Appropriation, which is the unauthorized use of someone else's likeness for profit.

Trespass comes in two forms: trespass Conversion is when someone takes

to land, and trespass to chattel, or someone else's property and
personal property. In either case, "converts" it to their own. In the
trespass means using the property criminal world, conversion is known
without the permission of the owner. as theft.
 https://youtu.be/f6TUiejBILE

Episode 1.2: An Overview of Tort Law – Intentional Torts,

Negligence, and Strict Liability
 NEGLIGENCE
Negligent torts occur when the defendant's actions were unreasonably
unsafe. Unlike intentional and negligent torts, strict liability torts do not depend
on the degree of care that the defendant used. Rather, in strict liability cases,
courts focus on whether a particular result or harm manifested.

Negligent torts encompass harm done to people generally through the failure of another to exercise a
certain level of care, usually defined as a reasonable standard of care. Accidents are a standard example
of negligent torts. Intentional torts, on the other hand, refer to harms done to people intentionally by the
willful misconduct of another, such as assault, fraud, and theft.

Most injuries that result from tortious behavior are the product of
negligence, not intentional wrongdoing. Negligence is the term
used by tort law to characterize behavior that creates
unreasonable risks of harm to persons and property.
A person acts negligently when his behavior departs from the conduct ordinarily expected of a
reasonably prudent person under the circumstances. In general, the law requires jurors to use their
common sense and life experience in determining the proper degree of care and vigilance with
which people must lead their lives to avoid imperiling the safety of others.

Most injuries that result from tortious behavior are the product of
negligence, not intentional wrongdoing. Negligence is the term used
by tort law to characterize behavior that creates unreasonable
risks of harm to persons and property.

A person acts negligently when his behavior departs from the

conduct ordinarily expected of a reasonably prudent person under
the circumstances. In general, the law requires jurors to use their
common sense and life experience in determining the proper
degree of care and vigilance with which people must lead their lives
to avoid imperiling the safety of others.
Liebeck vs McDonald's - The million dollar lawsuit

https://youtu.be/3Rz4lp-FIac
Elements of a Negligence Claim
Element #1: Duty
When assessing a negligence claim, the first step is to look to see whether or not the defendant
owed the plaintiff a legal duty of care.

In some circumstances, the relationship between the plaintiff and defendant might create a
legal duty -- for instance, a doctor owes a patient a legal duty to provide him or her with
competent medical care. Or, the defendant may owe the plaintiff a legal duty to act with
reasonable care in a certain situation -- as is the case when one is expected to operate a
motor vehicle safely and with a certain level of due care.

Element #2: Breach of Duty

Next, the court will look to see whether the defendant breached this duty by doing (or not doing
something) that a "reasonably prudent person" would do under similar circumstances. The term
"reasonably prudent person" refers to a legal standard that represents how the average person
would responsibly act in a certain situation.

Stated simply, the defendant likely will be found negligent if the average person, knowing what the
defendant knew at the time, would have known that someone might have been injured as a result
of his or her actions -- and would have acted differently than the defendant did in that situation.
Element #3: Causation

The third element requires that the plaintiff show that the defendant's negligence actually
caused his or her injury. Sure, someone might be acting negligently, but the plaintiff can only
recover if this negligence somehow causes the injury. For example, it wouldn't be fair to
sue someone who was negligently texting and driving for a totally unrelated fender
bender that happened just across the street -- just because the driver was negligent.

Another aspect of this element looks at whether the defendant could reasonably have
foreseen that his or her actions might cause an injury. If the defendant's actions somehow
caused the plaintiff injury through a random, unexpected act of nature, the injury would most
likely be deemed unforeseeable -- and the defendant will not likely be found liable.

Element #4: Damages

The final element of a negligence case is "damages." This element requires that the court be able
to compensate the plaintiff for his or her injury -- usually through monetary compensation for
expenses such as medical care or property repair.
 PRODUCTS LIABILITY

Last are torts involving strict liability. Strict, or “absolute,” liability

applies to cases where responsibility for an injury can be imposed on
the wrongdoer without proof of negligence or direct fault.

Strict liability torts, unlike negligence and intentional torts, are not concerned with the
culpability of the person doing the harm. Instead, strict liability focuses on the act itself.
If someone or some entity commits a certain act - for example, producing a defective
product - then that person or company is responsible for the damages from that act,
regardless of the level of care exercised or their intentions.
STRICT LIABILITY IN TORT AND CRIMINAL LAW

In both tort and criminal law, strict liability exists when a defendant is liable for committing an action,
regardless of what his/her intent or mental state was when committing the action. In criminal law,
possession crimes and statutory rape are both examples of strict liability offenses.

Strict Liability As Applied to Criminal Law

In criminal law, strict liability is generally limited to minor offenses. Criminal law classifies strict
liability as one of five possible mentes reae (mental states) that a defendant may have in
pursuit of the crime. The other four are "acting knowingly," "acting purposely," "acting
with recklessness," and "acting with negligence."
The mens rea of strict liability typically results in more lenient punishments than the other
four mentes reae. Typically in criminal law, the defendant's awareness of what he is doing
would not negate a strict liability mens rea (for example, being in possession of drugs will
typically result in criminal liability, regardless of whether the defendant knows that he is in
possession of the drugs)
Strict Liability As Applied to Tort Law

In tort law, there are two broad categories of activities for which a plaintiff may be held strictly liable -
possession of certain animals and abnormally dangerous activities. Additionally, in the area of torts
known as products liability, there is a sub-category known as strict products liability which applies
when a defective product for which an appropriate defendant holds responsibility causes injury to an
appropriate plaintiff.
 • Keeping Wild Animals: Anyone who keeps a wild animal will be
held responsible for any harm that the animal may cause another person.

• Ultrahazardous Activities: Activities such as transporting volatile chemicals

and using explosives are considered strict liability by the court when
someone is injured.

• Consumer Product Liability: If a product is defective, causes injury, and

makes the product dangerous, the manufacturer or seller of the product will
be liable under strict liability.

A product manufacturer has the unique position of earning and keeping the public’s trust. In the eyes of
the law, they have set themselves up to create and sell a product that users should be able to trust and
not worry about being injured. So a manufacturer who betrays the trust and creates an item, even
unintentionally, that injures a consumer would be held liable.
What Must the Plaintiff Prove to Win?

In order to win a strict liability lawsuit, the plaintiff must show the following:
• The plaintiff must show proof of injury;
• The plaintiff must prove that the defendant’s actions or product caused the injury; and
• The plaintiff must show that the defendant’s activities were unreasonably hazardous or that the
defendant had control over the product.
 Cipollone v. Liggett Group

Grimshaw v. Ford Motor Company, 1981

Bullock v. Philip Morris,

 Remedies
The law recognizes torts as civil wrongs and allows injured parties to recover for their losses. Injured
parties may bring suit to recover damages in the form of monetary compensation or for an injunction,
which compels a party to cease an activity. In certain cases, courts will award punitive damages in
addition to compensatory damages to deter further misconduct.
In the vast majority of tort cases, the court will award compensatory damages to an injured party that
has successfully proven his or her case.

Compensatory damages
Typically equal to the monetary value of the injured party's loss of earnings, loss of future
earning capacity, pain and suffering, and reasonable medical expenses. Thus, courts may
award damages for incurred as well as expected losses.
When the court has an interest in deterring future misconduct, the court may award punitive damages
in addition to compensatory damages. For example, in a case against a manufacturer for a
defectively manufactured product, a court may award punitive damages to compel
the manufacturer to ensure more careful production going forward.
In some cases, injured parties may bring suit to obtain an injunction rather than monetary relief. The
party seeking an injunction typically must prove that it would suffer considerable or irreparable harm
without the court's intervention.
 INITIATION OF CRIMINAL PROCEEDINGS

• Criminal procedure is
the adjudication process of
the criminal law. While criminal
procedure differs dramatically by
jurisdiction, the process generally
begins with a formal criminal
charge with the person on trial
either being free
on bail or incarcerated, and results
in the conviction or acquittal of
the defendant.
 Fourth Amendment Rights
Fifth and Sixth Amendment Rights Eighth Amendment Rights

The Fourth Amendment to the U.S. The Eighth Amendment protects

Constitution protects people from A series of constitutional rights, people after an arrest, which might
“unreasonable searches and seizures” commonly known be in the early stages of a criminal
by police. In order to prevent violations as Miranda rights, protect case, and after a conviction. It
of this right, police are required to people during police prohibits “excessive bail,” which
obtain a search warrant from a judge, investigations and at trial means that while a judge is not
after showing probable cause to obligated to grant bail for a
believe the search is likely to produce person after his or her arrest, the
evidence related to a crime. amount of bail may not be
unreasonable or excessive.
https://youtu.be/sM1eF_w-eHI
Stages of the Criminal Process
After a person has been arrested, the state must formally bring charges, either by filing a
complaint or obtaining a grand jury indictment. The court informs the defendant of the charges at
the first court appearance, known as an arraignment.

Arrest

Detention

Investigation

Pre trial procedures

Trial procedures

Judgment
 Arrest

Criminal prosecution typically begins with an arrest by a police officer. A police officer may arrest a person if

• the officer observes the person committing a crime;

• the officer has probable cause to believe that a crime has been committed by that
person; or
• the officer makes the arrest under the authority of a valid arrest warrant. After the
arrest, the police books the suspect.

When the police complete the booking process, they place the suspect in custody. If the suspect commited a
minor offense, the policy may issue a citation to the suspect with instructions to appear in court at a later date.

Once a person is in police custody and is charged with an alleged

offense, he or she may be able to get out of jail by posting bail or
obtaining a bond. A judge determines the amount of bail based
on factors like the severity of the alleged offense, the likelihood
that the defendant will commit additional crimes after being
released, and the chances that the defendant will flee the
jurisdiction before trial
Arraignment

The suspect makes his first court appearance at the arraignment. During
arraignment, the judge reads the charges filed against the defendant in the
complaint and the defendant chooses to plead "guilty," "not guilty" or "no contest"
to those charges. The judge will also review the defendant's bail and set dates for
future proceedings.

Preliminary Hearing or Grand Jury Proceedings

A preliminary hearing, or preliminary examination, is an adversarial proceeding in which counsel questions

witnesses and both parties makes arguments. The judge then makes the ultimate finding of probable cause. The
grand jury, on the other hand, hears only from the prosecutor. The grand jury may call their own witnesses and
request that further investigations be performed. The grand jury then decides whether sufficient evidence has been
presented to indict the defendant.
Pre-Trial Motions

Pre-trial motions are brought by both the prosecution and the defense in order to resolve final issues and establish what
evidence and testimony will be admissible at trial.

Trial

At trial, the judge or the jury will either find the defendant guilty or not guilty. The prosecution bears the
burden of proof in a criminal trial. Thus, the prosecutor must prove beyond a reasonable doubt that
the defendant committed the crimes charged. The defendant has a constitutional right to a jury trial in
most criminal matters.
A jury or judge makes the final determination of guilt or innocence after listening to opening and closing
statements, examination and cross-examination of witnesses and jury instructions. If the jury fails to
reach a unanimous verdict, the judge may declare a mistrial, and the case will either be dismissed or a
new jury will be chosen. If a judge or jury finds the defendant guilty, the court will sentence the
defendant.
What happens when a criminal case goes to court
Court ruling

During the sentencing phase of a criminal case, the court determines the appropriate punishment for the convicted
defendant. In determining a suitable sentence, the court will consider a number of factors, including the nature and
severity of the crime, the defendant's criminal history, the defendant's personal circumstances and the degree of
remorse felt by the defendant.

Probation and parole are privileges which allow criminals

to avoid prison or to be released from prison after serving
only a portion of their sentences.

Appeal
An individual convicted of a crime may ask that his or her case be reviewed by a higher court. If that
court finds an error in the case or the sentence imposed, the court may reverse the conviction or find
that the case should be re-tried.
 CRIMINAL
LAW COURTS
SYSTEM

In a criminal proceeding in
state court, a defendant may
face a jury trial or a bench trial
 Jury Trial

A jury trial, or trial by jury, is a lawful proceeding in which a jury ¡makes a decision
or finding the facts

A jury trial is a trial before a jury of 6 or 12 people who, after hearing the evidence and legal arguments, decide whether the defendant is
guilty or not guilty of the charges against him. At a jury trial, the judge must rule on the procedural and evidentiary issues such as who can
testify, what witnesses can testify about, and what documents or physical evidence the jury can consider.

Bench Trial

A bench trial is where the judge decides guilt or innocence.

Bench trials are similar to jury trials in that the prosecutor must present evidence that proves the accused is guilty beyond a
reasonable doubt of the crimes charged with.

In most states, a defendant is entitled to a jury trial if he faces the possibility of more than six months in jail. If you
are charged with simple assault, for instance, and the possible penalty is only 30 days in jail, you would not be
entitled to a jury trial. Your case will be tried at a bench trial.
JURY TRIAL
Seventh Amendment guarantees the right to
jury trial in certain civil cases

While criminal cases almost always result in a trial by jury, civil cases — under the provisions of
the Seventh Amendment — allow for juries in some instances.

• Civil cases are decided directly by a judge. While they are not constitutionally required to do so, most
states voluntarily allow jury trials in civil cases at the consent of both the plaintiff and the defendant.

➢ No facts tried by a jury shall be otherwise reexamined in any court of the United States,
than according to the rules of the common law.

• The amendment’s guarantee to a jury trial does not apply to civil cases involving
 Maritime law
 lawsuit against Federal Government
 Intellectual property and patent law
 What Happens During a Jury Trial?

Once your case is actually called for trial, the case will progress
through several stages:
The jury trial includes:
1. Jury selection by the attorneys

during the trial

1. Evidence is presented

Decision of guilty or not guilty at the end of the trial made by the jury
• If the jury finds defendant guilty, he or she is entitled to pay:

• Remedies:
Categorized according to their purpose, the four basic types of judicial remedies are
1. damages;
2. restitution;
3. coercive remedies; and
4. declaratory remedies.
 Jury Duty
Jury service is one of the most important civic duties you can perform. The
protection of rights and liberties in federal courts largely is achieved through the
teamwork of a judge and jury

In order to serve as a juror, a person must be a U.S. citizen, over the age of 18, live in the court’s jurisdiction, and have
the right to vote. Also, each person must be able to physically sit through the entire trial as well as hear and understand
the trial testimony. Jurors must also be mentally aware enough to comprehend and apply the judge’s legal instructions.
Any person who doesn’t meet these criteria will be dismissed “for cause.”
 When a citizen is called for jury duty, they will receive the official
summons calling them to be available for jury duty at a particular
time, date, and place.

When arriving at the assigned court, your first task is to fill out a questionnaire and participate in the jury selection
process.

jury questionnaires, which are used to gather information concerning jurors for use in jury selection, address a variety
of aspects of the jurors’ lives, including:

• Background characteristics (e.g., age, occupation, race, educational background, and marital status)
• General experiences (e.g., prior jury service, military service, hobbies, television viewing habits, and
organizational membership)
• Case-related experiences (e.g., unsatisfactory experiences with doctors or other relevant entities, prior use
of a party's product, being a victim of a relevant crime, and involvement in traffic accidents)
• Knowledge of the witnesses, attorneys, or parties (e.g., Do jurors know any of the individuals, parties, or
entities connected to the case who are listed in the questionnaire?)
• Awareness of the case (e.g., How much have the jurors heard about the case and what do they recall?)
• Opinions (e.g., What are the jurors’ opinions concerning "sting" operations, use of force by police, and
various legal principles)
 Jury Selection.- “Voir dire”

French for "to speak the truth." The process through which potential jurors from
the venire are questioned by either the judge or a lawyer to determine their
suitability for jury service. Also the preliminary questioning of witnesses
(especially experts) to determine their competence to testify

Process by which potential jurors are questioned abut their background and potential biases before being chosen to
sit to jury

The point is to discover how jurors feel about certain issues surrounding the case to ensure a fair trial can be had by
both sides.

Voir dire is the process used by the parties to select a fair and impartial jury. During voir dire,
the jury panel is questioned by both parties' lawyers. The questions are intended to help the
lawyers in the jury selection process. After voir dire, the jury is selected from the panel.
In voir dire, the judge and attorneys for both sides ask potential jurors questions to determine if they are
competent and suitable to serve in the case.

Questioning Jurors

the lawyers for each side question the potential jurors about their biases and backgrounds, as well
as any pre-existing knowledge they might have about the case. The attorneys can also ask
questions designed to uncover characteristics or experiences that might cause potential jurors to
favor either the prosecution or the defense. But the lawyers aren’t allowed to ask overly personal
questions, and they aren't allowed ask the jurors how they would decide the case in advance.
 Challenges to the Venire
After they have completed questioning, the lawyers begin removing potential jurors from the venire by making
challenges for cause and peremptory challenges

Challenges for Cause

Request that a prospective juror to be dismiss because there is a specific and forceful reason to belive the person cannot be fair,
unbiase or capable of serving as juror

Actual Bias.

Actual bias arises when potential jurors admit that they wouldn’t be able to be impartial. For example, a juror who states that she
would never vote for a guilty verdict in any case because her religious beliefs prevent her from sitting in judgment of another would
be excused for cause

Implied Bias.

Implied bias is present when potential jurors have character traits or personal experiences that make it unlikely
for them to be able to be impartial, regardless of what they say during voir dire. So, a juror who is a close
friend or relative of a key party, a witness, the judge, or an attorney for either side will be dismissed for cause.
Peremptory Challenges
No reason is required for a lawyer to use a peremptory challenge to excuse a potential juror. Such challenges
allow each side to dismiss jurors who are otherwise qualified, but appear likely to favor the opposing
party. However, peremptory challenges cannot be used to exclude jurors on the basis of race or class. Lawyers
only have a specified number (10) of peremptory challenges available—that number varies from state to
state and depending on the nature of the case (a misdemeanor, felony, or death penalty trial).

Peremptory challenges allow an attorney to reject a potential juror for real or imagined partiality that
would be difficult to demonstrate under the challenge for cause category.

Striking the Jury

In the process known as “striking a jury,” the prosecution and defense take turns arguing their challenges for
cause. If the judge grants a challenge, the juror will be struck from the jury panel. Once there are no more viable
challenges for cause, the sides alternate in striking jurors via peremptory challenges until those are exhausted or
each side is satisfied with the jury panel. Some states require all challenges to be made orally, while others allow
for written peremptory challenges.

Once the challenges are completed and there are enough jurors for a proper jury, the judge will place the
remaining jurors in the jury box.
CIVIL LAW/
CRIMINAL LAW
• The American legal system
contains two important
categories of law – civil and
criminal law. Although the laws
pertaining to both these
categories are different, there is
some common ground between
the two. Here we will take a
close look at the similarities and
the differences between the
two types of laws to
Civil Law vs. Criminal Law

https://youtu.be/j34HPXvlRzc
Civil v Criminal Law

• Civil and criminal laws pertain to violation of federal or state rules.

• Both civil and criminal cases are fought in a court presided over by a
judicial officer. And require a person that must move the court for an
order.
• In both civil and criminal cases the actions are examined in the light of
evidence and compared with the law.
• If someone has violated a law, he or she receives judgment based on the
circumstances surrounding the action. The case will end with a court order
or sentence after witnesses have testified and evidence related to the case
has been examined.

• The order of the court can be in the form of a fine, a prison, or both
 DIFFERENCES BETWEEN CIVIL AND CRIMINAL LAW

The main difference between civil and criminal laws is that the former involves crime against a specific
party of person while the latter involves crime against the society, state, or the government

• Are brought by private individuals,

• A civil case pertains to some personal or business conflict. The case is filed in the court
when one party feels wronged by the action of another. Common civil cases include child
Civil support, child custody, contract violations, property damage, personal injury, and
divorce.

• Are brought by federal, state, or local government in response to violation of a rule

• Murder cases, on the other hand, generally fall under the criminal law. The reason is that even
Criminal though a single person is killed, the crime is considered as an offence against the society. Other
examples of criminal cases include homicide, conspiracy and fraud, theft, manslaughter,
sexual assault, conspiracy to commit crime, possession of drugs, etc.
In civil law, a case commences when a complaint is filed by a party, which may be an individual, an
organization, a company or a corporation, against another party. The party complaining is called the
plaintiff and the party responding is called the defendant and the process is called litigation.

In civil litigation, criminal law,

the plaintiff is asking the court to the case is filed by the government, usually referred to as the
order the defendant to remedy a State and represented by a prosecutor, against a defendant. An
wrong, often in the form of individual can never file criminal charges against another
monetary compensation to the person: an individual may report a crime, but only the government
plaintiff. can file criminal charges in court.

Crimes are activities punishable by the government and are divided into two broad classes of
seriousness: felonies having a possible sentence of more than one year incarceration and
misdemeanors having a possible sentence of one year or less incarceration.
 in case of civil law the losing party has to reimburse the plaintiff, the amount of loss which is
determined by the judge and is called punitive damage.
Punishment:

In case of criminal law a person found guilty is punished by incarceration in a prison, a fine, or in
some occasion's death penalty.

A criminal litigation is more serious than civil litigation in that criminal defendants have more rights and protections
than a civil defendant.

in case of civil law the burden of proof first lies with the plaintiff and then with the defendant to
refute the evidence provided by the plaintiffs.
Burdens of proof:

In case of criminal law, the burden of proof lies with the government in order to prove that the
defendant is guilty

In case of civil litigation if the judge or jury believes that there are more than 50% of the evidence favoring the plaintiffs,
then plaintiffs win, which is very low as compared to 99% proof for criminal law. In case of criminal law, defendant is not
declared guilty unless there are approximately more than 99% proofs against him.
How the system works

• It involves punishing and rehabilitating offenders, and protecting the

society.
• The police and prosecutor are hired by the government to put the
criminal law criminal law into effect.
• Public funds are used to pay for these services.
deals with looking • If suppose you are the victim of the crime, you report it to the police and
after public interests. then it is their duty to investigate the matter and find the suspect.
• In most cases, if a charge has been properly presented and if there is
evidence supporting
• it, the Government, not the person who complains of the incident,
prosecutes
• it in the courts. This is called a system of public prosecutions.

• is about private disputes between individuals or between an individual and an

civil law organization or between organizations.
• Civil law deals with the harm, loss, or injury to one party or the other.
• A defendant in a civil case is found liable or not liable for damages, while in
a criminal case defendant may be found guilty or not.
 CRIMINAL CASE CIVIL CASE

Parties State v. accused Wrongdoer Victim v. accused Wrongdoer

Documents Only one pleading: Both sides must file pleadings
Complaint filed by a (more than one pleading)
government prosecutor
Pretrial Defendants usually appear in Most pretrial proceedings are
proceedings court for arraignments and handled by attorney, and the
other hearings parties make no appearance
until trial
Trial Jury or non-jury; defendant is Jury or non-jury; defendant is
found guilty or non-guilty found liable or not liable
Remedy Jail, fine, or probation Money damages or other
specific relief; never jail
Appeal Only defendant can appeal a Either side can file an appeal
trial veredict
CONTRACT LAW
Contract is the most familiar legal concept in our society because it is central to the essence of our political,
economic, social, and labor life. In common language, contract is used indistinctly as agreement, negotiation,
compromise, or deal. Whatever the word, the concept it symbolizes is our notion of freedom to conduct our own lives
together with others.

Anyone who conducts business uses contract law. Both companies and consumers use contracts when they buy
and sell goods, when they license products or activities, for employment agreements, for insurance agreements and
more. Contracts make these transactions happen smoothly and without any misunderstandings. They allow parties
to conduct their affairs confidently. Contracts help make sure that the parties to a transaction are clear on its terms

Basic contract law covers the many different phases of

negotiation and contract creation. If a contract is formed and
one of the parties fails to perform, then the other party can
sue to enforce the deal
 Contract law is an area of United States law that involves agreements between people, businesses, and
groups. When someone does not follow an agreement, it is called a "breach of contract" and contract laws
allow you to take the problem to court. Contract law attorneys and a judge will discuss the case and
determine a fair solution.

Contract law, in essence, can be classified as part of a general law of obligations; through
this definition, contract law can be grouped within tort law, restitution and unjust
enrichment. As a means of economic ordering, contract law will rely on the notion of
consensual exchange; in American jurisdictions, contract law is a broader scope of law
that will encompass a larger category of agreements

Contract is an agreement between private parties creating mutual obligations enforceable by law. The
basic elements required for the agreement to be a legally enforceable contract are:
• mutual assent, expressed by a valid offer and acceptance;
• adequate consideration; capacity; and legality. In some states, element of consideration can be satisfied by
a valid substitute.
Agreement and contracts

The terms “agreement” and “contract” are often used interchangeably, but they aren’t necessarily the same
thing.
• A contract is a specific agreement – usually in writing and signed – with terms and conditions that
are enforceable in court.
• An agreement may fall short of being an enforceable contract.

For example, an unwritten agreement between two parties where the terms are vague may not be
enforceable. Sometimes, parties, especially companies, refer to their enforceable, written contracts as
“agreements”. The important thing is that the contract or agreement contain all the required elements
for it to be enforceable.

A contract comprises of terms and representations. Contract may be terminated in 3r ways: through
performance, breach of contract, and through another contract. Mostly where contract is terminated by
performance, the performance is 100%. Complete. If a serious term of a contract is breached, then the
affected party can terminate the contract.

An agreement becomes a contract when it is made legally

binding and on meeting the three conditions.

all contracts are agreements, but not all agreements are

contracts
A contract is a legally enforceable agreement between two or more parties that creates an obligation to do or not do particular
things. The term "party" can mean an individual person, company, or other legal entity.

• Parties who are competent to enter into a contract. For example, a mentally disabled person could not enter into a
contract. Minors can enter into contracts but can void them in most cases before they reach majority age.

• Mutual agreement by all the parties. In other words, all parties have a meeting of the minds on a specific subject. Each
party either promises to perform an act that the party is not legally required to perform, or promises to abstain from
performing an act that it is legally entitled to perform.

Contract litigation proceedings demands that a court determine if a contract

exists and if it has in effect been violated. It must be evidenced that an
arrangement valid to the construction of contracts be present to enforce the
agreement according to U.S. federal contract law.
Review if the original offer was something of value. The enforceable nature
of a contract is a legitimate claim if legal analysis deems that the
fundamental rule elements of offer-acceptance-consideration are
identified to be part of the agreement.
CONCEPT

An agreement between private parties creating mutual obligations enforceable by law. The
basic elements required for the agreement to be a legally enforceable contract are:
mutual assent, expressed by a valid offer and acceptance;
adequate consideration; capacity; and legality. In some states, element of
consideration can be satisfied by a valid substitute.

Possible remedies for breach of contract include general damages, consequential

damages, reliance damages, and specific performance

The legal definition of contract is formalistic. The Restatement (Second) of Contracts (Section 1) says, “A
contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance
of which the law in some way recognizes as a duty.” Similarly, the Uniform Commercial Code says, “‘Contract’
means the total legal obligation which results from the parties’ agreement as affected by this Act and any
other applicable rules of law. ” Uniform Commercial Code, Section 1-201(11).

https://instituteoflaw.com/Preview/Law101-1b/Restatement2ndContracts-DONOTPRINT-week1b.pdf
GOVERNING LAW

Contracts are mainly governed by state statutory and common (judge-

made) law and private law (i.e. the private agreement). Private law principally
includes the terms of the agreement between the parties who are exchanging
promises. This private law may override many of the rules otherwise established
by state law. Statutory law, such as the Statute of Fraud, may require some
kinds of contracts be put in writing and executed with particular formalities, for
the contract to be enforceable. Otherwise, the parties may enter into a binding
agreement without signing a formal written document.

In the United States, contract law is governed by three main sources:

• The Common Law, created by the courts of law through the interpretation of the above facts and
circumstances. This is the main source of contract law in many countries, as the other sources are
generally interpreted and defined by the courts.

• The specific statutes in each jurisdiction, generally at the state level. For example, the Uniform
Commercial Code (UCC) of each state in the United States regulates contracts for the sale of goods
in each state.

• The Federal Law, which is uniform in its application, and governs those matters that are considered
most important for the defense of the rights of North American citizens, such as, for example, federal
taxes or the law of patents and copyrights.
For most contracts in the United States relating to business transactions, all fifty states have
enacted, at least partially, a statutory body of law (UCC), which regulates a variety of business
relationships that affect consumers and businesses, including others, Article 2 of the UCC that
regulates the sale of goods, which are defined by said code as the elements that are "mobile" at the
time of the contract. In relation to exclusive distribution contracts, there are some exceptions at the
state level, such as Louisiana and Wisconsin and the associated state of Puerto Rico, which have
statutes that establish strong protection for local distributors.

Uniform Commercial Code

The Uniform Commercial Code, or UCC, is a very large collection of legal rules regarding many
important business, or "commercial," activities. The UCC originally was created by two
national nongovernmental legal organizations: the National Conference of Commissioners
on Uniform State Laws (NCCUSL) and the American Law Institute (ALI). As the word
"Uniform" in its title suggests, a primary purpose of the UCC is to make business activities more
predictable and efficient by making business laws highly consistent across all American states. In
the words of the UCC itself, the Code is intended "to simplify, clarify and modernize" commercial
law, "to permit the continued expansion of commercial practices . . . ," and "to make uniform the
law among the various jurisdictions
Many important aspects of business are covered within the UCC, the Code provides detailed information on
such diverse business aspects as: breach of contract (and the options of both buyers and sellers when
confronted with a breach); circumstances under which buyers can reject goods; risk allocation during
transportation of goods; letters of credit and their importance; legal methods of payment for goods
and services; and myriad other subjects

Some of the UCC's goals include:

• Filling missing provisions in contracts with UCC guidelines.
• Enforcing uniform, streamlined treatment of check processing and other related transactions.
• Minimizing legal formalities in business contracts, thereby reducing the need for attorney
intervention.
• Making transactions between merchants and consumers more efficient.

Some basic points about what the UCC covers:

• Sales refers to the sale of goods as opposed to services
• Leases refers to the leasing of goods as opposed to, for example, real estate
• Negotiable Instruments are generally documents that can be exchanged for money, such as
checks or promissory notes
• Bulk Sales laws, while still included in the UCC, have been voided in almost every state; and
• Secured Transactions mainly concern creditors' legal rights in the personal property of borrowers
or debtors, with particular relevance to cases of bankruptcy.
Elements of a Legally Binding Contract

Contract law requires certain elements of a legally binding contract to be met in order for the agreement to
be enforceable. Regardless of the type of contract, if any of these four elements is not met, the contract may
not be enforceable:

The offer and the acceptance have some peculiarity of their own system, although in general terms,
they have similarity with regulation in our country, while The consideration is a concept of Anglo-
Saxon law
 Contracts always start with an offer. An offer is an expression of a willingness to enter into a contract on certain
OFFER terms. It is important to establish what is and is not an offer. Offers must be firm, not ambiguous, or vague. A person
who is making the offer is called the offeror.

a declaration of will made with the intention of entering into a contract and containing all the necessary elements for
the other person to accept it. In English, the person who makes the offer is called the offeror and the person who
receives it would be the offeree (recipient of the offer).

Likewise, the offer must be certain: it must contain all the necessary elements to be accepted so that the
substantial aspects of the agreement are sufficiently defined and are not left to the discretion of one of the parties.
This is known as certainty or certainty of terms (certainty or certainty of the terms of the contract).

The offer can expire with :

a) The death of the offeror that occurs before acceptance and the succession of the offeror must respond.
b) The offeror incapacity which occurs between the moment the offer is communicated to the recipient and
the receipt of the acceptance by the offeror, causes the ~ offer to expire. ~ "
c) The recipient incapacity.- in the opposite case of the expiration of the offer when the addressee falls into
incapacity between the moment someone receives it and the moment another accepts The contract is
voidable.
d) The impossibility of the object to be perform the offer also makes it expire
• Invitation to Treat:

An invitation to treat is an action inviting other parties to make an offer to form a contract. These actions
may sometimes appear to be offers themselves, and the difference can sometimes be difficult to
determine. The distinction is important because accepting an offer creates a binding contract while
“accepting” an invitation to treat is actually making an offer.

An offer must be distinguished from an invitation to treat, by which a person does not make
an offer but invites another party to do so. Whether a statement is an offer or an invitation to
treat depends primarily on the intention with which it is made. An invitation to treat is not
made with the intention that it is to be binding as soon as the person to whom it is
addressed communicates his assent to its terms

An invitation to treat is not an offer until you make a clear and direct approach to another party
to contract.

• Counter-Offers

A counter-offer negates the original offer. It alters the original offer, and by doing, so releases the
person making the original offer from any obligation.

A counteroffer functions as both a rejection of an offer to enter into a contract, as well as a new offer
that materially changes the terms of the original offer. Because a counteroffer serves as a rejection, it
completely voids the original offer. This means that the original offer can no longer be accepted
 Acceptance by the offeree (the person accepting an offer) is the unconditional
agreement to all the terms of the offer. There must be what is called a “meeting of the
ACCEPTANCE minds” between the parties of the contract. This means both parties to the contract
understand what offer is being accepted.

The acceptance must be absolute without any deviation, in other words, an acceptance in the “mirror image” of
the offer. The acceptance must be communicated to the person making the offer. Silence does not equal
acceptance.

Legitimation. The intuitus personae nature of the offer will determine the legitimacy of the recipient to accept it.
The general rule is the presumption of the intuitus personae character of the offer. Only the recipient can accept
it. Consequently, even if a third party executes exactly the services required by the offer, it will not be able to oblige
the offeror to fulfill its promise.

Communication. The offeror can impose on the recipient not only the term of acceptance, as already seen, but
also the means of communication of acceptance. In the absence of precision, the recipient may inform the
offeror of their acceptance by any reasonable means and in this case, it is enough that they make reasonable
attempts to get it to the offeree, regardless of whether due to circumstances beyond their control, the
acceptance is delayed. or does not reach the recipient.
 Consideration is the answer to the question, "Why are you entering
CONSIDERATION this contract?" or "What are you receiving for being a party to this
contract?"

Consideration is the act of each party exchanging something of value to their detriment

In common law, a promise is not binding as a contract unless it is supported by consideration (or it is made as a
deed). Consideration is "something of value" which is given for a promise and is required in order to make the
promise enforceable as a contract. This is traditionally either some detriment to the promisee (in that he may give
value) and/or some benefit to the promisor (in that he may receive value).

For example, payment by a buyer is consideration for the seller's promise to deliver goods, and delivery
of goods is consideration for the buyer's promise to pay. It follows that an informal gratuitous promise
does not amount to a contract

Importance of consideration

1. If there is no consideration, then there is a liberality, that is, a free legal act. Donations in the United States
exist only as a very special category of pledges subject to extremely rigorous formality

2. However, the enforced performance of the contract in Anglo-Saxon law consists, not in the enforced
performance of the performance specifically promised, but in the payment of an equivalent sum of money,
plus damages. Then, the recipient of a gratuitous promise, such as a donation, does not suffer any harm if the
promisor defaults.
Consideration requirements
Past Consideration:

In terms of a contract, past consideration is used to mean a promise or an act that was made or performed prior
to a contract. Past consideration typically comes into play when someone is trying to enforce a new promise.
When a new contract is written, past consideration will not count as consideration for the purposes of the
contract. The reason for this is that past consideration occurred before the new contract was entered, meaning
it could not have been provided for the new contract
• Promissory Estoppel:

Promissory estoppel is a doctrine in contract law which enforces a promise whether executed as a
contract or not. The doctrine seeks to protect the rights of a promisee or aggrieved party against the
promisor.

Within contract law, promissory estoppel refers to the doctrine that a party may recover on the basis of a
promise made when the party's reliance on that promise was reasonable, and the party attempting
to recover detrimentally relied on the promise

Promissory estoppel applies when the promisor has made a promise to the promisee. The promisee
must have relied on the promise and suffered a loss due to non-performance of the contract. The
doctrine prevents the promisor or enterprise from going back on their word or promise.

The Requirements of Promissory Estoppel

• The promisor must state and make it understood that he does not intend to enforce his legal rights. The promise made by the
promisor can be in the form of insinuation or conveyance.
• The promisee must have believed in the promise the promisor made and acted on that promise, which shows reasonable
dependence on it. It would also need to be apparent that the promise is one that a rational person would normally trust in.

• It needs to be an understanding that the promisee had suffered an actual substantial detriment in the form of an economic loss
or loss of well-being, which is a result of the promisor failing to deliver on their promise.
.
 Promissory estoppel is intended to stop the promisor from arguing that an underlying
promise should not be legally upheld or enforced.

To make sure justice or fairness prevails, a court of law may uphold a promise even when there is no consideration present. To
be fair, it would be on the condition that the promise was reasonably depended upon, and the dependence on it would have
resulted in some kind of loss due to the promisor failing to honor his promise

https://www.youtube.com/watch?v=9_lN1IUKM8o
 The fourth required element of a valid contract is legality. The basic rule is that
LEGALITY courts will not enforce an illegal bargain. Contracts are only enforceable when
they are made with the intention that they legal, and that the parties intend to
legally bind themselves to their agreement.

A. Vices of consent:
Invalidity of the offer and acceptance
It is a notion neighboring what we in our system know as violence. American jurisprudence defines it as any
incorrect maneuver or any threat that overcomes the free will of one of the parties. For this defect to invalidate the
contract, it must meet certain characteristics.

In contract law, duress is used as a form of defense to a crime where the defendant uses threats to force the
• Duress
plaintiff to commit a crime that is against their wishes. A party who is forced into an act or contract under duress
can rescind the contract, rendering it null and void.
• Undue influence means excessive persuasion that causes another person to act or refrain from acting by overcoming that
person’s free will and results in inequity.

• Misrepresentation, A contract may be deemed unenforceable if one party obtains the other party’s agreement by making false or
Nondisclosure, and misleading statements or omitting important information during discussions about entering into the agreement.
Fraud
A contract is considered unconscionable when something about its terms or how it was formed are so
• Unconscionability
unfair that it would “shock the conscience” if it were enforced.
• Public Policy, Illegality Courts won’t enforce contracts that agree to something against the law or the best interest of the public. For
example, courts will not enforce an agreement to purchase illegal drugs.
 Elements of validity
Like in our legal system capacity is divided into two main sections. The disability of the minor, due to her age (A)
and that of the elder due to illness (B).

• Lack of Mental Capacity: The capacity to enter into a contract may be compromised by mental illness or intellectual
deficiency. Competency to enter into a contract requires more than a transient surge of lucidity. It requires the ability to
understand not only the nature and quality of the transaction, but an understanding of its significance and consequences. If a
person is found to lack the mental capacity to enter into a contract, then the contract is not automatically void but it is
voidable.

• Minors and Contracts: Minors under the age of 18-years-old are allowed to sign contracts, but they are voidable at the minor’s
election.

• Contracts That Must Be In Writing: As already mentioned above, not all contracts have to be in a written format. However,
some absolutely do, or they are voidable. Under the common law doctrine of the “Statute of Frauds,” which has been codified
in the General Obligations Law (GOB), contracts for the purchase of real property contracts ¡must all be in writing.

Typically, contracts do not have to be in writing to be enforceable. However, certain types of contracts have to be reduced to writing to be
applicable, to avoid fraud and perjury, Typically the following types of contracts involve the fraud statute:

o Contracts involving the sale of an interest in land;

o contracts the performance of which extends beyond one year;
o contracts in which someone assumes responsibility for someone else's debt; that is, promises to be a surety;
o promises the consideration for which is getting married;
o contracts for the sale of goods worth more than $500.
o Certain promises by executors and administrators
 Enforceable and Unenforceable Contract

What makes a contract unenforceable?

Since a contract is a legally binding agreement, you might think it’s possible for a valid contract to be found
unenforceable; however, there are several reasons this could happen.

DURESS A contract can be invalidated if a person is coerced or threatened into making the agreement.

IMPOSSIBILITY A contract can be invalidated if, for some reason beyond your control, you cannot carry out the terms.

LACK OF CAPACITY in order for a contract to be enforceable both parties must be over 18 years of age and of sound mind.

MISTAKE the mistake must have a significant effect on the agreement.

MISREPRESENTATION Misrepresentations occur when a party makes a false claim, or in some other way, conceals or misrepresents
the state of affairs.

NONDISCLOSURE A contract can be deemed unenforceable if one party neglects to disclose important facts about the agreement

PUBLIC POLICY Contracts can be found unenforceable on grounds of public policy. Contracts cannot pose harm to either party or
society as a whole.
UNCONSCIONABILITY
means that one or more terms in the contract are unfair and the contract simply cannot be allowed as written. .
 VA L I D A N D V O I D C O N T R A C T

A valid and void contract are two different types of contracts that parties should be aware of.

Valid contract is one that was entered into legally and is fully enforceable. This means that it includes all of the
required elements of a contract.
• Void Contract. A void contract is a contract that isn’t legally enforceable, starting from the time it was
created. While both a void and voidable contract are null, a void contract cannot be ratified. In a legal
sense, a void contract is treated as if it was never created and becomes unenforceable in court.

Void Contracts – Causes

1. incompetence
There are many ways in which a contract can become void. If one party is incompetent, they legally become unable to agree to a contract.
This can include one of the people entering into the contract while being incapacitated or unable to make a proper judgment.

2. Inclusion of an unlawful object or consideration

The contract can also be considered void if an unlawful object or consideration is involved in the agreement. This can include the promise of
sex, an illicit substance, or anything else causing one or both parties to break the law.

3. Impossibility of performance
Another common reason for a void contract is the impossibility of performance. It occurs when any aspect of the contract becomes
impossible to carry out by one of the parties.
There are many reasons a void contract can arise, and looking at the legal elements that cause them will help you to understand them better.
Voidable Contracts

The terms “void” and “voidable” contracts are often used interchangeably but are completely different in
nature. While a void contract is completely unenforceable by law, a voidable contract is a valid agreement.
However, the terms within a voidable contract provide one or both parties entering into the contract the ability
to void the contract at any time.

Void Contract – Example

Voidable Contract – Example
Bob enters into an agreement with a music label to
split royalties from his new album 50/50. However, Assume a situation similar to the previous example. This
at the time of this agreement, Bob’s been drinking time, Bob is a minor and hasn’t had anything to drink.
at the bar for several hours and is heavily Since Bob is a minor, the contract is instantly voidable.
inebriated. Due to the fact that Bob was However, because he wasn’t incompetent, the contract
incompetent at the time the contract was agreed to, is valid. Bob will have the option of keeping or dropping
it is a void contract. out of the contract at any time.
 STRUCTURE OF COMMON LAW CONTRACTS

• Using clear and concise language in contracts is important to avoid misinterpretation, legal disputes and costly mistakes.

• The legal wording of contracts can have an important impact on the obligations of the parties and how those obligations are interpreted.

• Properly understanding contract language will help you better understand your obligations and clearly appreciate your rights.

• In addition to the proper language in a contract, your contract should also provide for some essential elements so it can be enforceable.

• You need to make sure the parties are clearly identified, the considerations are outlined and the parties sign.
Language of agreement
When you are referring to the language of the agreement in a contract, you’ll see statements like:
• “The parties hereby agree to subject the present contract to the laws of New York”
• “The parties agree to enter into a software subscription agreement upon the occurrence of the
following conditions…”

Language of prohibition
When formulating a prohibition, you’ll see wording such as:
• “Neither party shall disclose confidential information received during this contract”
• “Party A shall not reverse engineer the software”

Language of discretion
The language of discretion is seen in the following way:
• “In Party A’s sole discretion can request a refund”
• “The client may elect to terminate the agreement”

Language of obligation
The language of obligation is when a party or the parties commit to an obligation of some kind:
• “The Service Provider shall deliver the Work Product within 30 days”
• “The Client shall pay the invoice within 30 days from the receipt thereof”
• “The obligations in this agreement shall inure to the parties’ successors and assigns”
STRUCTURE OF A CONTRACT

A contract is made up of several elements. These elements establish the details that create a legally
binding contract and prevent any misunderstandings that are possible if a particular element is removed.
Business contracts do not require a specific length to be valid. Nor do they need to be typed or written.
Basic, handwritten contracts are enforceable Commercial contracts are structured as follows:

• First contains the description of the instrument which contains information about the parties entering
to the contract, following the recitals containing the background to the agreement, a definitions
section which set out how certain words in the contract are to be interpreted.

• Second, the operative provisions which is the main body of the contract, this are usually provisions
that can be classified as warranties and conditions.

• Third, contains so-called Boilerplate clauses, which are miscellaneous clauses. These are standard
clauses that are included in most contracts.

• Fourth is the signature section and, the "annexes", which are attached to the contract, it may list
something included in the contract in more detail, for example, a price list.
A. DESCRIPTION OF THE INSTRUMENT

It is located at the top of the page and its purpose is to be able to quickly identify the type of agreement that
is the subject of the contract.

This Standard Clause, also referred to as a captions, titles, or headings and captions clause, provides that
headings used to identify an agreement's provisions, including the sections, articles, clauses, exhibits, and
schedules, do not have any substantive meaning or interpretive value

In this section the following are included:

• Document Title. The title should clearly indicate the purpose of the contract
"Sale Agreement," "Purchase Agreement"

• Parties. In a business contract, the first section will show the parties involved.

• Language of agreement.- Your agreement will contain language signifying that

the parties have entered an agreement. Words of agreement can be added in a
number of ways.
B. PREAMBLE

The preamble of a contract is the introductory paragraph that identifies the parties to the agreement. It is
typically followed by paragraphs known as recitals (also called the background section). Sometimes, these
recital paragraphs are labeled “Whereas”. Taken together, the preamble and the recitals tell the who, what,
when, and why of the transaction.

They are written in capital letters or in bold. They refer to some key features of
the agreement, helping the parties to understand the background before
entering into the definitions section.

Types of Recital Clauses

Several kinds of recital clauses are available

• Party-related recitals - one or more recitals/whereas clauses can be included to

reflect the business activities relevant to each party.
• Context or background recitals - this kind of clause describes what circumstance or
event led up to the transaction. This could include things such as sales or trademark or
patent licenses.
• Compliance-related recitals - in these, the parties involved may want to state certain
requirements or prerequisites that need to be met prior to the signing of the contract.
Recitals may be helpful to define (in non-legal terms) the “Transaction”. Do not however use popular
or loose language to describe a subject matter that is otherwise well-defined in a definition as this
creates ambiguity.

Whereas-clauses should never contain any obligations, conditions, warranties, policy rules
or duties whatsoever.
C. DEFINITIONS

Definitions clauses, also known as contract definitions, are the defined terms in a legal document.
Drafting definitions clauses mitigates the chance of misunderstanding interpretations among the
parties. The defined terms section should be unambiguous and written in plain language (contract
counsel, 2021).

The purpose of including a definitions clause is to make all contract terms clear and to clarify the
specific terms of the contract. It can also help mitigate future risks. When both parties clearly
understand expectations, it is easier to meet them.

Example – Master Sales Agreement:

Definitions.
(a) Change of Control. The term “Change of Control” shall mean (i) any consolidation or
merger involving the Company pursuant to which the Company’s stockholders own less
than fifty percent of the voting securities of the surviving entity or (ii) the sale of all or
substantially all of the assets of the Company.
(b) Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term
commencing on the closing date of a Qualified Equity Financing and ending on the
expiration of this Warrant pursuant to Section 14 hereof.
(c) Holder. The term “Holder” shall mean any person or entity that shall be the registered
holder of this Warrant.
D. WARRANTIES AND CONDITIONS

Condition and warranty can be defined as stipulations, obligations or provisions directly associated
with goods or services that buyers and sellers impose on each other. A requirement or event that
should be performed before the completion of another action, is known as ‘Condition’. A ‘warranty’ is
an assurance given by the seller to the buyer about the state of the product, that the prescribed facts
are genuin
There are two types of conditions present in a typical contract:
• Expressed Condition: These are conditions that are clearly defined and agreed to.
• Implied Condition: These are conditions that are not verbally discussed but are expected to
be a part of the contract. Implied conditions might include the title of goods sold, the quality of
the goods, condition of completeness, and a sale by description.

Conditions are the set stipulations of the contract, whereas warranties are considered to be an additional
set of rules. They both might have time requirements, but the time limits set on the conditions of the
contract are legally enforceable. Warranties are usually a specific term within the contract's conditions
that are a written promise.

Knowing the difference between the two terms is important for:

• Liability
• Termination reasons
A warranty can be either “express” (i.e., explicit oral or written representations about the quality or
identity of the item) or “implied” (i.e., inferred into the contract in accordance with legal requirements),
and it can serve to help the purchaser or lessee to secure receipt of conforming goods or provide a
remedy for breach of the agreement by the seller.

In the event that a warranty is breached, the law provides the injured party with the right
to monetary damages, repair of the original good, or replacement with substitute goods. A
warranty combines with the laws governing negligence and strict liability to provide protection
to consumers as to product safety and contractual integrity.
If a warranty claim proves to be false, solutions include:
• A refund
• A full void of the contract
Warranties are also available either:
• For a limit of time
• For the entire life of the goods
Example

WARRANTY DISCLAIMER. ALL OF THE RIGHTS PROVIDED HEREUNDER ARE PROVIDED

ON AN AS-IS, WHERE-IS BASIS, WITHOUT ANY REPRESENTATION OR WARRANTY,
WHETHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OR FITNESS
FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY DISCLAIMED.
E. OPERATIVE LANGUAGE AND BOILERPLATE CLAUSES

The “operative Language” is the language that shows the legal relationship between the parties. It is the
language that sets up the rules as to who has to do something under the contract, and who has the right to
receive something under the contract. The drafter must choose language with care

Operative clauses identify actions or recommendations made in a resolution. Each operative clause
begins with a verb (called an operative phrase) and ends with a semicolon. Operative clauses must
be conducted in a logical progression with each having a logical idea or proposition and are always
numbered. If clauses require further explanation, bulleted lists set by letters or Roman numerals can also
be used. After the last operative clause, the resolution ends in a period

Operative clauses create contractual rights and obligations between the parties involved in the contract,
they are the basis for authority and liability.
BOILERPLATE CLASUES

A boilerplate clause is a standard section in a contract that is found at the end or bottom of the document.
This clause normally outlines certain conditions enforced to which parties must adhere, including when a
contract is broken and how any problems and disputes are resolved

This type of clause standardizes the structure and language of contracts. When drafting a contract,
slight changes can be made to certain parts of the text to adapt it to the specific needs of the
agreement.

Boilerplate clauses are generally found at the beginning and the end of an agreement. Such clauses are
often thought of as standard, miscellaneous provisions, but this is a very dangerous view to adopt. It is
not unusual for a boilerplate clause to be the cause of litigation.

Since a boilerplate clause will deal with issues such as the interpretation, validity and enforcement of an
agreement, it can have a significant impact on the other clauses in an agreement and on an agreement
as a whole. It is important that any such impact is intentional and not the result of a boilerplate clause
being included in an agreement with little thought
 Here are some other common contract clauses:

This clause gives the parties a time limit for filing a lawsuit if there’s a breach of
Statute of limitations clause. contract. A statute of limitations clause can’t conflict with any existing law, and many
states will not enforce a shorter statute of limitations than what’s already on the
books.

Statute of Limitations. You agree that regardless of any statute of laws to the contrary, any claim or cause of
action arising out of or related to use of the Service or this Agreement must be filled within one year after such claim
or cause of action arose or be forever barred.

Time of performance clause Because some matters need to be handled within a particular time frame, a time of
performance clause sets out when the contract duties can and can’t be performed.

Time of Performance. CONTRACTOR shall commence the services required under this Contract on the effective
date of this Contract, as set forth in the introductory clause. CONTRACTOR shall perform the services
and provide deliverables, if applicable, within the timelines indicated in Exhibit A.

This contract clause states that the current contract overrides any previous agreements
Merger clause

Merger Clause. This Limited Warranty sets forth the entire agreement and understanding of the Parties relating
to the subject matter herein and supersedes all prior or contemporaneous discussions, understandings and
agreements, whether oral or written, between them relating to the subject matter hereof.
 This type of clause releases a party from liability if losses or expenses are incurred. For
example, a subcontractor in a construction job may have to sign an indemnification
Indemnification clause.
clause stating that, if their work causes damage to the property, the contractor who hired
them is indemnified or released from liability relating to the subcontractor’s work.

Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct
or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the
Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s gross negligence,
willful misconduct or bad faith.

This clause protects parties who excuse another party when contract terms aren’t met.
As an example, your contract might state that you will charge 5 percent interest on
Non-waiver clause. late payments. The other party continually pays their balance late, but you don’t
charge them interest for several months. However, a non-waiver clause would allow
you to recover the interest charges, even though you accepted the other party making
late payments.

Non-Waiver. The failure of either party to insist upon the strict performance of any of the terms, conditions
and provisions of this Agreement shall not be construed as a waiver or relinquishment of future
compliance therewith, and said terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or condition of this Agreement on the part of either party shall be effective for
any purpose whatsoever unless such waiver is in writing and signed by such party.
 Governing law also known as a choice of law provision determines which law shall apply in the
event of a dispute.
Governing law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

A severability clause states that, even if there’s an invalid clause in the contract, the
Severability clause. rest of the contract is enforceable. Without this clause, one invalid provision
could void the entire contract.

Severability Clause. In the event any provision or part of this Agreement is

found to be invalid or unenforceable, only that particular provision or part so
found, and not the entire Agreement, will be inoperative.

This states that any disputes must be resolved through arbitration, instead of
Arbitration clause.
being brought to court.

Arbitration Clause. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel of three
arbitrators in New York, New York, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s award in any court
having jurisdiction; the expense of such arbitration shall be borne by the Company.
 A clause like this requires one party not to disclose confidential information
Non-disclosure clause
belonging to the other party. It’s most commonly seen in employment
agreements.

Non-Disclosure. During the Employment Period or at any time thereafter, irrespective of the
time, manner or cause of the termination of this Agreement, Employee will not directly or
indirectly reveal, divulge, disclose or communicate to any person or entity, other
than authorized officers, directors and employees of the Employers, in any
manner whatsoever, any Confidential Information (as hereinafter defined) of Employers or
any subsidiary of Employers without the prior written consent of the Board.

these clauses allow the party that wins in court to require the losing party to
Attorney fees clause
pay their attorney fees and sometimes other court fees and costs.

Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs and necessary disbursements in addition to any other relief to which such
party may be entitled.
E. TESTIMONIUM

testimonium or closing should demonstrate that the parties agree to it. They do this by signing the
document.

Testimonium clause is the last section of a will or conveyance reciting the date when an instrument was
signed, by whom it was signed, and in what capacity. Before signing a deed, a grantor should make
sure that everything is in order like the spelling of names and legal descriptions
 CONTRACT TERMINATION
To terminate a contract means to end the contract prior to it being fully performed by the parties. In other word
prior to the parties performing all off their respective obligations required by the contract, their duty to perform
these obligations ceases to exist.

The right to terminate.

There are two basic types of termination:

1) termination for convenience may originate only from the terms of a contract which provide for such
termination, for there is no general contract principle allowing termination for convenience.
2) A termination for cause is available only in response to a material breach of the contract by the other party.
What qualifies as a material breach to the contract may be determined by a review of the contract case law
or what qualifies as a material breach or default may be stated in the contract itself. A failure to perform any
contract term is a breach of the contract. However, substantial damages are recoverable only from a material
breach and a material breach entitles the non-breaching party to treat the material breach as a breach of the
entire contract.
Termination By Prior Agreement

You may terminate a contract if you and the other party have a prior written agreement that calls for a
contract termination because of a specific reason. The usual name for this type of provision is a
break clause. The agreement must give the details of what qualifies as a reason for contract
termination. It should also state what actions need to take place for one of the parties to terminate the
contract. In most cases, one party must submit a written notice to the other party to terminate the
contract.

A break clause must be included or else there is a breach of

the contract. This prior agreement is a termination
clause and is enforceable as long as both parties agreed to
its terms
Rescission of the Contract

Contract rescission is the legal term used when a contract is terminated or cancelled. It may also be called
“overturning” or “cancellation” of a contract. Contract rescission ends the contract. Often, this also cancels any
of the legal responsibilities that were in the contract. Contract rescission makes the contract void and
unenforceable

Reasons for requesting the termination of a contract

Contract rescission is most often available in certain specific circumstances. There are grounds for rescinding a
contract in the following situations

• Incapacity:
• Problems with contract formation • Fraud:
• Duress/Coercion/Undue Influence: .

• Mistake: A mistake is when the parties do not understand the terms in a contract.

• Anticipatory Repudiation: means that one party acts in a way that shows that they will not perform
their legal obligations under the contract.

• Consideration

• Against the Public Interes

Breach of Contract https://youtu.be/UDzW0h16rOc

The contract may be terminated for breach of contract by either party. A breach of contract may exist
because one party failed to meet his obligations at all or did not meet his obligations fully. This
includes when an obligation that is stated in the contract is not completed on time—you are late with a rent
payment, or when it is not fulfilled at all—a tenant vacates their apartment owing six-months' back rent.

Classification of breach of contract

Actual breach of contract occurs when a party is unable to fulfill its
1) Actual Breach of contract agreed contractual obligations either within the time for
performance or over the course of performance.

• Due to Late Performance • During the Course of Performance

If one of the parties fails to comply with the When one party refuses or fails to perform his or her
provisions of the contract within the term of contractual duties, it results in an actual contract breach
performance, the other party is not obliged to during the course of performance
fulfill its obligations. In this case it may be the
case that the defaulting party expresses its
intention to perform the contract.
2) Material Breach of Contract

A material breach occurs when one party receives significantly less benefit or a significantly different result than
what was specified in a contract. Material breaches can include a failure to perform the obligations laid out within
a contract or a failure to perform contracted obligations on time. When a material breach occurs, the other party
may pursue damages related to the breach and both its direct and indirect consequences.

3) Minor Breach of Contract

Also sometimes called a Partial Breach of Contract or an Immaterial Breach of Contract, a Minor Breach of
Contract refers to situations where the deliverable of the contract was ultimately received by the other party, but
the party in breach failed to fulfill some part of their obligation. In such cases, the party that suffered the breach
may only be able to pursue a legal remedy if they can prove that the breach resulted in financial losses. A late
delivery, for example, may not have a remedy if the breached party cannot show that the delay resulted in
financial consequences

3)Anticipatory Breach of Contract

Anticipatory breach of contract, also known as anticipatory repudiation, this occurs when one of the parties
expresses verbally or in writing its intention not to comply with the obligations contracted in the contract.
 Wrongful termination.

In the event a party terminates the contract without having justification either under general principles of
contract law or under the terms of the contract, such a termination is called a wrongful termination. A
wrongful termination is a repudiation of the contract, and is therefore in itself a material breach of the
contratct
Damages available to the non-breaching party following its termination of the contract or in response to a
wrongful termination by the other party include direct damages, consequential damages, and all other
damages necessary to place the non-breaching party in the same position it would have been in should
the contract have been completely performed by the parties

Steps to proper termination.

The terms of the contract itself sometimes identifies the conditions under which a party may be
found in material breach or default or conditions under which a party may terminate for
convenience.

Service of notice and proper completion of other procedural requirements necessary for termination under
the contract terms must be followed exactly. Otherwise, the termination might not be authorized by the
contract and therefore be a wrongful termination.
Although termination under general principles of contract law does not specifically require prior notice and
an opportunity to cure, providing notice and opportunity to cure may prompt the defaulting party into curing
the default and will place the non-breaching party in a more favorable light should the dispute end up in
arbitration or litigation. https://youtu.be/qxertS_ZrzM
Damages related to termination.

There are several remedies for breach of contract, such as award of damages, specific performance, rescission, and
restitution. In courts of limited jurisdiction, the main remedy is an award of damages. Because specific performance and
rescission are equitable remedies that do not fall within the jurisdiction of the magistrate

Damages refers to the sum of money the law imposes for a breach of some duty or violation of some
right. Generally, there are two types of damages: compensatory and punitive.

I. Compensatory Damages

(also called “actual damages”) cover the loss the nonbreaching party incurred as a result of the breach of contract. The
amount awarded is intended to make good or replace the loss caused by the breach

Their purpose is to compensate the breaching party for the economic losses resulting from the breach. The payment of
damages usually includes the costs for the loss of future income in addition to those costs that must be incurred for a new
contract.
General Damages. General damages cover the loss directly and necessarily incurred by the breach of contract.
General damages are the most common type of damages awarded for breaches of contract

General damages for this breach could include:

• refund of any amount Company B had prepaid for the furniture; plus
• reimbursement of any expense Company B incurred in sending the furniture back to Company A; plus
• payment for any increase in the cost Company B incurred in buying the right furniture, or its nearest equivalent, from
another seller.

Example: Company A delivered the wrong kind of furniture to Company B. After discovering the mistake later in the day,
Company B insisted that Company A pick up the wrong furniture and deliver the right furniture. Company A refused to
pick up the furniture and said that it could not supply the right furniture because it was not in stock. Company B
successfully sued for breach of contract.

Special Damages.
Special damages (also called “consequential damages”) cover any loss incurred by the breach of contract because of special
circumstances or conditions that are not ordinarily predictable. These are actual losses caused by the breach, but not in a direct and
immediate way. To obtain damages for this type of loss, the nonbreaching party must prove that the breaching party knew of the special
circumstances or requirements at the time the contract was made

Example: In the scenario above, if Company A knew that Company B needed the new furniture on a
particular day because its old furniture was going to be carted away the night before, the damages for
breach of contract could include all of the damages awarded in the scenario above, plus:
Prove Compensatory Damages
In most breach of contract lawsuits, the plaintiff must specifically state that they are requesting compensatory
damages when they file the claim. This is especially true for special damages, as those involve losses that are not
addressed in the terms of the contract. If the plaintiff fails to request compensatory damages, they may be
ineligible for monetary damages.

Some additional requirements for proving compensatory damages include:

• Causation: The defendant’s breach must be the reason for the plaintiff’s economic losses. These may either
be directly caused,as in general damages, or indirectly caused, such as special damages;

• Foreseeability: The losses must be foreseeable at the time of contract formation. Meaning, the foreseeable
damages should be considered as reasonably arising naturally from the breach; or, in the contemplation of
both parties as the probable result of a breach. If the losses were not foreseeable, a compensatory damages
award will not be issued;

• Calculable: The losses must be quantifiable and able to be calculated into specific monetary amounts.
Generally, this is accomplished using fair market values at the time of contract formation; and

• Unavoidable: If the non-breaching party could have prevented the losses but failed to do so, they will be
disqualified from receiving compensatory damages. This is known as “the doctrine of avoidable
consequences.”
II. Punitive Damages.

Punitive damages (also called “exemplary damages”) are awarded to punish or make an example of a wrongdoer
who has acted willfully, maliciously or fraudulently. Unlike compensatory damages that are intended to cover
actual loss, punitive damages are intended to punish the wrongdoer for egregious behavior and to deter others
from acting in a similar manner. Punitive damages are awarded in addition to compensatory damages.

Punitive damages are rarely awarded for breach of contract. They arise more often in tort cases,
to punish deliberate or reckless misconduct that results in personal harm.

How are Compensatory Damages Calculated?

The calculation of compensatory damages depends on the type of contract that was breached and the type of
loss that was incurred. Some general guidelines are:
• Standard Measure. The standard measure of damages is an amount that would allow the nonbreaching
party to buy a substitute for the benefit that would have been received if the contract had been performed.
In cases where the cost of the substitute is speculative, the nonbreaching party may recover damages in
the amount of the cost incurred in performing that party’s obligations under the contract.

• Contracts for the Sale of Goods. The damages are measured by the difference between the contract
price and the market price when the seller provides the goods, or when the buyer learns of the breach.
Are There Any Limitations on the Award of Compensatory Damages?

An important limitation on the award of damages is the duty to mitigate. The nonbreaching party is
obligated to mitigate, or minimize, the amount of damages to the extent reasonable. Damages cannot
be recovered for losses that could have been reasonably avoided or substantially ameliorated after the
breach occurred. The nonbreaching party’s failure to use reasonable diligence in mitigating the
damages means that any award of damages will be reduced by the amount that could have been
reasonably avoided.
Renting a Home vs. Owning a Home

Buying a home is a huge part of the American Dream. Choosing to buy or rent, though, is a major
decision that affects your financial health, lifestyle, and personal goals. Whichever option you choose
depends entirely on your lifestyle and financial situation. Both require a regular income (so you can afford
the payments and associated costs) and may also require a certain degree of effort to maintain.

But there are several differences that make renting and owning
property distinctly different. Renting a property doesn't come with all
the responsibilities associated with homeownership and you have
more flexibility, as you aren't necessarily tied down to your property.
Owning your home gives you a sizeable investment, but it does come
at a big cost—both upfront and over the long run.

Owning a home isn’t always better than renting, and renting is not
always as simple as it seems. Here, we highlight some of the key
differences between renting and buying.
REAL ESTATE SALE AND PURCHASE CONTRACT
Real estate transactions are governed by a wide body of federal
statutes and a combination of state statutes and common law.

The requirements established by state law often differ

significantly from one state to the next. Real estate law involves a
complex set of activities centered on the purchase and sale of
real estate, land titles, land uses, environment, leasing,
mortgages, litigation, among many others relating to real estate.

Although there is a law that regulates real estate transactions, their formalization is governed by contract law, which
is within the branch of civil law, which is why it is necessary to draw up a contract that describes in detail the terms
and conditions under which the transaction will be carried out.

Real estate law, or property law, generally refers to the laws

controlling the ownership or use of land in the United States. Real
estate law is a branch of civil law that covers the right to possess,
use, and enjoy land and the permanent man-made additions
attached to it. Real estate law directly or indirectly impacts most
of us on a daily basis, affecting homeowners, renters, landlords,
home buyers, and home sellers
 As its name implies, real estate law deals with real property, which is land, as opposed to personal property,
which is movable property. For the common law real estate law as well as the civil law, the inscriptions and
objects that are part of the land because they are attached to it such as buildings and structures are part of real
estate.

Property law regulates the purchase and sale of real estate including the sale of land for either residential or
commercial purposes. This branch of law also known as Property Law also regulates how the buyer makes
the acquisition and what can be done with the property acquired.

Any time a home is sold and the property is transferred from one person to another, a legal contract called a
real estate purchase agreement will be used to stipulate the conditions of the sale.

In real estate, a purchase agreement is a binding contract between a buyer and seller that outlines the details of a
home sale transaction. The buyer will propose the conditions of the contract, including their offer price, which the
seller will then either agree to, reject or negotiate. Negotiations may go back and forth between buyer and seller
before both parties are satisfied. Once both parties are in agreement and have signed the purchase agreement,
they’re considered to be “under contract.”

You may have also seen purchase agreements referred to as a:

Real estate sales contract
Home purchase agreement
Real estate purchase contract
House purchase agreement
Property Deeds

Property deeds are legal documents used in real estate that transfers ownership
of real property from a grantor (seller) to a grantee (buyer). Real property is land or
anything attached to the land, such as buildings or roads. For a deed to be legally
operative, it must include the identification of the grantor and grantee and the
adequate description of the property

The deed is an official document that according to the laws of each of the
states must be drawn up describing in detail the type of property, and the type
of ownership that the parties are transferring.

In a real-estate transaction, a deed is usually delivered at closing. Different

jurisdiction requires different elements in a valid deed.

The general warranty deed offers the grantee the most protection. With this type of deed, the
grantor makes a series of legally binding promises (called covenants) and warranties to the grantee
(and their heirs) agreeing to protect the grantee against any prior claims and demands of all
persons whomsoever in regards to the conveyed land.
Brokers

When selling a property, real estate agents are often hired by the owner of the property to introduce
interested buyers to the property. In the United States, real estate brokers, agents and salespersons are
regulated by state and local laws.

Real estate brokers are employed as the agent of the seller in order to obtain a buyer for
their property. The contract between the broker and seller is called a listing
agreement. The agreement may be an open agreement whereby the broker earns a
commission only if he or she finds a buyer. A listing is exclusive if the broker is the only
agent entitled to a commission for finding a buyer. Under an exclusive arrangement, a
broker may be entitled to a payment even if the seller finds the buyer without the brokers
aid. Real estate brokers and salesperson are licensed and regulated by local state laws

Real estate brokers are licensed by the state to perform all types of real estate transactions. They
represent either party during a transaction.
Real Estate Broker Liability

A broker will be expected to uphold several ethical and legal duties during a real estate transaction. This is
true no matter which party the broker represents. This is often referred to as the broker’s fiduciary duties to
the client. These duties generally include the following

• Keeping client matters confidential, such as the lowest offer their client will take during
negotiations (unless the client authorizes disclosure);
• Remaining loyal to the client, such as avoiding conflicts of interest;
• Disclose all things relevant, like any factor that would affect the property value;
• Act with care during the transaction, like performing a diligent investigation about defects with
the property;
• Safeguard any money or other valuable documents the broker comes into possession of during
the transaction; and
• Fulfilling the terms of the broker agreement or any other contract with the client.

State law or the licensing board may impose additional obligations. Failure to comply with any of these
obligations may be actionable in civil court, where, in addition to having your license suspended or
cancelled, you will be required to pay for damages to your client or third party.
 Real Estate Sales Contract

The agreement to sell between a buyer and seller of real estate is governed by the general principles of contract
law. See Contracts. The Statute of Frauds requires that contracts for real property be in writing. See,
e.g., California Civil Code § 1624.. This makes it easier if there is a dispute about contract so the parties do not
resort to what was said during negotiations.

The offer and acceptance are the key elements of a binding contract. Offer and acceptance occur when the
seller accepts the buyer's offer for the property, usually by signing a purchase contract already signed by the
buyer. This concept is also known as mutual acceptance (

When an offer is made to purchase a new home, a buyer will propose conditions for the sale, and spell out
important financial details such as their offer price. A home seller will then have the opportunity to accept, reject
or negotiate the terms of this offer. Following any ongoing negotiations which may occur in the form of
counteroffers, both parties will sign the purchase agreement when they are satisfied with the terms of the
agreement. At this time, both the property that’s up for sale and any parties to the agreement (for example, the
home buyer and seller) will be determined to be “under contract.”

Who Prepares The Real Estate Purchase Agreement?

Typically, the buyer’s agent writes up the purchase agreement. However, unless they are legally licensed to practice law, real estate
agents generally can’t create their own legal contracts. Instead, firms will often use standardized form contracts that allow agents to fill in
the blanks with the specifics of the sale
Clauses in a real estate sales contract
The clauses contained in a real estate purchase contract must contain detailed information not only about the
characteristics of the property but also about the terms and conditions under which the transaction will be carried
out. The following is a description of the minimum requirements that must be contained in its clauses

• Buyer and seller information: Full names and contact information for all buyers and sellers involved in the transaction

• Property details: address and a detailed description of the property including measurements and boundaries.

• Purchase price: The total sales price agreed upon for the property must include any deposit or additional costs associated
with the transaction

• Representations and warranties: in this clause the seller must state the condition of the property at the time of the sale. This
information can be disclosed by the seller in a warranty deed.

• Financing: will include information about how the home will be paid for. If the buyer isn’t paying in cash, they’ll need some sort of
financing (i.e. a loan) to buy the home, the specifics of which will be written out in the contract.
For example, the contract will specify if the buyer is obtaining a mortgage to
purchase the property, or if they’re using an alternative, such as assuming the
current mortgage on the property or using seller financing, where the buyer makes
payments to the seller rather than a traditional mortgage lender.
 • Fixtures and appliances: list of appliances, accessories and any other goods that, because they are part of the property, will be
included or excluded in the sale of the property.

• Title insurance: specification of who should be responsible of purchasing the title insurance to protect against hidden faults in
the property.

• Property taxes: declaration of the parties as to who shall pay the corresponding sales and purchase taxes in accordance with
the provisions of the laws of the state.

• Closing date: The exact date of the date of the the exact date on which the official transfer of title will occuras well as the date on
which possession of the property will be delivered to the buyer

• Closing Costs: Expenses generated by appraisals, title searches, to be paid by the seller and the buyer Ultimately, closing costs
may total 3 – 6% of a home’s purchase/sales price.

• Earnest money: the earnest money deposit or “good faith deposit” which is considered as a sign of intent to purchase the
property. Unless certain contingencies are met, the buyer will forfeit this earnest money deposit if he decides to back out of the
transaction
• Contingencies: refers to a condition that must be met and depends on certain real-world circumstances occurring

a. Inspection contingency: the buyer will request a site inspection to verify the physical and structural condition of the
property, if any defects are found, the buyer may cancel the home purchase agreement without liability
b. Appraisal contingency: An appraisal contingency is designed to ensure that a home’s appraised value is equal to or
higher than the agreed-upon purchase price (Steinberg, 2021).
c. Financing contingency: Also called mortgage contingency, its purpose is to protect the buyer in case the mortgage
loan has been denied, guaranteeing that the seller will return the earnest money deposit.
d. Title contingency: warrants to the buyer that the property has no mortgage or lien whatsoever in force.
e. Home sale contingency: This is intended to protect the buyer by establishing that the buyer's purchase of the property
is dependent on being able to sell his or her current home.

• Disclosures. - Sellers are legally obligated to disclose information they are aware of that could the safety or value of the
property

• Lead hazards: Structures built before 1978 might be required to include a lead paint addendum that details
the presence of any lead-based paint.

• Well locations: Some states require disclosure of the location and status of any wells located on the
property. Known wells must be identified on a map, and the seller must indicate whether the well is in use or
sealed.
 Real estate contract be termination

The best time to back out of a real estate purchase is before you’ve signed the purchase agreement. After that,
you’re under contract, and you may be penalized if you back out for reasons that aren’t stipulated in the
purchase agreement.
Buyers and sellers are provided multiple opportunities to cancel the purchase agreement within terms of the
agreement, such as when a contingency is not satisfied. But if the buyer or seller does not meet certain demands
in the agreement, then he or she could be considered in default of the contract.

The purchase agreement should specify the steps to take or the appropriate action, such as forfeiting the earnest
money deposit or pursuing litigation, if the other party defaults. Some common default situations include:

• Seller does not move out on time

• Buyer or seller cancels the sale
• Seller fails to complete contractually obligated repairs
REAL ESTATE LEASE CONTRACT
A lease is a contract outlining the terms under which one party
agrees to rent property owned by another party. It guarantees
the lessee, also known as the tenant, use of an asset and
guarantees the lessor, the property owner or landlord, regular
payments for a specified period in exchange. Both the lessee and the
lessor face consequences if they fail to uphold the terms of the
contract.

Leases are legal and binding contracts that set forth the terms of rental agreements in real
estate and real and personal property. These contracts stipulate the duties of each party to
effect and maintain the agreement and are enforceable by each

Leases are legal and binding contracts that set forth the terms of rental agreements in real estate and real and
personal property. These contracts stipulate the duties of each party to effect and maintain the agreement and are
enforceable by each. For example, a residential property lease includes the address of the property, landlord
responsibilities, and tenant responsibilities, such as the rent amount, a required security deposit, rent due date,
consequences for breach of contract, the duration of the lease, pet policies, and any other essential information
 According to Cornell Law School a lease is an agreement between two people where one person
with property (the lessor) allows the other (the leasee) to have use of that property for a limited
period, in exchange for a payment. The original owner ultimately retains possession of the property.

Lease or Rent
In Spanish we use the word arrendamiento to refer to a contract in which one party, called the lessor,
undertakes to transfer temporarily the use or enjoyment of a thing to another party, called the lessee, who in turn
undertakes to pay for such use or enjoyment a certain and determined price.

In common law, the terms lease or rental contract refer to the legally binding document by which the landlord
leases real estate to the tenant in exchange for a payment. While both agreements are similar in nature, they
important differences

A lease agreement is a contract between a landlord and a tenant that covers the renting of property for long
periods of time, usually a period of 12 months or more. The lease agreement is very specific in detailing the
responsibilities of both parties during the lease and it includes all the necessary information to ensure that both
parties are protected
Lease Agreements

The term of the lease and the amount of the monthly rent are binding and cannot be modified. At the end of the contract term, a new contract
must be signed, and the lessor may modify any conditions.

The advantages for the landlor are that he has the guarantee of stability of guaranteed, long-term income, but he also has the disadvantage of
not being able to increase the amount of the rent.

Rental Agreements

A rental agreement differs from a lease agreement in that it is not a long-term contract and usually occurs on a month-
to-month basis. This month-to-month lease agreement expires and then renews each month upon agreement
of the parties involved

The terms of a month-to-month lease are the same as a lease except that at the end of each month the landlord and
tenant may modify the terms. The advantages for the landlord are that he can increase the rent or request that the
tenant vacate the premises without violating the lease, but he must give at least 30 days’ notice for the tenant to
vacate the premises.
The Four Basic Types of Landlord-Tenant Relationships

The basis of the legal relationship between a landlord and tenant is grounded in both contract and property law.

Categories into which the duration is classified of the tenancy is typically:

• Term of Years Tenancy
For a fixed term, which must be clearly stipulated in the lease. During this period the tenant has
possession of the property and may restrict the entry of other persons (including the landlord) and to
sublet or assign the property.

• Periodic Tenancy
The lease is automatically renewed at the end of the term of the lease unless the landlord decides to
terminate it, for which he must notify the tenant in writing of his intention not to continue. During this
period the tenant has possession of the property and may restrict the entry of other persons (including
the landlord) and to sublet or assign the property.

• Tenancy at Will
There is no term period, as long as the lessor and the lessee agree, the contractual relationship is in
force.

• Tenancy at Sufferance
The tenant continues to inhabit the property after the lease expires.
Quiet Enjoyment

The landlord-tenant relationship is founded on duties proscribed by either statutory law, the common law, or the
individual lease. Basic to all leases is the implied covenant of quiet enjoyment. This covenant ensures the
tenant that his possession will not be disturbed by someone with a superior legal title to the land including the
landlord

Transferring the Tenant's Interest

If the contract does not state any type of limitation with respect to the transfer of the contract to third parties
through two figures

a) Assignment - The tenant assigns all interest in the property to a third party who becomes the new
tenant.

a) Sublease - The tenant conveys her interest to the third party, but the tenant maintains a revisionary
interest. The tenant becomes the sublessor, and the third party becomes the sublessee
 Eviction

Eviction is the removal of a tenant from rental property by the landlord, eviction proceeds when the tenant
fails to pay the rent or breaches the lease in any way.

In accordance with state and municipal laws, the landlord must notify the tenant the eviction as well as a
number of days to pay rent or fix any damages. If that period ends without resolution, then the landlord may
file an eviction lawsuit against the renter. A complainant may seek financial restitution for unpaid rent and
utility costs, damage to the property, late fees, and court costs in addition to the eviction.

Abandonment
Lease abandonment occurs when a tenant voluntarily abandons its obligations under a lease by vacating the
premises before the lease term has ended. However, to legally abandon a lease one of the following
requirements must be met.
1. The tenant vacates the leased property without justification
2. The tenant has no intent to return to the property
3. The tenant defaults on rent payment

We must not lose sight of the fact that the abandonment of a • Sue the tenant for the full amount of rent due.
property occurs when the contract is in force, so the owner to • Terminate the lease
recover the property can take 1 of 3 actions: • Mitigate the damages by acquiring another tenant and then sue the
former tenant for the lost rent
 Clauses
Possession of the Property
This element of a real estate lease addresses the rights of possession of the tenant. The landlord promises the tenant the possession of
the property for their enjoyment and promises that the landlord will not interfere with that possession.

This does not mean that the landlord cannot enter the property, as it is usually part of the lease agreement that the landlord has the right to
enter the property for repairs or other activities outlined in the lease.

How the Tenant Can Use the Property

There are many types of leases, residential, office, retail, etc. All of these types may have reason to specify restrictions on the use of the
property by the tenant. A residential lease might forbid use for any business purpose. An office lease might state that the property can only
be used as a "real estate" office. A retail lease might specify what types of product that could be sold in the space.

What Is the Term of the Lease?

Generally, leases specifically state a beginning and an ending date for the lease to be effective. This period, when set both front and
back end, would mean that no notice to vacate would be needed. The tenant would vacate on the prescribed ending date unless a new
agreement is reached.
 Security Deposit
Most leases have a provision for one or more security deposits against the possibility of non-payment of rent or damages to the
property. Most states have stringent rules for how deposits should be handled and for whether interest should be paid to the tenant
while the deposit is held. There are many deadline timelines for refunding of deposits once the lease period is ended, the property is
vacated and inspected for damage.

Improvements to the Leased Property

Generally, during a lease, there will be no improvements made by the landlord unless specifically called for in the lease
agreement, or unless a new agreement is made in writing. The tenant may make improvements with the permission of the
landlord, but they would become the property of the landlord at the end of the lease.

Improvements clauses are much more prevalent in commercial leases. Offices and retail spaces are subject to modifications that
are considered improvements and that are done to accommodate the business of the tenant

Maintenance of the Leased Property

Maintenance elements of a real estate lease can vary significantly depending on whether it is residential or commercial in
nature. In most residential property leases, the landlord is responsible for all repairs and maintenance. In commercial
properties there are varying agreements made that could make some maintenance the responsibility of the tenant
Assignment or Sublease of the Leased Property
If the tenant assigns their lease, it usually means that they've transferred all of their leasehold interests to the other party. In a
sublease, the original tenant is releasing the property to another, with some of their interests transferred.

The lease agreement will specify whether any assignment or subletting is allowed and under what circumstances. In many cases,
the tenant retains some or all of their liability for payment of rents and responsibility for damage to the property.

Options for the Tenant in the Real Estate Lease

Many leases provide an option for the tenant to renew the lease prior to the end of the lease period. With the proper notice, the
tenant can renew for another pre-agreed period. An example clause might read: "Any time up to thirty days prior to the
expiration of this lease; the tenant can elect to extend the lease another six months by written notice to the landlord. The rental
amount will be $xxx.xx per month for the new lease term."

Another option is the one to purchase the property during the lease period. Generally, the purchase price is stated, and the
landlord may or may not apply some of the rental payments to the down payment or purchase price

Force Majeure Clause

According to general law, a force majeure legal clause protects all the parties involved from natural disasters that may prevent
the tenant from engaging in their contractual duties, such as paying a late fee on a particular day.
Commercial Leases

Tenants who lease commercial properties have a variety of lease types available, all of which are structured to
assign more responsibility on the tenant and provide greater up-front profit for the landlord. Some commercial
leases require the tenant to pay rent plus the landlord's operational costs, while others require tenants to pay
rent plus property taxes and insurance. The four most common types of commercial real estate leases include:

• Single-Net Leases: In this kind of lease, the tenant is responsible for paying property taxes.

• Double-Net Leases: These leases make a tenant responsible for property taxes and insurance.

• Triple-Net Leases: Tenants who sign these leases pay property taxes, insurance, and maintenance costs.

• Gross Leases: Tenants pay rent while the landlord is responsible for other costs.
In addition to containing the general clauses of a residential lease contract, the lease contract for commercial
premises must include some additional clauses when the premises are located in a shopping mall

The points to be considered in the clauses of a commercial lease are as follows:

1. Permitted use: this clause is fundamental in the contract since it determines the type of business of the lessee

2. Trading hours: This clause in the Commercial Lease Agreement specifies the core trading hours.

3. Common areas: specify the common areas available for the tenant's use.

4. Maintenance and Repairs: This clause sets out the provisions regarding the maintenance of the premise. All the outgoing
costs incurred every month and all the repairs to be done must be pre-decided by the parties before entering into the
Commercial Lease Contract.

5. Sub-letting and assignment: This is an important clause and must be kept in mind before signing the lease contract. For
example, if sub-letting a premise is not allowed and the business fails or relocates, then the lessee cannot recover the rent.

6. Dispute resolution: This provision gives both parties a chance to resolve any disagreement by way of arbitration between
themselves on a number of issues, including rent increase, default or sub-letting.
Breaking a Lease
A tenant who breaks a lease without prior negotiation with the landlord faces a civil lawsuit, a derogatory
mark on their credit report, or both.

As a result of breaking a lease, a tenant may encounter problems renting a new residence, as well as
other issues associated with having negative entries on a credit report.

Tenants who need to break their leases must often negotiate with their landlords or seek legal counsel. In
some cases, finding a new tenant for the property or forfeiting the security deposit inspires landlords to
allow tenants to break their leases with no further consequences.

The terms of a lease are not automatically enforceable, so a clause that allows a landlord to enter the
premises at any time without notice or one that, via court action, grants a landlord to recover more than
statutory limits is not enforceable.

Some leases have early termination clauses that allow tenants to terminate the contracts under a specific
set of conditions or when their landlords do not fulfill their contractual obligations. For example, a tenant
may be able to terminate a lease if the landlord does not make timely repairs to the property
 LIMITED
LIABILITY
COMPANY (LLC)

Corporate law refers to the laws, rules, and regulations

that pertain to corporations. The laws involved regulate
the rights and obligations involved with the business
activities of a corporation, including formation,
ownership, operation, and management.

En México, el equivalente a una Limited Liability Company (LLC)

es una Sociedad de Responsabilidad Limitada (SRL).
 Limited Liability Company (LLC)
A Limited Liability Company, or an LLC, is a relatively new business
structure, that first appeared in Wyoming in 1977, and is now recognized
by every State's statute and the IRS. An LLC is neither a partnership
nor a corporation, but a distinct type of business structure that
offers an alternative to those two traditional entities by combining
the corporate advantages of limited liability with the advantages of
pass-through taxation usually associated with partnerships.

Limited liability companies (LLCs) are one of the most flexible types of businesses. LLCs combine aspects of both
partnerships and corporations. They retain the tax benefits of sole proprietorships and the limited liability of
corporations. LLC is a business structure in the U.S. that protects its owners from personal responsibility for
its debts or liabilities

Examples of Well Known LLC Companies

• Amazon was originally started in 1995 in a garage when it was an online bookstore. It now delivers everything
imaginable, from food to clothes to electronics. The site is used so much that when it went down last year for
49 minutes, the company missed out on an estimated $5.7 million in sales.
• Facebook, started as a college experiment in 2004. It had almost 1.79 billion active users each day in May
2020
• A Limited Liability Company (LLC) is a type of business entity that combines the pass-through
taxation of a partnership or sole proprietorship with the limited liability protection of a
corporation.

• This means that the owners of an LLC (referred to as "members") are not personally
responsible for the company's debts or legal obligations. Instead, the LLC is a separate legal
entity that can enter into contracts, sue or be sued, and own assets in its own name.

• LLCs are flexible in their structure and management, and can be owned by one or more individuals, as
well as other entities such as corporations or other LLCs. They are also not subject to the same
formalities as corporations, such as holding regular board meetings and issuing stock.

• In the United States, LLCs are a popular choice for small businesses, entrepreneurs, and real estate
investors. However, LLC laws and regulations can vary by state, so it is important to consult with an
attorney or accountant to determine if an LLC is the best choice for a particular business or investment
venture.
A Limited Liability Company, or an LLC, is a relatively new business structure, that first
appeared in Wyoming in 1977, and is now recognized by every State's statute and the IRS. An
LLC is neither a partnership nor a corporation, but a distinct type of business structure that
offers an alternative to those two traditional entities by combining the corporate advantages of
limited liability with the advantages of pass-through taxation usually associated with
partnerships.

A limited liability company (LLC) is a business structure in the U.S. that protects
its owners from personal responsibility for its debts or liabilities. Limited
liability companies are hybrid entities that combine the characteristics of a
corporation with those of a partnership or sole proprietorship. (Cornell Law
School, 2021)

A type of business organization that offers the limited liability of a corporation and the tax
benefits of a partnership. The owners of an LLC are referred to as "members", whose rights and
responsibilities in managing the LLC are governed by an operating agreement. An LLC is legally
formed by the filing of a document called the articles of organization with a state official,
usually the Secretary of State
A Limited Liability Partnership (LLP) and a Limited Liability Company (LLC) are two different types of
business entities, with some similarities but also some differences.

The main difference between an LLP and an LLC is the way they are taxed. An LLP is generally
taxed as a partnership, which means that the profits and losses of the business are passed through
to the partners, who report them on their individual tax returns. The LLP itself does not pay income
taxes.
An LLC, on the other hand, can choose how it wants to be taxed. By default, it is taxed as a pass-
through entity, similar to an LLP, where the profits and losses of the business are passed through to
the owners, who report them on their individual tax returns. However, an LLC can also choose to be
taxed as a corporation, which means that the business itself pays income taxes on its profits, and
the owners are taxed again when they receive distributions of those profits.

Another difference between an LLP and an LLC is in their management structure. An LLP is
managed by the partners, who all have equal say in the decision-making process. An LLC, on the
other hand, can be managed by the owners themselves (known as a member-managed LLC), or by
a designated manager (known as a manager-managed LLC).

Finally, an LLP is typically used for professional service firms, such as law firms, accounting firms,
or consulting firms, while an LLC is a more flexible structure that can be used for a wide variety of
businesses, including those in the service, retail, manufacturing, and real estate sectors.
• Governing Law
The Uniform Limited Liability Company Act is the governing law of main function is to provide the public with
notice that a limited liability entity has been formed. It is not intended to provide information on the entity’s
financial structure or the rights and responsibilities of its managers or owners.

The Uniform Limited Liability Company Act (ULLCA) is a model law that provides a framework for the formation
and operation of Limited Liability Companies (LLCs) in the United States. The ULLCA was developed by the
National Conference of Commissioners on Uniform State Laws (NCCUSL) to provide a consistent and uniform
set of rules for LLCs across different states

Limited Liability Company (LLC) has requirements for forming and operating an LLC,
including the filing of articles of organization, the management structure, the distribution
of profits and losses, and the liability of the members.

However, there are some general principles that apply to all LLCs in the United States, regardless of the
state where they are formed. For example, LLCs are considered separate legal entities from their
owners, which means that the LLC can enter into contracts, sue and be sued, and own assets in its
own name. Additionally, LLCs offer limited liability protection to their members, which means that the
personal assets of the members are generally protected from the debts and obligations of the LLC.
 A limited liability company, commonly referred to as an “LLC”, is a type of business structure commonly
used in the United States. LLCs can be seen as a hybrid structure that combines features of both a
corporation and a partnership. Like a corporation, LLCs provide their owners with limited liability in the
event the business fails. But like a partnership, LLCs “pass-through” their profits so that they are taxed
as part of the owners’ personal income.

• LLC Members.

LLC members are the owners of a Limited Liability Company (LLC). Members can
be individuals, corporations, or other LLCs. The rights and responsibilities of LLC
members depend on the operating agreement of the LLC, as well as the laws of
the state in which the LLC is registered.

Members in an LLC are analogous to partners in a partnership or shareholders in a corporation, depending on

how the LLC is managed. A member will more closely resemble a shareholder if an LLC chooses to be
managed by a manager or several managers, because then those members who are not managers will not
participate in day-to-day management of the company

They may or may not manage the business and affairs. Initial members are admitted at the
time of incorporation.
Limited Personal Liability

Like shareholders of a corporation, all LLC owners are protected from personal liability for business debts
and claims.

Because only LLC assets are used to pay off business debts, LLC owners stand to lose only the money that
they've invested in the LLC. This feature is often called "limited liability."

Exceptions to Limited Liability

Although LLC owners enjoy limited personal liability this protection is not absolute, in cases
of non-payment of taxes withheld from workers, the intentional commission of a fraudulent,
illegal act that causes damage to the company or a third party the LLC owner may be held
personally liable

Members of LLCs usually purchase liability insurance policy to protect their members' personal
property and assets from lawsuits and claims. On the other hand, the insurance does not cover non-
payment of bills.
In most states, LLC members have the right to manage the company unless the operating agreement states
otherwise. However, in some states, LLCs are required to have a designated manager to manage the day-to-
day operations of the LLC. In such cases, the manager may or may not be a member of the LLC.

LLC members have the right to share in the profits of the LLC, and their share of the profits is usually based on
their ownership percentage in the company. Members are also responsible for paying taxes on their share
of the LLC's profits.

Liability

LLC members are generally not personally liable for the debts and obligations of the LLC, which is one of the
key benefits of forming an LLC. However, there are some exceptions to this general rule, such as when
members engage in fraudulent or illegal activities, or when they personally guarantee the debts of the LLC.

One of the main advantages of a Limited Liability Company (LLC) is that its members generally have limited
liability for the debts and obligations of the LLC. This means that the personal assets of the members are
usually protected from creditors and other claims against the LLC.
Situations where LLC members may be held personally liable for the debts and obligations of the LLC.
Here are some examples:

1. Personal guarantee: If an LLC member personally guarantees a debt or obligation of the LLC, they
can be held personally liable for that debt or obligation.

2. Piercing the veil: In some cases, courts may "pierce the veil" of the LLC and hold the members
personally liable for the debts and obligations of the LLC. This can happen when the LLC is not
properly managed or when the LLC is used to commit fraud or other illegal activities.

3. Unpaid taxes: LLC members can be held personally liable for unpaid taxes owed by the LLC.

4. Negligence or misconduct: LLC members can be held personally liable for damages caused by their
own negligence or misconduct.

Here are some examples of situations where a court might "pierce the veil" and hold LLC members personally liable for
the debts and obligations of the LLC:
• Failure to follow corporate formalities: If an LLC does not follow proper corporate formalities, such as holding
regular meetings, maintaining proper records, or separating business and personal assets, a court may "pierce the
veil" and hold LLC members personally liable for the debts and obligations of the LLC.
• Fraudulent or illegal activities: If an LLC is used to commit fraud or other illegal activities, a court may "pierce the
veil" and hold LLC members personally liable for the damages caused by the LLC's actions.
• Type of LLCs

A single-member LLC (SMLLC)

A Single-Member LLC (SMLLC) is a type of limited liability company that has only one owner. This is in
contrast to a traditional LLC, which has two or more owners, known as members.

In an SMLLC, the owner has limited liability protection, meaning that their personal assets are
separate from the business assets and the owner is generally not personally liable for the debts and
obligations of the LLC. This is similar to a traditional LLC.

One key difference between an SMLLC and a traditional LLC is how the LLC is taxed. In an
SMLLC, the LLC is considered a "disregarded entity" for tax purposes, which means that the LLC's
income and expenses are reported on the owner's personal tax return. This is different from a
traditional LLC, which is taxed as a partnership or, if it elects to be taxed as a corporation, as a
separate entity from its owners.

SMLLCs are a popular choice for small business owners who

want the flexibility and limited liability protection of an LLC, but do
not have multiple owners.
Single-Member LLC (SMLLC) and a Sole Proprietorship

A Single-Member LLC (SMLLC) and a Sole Proprietorship are both business structures that have only one
owner, but there are some key differences between the two:
1. Liability Protection: A SMLLC offers limited liability protection to the owner, meaning that the
owner's personal assets are generally protected from business debts and legal claims. In
contrast, a Sole Proprietorship offers no liability protection, meaning that the owner's
personal assets are at risk if the business faces legal or financial issues.

2. Formality and Compliance: A SMLLC requires more formalities and compliance than a Sole
Proprietorship. For example, a SMLLC must be registered with the state and requires an
operating agreement that outlines the company's structure and management. A Sole
Proprietorship does not require any formal registration or documentation, and the owner has
complete control over the business.

3. Taxation: A SMLLC is considered a separate entity for tax purposes and must file its own tax
return. However, a SMLLC can also elect to be taxed as a sole proprietorship, which allows the
owner to report business income and losses on their personal tax return. A Sole
Proprietorship is not a separate entity for tax purposes and the owner reports business
income and losses on their personal tax return.
Multi-member LLCs
The LLC of several members can have two or more members, there is no maximum limit of members
that can be natural or legal persons (corporations or other LLCs) including its members can be US
citizens, as well as non-US citizens and non-US residents

MMLLCs are separate legal entities from their members so members are protected from liability for
the company’s risks and debts. In the event of a lawsuit or action by creditors, members do not have
to worry about their personal assets like real estate or personal bank accounts being subject to
collections
Here are some key characteristics of Multi-member LLCs:

1. Limited Liability Protection: Similar to Single-Member LLCs, Multi-member LLCs provide

limited liability protection to the owners. This means that the personal assets of the owners are
generally protected from business debts and legal claims.
2. Management: Multi-member LLCs can be managed by the members themselves, or they can
elect to appoint a manager to run the day-to-day operations of the business.
3. Taxation: Multi-member LLCs have flexibility in how they are taxed. By default, Multi-member
LLCs are considered "pass-through" entities for tax purposes, meaning that the business itself
does not pay taxes. Instead, the profits and losses are passed through to the individual
members, who report them on their personal tax returns.
4. Operating Agreement: Multi-member LLCs are required to have an operating agreement,
which outlines the ownership structure, management responsibilities, and decision-making
processes of the business.
Domestic and foreing LLC

A domestic LLC is a limited liability company that is formed and operates within a particular state or
jurisdiction within the United States. A foreign LLC, on the other hand, is a limited liability company
that is formed in one state or jurisdiction, but conducts business in another state or jurisdiction.

For example, if a limited liability company is formed in California but also operates in New
York, it would be considered a foreign LLC in New York.

Foreign LLCs are required to register with the Secretary of State or similar agency in the state or
jurisdiction where they conduct business, and must also comply with the laws and regulations of that
state or jurisdiction. This typically involves filing paperwork and paying fees to register as a foreign
entity, as well as appointing a registered agent in the state.

In addition, foreign LLCs must also maintain good standing in both their home state and the states
where they conduct business, and are subject to taxation in both states. It is important for businesses
to carefully consider the legal and tax implications of operating as a foreign LLC in another state, and
to work with an experienced attorney or accountant to ensure compliance with all relevant laws and
regulations.
• Series LLC (SLLC)

A Series LLC is a particular type of LLC that the Delaware legislature madeup in 1996 that lets you take one
LLC and break it down into its component parts. Instead of having just one overarching shield to protect
owners from the liabilities of the company they own, one Series LLC allows you to establish an unlimited
number of protected shields associated with assets of the company. As a result, one protected series within
the Series LLC may be insulated from the debts and liabilities of all other protected series of the LLC
A Series LLC (Limited Liability Company) is a form of a limited liability company that provides separate legal protection
for each series or division within the LLC. In other words, a Series LLC can have multiple "series" or "cells" of assets and
liabilities, each with its own separate identity, while still being part of the overall LLC.

This type of LLC structure is commonly used in real estate investments or other asset-heavy businesses, where there is
a need to segregate the assets and liabilities of each property or project.
The main advantage of a Series LLC is the ability to protect the assets of one series from the liabilities of another. This
allows investors to take on multiple projects or properties without worrying about cross-liability. It also makes it easier
to manage and administer each series separately, as each can have its own set of members, managers, and operating
agreements.

A real-life example of a Series LLC is a real estate investment company that owns multiple
properties in different states. The company can create a Series LLC and establish each property
as a separate series within the LLC. Each series can have its own assets, liabilities, and members,
which allows the company to isolate the risks and liabilities associated with each property.

For instance, suppose that ABC Real Estate Investment Company owns five different properties in
different states. By creating a Series LLC, ABC can establish each property as a separate series
within the LLC. If one of the properties is sued, the other properties and the assets in those series
are not affected. This provides additional protection against liability risks, as each series is
considered a separate legal entity.
 Characteristics Single-member LLC Multi-member LLC Domestic LLC Foreign LLC Professional LLC Series LLC (SLLC)

Members with a
Owners 1 2 or more 1 or more 1 or more professional license 1 or more
Liability Limited Limited Limited Limited Limited Limited
Taxation Pass-through Pass-through Varies Varies Pass-through Pass-through

Members or
Management Owner or Manager Members or Manager Member- Managed Managers or Members Members or Manager Managers

Duration Perpetual Perpetual Perpetual Perpetual Perpetual Perpetual

Formation documents
required Articles of Organization Articles of Organization Articles of Organization Articles of Organization Articles of Organization Articles of Organization

Annual fees and

reports Varies by state Varies by state Required Required Required Varies by state

Purpose Any lawful purpose Any lawful purpose Any lawful purpose Any lawful purpose Limited to licensed Any lawful purpose

Management flexibility High High Low Low Low High

Series liability
protection Not available Not available Not available Not available Not available Available
Starting a Limited Liability Company (LLC)

Starting a limited liability company (LLC) in the United States involves several key steps:

Choose a name for your LLC: You will need to choose a name for your LLC that is unique and not already in use
by another business in your state. You can check the availability of your desired name by searching the business entity
database of your state's Secretary of State or similar agency.

File articles of organization: You will need to file articles of organization with the Secretary of State or similar
agency in the state where you plan to form your LLC. The articles of organization typically include basic information
about the company, such as the name and address of the business, the names and addresses of the owners, and the
purpose of the business.

Obtain necessary licenses and permits: Depending on the nature of your business and your location, you
may need to obtain certain licenses and permits to operate your LLC legally. These requirements can vary by state and
industry, so it's important to research the specific requirements for your business.

Draft an operating agreement: While not always required by law, it's generally a good idea to create an operating
agreement for your LLC. This document outlines the ownership structure, management roles and responsibilities, and other
important details about how the business will operate.

Obtain an EIN: You will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS)
to use for tax purposes and other official business matters.
 Articles of Organization

The articles of organization typically include basic information about the company, such as its name, address,
and the names and addresses of its owners (known as members). The document may also outline the purpose
of the company, how it will be managed, and other important details about its operations.

articles of organization must include the following information:

1. Name of the LLC: The name must be unique and not already in use by another LLC in the state where the LLC is being
formed.

2. Purpose of the LLC: This sectionn should describe the type of business that the LLC will engage in.

3. Registered agent: The LLC must have a registered agent who will receive legal and tax documents on behalf of the LLC.

4. Management structure: The articles of organization should state whether the LLC will be managed by its members or by
designated managers.

5. Duration of the LLC: The articles should state how long the LLC will exist. Most LLCs are formed to exist indefinitely.

6. Member information: The articles should include the names and addresses of all members of the LLC.

7. Filing fee: The articles must be accompanied by a filing fee, which varies by state.

8. Signature: The articles must be signed by at least one member of the LLC.
Articles of organization is a document that acts as a formal application to legally establish the existence of
your LLC in your state and sets forth the primary details about your new enterprise. Filed as a single doc with
the Secretary of State's Office (or similar state organization that handles business registration), the articles of
organization describe the basic working traits of the LLC. As soon as the document is filed and accepted by
the state, the articles of organization legally create the LLC as a registered business entity in that state

Some people confuse Articles of Organization and Articles of Incorporation.

Articles of incorporation are not mandatory with an LLC, but it could be detrimental to
forego having them. If you incorporate a corporation., articles of incorporation are
mandatory and filed with the Secretary of the State

Articles of association are usually used for non-corporate entities, such as partnerships and
associations, and are not necessarily required by law. Articles of incorporation, on the other hand,
are a legal requirement for incorporating a business and must be filed with the relevant government
agency.
Importance of an operating agreement

The operating agreement of an LLC and bylaws are both important documents that govern the internal
operations of a company, but they are used for different types of entities.

While both documents serve a similar purpose of governing the operations of a company, they differ in their
scope and legal status. The operating agreement is specific to LLCs and is created by the owners or
members, while bylaws are required by law for corporations and are created by the board of directors.

An operating agreement is a legal document that outlines the ownership structure and
operating procedures of a limited liability company (LLC). It is typically created by the
owners or members of the LLC and is not required by law, although it is highly
recommended. The operating agreement sets out how the company will be managed, how
profits and losses will be allocated, and the rights and responsibilities of each member.

An Operating Agreement is just what it sounds like: an agreement on how your LLC will operate.
The objective of a LLC operating agreement is to establish the internal rules, procedures, and regulations
that govern the operation of the limited liability company (LLC). The operating agreement outlines how the
LLC will be managed, the roles and responsibilities of each member, the allocation of profits and losses, the
decision-making process, and other important matters related to the operation of the business.

The operating agreement is an important legal document that helps to establish the
structure and management of the LLC. It provides a framework for how the business will
operate, and helps to establish clear expectations and guidelines for all members. In
addition, the operating agreement can help to minimize disputes and conflicts among
members by providing a clear set of rules and procedures for resolving disputes.

Key points
Help ensure that courts will respect your limited personal liability. This is
• Protecting Limited Liability Status particularly key in a one-person LLC where, without the formality of an
agreement, the LLC will look a lot like a sole proprietorship. Having a formal
written operating agreement will lend credibility to your LLC's separate existence

• Defining Financial and Co-owned LLCs need to document their profit-sharing and decision-making protocols as well
Management Structure as their procedures for handling the departure and addition of members

Many states, for example, have a default rule that requires owners to divide up
• Overriding State Default Rules LLC profits and losses equally, regardless of each member's investment in the
business
The form and contents of operating agreements vary widely, but most will contain six key
sections: Organization, Management and Voting, Capital Contributions, Distributions, Membership Changes,
and Dissolution

Article I: Organization
This section describes aspects related to the creation of the company. It includes information
about when the company was established, who its members are, and what will be their
participation in the company. If there are multiple members, they may all have equal ownership
or different amounts of "units" of ownership

Article II: Capital Contributions

A capital contribution refers to the amount of money, property, or services that each member of
the LLC contributes to the company in exchange for an ownership interest in the business. The
operating agreement outlines the capital contributions required of each member and the terms of
those contributions.

It should specify the amount of the initial capital contribution required from each member, how
and when the contribution must be made, and whether additional contributions will be required in
the future. It may also outline any restrictions on the transfer of ownership interests, and any
penalties or consequences for failing to make timely contributions.
 Artice III. Percentages of Ownership
The owners of an LLC ordinarily make financial contributions of cash, property, or services to the
business to get it started. In return, each LLC member gets a percentage of ownership in the assets
of the LLC. Members usually receive ownership percentages in proportion to their contributions of
capital, but LLC members are free to divide up ownership in any way they wish

Article IV: Management and Voting

• Management:
The operating agreement specifies how the LLC will be managed. In a member-managed LLC, all
members have an equal say in the management of the company, regardless of their ownership
interest. In a manager-managed LLC, the members designate one or more managers to handle the
day-to-day operations of the company.

• Voting:
The operating agreement also specifies the rules for voting on important decisions, such as admitting
new members, amending the operating agreement, or dissolving the LLC. Generally, each member
has one vote for each ownership interest they hold. However, the operating agreement may provide
for unequal voting rights, depending on the capital contributions or other factors.

The operating agreement may also outline the procedures for conducting meetings, including notice
requirements and the quorum necessary for a valid vote. In some cases, the operating agreement may
allow for voting to take place remotely or via electronic means.
 • Management. you will need to decide how your LLC will be managed. With LLCs, there are two different possible
management structures. You can choose to have a member-managed LLC where all the members (owners) participate in running
the business. Or, you can have a manager-managed LLC where only designated members, or certain nonmembers/outsiders, or
a combination of members and nonmembers are given the responsibility to run the business.

member-management, meaning that all the members share responsibility for the
day-to-day running of the business. This approach is more common in part because
most LLCs are small businesses with limited resources and they don't need a
separate management level to operate. Unlike corporations, LLCs have a
streamlined organizational structure, without officers or boards of directors. As a
result, the LLC form is often chosen by people who want to be directly involved in
managing and operating their business

A manager-managed LLC means that the articles of organization should mention

the authority and responsibilities that the manager(s) will have. For example, will
managers have sole authority for all hiring decisions? What about equipment
purchases?

• Authorized Signatures. In almost all states it is a requirement that one of the members or owners sign and date the articles of
organization. It may be the case that if the LLC is member-managed, the state may require everyone to sign the document.
Article V: Distributions of Profits and Losses

Distribution and process are important aspects of an LLC operating agreement that dictate how profits and
losses are distributed among the members and how the company will be managed and operated.

• Distribution:
The operating agreement outlines how profits and losses will be distributed among the
members. This includes the percentage of profits and losses that each member is entitled
to based on their ownership interest in the LLC. The operating agreement may also specify
when distributions will be made, such as on a monthly or quarterly basis, and whether any
profits will be reinvested back into the business.

• Process:
The operating agreement should also outline the procedures for making important decisions
and managing the company. This includes the process for admitting new members,
amending the operating agreement, dissolving the LLC, and handling disputes among
members. The operating agreement may also specify the roles and responsibilities of the
members, managers, and officers, as well as any restrictions on their authority.

In addition, the operating agreement should address the process for managing the LLC's
finances, including the procedures for opening and maintaining bank accounts, paying bills, and
keeping accurate records. The agreement should also specify the process for conducting
meetings, including notice requirements, the quorum necessary for a valid meeting, and the
procedures for voting on important decisions.
Article VI: Membership Changes

This section describes the process for adding or removing members. It also states if and when members
can transfer their ownership of the company. For example, the company will want to specify what
happens if a member dies, a member goes bankrupt, two members divorce, etc.

Article VII: Dissolution

This section of the operating agreement will explain the circumstances in which the company may be or
must be dissolved. This is sometimes called “winding up” the affairs of the company

Additionally, many states also require an LLC to file a report every year—
or every two years—that updates their current business locations and
activities in the state, and any changes in their current members and
managers. There is often a fee associated with this report submission
 Articles of Organization vs Operating Agreement
Articles of Organization and Operating Agreement are two important legal documents used in the formation of
a Limited Liability Company (LLC). While they are both required for the formation of an LLC, they serve
different purposes.

• Articles of Organization: The Articles of Organization, also known as Certificate of Formation, are the
legal documents that must be filed with the state to formally create an LLC. This document includes basic
information about the LLC, such as the name and address of the LLC, the purpose of the LLC, the name
and address of the registered agent, and the names and addresses of the initial members. The Articles
of Organization are usually filed with the Secretary of State in the state where the LLC is formed.

• Operating Agreement: The Operating Agreement is a legal document that outlines the internal workings
of the LLC, including the rights, duties, and responsibilities of the members and managers, the rules for
making decisions and managing the LLC, the procedures for distributing profits and losses among the
members, and other important provisions related to the operation of the LLC. The Operating Agreement is
not required by law but is strongly recommended, as it helps to establish the legal structure and
management of the LLC and can help prevent disputes among members in the future.

While the Articles of Organization are filed with the state and are public record, the Operating
Agreement is an internal document and is not typically filed with the state. The Operating Agreement is
usually kept with the LLC's important records and is only shared with the LLC's members, managers,
and other authorized parties.
 Articles of Organization vs Operating Agreement
Articles of Organization and Operating Agreement are two important legal documents used in the formation of
a Limited Liability Company (LLC). While they are both required for the formation of an LLC, they serve
different purposes.

• Articles of Organization: The Articles of Organization, also known as Certificate of Formation, are the
legal documents that must be filed with the state to formally create an LLC. This document includes basic
information about the LLC, such as the name and address of the LLC, the purpose of the LLC, the name
and address of the registered agent, and the names and addresses of the initial members. The Articles
of Organization are usually filed with the Secretary of State in the state where the LLC is formed.

• Operating Agreement: The Operating Agreement is a legal document that outlines the internal workings
of the LLC, including the rights, duties, and responsibilities of the members and managers, the rules for
making decisions and managing the LLC, the procedures for distributing profits and losses among the
members, and other important provisions related to the operation of the LLC. The Operating Agreement is
not required by law but is strongly recommended, as it helps to establish the legal structure and
management of the LLC and can help prevent disputes among members in the future.

While the Articles of Organization are filed with the state and are public record, the Operating
Agreement is an internal document and is not typically filed with the state. The Operating Agreement is
usually kept with the LLC's important records and is only shared with the LLC's members, managers,
and other authorized parties.
The operating agreement of the company acts in a way similar, to the bylaws of a corporation. Below is a
comparison of terms between an LLC and a corporation

The document governs the company’s finances, organization, structure, and operations. Unlike
corporations that are required to appoint officers or a board of directors, an LLC is more flexible
with its management structures. This, too, is decided on and stated in the operating agreement.
CORPORATION

A corporation is a legal entity that is created under state law and is recognized as a separate entity
from its owners or shareholders. A corporation is owned by its shareholders, who elect a board of
directors to oversee the company's management and strategic direction.

The corporation can issue stock to raise capital, and the shareholders are generally not personally
liable for the debts and obligations of the corporation beyond their investment in the company. A
corporation can be either a for-profit or nonprofit entity.
Corporations are a separate legal entity created by shareholders. Incorporating a business protects owners from
being personally liable for the company’s debts or legal disputes. A corporation is more complicated to create, as
compared to the other three types of businesses. Articles of incorporation must be drafted, which include
information such as the number of shares to be issued, the name and location of the business, and the purpose of
the business.

As contrasted with the other two major forms of business ownership, the sole proprietorship and
the partnership, the corporation is distinguished by a number of characteristics that make it a more-
flexible instrument for large-scale economic activity, particularly for the purpose of raising large sums
of capital for investment. Chief among these features are:

1) limited liability, meaning that capital suppliers are not subject to losses greater than the
amount of their investment;
2) transferability of shares, whereby voting and other rights in the enterprise may be
transferred readily from one investor to another without reconstituting the organization under
law;
3) juridical personality, meaning that the corporation itself as a fictive “person” has legal
standing and may thus sue and be sued, may make contracts, and may hold property in a
common name; and
4) indefinite duration, whereby the life of the corporation may extend beyond the participation
of any of its incorporators
What does it means to incorporate a corporation

Incorporating a corporation means creating a legal entity that is separate from its owners or
shareholders, which has its own legal rights, liabilities, and obligations.

When a corporation is incorporated, it becomes a legal person that can enter into contracts,
own assets, and be sued or sue others in its own name. The process of incorporation
involves filing the necessary documents and fees with the state where the corporation will be
headquartered and registered, and fulfilling any other legal requirements for creating and
operating a corporation in that state.

"Corporation" refers to a legal entity that is separate and distinct from its owners (shareholders) and is treated as
a "person" under the law, with the ability to own property, enter into contracts, and engage in business activities.
"Incorporation" refers to the process of creating a corporation by filing articles of incorporation with the state
government and meeting various legal requirements. So, while a corporation is a legal entity, incorporation is
the process of creating that entity.

To be recognized as a corporation, a business must file an application that includes the

corporation's articles of incorporation (charter) with the State, pay an incorporation fee, and be
approved by the State. Once the approval is received, the corporation must develop its bylaws.
• Corporate Veil

Businesses that are registered as limited liability companies (LLCs) or corporations provide their owners with
protection against being held personally liable for the company’s debts and claims. That legal shield of separation
between a business and its owners is known as the “corporate veil.”

Under that shield the owners’ personal assets (home, property, bank accounts, retirement savings, etc.) cannot be
taken to settle debts and lawsuits brought against the business. However, personal liability protection is not
guaranteed if entrepreneurs do something (or fail to do something) that a court defines as “piercing the corporate
veil.”

However, in certain circumstances, the corporate veil can be pierced or

disregarded by a court, which means that the owners can be held
personally liable for the debts and obligations of the corporation. This
can happen if the owners fail to maintain the proper formalities of the
corporation, commingle personal and corporate funds, or engage in
fraudulent or illegal activities.
Corporation Name
A corporation name is the legal name of a corporation that is registered with the state government where the
corporation is incorporated. It is the official name that the corporation uses to conduct business and enter into
contracts, and it is also the name that is listed on legal documents, licenses, and permits. A corporation name is
typically composed of three parts: the chosen name, the corporate ending (such as "Corp." or "Inc."), and the state
of incorporation. The name must be unique and not already in use by another corporation in the same state.

"Corp", "Inc", and "Ltd" are all suffixes commonly used in the names of corporations in the United States and
other countries.

• "Corp" is short for "corporation" and is used to indicate that the business is a
separate legal entity from its owners.
• "Inc" is short for "incorporated" and has a similar meaning to "Corp". It is also
commonly used in the United States.
• "Ltd" is short for "limited" and is used primarily in the United Kingdom and other
Commonwealth countries to indicate that the company has limited liability.

Corp" is a common abbreviation for "corporation", which indicates that a business has been incorporated. It is
often included in a company's legal name and is used to denote that the business is a separate legal entity
from its owners, with limited liability for its debts and obligations.
Corporation Purpose

The purposes of a corporation are varied, they can be involved in educational, business, private sector or
governmental organizations, or any type of institution.

Once the corporation is registered the words corp must be included after the name and must be used in all
legal structures. In a corporation, directors and other senior officers have the right to buy stock for the
corporation. If we register a new business name and complete the legal formalities stipulated therein, the new
corporation will begin.

Corporations are managed by the board of directors, which is appointed by its shareholders. However,
becoming a corporation has a complex structure.

The purpose of a corporation can vary depending on its

specific mission and goals. In general, however, the purpose
of a corporation is to generate profit for its shareholders by
providing goods or services to customers.
There are three main types of corporations:

1. C Corporation: This is the most common type of corporation and is taxed separately from its owners. C
corporations have unlimited shareholders and can raise capital by issuing stocks.

2. S Corporation: An S corporation is a smaller version of a C corporation and is taxed similarly to a

partnership. It has limited shareholders (up to 100) and all shareholders must be U.S. citizens or residents.

3. Nonprofit Corporation: A nonprofit corporation is a corporation that is formed for a charitable, religious, or
educational purpose. Nonprofit corporations are exempt from certain taxes and have special rules governing
their operation.

4. Close Corporation: A close corporation is a type of corporation that is owned by a small group of people and
is not publicly traded.

https://youtu.be/Fw5TEf-ggTA
Types of Shareholders

In a corporation, shareholders are the owners of the company. They are individuals, organizations or entities
who own shares of stock in the corporation. Shareholders are typically entitled to vote on important matters that
affect the corporation, such as electing the board of directors and approving major corporate actions.

There are generally two types of shareholders in a corporation:

1. Common Shareholders: These shareholders are the owners of the corporation and have the right to
vote on corporate matters such as the election of the board of directors and major business decisions.
Common shareholders also receive a share of the corporation's profits, known as dividends, and have
the right to sell their shares in the corporation.

2. Preferred Shareholders: These shareholders typically do not have voting rights, but have priority
when it comes to receiving dividends or assets in the event of the corporation's liquidation or
bankruptcy. Preferred shareholders are often given a fixed rate of return on their investment, which
can be an advantage in times of economic uncertainty.
Corporation charter documents

Charter documents for a corporation typically include the following:

1. Articles of Incorporation: This is a legal document that establishes the corporation and includes
details such as the name of the corporation, its purpose, the number of shares of stock authorized,
and the names and addresses of the initial board of directors.

2. Bylaws: These are the rules that govern the internal management of the corporation, including how
meetings are conducted, how directors are elected, and how officers are appointed.

3. Shareholders' Agreement: This is a contract between the shareholders that governs the relationship
between them and sets out their rights and obligations.

4. Stock Certificates: These are physical or electronic documents that represent ownership in the
corporation.

5. Minutes of Meetings: These are written records of the proceedings of meetings of the board of
directors and shareholders.
ARTICLES OF INCORPORATION
According to Cornell Law School, articles of incorporation is the highest governing document in
a corporation. Also known as the corporate charter, it generally includes the purpose of the corporation, the
type and number of shares, and the process of electing a board of directors. The articles of incorporation must
be filed with the state at the time of incorporation, and may be amended or repealed as permitted by law and
the articles themselves.

The articles of incorporation serve as the legal foundation of the corporation,

outlining the basic structure and purpose of the company.

Articles of incorporation are easy to confuse with bylaws, which lay out the rules and regulations that govern
a corporation and help to establish the roles and duties of the company’s directors and officers. Bylaws work
in conjunction with the articles of incorporation to form the legal backbone of the business. (Freedman, 2021)

The articles of incorporation separate the business owner from the business. Articles of incorporation
create a separate legal entity for the business. Incorporating reduces a business owner’s personal risk,
because the business becomes financially responsible for its debts and legally responsible in the case of
lawsuits
The articles of incorporation, also known as the corporate charter, are a legal document that establishes the
existence of a corporation and sets out its basic structure and purpose. The specific content of the articles of
incorporation can vary depending on the state or jurisdiction in which the corporation is formed, but typically
includes the following information:

The Articles of Incorporation must include:

1. The name of the corporation
2. The purpose or purposes for which the corporation is being formed
3. The duration of the corporation, if it is not perpetual
4. The number and type of shares of stock the corporation is authorized to issue
5. The registered agent and registered office of the corporation
6. The names and addresses of the incorporators
7. The name and address of the initial board of directors, if there is one
8. Any other provisions or information required by state law or desired by the incorporators or directors

• The incorporator is the person or entity who files the articles of

incorporation with the state or jurisdiction where the corporation is being
formed. The articles of incorporation are a legal document that establishes
the existence of the corporation and sets out its basic structure and purpose.
• A registered agent is the person or entity that is designated to receive legal
and other official documents on behalf of the corporation.
 ARTICLES OF INCORPORATION

Article I. Name
The name of the corporation shall be [Insert Corporation Name
Article II. Purpose
The purpose of the corporation is to engage in any lawful activity for which corporations may be organized under the laws of the State of [Insert
State Name] and any other jurisdictions where it may conduct business.
Article III. Registered Agent
The initial registered agent of the corporation shall be [Insert Name of Registered Agent] with a mailing address of [Insert Address of Registered
Agent].
Article IV. Shares
The corporation shall have the authority to issue [Insert Number of Authorized Shares] shares of common stock, par value [Insert Value of Par
Value], which shall be divided into [Insert Number of Classes, if any] class(es).
Article V. Directors
The initial board of directors shall consist of [Insert Number of Directors], whose names and addresses are set forth below: [Insert Name and
Address of Director 1] [Insert Name and Address of Director 2] [Insert Name and Address of Director 3]
Article VI. Incorporator The incorporator of the corporation is [Insert Name of Incorporator], with a mailing address of [Insert Address of
Incorporator].
IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation on [Insert Date].
[Insert Signature of Incorporator] [Insert Printed Name of Incorporator]
What Happens Following the Approval of the Articles of Incorporation?

Once the articles are filed the secretary state checks that they are complete, and that the name of the
corporation is available. The office of the secretary issues the certification of formation or a charter and
that is when the company is deemed to be incorporated and begins to operate.

Once in existence, the corporation must hold the initial

meetings of shareholders and directors, adopt bylaws,
appoint officers, and issue stock. These events must be
properly recorded in the corporate record book. The corporation
must also apply for a federal tax identification number
(EIN) before doing business or opening bank accounts. Many
times, the corporation will need to obtain business permits—even
for an online business. In some cases, the corporation might also
want to file an S corporation election with the IRS
Bylaws are a set of rules and regulations that govern the internal management and operation of a
corporation . Bylaws typically establish the structure and responsibilities of the organization's governing
bodies, such as the board of directors and officers, as well as the procedures for conducting meetings and
making decisions.

Bylaws are important because they provide a framework for the internal governance and decision-making of
an organization. They help ensure that everyone involved in the organization is on the same page and has a
clear understanding of their roles and responsibilities. Bylaws can also help to prevent disputes and
misunderstandings by providing a clear set of rules for how decisions are made and how conflicts are
resolved.
1. Purpose and objectives of the organization
2. Membership and qualifications for membership, if applicable
3. Roles and responsibilities of the board of directors and officers
4. Procedures for electing and removing directors and officers
Bylaws may cover a range of 5. Powers and duties of directors and officers
topics, including: 6. Guidelines for conducting meetings of the board of directors, committees,
and members
7. Procedures for making decisions, such as quorum requirements, voting
rights, and proxies
8. Rules for the issuance and transfer of shares, if applicable
9. Procedures for amending the bylaws.
Bylaws typically include provisions that establish the structure and operation of an organization, as well as rules
and regulations that govern the internal affairs of the organization. Here are some of the things that bylaws typically
include
1. Purpose and objectives of the organization: Bylaws should outline the mission and goals of the organization, as well
as its overall purpose and scope of activities.

2. Membership: If the organization has members, the bylaws should describe the qualifications for membership, the rights and
responsibilities of members, and the procedures for joining and leaving the organization.

3. Board of directors: Bylaws should specify the number of directors, their terms of office, the process for electing or appointing
them, and their duties and responsibilities.

4. Officers: Bylaws should describe the officers of the organization, such as the president, vice president, treasurer, and secretary,
and their duties and responsibilities.

5. Meetings: Bylaws should establish the procedures for holding meetings, such as the frequency of meetings, how they are
called, who can attend, and the rules for voting.

6. Finances: Bylaws should describe the financial management of the organization, including the process for creating and
approving a budget, the management of funds, and any financial reporting requirements.

7. Amendments: Bylaws should establish procedures for amending the bylaws, including the process for proposing and
approving changes.
CORPORATIVE BODIES OF A CORPORATION

A corporation is a legal entity that is separate and distinct from its owners, and as such, it has its own corporate
bodies responsible for its management and operation. The following are the main corporate bodies of a
corporation:

Shareholders: Shareholders are the owners of the corporation and are responsible for
electing the board of directors, approving major decisions, such as mergers and
acquisitions, and receiving dividends, if any. Shareholders generally have limited liability
and are not personally responsible for the debts or liabilities of the corporation.

Board of Directors: The board of directors is responsible for overseeing the

management of the corporation and making major decisions, such as approving the
corporation's strategic plan and appointing executive officers. Directors are elected by
the shareholders and generally serve for a specified term

Executive Officers: Executive officers are responsible for managing the day-to-day
operations of the corporation and implementing the decisions of the board of directors.
The executive officers of a corporation typically include a CEO, CFO, and COO, among
others.
SHAREHOLDER MEETING

A shareholder meeting is a meeting that is held by a corporation in which shareholders come together to
discuss and vote on matters related to the corporation. Shareholder meetings may be required by law or by
the corporation's bylaws, and they may be held in person, online, or through other electronic means.

Shareholder meetings typically cover a wide range of topics, including the election of board members, the
approval of major decisions, such as mergers and acquisitions, the consideration of shareholder proposals,
and the review of financial reports.

During a shareholder meeting, shareholders have the opportunity to ask questions and express their views
on matters that are being discussed. Shareholders may also vote on various issues, either in person or by
proxy.

Shareholder meetings may be held in person, online, or through

other electronic means, depending on the corporation's bylaws
and the laws of the jurisdiction in which the corporation is
incorporated.
 Annual General Meeting (AGM): As the name suggests, an AGM is a meeting that is held
once a year, as required by law or the corporation's bylaws. At an AGM, the corporation provides an
update to shareholders on its financial performance and other important matters, and shareholders
have the opportunity to ask questions, vote on matters that require their approval, and elect
members of the board of directors.
• For example, in Delaware, which is a popular state for incorporation, corporations are required to hold an
AGM once a year, within 13 months of their last AGM. This means that a corporation incorporated in
Delaware must hold its AGM at least once every 13 months.
• Other states may have similar requirements, while some may have different timing requirements. For
example, in California, corporations must hold their AGM within 120 days of the end of their fiscal year,
which is typically 12 months after the previous AGM.

In a corporation, the general annual meeting is typically called by the board of directors. The exact timing and
procedures for the meeting are usually set out in the corporation's bylaws and the applicable laws.

The board of directors will typically set the date, time, and location for the annual meeting and will provide notice to
all shareholders in accordance with the bylaws and the law. The notice will include information about the agenda for
the meeting and any items that will require a vote.
Extraordinary / Special Meeting: A special meeting is a meeting that is held outside of the regular
schedule of AGMs. Special meetings are typically called when there is an urgent matter that requires the
attention of shareholders, such as a proposed merger or acquisition, or a change to the corporation's bylaws.
The purpose of a special meeting is typically specific and narrowly defined, and shareholders are only required
to vote on the matters that are listed on the meeting agenda.

An extraordinary meeting may be called by the board of directors, the CEO, or a specified
percentage of shareholders. The notice period and other requirements for an extraordinary meeting
are typically set out in the corporation's bylaws and the applicable laws.

During an extraordinary meeting, the agenda is usually limited to the specific matters that were
included in the notice calling the meeting. Shareholders or board members may vote on these
matters, and any decisions made are binding on the corporation.
In a US corporation, there are certain issues that may only be addressed at an Annual General Meeting
(AGM) or a Special General Meeting (SGM). These issues may include:

Issues Addressed at an Annual General Meeting (AGM):

• Election of directors
• Approval of financial statements
• Appointment of auditors
• Approval of executive compensation
• Other routine matters specified in the corporation's bylaws

Issues Addressed at a Special General Meeting (SGM):

• Changes to the corporation's bylaws

• Major corporate decisions or transactions, such as mergers, acquisitions, or divestitures
• Election or removal of directors outside of the normal AGM schedule
• Approval of major capital expenditures or investments
• Other urgent or significant matters that require shareholder approval
Steps for the holding of a general shareholders' meeting

A corporation may hold a general and extraordinary shareholder meeting at the same time, as long as all
the necessary requirements are met for both types of meetings.

In such a case, the notice of meeting should clearly state that both types of meetings will be held, and
should provide the agenda items and resolutions to be considered for each meeting separately. The notice
should also specify the different voting requirements for each type of resolution.

During the meeting, the chairperson should clearly distinguish between the different types of
resolutions and ensure that voting on each resolution is done separately and in accordance with the
required voting thresholds.

Proxy: A proxy is a legal document that allows a shareholder to

designate someone else, usually the company's management, to
vote on their behalf. Shareholders may choose to use a proxy if
they are unable to attend the meeting in person or if they prefer
to have someone else handle the voting for them.
I. Determine the type of meeting: The first step is to determine the type of meeting that needs to be
held, whether it is an annual general meeting, special general meeting, or extraordinary general
meeting.

II. Set the date, time, and location: Once the type of meeting has been determined, the date, time, and
location for the meeting must be set in accordance with the corporation's governing documents and any
applicable laws and regulations.

If there is a mistake in setting the date, time, or location for a shareholders' meeting, it could lead to various issues
depending on the severity of the mistake. For example:
• If the notice period for the meeting is not met: This could invalidate the entire meeting and any decisions made
during the meeting could be challenged or overturned.
• If the meeting is held at an incorrect location: This could lead to logistical issues and may prevent some
shareholders from attending the meeting, which could affect the quorum requirements.
• If the meeting is held on an incorrect date or time: This could lead to confusion among shareholders and
prevent some shareholders from attending the meeting, which could affect the quorum requirements.

In any of these scenarios, the corporation may need to reschedule the meeting and provide a new notice of meeting
that meets all the legal requirements.
Annual General Meeting:

• Timing: In most jurisdictions, the corporation must hold an AGM within a certain period of time
after the end of the corporation's fiscal year. This time frame can vary, so it is important to check
the relevant laws and regulations in the jurisdiction where the corporation is registered.

• Notice period: The corporation must give shareholders notice of the AGM within a certain
period of time prior to the meeting. This notice period can also vary, so it is important to check
the relevant laws and regulations in the jurisdiction where the corporation is registered. In many
cases, the notice period is at least least 10 days but no more than 60 days.

• Location: The location of the AGM should be accessible to the majority of shareholders, and it
should be large enough to accommodate all attendees. It is also important to ensure that the
location is in compliance with any applicable health and safety regulations.
Extraordinary General Meeting:

• Timing: An EGM can be called at any time by the corporation's board of directors or by a
certain percentage of shareholders. The timing of an EGM will depend on the urgency of the
matter being considered.

• Notice period: The notice period for an EGM may be shorter than that for an AGM,
depending on the urgency of the matter being considered. However, the corporation must still
provide adequate notice to shareholders in accordance with the corporation's governing
documents and any applicable laws and regulations.

As a general guideline, it is recommended to provide shareholders with at least 10 days'

notice for an extraordinary meeting. However, if the matter is urgent, it may be necessary to
provide shorter notice, as allowed by law and the corporation's bylaws.

• Location: The location of the EGM should be accessible to the majority of shareholders, and
it should be large enough to accommodate all attendees. It is also important to ensure that the
location is in compliance with any applicable health and safety regulations.
 III. Prepare the notice of meeting: The notice of meeting must be prepared and sent to all shareholders in
accordance with the corporation's governing documents and any applicable laws and regulations.
The notice of a general meeting, whether it is an annual general meeting (AGM) or an extraordinary
meeting, should be sent to all shareholders who are entitled to receive notice of the meeting, either by
mail or electronic means, such as email or through a secure online platform, and in a designated public
place or publish it in a newspaper

Key information

1. Date, time and location of the meeting: The notice should include the date, time and location of the meeting, as well as
any information on how to access the meeting if it is being held virtually.
2. Agenda: The notice should provide a clear and comprehensive agenda of the matters that will be discussed at the
meeting.
3. Voting information: The notice should include information on how shareholders can vote on the matters being
considered, including any deadlines for submitting proxy votes or other voting materials.
4. Record date: The notice should include the record date, which is the date on which a shareholder's ownership of shares
is determined for the purposes of the meeting.
5. Quorum requirement: The notice should specify the quorum requirement, which is the minimum number of shares that
must be represented at the meeting in order for business to be conducted.
6. Contact information: The notice should include contact information for the corporation or its agent in case shareholders
have any questions or concerns.
IV. Conduct the meeting: At the meeting, the chairperson will call the meeting to order and conduct the
meeting in accordance with the corporation's governing documents and any applicable laws and
regulations.

1. Registration: Shareholders and their proxies must register upon arrival at the meeting. This
includes verifying their identity and any shareholdings, and collecting any necessary voting
materials.
2. Call to order: The chairperson of the meeting will call the meeting to order and introduce
the agenda items to be discussed.
3. Approval of minutes: If applicable, the minutes from the previous meeting may be
reviewed and approved by the shareholders.
4. Reports: The board of directors and officers of the corporation may provide reports on the
corporation's financial performance, operations, and any other relevant matters.
5. Resolutions: The shareholders will consider and vote on the resolutions proposed in the
notice of meeting and proxy materials. This may include electing directors, approving
financial statements, and any other matters requiring shareholder approval.
6. Discussion: Shareholders may have the opportunity to ask questions or discuss the
resolutions before voting.
7. Voting: Shareholders will vote on the resolutions, either in person or by proxy. The voting
results will be recorded and announced by the chairperson.
8. Adjournment: Once all agenda items have been addressed, the chairperson will formally
adjourn the meeting.
QUORUM

In the United States, quorum requirements for a general or extraordinary meeting of shareholders vary by
state and are typically governed by the corporation's bylaws. However, many states follow the Model
Business Corporation Act (MBCA), which provides a default quorum requirement of a majority of the
outstanding shares entitled to vote.

In addition, some states have specific statutory requirements for quorum. For example:

• In Delaware, which is a popular state of incorporation for many businesses, a quorum consists of
either one-third of the outstanding shares entitled to vote or a majority of the shares present in
person or by proxy at the meeting, whichever is less.
• In California, a quorum consists of either one-third of the voting power or a majority of the voting
power present in person or represented by proxy at the meeting.
• In New York, a quorum consists of a majority of the outstanding shares entitled to vote.
BOARD OF DIRECTORS

A board of directors is a group of individuals elected by a corporation's shareholders to oversee the

management and direction of the corporation. The board of directors is responsible for making important
decisions related to the corporation's operations, including setting strategic goals, making major
financial decisions, hiring and evaluating senior executives, and providing oversight of the
corporation's performance.

The board of directors typically meets regularly throughout the year to discuss and make decisions
related to the corporation's business. In addition to these regular meetings, the board of directors
may also convene special meetings as needed to address specific issues or emergencies.

The size and composition of a board of directors can vary depending on the corporation's size, industry, and
other factors. However, most boards of directors consist of between five and fifteen members, with larger
corporations typically having larger boards. Board members are typically elected to serve for a fixed term,
often one to three years, and may be eligible for reelection at the end of their term.
The composition of a board of directors and its specific responsibilities can vary depending on the corporation's size,
industry, and other factors. However, there are some general principles that apply to most boards of directors.

Composition:

• The board of directors is typically made up of a group of individuals who are elected by the corporation's
shareholders.
• The number of board members can vary depending on the corporation's size and structure, but is usually
between five and fifteen members.
• The board of directors is typically chaired by a non-executive director who is responsible for leading the board
and ensuring that it fulfills its duties.

Responsibilities:

• The board of directors is responsible for overseeing the management of the corporation and setting its strategic
direction.
• The board of directors is responsible for appointing and overseeing the performance of the corporation's senior
executives, including the CEO.
• The board of directors is responsible for approving major financial decisions, such as mergers and acquisitions,
capital expenditures, and significant investments.
• The board of directors is responsible for ensuring that the corporation complies with legal and regulatory
requirements, including financial reporting requirements and environmental and safety regulations.
• The board of directors is responsible for ensuring that the corporation operates in an ethical and socially
responsible manner.
A board of directors typically works by holding regular meetings where members discuss and make decisions on
important matters related to the corporation's operations and governance. Here is an overview of how a board of
directors works:

1. Regular meetings: The board of directors typically holds regular meetings, such as quarterly or monthly, to discuss
matters related to the corporation's operations and governance. These meetings are usually scheduled well in advance and
are attended by all board members.
2. Agendas: Prior to each meeting, the board chair and/or CEO will prepare an agenda that outlines the topics to be
discussed and any materials that should be reviewed in advance.
3. Quorum: In order for the board to make decisions, a quorum of board members must be present. The quorum requirement
is typically set in the corporation's bylaws.
4. Discussion and decision-making: During each meeting, board members will discuss the items on the agenda and
make decisions on important matters, such as approving the budget, hiring executives, and setting strategic direction. The
board may also receive reports from committees and management.
5. Committees: To manage the workload and ensure that issues are thoroughly reviewed, the board may form committees to
focus on specific areas, such as audit, compensation, or nominating. These committees typically report back to the full board
on their findings and recommendations.
6. Record-keeping: The corporation will keep detailed minutes of each board meeting, which outline the decisions made
and any actions taken.
7. Governance: The board of directors also has a responsibility to ensure that the corporation is operating in compliance with
legal and regulatory requirements, and that it is following best practices in terms of corporate governance.
 COMMERCIAL
COMPANIES
• https://youtu.be/4-yE5JduTIo

Corporate law refers to the laws, rules, and regulations

that pertain to corporations. The laws involved regulate
the rights and obligations involved with the business
activities of a corporation, including formation,
ownership, operation, and management.
Corporate law also known as business law or company law is the body of law that regulates the rights,
relationships and conduct of individuals, companies, organizations and businesses. Corporate law
regulates the formation, financing, governance and demise of a corporation.

The world of company law is vast. It encompasses so many different elements. From the company
formation to the director’s duties, everything can be contained within this law. Therefore, it’s so
important for people to understand how it works and what you need to know to navigate
the corporate world safely

Corporations are unique in that they’re seen as completely separate entities in the eyes of the law.
Although they can be made up of large groups of people (investors, owners, employees),
corporations are treated as a single entity, meaning the laws deal with the business directly rather
than the people within it. Essentially, the corporation is treated as a person.

Corporations are famous for raking in large amounts of money and holding a decent amount of power
in a particular market. As they become more profitable and powerful, corporations can start to
monopolize markets, meaning they become the exclusive provider of a particular trade, product, or
service
Commercial company: an association of two or more persons who decide, bound by a contract, to assign
to one or more activities cash or in-kind goods, with the aim of sharing the benefits that may result. It can
also be created by a single person then called "sole partner".

Types Commercial company

• Sole Proprietorships,
• Partnerships,
• Limited Liability Companies (LLC), and
• Corporations.

Before creating a business, entrepreneurs should carefully consider which type of business structure is
best suited to their enterprise.
Partnerships are typically classified as pass-through entities for
tax purposes. This means that the partnership itself does not pay
income tax on its earnings. Instead, the income, deductions, and
credits of the partnership "pass through" to the partners, who
report these amounts on their individual income tax returns and
pay any tax due at their individual tax rates.
SOLE PROPIERTORSHIP
The most common form of business ownership is a sole proprietorship. This
is because it is the simplest and least expensive form of ownership, and it is
easy to set up and maintain. In a sole proprietorship, the business is owned
and operated by a single individual, who is responsible for all of the
business's debts and obligations.

Some of the characteristics of a sole proprietorship include:

1. Easy to set up: It is relatively simple and easy to set up a sole proprietorship. You just need to register your
business with the local authorities and obtain any necessary licenses.
2. Unlimited liability: As the sole proprietor, you are personally liable for all the debts and obligations of the
business. This means that if the business is sued or incurs debt, your personal assets are at risk.
3. Taxation: The income and expenses of a sole proprietorship are reported on the owner's personal tax return.
The business does not pay separate taxes.
4. Control: The sole proprietor has complete control over the business and its operations.
5. Limited life: A sole proprietorship does not have a separate legal existence from its owner. Therefore, it ceases
to exist upon the death or retirement of the owner.
6. Limited resources: A sole proprietorship is typically limited in terms of resources, both financial and otherwise.
It may be difficult to raise capital or expand the business without taking on partners or incorporating.
7. No sharing of profits: As the sole owner, all profits of the business go to you. There is no sharing of profits
with partners or shareholders.
The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole
proprietorship has no separate identity under the law. The sole proprietor owner will typically have
customers write checks in the owner's name, even if the business uses a fictitious name. Sole
proprietor owners can, and often do, commingle personal and business property and funds, something
that partnerships, LLCs and corporations cannot do.

Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietors need
not observe formalities such as voting and meetings associated with the more complex business
forms. Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor
owner. Many businesses begin as sole proprietorships and graduate to more complex business forms
as the business develops.

A sole proprietor may use a trade name or business name other than his or her legal name. In many
jurisdictions, there are rules to enable the true owner of a business name to be ascertained. In the
United States, there is generally a requirement to file a doing business as statement with the local
authorities. In the United Kingdom, the proprietor’s name must be displayed on business stationery, in
business emails, and at business premises, and there are other requirements
Sole Proprietor or Independent Contractor?

A sole proprietorship, unlike an independent contractor, is home-based with the option that
when they grow, they can modify their structure to form a limited liability company.

A sole proprietorship is a type of business structure in which an individual owns and operates the
business. An independent contractor, on the other hand, is a self-employed individual who provides
services to clients or customers on a contract basis.

While a sole proprietorship may operate as an independent contractor, the two are not the same thing. A
sole proprietorship is a legal entity, while being an independent contractor is a type of working
arrangement.

An individual who operates a sole proprietorship may work as an independent contractor, but not all
independent contractors operate as sole proprietors. For example, an independent contractor may
choose to operate as a limited liability company (LLC) or corporation rather than a sole proprietorship.
• Forming a Sole Proprietorship
You do not have to take any formal action to form a sole proprietorship. As long as you are the sole proprietor,
this status is automatically derived from your business activities.

Four simple steps

• Choose a business name.

Sole proprietorships can be formed under the name of the owner of the business or under a fictitious name
(also known as an assumed name, trade name or DBA name, short for "doing business as

• File an assumed business name.

InTexas, the state law requires that the name be distinguishable from the name of another company currently
on record.

• Obtain licenses, permits, and zoning clearance.

Depending on the line of business, it is most likely that business or professional licenses must be obtained.

• Obtain an Employer Identification Number.

A sole proprietorship’s profits are taxed as the owner’s personal income, and—despite its name—sole
proprietorships may hire employees so long as they have an Employee Identification Number (EIN).
 Operation of a Sole proprietorship

a. Business control In a proprietorship, management rests with the proprietor

himself/herself. The proprietor is a manager also.

Sole proprietorships are not companies, you cannot sell shares to

a. Funding investors to raise capital. Most times, you’ll be relying on your own
resources, such as savings and retained profits, as well as bank loans
and credit cards to raise the money you need

Sole proprietors have unlimited personal liability. There is no legal

distinction between the owner and the business. This means that
a. Liability creditors of the business and individuals who have other claims
against the owner can reach both the owner’s business and personal
assets

Vicarious liability means that one person may be held responsible for another person’s actions. In
employment law, vicarious liability is also known as respondeat superior, which is Latin for “let the master
answer.” Like other business forms, a sole proprietorship can hire employees. While exceptions exist, if
the employee is acting within the scope of his employment and his actions cause harm to someone else,
the employer could be liable
Sole Proprietor Taxes

Because you and your business are one and the same, the business itself is not taxed separately – the sole
proprietorship income is your income.

Advantages of a Sole Proprietorship Disadvantages of a Sole Proprietorship

• Unlimited personal liability. Because there is no legal

• Easy and inexpensive to form: A sole proprietorship
separation between you and your business, you can be held
is the simplest and least expensive business structure
personally liable for the debts and obligations of the
to establish.
business.
• Complete control. Because you are the sole owner of
• Hard to raise money. Sole proprietors often face challenges
the business, you have complete control over all
when trying to raise money. Because you can’t sell stock in
decisions.
the business, investors won't often invest.
• Simplified tax preparation. Your business is not taxed
• Heavy burden. The flipside of complete control is the burden
separately, so it’s easy to fulfill the tax reporting
and pressure it can impose. You alone are ultimately
requirements
responsible for the successes and failures of your business.
PARTNERSHIP
Partnerships are the simplest and most efficient type of business entity in the United
States. Under U.S. law a partnership is a business association of two or more
individuals, through which partners share the profits and responsibility for the liabilities of
their business. Partnerships have no formal startup costs, and usually have not
regulations aside form industry specific rules to comply with.

A partnership is a kind of business where a formal agreement between two or more people is made who agree
to be the co-owners, distribute responsibilities for running an organization and share the income or losses that
the business generates. Partnerships can be complex depending on the scope of business operations and the
number of partners involved.

As the name states, a partnership is a business owned by two or more people, known as partners. Like sole
proprietorships, partnerships are able to take advantage of flow-through taxation.

This means that the income is treated as the owners’ incomes so it is only taxed once. Owners in
partnerships are responsible for the liabilities of the firm. However, there are some nuances to this. There are
different types of partnerships: general partnerships, limited partnerships, and limited liability partnerships
• Governing Laws

Creation, organization, and dissolution of partnerships are governed by state law. However, many states
have adopted the Uniform Partnership Act.

Creation, organization, and dissolution of partnerships in the United States are governed by state law.
However, many states have adopted the Uniform Partnership Act. Federal law plays a minimal role in
partnership law except in the context of a diversity action, or in instances where a partnership agreement
contains an effective choice-of-law provision designating the application of federal law. Federal law also
governs whether a partnership exists for federal tax purposes

One of the most important aspects of the UPA states that

when one partner in a business leaves, a majority interest of
the remaining partners can agree to continue the
partnership within 90 days of the dissociation. The Uniform
Partnership Act effectively saved partnerships from
dissolution following a partner's dissociation
A partnership can carry out any type of business, the partners can be individuals or legal entities
including governments, non-profit companies, companies or individuals.

There are several types of partnership arrangements. In particular, in a partnership business, all
partners share liabilities and profits equally, while in others, partners may have limited liability.
There also is the so-called "silent partner," in which one party is not involved in the day-to-day
operations of the business

A silent partner may be a natural person or legal entity that only contributes
capital and does not participate in the operations of the company. These
partners are also known as limited partners since the liability is limited only to
the amount of the capital contributed.
A partner relationship is generally the result of a contract either express or implied. To
determine whether a partnership exists courts look at: (1) intention of the parties, (2) sharing of
profits and losses (3) joint administration and control of business operation, (4) capital
investment by each partner, and (5) common ownership of property. (Cornell Law School,
2021)

For the proper functioning of a partnership each partner must contribute resources with which
the business will be conducted, these resources can be money, property, labor to participate in
the profits and losses of the company. At least one of the partners participates in making
decisions about the day-to-day affairs of the business.

All partnerships must have a verbal or written agreement specifying how the partners are to
make decisions such as how to share profits or losses, how to resolve conflicts and alter the
ownership structure, and how to dissolve the business, if necessary.

Partnerships are generally easier and less costly to create than corporations.
S.N.C S.C.S. S.R.L.
Type of partnerships

General Partnerships:

This is the easiest type of partnership to form, with few upkeep costs. Every partner is
considered as participating in the operations of the business, and there is unlimited
liability for every partner. This means that every partner’s personal assets can be
used to repay the liabilities of the partnership. This also means that each partner
is responsible for every other partner’s actions

This type of partnership is the simplest one since it does not have complicated requirements for its
incorporation, operation and termination. This type of partnership grants its partners "powers of attorney",
binding the contract to a partnership agreement, additionally the partners have the right to participate in the
operation of the business unless otherwise stipulated in the partnership agreement.

A general partnership is an unincorporated business, which means you don’t need to register your business
with the state in order to legally operate. In fact, when two or more people go into business together with the
goal of earning a profit, a general partnership exists by default
A general partnership must satisfy the following conditions:
• The partnership must minimally include two people.
• All partners must agree to any liability that their partnership may incur.
• The partnership should ideally be memorialized in a formal written partnership
agreement, though oral agreements are valid.

A. GENERAL PARTNERS
A general partner has the authority to act on behalf of the business without the knowledge or permission of
the other partners. Unlike a limited or silent partner, the general partner may have unlimited liability for the
debts of the business

The general partners are the owners of the partnership and actively participate in the management and
operation of the partnership and make decisions for the benefit of the company, they bring specialized
knowledge and skills to the partnership and contribute to its pool of contacts and clients. Since they share
management responsibilities, each has more time to devote to their respective professional duties.
B. LIABILITY

In a general partnership, all partners share legal and financial liability equally. The individuals are personally
responsible for the debts the partnership takes on. Profits are also shared equally. The specifics of profit
sharing will almost certainly be laid out in writing in a partnership agreement.

Joint liability in a general partnership

• Each partner is liable for their own actions;

• Each partner is liable for actions taken by the other partners;
• Each partner is liable for actions taken by employees on behalf of the business

If someone sues a general partnership, the partners have shared

responsibility for any damages a judge or jury awards.

Joint Authority

The benefit of partnership is joint authority in a discretionary business arrangement that has the potential
to create prosperity for all involved.
A partnership agreement of a general partnership is a legal document that outlines the terms and
conditions of the partnership between two or more individuals or entities. The agreement is designed to
establish the rights and responsibilities of each partner, the profit-sharing arrangements, the management
structure, and the procedures for resolving disputes or dissolving the partnership.

Some of the key provisions that are typically included in a partnership agreement for a general
partnership include:

1. The name and purpose of the partnership

2. The duration of the partnership
3. The capital contributions made by each partner
4. The allocation of profits and losses among the partners
5. The decision-making process and management structure of the partnership
6. The restrictions on the transfer of partnership interests
7. The procedures for admitting new partners or withdrawing existing partners
8. The procedures for resolving disputes among the partners
9. The process for dissolving the partnership and distributing assets

A partnership agreement for a general partnership is a crucial document that helps ensure that all
partners have a clear understanding of their roles and responsibilities in the partnership.
This Partnership Agreement (“Agreement”) is made on [Date] by and between [Partner 1 name and
address], and [Partner 2 name and address].

1. Name and Purpose The name of the partnership shall be [Name of Partnership]. The purpose of the partnership is to
[Purpose of Partnership].
2. Capital Contributions Each partner will contribute [Amount] in cash or other property, as determined by the partners, to
the partnership as capital.
3. Profit and Losses The profits and losses of the partnership shall be allocated equally among the partners.
4. Management The partners shall manage the partnership jointly and shall have equal rights in the management of the
partnership.
5. Decision-making Majority vote of the partners shall be required for any decisions regarding the partnership.
6. Transfer of Interests No partner shall transfer any interest in the partnership without the unanimous consent of the other
partners.
7. Admission of New Partners No new partners shall be admitted to the partnership without the unanimous consent of the
existing partners.
8. Withdrawal of Partners Any partner may withdraw from the partnership at any time upon giving notice in writing to the
other partners.
9. Dispute Resolution Any disputes arising under this Agreement shall be resolved by arbitration.
10. Dissolution The partnership may be dissolved by mutual agreement of the partners, or by a vote of [Number] of the
partners. In the event of dissolution, the assets of the partnership shall be liquidated and distributed equally among the
partners.

IN WITNESS WHEREOF, the parties have executed this Partnership Agreement as of the date first written
above.
[Partner 1 Name and Signature] [Partner 2 Name and Signature]
Limited Partnerships:

This type of partnership has at least one general partner. This general partner takes on
unlimited liability for the partnership and manages the operations of the company.
Additionally, there are also limited partners in limited partnerships. Limited partners only
take on as much liability as their financial stake in the business. However, as limited
partners, they are not involved in management decisions and do not have any direct control
over the company

To form a limited partnership, partners must register the venture in the applicable state, typically through the
office of the local Secretary of State. It is important to obtain all relevant business permits and licenses, which
vary based on locality, state, or industry. The U.S. Small Business Administration (SBA) lists all local, state, and
federal permits and licenses necessary to start a business

Creating a limited partnership or limited liability partnership is done at the state level. Each state has its own
rules, but in general you must pay a fee and file papers with the state, usually a "certificate of limited
partnership" This document is similar to the articles of incorporation filed by a corporation and includes
information about the general and limited partners.

In addition to registration, you will need to draft a partnership agreement detailing

all of the partners' responsibilities. The agreement also details how the profits of
the partnership are divided among the partners.
• Operation of a limited partnership

This type of partnership requires two types of partners, general partners, and limited partners. General
partners General partners have unlimited liability and have full management control of the business.
Limited partners have little to no involvement in management, but also have liability that's limited to
their investment amount in the LP.

The general partners may be individuals or legal entities, and in addition to making the company's
decisions, they are responsible for the daily management of the limited partnership and are liable for the
company's financial obligations, including debts and litigation. Other contributors, known as limited (or
silent) partners, provide capital but cannot make managerial decisions and are not responsible for any
debts beyond their initial investment.

“General partners own and operate a business, while limited partners invest in the
business but do not make operational decisions or carry any personal liability for
company debt. One or more of each type of partner can come together to create a
limited liability partnership”.
 General partner in general partnership and limited partnership controls the day-to-day operations of the firm
and be personally liable for the debts of the firm, but the role of limited partners is different

• Limited partners do not play an active role in the business. The limited partners (most LPs
have more than one limited partner) contribute financially to the business (for example, a limited
partner might invest $100,000 in a real estate partnership) but have minimal control over business
decisions or operations, and normally cannot bind the partnership to business deals

• Limited partners are not personally liable. In return for giving up management
power, limited partners get the benefit of protection from personal liability. This means
that a limited partner can't be forced to pay off business debts or claims with personal
assets. A limited partner, however, can lose his or her financial investment in the
business

• Limited partners face slightly different tax rules. For income tax
purposes, limited partnerships generally are treated like general
partnerships, with all partners individually reporting and paying taxes on
their share of the profits each year.
A Limited Partnership Agreement may address, among other things, the following subjects:

• Business Purpose of the Limited Partnership

• Term of Existence
• Capital Contributions of partners
• Allocation of Profits and Losses
• Distribution of Net Cash Flow
• Powers and duties of General Partner and limitation on the powers of General Partner
• Hiring and firing of employees
• Compensation of partners
• Bonus provisions
• Decisions that require limited partner approval
• Buy-Sell obligations, options or rights of first refusal
• Events that cause termination and dissolution of the Limited Partnership
• Disability provisions
• Retirement provisions
• Arbitration, mediation or other dispute resolution mechanisms

Limited Partnership Agreements can also contain a “right of first refusal” which gives either the Limited
Partnership or the other partners the first opportunity to buy the partnership interest, at a designated price, before
it is sold to outsiders
Uses for Limited Partnerships

Real Estate: Limited partnerships are commonly used in the real estate industry to pool
together investor capital for the purpose of investing in real estate projects. In this type of
limited partnership, the general partner is typically a real estate developer or investment
firm, while the limited partners are investors who provide the funding.

Oil and Gas: Limited partnerships are also commonly used in the oil and gas industry to
finance exploration and drilling projects. In this type of limited partnership, the general
partner is typically an oil and gas company with expertise in exploration and production,
while the limited partners are investors who provide the funding. The general partner is
responsible for managing the project, while the limited partners have limited liability and
are entitled to a share of the profits.

Film and Television: Limited partnerships are sometimes used in the entertainment industry to finance
film and television productions. In this type of limited partnership, the general partner is typically a
production company or studio, while the limited partners are investors who provide the funding. The
general partner is responsible for producing the film or television show, while the limited partners have
limited liability and are entitled to a share of the profits.
Limited Liability Partnerships (LLP):

LLP stands for limited liability partnership. As the name

suggests, an LLP provides its members with a degree of
liability protection, shielding them and their personal assets.

A limited liability partnership (LLP) is a type of business structure that combines elements of a partnership
with the liability protection of a corporation. In an LLP, partners have limited liability for the debts and
obligations of the business, meaning their personal assets are not at risk if the business is sued or cannot
pay its debts.

Like the general partnership and the limited partnership, the LLP requires a minimum of two members: a
general partner and a limited partner. However, in this case the general partner and limited partner may be a
natural person or a corporation or even another partnership

LLPs (Limited Liability Partnerships) are commonly used by

professional service providers, including, Law firms,
accounting firms, architects: engineers, healthcare
professionals, Healthcare
In an LLP, partners may have different levels of participation and responsibility, which can be reflected in their
titles and roles. Some of the common levels of partners in an LLP are:

• General Partner: A general partner is actively involved in the day-to-day operations of the business
and shares in the profits and losses of the partnership.

• Limited Partner: A limited partner is a passive investor who provides capital to the business but is
not involved in its management or operations. Limited partners typically have limited liability for the
partnership's debts and obligations.

• Senior Partner: A senior partner is typically a partner who has been with the firm for a long time
and has a higher level of experience and responsibility than other partners. They may be involved in
management decisions and have a higher share of profits.

• Junior Partner: A junior partner is a partner who has recently joined the firm and has less
experience and responsibility than senior partners. They may be involved in specific client work or
projects and have a lower share of profits.

Partners are owners, not employees, so they don't generally get a regular
paycheck. Each partner receives a distributive share of the profits and losses of
How Partners Are Paid the business each year. Payments are made based on the partnership
agreement, and the partners are taxed individually on these payments
• Formation
For the incorporation of an LLP there must be a written document in which the amount of the contributions
in money of the limited partners is recorded as well as the control that will be exercised in the operations of
the company. In this way, limited partners will not be held liable for the partnership's debt obligations and
the partnership won't be influenced too greatly by the limited partner.
LLPs are formed at the state level by filing a Certificate of Registration or similar document
with the Secretary of State or other formation agency and paying the required filing fee. A
LLP usually must designate a registered agent and is often subject to payment of a state
franchise tax for the privilege of operating as a limited liability entity

Regardless of the requirements, all states ask that applicants comply with the following general steps

Applicants should check if The name is chosen freely by the partners Designate a registered agent that
the type of business is following with “Limited Liability Partnership” or agrees to accept legal papers and
eligible for a limited liability “LLP” in order to indicate that you’re operating as other documents on the partners
partnership such. business’s behalf.

File a certificate of limited liability partnership Partnership agreement which outlines

Partners must have their
which allows the LLP to start operating. The the responsibilities, also lays out exactly
required business licenses
certificate must be file with the state. what liability defenses each partner
and permits, depending on the
business’s name, address, the names and receives, and acts as insurance against
type of business and the state
contact information for the partners, personal asset seizing in case of a
where operate in.
registered agent’s contact information, lawsuit or something similar
• Ownership and Operation

The general and limited partners are the owners of the partnership, according to the percentage of
contributions described in the partnership agreement. In the absence of such an agreement, the ownership
of the partnership is divided equally.

A main benefit of creating an LLP is a balance of management control with reduced liability exposure.
Similar to a general partnership, an LLP permits eligible parties to form a business entity that allows its
partners to actively participate in the operation of their business. Unlike general partners, partners in an
LLP usually possess some form of limited potential personal liability for the debts, negligence, or
wrongdoing of other partners in the business organization

In a Limited Liability Partnership (LLP), each partner has limited liability for the
debts and obligations of the partnership. This means that each partner is not
personally responsible for the debts and liabilities of the partnership, beyond the
amount of their investment in the partnership.

Limited liability is one of the key advantages of an LLP, as it provides protection for
individual partners against the financial risks associated with the partnership. This
means that the personal assets of individual partners are not at risk if the
partnership incurs losses or is unable to meet its financial obligations.
Articles of Association or LLP Agreement

The Articles of Association or LLP Agreement is a legal document that outlines the rights, duties, and
responsibilities of the partners of an LLP, as well as the management structure, profit-sharing arrangements, and
other important details. It is a critical document that sets out the terms and conditions of the partnership between
the partners of an LLP.

Some of the key provisions typically included in an LLP Agreement or Articles of Association include:

1. Name and address of the LLP: This section of the agreement outlines the legal name of the LLP, as
well as its principal place of business.
2. Purpose of the LLP: This section explains the business activities that the LLP will engage in.
3. Capital contributions: This section outlines the amount of money or other assets that each partner
will contribute to the LLP, and the timing and manner of these contributions.
4. Profit-sharing arrangements: This section outlines how profits and losses will be distributed among
the partners.
5. Management structure: This section outlines how the LLP will be managed, including the roles and
responsibilities of designated partners and any decision-making processes.
6. Term and termination: This section outlines the duration of the partnership and the conditions under
which the partnership can be terminated.
7. Dispute resolution: This section outlines the process for resolving disputes among partners.
8. Confidentiality and non-compete clauses: This section may include provisions related to
confidentiality and non-compete agreements among partners.
Main differences between General Partnership, Limited Partnership, and LLP

Limited Liability
General Partnership Limited Partnership Partnership
Liability Unlimited Limited Limited

Partners or
Management All partners General & Limited
designated partners

Equal or based on
Capital Contribution Equal General & Limited
agreement

Personal Liability Yes Yes for General No

Taxation Pass-through Pass-through Pass-through

Transfer of
Difficult Possible Possible
Ownership
Legal Entity No Yes Yes
• Termination of a partnerships

Partnership termination refers to the way in which a business partnership is legally ended. In most
cases, a partnership will terminate in a “natural” way, such as when the business aim of the
partnership has been achieved. In other cases, a partnership may terminate prematurely due to
unexpected circumstances, such as the death of a partner, or due to an illegal violation

Dissolving a general partnership often occurs if a partner dies, becomes incapacitated, or

formally expresses her desire to disassociate from the partnership.

Most states require a formal statement to be filed for the dissolution. In some states this is
also known as a certificate of cancellation. Additionally, there is a set time period of
submitting this form to be properly processed by the office. Besides, completing the right
paperwork for the dissolution you need to notify your clients to inform them about your
decision of ending the business. You would also need to contact your suppliers and
customers to publicly announce that your company is no longer in business and the
partnership ended.
Fiduciary duties in a partnership

In partnerships, you may have duties of trust, known as fiduciary duties, depending upon the type of
partnership and the nature of your role in that partnership. Your fiduciary duties will differ depending upon
whether you are participating in a general partnership or limited partnership and if you are a general
partner or limited partner in that business entity. State statutory law, judicial precedent, and the terms of
your partnership agreement will further determine what fiduciary duties, if any, you owe to others in your
general or limited partnership. Possessing fiduciary duties may spell greater legal liability for a partner who
fails to live up to these obligations of trust

Duty of Good Faith and Fairness: Under this duty, partners must act with
honesty and show good faith and fairness to each other in their partnership
interactions
Duty of Loyalty: The duty of loyalty requires relevant partners to place the
success and interests of their partnership above their own personal or other
business interests.

Duty of Care: Under the duty of care, partners are expected to act in a
reasonably prudent manner in managing and directing the partnership

Duty of Disclosure: In order to make informed decisions, participating partners

should make full disclosures about reasonably known risks and potential
benefits of a particular action