Essay Questions

1. When does a taking occur for eminent domain purposes? Refer to the Lucas case.     Eminent domain refers to the inherent power of the state to take or seize the private property of its individual citizens. Property taken through eminent domain is mainly set aside for the development of public utilities or assigned to a third party who is then supposed to use it for the general good of the public (Larson, 2004).

There are generally four types of takings which the state can be employed by the state through eminent domain. These are:

Complete Taking – This is where the state seizes an entire property in for public use. In this regard, the Takings Clause which is included in the Fifth Amendment provides that the taking of private property by the federal government must be accompanied by appropriate compensation. The Taking Clause is enforceable in the state and local governments through the Fourteenth Amendment (Funk, 2005). In the case of Lucas v. South Carolina Coastal Council (1992), the plaintiff was entitled to compensation as a result of the complete taking of his land. However the Supreme Court denied him any compensation stating that the restriction imposed on the use of the land was in the interest of the general public due to the intended use of the land. Therefore the Takings Clause does not apply in this case in spite of the economic benefits lost incurred as a result of the complete taking of his property.

Partial Taking – The state in this case takes a portion of a particular property mainly for the expansion of the existing utilities. The owner of the property is liable for compensation in regard to the piece of land seized and any resulting decline in the value of the remaining property.

Temporary Taking-The government may require a piece of land to be used as a site when undertaking a certain project. This compels it to use eminent domain to take the portion of land. The owner in this case retains the ownership of the land and compensated for any losses resulting from taking it.

Easements and Rights of Way – The government might be forced to encroach on a certain portion of private land in the process of installing key infrastructure such as power lines, telephone lines and drainage systems. In such a case, the owner of the property maintains the right over the property but must not interfere with the right of way.

2. Discuss tort reform and its relationship to business. Discuss both sides of the issues.

The contemporary tort system in the U.S. has been blamed for the ailing legal system which has come under heavy criticism for its inefficiency, ineffectiveness and in addition to being too costly. The torts have risen to unprecedented levels in the last two decades as a result of unreasonable claims awarded to injured parties in civil suits. The insurance industry has been the major driving force for the increase in torts due to the numerous loop holes which have resulted in vast mal practices (Joint Economic Committee, 1996). This has led to the exaggeration of insurance claims which has resulted in individuals being overcompensated even for minor injuries and damages.

The heavy torts have had far reaching effects on the economy on a micro and macro level. To begin with, the heavy claims serviced by insurance companies have compelled players in the industry to increase premiums paid by individuals and businesses. On the individual level, this has increased their cost of living and thus reduced their disposable income. People are forced to adjust their budgets so as to meet their insurance costs. If this trend continues, most individuals will not be able to afford insurance cover in the future.

In regard to businesses, the high premiums have escalated their overhead costs thereby reducing their profit margins. This has forced businesses to transfer these costs to the consumer leading to higher prices for goods and services. This is taking place at a time when the consumers have a lower disposable income and therefore their purchasing power is diminished. The demand for the goods and services is therefore low and this has reduced the volume of sales. In order to continue operating on a going concern status, most businesses have been forced to engage in cost cutting measures which includes laying off their staff and cutting their budgets on things such as sales and marketing. This has resulted in a slow down of the general economic activity.

The increase in the prices of goods results in increased inflation which in turn causes the lending rates of banks to rise. This makes it difficult for businesses as well as individuals to access credit. With a reduced working capital as a result of diminishing sales, most companies will be forced to rely on these expensive loans to maintain their operations. In such an economic climate, many businesses will be forced to go under. In addition, foreign investors will look for alternative destinations to invest their money. The high torts will also discourage potential investors leading to a further decline in the economy.

The American Tort Reform Association – ARTA seems to be the final hope in mitigating this situation. ARTA has come up with a nationwide program to block the tort reforms been advocated by injury lawyers. In addition to this, the association is fighting for the reform of insurance companies and the legal system particularly in regard to the issue of torts. This will be mainly achieved by intensive lobbying in the state legislatures on the need to enact these reforms especially considering the plight of the economy and the society as a whole (American Tort Reform Association, 2008).

 

 

3. Discuss the function(s) of confidentiality agreements. What are some fields in which confidentiality agreements are commonplace?

 

Confidentiality agreements or non disclosure agreements are contracts entered by two or more parties where it is generally agreed that the information acquired by one of parties from another or developed by one of the parties will remain confidential (Radack, 2005). These agreements are usually between employees and their employers and are included in the signing of the job contract. In addition to prohibiting the disclosure of confidential acquired in the course of doing their work, confidentiality agreements also have a time period within which the employee(s) should not engage in similar employment after leaving the organization.

Confidentiality agreements have a number of functions. To begin with, they act as a tool for protecting a company’s trade secrets. This is more so in regard to the business’s competitors. As mentioned above, the agreements restrict the employment activities of its former employees especially in regard to employment by competitors. If an employee violates this agreement through acting against the issues agreed upon, the employer may institute legal proceedings against him and claim injunctive and monetary damages.

Confidentiality agreements usually help to make a distinction between confidential information and disclose able information. This is necessary in order to prevent any misunderstandings in the future as a result of the disclosure of information which was assumed by the employee as not being confidential to a third party. The employee is therefore held liable if he discloses information which was classified as confidential.

Confidentiality agreements are also crucial in safeguarding against the loss of patent rights owned by an organization. In most jurisdiction the public disclosure of the formula or the methodology behind a certain invention leads is enough ground for the loss of patent to the invention (Rogers, 2003). This means that the public is at liberty to duplicate the invention which results in the loss of revenue. Therefore employees who have access to such formulae are required to sign a confidentiality agreement barring them from disclosing such information. In addition, such employees are prohibited through the agreement from setting up a business similar to that of their employer.

4. Discuss why it is so important to express one’s contractual commitment instead of attempting to enforce an implied-in-fact contract. Mention the Bennett case in your discussion.

 

In an express contract, the contracting parties agree upon all the promised terms of their agreement after engaging in negotiations. This makes the contract binding and therefore in the event of the violations of these terms, the injured party can seek legal redress armed with all the evidence regarding the agreement (Robinson & Gale, 2008).

On the hand, an implied-in-fact contract is based on the actions of the contracting parties and is therefore not backed by any formal agreement. The legality of such a contract is therefore based on the assumed implications of the actions of the different parties involved in the contract. Therefore in case of the fall out, it the burden of proof lies with the contracting parties. It is their duty to prove that their actions were wrongly interpreted by the other party (Metzger, 2008). This involves a lot of subjectivity and therefore the decision reached by the court might not be representative of the situation on the ground.

In the case of Bennett, no formal agreement was made between him and the employer, this leads to the direct conclusion that the Bennett was employed on an implied-in-fact contract. There was no document which showed the term of his employment. He nevertheless stated expressly that he did wish to be employed on a short term basis during his interview. In response, the manager assured him that this was not a problem as the company was planning on retaining their staff for the whole duration of the promotional program. This was to last for three years. The informal agreements reached during the interview can therefore be said to be the only reliable evidence on the terms of his employment. Although the mangers dismiss the statements they made as vague, there is no other evidence to counter these allegations. Therefore terminating Bennett’s contract before three years had elapsed was in breached of the implied-in-fact contract and he was therefore entitled to compensation for the injury incurred when working for Emerson.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

American Tort Reform Association. (2008). Defrocking Tort Deform: Stopping Personal Injury Lawyers from Repealing Existing Tort Reforms and Expanding Rights to Sue in State. Retrieved April 4, 2009 from http://www.atra.org

Funk, B. (2005). The Takings Clause of the Fifth Amendment Retrieved April 4, 2009 from http://www.progressiveregulation.org/perspectives/takings.cfm

Joint Economic Committee. (1996), Improving the American Legal System: The Economic Benefits of Tort Reform. Retrieved April 4, 2009 from http://www.house.gov/jec/tort/tort/tort.htm

Larson, A. (2004) Eminent Domain. Retrieved April 4, 2009 from http://www.expertlaw.com/library/real_estate/eminent_domain.html

Metzger, M. B. (2008).Business Law and the Regulatory Environment: Concepts and Cases, 14^th Edition. Irwin Publishers.

Radack, V. D. (2005). Understanding Confidentiality Agreements. Retrieved April 4, 2009 from http://www.tms.org/pubs/journals/JOM/matters/matters-9405.html

Rogers, J. L. (2003) Protect Your Patent. Sphinx Publishers.

Robinson, C.W. & Gale., T (2008) Elementary law. University of California