Making rules: Administrative legislation

Agencies engage in rulemaking every time they create laws through their legislative authority. Many areas of the law are so complex that congressional legislation doesn’t cover all the possibilities that could ever come up. It’s difficult to get a majority of the 535 members of Congress to agree on what to serve for dinner let alone pass major legislation! For example, the laws regarding income tax collection are quite voluminous, and you could say that Congress missed a few spots when it wrote the Internal Revenue Code. To fill in the blanks, Congress gave the Internal Revenue Service (IRS) the authority to write rules covering more specific situations.

The rulemaking authority of administrative agencies is not without checks and balances. The legislative branch sets standards for administrative rulemaking. If the agency rules do not meet the legislative parameters, the courts have the power of judicial review and can strike down the rules. Congress also retains the power to veto an administrative rule in a process called legislative oversight, which means that if it doesn’t like the rules that an agency writes, Congress can override the rules by legislation.

Taking it to the judge: Administrative hearings

Quasi-judicial adjudicatory hearings give adversarial parties their “day in court” when an administrative agency determines the rights of citizens and other entities under the law the agency administers. For example, if a Social Security recipient is denied benefits, that person can have his case heard by an unbiased administrative law judge.

Agency hearings are a bit less formal than court. But when an agency requires someone to appear at a hearing, the APA ensures that the decisions aren’t arbitrary. The applicant has certain due process rights, including the right to notice of the hearing, the right to call witnesses and cross-examine the government’s witnesses, and the right to counsel or other representation, if desired. In addition, losing parties have the right to judicial review of the agency’s decision, which means they can appeal their cases to court. The APA also provides for judicial review. In other words, if a party doesn’t like the agency’s decision, that party can appeal it to court.

Although paralegals generally may not represent clients in court, they can get firsthand experience advocating for clients by going to bat for them in many types of administrative hearings. Administrative hearings are some of the few venues where paralegals may actually represent clients, especially because paralegals are less expensive than attorneys and the APA doesn’t make provisions for persons who can’t afford representation.

Paralegals can represent clients in certain cases before administrative tribunals, but it may not always be allowed. Finding out if the agency allows paralegals to represent clients, either by its own rules or by some other law, is important. If you represent a client when doing so is not allowed, you could be found guilty of the unauthorized practice of law, a crime in many states.

Casual contact: Informal advocacy

Informal advocacy takes on many characteristics, and your approach can be as varied as the agency official you’re dealing with. For example, suppose you’re trying to get a public record like a birth certificate from an agency. Sometimes a phone call or a letter gets a positive response. It’s often said that the shortest distance between two points is a straight line, and that’s what informal advocacy is all about.

Because you might encounter many different agency personnel with just as many personalities, you need to be perceptive enough to know what kind of person you’re dealing with and flexible enough to change your tactics depending on the response you get. For example, you may encounter officials who are sticklers for rules. If these types tell you that you have to jump through a set of hoops to obtain a particular type of record, you could ask them to show you the specific regulations that they’re relying on. If their rule isn’t written down somewhere, insist that they not require the particular hoop jumping in your case. Or appeal to their sense of equity, justice, or common sense to see if they may be willing to grant an exception in your unique case.

At other times, an emotional approach may be just the ticket to solving your client’s problem. As silly as it may sound, you may get away with using emotions to address a situation, depending, of course, on the personality of the person sitting at other end of the telephone or desk. Some bureaucrats may respond more positively if you let them know you’re upset, while that same approach may have the opposite effect on others. Depending on how well you read the situation, you may find that a government official responds better to flattery.

And don’t forget the old adage that you can get more flies with honey than you can with vinegar. You can be quite effective with informal advocacy by simply developing a rapport with an official you need to negotiate with. Approach officials directly, treat them with kindness, and always be honest. Sometimes, if you deal with the same person over and over again for different clients, you can develop a good working relationship built on mutual trust and respect, which can work miracles in many instances.

Systematic means: Formal advocacy

If the direct approach to the agency doesn’t do the trick on an informal basis, you may have to take the client’s matter to a higher level. Formal advocacy occurs when you go beyond the agency official behind the desk to a more official setting, like an administrative tribunal. The more your situation begins to look like you’re in a courtroom setting, the more it becomes formal advocacy. For instance, formal advocacy could consist of adversarial parties arguing their respective positions in front of an administrative law judge or a hearing examiner. You may also have a case where witnesses to the conflict testify under oath and get cross-examined by the opposing side. The officer for these quasi-judicial hearings must in most cases produce a written decision in favor of one party over another.

The techniques and skills you apply in formal advocacy resemble the same approach an attorney may take when litigating a matter in court: conducting a pre-hearing investigation of the client’s case, conducting legal research, drafting memos, organizing evidence for the hearing, and developing strategies to present the case to the hearing examiner. (You can find more about these specific litigation procedures and methods in Chapter 6.)

When you’ve appealed your request without satisfaction as far up the administrative agency chain of command as you can — from the front desk clerk, to the supervisor, to the agency head, and finally to an administrative law judge or hearing officer — you’ve exhausted all administrative remedies. At this point, the matter is ripe for judicial review, which means you may appeal it to a civil court. Even if you were able to represent the client at the administrative level, the client will almost always require attorney representation at court hearings.

As a paralegal, you may advocate both formally and informally on behalf of a client in many types of administrative proceedings. Be sure to exhaust all administrative remedies before the client brings the case to court for judicial review. As we always say, “Court should be your last resort.”

Prove it: The prosecutor’s burden

In any criminal prosecution, the defendant has a presumption of innocence, which means the defendant has no obligation to prove her innocence. Instead, the government has the burden to prove that each element of the crime charged really happened beyond a reasonable doubt. Otherwise, the defendant will be acquitted (that is, she will be found not guilty of the crime charged). The standard for proving beyond a reasonable doubt is the highest burden of proof in the law. It’s not exactly proving with 100 percent scientific certainty, but it’s close. The prosecutor has to show that any reasonable person would believe that the defendant is guilty.

It wasn’t my fault: Affirmative defenses

To counteract the prosecution’s case, defendants try to disprove the evidence brought against them either by showing that they didn’t commit the crime or that they shouldn’t be held responsible for committing the crime. To prove the latter and attempt to defeat criminal liability, they raise affirmative defenses. You’re probably familiar with some of these defenses from watching crime shows:

• Self-defense: A common defense in assault, battery, and homicide cases is self-defense. Defendants may argue that they were justified in reacting with reasonable force against the victim because they needed to defend themselves from the victim’s assault and/or battery on them.
• Diminished capacity: Defendants may argue their actions are excusable, either by insanity or by some form of diminished capacity. This means that they didn’t have the ability to actually form the intent to commit the crime.
• Entrapment: A defense used often in drug prosecutions is entrapment. The defendant argues that law enforcement officers enticed the defendant into committing the crime.
• Duress: Duress is another, less common, defense. Defendants arguing entrapment state that they had to commit the crime to prevent a greater harm from occurring. The classic example is when a defendant argues that he had to steal property because he was starving.

Hitting the big time: Felonies

Felonies consist of more serious offenses such as murder, rape, and robbery. Convicted felons generally don’t receive the proverbial “slap on the wrist” for these crimes. Instead, they’re more likely to get shipped off to the big house: the state penitentiary. The most serious felonies are crimes against persons as opposed to crimes against someone else’s property. Here are descriptions of many of the felony crimes against persons.

Although the following is a list of general classifications of crimes, you should always check the laws in your own state and municipality to determine the actual elements of any crime and the laws of jurisdiction (that is, federal, state, local) where you’re working.

• Homicide: Homicide, the most serious of all felonies, occurs when a defendant kills another person. Types of homicide range from murder to manslaughter based on the defendant’s degree of responsibility. The degree of crime depends on whether the defendant intended to kill the victim or whether it was accidental. The degree of the crime depends, therefore, on whether the elements include intentional, reckless, or negligent acts.
  • Murder is generally an intentional or knowing killing of another person. If the defendant plans out the crime ahead of time, it’s called premeditated murder, and it can carry a sentence of the death penalty or life without parole in many states.

  • Manslaughter or negligent homicide, depending on the terminology of the specific state, occurs when someone’s death results from someone else’s recklessness or negligence but not an intentional killing. Punishments for these crimes are less severe.

    Regarding intent, many states have a felony murder rule, which states that if defendants commit certain felonies and, in the course of committing these felonies a person dies, the defendant is also guilty of felony murder.

• Rape: The crime of rape occurs when the defendant engages in sexual intercourse with a victim against her will. When the defendant perpetrates sexual contact rather than intercourse, the defendant commits crimes that are sometimes referred to as sexual assault or indecent liberties. Other crimes of this nature include child molestation, child rape, and stalking.

• Felony assault: Felony assault, or aggravated assault as it’s sometimes called, occurs when someone attacks another person with the intent to inflict severe bodily harm, usually by strong enough means to cause death or permanent injury.

  An assault occurs whenever someone places another person in imminent fear of his well-being.

• Robbery: Robbery occurs when a defendant uses force either to steal property (including money) or to maintain control over that property. It’s considered to be a crime against a person because, even though the defendant steals only property, it’s a harrowing experience for the victim.
• Burglary: Burglary involves entering someone’s dwelling or some other building, with the intent to commit a crime, usually theft or assault. The prosecution must prove intent to commit a crime inside the building. If there was no intent to commit a crime, it’s a matter of criminal trespass, which is usually a misdemeanor.
• Kidnapping: Kidnapping occurs when a defendant takes a person somewhere against the person’s will. If the wrongdoer inflicts injury or uses a weapon, the crime is usually more serious. Similar crimes include false imprisonment, where the victim is unwillingly held in some location, and coercion, where the defendant forces the victim to do something.
• Arson: When a defendant knowingly or intentionally sets fire to a building or car, it’s arson. Arson is more serious when a person is in the building, if the defendant sets fire to a dwelling (rather than just any old building), if someone (such as a firefighter) dies in the fire, or if the defendant sets a fire to collect insurance money. If the fire doesn’t involve a building or car, the crime might be classified as reckless burning.

There are other, less serious, felonies involving crimes against only property. They become felonies because they involve either a significant amount of property or because of the character of the property involved. Examples include auto theft, gun theft, forgery, identity theft, or theft of anything worth more than a certain amount of money as defined by state law. Some states place this minimum threshold at $250. Other property crimes, like writing bad checks, possessing stolen property, and criminal mischief (vandalism), become felonies when the amount of property involved exceeds the threshold.

Other miscellaneous felony offenses include crimes such as bribery, perjury, drug offenses, gambling, money laundering, and prostitution. These crimes are often referred to as “victimless crimes,” but critics of this characterization point out that the victims of these crimes are either the social order or the person who engages in the specified conduct.

The punishments meted out for felony offenses depend on the nature of the crime and each state’s laws regarding sentencing. Some states may allow first-time offenders convicted of lower-level felonies to do little or no jail time or serve a suspended sentence with probation. More likely, though, the punishment for felonies ranges from at least some jail time for property crimes to lengthy prison sentences for the more serious property offenses and felony crimes against a person.

The lesser of two evils: Misdemeanors

Misdemeanors fall at the other end of the spectrum in terms of the seriousness of the conduct and severity of the potential punishment. Misdemeanors include offenses like shoplifting, drunk driving, and assault where little or no injury results or could result. Misdemeanor convictions receive lesser sentences, and defendants serve their time in county jails rather than in the state prison system.

Most crimes against a person are felonies because society places a higher premium on personal freedom, and these crimes invade another person’s basic human rights to be free from injury and annoyance. So, misdemeanor crimes against the person may include assault where the victim suffers or could suffer little or no injury, harassment in the form of verbal threats, and violation of a court’s restraining order.

The majority of misdemeanors are crimes against property. Shoplifting and other, less serious theft crimes make up a significant number of the misdemeanors you’re likely to encounter as a paralegal in a criminal law practice. The main element that makes these crimes misdemeanors is the amount of money involved. Generally, if the amount stolen falls below a certain threshold (in many states $250 and under), you’re dealing with a misdemeanor. Other misdemeanor property offenses that use a threshold include bad check writing and criminal mischief, where someone intentionally damages property.

Traffic offenses make up a large portion of misdemeanor offenses. These include driving under the influence of alcohol or drugs (DUI), reckless driving, driving on a suspended license, and lacking vehicle registration. Most states don’t consider minor traffic infractions, like speeding, running a stop sign, failing to signal properly, and committing equipment violations, to be criminal offenses. So, violators of these laws usually don’t get jury trials or jail sentences.

An ounce of prevention: Injunctions

An injunction is a request to the court to order that certain wrongful conduct be prevented or discontinued right away. Environmental groups commonly seek injunctions to prevent the development of forests and wetlands. Another common example is a restraining order. You see this a lot in divorces where one party wants to restrain the other party from spending marital assets like there’s no tomorrow (prior to the court hearing on final division of property) or skipping town with a child of the marriage (before the hearing to determine custody of the children).

Just do it: Specific performance

A plaintiff seeking specific performance requests the court to compel certain action. For example, the plaintiff may ask the court to order another party to perform its obligation on a contract to sell real estate or unique personal property. A court grants a request for specific performance by forcing the defendant to transfer real property according to the terms of the sales agreement. Similarly, the court can also order a losing party to transfer items of personal property, such as a one-of-a-kind Babe Ruth baseball card, pursuant to the terms of the parties’ original agreement.

Show me the money: Monetary damages

The vast majority of civil actions don’t involve a request for equitable relief. Instead, plaintiffs in most cases seek good old-fashioned money damages from the defendant. These breach-of-contract and tort actions find their source in Anglo-Saxon common law, or judge-made law. In this justice system, each cause of action requires the plaintiff to prove actual damages caused by the defendant, or tortfeasor.

Much of civil law deals with the substantive law of torts and contracts. To work successfully in the area of civil law, you’ll need to be familiar with both areas.

You meant to do that: Intentional torts

The one element of intentional torts that makes them stand out is the intent of the actor, or tortfeasor. For a tort to be intentional, the one who commits the tort has to intend to do whatever injury is prohibited. The actor must be certain, or substantially certain, that his actions will have a detrimental effect on others or their property. So, there are two separate categories of intentional torts: intentional harm to a person and intentional harm to property.

Accidents do happen: Negligent torts

Intentional torts pertain exclusively to deliberate actions of the defendant. Over time, however, the tort system has evolved to cover not only intentional harm but also harmful situations that may be unintentional. These unintentional torts form a general category of wrongs that are tested by the standard of negligence.

Negligent torts are the most common and the most varied torts in our civil law system. A common example of a negligent tort is personal injury, where a defendant’s negligence results in injury to the plaintiff.

As a paralegal, you’ll assist in the development of each of the four elements of the prima facie case for negligence because if a court or jury finds that the plaintiff’s attorney has proven each of these four elements, then the jury can award damages. So, having a good understanding of each of the following is pretty important:

• The defendant owed a duty of care to the plaintiff. The element of duty is based on the belief that each person owes a duty to others to refrain from hurting them. For example, John owes a duty to Mary to drive carefully and to refrain from hitting her vehicle while driving his car. Duty is often judged by the “reasonable person” standard. Society would consider John’s hitting Mary with his car unreasonable, and John has a duty to act reasonably. Therefore, he’s negligent if he hits Mary. The jury has to determine whether defendants have acted as reasonable persons in negligence cases.

• The defendant breached that duty. When John hit Mary with the car, he breached the duty of care he owed to Mary. Breach of duty is the second element that requires proof in a negligence action. In order to prove breach, the attorney can prove that either the instrument that caused the injury was within the exclusive control or possession of the tortfeasor (res ipsa loquitur, “the thing speaks for itself”) or the actor violated a statute or ordinance covering the situation (negligence per se).

  Proving either res ipsa loquitur or negligence per se usually results in proving that the defendant breached a duty. If John violated a statute when he hit Mary with his car, it would be fairly easy to prove that he breached his duty to Mary. After the plaintiff proves a breach of duty, her attorney progresses to proving proximate cause, which is usually the most difficult element to prove.

• The defendant’s breach of duty was the proximate cause of the plaintiff’s injury (in other words, if the defendant hadn’t breached the duty, the plaintiff wouldn’t have suffered). To show proximate cause, the attorney must prove not only that the defendant actually caused the injury, but also that the defendant was the legal cause of the injury. The attorney, through the assistance of the paralegal, must show that the injury was foreseeable and that there were no other intervening causes of the injury. In the example, Mary’s attorney must prove that “but for” John’s actions, the accident never would have happened. The attorney must also prove that the accident happened without any superseding causes, such as an earthquake’s forcing John’s car to hit Mary. Next, Mary’s attorney must prove that the result of the accident was foreseeable and that there were no intervening events that caused the accident, such as another car’s hitting Mary first and causing the damage.
• The plaintiff suffered damages. If the defendant’s negligence is found to be the proximate cause of the plaintiff’s injuries, the defendant has to pay damages to the plaintiff. The plaintiff establishes damages by introducing evidence that indicates special damages (expenses you can show receipts for, like hospital bills and car-repair bills), general damages (damage you can’t show receipts for, like pain and suffering), and other categories of damages, including punitive damages (to punish the defendant) and consequential damages (which are damages arising as a result of the wrongdoing). In every case, the plaintiff has the duty to take reasonable steps to mitigate (or reduce) any damages.

To be successful in a negligence action, the plaintiff must establish each of the four elements of the prima facie case. Paralegals are instrumental in defining the facts that are vital to establishing and proving their offices’ clients’ cases.

The defendant who is alleged to have committed a negligent tort may respond with several different defenses. These defenses include the following:

• Contributory or comparative negligence: Under the doctrines of contributory or comparative negligence, damages may be diminished or may not be awarded at all if it can be shown that the injured party contributed to the accident. If Mary was not wearing a seat belt at the time of the accident with John, she could be found to be contributorily negligent. John, therefore, may not have to pay damages, or the amount of damages for which he is responsible may be limited.

  The modern trend is to move away from the strict standard of contributory negligence and move toward a standard of comparative negligence. Under the doctrine of comparative negligence, the judge or jury examines each party’s negligence and decreases the damage award by the percentage of negligence that was caused by the plaintiff. In Mary’s case, if she were found to be 30 percent at fault, and John were found to be 70 percent at fault, the damages for which John would be responsible would be decreased by 30 percent. The specific elements of this rule depend on the law of the state where the action is tried.

• Joint and several liability: Actions for negligence can be further complicated by the concept of joint tortfeasors, known as joint and several liability. If two people act together in concert to produce the harm, both may be held liable for the injury, or one may solely be held liable. Even if the two tortfeasors perform different deeds but the responsibility for the resulting injury is inseparable, they’re still held jointly liable. The issue of joint and several liability may become especially important in cases involving numerous defendants. Let’s say a plaintiff sues for injuries sustained in an auto accident that occurs on a poorly designed road. The jury may award this plaintiff a judgment against numerous defendants, but only the “deep pocket” (the defendant with the big bucks, often the local government) may end up satisfying the judgment.

• Vicarious liability: The concept of vicarious liability relates to the liability one person has for another person’s actions. If John were to hit Mary while delivering a pizza for his employer, his employer may be held liable for the injuries that Mary sustained. This is a case of respondeat superior, a Latin phrase meaning “let the master respond.” In this case, Mary would bring an action against both John and the pizza company. Vicarious liability applies to other relationships besides that between employer and employee; it also applies to parent/child relationships and owner/user relationships.

  Vicarious liability doesn’t apply when the employee is acting outside the course and scope of his employment. In the preceding example, if John wasn’t working at the time of the accident but was driving the pizza delivery truck on a frolic and a lark to party, he’s responsible for Mary’s damages, and his employer is probably off the hook.

A little bit of both: Quasi-intentional torts

Quasi-intentional torts defy categorization because they consist of actions that are a mix of intentional and negligent torts.

Quasi-intentional torts include defamation, invasion of privacy, intentional misrepresentation, and wrongful institution of legal proceedings. The courts are rapidly taking the protection that these tort actions offer more seriously.

• Defamation: Defamation consists of making false statements about another. To establish a prima facie case for defamation, the plaintiff must prove that the defendant, either through written means or broadcast (libel) or through injurious spoken comments (slander), conveyed untrue remarks to a third party that harmed another’s reputation. An accused may defend a defamation action by proving that the injurious comments were actually true or, if aimed at a public figure, were made non-maliciously or in jest, as in late-night talk show host monologues.
• Invasion of privacy: Invasion of privacy occurs in several ways:
  • When someone uses another person’s name or picture for commercial advantage without consent
  • When someone unreasonably pries into another person’s private affairs
  • When someone unreasonably and publicly discloses another person’s private matters (Note: The damages in privacy invasion actions usually include emotional distress, and the main defense is that the plaintiff consented to disclosure.)

• Intentional misrepresentation: Intentional misrepresentation torts allege that the defendant has committed fraud against or deceived the plaintiff. To establish a prima facie case, the plaintiff must prove all the following:

  • The defendant falsely represented herself
  • The defendant knew that the representation was false
  • The defendant intended the plaintiff to act in a particular manner based on the reliance on the defendant’s representation
  • Damage resulted from this reliance

  For instance, let’s say that Jerry has never gone to law school and never passed a bar exam, but he places an advertisement in the newspaper stating that he’s a practicing attorney. If you hire Jerry and he loses your case in court, you may very well have a cause of action against him for intentional misrepresentation.

• Wrongful institution of legal proceedings: Wrongful institution of legal proceedings or malicious prosecution covers the wrongful prosecution of a defendant in criminal cases or the wrongful suing of a defendant in a civil action. To establish a prima facie case for malicious prosecution, the plaintiff must prove that there was a criminal proceeding against the plaintiff that was decided in favor of the plaintiff, that there existed a lack of probable cause for the proceedings, that the purpose of bringing the criminal proceedings against the plaintiff was one other than to serve justice, and that the plaintiff suffered damages.

No excuses: Strict liability

There are no defenses for strict liability cases. From the plaintiff or plaintiff’s attorney’s point of view, these are the slam dunks and home runs of the legal field. The primary issue in strict liability cases isn’t about who’s responsible but what the damages are. In these cases, the defendant has an absolute duty to make sure the plaintiff is safe. Examples of strict liability cases include actions involving vicious animals and ultra-hazardous activities. Owners of known vicious animals or vicious breeds of dogs may be held strictly liable for the damage their animals cause, and persons who offer abnormally dangerous activities that can never be perfectly safe, such as bungee jumping and blasting with dynamite, are strictly liable for any injury that occurs as a result of engaging in that activity.

Buyer beware: Product liability

Product liability is closely related to strict liability (see the preceding section). Plaintiffs bring product liability actions against manufacturers and sellers of defective or potentially harmful products, products that are unreasonably dangerous when they enter the stream of commerce. Liability in product cases may be determined by the defendant’s conduct and is established when the defendant breaches a duty of care owed to its customers in producing the product.

Many product liability cases are brought in the form of a class action suit because the product affects many people in a similar manner. In these cases, a few harmed individuals or one individual represent the entire group in the action. Typically, a single law firm serves as the counsel for this large group of plaintiffs. Recent examples of product liability cases have involved exploding gas tanks on cars and problems with Vioxx and related drugs.

A big bother: Nuisance

Nuisance involves more than just an annoying younger sibling or a pesky fly. A plaintiff brings a nuisance action against a defendant who interferes with the plaintiff’s reasonable use and enjoyment of property. A defendant may cause either a public or private nuisance. Mary can bring a private nuisance action against her neighbor, John, if his excessively loud stereo at night caused her nocturnal hamsters to die. Mary or her local government could bring a public nuisance action against John if his factory emitted pollutants into a stream and Mary’s livestock got sick from drinking the water downstream.

In a nuisance action, the court can award either money damages or injunctive relief. When awarding money, the court determines an amount that provides restitution for those who are injured. Injunctive relief allows the court to prevent the injuring party from causing further damages. This relief assists in controlling companies from polluting the air or land and also allows for a free-market resolution of damages.

Making a pact: The elements of a valid contract

To be valid, a contract must include an offer, an acceptance of that offer, a mutual manifestation of an agreement to be bound by the offer and acceptance, and consideration. If a contract is missing any of its four elements, it isn’t valid. The following brief explanation of the four elements of a contract will help you to better understand the law of contracts:

• An offer initiates a contract. The offer may be phrased as, “I will give you $500 in return for two DVD players,” or it may be simply phrased as, “Here is $500,” when the intention is that the $500 is being traded for two DVD players. Making an offer is fairly simple, so it’s easy to enter into a contract. A valid offer essentially requires that the offering party intend that her proposal be legally binding and that the proposal be complete.

• A valid acceptance of an offer consists of three elements:

  • An intent on the part of the acceptor to be bound by the terms of the offer
  • An unconditional demonstration that the acceptor intends to be bound by the terms of the offer
  • A mutual agreement of the parties

  If John says that he will give Sam $500 for two DVD players and Sam agrees to John’s offer, Sam’s agreement to the offer is an acceptance. If Sam accepts the valid offer and Sam indicates that his acceptance of the terms of the offer is unconditional, Sam and John have formed a contract under the common law requirements of forming a valid contract.

• Both parties must manifest assent, which means they have the actual belief and intent that they’re mutually bound by the terms of their agreement. It’s difficult to accurately understand a person’s thoughts and intentions at the time a contract is formulated, but both parties’ actions should reasonably show that they intend to be bound by the terms of the contract. From Sam and John’s behavior at the formation of the contract, it’s apparent that they wanted to be bound by their agreement. However, if Sam shrugged and said, “I don’t think we should be doing this,” the manifestation of assent and acceptance could be questioned.
• The final prerequisite of a valid contract is consideration. There must be an exchange of something of value. One party cannot merely give the other party the offered item. This would constitute a gift rather than a contract. Consideration may consist of an item of value (such as money), a legal detriment (such as forbearance), or a legal benefit (such as a monetary loan). Under Sam and John’s agreement, the $500 and the DVD players represent the contract’s consideration.

Undoing the deal: Types of contract litigation

It’s said that contracts are made to be broken, and if that happens, paralegals are there to assist in the prosecution and defense of lawsuits bought under the law of contracts. The three major types of contract litigation you should know about are

• Breach of contract: Breach of contract results when one of the parties fails to fulfill the contract’s written or oral commitments. This action is the most common one under contract law. If two parties entered into a valid contract and one party didn’t fulfill the terms of that contract, the result is a breach of contract. The party who didn’t receive fulfillment of the agreement may bring an action against the party who breached the contract.
• Bad faith: Entering into an agreement with no intention of fulfilling its terms is called bad faith. Usually the court compels the party who entered into the agreement in bad faith to pay the other party the amount that he may have lost due to the other’s bad faith. That amount could be the total cost that the injured party incurred or the total profit that the injured party lost, depending on the situation. Many states, for instance, allow recovery for bad faith against insurance companies that don’t properly pay benefits to the insured as promised in the original agreement.
• Breach of fiduciary duty: A breach of fiduciary duty is the failure to act in the best interest of a party when there exists an obligation to do so. This breach most often occurs with someone who makes investments for others. Stockbrokers, bankers, and other investors owe their customers a fiduciary duty to invest their money safely and act in their best interests. If an investor breaches this duty, the injured client may seek remedy through contract litigation.