Prevention of High-Risk Gambles in Securities
The U.S. Securities and Exchange Commission (SEC) is mandated to ensure that investors are protected form unfair business practices (Reinert, Rajan and Glass, 2010). They must ensure fair dealings, organize capital markets, and facilitate capital formation (Reinert, Rajan and Glass, 2010). Companies are required to provide information that will help the public make the right decisions regarding their investments. This safeguards the public from risky gambles. The Commodity Future Trading Commission (CFTC) is charged with product futures and options market. Their work is to ensure that markets are efficient and competitive, thus protecting investors from any form of manipulation and fraud perpetuated by industry players (Reinert, Rajan and Glass, 2010).
The two commissions were instrumental in identifying the fraud at JP Morgan. In this case, SEC could investigate the correctness of the financial reporting of the company to ensure conformity with acceptable reporting standards. As far as the CFTC is concerned, JP Morgan case was supposed to be investigated because the company had a direct access to Federal Reserve’s discount window.
Elements of a Valid Contract
Miller (2011) defines a contract as “a set of promises constituting an agreement between parties, giving each a legal duty to the other and also the right to seek a remedy for breach of the promises or duties” (p. 194). Therefore, a contract is a legally binding set of promises between two or more parties. If one party does not honor its part of the contract, this can lead to a legal battle in the courts. A valid contract has four elements. First, there must ne an offer from one party and acceptance from the other party. Secondly, there must be a consideration, or something of worth for a contract to be executed. Thirdly, a valid contract should be formed to transact a legal business or undertaking. Lastly, people in the contract should have the ability to enter into a contract. For instance, an insane person cannot enter into a contract (Miller 2011). In every contract, there is an implied duty of good faith and good dealing. One instance where this can be examined is the mortgage industry, where the duty of care and good dealing has come under intense scrutiny. In the mortgage industry, consumers and lending institutions must understand and adhere to the duty of good faith and fair dealings. Customers should understand the contracts involved when the borrow funds to build their homes. On the other hand, banks should carry out background checks to determine the creditworthiness of the customers. Further, the implications of the mortgage should be clearly understood by all the parties involved.
Intentional and Negligent Tort Actions
Torts are wrongs committed by individuals, and which result to injury or harm to another person or property (Miller, 2011). The law of torts tries to ensure that people who have suffered injuries because of the wrongful actions of others are compensated. An intentional tort occurs where there is intent on a person to cause harm to another person or property (Miller, 2011). Intentional tort takes various forms including assault, battery, and slander. In some cases, they are classified as criminal acts. On the other hand, a negligent tort occurs when one party is careless in his or her duties, which leads to injury or harm to another party. Because of ones’ carelessness, he or she is held liable, though there was no intention on their part to cause harm or injury to the other person (Miller, 2011). To understand the difference between negligence and intentional tort, it would be prudent to explore two different scenarios. In the two cases, the plaintiff is a man called Daniels, and the two cases he is suing for a broken arm.
Daniels is walking down the aisle of Tesco Supermarket. There is a puddle of spilt cooking oils on the aisle. He slips and falls, injuring his right hand. In this scenario, the storeowner is liable for negligence. Although the owner did not intent for the customer to slip and fall, he is liable because his negligence resulted in the injury of Mr. Daniels.
Daniels is walking toward his car. Before he opens the car door, he is attacked by a man who intents to steal from him. The assailant pushes him to the ground, breaking his arm. Before the assailant escapes, he is caught by an angry mob. Mr. Daniels sues the assailant for his injuries.
The results of the two cases are the same. The two defendants can be held liable for the injuries sustained by the plaintiff. Tesco’s owner is liable for negligence. The assailant is liable for intentional tort.
Interference with Contractual Relations
Tortuous interference occurs when one persons (the tortfeasor) prevents the other person (the plaintiff) from successfully establishing or entering into a business relationship (Wong, 2010). Such interferences protect ones’ right to enjoy advantages of a legally binding contract. The existence of a valid contract at the time of the interference is what differentiates tortuous interference with the contract (Wong, 2010). If there is a valid reason for the interference with the contractual obligation, as it is with JP Morgan case, then the defendant will not be held liable.
Mobile Banking and Automation
Most banks are protected by the Online Banking Security Guarantee. This system ensures security of the customers’ banking information. Banks are mandated to protect customer deposits and the security of customers when they carry out online transactions (Singh and Dutta, 2013). If a loss occurs as customers undertake online activities, the banks are required to refund the money to the customers’ account. Banks have a variety of banking applications. Therefore, thieves cannot determine which technique the customers are using at any given time.
Miller, R. (2011). Cengage Advantage Books: Business Law Today, the Essentials: Text and Summarized Cases. London: Cengage Learning.
Reinert, K. A., Rajan, R., and Glass, J. A. (2010). The Princeton Encyclopedia of the World Economy. New York: Princeton University Press.
Singh, K. and Dutta, V. (2013). Commercial Bank Management. New Delhi: McGraw-Hill.
Wong, M.G. (2010). Essentials of Sports Law. London: ABC-CLIO.
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