ECON451 Lecture Notes - Lecture 3: Expectation Damages, Breakcore

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9 Aug 2016
Department
Course
Professor
Lecture #3 19:43
Palmer
- Summarize case
- summarize sc’s decision
- summarize palmer’s criticism
- do you agree?
5 MARKS WRITING STYLE, 5 MARKS ANALYSIS
Trademark
-Distinctive symbols or phrases
-Trademark is important in differentiated products settings
-Companies can have incentive to invest in reputation
-Trademark must be able to last forever
- CANNOT trademark the “look” of a product
Trade Secret
- putting the onus on the author of an idea to enforce their own IP and its
usually done contractually
- Databases get no IP  There was a company that made yallow pages
and white pages phonebooks and made money selling adds in the yellow,
another company went and made their own yellow and white pages
phonebook, but straight out copied the white pages part of it. Sued and lost
because supreme court ruled that database is not a creative.
- Now everything has an end-user license agreement because software
companies feel like they don't get enough protection from IP  Since you
cant sue for the use of their database (no property protection) they rely on
EUA (Contractual protection)
Contracts
-essentially about the movement of property rights
-contracts are there to solve the holdup PROBLEM (This is because a
lot of exchange of goods are not simultaneous for both sides, maybe you
agree to work for someone for a period of time in exchange for a flow of
cash, you don't want someone saying oh thanks for working now we wont
pay you)
-Contractor/House  two-sided holdup problem (you don't know if they
did a good job and if it’ll fall apart), this is where contract kicks in
-The first job of the courts is to enforce contracts
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BUT not ALL contracts are complete.
What does this mean? Sometimes contracts don't specify what both parties
should do in the scenario that different situations arise.
The second function that the courts carry out is to impose damages
The third function that the courts carry out is to settle disputes whether
the parties entered into a contract or not.  determining if contracts
have been signed
Note: there are certain scenarios that courts take into consideration
Courts don't want to get involved. They want people to settle it between
each other as much as possible.
Courts are hesitant to get involved in contract disputes between
family members.
Note: repeated interaction can help provide incentives to comply with
contracts
Exceptions to contract enforcement
1. if contract involves illegal activity  this includes a contract about
being silent about illegal activities
2. Contract with the “incompetent”  this means minors, un-
mentally fit individuals, individuals under the influence, under
duress
3. Unconscionable penalties – if penalty clauses (if you cant uphold your
end of the contract) are deemed excessive then the courts will not uphold
them.  Signaling, so basically high penalties are set because the
possibility that a party defaults on it would cost the other party a high
price. This type of contract including its penalty clauses is signed on a
balance of probabilities.
A good reason to not uphold the excessive penalty by the courts is
that there might be externalities involved (like in fulfilling the
contract I might harm someone or break the law because the
penalty is so severe)
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