10th EDIT ION
Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States
WRITE THIS ESSAY FOR ME
Tell us about your assignment and we will find the best writer for your paper.
Get Help Now!Fundamentals of Business Law Today
Roger LeRoy Miller Institute for University Studies, Arlington, Texas
S U M M A R I Z E D C A S E S
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest.
portant otice e ia content reference ithin the pro ct escription or the pro ct te t a not e availa le in the e oo version
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
© 2016, 2013 Cengage Learning
ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means— graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems—except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher.
For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support
1-800-354-9706
For permission to use material from this text or product, submit all requests online at
www.cengage.com/permissions.
Further permissions questions can be e-mailed to permissionrequest@cengage.com.
Library of Congress Control Number: 2014953144
Student Edition ISBN-13: 978-1-305-07544-3
Cengage Learning 200 First Stamford Place, 4th Floor Stamford, CT 06902 USA
Cengage Learning is a leading provider of customized learning solutions with office locations around the globe, including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan. Locate your local office at www.cengage.com/global.
Cengage Learning products are represented in Canada by Nelson Education, Ltd.
To learn more about Cengage Learning, visit www.cengage.com.
Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com.
Unless otherwise noted, all content © 2016 Cengage Learning.
Printed in the United States of America Print Number: 01 Print Year: 2014
Fundamentals of Business Law Today: Summarized Cases TENTH EDITION
Roger LeRoy Miller
Vice President and General Manager, Social Sciences & Qualitative Business:
Erin Joyner
Product Director: Michael Worls
Senior Product Manager: Vicky True-Baker
Managing Developer: Rebecca von Gillern
Product Assistant: Ryan McAndrews
Marketing Director: Kristen Hurd
Senior Marketing Manager: Katie Jergens
Marketing Coordinator: Chris Walz
Senior Art Director: Michelle Kunkler
Senior Content Project Manager: Ann Borman
Manufacturing Planner: Kevin Kluck
Compositor: Lachina Publishing Services
Indexer: Stephanie Reymann
Cover and Internal Designer: Stratton Design
Cover Image: Comstock Images/Getty Images
Interior Design Logo Credits: Electronic tablet: iStockphoto/ askinkamberoglu; spotlight: Shutterstock/ somchaij; businesswoman: Shutterstock/ Edhar.
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
WCN: 02-200-203
Chapter 1 The Legal and Constitutional Environment of Business 2
Chapter 2 Courts and Alternative Dispute Resolution 30
Chapter 3 Ethics and Business Decision Making 53
U N I T 1 The Legal Environment of Business 1
U N I T 2 Torts and Crimes 69
Chapter 4 Tort Law 70 Chapter 5 Intellectual
Property 90 Chapter 6 Internet Law,
Social Media, and Privacy 107
Chapter 7 Criminal Law and Cyber Crime 123
U N I T 3 Contracts 149
U N I T Sales and Lease Contracts 251
Chapter 8 Nature and Classification 150
Chapter 9 Agreement in Traditional and E-Contracts 164
Chapter 10 Consideration, Capacity, and Legality 182
Chapter 11 Defenses to Contract Enforceability 200
Chapter 12 Third Party Rights and Discharge 217
Chapter 13 Breach and Remedies 235
Chapter 14 The Formation of Sales and Lease Contracts 252
Chapter 15 Performance and Breach of Sales and Lease Contracts 277
Chapter 16 Warranties and Product Liability 295
4
U N I T
U N I T
5
6
Negotiable Instruments 313
Debtor-Creditor Relationships 359
Chapter 17 Negotiability, Transferability, and Liability 314
Chapter 18 Checks and Banking in the Digital Age 338
Chapter 19 Secured Transactions 360
Chapter 20 Creditors’ Rights and Bankruptcy 377
iii
Contents in Brief
Chapter 21 Agency Relationships 404
Chapter 22 Employment Law 421
U N I T 7 Employment Relations 403
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
iv CONTENTS IN BRIEF
U N I T 8 Business Organizations 449
Chapter 23 Sole Proprietorships, Partnerships, and Limited Liability Companies 450
Chapter 24 Corporate Formation, Financing, and Termination 470
Chapter 25 Corporate Directors, Officers, and Shareholders 488
Chapter 26 Investor Protection, Insider Trading, and Corporate Governance 504
U N I T 9 Property and Its Protection 525
U N I T Special Topics 577
Chapter 27 Personal Property and Bailments 526
Chapter 28 Real Property and Landlord- Tenant Law 542
Chapter 29 Insurance, Wills, and Trusts 555
Chapter 30 Liability of Accountants and Other Professionals 578
Chapter 31 International Law in a Global Economy 593
10
A P P E N D I C E S
A How to Brief Cases and Analyze Case Problems A-1
B The Constitution of the United States A-3
C The Uniform Commercial Code (Excerpts) A-11
D The Sarbanes-Oxley Act (Excerpts and Explanatory Comments) A-131
E Answers to Issue Spotters A-138
F Answers to Even- Numbered For Review Questions A-143
G Sample Answers for Case Problems with Sample Answer A-150
Glossary G-1 Table of Cases TC-1 Index I-1
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Detailed Contents
The Legal Environment of Business 1
CHAPTER 1 The Legal and Constitutional Environment of Business 2
Business Activities 2 Sources of American Law 4 The Common Law Tradition 5 Classifications of Law 7 The Constitution as It Affects Business 8
Case 1.1: Doe v. Prosecutor, Marion County, Indiana 11 Spotlight Case 1.2: Bad Frog Brewery, Inc. v. New York State Liquor Authority 12 Case 1.3: Maxwell’s Pic-Pac, Inc. v. Dehner 15
Privacy Rights 16 Management Perspective: Marriage Equality and the Constitution 17 Reviewing . . . The Legal and Constitutional Environment of Business 18 Appendix to Chapter 1: Finding and Analyzing the Law 22
CHAPTER 2 Courts and Alternative Dispute Resolution 30
The Judiciary’s Role 30 Basic Judicial Requirements 31 The State and Federal Court Systems 35 Following a State Court Case 38
Case 2.1: Espresso Disposition Corp. 1 v. Santana Sales & Marketing Group, Inc. 39
Case 2.2: Brothers v. Winstead 40 The Courts Adapt to the Online World 43 Alternative Dispute Resolution 44
Case 2.3: Cleveland Construction, Inc. v. Levco Construction, Inc. 46 Reviewing . . . Courts and Alternative Dispute Resolution 47
CHAPTER 3 Ethics and Business Decision Making 53
Business Ethics 54 Case 3.1: Scott v. Carpanzano 55 Case 3.2: May v. Chrysler Group, LLC 57
Business Ethics and Social Media 57 Approaches to Ethical Reasoning 58 Making Ethical Business Decisions 60 Global Business Ethics 62
Reviewing . . . Ethics and Business Decision Making 63 Unit 1—Business Case Study with Dissenting Opinion: Paduano v. American Honda Motor Co. 67
v
U N I T 1
Preface to the Instructor xiii
CHAPTER 4 Tort Law 70
The Basis of Tort Law 70 Intentional Torts against Persons 72
Case 4.1: McKee v. Laurion 75 Intentional Torts against Property 78
Torts and Crimes 69 U N I T 2
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
vi DETAILED CONTENTS
Adapting the Law to the Online Environment: Facebook Uses Privacy Concerns to “Smear” Google 79 Case 4.2: Welco Electronics, Inc. v. Mora 80
Negligence 81 Spotlight Case 4.3: Taylor v. Baseball Club of Seattle, L.P. 84
Strict Liability 85 Reviewing . . . Tort Law 86
CHAPTER 5 Intellectual Property 90
Trademarks and Related Property 91 Classic Case 5.1: Coca-Cola Co. v. Koke Co. of America 91 Management Perspective: Derogatory Trademarks 93
Patents 96 Copyrights 98
Case 5.2: Inhale, Inc. v. Starbuzz Tobacco, Inc. 98 Case 5.3: Winstead v. Jackson 99
Trade Secrets 101 International Protection for Intellectual Property 101
Reviewing . . . Intellectual Property 103
CHAPTER 6 Internet Law, Social Media, and Privacy 107
Internet Law 107 Spotlight Case 6.1: Hasbro, Inc. v. Internet Entertainment Group, Ltd. 110
Copyrights in Digital Information 111 Social Media 112
Case 6.2: In re O’Brien 113 Online Defamation 115
Case 6.3: Yelp, Inc. v. Hadeed Carpet Cleaning, Inc. 115 Privacy 116
Adapting the Law to the Online Environment: A Consumer Privacy Bill of Rights 118 Reviewing . . . Internet Law, Social Media, and Privacy 118
CHAPTER 7 Criminal Law and Cyber Crime 123
Civil Law and Criminal Law 123 Criminal Liability 125
Types of Crimes 127 Case 7.1: State of Wisconsin v. Steffes 128 Spotlight Case 7.2: People v. Sisuphan 130
Defenses to Criminal Liability 132 Constitutional Safeguards and Criminal Procedures 134
Case 7.3: State of Oklahoma v. Marcum 135 Criminal Process 137 Cyber Crime 139
Reviewing . . . Criminal Law and Cyber Crime 141 Unit 2—Business Case Study with Dissenting Opinion: MedImmune, Inc. v. Genentech, Inc. 146
Contracts 149 U N I T 3
CHAPTER 8 Nature and Classification 150
An Overview of Contract Law 150 Case 8.1: Pan Handle Realty, LLC v. Olins 151
Elements of a Contract 152 Types of Contracts 152
Adapting the Law to the Online Environment: Can a Disclaimer Prevent an E-Mail from Forming an Agreement? 155
Quasi Contracts 156 Case 8.2: Seawest Services Association v. Copenhaver 157
Interpretation of Contracts 158 Spotlight Case 8.3: Wagner v. Columbia Pictures Industries, Inc. 158 Reviewing . . . Nature and Classification 160
CHAPTER 9 Agreement in Traditional and E-Contracts 164
Agreement 164 Classic Case 9.1: Lucy v. Zehmer 165 Spotlight Case 9.2: Basis Technology Corp. v. Amazon.com, Inc. 167 Case 9.3: Gyabaah v. Rivlab Transportation Corp. 168
Agreement and E-Contracts 172
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
viiDETAILED CONTENTS
Adapting the Law to the Online Environment: The Validity of E-Signatures on Agreements with Online Colleges and Universities 173
The Uniform Electronic Transactions Act 175 Reviewing . . . Agreement in Traditional and E-Contracts 177
CHAPTER 10 Consideration, Capacity, and Legality 182
Consideration 182 Spotlight Case 10.1: Already, LLC v. Nike, Inc. 185
Contractual Capacity 187 Legality 189
Case 10.2: Brown & Brown, Inc. v. Johnson 191 Case 10.3: Holmes v. Multimedia KSDK, Inc. 193 Reviewing . . . Consideration, Capacity, and Legality 195
CHAPTER 11 Defenses to Contract Enforceability 200
Voluntary Consent 200 Adapting the Law to the Online Environment: Misrepresentation in Online Personals 203 Case 11.1: Cronkelton v. Guaranteed Construction Services, LLC 204
The Statute of Frauds—Writing Requirement 206 Case 11.2: NYKCool A.B. v. Pacific Fruit, Inc. 208
The Sufficiency of the Writing 210 Case 11.3: Beneficial Homeowner Service Corp. v. Steele 210
The Parol Evidence Rule 211 Reviewing . . . Defenses to Contract Enforceability 213
CHAPTER 12 Third Party Rights and Discharge 217
Assignments 217 Delegations 220 Third Party Beneficiaries 222
Case 12.1: Lake County Grading Co. v. Village of Antioch 224
Contract Discharge 224 Case 12.2: Kohel v. Bergen Auto Enterprises, LLC 226 Case 12.3: Kolodin v. Valenti 229 Reviewing . . . Third Party Rights and Discharge 231
CHAPTER 13 Breach and Remedies 235
Damages 235 Adapting the Law to the Online Environment: The Effect of Breaching an Online Testing Service’s Terms of Use 236 Case 13.1: Hallmark Cards, Inc. v. Murley 237 Spotlight Case 13.2: B-Sharp Musical Productions, Inc. v. Haber 240
Equitable Remedies 240 Case 13.3: Clara Wonjung Lee, DDS, Ltd. v. Robles 241
Recovery Based on Quasi Contract 242 Contract Provisions Limiting Remedies 243
Reviewing . . . Breach and Remedies 244 Unit 3—Business Case Study with Dissenting Opinion: Braddock v. Braddock 248
Sales and Lease Contracts 251
U N I T 4
CHAPTER 14 The Formation of Sales and Lease Contracts 252
The Scope of the UCC 253 Article 2—Sales 253
Case 14.1: Nautilus Insurance Co. v. Cheran Investments, LLC 253 Adapting the Law to the Online Environment: Local Governments Attempt to Tax Online Travel Companies 254
Article 2A—Leases 255 The Formation of Sales and Lease Contracts 256
Case 14.2: Amaya v. Brater 256
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
viii DETAILED CONTENTS
CHAPTER 17 Negotiability, Transferability, and Liability 314
Types of Instruments 314 Case 17.1: Silicon Valley Bank v. Miracle Faith World Outreach, Inc. 316
Requirements for Negotiability 318 Case 17.2: Alpacas of America, LLC v. Groome 319
Transfer of Instruments 322 Case 17.3: In re Bass 323
Holder in Due Course (HDC) 326 Signature and Warranty Liability 328 Defenses, Limitations, and Discharge 331
Reviewing . . . Negotiability, Transferability, and Liability 333
CHAPTER 18 Checks and Banking in the Digital Age 338
Checks 338 The Bank-Customer Relationship 340
Case 18.1: Royal Arcanum Hospital Association of Kings County, Inc. v. Herrnkind 341
The Bank’s Duty to Honor Checks 341 Case 18.2: Afiriyie v. Bank of America, N.A. 342 Case 18.3: Michigan Basic Property Insurance Association v. Washington 345
The Bank’s Duty to Accept Deposits 346 Electronic Fund Transfers 349 E-Money and Online Banking 350
Adapting the Law to the Online Environment: Smartphone-Based Payment Systems 351
Title and Risk of Loss 262 Case 14.3: Person v. Bowman 265
Contracts for the International Sale of Goods 267 Reviewing . . . The Formation of Sales and Lease Contracts 268 Appendix to Chapter 14: An Example of a Contract for the International Sale of Coffee 273
CHAPTER 15 Performance and Breach of Sales and Lease Contracts 277
Performance Obligations 277 Obligations of the Seller or Lessor 278
Management Perspective: Good Faith and Fair Dealing 278 Case 15.1: Wilson Sporting Goods Co. v. U.S. Golf & Tennis Centers, Inc. 280 Classic Case 15.2: Maple Farms, Inc. v. City School District of Elmira 281
Obligations of the Buyer or Lessee 283 Anticipatory Repudiation 284 Remedies of the Seller or Lessor 284 Remedies of the Buyer or Lessee 286
Spotlight Case 15.3: Fitl v. Strek 289 Limitation of Remedies 290
Reviewing . . . Performance and Breach of Sales and Lease Contracts 290
CHAPTER 16 Warranties and Product Liability 295
Warranties 295 Classic Case 16.1: Webster v. Blue Ship Tea Room, Inc. 297
Lemon Laws 300 Product Liability 300 Strict Product Liability 301
Spotlight Case 16.2: Bruesewitz v. Wyeth, LLC 301 Case 16.3: Riley v. Ford Motor Co. 303
Defenses to Product Liability 305
Negotiable Instruments 313
U N I T 5
Reviewing . . . Warranties and Product Liability 307 Unit 4—Business Case Study with Dissenting Opinion: Casserlie v. Shell Oil Co. 311
Copyright 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
ixDETAILED CONTENTS
Debtor-Creditor Relationships 359
U N I T 6
CHAPTER 19 Secured Transactions 360
The Terminology of Secured Transactions 360 Creation of a Security Interest 361 Perfection of a Security Interest 362
Adapting the Law to the Online Environment: Secured Transactions Online 362 Case 19.1: In re Baker 364 Case 19.2: In re Camtech Precision Manufacturing, Inc. 365
The Scope of a Security Interest 367 Priorities 368 Rights and Duties of Debtors and Creditors 369 Default 371
Case 19.3: Smith v. Firstbank Corp. 372 Reviewing . . . Secured Transactions 373
CHAPTER 20 Creditors’ Rights and Bankruptcy 377
Introducing our Online Essay Writing Services Agency, where you can confidently place orders for a wide range of academic assignments. Our reputable homework writing company specializes in crafting essays, term papers, research papers, capstone projects, movie reviews, presentations, annotated bibliographies, reaction papers, research proposals, discussions, and various other assignments. Rest assured, our content is guaranteed to be 100% original, as every piece is meticulously written from scratch. Say goodbye to concerns about plagiarism and trust us to deliver authentic and high-quality work.
