Business Law Today – Standard Edition: Text & Summarized Cases, 13th Edition
Roger LeRoy Miller
Contents
Unit 1 The Legal Environment of Business 1
Chapter 1
Law and Legal Reasoning 2
Business Activities and the Legal Environment 3
Sources of American Law 4
The Common Law 8
■■ Managerial Strategy: The Power of Precedent 10
■■ Landmark in the Law: Equitable Maxims 15
Classifications of Law 15
Appendix to Chapter 1 21
Finding and Analyzing the Law 21
Finding Statutory and Administrative Law 21
Finding Case Law 22
Reading and Understanding Case Law 24
Exhibit 1A–3 A Sample Court Case 28
Adelman’s Truck Parts Corp. v. Jones Transport 28
■■ Business Law Analysis: Case Briefing and IRAC Legal Reasoning 29
Chapter 2
The Constitutional Powers of Government 32
Case 2.1: Classy Cycles, Inc. v. Panama City Beach 33
■■ Landmark in the Law: Gibbons v. Ogden (1824) 35
Classic Case 2.2: Heart of Atlanta Motel v. United States 36
Business and the Bill of Rights 38
■■ Adapting the Law to the Online Environment:
Social Media and the Constitution 40
Spotlight on Beer Labels: Case 2.3: Bad Frog Brewery, Inc. v.
New York State Liquor Authority 43
■■ Business Law Analysis: Determining When Public
Religious Displays Violate the Establishment Clause 45
Due Process and Equal Protection 47
Privacy Rights 49
■■ Cybersecurity and the Law: Should Apple Help
Law Enforcement? 49
Chapter 3
Ethics in Business 56
Ethics and the Role of Business 57
■■ Business Web Log: Bogus Bank and Credit Card Accounts
at Wells Fargo Bank 58
■■ Adapting the Law to the Online Environment: Should
Employees Have a “Right of Disconnecting”? 60
Case 3.1: Al-Dabagh v. Case Western Reserve University 62
Ethical Principles and Philosophies 63
■■ Managerial Strategy: The Stakeholder Capitalism Movement 68
Sources of Ethical Issues in Business Decisions 68
Case 3.2: Watson Laboratories, Inc. v. State of Mississippi 69
Making Ethical Business Decisions 72
■■ Business Law Analysis: Applying the IDDR Framework 76
Business Ethics on a Global Level 76
Appendix to Chapter 3: 84
Costco Code of Ethics 84
Chapter 4
Courts and Alternative
Dispute Resolution 85
The Judiciary’s Role in American Government 86
■■ Landmark in the Law: Marbury v. Madison (1803) 86
Basic Judicial Requirements 87
Spotlight on Gucci: Case 4.1: Gucci America, Inc. v. Wang Huoqing 92
The State and Federal Court Systems 93
Case 4.2: Oxford Tower Apartments, LP v. Frenchie’s Hair Boutique 95
Following a State Court Case 98
■■ Adapting the Law to the Online Environment:
Using Social Media for Service of Process 99
Case 4.3: Klipsch Group, Inc. v. ePRO E-Commerce Limited 104
Courts Online 107
Alternative Dispute Resolution 108
■■ Business Web Log: Samsung and Forced Arbitration 111
Chapter 5
Tort Law 119
The Basis of Tort Law 119
Intentional Torts against Persons 121
■■ Business Law Analysis: Analyzing Intentional Infliction
of Emotional Distress Claims 123
Case 5.1: Sky v. Van Der Westhuizen 125
■■ Adapting the Law to the Online Environment:
Revenge Porn and Invasion of Privacy 128
Intentional Torts against Property 132
Negligence 134
Case 5.2: Bogenberger v. Pi Kappa Alpha Corporation, Inc. 135
■■ Landmark in the Law: Palsgraf v. Long Island
Railroad Co. (1928) 138
Spotlight on the Seattle Mariners: Case 5.3: Taylor v.
Baseball Club of Seattle, L.P. 140
Strict Liability 141
Chapter 6
Product Liability 146
Product Liability Claims 146
■■ Business Web Log: Johnson & Johnson Faces
Continuing Lawsuits Over Its Talcum Powder 147
■■ Landmark in the Law: MacPherson v. Buick Motor Co.
(1916) 148
Case 6.1: Primal Vantage Co. v. O’Bryan 149
Strict Product Liability 150
■■ Cybersecurity and the Law: The Internet of Things 151
■■ Business Law Analysis: How State Legislation Can Limit
Recovery for Design Defects 153
Case 6.2: Stange v. Janssen Pharmaceuticals, Inc. 155
■■ Managerial Strategy: When Is a Warning Legally Bulletproof? 156
Defenses to Product Liability 158
Spotlight on Injuries from Vaccinations: Case 6.3: Bruesewitz v.
Wyeth, LLC 159
Chapter 7
Intellectual Property Rights 166
Trademarks 167
■■ Managerial Strategy: Trademarks and Service Marks 167
Classic Case 7.1: Coca-Cola Co. v. Koke Co. of America 168
■■ Business Web Log: Amazon Faces Fake Products 173
Patents 175
■■ Business Law Analysis: The Impact of Patent Time Limits 175
Copyrights 178
Case 7.2: LEGO A/S v. ZURU Inc. 180
■■ Adapting the Law to the Online Environment: Beyoncé,
Sampling, and a $20 Million Lawsuit 183
Case 7.3: Oracle USA, Inc. v. Rimini Street, Inc. 184
Trade Secrets 185
International Protections 186
Chapter 8
Internet Law, Social Media, and
Privacy 192
Internet Law 193
Spotlight on Internet Porn: Case 8.1: Hasbro, Inc. v. Internet
Entertainment Group, Ltd. 196
Copyrights in Digital Information 197
■■ Landmark in the Law: The Digital Millennium Copyright Act 198
■■ Adapting the Law to the Online Environment: Riot Games,
Inc., Protects Its Online Video Game Copyrights 199
Case 8.2: BMG Rights Management (US), LLC v. Cox
Communications, Inc. 200
Social Media 201
Online Defamation 204
■■ Business Law Analysis: Immunity of ISPs under the
Communications Decency Act 206
Privacy 206
Case 8.3: Campbell v. Facebook, Inc. 207
Chapter 9
Criminal Law and Cyber Crime 214
Civil Law and Criminal Law 214
Criminal Liability 217
■■ Adapting the Law to the Online Environment: Should
Bitcoin Be Illegal? 217
Case 9.1: United States v. Crabtree 218
■■ Managerial Strategy: The Criminalization of American
Business 220
Types of Crimes 221
Spotlight on White-Collar Crime: Case 9.2: People v. Sisuphan 224
Defenses to Criminal Liability 228
Constitutional Safeguards 230
Cyber Crime 233
■■ Landmark in the Law: Miranda v. Arizona (1966) 234
■■ Cybersecurity and the Law: Counter-Strike: Global Offensive 236
Unit 2 Contracts and E-Contracts 243
Chapter 10
Nature and Classification 244
An Overview of Contract Law 244
Elements of a Contract 246
Case 10.1: Credible Behavioral Health, Inc. v. Johnson 247
Types of Contracts 248
Case 10.2: Boswell v. Panera Bread Co. 250
Quasi Contracts 253
■■ Business Law Analysis: Deciding If a Court Would Impose
a Quasi Contract 254
Interpretation of Contracts 255
Spotlight on Columbia Pictures: Case 10.3: Wagner v.
Columbia Pictures Industries, Inc. 256
Chapter 11
Agreement 262
Offer 262
Classic Case 11.1: Lucy v. Zehmer 263
Spotlight on Amazon.com: Case 11.2: Basis Technology
Corp. v. Amazon.com, Inc. 265
■■ Business Law Analysis: Offers of a Reward 267
Acceptance 269
■■ Adapting the Law to the Online Environment: Can Your E-Mails
Create a Valid Contract? 270
E-Contracts 273
Case 11.3: Bailey v. Kentucky Lottery Corp. 276
The Uniform Electronic Transactions Act 279
Chapter 12
Consideration, Capacity, and
Legality 285
Consideration 285
■■ Landmark in the Law: Hamer v. Sidway (1891) 286
Case 12.1: Cincinnati Reds, L.L.C. v. Testa 287
Spotlight on Nike: Case 12.2: Already, LLC v. Nike, Inc. 292
Promissory Estoppel 293
Contractual Capacity 294
Legality 297
■■ Business Law Analysis: Determining If a Contract with an
Unlicensed Party Is Enforceable 298
Case 12.3: Kennedy v. Shave Barber Co. 300
■■ Managerial Strategy: Creating Liability Waivers
That Are Not Unconscionable 303
The Effect of Illegality 304
Chapter 13
Defenses to Contract Enforceability 310
Mistakes 310
Fraudulent Misrepresentation 313
Case 13.1: McCullough v. Allstate Property and Casualty
Insurance Co. 314
■■ Adapting the Law to the Online Environment:
The Problem of “Contract Cheating” 317
Undue Influence and Duress 318
The Writing Requirement 319
Case 13.2: Sloop v. Kiker 320
The Parol Evidence Rule 325
Case 13.3: Habel v. Estate of Capelli 326
Chapter 14
Third Party Rights and Discharge 333
Assignments 333
Delegations 337
Case 14.1: Mirandette v. Nelnet, Inc. 339
Third Party Beneficiaries 339
Case 14.2: Bozzio v. EMI Group, Ltd. 340
Contract Discharge 343
■■ Business Law Analysis: Determining When a Breach Is Material 347
Case 14.3: Chalk Supply LLC v. Ribbe Real Estate LLC 348
Chapter 15
Breach and Remedies 357
Damages 358
■■ Cybersecurity and the Law: Arby’s Restaurant Group, Inc. 359
Case 15.1: HDAV Outdoor, LLC v. Red Square Holdings, LLC 361
■■ Landmark in the Law: Hadley v. Baxendale (1854) 362
Spotlight on Liquidated Damages: Case 15.2: Kent State
University v. Ford 364
Equitable Remedies 365
■■ Business Law Analysis: Enforceability of Liquidated
Damages Provisions 365
Case 15.3: Cipriano Square Plaza Corp. v. Munawar 366
Recovery Based on Quasi Contract 369
Contract Provisions Limiting Remedies 370
Unit 3 Commercial Transactions 377
Chapter 16
Sales and Lease Contracts 378
■■ Landmark in the Law: The Uniform Commercial Code 379
The Scope of Articles 2 and 2A 379
■■ Adapting the Law to the Online Environment:
Taxing Web Purchases 381
The Formation of Sales and Lease Contracts 383
Case 16.1: Toll Processing Services, LLC v. Kastalon, Inc. 384
■■ Business Law Analysis: Additional Terms between Merchants 388
Classic Case 16.2: Jones v. Star Credit Corp. 393
Title and Risk of Loss 394
■■ Managerial Strategy: Commercial Use of Drones 396
Case 16.3: Total Quality Logistics, LLC v. Balance
Transportation, LLC 398
Contracts for the International Sale of Goods 401
Chapter 17
Performance and Breach of
Sales and Lease Contracts 408
Obligations of the Seller or Lessor 409
Case 17.1: All the Way Towing, LLC v. Bucks County
International, Inc. 411
Obligations of the Buyer or Lessee 414
Remedies of the Seller or Lessor 416
Remedies of the Buyer or Lessee 419
Spotlight on Baseball Cards: Case 17.2: Fitl v. Strek 423
Warranties 425
Classic Case 17.3: Webster v. Blue Ship Tea Room, Inc. 428
■■ Business Law Analysis: Implied Warranties 430
Chapter 18
Negotiable Instruments 438
Formation of Negotiable Instruments 439
■■ Adapting the Law to the Online Environment: Pay with Your
Smartphone 441
Case 18.1: OneWest Bank, FSB v. Nunez 445
■■ Business Law Analysis: Deciding If an Instrument Is
Negotiable 446
Case 18.2: Collins Asset Group, LLC v. Alialy 447
Transfer of Instruments 450
Holder in Due Course (HDC) 452
Case 18.3: Jarrell v. Conerly 454
Signature and Warranty Liability 456
Defenses, Limitations, and Discharge 461
Chapter 19
International and Space Law 469
International Law 469
Case 19.1: Rubin v. Islamic Republic of Iran 473
■■ Business Law Analysis: Sovereign Immunity Claims 474
Doing Business Internationally 475
Regulation of Specific Business Activities 477
Case 19.2: Changzhou Trina Solar Energy Co. v. International Trade
Commission 479
U.S. Laws in a Global Context 481
Spotlight on International Torts: Case 19.3: Daimler AG v. Bauman 482
Space Law 483
■■ Cybersecurity and the Law: Safe Satellites 484
Chapter 20
Banking 490
Checks and the Bank-Customer Relationship 491
The Bank’s Duty to Honor Checks 493
Case 20.1: Legg v. West Bank 494
Case 20.2: Horton v. JPMorgan Chase Bank, N.A. 497
The Bank’s Duty to Accept Deposits 499
■■ Landmark in the Law: Check Clearing for the 21st Century
Act (Check 21) 500
Electronic Fund Transfers 502
Case 20.3: Binns v. Truist Bank 504
Banking in the Digital Age 505
■■ Adapting the Law to the Online Environment: Open Banking 506
Chapter 21
Security Interests and Creditors’ Rights 512
Creating and Perfecting a Security Interest 512
Spotlight on Wedding Rings: Case 21.1: Royal Jewelers, Inc. v. Light 514
■■ Adapting the Law to the Online Environment: Secured
Transactions Online 515
■■ Business Law Analysis: Perfecting a Security Interest 517
Scope of a Security Interest 521
Priorities, Rights, and Duties 523
Case 21.2: Lewis v. Chris Carbine, Inc. 524
Default 526
Case 21.3: SunTrust Bank v. Monroe 528
Other Laws Assisting Creditors 530
Chapter 22
Bankruptcy 540
The Bankruptcy Code 540
■■ Business Web Log: Online Competition, Bankruptcy,
and the “Retail Apocalypse” 541
■■ Landmark in the Law: The Bankruptcy Abuse Prevention
and Consumer Protection Act 542
Chapter 7—Liquidation 543
■■ Business Law Analysis: Violations of the Automatic Stay 547
Case 22.1: In re Anderson 552
Case 22.2: In re Dykes 555
Chapter 11—Reorganization 556
Bankruptcy Relief under Chapter 13 and Chapter 12 559
Case 22.3: In re Chamberlain 561
Unit 4 Agency and Employment Law 567
Chapter 23
Agency Relationships in Business 568
Agency Law 569
Formation of an Agency 572
Duties of Agents and Principals 574
Spotlight on Taser International: Case 23.1: Taser
International, Inc. v. Ward 576
Agent’s Authority 578
Case 23.2: Dearborn West Village Condominium
Association v. Makki 580
Liability in Agency Relationships 582
■■ Business Law Analysis: Liability of Disclosed Principals 582
■■ Landmark in the Law: The Doctrine of
Respondeat Superior 585
Case 23.3: Simon v. Farm Bureau Insurance Co. 587
Termination of an Agency 588
Chapter 24
Employment, Immigration, and
Labor Law 596
Employment at Will 597
Wages, Hours, and Leave 598
Case 24.1: Encino Motorcars, LLC v. Navarro 600
Health, Safety, Income Security, and Privacy 602
Case 24.2: Packers Sanitation Services, Inc. v. Occupational Safety
and Health Review Commission 603
■■ Business Law Analysis: Workers’ Compensation Claims 605
■■ Adapting the Law to the Online Environment:
Social Media in the Workplace Come of Age 609
Immigration Law 610
Labor Law 612
■■ Managerial Strategy: Union Organizing Using a Company’s
E-Mail System 615
Case 24.3: Contemporary Cars, Inc. v. National Labor
Relations Board 616
Chapter 25
Employment Discrimination 624
Title VII of the Civil Rights Act 625
■■ Adapting the Law to the Online Environment: Hiring
Discrimination Based on Social Media Posts 629
Case 25.1: Young v. United Parcel Service, Inc. 630
■■ Business Law Analysis: Retaliation Claims 634
Case 25.2: Franchina v. City of Providence 635
Discrimination Based on Age,
Disability, or Military Status 636
Case 25.3: Kassa v. Synovus Financial Corp. 641
Defenses to Employment Discrimination 643
Affirmative Action 645
Unit 5 Business Organizations 651
Chapter 26
Sole Proprietorships and
Franchises 652
Sole Proprietorships 653
Case 26.1: Port Orchard Airport, Inc. v. Wagner 653
■■ Adapting the Law to the Online Environment:
“Doing Business As” a Sole Proprietor 655
Franchises 656
The Franchise Contract 658
■■ Cybersecurity and the Law: Brinker International, Inc. 660
Franchise Termination 661
Case 26.2: S&P Brake Supply, Inc. v. Daimler Trucks
North America, LLC 661
Spotlight on Holiday Inns: Case 26.3: Holiday Inn
Franchising, Inc. v. Hotel Associates, Inc. 663
Chapter 27
All Forms of Partnership 668
Basic Partnership Concepts 669
Case 27.1: Harun v. Rashid 670
Formation and Operation 672
Classic Case 27.2: Meinhard v. Salmon 675
Dissociation and Termination 678
Case 27.3: Guenther v. Ryerson 681
Limited Liability Partnerships 682
Limited Partnerships 683
Chapter 28
Limited Liability Companies and
Special Business Forms 691
The Limited Liability Company 691
■■ Landmark in the Law: Limited Liability Company
(LLC) Statutes 692
Case 28.1: Nesset, Inc. v. Jones 695
LLC Operation and Management 696
■■ Managerial Strategy: Can a Person Who Is Not a
Member of a Protected Class Sue for Discrimination? 697
Case 28.2: Schaefer v. Orth 698
Dissociation and Dissolution of an LLC 699
Case 28.3: Reese v. Newman 700
■■ Business Law Analysis: When Will a Court Order the
Dissolution of an LLC? 701
Special Business Forms 702
Chapter 29
Corporations 708
Nature and Classification 708
Case 29.1: Wulf v. Bravo Brio Restaurant Group, Inc. 710
Case 29.2: Greenfield v. Mandalay Shores Community
Association 714
Formation and Powers 715
■■ Cybersecurity and the Law: The CLOUD Act 720
■■ Business Law Analysis: Piercing the Corporate Veil 722
Directors and Officers 722
Classic Case 29.3: Guth v. Loft, Inc. 727
Shareholders 728
Major Business Forms Compared 735
Chapter 30
Investor Protection, Insider Trading,
and Corporate Governance 743
Securities Act of 1933 744
Case 30.1: Securities and Exchange Commission v. Scoville 744
■■ Adapting the Law to the Online Environment: Investment
Crowdfunding—Regulations and Restrictions 748
■■ Landmark in the Law: Changes to Regulation A: “Reg A+” 749
Securities Exchange Act of 1934 752
Classic Case 30.2: Securities and Exchange Commission v. Texas Gulf
Sulphur Co. 754
Case 30.3: Singer v. Reali 758
State Securities Laws 760
Corporate Governance 761
Unit 6 Government Regulation 771
Chapter 31
Antitrust Law
and Promoting Competition 772
The Sherman Antitrust Act 773
■■ Landmark in the Law: The Sherman Antitrust Act 773
Case 31.1: United States v. Vega-Martínez 775
Section 1 of the Sherman Act 775
Section 2 of the Sherman Act 779
The Clayton Act 782
■■ Adapting the Law to the Online Environment:
Big Tech’s Monopoly Problem 782
Case 31.2: Candelore v. Tinder, Inc. 784
Enforcement and Exemptions 786
Case 31.3: TransWeb, LLC v. 3M Innovative Properties Co. 787
U.S. Antitrust Laws in the Global Context 788
Chapter 32
Consumer and Environmental Law 794
Advertising, Marketing, Sales, and Labeling 795
Spotlight Case 32.1: POM Wonderful, LLC v. Federal Trade Commission 796
Case 32.2: Haywood v. Massage Envy Franchising, LLC 798
Protection of Health and Safety 802
Credit Protection 805
Case 32.3: Manuel v. Merchants and Professional Bureau, Inc. 808
Protecting the Environment 809
Air and Water Pollution 811
Toxic Chemicals and Hazardous Waste 814
Chapter 33
Liability of Accountants
and Other Professionals 822
Potential Liability to Clients 823
Case 33.1: Suarez v. Fernandez 827
Potential Liability to Third Parties 828
Liability of Accountants under Federal Laws 830
Case 33.2: Laccetti v. Securities and Exchange Commission 832
Potential Criminal Liability 836
Confidentiality and Privilege 837
Case 33.3: Commonwealth of Pennsylvania v. Schultz 838
Unit 7 Property and Its Protection 845
Chapter 34
Personal Property and Bailments 846
Personal Property versus Real Property 846
Acquiring Ownership of Personal Property 848
■■ Adapting the Law to the Online Environment:
The Exploding World of Digital Property 848
■■ Business Law Analysis: Effective Gift of a Brokerage Account 850
Classic Case 34.1: In re Estate of Piper 851
Mislaid, Lost, and Abandoned Property 853
Case 34.2: Zephier v. Agate 855
Bailments 855
Case 34.3: Zissu v. IH2 Property Illinois, L.P. 860
Chapter 35
Real Property and
Landlord-Tenant Law 868
The Nature of Real Property 868
Ownership Interests and Leases 870
Case 35.1: In the Matter of the Estate of Nelson 871
Unit 7 Property and Its Protection 845
Transfer of Ownership 876
Spotlight on Sales of Haunted Houses: Case 35.2:
Stambovsky v. Ackley 877
■■ Business Law Analysis: When Possession of Property Is
Not “Adverse” 880
Case 35.3: A2 Creative Group, LLC v. Anderson 881
Landlord-Tenant Relationships 883
Chapter 36
Insurance, Wills, and Trusts 891
Insurance 891
Case 36.1: Breeden v. Buchanan 894
Wills 899
Case 36.2: In the Matter of the Estate of Thorn 902
■■ Adapting the Law to the Online Environment: Online
Asset Estate Planning 905
Trusts 907
Case 36.3: Dowdy v. Dowdy 909
Appendices
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–3
D Answers to Issue Spotters A–4
E Sample Answers for Business Case Problems
with Sample Answer A–10
Glossary G–1
Table of Cases TC–1
Index I–1