Business Law Today, Comprehensive Edition, Text & 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
Exhibit 1A–1 The National Reporter System—Regional/Federal 23
Reading and Understanding Case Law 24
Exhibit 1A–2 How to Read Citations 25
Exhibit 1A–3 A Sample Court Case 28
■■ Business Law Analysis: Case Briefing and IRAC Legal Reasoning 32
Chapter 2
The Constitutional Powers of Government 35
Case 2.1: Classy Cycles, Inc. v. Panama City Beach 36
■■ Landmark in the Law: Gibbons v. Ogden (1824) 38
Classic Case 2.2: Heart of Atlanta Motel v. United States 39
Business and the Bill of Rights 41
■■ Adapting the Law to the Online Environment: Social
Media and the Constitution 43
Spotlight on Beer Labels: Case 2.3: Bad Frog Brewery,
Inc. v. New York State Liquor Authority 46
■■ Business Law Analysis: Determining When Public
Religious Displays Violate the Establishment Clause 48
Due Process and Equal Protection 50
Privacy Rights 52
■■ Cybersecurity and the Law: Should Apple Help
Law Enforcement? 52
Chapter 3
Ethics in Business 59
Ethics and the Role of Business 60
■■ Business Web Log: Bogus Bank and Credit Card
Accounts at Wells Fargo Bank 61
■■ Adapting the Law to the Online Environment: Should
Employees Have a “Right of Disconnecting”? 63
Case 3.1: Al-Dabagh v. Case Western Reserve University 65
Ethical Principles and Philosophies 66
■■ Managerial Strategy: The Stakeholder Capitalism Movement 71
Sources of Ethical Issues in Business Decisions 71
Case 3.2: Watson Laboratories, Inc. v. State of Mississippi 72
Making Ethical Business Decisions 75
■■ Business Law Analysis: Applying the IDDR Framework 79
Business Ethics on a Global Level 80
Appendix to Chapter 3 87
Costco Code of Ethics 87
Chapter 4
Courts and Alternative
Dispute Resolution 88
The Judiciary’s Role in American Government 89
■■ Landmark in the Law: Marbury v. Madison (1803) 89
Basic Judicial Requirements 90
Spotlight on Gucci: Case 4.1: Gucci America, Inc. v. Wang Huoqing 95
The State and Federal Court Systems 97
Case 4.2: Oxford Tower Apartments, LP v. Frenchie’s Hair Boutique 98
Following a State Court Case 101
■■ Adapting the Law to the Online Environment:
Using Social Media for Service of Process 103
Case 4.3: Klipsch Group, Inc. v. ePRO E-Commerce Limited 107
Courts Online 111
Alternative Dispute Resolution 112
■■ Business Web Log: Samsung and Forced Arbitration 115
Chapter 5
Tort Law 123
The Basis of Tort Law 123
Intentional Torts against Persons 125
■■ Business Law Analysis: Analyzing Intentional Infliction
of Emotional Distress Claims 127
Case 5.1: Sky v. Van Der Westhuizen 129
■■ Adapting the Law to the Online Environment: Revenge
Porn and Invasion of Privacy 132
Intentional Torts against Property 136
Negligence 138
Case 5.2: Bogenberger v. Pi Kappa Alpha Corporation, Inc. 139
■■ Landmark in the Law: Palsgraf v. Long Island
Railroad Co. (1928) 143
Spotlight on the Seattle Mariners: Case 5.3: Taylor v. Baseball
Club of Seattle, L.P. 144
Strict Liability 145
Chapter 6
Product Liability 151
Product Liability Claims 151
■■ Business Web Log: Johnson & Johnson Faces Continuing
Lawsuits Over Its Talcum Powder 152
■■ Landmark in the Law: MacPherson v. Buick
Motor Co. (1916) 153
Case 6.1: Primal Vantage Co. v. O’Bryan 154
Strict Product Liability 155
■■ Cybersecurity and the Law: The Internet of Things 157
■■ Business Law Analysis: How State Legislation
Can Limit Recovery for Design Defects 158
Case 6.2: Stange v. Janssen Pharmaceuticals, Inc. 160
■■ Managerial Strategy: When Is a Warning Legally
Bulletproof? 161
Defenses to Product Liability 163
Spotlight on Injuries from Vaccinations: Case 6.3:
Bruesewitz v. Wyeth, LLC
Chapter 7
Intellectual Property Rights 171
Trademarks 172
■■ Managerial Strategy: Trademarks and Service Marks 172
Classic Case 7.1: Coca-Cola Co. v. Koke Co. of America 173
■■ Business Web Log: Amazon Faces Fake Products 178
Patents 180
■■ Business Law Analysis: The Impact of Patent Time Limits 181
Copyrights 183
Case 7.2: LEGO A/S v. ZURU Inc. 185
■■ Adapting the Law to the Online Environment:
Beyoncé, Sampling, and a $20 Million Lawsuit 188
Case 7.3: Oracle USA, Inc. v. Rimini Street, Inc. 189
Trade Secrets 190
International Protections 191
Chapter 8
Internet Law, Social Media,
and Privacy 197
Internet Law 198
Spotlight on Internet Porn: Case 8.1: Hasbro,
Inc. v. Internet Entertainment Group, Ltd. 202
Copyrights in Digital Information 203
■■ Landmark in the Law: The Digital Millennium Copyright Act 203
■■ Adapting the Law to the Online Environment: Riot
Games, Inc., Protects Its Online Video Game Copyrights 204
Case 8.2: BMG Rights Management (US), LLC v. Cox
Communications, Inc. 206
Social Media 207
Online Defamation 210
■■ Business Law Analysis: Immunity of ISPs
under the Communications Decency Act 211
Privacy 212
Case 8.3: Campbell v. Facebook, Inc. 212
Chapter 9
Criminal Law and Cyber Crime 220
Civil Law and Criminal Law 220
Criminal Liability 223
■■ Adapting the Law to the Online Environment: Should
Bitcoin Be Illegal? 223
Case 9.1: United States v. Crabtree 224
■■ Managerial Strategy: The Criminalization of
American Business 226
Types of Crimes 228
Spotlight on White-Collar Crime: Case 9.2: People v. Sisuphan 230
Unit 2 Contracts and E-Contracts 249
Chapter 10
Nature and Classification 250
An Overview of Contract Law 250
Elements of a Contract 252
Case 10.1: Credible Behavioral Health, Inc. v. Johnson 253
Types of Contracts 254
Case 10.2: Boswell v. Panera Bread Co. 256
Quasi Contracts 259
■■ Business Law Analysis: Deciding If a Court
Would Impose a Quasi Contract 260
Interpretation of Contracts 261
Spotlight on Columbia Pictures: Case 10.3: Wagner v.
Columbia Pictures Industries, Inc. 262
Chapter 11
Agreement 269
Offer 269
Classic Case 11.1: Lucy v. Zehmer 270
Spotlight on Amazon.com: Case 11.2: Basis Technology
Corp. v. Amazon.com, Inc. 273
■■ Business Law Analysis: Offers of a Reward 275
Acceptance 277
■■ Adapting the Law to the Online Environment:
Can Your E-Mails Create a Valid Contract? 278
E-Contracts 280
Case 11.3: Bailey v. Kentucky Lottery Corp. 283
The Uniform Electronic Transactions Act 286
Chapter 12
Consideration 293
Elements of Consideration 293
■■ Landmark in the Law: Hamer v. Sidway (1891) 294
Case 12.1: Cincinnati Reds, L.L.C. v. Testa 295
Agreements That Lack Consideration 297
Case 12.2: Baugh v. Columbia Heart Clinic, P.A. 298
Settlement of Claims 300
Spotlight on Nike: Case 12.3: Already, LLC v. Nike, Inc. 301
Promissory Estoppel 302
Chapter 13
Capacity and Legality 307
Contractual Capacity 307
Spotlight on KFC: Case 13.1: PAK Foods Houston, LLC v. Garcia 308
Legality 311
■■ Business Law Analysis: Determining If a Contract with an
Unlicensed Party Is Enforceable 313
Case 13.2: Kennedy v. Shave Barber Co. 315
■■ Managerial Strategy: Creating Liability Waivers
That Are Not Unconscionable 318
Case 13.3: Holmes v. Multimedia KSDK, Inc. 318
The Effect of Illegality 319
Chapter 14
Voluntary Consent 326
Mistakes 326
Fraudulent Misrepresentation 329
Case 14.1: McCullough v. Allstate Property and Casualty
Insurance Co. 330
Case 14.2: Cronkelton v. Guaranteed Construction Services, LLC 333
■■ Adapting the Law to the Online Environment: The Problem
of “Contract Cheating” 334
Case 14.3: Adeli v. Silverstar Automotive, Inc. 335
Undue Influence and Duress 336
Chapter 15
The Statute of Frauds—
Writing Requirement 340
The Writing Requirement 340
Case 15.1: Sloop v. Kiker 341
Exceptions to the Statute of Frauds 345
Sufficiency of the Writing 347
Case 15.2: Moore v. Bearkat Energy Partners, LLC 348
The Parol Evidence Rule 348
Case 15.3: Habel v. Estate of Capelli 349
Chapter 16
Performance and Discharge 356
Conditions of Performance 356
Discharge by Performance 358
■■ Business Law Analysis: Determining When a Breach
Is Material 360
Case 16.1: Chalk Supply LLC v. Ribbe Real
Estate LLC 361
Discharge by Agreement 362
Case 16.2: DWB, LLC v. D&T Pure Trust 364
Discharge by Operation of Law 365
Case 16.3: Hampton Road Bankshares, Inc. v. Harvard 366
Chapter 17
Breach and Remedies 372
Damages 373
■■ Cybersecurity and the Law: Arby’s Restaurant Group, Inc. 374
Case 17.1: HDAV Outdoor, LLC v. Red Square Holdings, LLC 376
■■ Landmark in the Law: Hadley v. Baxendale (1854) 377
Spotlight on Liquidated Damages: Case 17.2: Kent State
University v. Ford 379
Equitable Remedies 380
■■ Business Law Analysis: Enforceability of Liquidated
Damages Provisions 381
Case 17.3: Cipriano Square Plaza Corp. v. Munawar 381
Recovery Based on Quasi Contract 385
Contract Provisions Limiting Remedies 386
Chapter 18
Third Party Rights 393
Assignments 393
Case 18.1: JP Morgan Chase Bank N.A. v. McNeill 395
Delegations 398
Case 18.2: Mirandette v. Nelnet, Inc. 400
Third Party Beneficiaries 401
Case 18.3: Bozzio v. EMI Group, Ltd. 401
Unit 3 Commercial Transactions 409
Chapter 19
The Formation of Sales and Lease
Contracts 410
■■ Landmark in the Law: The Uniform Commercial Code 411
The Scope of Articles 2 and 2A 411
■■ Adapting the Law to the Online Environment:
Taxing Web Purchases 413
The Formation of Sales and Lease Contracts 415
Case 19.1: Toll Processing Services, LLC v. Kastalon, Inc. 416
Case 19.2: Cadillac Rubber & Plastics, Inc. v. Tubular Metal
Systems, LLC 420
■■ Business Law Analysis: Additional Terms between Merchants 422
Classic Case 19.3: Jones v. Star Credit Corp. 427
Contracts for the International Sale of Goods 427
Chapter 20
Title and Risk of Loss 434
Identification 435
Case 20.1: BMW Group, LLC v. Castle Oil Corp. 436
Passage of Title 437
■■ Managerial Strategy: Commercial Use of Drones 438
Spotlight on Andy Warhol: Case 20.2: Lindholm v. Brant 440
Risk of Loss 442
Case 20.3: Total Quality Logistics, LLC v. Balance Transportation, LLC 443
Insurable Interest 446
Chapter 21
Performance and Breach of
Sales and Lease Contracts 450
Obligations of the Seller or Lessor 451
Case 21.1: All the Way Towing, LLC v. Bucks County
International, Inc. 453
Obligations of the Buyer or Lessee 456
Remedies of the Seller or Lessor 459
Remedies of the Buyer or Lessee 461
Spotlight on Baseball Cards: Case 21.2: Fitl v. Strek 466
Warranties 467
Classic Case 21.3: Webster v. Blue Ship Tea Room, Inc. 471
■■ Business Law Analysis: Implied Warranties 473
Chapter 22
Negotiable Instruments 481
Formation of Negotiable Instruments 482
■■ Adapting the Law to the Online Environment: Pay with Your
Smartphone 484
Case 22.1: OneWest Bank, FSB v. Nunez 488
■■ Business Law Analysis: Deciding If an Instrument
Is Negotiable 490
Case 22.2: Collins Asset Group, LLC v. Alialy 491
Transfer of Instruments 493
Holder in Due Course (HDC) 495
Case 22.3: Jarrell v. Conerly 498
Signature and Warranty Liability 500
Defenses, Limitations, and Discharge 505
Chapter 23
International and Space Law 513
International Law 513
Case 23.1: Rubin v. Islamic Republic of Iran 517
■■ Business Law Analysis: Sovereign Immunity Claims 519
Doing Business Internationally 519
Regulation of Specific Business Activities 522
Case 23.2: Changzhou Trina Solar Energy Co.,
Ltd. v. International Trade Commission 523
U.S. Laws in a Global Context 525
Spotlight on International Torts: Case 23.3:
Daimler AG v. Bauman 526
Space Law 528
■■ Cybersecurity and the Law: Safe Satellites 529
Chapter 24
Banking 535
Checks and the Bank-Customer Relationship 536
The Bank’s Duty to Honor Checks 538
Case 24.1: Legg v. West Bank 539
Case 24.2: Horton v. JPMorgan Chase Bank, N.A. 542
The Bank’s Duty to Accept Deposits 545
■■ Landmark in the Law: Check Clearing for the 21st Century
Act (Check 21) 546
Electronic Fund Transfers 548
Case 24.3: Binns v. Truist Bank 550
Banking in the Digital Age 551
■■ Adapting the Law to the Online Environment: Open Banking 552
Chapter 25
Security Interests and Creditors’
Rights 558
Creating and Perfecting a Security Interest 558
Spotlight on Wedding Rings: Case 25.1: Royal Jewelers,
Inc. v. Light 560
■■ Adapting the Law to the Online Environment”
Secured Transactions Online 562
■■ Business Law Analysis: Perfecting a Security Interest 564
Scope of a Security Interest 567
Priorities, Rights, and Duties 569
Case 25.2: Lewis v. Chris Carbine, Inc. 570
Default 573
Case 25.3: SunTrust Bank v. Monroe 575
Other Laws Assisting Creditors 577
Chapter 26
Bankruptcy 588
The Bankruptcy Code 588
■■ Business Web Log: Online Competition, Bankruptcy,
and the “Retail Apocalypse” 589
■■ Landmark in the Law: The Bankruptcy Abuse Prevention
and Consumer Protection Act 590
Chapter 7—Liquidation 591
■■ Business Law Analysis: Violations of the Automatic Stay 595
Case 26.1: In re Anderson 600
Case 26.2: In re Dykes 603
Chapter 11—Reorganization 605
Bankruptcy Relief under Chapter 13 and Chapter 12 607
Case 26.3: In re Chamberlain 609
Unit 4 Agency and Employment Law 615
Chapter 27
Agency Relationships in Business 616
Agency Law 617
Formation of an Agency 620
Duties of Agents and Principals 622
Spotlight on Taser International: Case 27.1: Taser International,
Inc. v. Ward 624
Agent’s Authority 626
Case 27.2: Dearborn West Village Condominium
Association v. Makki 628
Liability in Agency Relationships 630
■■ Business Law Analysis: Liability of Disclosed Principals 631
■■ Landmark in the Law: The Doctrine of Respondeat
Superior 634
Case 27.3: Simon v. Farm Bureau Insurance Co. 635
Termination of an Agency 636
Chapter 28
Employment, Immigration,
and Labor Law 644
Employment at Will 645
Wages, Hours, and Leave 646
Case 28.1: Encino Motorcars, LLC v. Navarro 648
Health, Safety, Income Security, and Privacy 650
Case 28.2: Packers Sanitation Services, Inc. v. Occupational Safety
and Health Review Commission 652
■■ Business Law Analysis: Workers’ Compensation Claims 653
■■ Adapting the Law to the Online Environment: Social
Media in the Workplace Come of Age 657
Immigration Law 658
Labor Law 660
■■ Managerial Strategy: Union Organizing Using a Company’s
E-Mail System 664
Case 28.3: Contemporary Cars, Inc. v. National Labor Relations Board 665
Chapter 29
Employment Discrimination 672
Title VII of the Civil Rights Act 673
■■ Adapting the Law to the Online Environment: Hiring
Discrimination Based on Social Media Posts 677
Case 29.1: Young v. United Parcel Service, Inc. 678
■■ Business Law Analysis: Retaliation Claims 682
Case 29.2: Franchina v. City of Providence 683
Discrimination Based on Age,
Disability, or Military Status 685
Case 29.3: Kassa v. Synovus Financial Corp. 689
Defenses to Employment Discrimination 691
Affirmative Action 693
Unit 5 Business Organizations 699
Chapter 30
Sole Proprietorships and
Franchises 700
Sole Proprietorships 701
Case 30.1: Port Orchard Airport, Inc. v. Wagner 701
■■ Adapting the Law to the Online Environment:
“Doing Business As” a Sole Proprietor 703
Franchises 704
The Franchise Contract 706
■■ Cybersecurity and the Law: Brinker
International, Inc. 708
Franchise Termination 709
Case 30.2: S&P Brake Supply, Inc. v. Daimler Trucks North
America, LLC 709
Spotlight on Holiday Inns: Case 30.3: Holiday Inn Franchising,
Inc. v. Hotel Associates, Inc. 711
Chapter 31
All Forms of Partnership 716
Basic Partnership Concepts 717
Case 31.1: Harun v. Rashid 718
Formation and Operation 720
Classic Case 31.2: Meinhard v. Salmon 723
Dissociation and Termination 726
Case 31.3: Guenther v. Ryerson 729
Limited Liability Partnerships 730
Limited Partnerships 731
Chapter 32
Limited Liability Companies
and Special Business Forms 739
The Limited Liability Company 739
■■ Landmark in the Law: Limited Liability Company
(LLC) Statutes 740
Case 32.1: Nesset, Inc. v. Jones 743
LLC Operation and Management 744
■■ Managerial Strategy: Can a Person Who Is Not a
Member of a Protected Class Sue for
Discrimination? 745
Case 32.2: Schaefer v. Orth 746
Dissociation and Dissolution
of an LLC 747
Case 32.3: Reese v. Newman 748
■■ Business Law Analysis: When Will a Court Order the
Dissolution of an LLC? 749
Special Business Forms 750
Chapter 33
Corporate Formation
and Financing 756
Nature and Classification 756
Case 33.1: Wulf v. Bravo Brio Restaurant Group, Inc. 758
Case 33.2: Pantano v. Newark Museum 760
Case 33.3: Greenfield v. Mandalay Shores Community
Association 763
Formation and Powers 764
Piercing the Corporate Veil 768
■■ Cybersecurity and the Law: The CLOUD Act 768
Corporate Financing 770
■■ Business Law Analysis: Piercing the Corporate Veil 770
Chapter 34
Corporate Directors,
Officers, and Shareholders 777
Directors and Officers 777
Duties and Liabilities of Directors and Officers 780
Case 34.1: Oliveira v. Sugarman 781
Classic Case 34.2: Guth v. Loft, Inc. 783
Shareholders 785
Rights of Shareholders 788
Case 34.3: Robinson v. Langenbach 791
Chapter 35
Corporate Mergers,
Takeovers, and Termination 796
Merger, Consolidation, and Share Exchange 796
Purchase of Assets 800
Case 35.1: McElrath v. Kalanick 800
Case 35.2: Heavenly Hana, LLC v. Hotel Union &
Hotel Industry of Hawaii Pension Plan 802
Takeovers 803
Corporate Termination 805
Major Business Forms Compared 806
Investor Protection, Insider Trading,
and Corporate Governance 812
Securities Act of 1933 813
Case 36.1: Securities and Exchange Commission v. Scoville 813
■■ Adapting the Law to the Online Environment: Investment
Crowdfunding—Regulations and Restrictions 817
■■ Landmark in the Law: Changes to Regulation
A: “Reg A+” 818
Securities Exchange Act of 1934 821
Classic Case 36.2: Securities and Exchange
Commission v. Texas Gulf Sulphur Co. 822
Case 36.3: Singer v. Reali 827
State Securities Laws 829
Corporate Governance 830
Unit 6 Government Regulation 839
Chapter 37
Administrative Law 840
Practical Significance 840
Agency Creation and Powers 843
Case 37.1: Simmons v. Smith 845
The Administrative Process 846
Case 37.2: Edwin Taylor Corp. v. U.S. Department
of Labor 851
Judicial Deference to Agency Decisions 852
Case 37.3: Olivares v. Transportation Security
Administration 853
Public Accountability 854
Chapter 38
Antitrust Law
and Promoting Competition 860
The Sherman Antitrust Act 861
■■ Landmark in the Law: The Sherman
Antitrust Act 861
Case 38.1: United States v. Vega-Martínez 863
Section 1 of the Sherman Act 863
Section 2 of the Sherman Act 867
The Clayton Act 870
■■ Adapting the Law to the Online Environment: Big
Tech’s Monopoly Problem 870
Case 38.2: Candelore v. Tinder, Inc. 872
Enforcement and Exemptions 875
Unit 6 Government Regulation 839
Case 38.3: TransWeb, LLC v. 3M Innovative Properties Co. 876
U.S. Antitrust Laws in the Global Context 877
Chapter 39
Consumer and Environmental Law 883
Advertising, Marketing, Sales, and Labeling 884
Case 39.1: POM Wonderful, LLC v. Federal Trade Commission 885
Case 39.2: Haywood v. Massage Envy Franchising, LLC 888
Protection of Health and Safety 891
Credit Protection 894
Case 39.3: Manuel v. Merchants and Professional Bureau, Inc. 898
Protecting the Environment 898
Air and Water Pollution 900
Toxic Chemicals and Hazardous Waste 904
Chapter 40
Liability of Accountants
and Other Professionals 911
Potential Liability to Clients 912
Case 40.1: Suarez v. Fernandez 916
Potential Liability to Third Parties 917
Liability of Accountants under Federal Laws 919
Case 40.2: Laccetti v. Securities and Exchange Commission 921
Potential Criminal Liability 925
Confidentiality and Privilege 926
Case 40.3: Commonwealth of Pennsylvania v. Schultz 926
Unit 7 Property and Its Protection 933
Chapter 41
Personal Property and Bailments 934
Personal Property versus Real Property 934
Acquiring Ownership of Personal Property 936
■■ Adapting the Law to the Online Environment: The
Exploding World of Digital Property 936
■■ Business Law Analysis: Effective Gift of a Brokerage Account 938
Classic Case 41.1: In re Estate of Piper 939
Mislaid, Lost, and Abandoned Property 941
Case 41.2: Zephier v. Agate 943
Bailments 943
Case 41.3: Zissu v. IH2 Property Illinois, L.P. 948
Chapter 42
Real Property and
Landlord-Tenant Law 956
The Nature of Real Property 956
Ownership Interests and Leases 958
Case 42.1: In the Matter of the Estate of Nelson 959
Transfer of Ownership 964
Spotlight on Sales of Haunted Houses: Case 42.2:
Stambovsky v. Ackley 965
■■ Business Law Analysis: When Possession of Property Is
Not “Adverse” 969
Case 42.3: A2 Creative Group, LLC v. Anderson 969
Landlord-Tenant Relationships 972
Chapter 43
Insurance, Wills, and Trusts 980
Insurance 980
Case 43.1: Breeden v. Buchanan 983
Wills 988
Case 43.2: In the Matter of the Estate of Thorn 992
In the Matter of the Estate of Thorn 992
■■ Adapting the Law to the Online Environment: Online
Asset Estate Planning 995
Trusts 997
Case 43.3: Dowdy v. Dowdy 999
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 A–3
D Answers to the Issue Spotters A–4
E Sample Answers for Business Case Problems
with Sample Answer A–11
Glossary G–1
Table of Cases TC–1
Index I–1