Debate This: Carrier’s liability · Debate This: Carrier’s liability · Chapter 41, p. 990 Vanessa Denai owned forty acres of land in rural Louisiana. On the property were a 1,600-square-foot house and a metal barn. Denai met Lance Finney, who had been seeking a small plot of rural property to rent. After several meetings, Denai invited Finney to live on a corner of her land in exchange for Finney’s assistance in cutting wood and tending her property. Denai agreed to store Finney’s sailboat in her barn. With Denai’s consent, Finney constructed a concrete and oak foundation on Denai’s property and purchased a 190-square-foot dome from Dome Baja for $3,395. The dome was shipped by Doty Express, a transportation company licensed to serve the public. When it arrived, Finney installed the dome frame and fabric exterior so that the dome was detachable from the foundation. A year after Finney installed the dome, Denai wrote Finney a note stating, “I’ve decided to give you four acres of land surrounding your dome as drawn on this map.” This gift violated no local land-use restrictions. Using the information presented in the chapter, answer the following questions. 1. Is the dome real property or personal property? Explain. 2. Is Denai’s gift of land to Finney a gift causa mortis or a gift inter vivos? 3. What type of bailment relationship was created when Denai agreed to store Finney’s boat? What degree of care was Denai required to exercise in storing the boat? 4. What standard of care applied to the shipment of the dome by Doty Express? Debate This: Common carriers should not be able to limit their liability. Discussion: Week 4: Possible Effects of Poverty on Young Children’s Language and Literacy Development Imagine that there are two 4-year-old girls standing in front of you. One girl, whom you might assume to be from a more economically affluent home, has hair that cascades down in neat curls, a dress ablaze with bright colors, and a new princess lunchbox in her hand. The other girl appears a bit unkempt, with mismatched socks and a sweet, yet sleepy, smile. Without hearing either girl speak, which might you select as the one with a greater vocabulary? Why? Like most people, you might gravitate toward the child who appears to be from the more economically affluent home. Although this choice might seem stereotypical, this selection does mirror findings from research studies that have linked vocabulary development and skill statistically with economic background. For example, one study found that by 3 years of age, there was a 30 million word gap between children from the wealthiest and the poorest families (Fernald, Marchman, & Weisleder, 2013). What is the reason for this gap? How can the daily contrasts between each environment affect the ability to acquire and develop language? Simply put, language is derived largely from parental support and diverse experiences. Because of a variety of factors, children in low income environments generally ...

1. Debate This: Carrier’s liability
· Debate This: Carrier’s liability
· Chapter 41, p. 990
Vanessa Denai owned forty acres of land in rural Louisiana. On
the property were a 1,600-square-foot house and a metal barn.
Denai met Lance Finney, who had been seeking a small plot of
rural property to rent. After several meetings, Denai invited
Finney to live on a corner of her land in exchange for Finney’s
assistance in cutting wood and tending her property. Denai
agreed to store Finney’s sailboat in her barn.
With Denai’s consent, Finney constructed a concrete and oak
foundation on Denai’s property and purchased a 190-square-foot
dome from Dome Baja for $3,395. The dome was shipped by
Doty Express, a transportation company licensed to serve the
public. When it arrived, Finney installed the dome frame and
fabric exterior so that the dome was detachable from the
foundation. A year after Finney installed the dome, Denai wrote
Finney a note stating, “I’ve decided to give you four acres of
land surrounding your dome as drawn on this map.” This gift
violated no local land-use restrictions. Using the information
presented in the chapter, answer the following questions.
1. Is the dome real property or personal property? Explain.
2. Is Denai’s gift of land to Finney a gift causa mortis or a gift
inter vivos?
3. What type of bailment relationship was created when Denai
agreed to store Finney’s boat? What degree of care was Denai
required to exercise in storing the boat?
4. What standard of care applied to the shipment of the dome by
Doty Express?
Debate This:
Common carriers should not be able to limit their liability.

2. Discussion: Week 4: Possible Effects of Poverty on Young
Children’s Language and Literacy Development
Imagine that there are two 4-year-old girls standing in front of
you. One girl, whom you might assume to be from a more
economically affluent home, has hair that cascades down in neat
curls, a dress ablaze with bright colors, and a new princess
lunchbox in her hand. The other girl appears a bit unkempt, with
mismatched socks and a sweet, yet sleepy, smile. Without
hearing either girl speak, which might you select as the one
with a greater vocabulary? Why?
Like most people, you might gravitate toward the child who
appears to be from the more economically affluent home.
Although this choice might seem stereotypical, this selection
does mirror findings from research studies that have linked
vocabulary development and skill statistically with economic
background. For example, one study found that by 3 years of
age, there was a 30 million word gap between children from the
wealthiest and the poorest families (Fernald, Marchman, &
Weisleder, 2013). What is the reason for this gap? How can the
daily contrasts between each environment affect the ability to
acquire and develop language?
Simply put, language is derived largely from parental support
and diverse experiences. Because of a variety of factors,
children in low income environments generally do not have the
variety of experiences that those in higher income famili es
have, nor are they exposed to as rich a speaking and reading
vocabulary. Consider again the two children. How might their
mornings have been different? For example, if the first girl’s
mother spent time doing her daughter’s hair, how might she
have been talking to and supporting her daughter’s literacy at
the same time? And if the second girl put on her own socks,
what language opportunities might her mother have missed
while she was nervously gathering enough change for bus fare
and her daughter’s lunch? As the second mother worked to
provide, she might have felt she had less opportunity to engage
her daughter in child-directed speech, which is the case for

3. many children in low income environments.
In this Discussion, you explore the possible effects of poverty
on young children’s language and literacy development.
To prepare
Review the Roseberry-McKibbin (2012) article in the Learning
Resources and reflect on the statistics that highlight the effects
of poverty on early language experiences. Then, select one of
the following scenarios as the focus of your Discussion posting.
RESOURCES
PBS: Frontline. (2017). Poor Kids. Retrieved June 19, 2018
from https://www.pbs.org/wgbh/frontline/film/poor-kids/
Barnardo’s. (n.d.-b). Tatiana’s story [Video file]. Retrieved
September 29, 2015, from
https://vimeo.com/groups/9196/videos/7141717
Fessler, P. (2014). One family’s story shows how the cycle of
poverty is hard to break [Blog post]. Retrieved from
http://www.npr.org/2014/05/07/309734339/one-familys-story-
shows-how-the-cycle-of-poverty-is-hard-to-break
Mann, R. (2013). Louisiana teachers share their stories of child
poverty: Robert Mann. The Times-Picayune. Retrieved from
http://www.nola.com/opinions/index.ssf/2013/08/louisiana_teac
hers_share_their.html

4. Comprehensive Edition
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Business Law Today, Comprehensive Edition
Text & Cases
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Roger LeRoy Miller
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Printed in the United States of America
Print Number: 01 Print Year: 2018
30301_fm_hr_i-xxii.indd 2 8/31/18 3:11 PM
Unit 1 The Legal Environment of Business 1
1 Law and Legal Reasoning 2
2 Constitutional Law 31
3 Ethics in Business 57
4 Courts and Alternative Dispute Resolution 86
5 Tort Law 123

8. 6 Product Liability 151
7 Intellectual Property Rights 172
8 Internet Law, Social Media, and Privacy 200
9 Criminal Law and Cyber Crime 224
Unit 2 Contracts and E-Contracts 257
10 Nature and Classification 258
11 Agreement 277
12 Consideration 302
13 Capacity and Legality 316
14 Voluntary Consent 335
15 The Statute of Frauds—Writing Requirement 350
16 Performance and Discharge 366
17 Breach and Remedies 382
18 Third Party Rights 402
Unit 3 Commercial Transactions 419
19 The Formation of Sales and Lease Contracts 420
20 Title and Risk of Loss 448
21 Performance and Breach of Sales and Lease Contracts 464
22 Negotiable Instruments 496
23 International and Space Law 532
24 Banking in the Digital Age 554
25 Security Interests and Creditors’ Rights 577
26 Bankruptcy 607
Unit 4 Agency and Employment Law 637
27 Agency Relationships in Business 638
28 Employment, Immigration, and Labor Law 666
29 Employment Discrimination 694
Unit 5 Business Organizations 725
30 Sole Proprietorships and Franchises 726
31 All Forms of Partnership 743
32 Limited Liability Companies and Special Business Forms
767

9. 33 Corporate Formation and Financing 785
34 Corporate Directors, Officers, and Shareholders 807
35 Corporate Mergers, Takeovers, and Termination 826
36 Investor Protection, Insider Trading, and Corporate
Governance 841
Unit 6 Government Regulation 871
37 Administrative Law 872
38 Antitrust Law and Promoting Competition 893
39 Consumer and Environmental Law 918
40 Liability of Accountants and Other Professionals 948
Unit 7 Property and Its Protection 971
41 Personal Property and Bailments 972
42 Real Property and Landlord-Tenant Law 994
43 Insurance, Wills, and Trusts 1017
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–13
Glossary G–1
Table of Cases TC–1
Index I–1
Contents in Brief
iii

10. 30301_fm_hr_i-xxii.indd 3 8/31/18 3:11 PM
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 7
■ Landmark in the Law: Equitable Maxims 12
Classifications of Law 13
■ Beyond Our Borders: National Law Systems 14
Appendix to Chapter 1: Finding and Analyzing the Law 19
■ Business Law Analysis: Case Briefing and IRAC Legal
Reasoning 30
Chapter 2
Constitutional Law 31
The Constitutional Powers of Government 32
■ Managerial Strategy: Marriage Equality and the Constitution
33
■ Landmark in the Law: Gibbons v. Ogden (1824) 35
Classic Case 2.1: Heart of Atlanta Motel v. United States (1964)

11. 36
Business and the Bill of Rights 38
■ Beyond Our Borders: The Impact of Foreign Law
on the United States Supreme Court 40
■ Adapting the Law to the Online Environment:
Does Everyone Have a Constitutional Right to Use
Social Media? 41
Case 2.2: Animal Legal Defense Fund v. Wasden (2018) 42
■ Ethical Issue: Can a high school suspend teenagers from
extracurricular activities because they posted suggestive
photos of themselves online at social networking sites? 43
Spotlight on Beer Labels: Case 2.3: Bad Frog Brewery, Inc. v.
New York State Liquor Authority (1998) 45
■ Business Law Analysis: Determining When Public
Religious Displays Violate the Establishment Clause 48
Due Process and Equal Protection 49
Privacy Rights 51
Chapter 3
Ethics in Business 57
Ethics and the Role of Business 58
■ Business Web Log: Bogus Bank and Credit Card
Accounts at Wells Fargo Bank 59
■ Adapting the Law to the Online Environment:

12. Should Employees Have a “Right of Disconnecting”? 62
Case 3.1: Al-Dabagh v. Case Western Reserve University
(2015) 63
Ethical Principles and Philosophies 65
Sources of Ethical Issues in Business Decisions 69
Case 3.2: Watson Laboratories, Inc. v. State of Mississippi
(2018) 70
Making Ethical Business Decisions 73
■ Business Law Analysis: Applying the IDDR Framework 77
Business Ethics on a Global Level 78
Appendix to Chapter 3: Costco Code of Ethics 85
Chapter 4
Courts and
Alternative Dispute Resolution 86
■ Business Web Log: Samsung and Forced Arbitration 87
The Judiciary’s Role in American Government 87
■ Landmark in the Law: Marbury v. Madison (1803) 88
Basic Judicial Requirements 89
Spotlight on Gucci: Case 4.1: Gucci America, Inc. v. Wang
Huoqing (2011) 94
The State and Federal Court Systems 96
■ Beyond Our Borders: Islamic Law Courts Abroad and at

13. Home 97
Case 4.2: Johnson v. Oxy USA, Inc. (2016) 99
■ Managerial Strategy: Should You Consent to Have Your
Business Case Decided by a U.S. Magistrate Judge? 101
■ Ethical Issue: Should Supreme Court justices follow the
Code of Conduct for United States Judges? 103
Following a State Court Case 103
iv
30301_fm_hr_i-xxii.indd 4 8/31/18 3:11 PM
■ Adapting the Law to the Online Environment:
Using Social Media for Service of Process 105
Case 4.3: Klipsch Group, Inc. v. ePRO E-Commerce Limited
(2018) 109
Courts Online 113
Alternative Dispute Resolution 113
Chapter 5
Tort Law 123
The Basis of Tort Law 123
Intentional Torts against Persons 125
■ Business Law Analysis: Analyzing Intentional Infliction

14. of Emotional Distress Claims 127
Case 5.1: Blake v. Giustibelli (2016) 129
■ Ethical Issue: When does an online criticism of a physician
become defamation? 131
■ 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.
(2018) 139
■ Landmark in the Law: Palsgraf v. Long Island Railroad Co.
(1928) 142
Spotlight on the Seattle Mariners: Case 5.3: Taylor v. Baseball
Club of Seattle, L.P. (2006) 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

15. Case 6.1: Schwarck v. Arctic Cat, Inc. (2016) 154
Strict Product Liability 155
■ Linking Business Law to Corporate Management:
Quality Control 157
■ Business Law Analysis: How State Legislation Can Limit
Recovery for Design Defects 159
■ Ethical Issue: Can a Taser be considered unreasonably
dangerous as designed? 159
Case 6.2: Stange v. Janssen Pharmaceuticals, Inc. (2018) 161
■ Managerial Strategy: When Is a Warning Legally Bulletproof?
162
Defenses to Product Liability 164
Spotlight on Injuries from Vaccinations: Case 6.3:
Bruesewitz v. Wyeth, LLC (2011) 165
Chapter 7
Intellectual Property Rights 172
Trademarks 173
■ Linking Business Law to Marketing: Trademarks
and Service Marks 173
Classic Case 7.1: Coca-Cola Co. v. Koke Co. of America (1920)
174
■ Ethical Issue: Should the law allow offensive trademark
names? 176

16. ■ Beyond Our Borders: ALEVE versus FLANAx—
Same Pain Killer, But in Different Countries 177
Case 7.2: LFP IP, LLC v. Hustler Cincinnati, Inc. (2016) 178
■ Business Web Log: Amazon Faces Fake Products 182
Patents 183
Copyrights 186
■ Business Law Analysis: Licensing Is a Defense to
Copyright Infringement 189
■ Adapting the Law to the Online Environment:
Beyoncé, Sampling, and a $20 Million Lawsuit 190
Case 7.3: Oracle USA, Inc. v. Rimini Street, Inc. (2018) 192
Trade Secrets 193
International Protections 193
Chapter 8
Internet Law,
Social Media, and Privacy 200
Internet Law 201
Spotlight on Internet Porn: Case 8.1: Hasbro, Inc. v.
Internet Entertainment Group, Ltd. (1996) 205
Copyrights in Digital Information 206
■ Landmark In the Law: The Digital Millennium Copyright Act
207

17. ■ Adapting the Law to the Online Environment:
Riot Games, Inc., Protects Its Online Video Game Copyrights
208
Case 8.2: BMG Rights Management (US), LLC v.
Cox Communications, Inc. (2018) 209
Social Media 210
Online Defamation 214
■ Business Law Analysis: Immunity of ISPs under
the Communications Decency Act 215
Case 8.3: David v. Textor (2016) 216
Privacy 217
■ Beyond Our Borders: “The Right to Be Forgotten”
in the European Union 218
■ Ethical Issue: Should smart-TV manufacturers collect
consumer-use data? 219
vContents
30301_fm_hr_i-xxii.indd 5 8/31/18 3:11 PM
Chapter 9
Criminal Law and Cyber Crime 224
Civil Law and Criminal Law 224

18. Criminal Liability 227
■ Adapting the Law to the Online Environment:
Using Twitter to Cause Seizures—A Crime? 227
Case 9.1: United States v. Crabtree (2018) 228
■ Managerial Strategy: The Criminalization of American
Business 230
Types of Crimes 231
■ Business Law Analysis: Proof of Credit-Card Theft 233
Spotlight on White-Collar Crime: Case 9.2: People v. Sisuphan
(2010) 235
Defenses to Criminal Liability 239
Constitutional Safeguards and Criminal Procedures 241
■ Ethical Issue: Should police be able to force you to unlock
your mobile phone? 243
■ Landmark in the Law: Miranda v. Arizona (1966) 244
Cyber Crime 247
Case 9.3: United States v. Warner (2016) 248
Unit One: Task-Based Simulation 256
Unit 2 Contracts and E-Contracts 257
Chapter 10
Nature and Classification 258

19. An Overview of Contract Law 258
Elements of a Contract 260
Case 10.1: Weston v. Cornell University (2016) 261
Types of Contracts 262
■ Ethical Issue: Does a “You break it, you buy it” sign
create a unilateral contract? 263
Case 10.2: Boswell v. Panera Bread Co. (2018) 264
Quasi Contracts 267
■ Business Law Analysis: Deciding If a Court Would Impose
a Quasi Contract 268
Interpretation of Contracts 269
Spotlight on Columbia Pictures: Case 10.3: Wagner v.
Columbia Pictures Industries, Inc. (2007) 270
Chapter 11
Agreement 277
Offer 277
Classic Case 11.1: Lucy v. Zehmer (1954) 278
Spotlight on Amazon.com: Case 11.2: Basis Technology Corp.
v.
Amazon.com, Inc. (2008) 281
■ Business Law Analysis: Offers of a Reward 283

20. Acceptance 285
■ Adapting the Law to the Online Environment: Can Your
E-Mails or Instant Messages Create a Valid Contract? 286
E-Contracts 289
■ Linking Business Law to Marketing: Customer
Relationship Management 290
Case 11.3: Bailey v. Kentucky Lottery Corp. (2018) 293
■ Ethical Issue: How enforceable are click-on agreements
to donate funds to a charity? 294
The Uniform Electronic Transactions Act 296
Chapter 12
Consideration 302
Elements of Consideration 302
■ Landmark in the Law: Hamer v. Sidway (1891) 303
Case 12.1: USS–POSCO Industries v. Case (2016) 304
Agreements That Lack Consideration 306
Case 12.2: Baugh v. Columbia Heart Clinic, P.A. (2013) 307
Settlement of Claims 309
Spotlight on Nike: Case 12.3: Already, LLC v. Nike, Inc. (2013)
310
Promissory Estoppel 311

21. Chapter 13
Capacity and Legality 316
Contractual Capacity 316
Spotlight on KFC: Case 13.1: PAK Foods Houston, LLC v.
Garcia (2014) 317
Legality 321
■ Business Law Analysis: Determining If a Contract with
an Unlicensed Party Is Enforceable 322
Case 13.2: Woischke v. Stursberg & Fine, Inc. (2018) 322
■ Ethical Issue: Are expansive noncompete agreements
reducing worker mobility? 324
■ Managerial Strategy: Creating Liability Waivers
that are not Unconscionable 327
Case 13.3: Holmes v. Multimedia KSDK, Inc. (2013) 328
The Effect of Illegality 329
vi Contents
30301_fm_hr_i-xxii.indd 6 8/31/18 3:11 PM
Chapter 14
Voluntary Consent 335
Mistakes 335

22. ■ Ethical Issue: Should a surviving member of Lynyrd Skynyrd
abide by a thirty-year-old consent decree? 337
Fraudulent Misrepresentation 338
Case 14.1: McCullough v. Allstate Property and Casualty
Insurance Co. (2018) 339
Case 14.2: Cronkelton v. Guaranteed Construction Services,
LLC (2013) 342
■ Adapting the Law to the Online Environment: “Catfishing”:
Is That Online “Friend” for Real? 343
Case 14.3: Fazio v. Cypress/GR Houston I, LP (2013) 344
Undue Influence and Duress 346
Chapter 15
The Statute of Frauds—
Writing Requirement 350
The Writing Requirement 350
Case 15.1: Sloop v. Kiker (2016) 351
Exceptions to the Statute of Frauds 355
■ Beyond Our Borders: The Statute of Frauds and International
Sales Contracts 355
Sufficiency of the Writing or Electronic Record 357
Case 15.2: Moore v. Bearkat Energy Partners, LLC (2018) 358

23. The Parol Evidence Rule 359
Case 15.3: Frewil, LLC v. Price (2015) 361
Chapter 16
Performance and Discharge 366
Conditions of Performance 366
Discharge by Performance 368
■ Business Law Analysis: Determining When a Breach Is
Material 370
Case 16.1: Kohel v. Bergen Auto Enterprises, LLC (2013) 371
■ Ethical Issue: Is it a material breach of contract for a hospital
to accept a donation and then refuse to honor part of its
commitment? 372
Discharge by Agreement 373
Case 16.2: DWB, LLC v. D&T Pure Trust (2018) 374
Discharge by Operation of Law 375
Case 16.3: Hampton Road Bankshares, Inc. v. Harvard (2016)
376
■ Beyond Our Borders: Impossibility or Impracticability
of Performance in Germany 378
Chapter 17
Breach and Remedies 382
Damages 383

24. Case 17.1: Baird v. Owens Community College (2016) 384
■ Landmark in the Law: Hadley v. Baxendale (1854) 387
Spotlight on Liquidated Damages: Case 17.2:
Kent State University v. Ford (2015) 389
■ Business Law Analysis: Enforceability of Liquidated
Damages Provisions 390
Equitable Remedies 391
Case 17.3: Cipriano Square Plaza Corp. v. Munawar (2018) 391
Recovery Based on Quasi Contract 395
Contract Provisions Limiting Remedies 396
■ Ethical Issue: Can contracts for mixed martial arts
fighters limit a fighter’s right to stop fighting? 396
Chapter 18
Third Party Rights 402
Assignments 402
Case 18.1: Bass-Fineberg Leasing, Inc. v. Modern Auto Sales,
Inc. (2015) 405
Delegations 407
Case 18.2: Mirandette v. Nelnet, Inc. (2018) 409
Third Party Beneficiaries 410
Case 18.3: Bozzio v. EMI Group, Ltd. (2016) 410

25. Unit Two: Task-Based Simulation 418
Unit 3 Commercial Transactions 419
Chapter 19
The Formation of Sales
and Lease Contracts 420
■ Landmark in the Law: The Uniform Commercial Code 421
The Scope of Articles 2 and 2A 421
■ Adapting the Law to the Online Environment:
Taxing Web Purchases 423
The Formation of Sales and Lease Contracts 425
Case 19.1: Toll Processing Services, LLC v. Kastalon, Inc.
(2018) 426
viiContents
30301_fm_hr_i-xxii.indd 7 8/31/18 3:11 PM
Case 19.2: C. Mahendra (N.Y.), LLC v. National Gold &
Diamond
Center, Inc. (2015) 430
■ Business Law Analysis: Additional Terms between Merchants
432
Classic Case 19.3: Jones v. Star Credit Corp. (1969) 437

26. Contracts for the International Sale of Goods 437
Appendix to Chapter 19: An Example of a Contract for the
International Sale of Coffee 444
Chapter 20
Title and Risk of Loss 448
Identification 449
Case 20.1: BMW Group, LLC v. Castle Oil Corp. (2016) 450
Passage of Title 451
■ Managerial Strategy: Commercial Use of Drones 451
Case 20.2: Louisiana Department of Revenue v. Apeck
Construction, LLC (2018) 452
Spotlight on Andy Warhol: Case 20.3: Lindholm v. Brant (2007)
456
Risk of Loss 457
Insurable Interest 460
Chapter 21
Performance and Breach
of Sales and Lease Contracts 464
Obligations of the Seller or Lessor 465
Case 21.1: All the Way Towing, LLC v. Bucks County
International, Inc. (2018) 467
Obligations of the Buyer or Lessee 470

27. Remedies of the Seller or Lessor 472
Remedies of the Buyer or Lessee 475
■ Beyond Our Borders: The CISG’s Approach to
Revocation of Acceptance 479
Spotlight on Baseball Cards: Case 21.2: Fitl v. Strek (2005) 480
Warranties 482
Classic Case 21.3: Webster v. Blue Ship Tea Room, Inc. (1964)
485
■ Business Law Analysis: Implied Warranties 487
Chapter 22
Negotiable Instruments 496
Formation of Negotiable Instruments 497
■ Adapting the Law to the Online Environment:
Pay with Your Smartphone 499
Case 22.1: OneWest Bank, FSB v. Nunez (2016) 503
■ Business Law Analysis: Deciding If an Instrument
Is Negotiable 505
Case 22.2: Charles R. Tips Family Trust v. PB Commercial,
LLC (2015) 508
Transfer of Instruments 509
■ Beyond Our Borders: Severe Restrictions on Check

28. Indorsements in France 510
Holder in Due Course (HDC) 513
Case 22.3: Jarrell v. Conerly (2018) 516
Signature and Warranty Liability 518
Defenses, Limitations, and Discharge 523
■ Landmark in the Law: Federal Trade Commission Rule 433
525
Chapter 23
International and Space Law 532
International Law 532
■ Beyond Our Borders: Border Searches of Your
Electronic Devices 533
Case 23.1: Rubin v. Islamic Republic of Iran (2018) 537
■ Business Law Analysis: Sovereign Immunity Claims 539
Doing Business Internationally 539
■ Ethical Issue: Is it ethical (and legal) to brew “imported”
beer brands domestically? 539
Regulation of Specific Business Activities 542
Case 23.2: Changzhou Trina Solar Energy Co., Ltd. v.
International
Trade Commission (2018) 543
U.S. Laws in a Global Context 545

29. Spotlight on International Torts: Case 23.3: Daimler AG v.
Bauman (2014) 546
Space Law 548
Chapter 24
Banking in the Digital Age 554
Checks and the Bank-Customer Relationship 555
The Bank’s Duty to Honor Checks 558
Case 24.1: Legg v. West Bank (2016) 558
Case 24.2: Horton v. JPMorgan Chase Bank, N.A. (2018) 561
The Bank’s Duty to Accept Deposits 564
Case 24.3: Shahin v. Delaware Federal Credit Union (2015) 565
■ Landmark in the Law: Check Clearing for the 21st Century
Act (Check 21) 568
Electronic Fund Transfers 569
viii Contents
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Unit 4 Agency and Employment Law 637
Chapter 27

30. Agency Relationships in Business 638
Agency Law 639
■ Ethical Issue: Is it fair to classify Uber and Lyft drivers
as independent contractors? 640
Formation of an Agency 642
Case 27.1: Reidel v. Akron General Health System (2018) 643
Duties of Agents and Principals 644
Spotlight on Taser International: Case 27.2: Taser International,
Inc. v. Ward (2010) 646
Agent’s Authority 649
Liability in Agency Relationships 651
■ Business Law Analysis: Liability of Disclosed Principals 652
■ Landmark in the Law: The Doctrine of Respondeat Superior
655
■ Beyond Our Borders: Islamic Law and Respondeat Superior
657
Case 27.3: M.J. v. Wisan (2016) 657
Termination of an Agency 659
Chapter 28
Employment, Immigration,
and Labor Law 666
Employment at Will 667

31. Case 28.1: Caterpillar, Inc. v. Sudlow (2016) 668
Wages, Hours, and Leave 669
■ Ethical Issue: Are employees entitled to receive wages
for all the time they spend at work, including times when
they are taking a personal break? 670
■ Beyond Our Borders: Brazil Requires Employers to Pay
Overtime for Use of Smartphones after Work Hours 671
Case 28.2: Encino Motorcars, LLC v. Navarro (2018) 671
Health, Safety, Income Security, and Privacy 674
■ Business Law Analysis: Workers’ Compensation Claims 675
■ Adapting the Law to the Online Environment:
Social Media in the Workplace Come of Age 679
Immigration Law 680
Online Banking and E-Money 571
■ Adapting the Law to the Online Environment:
Electronic Payment Systems and the Use of Checks 571
Chapter 25
Security Interests and
Creditors’ Rights 577
Creating and Perfecting a Security Interest 577
Spotlight on Wedding Rings: Case 25.1: Royal Jewelers,
Inc. v. Light (2015) 579
■ Adapting the Law to the Online Environment:

32. Secured Transactions Online 581
■ Business Law Analysis: Perfecting a Security Interest 583
Scope of a Security Interest 586
Case 25.2: In re T usa–Expo Holdings, Inc. (2016) 587
Priorities, Rights, and Duties 590
Default 592
Case 25.3: SunTrust Bank v. Monroe (2018) 594
■ Ethical Issue: How long should a secured party have to
seek a deficiency judgment? 596
Other Laws Assisting Creditors 596
Chapter 26
Bankruptcy 607
The Bankruptcy Code 607
■ Business Web Log: Online Retail Competition
Causes Yet Another Brick-and-Mortar Retailer
to File for Bankruptcy 608
■ Landmark in the Law: The Bankruptcy Abuse Prevention
and Consumer Protection Act 609
Chapter 7—Liquidation 610
■ Business Law Analysis: Violations of the Automatic Stay 614
Case 26.1: In re Anderson (2016) 619

33. ■ Ethical Issue: Should there be more relief for student
loan defaults? 621
Case 26.2: In re Cummings (2015) 622
Chapter 11—Reorganization 624
■ Linking Business Law to Corporate Management:
What Can You Do to Prepare for a Chapter 11
Reorganization? 625
Bankruptcy Relief under Chapter 13
and Chapter 12 627
Case 26.3: In re Chamberlain (2018) 629
Unit Three: Task-Based Simulation 635
ixContents
30301_fm_hr_i-xxii.indd 9 8/31/18 3:11 PM
Labor Law 683
■ Managerial Strategy: Union Organizing Using a Company’s
E-Mail System 686
Case 28.3: Contemporary Cars, Inc. v. National Labor
Relations Board (2016) 687
Chapter 29
Employment Discrimination 694
Title VII of the Civil Rights Act 695

34. ■ Linking Business Law to Corporate Managemen t:
Human Resource Management 696
■ Adapting the Law to the Online Environment:
Hiring Discrimination Based on Social Media Posts 700
Case 29.1: Bauer v. Lynch (2016) 701
Case 29.2: Young v. United Parcel Service, Inc. (2015) 703
■ Ethical Issue: Should corporations be forced
to publicize the ratio of CEO-to-worker pay? 704
■ Business Law Analysis: Retaliation Claims 707
Case 29.3: Franchina v. City of Providence (2018) 708
■ Beyond Our Borders: Sexual Harassment in Other Nations 709
Discrimination Based on Age, Disability, or Military Status
710
Defenses to Employment Discrimination 716
Affirmative Action 717
Unit Four: Task-Based Simulation 723
Unit 5 Business Organizations 725
Chapter 30
Sole Proprietorships
and Franchises 726
Sole Proprietorships 727

35. Case 30.1: A. Gadley Enterprises, Inc. v. Department of Labor
and
Industry Office of Unemployment Compensation
Tax Services (2016) 727
■ Ethical Issue: Can the religious beliefs of a small business
owner justify the business refusing to provide services
to members of the LGBT community? 728
■ Adapting the Law to the Online Environment:
A Sole Proprietorship, Facebook Poker, and Bankruptcy 730
Franchises 730
■ Beyond Our Borders: Franchising in Foreign Nations 731
The Franchise Contract 734
Franchise Termination 735
Case 30.2: S&P Brake Supply, Inc. v. Daimler Trucks
North America, LLC (2018) 736
Spotlight on Holiday Inns: Case 30.3: Holiday Inn Franchising,
Inc. v. Hotel Associates, Inc. (2011) 738
Chapter 31
All Forms of Partnership 743
Basic Partnership Concepts 744
Case 31.1: Harun v. Rashid (2018) 745
Formation and Operation 747
■ Beyond Our Borders: Doing Business with

36. Foreign Partners 748
Classic Case 31.2: Meinhard v. Salmon (1928) 751
Dissociation and Termination 753
Limited Liability Partnerships 757
Limited Partnerships 758
Case 31.3: DeWine v. Valley View Enterprises, Inc. (2015) 759
■ Ethical Issue: Should an innocent general partner be
jointly liable for fraud? 761
Chapter 32
Limited Liability Companies
and Special Business Forms 767
The Limited Liability Company 767
■ Landmark in the Law: Limited Liability Company
(LLC) Statutes 768
Case 32.1: Hodge v. Strong Built International, LLC (2015) 771
■ Beyond Our Borders: Limited Liability Companies in
Other Nations 772
LLC Operation and Management 773
■ Managerial Strategy: Can a Person Who Is Not a Member
of a Protected Class Sue for Discrimination? 774
Case 32.2: Schaefer v. Orth (2018) 775

37. Dissociation and Dissolution of an LLC 776
x Contents
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Chapter 37
Administrative Law 872
Practical Significance 872
■ Linking Business Law to Corporate Management:
Dealing with Administrative Law 875
Agency Creation and Powers 875
Case 37.1: Simmons v. Smith (2018) 877
The Administrative Process 879
■ Ethical Issue: Do administrative agencies exercise
too much authority? 880
Case 37.2: Craker v. Drug Enforcement Administration (2013)
884
Case 32.3: Reese v. Newman (2016) 777
■ Business Law Analysis: When Will a Court Order the
Dissolution of an LLC? 778
Special Business Forms 779
Chapter 33

38. Corporate Formation and Financing 785
Nature and Classification 785
■ Adapting the Law to the Online Environment:
Programs That Predict Employee Misconduct 787
Case 33.1: Drake Manufacturing Co. v. Polyflow, Inc. (2015)
788
Case 33.2: Pantano v. Newark Museum (2016) 790
Case 33.3: Greenfield v. Mandalay Shores Community
Association (2018) 793
Formation and Powers 793
■ Beyond Our Borders: Does Cloud Computing
Have a Nationality? 797
Piercing the Corporate Veil 798
■ Business Law Analysis: Piercing the Corporate Veil 799
Corporate Financing 800
Chapter 34
Corporate Directors,
Officers, and Shareholders 807
Directors and Officers 807
Duties and Liabilities of Directors and Officers 810
Case 34.1: Oliveira v. Sugarman (2016) 811
Classic Case 34.2: Guth v. Loft, Inc. (1939) 813

39. Shareholders 815
Rights and Duties of Shareholders 818
Case 34.3: Hammoud v. Advent Home Medical, Inc. (2018) 820
Chapter 35
Corporate Mergers, Takeovers,
and Termination 826
Merger, Consolidation, and Share Exchange 826
Case 35.1: In re Trulia, Inc. Stockholder Litigation (2016) 828
Purchase of Assets 830
Case 35.2: Heavenly Hana, LLC v. Hotel Union & Hotel
Industry
of Hawaii Pension Plan (2018) 832
Takeovers 833
Corporate Termination 834
Major Business Forms Compared 836
Chapter 36
Investor Protection, Insider
Trading, and Corporate Governance 841
Securities Act of 1933 842
■ Managerial Strategy: The SEC’s New Pay-Ratio
Disclosure Rule 844

40. ■ Adapting the Law to the Online Environment: Investment
Crowdfunding—Regulations and Restrictions 846
■ Landmark in the Law: Changes to Regulation A: “Reg A+”
847
Case 36.1: Omnicare, Inc. v. Laborers District Council
Construction
Industry Pension Fund (2015) 850
Securities Exchange Act of 1934 851
Classic Case 36.2: Securities and Exchange Commission v.
Texas
Gulf Sulphur Co. (1968) 853
Case 36.3: Singer v. Reali (2018) 857
State Securities Laws 860
Corporate Governance 861
■ Beyond Our Borders: Corporate Governance in Other Nations
861
Unit Five: Task-Based Simulation 869
Unit 6 Government Regulation 871
xiContents
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Judicial Deference to Agency Decisions 885

41. Case 37.3: Olivares v. Transportation Security Administration
(2016) 886
Public Accountability 887
Chapter 38
Antitrust Law
and Promoting Competition 893
The Sherman Antitrust Act 894
■ Business Web Log: Facebook and Google in a World
of Antitrust Law 894
■ Landmark in the Law: The Sherman Antitrust Act 895
Section 1 of the Sherman Act 897
Section 2 of the Sherman Act 900
Case 38.1: McWane, Inc. v. Federal Trade Commission (2015)
902
The Clayton Act 904
Case 38.2: Candelore v. Tinder, Inc. (2018) 905
Enforcement and Exemptions 909
Case 38.3: TransWeb, LLC v. 3M Innovative Properties Co.
(2016) 910
U.S. Antitrust Laws in the Global Context 911
■ Adapting the Law to the Online Environment:
The European Union Issues Record Fine against

42. Google in Antitrust Case 913
Chapter 39
Consumer and Environmental Law 918
Advertising, Marketing, Sales, and Labeling 919
Case 39.1: POM Wonderful, LLC v. Federal Trade Commission
(2015) 920
■ Adapting the Law to the Online Environment:
Regulating “Native” Ads on the Internet 922
Case 39.2: Haywood v. Massage Envy Franchising, LLC (2018)
923
Protection of Health and Safety 927
Credit Protection 929
Case 39.3: Santangelo v. Comcast Corp. (2016) 931
■ Ethical Issue: Can a company that provides background
checks
willfully violate the Fair Credit Reporting Act? 933
Protecting the Environment 934
■ Beyond Our Borders: Can a River Be a Legal Person? 935
Air and Water Pollution 937
Toxic Chemicals and Hazardous Waste 941
Chapter 40
Liability of Accountants

43. and Other Professionals 948
Potential Liability to Clients 949
■ Landmark in the Law: The SEC Adopts Global
Accounting Rules 950
■ Ethical Issue: What are an attorney’s responsibilities
with respect to protecting data stored on the cloud? 952
Potential Liability to Third Parties 954
Liability of Accountants under Other Federal Laws 956
Case 40.1: Laccetti v. Securities and Exchange Commission
(2018) 958
Potential Criminal Liability 962
Confidentiality and Privilege 963
Case 40.2: Commonwealth of Pennsylvania v. Schultz (2016)
963
Unit Six: Task-Based Simulation 970
Unit 7 Property and Its Protection 971
Chapter 41
Personal Property
and Bailments 972
Personal Property versus Real Property 972
Acquiring Ownership of Personal Property 974
■ Adapting the Law to the Online Environment:

44. The Exploding World of Digital Property 974
■ Ethical Issue: Who owns the engagement ring? 975
■ Business Law Analysis: Effective Gift of a
Brokerage Account 976
Classic Case 41.1: In re Estate of Piper (1984) 977
Mislaid, Lost, and Abandoned Property 979
Case 41.2: State of Washington v. Preston (2018) 981
Bailments 982
Case 41.3: Zissu v. IH2 Property Illinois, L.P. (2016) 986
xii Contents
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Chapter 42
Real Property and
Landlord-Tenant Law 994
The Nature of Real Property 994
Ownership Interests and Leases 996
Case 42.1: In the Matter of the Estate of Nelson (2018) 997
Transfer of Ownership 1002
Spotlight on Sales of Haunted Houses: Case 42.2:

45. Stambovsky v. Ackley (1991) 1003
■ Business Law Analysis: When Possession of Property
Is Not “Adverse” 1006
Case 42.3: Montgomery County v. Bhatt (2016) 1007
■ Ethical Issue: Should eminent domain be used
to promote private development? 1009
Landlord-Tenant Relationships 1009
Chapter 43
Insurance, Wills, and Trusts 1017
Insurance 1017
Case 43.1: Breeden v. Buchanan (2015) 1020
Wills 1025
Case 43.2: In re Navarra (2018) 1029
■ Adapting the Law to the Online Environment:
Social Media Estate Planning 1032
Trusts 1035
Case 43.3: Dowdy v. Dowdy (2016) 1036
Unit Seven: Task-Based Simulation 1046
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

46. D Answers to the Issue Spotters A–4
E Sample Answers for Business Case Problems with
Sample Answer A–13
Glossary G–1
Table of Cases TC–1
Index I–1
xiiiContents
30301_fm_hr_i-xxii.indd 13 8/31/18 3:11 PM
T
he study of business law and the legal environment has
universal applicability.
A student entering any field of business must have at least a
passing understanding
of business law in order to function in the real world. Business
Law Today: Comprehensive
Edition, provides the information in an interesting and
contemporary way. The Twelfth Edition
continues its established tradition of being the most up-to-date
text on the market.
Instructors have come to rely on the coverage, accuracy, and
applicability of Business Law
Today: Comprehensive Edition. This best-selling text engages
your students, solidifies their
understanding of legal concepts, and provides the best teaching
tools available. I have spent
a great deal of effort making this edition more contemporary,

47. exciting, and visually appealing
than ever before. Special pedagogical devices within the text
focus on legal, ethical, global,
and corporate issues, while addressing core curriculum
requirements.
The Twelfth Edition incorporates the latest legal developments
and United States Supreme
Court decisions. It also includes more than fifty new features
and sixty new cases, hundreds
of new examples and case examples, new exhibits, learning
objectives, margin definitions,
and case problems.
New and Updated Features
The Twelfth Edition of Business Law Today: Comprehensive
Edition is filled with exciting new
and updated features designed to cover current legal topics of
high interest.
1. Entirely new Business Web Log features underscore the
importance of the text material to
real-world businesses. Each of these features discusses a major
U.S. company that is engaged
in a dispute involving a topic covered in the chapter. Some
examples include:
• Samsung and Forced Arbitration (Chapter 4)
• Amazon Faces Fake Products (Chapter 7)
• Facebook and Google in a World of Antitrust Law (Chapter
38)
2. Entirely new Business Law Analysis features appear in
numerous chapters of the text. These fea-

48. tures are useful tools to help students master the legal analysis
skills that they will need to answer
questions and case problems in the book, on exams, and in
business situations. Subjects include:
• Deciding If a Court Would Impose a Quasi Contract (Chapter
10)
• Enforceability of Liquidated Damages Provisions (Chapter 17)
• When Will a Court Order the Dissolution of an LLC? (Chapter
32)
3. Entirely new hypotheticals in many chapter introductions
provide a real-world link that generates
student interest and highlights specific legal concepts that will
be discussed in the chapter. These
hypotheticals—often based on real cases or business
situations—help to introduce and illustrate
legal issues facing managers, companies, and even industries.
4. Adapting the Law to the Online Environment features
examine cutting-edge cyberlaw topics, such as:
• Does Everyone Have a Constitutional Right to Use Social
Media? (Chapter 2)
• Using Twitter to Cause Seizures—A Crime? (Chapter 9)
• Programs That Predict Employee Misconduct (Chapter 33)
Preface
xiv
30301_fm_hr_i-xxii.indd 14 8/31/18 3:11 PM

49. 5. Ethical Issue features focus on the ethical aspects of a topic
being discussed in order to emphasize
that ethics is an integral part of a business law course.
Examples include:
• How Enforceable Are Click-on Agreements to Donate Funds
to Charity? (Chapter 11)
• Is It Ethical (and Legal) to Brew “Imported” Beer Brands
Domestically? (Chapter 23)
• Is It Fair to Classify Uber and Lyft Drivers as Independent
Contractors? (Chapter 27)
6. Beyond Our Borders features illustrate how other nations
deal with specific legal issues to give
students a sense of the global legal environment. Topics
include:
• Does Cloud Computing Have a Nationality? (Chapter 33)
• Can a River Be a Legal Person? (Chapter 39)
7. Managerial Strategy features emphasize the management
aspects of business law and the legal
environment, such as:
• Marriage Equality and the Constitution (Chapter 2)
• The Criminalization of American Business (Chapter 9)
• The SEC’s New Pay-Ratio Disclosure Rule (Chapter 36)

50. 8. Landmark in the Law features discuss a landmark case,
statute, or development that has significantly
affected business law. Examples include:
• Palsgraf v. Long Island Railroad Co. (Chapter 5)
• The Bankruptcy Abuse Prevention and Consumer Protection
Act (Chapter 26)
• Changes to Regulation A: “Reg A+” (Chapter 36)
9. Linking Business Law to [one of the six functional fields of
business] features appear in select
chapters to underscore how the law relates to other fields of
business. For instance, Chapter 7
has a feature titled Linking Business Law to Marketing:
Trademarks and Service Marks, and
Chapter 37 has a feature called Linking Business Law to
Corporate Management: Dealing with
Administrative Law.
New Emphasis on Making Ethical
Business Decisions—The IDDR Approach
The ability of businesspersons to reason through ethical issues
is now more important than
ever. For the Twelfth Edition of Business Law Today:
Comprehensive Edition, I have created
a completely new framework for helping students (and
businesspersons) make ethical
decisions—the IDDR approach, which is introduced in Chapter
3. This systematic approach
provides students with a clear step-by-step process to analyze
the legal and ethical implica-
tions of decisions that arise in everyday business operations.
The IDDR approach uses four
logical steps:

51. • Step 1: Inquiry
• Step 2: Discussion
• Step 3: Decision
• Step 4: Review
Students can easily remember the first letter of each step by
using the phrase “I Desire to Do
Right.” A completely revised Chapter 3 (Ethics in Business)
details the goals of each IDDR
step and then provides a sample scenario to show students how
to apply this new approach to
ethical decision making. In addition to introducing the IDDR
approach, I have made Chapter 3
more current and more practical and reduced the amount of
theoretical ethical principles it
presents. The text now focuses on real-life application of ethical
principles.
xvPreface
30301_fm_hr_i-xxii.indd 15 8/31/18 3:11 PM
After Chapter 3, to reinforce the application of the IDDR
approach, students are asked
to use its steps when answering each chapter’s A Question of
Ethics problem. Each of these
problems has been updated and is based on a 2017 case. In
addition, the Twelfth Edition
retains the Ethical Issue feature in most chapters, many of
which have been refreshed with

52. timely topics involving the ever-evolving technologies and
trends in business.
New Cases and Case Problems
The Twelfth Edition of Business Law Today: Comprehensive
Edition has new cases and case
problems from 2018 and 2017 in every chapter. The new cases
have been carefully selected
to illustrate important points of law and to be of high interest to
students and instructors.
I have made it a point to find recent cases that enhance learning
and are straightforward
enough for business law students to understand.
Certain cases and case problems have been carefully chosen as
good teaching cases and are
designated as Spotlight Cases and Spotlight Case Problems.
Some examples include Spotlight
on Apple, Spotlight on Beer Labels, Spotlight on Nike, and
Spotlight on the Seattle Mariners.
Instructors will find these Spotlight decisions useful to
illustrate the legal concepts under
discussion, and students will enjoy studying the cases because
they involve interesting and
memorable facts. Other cases have been chosen as Classic Cases
because they establish a
legal precedent in a particular area of law.
Each case concludes with a section, called Critical Thinking,
that includes at least one
question. Each question is labeled Ethical, Economic, Legal
Environment, Political, Social, or
What If the Facts Were Different? In addition, Classic Cases
include an Impact of This Case on
Today’s Law section that clarifies how the case has affected the

53. legal environment. Suggested
answers to all case-ending questions can be found in the
Solution
s Manual for this text.
Many New Highlighted and Numbered Case Examples
Many instructors use cases and examples to illustrate how the
law applies to business. This
edition of Business Law Today: Comprehensive Edition offers
hundreds of highlighted and con-
secutively numbered Examples and Case Examples. Examples
illustrate how the law applies
in a specific situation, and Case Examples present the facts and
issues of an actual case and
then describe the court’s decision and rationale.
New to this edition are Spotlight Case Examples, which deal
with especially high-interest
cases, and Classic Case Examples, which discuss older,
landmark decisions. The numbered
Examples and Case Examples features are integrated throughout
the text to help students
better understand how courts apply legal principles in the real

54. world.
Critical Thinking and Legal Reasoning Elements
For this edition of Business Law Today: Comprehensive Edition
I have included a discussion of
legal reasoning in Chapter 1. The all-new Business Law
Analysis features that can be found
throughout the text emphasize legal reasoning skills as well.
Critical thinking questions
conclude most of the features and cases in this text. Also, at the
end of each chapter, a Debate
This question requires students to think critically about the
rationale underlying the law on
a particular topic.
The chapter-ending materials also include a separate section of
questions that focus on
critical thinking and writing. This section always includes a
Time-Limited Group Assignment
and may also include a Critical Legal Thinking question
requiring students to think critically
about some aspect of the law discussed in the chapter or a
Business Law Writing question
requiring students to compose a written response.

55. xvi Preface
30301_fm_hr_i-xxii.indd 16 8/31/18 3:11 PM
Answers to all critical thinking questions, as well as to the
Business Scenarios and Case
Problems at the end of every chapter, are presented in the
Twelfth Edition’s