Introduction to Business Law

Contents
Preface
UNIT 1: The Legal Environment
Chapter 1 Introduction to Law
1-1 Exploring the Law
1-1a Sources of Contemporary Law
1-1b Classifications of Law
1-2 Working with the Book’s Features
1-2a Analyzing a Case
1-2b Analysis
1-2c Exam Strategy
1-2d You Be the Judge
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 2: Ethics and Corporate Social Responsibility
2-1 Why Study Ethics?
2-1a Ethics in Business
2-1b Why Be Ethical?
2-2 Theories of Ethics
2-2a Utilitarian Ethics
2-2b Deontological Ethics
2-2c Rawlsian Justice
2-2d Front Page Test
2-2e Moral Universalism and Relativism
2-3 Ethics Traps
2-3a Money
2-3b Competition
2-3c Rationalization
2-3d We Can’t Be Objective about Ourselves
2-3e Moral Licensing
2-3f Conflicts of Interest
2-3g Conformity
2-3h Following Orders
2-3i Euphemisms and Reframing
2-3j Lost in a Crowd
2-3k Short-Term Perspective
2-3l Blind Spots
2-3m Lying: A Special Case
2-3n Ethics Case: Truth (?) in Borrowing
2-3o Avoiding Ethics Traps
2-3p Reacting to Unethical Behavior
2-4 Applying the Principles
2-4a Personal Ethics in the Workplace
2-4b Ethics Case: Weird Wierdsma
2-4c The Organization’s Responsibility to Society
2-4d Ethics Case: Up in Smoke
2-4e The Organization’s Responsibility to Its Employees
2-4f Ethics Case: The Storm after the Storm
2-4g The Organization’s Responsibility to Its Customers
2-4h Ethics Case: Mickey Weighs In
2-4i The Organization’s Responsibility to Overseas Workers
2-4j Ethics Case: A Worm in the Apple
2-4k Corporate Social Responsibility (CSR)
2-4l Ethics Case: The Beauty of a Well-Fed Child
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 3: International Law
3-1 International Law: Public versus Private
3-2 Actors in International Law
3-2a The United Nations
3-2b The International Court of Justice
3-2c International Chamber of Commerce
3-2d Sovereign Nations
3-3 The World’s Legal Systems
3-3a Common Law
3-3b Civil Law
3-3c Islamic Law
3-4 Sources and Applicability of International Law
3-4a Sources of International Law
3-4b Interaction of Foreign and Domestic Laws
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 4: Constitutional, Statutory, Administrative, and Common Law
4-1 Constitutional Law
4-1a Government Power
4-1b Power Granted
4-1c Protected Rights
4-1d Fifth Amendment: Due Process and the Takings Clause
4-1e Fourteenth Amendment: Equal Protection Clause
4-2 Statutory Law
4-2a Committee Work
4-3 Common Law
4-3a Stare Decisis
4-3b Bystander Cases
4-4 Administrative Law
4-4a Rule Making
4-4b Investigation
4-4c Adjudication
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 5: Dispute Resolution
5-1 Court Systems
5-1a State Courts
5-1b Federal Courts
5-2 Litigation
5-2a Pleadings
5-2b The Discovery Process
5-2c Summary Judgment
5-3 Trial
5-3a Right to Jury Trial
5-3b Opening Statements
5-3c Burden of Proof
5-3d Plaintiff’s Case
5-3e Defendant’s Case
5-3f Closing Argument
5-3g Verdict
5-4 Appeals
5-4a Appeal Court Options
5-5 Alternative Dispute Resolution
5-5a Mediation
5-5b Arbitration
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 6: Crime
6-1 Criminal Procedure
6-1a A Civil versus a Criminal Case
6-1b State of Mind
6-1c Gathering Evidence: The Fourth Amendment
6-1d After Arrest
6-2 Crimes That Harm Businesses (and Their Customers)
6-2a Larceny
6-2b Embezzlement
6-2c Fraud
6-2d Arson
6-2e Hacking
6-3 Crimes Committed by Business
6-3a Making False Statements
6-3b RICO
6-3c Money Laundering
6-3d Hiring Illegal Workers
6-3e Foreign Corrupt Practices Act
6-3f Punishing a Corporation
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
UNIT 2: Torts
Chapter 7 Intentional Torts and ­Business Torts
7-1 Intentional Torts
7-1a Defamation
7-1b False Imprisonment
7-1c Battery and Assault
7-1d Fraud
7-1e Intentional Infliction of Emotional Distress
7-2 Damages
7-2a Compensatory Damages
7-2b Punitive Damages
7-2c Tort Reform and the Exxon Valdez
7-2d Business Torts
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 8: Negligence, Strict Liability, and Product Liability
8-1 Negligence
8-1a Duty of Due Care
8-1b Special Duty: Landowners
8-1c Special Duty: Professionals
8-1d Breach of Duty
8-1e Causation
8-1f Damages
8-1g Defenses
8-2 Strict Liability and Product Liability
8-2a Strict Liability
8-2b Product Liability
8-2c Contemporary Trends
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 9: Privacy and Internet Law
9-1 Privacy in a Digital World
9-1a How We Lose Our Privacy in the Digital World
9-2 The Law of Privacy
9-2a Constitutional Law: The Fourth Amendment
9-2b Common Law: Privacy Torts
9-2c Privacy Statutes
9-3 Regulation in the Digital World
9-3a Regulation of User-Generated Content
9-3b Online Speech
9-3c Liability of Internet Service Providers
9-3d Consumer Protection
Chapter Conclusion
Exam Review
Multiple-Choice Questions
Case Questions
Discussion Questions
UNIT 3: Contracts and the UCC
Chapter 10: Forming a Contract
10-1 Contracts
10-1a Elements of a Contract
10-1b Types of Contracts
10-1c Sources of Contract Law
10-2 Enforcing Non-Contracts
10-2a Promissory Estoppel
10-2b Quasi-Contract
10-3 Agreement
10-3a Making an Offer
10-3b Termination of Offers
10-3c Acceptance
10-3d Communication of Acceptance
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 11: Requirements for a Contract
11-1 Consideration
11-1a What Is Value?
11-1b What Constitutes Exchange?
11-2 Legality
11-2a Non-compete Agreements: Sale of a Business
11-2b Non-compete Agreements: Employment Contracts
11-2c Exculpatory Clauses
11-3 Capacity
11-3a Minors
11-3b Mentally Impaired Persons
11-3c Intoxication
11-4 Reality of Consent
11-4a Fraud
11-4b Mistake
11-5 Contracts in Writing
11-5a Contracts That Must Be in Writing
11-5b What the Writing Must Contain
11-5c Sale of Goods
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 12: Performance of a Contract
12-1 Third Party Beneficiaries
12-1a Types of Beneficiaries
12-2 Assignment and Delegation
12-2a Assignment
12-2b Delegation of Duties
12-3 Performance and Discharge
12-3a Performance
12-3b Good Faith
12-3c Breach
12-3d Impossibility
12-4 Remedies
12-4a Expectation Interest
12-4b Reliance Interest
12-4c Restitution Interest
12-4d Other Equitable Interests
12-4e Mitigation of Damages
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 13: Practical Contracts
13-1 Creating a Contract
13-1a The Lawyer
13-1b Who Drafts the Contract?
13-1c Mistakes
13-2 The Structure of a Contract
13-2a Terms That Vary by Contract
13-2b Boilerplate
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 14: Sales
14-1 Sales
14-1a Development of the UCC
14-1b Contract Formation
14-1c Performance and Remedies
14-2 Warranties
14-2a Express Warranties
14-2b Implied Warranties
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 15: Negotiable Instruments
15-1 Negotiable Instruments
15-1a Commercial Paper
15-1b Types of Negotiable Instruments
15-1c Negotiation
15-2 Holder in Due Course
15-2a Requirements for Being a Holder in Due Course
15-2b Defenses against a Holder in Due Course
15-2c Consumer Exception
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 16: Secured Transactions
16-1 Article 9: Terms and Scope
16-1a Scope of Article 9
16-2 Attachment of a Security Interest
16-2a Agreement
16-2b Possession
16-2c Value
16-2d Debtor Rights in the Collateral
16-2e Attachment to Future Property
16-3 Perfection
16-3a Perfection by Filing
16-3b Perfection by Possession
16-3c Perfection of Consumer Goods
16-4 Protection of Buyers
16-4a Buyers in Ordinary Course of Business
16-5 Priorities among Creditors
16-6 Default and Termination
16-6a Default
16-6b Termination
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
UNIT 4: Agency and Employment Law
Chapter 17 Agency
17-1 The Agency Relationship
17-1a Creating an Agency Relationship
17-1b Duties of Agents to Principals
17-1c Duties of Principals to Agents
17-1d Terminating an Agency Relationship
17-2 Liability to Third Parties
17-2a Principal’s Liability for Contracts
17-2b Agent’s Liability for Contracts
17-2c Principal’s Liability for Negligent Physical Torts
17-2d Principal’s Liability for Intentional Physical Torts
17-2e Principal’s Liability for Nonphysical Torts
17-2f Agent’s Liability for Torts
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 18: Employment and Labor Law
18-1 Employment at Will
18-2 Employment Security
18-2a Common Law Protections
18-2b Family and Medical Leave Act
18-2c Whistleblowing
18-3 Workplace Freedom and Safety
18-3a Off-Duty Activities
18-3b The Right to Free Speech
18-3c Lie Detector Tests
18-3d OSHA
18-3e Employee Data
18-3f Guns
18-4 Financial Protection
18-4a Fair Labor Standards Act
18-4b Workers’ Compensation
18-4c Health Insurance
18-4d Social Security
18-5 Labor Unions
18-5a Organizing a Union
18-5b Collective Bargaining
18-5c Concerted Action
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 19: Employment Discrimination
19-1 Equal Pay Act of 1963
19-2 The Civil Rights Act of 1964
19-2a Prohibited Activities
19-2b Religion
19-2c Family Responsibility Discrimination
19-2d Sexual Orientation
19-2e Gender Identity and Expression
19-2f Immigration
19-2g Reverse Discrimination
19-2h Defenses to Charges of Discrimination
19-3 Pregnancy Discrimination Act
19-4 Age Discrimination
19-5 The Americans with Disabilities Act
19-5a The Hiring Process
19-5b Relationship with a Disabled Person
19-5c Obesity
19-5d Mental Disabilities
19-6 Genetic Information Nondiscrimination Act
19-7 Hiring Practices
19-7a Interviews
19-7b Social Media
19-8 Enforcement
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
UNIT 5: The Lifecycle of a Business
Chapter 20: Starting a Business: LLCs and Other Options
20-1 Sole Proprietorships
20-2 Corporations
20-2a Corporations in General
20-2b Special Types of Corporations
20-3 Limited Liability Companies
20-3a Limited Liability
20-3b Formation
20-3c Flexibility
20-3d Transferability of Interests
20-3e Duration
20-3f Going Public
20-3g Piercing the Company Veil
20-3h Legal Uncertainty
20-3i Choices: LLC versus Corporation
20-4 Social Enterprises
20-5 General Partnerships
20-5a Tax Status
20-5b Liability
20-5c Formation
20-5d Raising Capital
20-5e Management
20-5f Transfer of Ownership
20-5g Terminating a Partnership: Dissociation
20-6 Limited Liability Partnerships
20-7 Professional Corporations
20-8 Franchises
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 21: Corporations
21-1 Promoter’s Liability
21-2 Incorporation Process
21-2a Where to Incorporate?
21-2b The Charter
21-3 After Incorporation
21-4 Death of the Corporation
21-4a Voluntary Termination by the Shareholders
21-4b Termination by the State
21-4c Piercing the Corporate Veil
21-5 Management Duties
21-5a The Business Judgment Rule
21-5b Applications of the Business Judgment Rule
21-6 Shareholder Rights
21-6a The Relationship between Shareholders and Managers
21-6b Right to Information
21-6c Right to Vote
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 22: Bankruptcy
22-1 Overview of the Bankruptcy Code
22-2 Chapter 7 Liquidation
22-2a Filing a Petition
22-2b Trustee
22-2c Creditors
22-2d Automatic Stay
22-2e Bankruptcy Estate
22-2f Payment of Claims
22-2g Discharge
22-3 Chapter 11 Reorganization
22-3a Debtor in Possession
22-3b Creditors’ Committee
22-3c Plan of Reorganization
22-3d Confirmation of the Plan
22-3e Discharge
22-3f Small-Business Bankruptcy
22-4 Chapter 13 Consumer Reorganizations
22-4a Beginning a Chapter 13 Case
22-4b Plan of Payment
22-4c Discharge
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
UNIT 6:
Government Regulation
Chapter 23: Securities and Antitrust
23-1 Securities Laws
23-1a What Is a Security?
23-1b Securities Act of 1933
23-1c Securities Exchange Act of 1934
23-1d Insider Trading
23-1e Blue Sky Laws
23-2 Antitrust
23-2a The Sherman Act
23-2b The Clayton Act
23-2c The Robinson-Patman Act
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 24: Consumer Protection
24-1 Introduction
24-2 Sales
24-2a Deceptive Acts or Practices
24-2b Unfair Practices
24-2c Abusive Acts
24-2d Bait-and-Switch
24-2e Merchandise Bought by Mail, by Telephone, or Online
24-2f Telemarketing
24-2g Unordered Merchandise
24-2h Door-to-Door Sales
24-3 Consumer Credit
24-3a Payday Loans
24-3b Truth in Lending Act
24-3c Home Mortgage Loans
24-3d Plastic: Credit, Debit, and ATM Cards
24-3e Electronic Fund Transfers
24-3f Credit Reports
24-3g Debt Collection
24-3h Equal Credit Opportunity Act
24-4 Magnuson-Moss Warranty Act
24-5 Consumer Product Safety
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 25: Environ­mental Law
25-1 Introduction
25-2 Air Pollution
25-2a Clean Air Act
25-2b Climate Change
25-2c Automobile Pollution
25-3 Water Pollution: The Clean Water Act
25-3a Coverage
25-3b Major Provisions
25-4 Waste Disposal
25-4a Resource Conservation and Recovery Act
25-4b Superfund
25-5 Chemicals
25-6 Natural Resources
25-6a National Environmental Policy Act
25-6b Endangered Species Act
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 26: Accountants’ Liability
26-1 Introduction
26-1a Sarbanes-Oxley
26-1b Consolidation in the Accounting Profession
26-1c Audits
26-2 Liability to Clients
26-2a Contract
26-2b Negligence
26-2c Common Law Fraud
26-2d Breach of Trust
26-3 Liability to Third Parties
26-3a Negligence
26-3b Fraud
26-3c Securities Act of 1933
26-3d Securities Exchange Act of 1934
26-4 Criminal Liability
26-5 Other Accountant-Client Issues
26-5a The Accountant-Client Relationship
26-5b Accountant-Client Privilege
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
UNIT 7: Property
Chapter 27: Intellectual Property
27-1 Patents
27-1a Types of Patents
27-1b Requirements for a Utility Patent
27-1c Patent Application and Issuance
27-1d Patent Infringement
27-1e International Patent Treaties
27-2 Copyrights
27-2a Copyright Term
27-2b Copyright Infringement and Fair Use
27-2c The Digital Millennium Copyright Act
27-3 Trademarks
27-3a Ownership and Registration
27-3b Valid Trademarks
27-3c Trademark Infringement
27-4 Trade Secrets
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 28: Real Property and Landlord–Tenant Law
28-1 Nature of Real Property
28-2 Concurrent Estates
28-2a Tenancy in Common
28-2b Joint Tenancy
28-3 Adverse Possession
28-3a Entry and Exclusive Possession
28-3b Open and Notorious Possession
28-3c A Claim Adverse or Hostile to the Owner
28-3d Continuous Possession for the Statutory Period
28-4 Land Use Regulation
28-4a Nuisance Law
28-4b Zoning
28-4c Eminent Domain
28-5 Landlord–Tenant Law
28-5a Types of Tenancy
28-5b Landlord’s Duties
28-5c Tenant’s Duties
28-6 Change in the Parties
28-6a Sale of the Property
28-6b Assignment and Sublease
28-7 Liability of Landlords and Tenants
28-7a Tenant’s Liability
28-7b Landlord’s Liability
28-7c Crime
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 29 Personal Property and Bailment
29-1 Acquiring Personal Property
29-1a Gifts
29-1b Found Property
29-2 Bailment
29-2a Control
29-2b Rights of the Bailee
29-2c Duties of the Bailee
29-2d Rights and Duties of the Bailor
29-2e Liability for Defects
29-2f Common Carriers and Contract Carriers
29-2g Innkeepers
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 30 Estate Planning
30-1 Introduction
30-1a Definitions
30-1b Purpose
30-1c Probate Law
30-2 Wills
30-2a Requirements for a Valid Will
30-2b Spouse’s Share
30-2c Children’s Share
30-2d Digital Assets
30-2e Amending a Will
30-2f Intestacy
30-2g Power of Attorney
30-2h Probate
30-2i Property Not Transferred by Will
30-2j Anatomical Gifts
30-2k End of Life Health Issues
30-3 Trusts
30-3a Advantages and Disadvantages
30-3b Types of Trusts
30-3c Trust Administration
30-3d A Trust’s Term
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
Chapter 31 Insurance
31-1 Introduction
31-2 Insurance Contract
31-2a Offer and Acceptance
31-2b Limiting Claims by the Insured
31-2c Bad Faith by the Insurer
31-3 Types of Insurance
31-3a Property Insurance
31-3b Life Insurance
31-3c Health Insurance
31-3d Disability Insurance
31-3e Liability Insurance
31-3f Automobile Insurance
Chapter Conclusion
Exam Review
Matching Questions
True/False Questions
Multiple-Choice Questions
Case Questions
Discussion Questions
APPENDIX
A
APPENDIX B
APPENDIX C
GLOSSARY
Table of Cases
Index