Business and the Legal Environment - 2012 Book Archive

1423 Pages·2012·11.87 MB·English

Business and the Legal
Environment
v. 1.0
This is the bookBusiness and the Legal Environment(v. 1.0).
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Table of Contents
About the Authors................................................................................................................. 1
Acknowledgments................................................................................................................. 5
Preface..................................................................................................................................... 6
Chapter 1: Introduction to Law and Legal Systems....................................................... 8
What Is Law?...................................................................................................................................................9
Schools of Legal Thought............................................................................................................................11
Basic Concepts and Categories of US Positive Law...................................................................................17
Sources of Law and Their Priority..............................................................................................................23
Legal and Political Systems of the World..................................................................................................32
A Sample Case...............................................................................................................................................34
Summary and Exercises..............................................................................................................................40
Chapter 2: Corporate Social Responsibility and Business Ethics ............................. 44
What Is Ethics?.............................................................................................................................................46
Major Ethical Perspectives..........................................................................................................................52
An Ethical Decision Model...........................................................................................................................63
Corporations and Corporate Governance..................................................................................................66
Summary and Exercises..............................................................................................................................78
Chapter 3: Courts and the Legal Process ....................................................................... 83
The Relationship between State and Federal Court Systems in the United States...............................85
The Problem of Jurisdiction........................................................................................................................92
Motions and Discovery..............................................................................................................................111
The Pretrial and Trial Phase.....................................................................................................................114
Judgment, Appeal, and Execution............................................................................................................120
When Can Someone Bring a Lawsuit?......................................................................................................124
Relations with Lawyers..............................................................................................................................127
Alternative Means of Resolving Disputes................................................................................................130
Cases............................................................................................................................................................133
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Chapter 4: Constitutional Law and US Commerce..................................................... 141
Basic Aspects of the US Constitution.......................................................................................................142
The Commerce Clause...............................................................................................................................147
Dormant Commerce Clause.......................................................................................................................154
Preemption: The Supremacy Clause........................................................................................................159
Business and the Bill of Rights..................................................................................................................163
Cases............................................................................................................................................................173
Summary and Exercises............................................................................................................................195
Chapter 5: Administrative Law...................................................................................... 200
Administrative Agencies: Their Structure and Powers.........................................................................201
Controlling Administrative Agencies.......................................................................................................209
The Administrative Procedure Act..........................................................................................................212
Administrative Burdens on Business Operations...................................................................................215
The Scope of Judicial Review....................................................................................................................219
Cases............................................................................................................................................................224
Summary and Exercises............................................................................................................................231
Chapter 6: Criminal Law.................................................................................................. 236
The Nature of Criminal Law......................................................................................................................237
Types of Crimes..........................................................................................................................................240
The Nature of a Criminal Act....................................................................................................................250
Responsibility.............................................................................................................................................254
Procedure....................................................................................................................................................257
Constitutional Rights of the Accused.......................................................................................................260
Cases............................................................................................................................................................264
Summary and Exercises............................................................................................................................271
Chapter 7: Introduction to Tort Law............................................................................. 276
Purpose of Tort Laws.................................................................................................................................277
Intentional Torts........................................................................................................................................283
Negligence..................................................................................................................................................292
Strict Liability.............................................................................................................................................300
Cases............................................................................................................................................................304
Summary and Exercises............................................................................................................................316
Chapter 8: Contracts......................................................................................................... 320
General Perspectives on Contracts..........................................................................................................321
Contract Formation...................................................................................................................................332
Remedies.....................................................................................................................................................340
Cases............................................................................................................................................................346
Summary and Exercises............................................................................................................................354
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Chapter 9: Products Liability.......................................................................................... 359
Introduction: Why Products-Liability Law Is Important.......................................................................360
Warranties..................................................................................................................................................365
Negligence..................................................................................................................................................378
Strict Liability in Tort................................................................................................................................382
Tort Reform................................................................................................................................................391
Cases............................................................................................................................................................395
Summary and Exercises............................................................................................................................406
Chapter 10: Consumer Credit Transactions................................................................ 414
Entering into a Credit Transaction..........................................................................................................416
Consumer Protection Laws and Debt Collection Practices....................................................................425
Cases............................................................................................................................................................431
Summary and Exercises............................................................................................................................441
Chapter 11: Secured Transactions and Suretyship.................................................... 446
Introduction to Secured Transactions.....................................................................................................447
Priorities.....................................................................................................................................................466
Rights of Creditor on Default and Disposition after Repossession.......................................................474
Suretyship...................................................................................................................................................479
Cases............................................................................................................................................................487
Summary and Exercises............................................................................................................................497
Chapter 12: Mortgages and Nonconsensual Liens ..................................................... 504
Uses, History, and Creation of Mortgages...............................................................................................505
Priority, Termination of the Mortgage, and Other Methods of Using Real Estate as Security..........512
Nonconsensual Lien...................................................................................................................................520
Cases............................................................................................................................................................524
Summary and Exercises............................................................................................................................541
Chapter 13: Bankruptcy................................................................................................... 546
Introduction to Bankruptcy and Overview of the 2005 Bankruptcy Act.............................................547
Case Administration; Creditors’ Claims; Debtors’ Exemptions and Dischargeable Debts; Debtor’s
Estate...........................................................................................................................................................553
Chapter 7 Liquidation................................................................................................................................566
Chapter 11 and Chapter 13 Bankruptcies................................................................................................572
Alternatives to Bankruptcy.......................................................................................................................578
Cases............................................................................................................................................................581
Summary and Exercises............................................................................................................................592
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Chapter 14: Relationships between Principal and Agent......................................... 598
Introduction to Agency and the Types of Agents...................................................................................599
Duties between Agent and Principal........................................................................................................610
Cases............................................................................................................................................................623
Summary and Exercises............................................................................................................................638
Chapter 15: Liability of Principal and Agent; Termination of Agency.................. 643
Principal’s Contract Liability....................................................................................................................644
Principal’s Tort and Criminal Liability....................................................................................................650
Agent’s Personal Liability for Torts and Contracts; Termination of Agency.......................................658
Cases............................................................................................................................................................664
Summary and Exercises............................................................................................................................676
Chapter 16: Employment Law......................................................................................... 681
Federal Employment Discrimination Laws.............................................................................................682
Employment at Will...................................................................................................................................698
Other Employment-Related Laws.............................................................................................................702
Cases............................................................................................................................................................708
Summary and Exercises............................................................................................................................731
Chapter 17: Labor-Management Relations.................................................................. 738
A Brief History of Labor Legislation.........................................................................................................740
The National Labor Relations Board: Organization and Functions......................................................745
Labor and Management Rights under the Federal Labor Laws.............................................................747
Case..............................................................................................................................................................760
Summary and Exercises............................................................................................................................765
Chapter 18: Partnerships: General Characteristics and Formation....................... 770
Introduction to Partnerships and Entity Theory...................................................................................771
Partnership Formation..............................................................................................................................777
Cases............................................................................................................................................................786
Summary and Exercises............................................................................................................................799
Chapter 19: Partnership Operation and Termination .............................................. 804
Operation: Relations among Partners......................................................................................................805
Operation: The Partnership and Third Parties.......................................................................................816
Dissolution and Winding Up.....................................................................................................................822
Cases............................................................................................................................................................834
Summary and Exercises............................................................................................................................850
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Chapter 20: Hybrid Business Forms.............................................................................. 857
Limited Partnerships.................................................................................................................................859
Limited Liability Companies.....................................................................................................................867
Other Forms................................................................................................................................................874
Cases............................................................................................................................................................879
Summary and Exercises............................................................................................................................888
Chapter 21: Corporation: General Characteristics and Formation........................ 894
Historical Background...............................................................................................................................895
Partnerships versus Corporations............................................................................................................899
The Corporate Veil: The Corporation as a Legal Entity.........................................................................902
Classifications of Corporations.................................................................................................................907
Corporate Organization.............................................................................................................................910
Effect of Organization................................................................................................................................917
Cases............................................................................................................................................................919
Summary and Exercises............................................................................................................................931
Chapter 22: Legal Aspects of Corporate Finance........................................................ 938
General Sources of Corporate Funds........................................................................................................939
Bonds...........................................................................................................................................................942
Types of Stock.............................................................................................................................................945
Initial Public Offerings and Consideration for Stock.............................................................................951
Dividends....................................................................................................................................................955
The Winds of Change.................................................................................................................................960
Cases............................................................................................................................................................963
Summary and Exercises............................................................................................................................970
Chapter 23: Corporate Powers and Management ...................................................... 975
Powers of a Corporation............................................................................................................................976
Rights of Shareholders..............................................................................................................................981
Duties and Powers of Directors and Officers...........................................................................................988
Liability of Directors and Officers............................................................................................................992
Cases..........................................................................................................................................................1004
Summary and Exercises..........................................................................................................................1013
Chapter 24: Securities Regulation............................................................................... 1019
The Nature of Securities Regulation......................................................................................................1020
Liability under Securities Law................................................................................................................1029
Cases..........................................................................................................................................................1036
Summary and Exercises..........................................................................................................................1044
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Chapter 25: Corporate Expansion, State and Federal Regulation of Foreign
Corporations, and Corporate Dissolution.................................................................. 1048
Corporate Expansion...............................................................................................................................1049
Foreign Corporations...............................................................................................................................1057
Dissolution................................................................................................................................................1061
Cases..........................................................................................................................................................1064
Summary and Exercises..........................................................................................................................1070
Chapter 26: Antitrust Law............................................................................................. 1075
History and Basic Framework of Antitrust Laws in the United States...............................................1076
Horizontal Restraints of Trade...............................................................................................................1088
Vertical Restraints of Trade....................................................................................................................1095
Price Discrimination: The Robinson-Patman Act.................................................................................1103
Exemptions...............................................................................................................................................1113
Sherman Act, Section 2: Concentrations of Market Power.................................................................1116
Acquisitions and Mergers under Section 7 of the Clayton Act............................................................1124
Cases..........................................................................................................................................................1134
Summary and Exercises..........................................................................................................................1153
Chapter 27: Unfair Trade Practices and the Federal Trade Commission ........... 1163
The Federal Trade Commission: Powers and Law Governing Deceptive Acts...................................1164
Deceptive Acts and Practices..................................................................................................................1168
Unfair Trade Practices.............................................................................................................................1175
Remedies...................................................................................................................................................1179
Cases..........................................................................................................................................................1182
Summary and Exercises..........................................................................................................................1189
Chapter 28: The Nature and Regulation of Real Estate and the Environment .. 1194
Estates.......................................................................................................................................................1195
Rights Incident to Possession and Ownership of Real Estate..............................................................1200
Easements: Rights in the Lands of Others.............................................................................................1203
Regulation of Land Use............................................................................................................................1207
Environmental Law..................................................................................................................................1215
Cases..........................................................................................................................................................1225
Summary and Exercises..........................................................................................................................1233
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Chapter 29: Introduction to Property: Personal Property and Fixtures ............ 1238
The General Nature of Property Rights.................................................................................................1239
Personal Property....................................................................................................................................1243
Fixtures.....................................................................................................................................................1250
Case............................................................................................................................................................1254
Summary and Exercises..........................................................................................................................1257
Chapter 30: Intellectual Property................................................................................ 1262
Patents.......................................................................................................................................................1264
Trade Secrets............................................................................................................................................1271
Copyright..................................................................................................................................................1276
Trademarks...............................................................................................................................................1283
Cases..........................................................................................................................................................1288
Summary and Exercises..........................................................................................................................1297
Chapter 31: The Transfer of Real Estate by Sale...................................................... 1301
Forms of Ownership.................................................................................................................................1302
Brokers, Contracts, Proof of Title, and Closing.....................................................................................1308
Adverse Possession..................................................................................................................................1325
Cases..........................................................................................................................................................1328
Summary and Exercises..........................................................................................................................1336
Chapter 32: Landlord and Tenant Law....................................................................... 1340
Types and Creation of Leasehold Estates...............................................................................................1341
Rights and Duties of Landlords and Tenants........................................................................................1345
Transfer of Landlord’s or Tenant’s Interest..........................................................................................1353
Landlord’s Tort Liability..........................................................................................................................1356
Cases..........................................................................................................................................................1359
Summary and Exercises..........................................................................................................................1365
Chapter 33: International Law..................................................................................... 1370
Introduction to International Law.........................................................................................................1371
Sources and Practice of International Law...........................................................................................1374
Important Doctrines of Nation-State Judicial Decisions......................................................................1380
Regulating Trade......................................................................................................................................1391
Cases..........................................................................................................................................................1394
Summary and Exercises..........................................................................................................................1411
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About the Authors
Don Mayer
Don Mayer teaches law, ethics, public policy, and
sustainability at the Daniels College of Business,
University of Denver, where he is professor in
residence. His research focuses on the role of business
in creating a more just, sustainable, peaceful, and
productive world. With James O’Toole, Professor Mayer
has coedited and contributed content toGood Business:
Exercising Effective and Ethical Leadership(Routledge,
2010). He is also coauthor ofInternational Business Law:
Cases and Materials, which is in its fifth edition with
Pearson Publishing Company. He recently served as the
first Arsht Visiting Ethics Scholar at the University of
Miami.
After earning a philosophy degree from Kenyon College and a law degree from Duke
University Law School, Professor Mayer served as a Judge Advocate General’s (JAG)
Corps officer in the United States Air Force during the Vietnam conflict and went
into private practice in North Carolina. In 1985, he earned his LLM in international
and comparative law at the Georgetown University Law Center. Later that year, he
began his academic career at Western Carolina University and proceeded to become
a full professor at Oakland University in Rochester, Michigan, where he taught for
many years before moving to the University of Denver. He has taught as a visitor at
California State Polytechnic University, the University of Michigan, the Manchester
Business School Worldwide, and Antwerp Management School.
Professor Mayer has won numerous awards from the Academy of Legal Studies in
Business, including the Hoeber Award for best article in theAmerican Business Law
Journal, the Maurer Award for best article on business ethics (twice), and the Ralph
Bunche Award for best article on international business law (three times). His work
has been published in many journals and law reviews but most often inAmerican
Business Law Journal, theJournal of Business Ethics, and theBusiness Ethics Quarterly.
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