Legal environment

860 Pages·2008·11.31 MB·English

by  Samuelson, Susan S.;Beatty, Jeffrey F

This page intentionally left blank
Jeffrey F. Beatty
Boston University
•
Susan S. Samuelson
Boston University
Legal Environment, Third Edition
Jeffrey F. Beatty and Susan S. Samuelson
VP/Editorial Director: Manager of Technology, Editorial: Printer:
Jack W. Calhoun John Barans QuebecorWorld-Versailles
Versailles, KY
Publisher: Technology Project Manager:
Rob Dewey Pam Wallace Art Director:
Linda Helcher
Acquisitions Editor: Sr. Manufacturing Coordinator:
Steve Silverstein, Esq. Charlene Taylor Internal Designer:
Kim Torbeck, Imbue Design
Sr. Developmental Editor: Production House:
Bob Sandman Graphic World Inc. Cover Designer:
Kim Torbeck, Imbue Design
Executive Marketing Manager: Composition:
Lisa Lysne International Typesetting Cover Images:
and Composition Roy Rainford/Robert Harding
Content Project Manager:
World Imagery/Getty Images
Tamborah Moore
COPYRIGHT © 2008, 2005 ALL RIGHTS RESERVED. Library of Congress Control Number:
West Legal Studies in Business, an No part of this work covered by the 2006940876
imprint of Thomson/South-Western, copyright hereon may be reproduced or
a part of The Thomson Corporation. used in any form or by any means— For more information about our
Thomson, the Star logo, and graphic, electronic, or mechanical, products, contact us at:
South-Western are trademarks used including photocopying, recording,
Thomson Learning Academic Resource
herein under license. taping, Web distribution or information
Center
storage and retrieval systems, or in any
1-800-423-0563
Printed in the United States of America other manner—without the written
1 2 3 4 5 09 08 07 permission of the publisher.
Thomson Higher Education
Student Edition ISBN-13: For permission to use material from this 5191 Natorp Boulevard
978-0-324-53711-6 text or product, submit a request online at Mason, OH 45040
Student Edition ISBN-10: http://www.thomsonrights.com. USA
0-324-53711-5
Instructor’s Edition ISBN-13:
978-0-324-65049-5
Instructor’s Edition ISBN-10:
0-324-65049-3
Contents: Overview
Unit 4
Preface xvi
Business Organizations
429
Unit 1
Chapters 17 Starting a Business 430
18 Corporations 457
19 Securities Regulation 487
The Legal Environment
1
Chapters 1 Introduction to Law 2
2 Business Ethics and Social
Unit 5
Responsibility 24
3 Dispute Resolution 43
4 Common Law, Statutory Law, Government Regulation and
and Administrative Law 73
Property
517
5 Constitutional Law 99
6 Torts 126 Chapters 20 Antitrust 518
7 Crime 152 21 Cyberlaw 541
8 International Law 182 22 Intellectual Property 562
23 Property 586
24 Consumer Law 612
25 Environmental Law 636
Unit 2
Appendix A
Contracts & the UCC
209
The Constitution of the
Chapters 9 Introduction to Contracts 210
10 Legality, Consent, and United States A 1
Writing 230
Appendix B
11 Conclusion to Contracts 252
12 Sales, Product Liability, and
Uniform Commercial Code
Negotiable Instruments 275
(Selected Provisions)
13 Secured Transactions and B 1
Bankruptcy 304
Glossary
G 1
Table of Cases
T 1
Unit 3 Index I 1
Agency & Employment
339
Chapters 14 Agency 340
15 Employment Law 369
16 Labor Law 401
v
Contents
Preface xvi
CHAPTER 2
Business Ethics and Social
Responsibility 24
Unit 1
Why Bother with Ethics? 25
Society as a Whole Benefits from
The Legal Environment
1
Ethical Behavior 26
People Feel Better When They Behave
CHAPTER 1 Ethically 26
Unethical Behavior Can Be Very Costly 27
Introduction to Law 2
What Is Ethical Behavior? 27
Three Important Ideas about Law 3
Analyzing the Ethics Checklist 28
Power 3
Applying the Ethics Checklist:
Importance 3
Making Decisions 32
Fascination 4
Organization’s Responsibility to Its Customers 33
Origins of Our Law 5 Organization’s Responsibility to Its Employees 34
English Roots 5 Organization’s Responsibility to
THE OCULIST’S CASE (1329) 7 Its Shareholders 36
Organization’s Responsibility Overseas 37
Law in the United States 8
Employee’s Responsibility to Their
Sources of Contemporary Law 9
Organization 38
Constitutions 9
Statutes 9
CHAPTER 3
Common Law 10
Administrative Law 10 Dispute Resolution 43
Other Sources of Law 10
Three Fundamental Areas of Law 44
Classifications of Law 12
Dispute Prevention 44
Criminal and Civil Law 12 Litigation versus Alternative Dispute
Substantive and Procedural Law 12 Resolution 44
Public and Private Law 12
Alternative Dispute Resolution 44
Jurisprudence 13
Negotiation 45
Law and Morality 13
Mediation 45
Legal Positivism 13
Arbitration 46
Natural Law 14
Legal Realism 15 Court Systems 47
Working with the Book’s Features 16 State Courts 47
Federal Courts 49
Analyzing a Case 16
KUEHN V.PUB ZONE 16 Litigation 52
You Be the Judge 19 Pleadings 52
YOU BE THE JUDGE MCCOLLUM V. AMERICAN CASH CARD CORP.V.
CBS,INC. 19 AT&T CORP. 58
vi
Contents vii
JONES V.CLINTON 60 Statutory Control 92
Political Control 92
Trial 62
Judicial Review 93
Adversary System 62
AMADOR-PALOMARES V.
Right to Jury Trial 62
ASHCROFT 94
Voir Dire 63
Informational Control and the Public 95
Opening Statements 63
Burden of Proof 63
Plaintiff’s Case 64 CHAPTER 5
Rules of Evidence 64 Constitutional Law 99
Motion for Directed Verdict 65
Government Power 100
Defendant’s Case 65
Closing Argument 66 One in a Million 100
Jury Instructions 66
Overview 100
Verdict 66
Separation of Powers 101
Motions after the Verdict 66
Federalism 101
Appeals 66 Individual Rights 101
HERNANDEZ V.MONTVILLE
Power Granted 102
TOWNSHIP BOARD OF
Congressional Power 102
EDUCATION 67
GRANHOLM V.HEALD 104
Appeals Court Options 68
Executive Power 105
Judicial Power 106
CHAPTER 4
YOUNGSTOWN SHEET & TUBE
Common Law, Statutory Law, and
CO.V.SAWYER 107
Administrative Law 73
Protected Rights 108
Common Law 74
Incorporation 109
Stare Decisis 74 First Amendment: Free Speech 110
Bystander Cases 74 TEXAS V.JOHNSON 110
TARASOFF V.REGENTS OF THE
YOU BE THE JUDGE BARNES V.GLEN
UNIVERSITY OF CALIFORNIA 75
THEATRE,INC. 112
Statutory Law 77 LORILLARD TOBACCO CO.V.
Bills 78 REILLY 114
Discrimination: Congress and the Courts 78 Fifth Amendment: Due Process and the Takings
Clause 115
Debate 79
Statutory Interpretation 82 PALAZZOLO V.RHODE
GRIGGS V.DUKE POWER CO. 82 ISLAND 118
Voters’ Role 84 Fourteenth Amendment: Equal Protection
Congressional Override 84 Clause 120
The Other Player: Money 85 Private Regulations 122
Administrative Law 86
CHAPTER 6
Background 87
Torts 126
Classification of Agencies 87
Power of Agencies 88 Intentional Torts 128
DOE V.MARYLAND BOARD
Defamation 128
OF SOCIAL WORKERS 91
YOU BE THE JUDGE KNIEVEL
Limits on Agency Power 92 V.ESPN 129
viii Contents
False Imprisonment 131 WISCONSIN V.KNUTSON,
Intentional Infliction of Emotional Distress 131 INC. 164
JANE DOE AND NANCY ROE V. Punishing a Corporation 165
LYNN MILLS 132 Selected Crimes Committed by Business 166
Additional Intentional Torts 133 RICO 167
UNITED STATESV.
Damages 133
BIEGANOWSKI 168
Compensatory Damages 133
Constitutional Protections 170
Punitive Damages 135
WILLIAMS V.PHILIP MORRIS The Criminal Process 170
INCORPORATED 135 The Fourth Amendment 173
The Fifth Amendment 175
Business Torts 137
The Sixth Amendment 177
Tortious Interference with Business Relations 137 The Eighth Amendment 177
Privacy and Publicity 138 EWING V.CALIFORNIA 177
Negligence 138
Duty of Due Care 139
HERNANDEZ V.ARIZONA BOARD CHAPTER 8
OF REGENTS 139 International Law 182
WIENER V.SOUTHCOAST
MNEs and Power 183
CHILDCARE CENTERS,INC. 141
Breach of Duty 142 Trade Regulation 184
Factual Cause and Foreseeable Harm 143
Export Controls 184
Injury 145
Import Controls 185
COLE V.QUIRK 145
RUBIE’S COSTUME COMPANY V.
Defenses 146
UNITED STATES 186
Strict Liability 147 General Agreement on Tariffs and Trade
(GATT) 188
Ultrahazardous Activity 148
UNITED STATES—IMPORT
PROHIBITION OF CERTAIN
CHAPTER 7 SHRIMP AND SHRIMP
PRODUCTS 189
Crime 152
Regional Agreements 192
Crime,Society,and Law 153 International Sales Agreements 193
Civil Law/Criminal Law 153
Direct Sales 193
Punishment 154
CENTRIFUGAL CASTING
The Prosecution’s Case 156
MACHINE CO.,INC.V.AMERICAN
Defenses 157
BANK & TRUST CO. 197
YOU BE THE JUDGE BIEBER V.
Indirect Sales through a Distributor 198
PEOPLE 158
YOU BE THE JUDGE HARTFORD FIRE
Crimes That Harm Business 159 INSURANCE CO.V.CALIFORNIA 199
Licensing a Foreign Manufacturer 200
Larceny 160
Fraud 160 Investing Abroad 201
Embezzlement 161
Repatriation of Profits 201
Computer Crime 161
Expropriation 201
UNITED STATESV.AMURE 163
Foreign Corrupt Practices Act 203
Crimes Committed by Business 164 UNITED STATES V.KING 204
Contents ix
Unit 2
Exculpatory Clauses 234
RANSBURG V.RICHARDS 235
Contracts & the UCC Unconscionable Contracts 236
209
Capacity and Consent 236
Capacity 237
CHAPTER 9
Reality of Consent 238
Introduction to Contracts 210
FIMBEL V.DECLARK 241
The Purpose of a Contract 211 Contracts in Writing 242
Judicial Activism versus Judicial Restraint 211
Written Contracts 243
Issues (and Answers) 212
Contracts Defined 212 Unenforceable (Sorry, Oliver.) 243
Contracts That Must Be in Writing 244
Types of Contracts 212
BAKER V.DAVES 244
Bilateral and Unilateral Contracts 212 What the Writing Must Contain 246
Express and Implied Contracts 213 Sale of Goods 247
YOU BE THE JUDGE DEMASSE V.ITT Parol Evidence 248
CORPORATION 213
Executory and Executed Contracts 214
Valid, Unenforceable, Voidable, and Void CHAPTER 11
Agreements 214
Conclusion to Contracts 252
Remedies Created by Judicial Activism 215
Third Party Beneficiary 253
Promissory Estoppel 215
Quasi-Contract 216 SCHAUER V.MANDARIN GEMS
OF CALIFORNIA,INC. 254
Sources of Contract Law 216
Assignment and Delegation 255
Common Law 216
Uniform Commercial Code 217 Assignment 256
Restatement (Second) of Contracts 217 Delegation of Duties 257
YOU BE THE JUDGE ROSENBURGV.
Agreement 218
SON,INC. 258
Meeting of the Minds 218
Performance and Discharge 259
Offer 218
Performance 259
BAER V.CHASE 220
BRUNSWICK HILLS RACQUET
Acceptance 222
CLUB INC.V.ROUTE 18
SPECHT V.NETSCAPE
SHOPPING CENTER
COMMUNICATIONS
ASSOCIATES 261
CORPORATION 224
Breach 263
Consideration 225 Impossibility 263
HAMER V.SIDWAY 226 Remedies 264
Expectation Interest 265
CHAPTER 10 HADLEYV.BAXENDALE 266
Legality, Consent, and Writing 230 Reliance Interest 268
Restitution Interest 268
Legality 231 Other Equitable Interests 269
Restraint of Trade 231 MILICICV.BASKETBALL
KING V.HEAD START FAMILY MARKETING COMPANY,INC. 270
HAIR SALONS,INC. 232 Special Issues of Damages 271