Adapting the Law to the Online Environment
A
How the Internet Is Expanding Precedent 12

This special feature
examines cutting-edge
cyberlaw issues coming
before today’s courts.

The Supreme Court Upholds a Law
that Prohibits Pandering Virtual Child
Pornography 43
The Duty to Preserve Electronic Evidence for
Discovery 74
Should CDA Immunity Extend to Negligence
Claims against MySpace? 113
Should the Law Continue to Allow Business
Process Patents? 131
Can Students Who Gain Unauthorized
Access to an Online Antiplagiarism
Service Be Subject to the Computer Fraud
and Abuse Act? 187

The Thorny Issue of Taxing
Internet Sales 363
Should Video Games Be Required to Have
Warning Labels? 429
The Debt That Never Goes Away—It’s
Discharged in Bankruptcy but Still on the
Debtor’s Credit Report 543

Can Parties Create and Modify Employment
Contracts via E-Mail? 609
Satisfying the FTC’s Franchise Rule in the
Internet Age 673
Economic Recession Fuels the Internet
Taxation Debate 725

Corporate Reputations under Attack 206

Moving Company Information to
the Internet 763

Online Personals—Fraud and
Misrepresentation Issues 291

Corporate Blogs and Tweets Must Comply
with the Securities Exchange Act 787

Linking the Law
Linking the Law to Management:
Dealing with Administrative Law 17

This special feature,
which is new to this
edition, relates chapter
content to specific
business areas with an
emphasis on careers.

Linking the Law to Marketing:

Trademarks and Service Marks 140
Linking the Law to Managerial Accounting:
Managing a Company’s Reputation 208
Linking the Law to Marketing:
Customer Relationship Management 256
Linking the Law to Economics:
Usury Laws Become Federal 281
Linking the Law to Business Communication:
When E-Mails Become Enforceable
Contracts 306
Linking the Law to Management:
Quality Control 432
Linking the Law to Economics:
Banking in the Period of Crisis 491

Linking the Law to Economics:
The Effects of Bankruptcy Law
on Consumers and Businesses 549
Linking the Law to Marketing:
Going Global 570
Linking the Law to Management:
Human Resource Management
Comes to the Fore 658
Linking the Law to Finance:
Sources of Funds 746
Linking the Law to Taxation:
The Tax Consequences of Deleveraging
During an Economic Crisis 802
Linking the Law to Business Statistics:
Statistical Sampling when Conducting

Audits 875
Linking the Law to Economics:
Eminent Domain 919


Beyond Our Borders

This feature provides
a perspective on
the global legal
environment,
international laws, and
laws of other nations
that relate to specific
legal concepts or topics
discussed in a chapter.

National Law Systems 16
Islamic Law Courts Abroad and at Home 67
The Impact of Foreign Law on the United
States Supreme Court 39

The CISG’s Approach to Revocation
of Acceptance 407
Arbitration versus Litigation 565
Islamic Law and Respondeat Superior 599

“Libel Tourism” 95

Sexual Harassment in Other Nations 648


The Anti-Counterfeiting Trade
Agreement 137

Franchising in Foreign Nations 675

An Absence of Codified Criminal Law:
The Pushtun Way 147
Russian Hackers to the Fore 176
The United States Looks into International
Bribery 207
International Use and Regulation of the
Internet 253
Statute of Frauds and International Sales
Contracts 302

Doing Business with Foreign Partners 687
Limited Liability Companies in Other
Nations 712
Derivative Actions in Other Nations 769
Corporate Governance in Other Nations 797
The European Union’s Expanding Role in
Antitrust Litigation 829
Protecting U.S. Consumers from CrossBorder Telemarketers 840

Impossibility or Impracticability
of Performance in Germany 331

Landmark in the Law


This feature discusses
seminal cases,
statutes, or other legal
developments that have
had significant effects
on business law.

EEquitable Principles and Maxims 13

MacPherson v. Buick Motor Co. (1916) 424

Gibbons v. Ogden (1824) 34
G

Federal Trade Commission Rule 433 463

M
Marbury v. Madison (1803) 59

Check Clearing in the 21st Century Act
(Check 21) 484

P
Palsgraf v. Long Island
R
Railroad Co. (1928) 109
TThe Digital Millennium
Copyright Act of 1998 135
Miranda v. Arizona (1966) 163


The Bankruptcy Reform Act of 2005 530
The Doctrine of Respondeat Superior 597
Limited Liability Company (LLC) Statutes 707

Hamer v. Sidway (1891) 264

The Securities and Exchange
Commission 780

The Statute of Frauds 297

The Sherman Antitrust Act of 1890 814

Lawrence v. Fox (1859) 319

The SEC Adopts Global Accounting
Rules 863

Hadley v. Baxendale (1854) 341
The Uniform Commercial Code 361


Standard Edition

Business Law Today
TEXT & SUMMARIZED CASES
E-Commerce, Legal, Ethical,
and Global Environment

Roger LeRoy Miller


NINTH EDITION

Herbert D. Kelleher
Emeritus Professor in Business Law
MSIS Department
University of Texas at Austin

Institute for University Studies
Arlington, Texas

(John Elk III/Lonely Planet Images/Getty Images)

Gaylord A. Jentz

Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States


Business Law Today
Standard Edition
TEXT & SUMMARIZED CASES
E-Commerce, Legal, Ethical,
and Global Environment
NINTH EDITION
Vice President and Editorial Director:
Jack Calhoun
Editor-in-Chief:
Rob Dewey
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Vicky True

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Jan Lamar
Executive Marketing Manager:
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Contents in Brief

Unit One

Unit Three

T Legal
The
EEnvironment of Business 1

Commercial Transactions 359

Chapter 15

The Formation of
Sales and Lease Contracts 360


Courts and
Alternative Dispute Resolution 57

Chapter 16

Performance and Breach
of Sales and Lease Contracts 390

Chapter 4

Torts and Cyber Torts 90

Chapter 17

Warranties and Product Liability 414

Chapter 5

Intellectual Property and Internet Law 119

Chapter 18

Negotiable Instruments:
Transferability and Liability 438

Chapter 6

Criminal Law 145

Chapter 19


Chapter 7

Cyber Crime 172

Checks and Banking
in the Digital Age 471

Chapter 8

Ethics and Business Decision Making 193

Chapter 20

Security Interests
in Personal Property 496

Chapter 21

Creditors’ Rights and Bankruptcy 520

Chapter 22

International Law
in a Global Economy 554

Chapter 1

The Legal Environment 2


Chapter 2

Constitutional Law 32

Chapter 3

Unit Two

Contracts 217

Unit Four
Chapter 9

Nature and Classification 218

Chapter 10

Agreement in
Traditional and E-Contracts 236

Chapter 11

Consideration, Capacity, and Legality 262

Chapter 12

Defenses to Contract Enforceability 287

Chapter 13


Third Party Rights and Discharge 311

Chapter 14

Breach and Remedies 337
CONTE NTS I N BRI E F

Agency and
Employment Law 579
Chapter 23

Agency Relationships in Business 580

iii


iv

CONTE NTS I N BRI E F

Chapter 24

Employment,
Immigration, and Labor Law 606

Chapter 25

Employment Discrimination 638

Unit Seven


Property and Its Protection 883

Unit Five

Business Organizations 667

Chapter 35

Personal Property and Bailments 884

Chapter 36

Real Property and
Landlord-Tenant Law 905

Chapter 37

Insurance, Wills, and Trusts 924

Chapter 26

Sole Proprietorships
and Private Franchises 668

Chapter 27

All Forms of Partnership 683

Chapter 28


Limited Liability Companies
and Special Business Forms 706

Appendix A

How to Brief Cases
and Analyze Case Problems A–1

Chapter 29

Corporate Formation,
Merger, and Termination 722

Appendix B

The Constitution of the United States A–3

Chapter 30

Corporate Directors,
Officers, and Shareholders 753

Appendix C

The Uniform Commercial Code
(Excerpts) A–10

Chapter 31


Investor Protection, Insider Trading,
and Corporate Governance 778

Appendix D

The Sarbanes-Oxley Act of 2002
(Excerpts and Explanatory
Comments) A–120

Appendix E

Sample Answers for End-of-Chapter
Hypothetical Questions with Sample
Answer A–126

Appendix F

Case Excerpts for
Case Analysis Questions A–132

Unit Six

Appe
e ndicc es
Appendices

Government Regulation 811

Chapter 32


Promoting Competition 812

Chapter 33

Consumer and Environmental Law 835

Chapter 34

Liability of Accountants
and Other Professionals 860

Glossary G–1
Table of Cases TC–1
Index I–1


Contents*

*Consult the inside front and back covers of this book for
easy reference to the many special features in this textbook.

In re Episcopal Church Cases (2009) 44

Unit One

T Legal
The
EEnvironment of Business 1

Preventing Legal Disputes


46

Due Process and Equal Protection 46
Privacy Rights 48
Reviewing . . . Constitutional Law 51
Business Application Is “Pretexting” Illegal? 52

Chapter 1

The Legal Environment 2

Business Activities and the Legal Environment 3
Sources of American Law 4
The Common Law Tradition 9
Adapting the Law to the Online Environment How the Internet Is
Expanding Precedent 12
Landmark in the Law Equitable Principles and Maxims 13

Classifications of Law 14
Beyond Our Borders National Law Systems 16
Linking the Law to Management: Dealing with Administrative Law 17
Reviewing . . . The Legal Environment 17
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Appendix to Chapter 1: Finding and Analyzing the Law 22

Finding Statutory and Administrative Law 22

Finding Case Law 23
Reading and Understanding Case Law 25
Chapter 2

Constitutional Law 32

The Constitutional Powers of Government 32
Landmark in the Law

Gibbons v. Ogden (1824) 34

Heart of Atlanta Motel v. United States (1964) 35

Business and the Bill of Rights 37
Beyond Our Borders The Impact of Foreign Law on the United States
Supreme Court 39
Bad Frog Brewery, Inc. v. New York State Liquor Authority (1998) 41
Adapting the Law to the Online Environment The Supreme Court
Upholds a Law That Prohibits Pandering Virtual Child Pornography 43
CO N T E N TS

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 3

Courts and
Alternative Dispute Resolution 57


The Judiciary’s Role in American Government 57
Basic Judicial Requirements 58
Landmark in the Law Marbury v. Madison (1803) 59
Preventing Legal Disputes 63
Oregon v. Legal Services Corp. (2009) 64

The State and Federal Court Systems 65
Beyond Our Borders

Islamic Law Courts Abroad and at Home 67

Following a State Court Case 70
Adapting the Law to the Online Environment
Electronic Evidence for Discovery 74

The Duty to Preserve

Evans v. Eaton Corp. (2008) 76

The Courts Adapt to the Online World 77
Alternative Dispute Resolution 78
NICR Corp. v. Korala Associates, Ltd. (2008) 81
Reviewing . . . Courts and Alternative Dispute Resolution 84
Business Application To Sue or Not to Sue? 84
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 4


Torts and Cyber Torts 90

The Basis of Tort Law 91
Intentional Torts against Persons 92
v


vi

CO N T E N TS

Beyond Our Borders

“Libel Tourism” 95

McClain v. Octagon Plaza, LLC (2008) 100

Intentional Torts against Property 102
Trustees of University of District of Columbia v. Vossoughi (2009) 104

Unintentional Torts (Negligence) 105
Preventing Legal Disputes 107
Landmark in the Law Palsgraf v. Long Island Railroad Co. (1928) 109

Strict Liability 111
Cyber Torts—Online Defamation 112
Fair Housing Council of San Francisco Valley v. Roommate.com,
LLC (2008) 113
Adapting the Law to the Online Environment Should CDA Immunity
Extend to Negligence Claims against MySpace? 113

Reviewing . . . Torts and Cyber Torts 114
Business Application How Important Is Tort Liability to Business? 114
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 5

Intellectual Property
and Internet Law 119

Criminal Liability 147
Preventing Legal Disputes 150

Types of Crimes 150
Defenses to Criminal Liability 156
Constitutional Safeguards and Criminal Procedures 158
United States v. Moon (2008) 160
Herring v. United States (2009) 162
Landmark in the Law

Miranda v. Arizona (1966) 163

Criminal Process 164
Reviewing . . . Criminal Law 166
Business Application Determining How Much Force You Can Use to
Prevent Crimes on Business Premises 167
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises


Chapter 7

Cyber Crime 172

Computer Crime and the Internet 172
Cyber Crimes against Persons and Property 173
Beyond Our Borders

Russian Hackers to the Fore 176

State v. Cline (2008) 178

Trademarks and Related Property 120
The Coca-Cola Co. v. Koke Co. of America (1920) 120

Cyber Marks 125
George V Restauration S.A. v. Little Rest Twelve, Inc. (2009) 127
Preventing Legal Disputes 128

Patents 128
KSR International Co. v. Teleflex, Inc. (2007) 129

Copyrights 130
Adapting the Law to the Online Environment Should the Law
Continue to Allow Business Process Patents? 131
Landmark in the Law The Digital Millennium Copyright Act of 1998 135

Trade Secrets 136
International Protection for Intellectual Property 137

Beyond Our Borders The Anti-Counterfeiting Trade Agreement 139
Reviewing . . . Intellectual Property and Internet Law 139
Linking the Law to Marketing Trademarks and Service Marks 140
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 6

Criminal Law 145

Civil Law and Criminal Law 145
Beyond Our Borders
Pushtun Way 147

An Absence of Codified Criminal Law: The

Cyber Crimes in the Business World 179
The Spread of Spam 182
Cyber Crimes against the Community—Gambling in
Cyberspace 183
United States v. $6,976,934.65, Plus Interest Deposited into Royal Bank of
Scotland International (2009) 184

Fighting Cyber Crime 185
Adapting the Law to the Online Environment Can Students Who Gain
Unauthorized Access to an Online Antiplagiarism Service Be Subject to
the Computer Fraud and Abuse Act? 187
Reviewing . . . Cyber Crime 187
Business Application How Can You Protect against Identity Theft? 188

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 8

Ethics and Business Decision Making 193

Business Ethics 194
United States v. Skilling (2009) 195
Preventing Legal Disputes 197

Ethical Transgressions by Financial Institutions 198
Approaches to Ethical Reasoning 200
Fog Cutter Capital Group, Inc. v. Securities and Exchange
Commission (2007) 202


vii

CO N T E N TS

Making Ethical Business Decisions 204
Practical Solutions to Corporate Ethics Questions 204
Business Ethics on a Global Level 205
Adapting the Law to the Online Environment Corporate Reputations
under Attack 206
Beyond Our Borders The United States Looks into International
Bribery 207
Reviewing . . . Ethics and Business Decision Making 208

Linking the Law to Managerial Accounting Managing a Company’s
Reputation 208
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises
Unit One
Unit One

Cumulative Business Hypothetical 213
Extended Case Study: Paduano v. American Honda
Motor Co. 213

Unit Two

Contracts 217

Preventing Legal Disputes 241
T. W. Nickerson, Inc. v. Fleet National Bank (2009) 243

Agreement in E-Contracts 248
The Uniform Electronic Transactions Act 252
Beyond Our Borders International Use and Regulation of the
Internet 253
Reviewing . . . Agreement in Traditional and E-Contracts 256
Linking the Law to Marketing Customer Relationship
Management 256
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises


Chapter 11

Consideration,
Capacity, and Legality 262

Consideration 262
Landmark in the Law

Hamer v. Sidway (1891) 264

Access Organics, Inc. v. Hernandez (2008) 266

Promissory Estoppel 268
Contractual Capacity 269
Legality 272
Chapter 9

Nature and Classification 218

Comedy Club, Inc. v. Improv West Associates (2009) 275
Preventing Legal Disputes 276
Speedway SuperAmerica, LLC v. Erwin (2008) 278

An Overview of Contract Law 219
Elements of a Contract 220
Types of Contracts 221
Uhrhahn Construction & Design, Inc. v. Hopkins (2008) 224

Quasi Contracts 225
Interpretation of Contracts 227

Preventing Legal Disputes 227
Wagner v. Columbia Pictures Industries, Inc. (2007) 228
U.S. Bank, N.A. v. Tennessee Farmers Mutual Insurance Co. (2009) 229
Reviewing . . . Nature and Classification 230
Business Application How Can You Avoid Unintended Employment
Contracts? 231
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

The Effect of Illegality 279
Reviewing . . . Consideration, Capacity, and Legality 280
Linking the Law to Economics Usury Laws Become Federal 281
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 12

Defenses to Contract Enforceability 287

Voluntary Consent 287
Inkel v. Pride Chevrolet-Pontiac, Inc. (2008) 289
Adapting the Law to the Online Environment Online Personals—Fraud
and Misrepresentation Issues 291
Rosenzweig v. Givens (2009) 293
Preventing Legal Disputes 295

Chapter 10


Agreement in
Traditional and E-Contracts 236

The Statute of Frauds—Writing Requirement 296
Landmark in the Law

The Statute of Frauds 297

School-Link Technologies, Inc. v. Applied Resources, Inc. (2007) 300

Agreement 236
Lucy v. Zehmer (1954) 237
Basis Technology Corp. v. Amazon.com, Inc. (2008) 240

Beyond Our Borders
Contracts 302

The Statute of Frauds and International Sales

The Statute of Frauds—Sufficiency of the Writing 302


viii

CO N T E N TS

The Parol Evidence Rule 303

Unit Three


Reviewing . . . Defenses to Contract Enforceability 306
Linking the Law to Business Communication When E-Mails Become
Enforceable Contracts 306

Commercial Transactions 359

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 13

Third Party Rights and Discharge 311

Chapter 15

The Formation of
Sales and Lease Contracts 360

Assignments 311
Preventing Legal Disputes 315

Delegations 315
Third Party Beneficiaries 317
Landmark in the Law

Lawrence v. Fox (1859) 319

Revels v. Miss America Organization (2007) 320


Contract Discharge 321
Wisconsin Electric Power Co. v. Union Pacific Railroad Co. (2009) 324

The Scope of the UCC and Articles 2 (Sales)
and 2A (Leases) 361
Landmark in the Law The Uniform Commercial Code 361
Adapting the Law to the Online Environment The Thorny Issue of
Taxing Internet Sales 363
Jannusch v. Naffziger (2008) 364

The Formation of Sales and Lease Contracts 366

Facto v. Pantagis (2007) 330

Preventing Legal Disputes 369

Beyond Our Borders Impossibility or Impracticability of Performance
in Germany 331
Reviewing . . . Third Party Rights and Discharge 331
Business Application Dealing with Third Party Rights 332

Glacial Plains Cooperative v. Lindgren (2009) 374
Jones v. Star Credit Corp. (1969) 376

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 14


Breach and Remedies 337

Damages 338
Preventing Legal Disputes 340
Landmark in the Law Hadley v. Baxendale (1854) 341

Title and Risk of Loss 377
Contracts for the International Sale of Goods 382
Reviewing . . . The Formation of Sales and Lease Contracts 384
Business Application Who Bears the Risk of Loss—the Seller or the
Buyer? 384
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 16

Performance and Breach
of Sales and Lease Contracts 390

Hanson v. Boeder (2007) 342

Equitable Remedies 344
Stainbrook v. Low (2006) 346
Drake v. Hance (2009) 347

Recovery Based on Quasi Contract 348
Contract Provisions Limiting Remedies 349
Reviewing . . . Breach and Remedies 350
Business Application What Do You Do When You Cannot Perform? 350

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises
Unit Two
Unit Two

Cumulative Business Hypothetical 356
Extended Case Study: Braddock v. Braddock 356

Performance Obligations 390
Obligations of the Seller or Lessor 391
Maple Farms, Inc. v. City School District of Elmira (1974) 394
Preventing Legal Disputes 397

Obligations of the Buyer or Lessee 397
Anticipatory Repudiation 398
Remedies of the Seller or Lessor 399
Remedies of the Buyer or Lessee 402
Houseman v. Dare (2009) 403
Fitl v. Strek (2005) 406
Beyond Our Borders
Acceptance 407

The CISG’s Approach to Revocation of

Limitation of Remedies 407
Reviewing . . . Performance and Breach of Sales and Lease Contracts 408


ix


CO N T E N TS

Business Application
Breached? 408

What Can You Do When a Contract Is

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 19

Checks and Banking
in the Digital Age 471

Checks 471
MidAmerica Bank, FSB v. Charter One Bank (2009) 473

Chapter 17

Warranties and Product Liability 414

Warranties 414
Preventing Legal Disputes 416
Shoop v. DaimlerChrysler Corp. (2007) 417
Webster v. Blue Ship Tea Room, Inc. (1964) 418

Lemon Laws 422

Product Liability 423
Strict Product Liability 423
Landmark in the Law MacPherson v. Buick Motor Co. (1916) 424
Wyeth v. Levine (2009) 427
Adapting the Law to the Online Environment Should Video Games Be
Required to Have Warning Labels? 429

Defenses to Product Liability 430

The Bank-Customer Relationship 474
Bank’s Duty to Honor Checks 475
Auto-Owners Insurance Co. v. Bank One (2008) 478
Preventing Legal Disputes 480

Bank’s Duty to Accept Deposits 481
Landmark in the Law
(Check 21) 484

Bank One, N.A. v. Dunn (2006) 486

Electronic Fund Transfers 487
E-Money and Online Banking 489
Reviewing . . . Checks and Banking in the Digital Age 490
Linking the Law to Economics Banking in a Period of Crisis 491
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Reviewing . . . Warranties and Product Liability 432
Linking the Law to Management Quality Control 432

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 18

Negotiable Instruments:
Transferability and Liability 438

Check Clearing in the 21st Century Act

Chapter 20

Security Interests
in Personal Property 496

The Terminology of Secured Transactions 497
Creating a Security Interest 497
Perfecting a Security Interest 498
Preventing Legal Disputes 501

Types of Instruments 439
Requirements for Negotiability 442
Preventing Legal Disputes 443
Foundation Property Investments, LLC v. CTP, LLC (2007) 446

Transfer of Instruments 448
Holder in Due Course (HDC) 452
Georg v. Metro Fixtures Contractors, Inc. (2008) 453
South Central Bank of Daviess County v. Lynnville National

Bank (2009) 454

Signature and Warranty Liability 456
Defenses, Limitations, and Discharge 461
Landmark in the Law Federal Trade Commission Rule 433 463
Reviewing . . . Negotiable Instruments: Transferability and Liability 464
Business Application Pitfalls When Writing and Indorsing Checks 464
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Corona Fruits & Veggies, Inc. v. Frozsun Foods, Inc. (2006) 502

The Scope of a Security Interest 504
Priorities 506
Rights and Duties of Debtors and Creditors 508
Default 510
First National Bank of Litchfield v. Miller (2008) 511
Hicklin v. Onyx Acceptance Corp. (2009) 513
Reviewing . . . Security Interests in Personal Property 515
Business Application How Do You Perfect a Security Interest? 515
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 21

Creditors’ Rights and Bankruptcy 520

Laws Assisting Creditors 521

Capital Color Printing, Inc. v. Ahern (2008) 526


x

CO N T E N TS

Preventing Legal Disputes 528

Laws Assisting Debtors 528
Bankruptcy Proceedings 528
Landmark in the Law

Unit Four

Agency and
Employment Law 579

The Bankruptcy Reform Act of 2005 530

Chapter 7—Liquidation 530
In re Kuehn (2009) 534
In re Mosley (2007) 541

Chapter 11—Reorganization 542
Adapting the Law to the Online Environment The Debt That Never
Goes Away—It’s Discharged in Bankruptcy but Still on the Debtor’s
Credit Report 543

Bankruptcy Relief under Chapter 13 and Chapter 12 545

Reviewing . . . Creditors’ Rights and Bankruptcy 548
Linking the Law to Economics The Effects of Bankruptcy Law on
Consumers and Businesses 549
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 22

International Law
in a Global Economy 554

International Law—Sources and Principles 555
Doing Business Internationally 557
Regulation of Specific Business Activities 559
Fuji Photo Film Co. v. International Trade Commission (2007) 560
United States v. Inn Foods, Inc. (2009) 561

Commercial Contracts in an International Setting 563
Preventing Legal Disputes 563
Beyond Our Borders Arbitration versus Litigation 565

Payment Methods for International Transactions 565
U.S. Laws in a Global Context 566

Chapter 23

Agency Relationships in Business 580

Agency Relationships 581

Lopez v. El Palmar Taxi, Inc. (2009) 583

How Agency Relationships Are Formed 584
Duties of Agents and Principals 586
Preventing Legal Disputes 588

Agent’s Authority 589
Ermoian v. Desert Hospital (2007) 591

Liability in Agency Relationships 592
Warner v. Southwest Desert Images, LLC (2008) 595
Landmark in the Law

The Doctrine of Respondeat Superior 597

How Agency Relationships Are Terminated 598
Beyond Our Borders Islamic Law and Respondeat Superior 599
Reviewing . . . Agency Relationships in Business 600
Business Application How Can an Employer Use Independent
Contractors? 601
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 24

Employment,
Immigration, and Labor Law 606

Khulumani v. Barclay National Bank, Ltd. (2007) 568

Reviewing . . . International Law in a Global Economy 569
Linking the Law to Marketing Going Global 570
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises
Unit Three
Unit Three

Cumulative Business Hypothetical 575
Extended Case Study: Casserlie v. Shell Oil Co. 575

Employment at Will 606
Wage and Hour Laws 608
Adapting the Law to the Online Environment Can Parties Create and
Modify Employment Contracts via E-Mail? 609

Layoffs 611
Family and Medical Leave 612
Darst v. Interstate Brands Corp. (2008) 613

Worker Health and Safety 614
Income Security 616
Employee Privacy Rights 619
Preventing Legal Disputes 621

Immigration Law 623
Castellanos-Contreras v. Decatur Hotels, LLC (2009) 626

Labor Unions 627



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CO N T E N TS

Local Joint Executive Board of Las Vegas v. National Labor Relations
Board (2008) 630
Reviewing . . . Employment, Immigration, and Labor Law 631
Business Application How to Develop an Employee Internet Policy 632
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Franchise Rule in the Internet Age 673

The Franchise Contract 674
Beyond Our Borders

Franchising in Foreign Nations 675

Termination of the Franchise 676
LJL Transportation, Inc. v. Pilot Air Freight Corp. (2009) 676
Preventing Legal Disputes 677
Chic Miller’s Chevrolet, Inc. v. General Motors Corp. (2005) 678

Chapter 25

Employment Discrimination 638

Title VII of the Civil Rights Act of 1964 639

Preventing Legal Disputes 645
Beyond Our Borders Sexual Harassment in Other Nations 648

Discrimination Based on Age 648

Reviewing . . . Sole Proprietorships and Private Franchises 678
Business Application What Problems Can a Franchisee Anticipate? 679
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 27

All Forms of Partnership 683

Sprint/United Management Co. v. Mendelsohn (2008) 649

Discrimination Based on Disability 650
Rohr v. Salt River Project Agricultural Improvement and Power
District (2009) 652
Francin v. Mosby, Inc. (2008) 654

Defenses to Employment Discrimination 655
Affirmative Action 656
State Statutes 657
Reviewing . . . Employment Discrimination 658
Linking the Law to Management Human Resource Management
Comes to the Fore 658
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and

Writing Assignments • Practical Internet Exercises
Unit Four Cumulative Business Hypothetical 664
Unit Four Extended Case Study: Media General Operations, Inc. v.
National Labor Relations Board 664

Unit Five

Business Organizations 667

Basic Partnership Concepts 683
Partnership Formation 685
Beyond Our Borders

Doing Business with Foreign Partners 687

Partnership Operation, Dissociation, and
Termination 687
Warnick v. Warnick (2006) 693
Preventing Legal Disputes 695

Limited Liability Partnerships 695
Limited Partnerships 697
1515 North Wells, LP v. 1513 North Wells, LLC (2009) 699
In re Dissolution of Midnight Star Enterprises, LP (2006) 700
Reviewing . . . All Forms of Partnership 701
Business Application Why Are General Partnerships Declining in
Popularity? 701
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises


Chapter 28

Limited Liability Companies
and Special Business Forms 706

Landmark in the Law

Limited Liability Company (LLC) Statutes 707

Limited Liability Companies 707
Chapter 26

Sole Proprietorships
and Private Franchises 668

McFarland v. Virginia Retirement Services of Chesterfield, LLC (2007) 708
02 Development, LLC v. 607 South Park, LLC (2008) 709
Allen v. Dackman (2009) 710

LLC Operation and Management 711
Sole Proprietorships 669
Garden City Boxing Club, Inc. v. Dominguez (2006) 670

Franchises 670
Adapting the Law to the Online Environment Satisfying the FTC’s

Beyond Our Borders

Limited Liability Companies in Other Nations 712


Dissociation and Dissolution of an LLC 713
Preventing Legal Disputes 714

Special Business Forms 715


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CO N T E N TS

Reviewing . . . Limited Liability Companies and Special Business
Forms 717
Business Application How Do You Choose between LLCs and LLPs? 717
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 29

Corporate Formation,
Merger, and Termination 722

Corporate Nature and Classification 723
Adapting the Law to the Online Environment
Fuels the Internet Taxation Debate 725

Economic Recession

Willams v. Stanford (2008) 729


Chapter 31

Investor Protection, Insider
Trading, and Corporate Governance 778

Securities Act of 1933 779
Landmark in the Law The Securities and Exchange Commission 780
Preventing Legal Disputes 781

Securities Exchange Act of 1934 786
Adapting the Law to the Online Environment Corporate Blogs and
Tweets Must Comply with the Securities Exchange Act 787
SEC v. Texas Gulf Sulphur Co. (1968) 788
Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. (2008) 790
Stark Trading v. Falconbridge, Ltd. (2009) 794

Corporate Formation and Powers 730
Preventing Legal Disputes 732

Defects in Formation and Corporate Status 735
Brown v. W.P. Media, Inc. (2009) 736
In re Aqua Clear Technologies, Inc. (2007) 737

State Securities Laws 795
Corporate Governance 796
Beyond Our Borders

Corporate Governance in Other Nations 797


Online Securities Fraud 800

Corporate Financing 738
Mergers and Acquisitions 740
Termination 744
Reviewing . . . Corporate Formation, Merger, and Termination 746
Linking the Law to Finance Sources of Funds 746
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 30

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Corporate Directors,
Officers, and Shareholders 753

Reviewing . . . Investor Protection, Insider Trading, and Corporate
Governance 802
Linking the Law to Taxation The Tax Consequences of Deleveraging
during an Economic Crisis 802
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises
Unit Five
Unit Five


Cumulative Business Hypothetical 808
Extended Case Study: Notz v. Everett Smith Group, Ltd. 808

Unit Six

Government Regulation 811

Roles of Directors and Officers 753
Preventing Legal Disputes 756

Duties and Liabilities of Directors and Officers 757
Guth v. Loft, Inc. (1939) 760

Role of Shareholders 761
Adapting the Law to the Online Environment
Information to the Internet 763

Moving Company

Portnoy v. Cryo-Cell International, Inc. (2008) 765

Rights of Shareholders 766
Beyond Our Borders Derivative Actions in Other Nations 769

Duties and Liabilities of Shareholders 769
Mazloom v. Mazloom (2009) 770

Major Business Forms Compared 771
Reviewing . . . Corporate Directors, Officers, and Shareholders 773
Business Application Creating an E-Document-Retention Policy 773


Chapter 32

Promoting Competition 812

The Sherman Antitrust Act 813
Landmark in the Law

The Sherman Antitrust Act of 1890 814

Section 1 of the Sherman Act 815
Leegin Creative Leather Products, Inc. v. PSKS, Inc. (2007) 818

Section 2 of the Sherman Act 818
Preventing Legal Disputes 820
Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co. (2007) 821

The Clayton Act 822


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CO N T E N TS

Chicago Bridge & Iron Co. v. Federal Trade Commission (2008) 825

Enforcement and Exemptions 826
U.S. Antitrust Laws in the Global Context 827
Beyond Our Borders The European Union’s Expanding Role in Antitrust
Litigation 829

Reviewing . . . Promoting Competition 829
Business Application How Can You Avoid Antitrust Problems? 830

Unit Six Cumulative Business Hypothetical 880
Unit Six Extended Case Study: McCoy v. Chase Manhattan Bank,
USA 880

Unit Seven

Property and Its Protection 883

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 33

Consumer and Environmental Law 835
Chapter 35

Consumer Law 835
Federal Trade Commission v. QT, Inc. (2008) 837
Preventing Legal Disputes 839
Beyond Our Borders Protecting U.S. Consumers from Cross-Border
Telemarketers 840

Environmental Law 846
Entergy Corp. v. Riverkeeper, Inc. (2009) 850
Reviewing . . . Consumer Law 854
Business Application How Can You Keep Abreast of

Environmental Laws? 855
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 34

Liability of Accountants
and Other Professionals 860

Potential Common Law Liability to Clients 861
Landmark in the Law

The SEC Adopts Global Accounting Rules 863

Walsh v. State (2009) 864

Potential Liability to Third Parties 865
The Sarbanes-Oxley Act of 2002 867
Potential Statutory Liability of Accountants under
Securities Laws 869
Preventing Legal Disputes 870
Overton v. Todman & Co., CPAs, P.C. (2007) 872

Potential Criminal Liability 873
Confidentiality and Privilege 874
Reviewing . . . Liability of Accountants and Other Professionals 874
Linking the Law to Business Statistics Statistical Sampling When
Conducting Audits 875
Key Terms • Chapter Summary • ExamPrep • For Review •

Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Personal Property and Bailments 884

Property Ownership 885
Acquiring Ownership of Personal Property 886
In re Estate of Piper (1984) 888

Mislaid, Lost, and Abandoned Property 890
Bailments 892
LaPlace v. Briere (2009) 896
Treiber & Straub, Inc. v. United Parcel Service, Inc. (2007) 898
Reviewing . . . Personal Property and Bailments 899
Business Application What Should You Do with Lost Property? 900
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises

Chapter 36

Real Property and
Landlord-Tenant Law 905

The Nature of Real Property 905
Ownership Interests in Real Property 907
Biglane v. Under The Hill Corp. (2007) 908
Roman Catholic Church of Our Lady of Sorrows v. Prince Realty
Management, LLC (2008) 910


Transfer of Ownership 911
Drake v. Walton County (2009) 914

Leasehold Estates 915
Landlord-Tenant Relationships 916
Reviewing . . . Real Property and Landlord-Tenant Law 918
Linking the Law to Economics Eminent Domain 919
Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises


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CO N T E N TS

Chapter 37

Insurance, Wills, and Trusts 924

Insurance 924
Woo v. Fireman’s Fund Insurance Co. (2007) 931

Wills 932
Preventing Legal Disputes 938

Trusts 940
Garrigus v. Viarengo (2009) 942
Reviewing . . . Insurance, Wills, and Trusts 944
Business Application How Can You Manage Risk in Cyberspace? 944

Key Terms • Chapter Summary • ExamPrep • For Review •
Hypothetical Scenarios and Case Problems • Critical Thinking and
Writing Assignments • Practical Internet Exercises
Unit Seven
Unit Seven

Cumulative Business Hypothetical 950
Extended Case Study: Kovarik v. Kovarik 950

Appendices
Appendix A How to Brief Cases
and Analyze Case Problems A–1
Appendix B The Constitution of the United States A–3
Appendix C The Uniform Commercial Code
(Excerpts) A–10
Appendix D The Sarbanes-Oxley Act of 2002 (Excerpts
and Explanatory Comments) A–120
Appendix E Sample Answers for End-of-Chapter
Hypothetical Questions with Sample
Answer A–126
Appendix F Case Excerpts for
Case Analysis Questions A–132
Glossary G–1
Table of Cases TC–1
Index I–1


Preface to the Instructor
Business law and the legal environment should be an exciting, contemporary, and interesting course. Business Law Today, Ninth Edition, imparts this excitement to your students.
We have spent a great deal of effort in giving this book a visual appeal that will encourage

students to learn the law. By incorporating the latest research results, Business Law Today
continues its established tradition of being the most up-to-date text on the market. The law
presented in the Ninth Edition of Business Law Today includes new statutes, regulations,
and cases, as well as the most recent developments in cyberlaw.
You will find that coverage of traditional business law has not been sacrificed in the process of creating this text. Additionally, Business Law Today explicitly addresses the American
Assembly of Collegiate Schools of Business’s (AACSB’s) broad array of curriculum requirements. For example, many of the features and special pedagogical devices in this text focus
on the global, political, ethical, social, environmental, technological, and cultural contexts
of business law. In addition, critical-thinking skills are reinforced throughout.

A New Chapter on Cyber Crime
Cyber crime has become an increasingly critical problem for businesses today. We believe
that this problem has become important enough to warrant a separate chapter, which is
new to this edition. In it, we examine such cyber crimes as hacking, identity theft, phishing, spamming, and online credit-card fraud. We also discuss the difficulties in prosecuting
cyber criminals, many of whom reside in other countries.

Practical and Effective Learning Tools
Instructors have come to rely on the coverage, accuracy, and applicability of Business Law
Today. For this edition, we have included a number of features to make the text more applicable to today’s business environment and to promote critical-thinking skills. We have also
significantly streamlined and reorganized the materials, and have focused on making the
text more cohesive and understandable.
We have added a new Linking the Law feature (discussed next) to encourage interdisciplinary learning and have added many new highlighted and numbered Case Examples to
help students understand how courts decide real-world disputes. As in the last edition, we
continue to provide a variety of assessment tools, including the new ExamPrep section, plus
sample questions and Reviewing features. The subsections that follow outline the new and
retained special features of this text.

New Feature Links the Law to Other Business School Disciplines
For the Ninth Edition of Business Law Today, we have added a special new feature entitled
Linking the Law to [Accounting, Economics, Finance, Management, Marketing, Taxation]. These special features appear in selected chapters to underscore how the law relates
to various other disciplines in the typical business school curriculum. They not only enable

instructors to meet AACSB teaching requirements but also provide vital and practical information to students on how the subjects they study are interconnected. In addition, each
of these features concludes with a For Critical Analysis question designed to encourage
students to engage in critical thinking and to consider the implications of the topic under
discussion. Some of the new Linking the Law features include:
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• Linking the Law to Managerial Accounting: Managing a Company’s Reputation
(Chapter 8).
• Linking the Law to Economics: Banking in the Period of Crisis (Chapter 19).
• Linking the Law to Marketing: Going Global (Chapter 22).
• Linking the Law to Taxation: The Consequences of Your Business Organization Choice
(Chapter 26).

New Highlighted and Numbered Case Examples
One of the most appreciated features of Business Law Today has always been the highlighted
numbered examples that appear throughout the book to illustrate the legal principles
under discussion. For this edition, rather than presenting more summarized cases in each
chapter, we have expanded the in-text numbered examples to include Case Examples.
These Case Examples are integrated appropriately throughout the text and present the facts,
issues, and rulings from actual court cases. Students can quickly read through the example
to see how courts apply the legal principles under discussion.

Business Applications

Every chapter in the Ninth Edition concludes with either a Linking the Law feature (previously discussed) or a Business Application feature. The Business Applications focus on practical considerations related to the chapter’s contents and conclude with a checklist of tips
for the businessperson. For example, some of the topics include:
• Determining How Much Force You Can Use to Prevent Crimes on Business Premises
(Chapter 6).
• How to Develop an Employee Internet Policy (Chapter 24).
• How Do You Choose between LLCs and LLPs? (Chapter 28).

Preventing Legal Disputes
For the Ninth Edition of Business Law Today, we continue our emphasis on providing practical
information in every chapter through a special feature entitled Preventing Legal Disputes.
These brief, integrated sections offer sensible guidance on steps that businesspersons can take
in their daily transactions to avoid legal disputes and litigation in a particular area.

Adapting the Law to the Online Environment
The Ninth Edition contains many new Adapting the Law to the Online Environment features, which examine cutting-edge cyberlaw issues coming before today’s courts. Here are
some examples of these features:
• The Supreme Court Upholds a Law That Prohibits Pandering Virtual Child Pornography (Chapter 2).
• Should CDA Immunity Extend to Negligence Claims against MySpace? (Chapter 4).
• Should the Law Continue to Allow Business Process Patents? (Chapter 7).
• The Debt That Never Goes Away—It’s Discharged in Bankruptcy but Still on the Debtor’s
Credit Report (Chapter 21).
• Corporate Blogs and Tweets Must Comply with the Securities and Exchange Act
(Chapter 31).
Each feature concludes with a For Critical Analysis section that asks the student to think
critically about some facet of the issues discussed in the feature. Suggested answers to
these questions are included in both the Instructor’s Manual and the Answers Manual
that accompany this text.


P R E FAC E TO T H E I N ST R U C TO R


xvii

Critical-Thinking and Legal Reasoning Elements
Because today’s business leaders are often required to think “outside the box” when making business decisions, we offer many critical-thinking elements that challenge students’
understanding of the materials beyond simple retention. Your students’ critical-thinking
and legal reasoning skills will be increased as they work through the numerous pedagogical
devices throughout the text. Nearly every feature and every case presented in the text conclude with some type of critical-thinking question. These questions include For Critical
Analysis, What If the Facts Were Different? and Why Is This Case Important?
In addition, in the chapter-ending materials, we include a separate section of questions
that focus on critical thinking and writing.
• Nearly every chapter includes a Critical Legal Thinking question that requires students
to think critically about some aspect of the law discussed in the chapter.
• Selected chapters include a Critical Thinking and Writing Assignment for Business
question that focuses on critical thinking and writing in a business-oriented context.
• For selected chapters, Case Analysis Questions are included to improve the students’
ability to analyze cases and perform legal reasoning. Students are asked to read through
a case excerpt that is provided in Appendix F, brief the case, and then answer a series of
questions relating to the case.
Additionally, for the Ninth Edition, we have completely revised and updated the Handbook
on Critical Thinking in Business Law and the Legal Environment. This important revised
resource will enhance your students’ ability to think critically about issues in business law
and the legal environment. It is available on request as a bundle with the main text. Ask your
South-Western/Cengage Learning sales representative about this impressive package.

Reviewing Features and ExamPrep Sections
At the end of each chapter in this text, we include a Reviewing feature that helps solidify
students’ understanding of the chapter materials. Each of these features presents a hypothetical scenario and then asks a series of questions that require students to identify the
issues and apply the legal concepts discussed in the chapter. They are intended to help
students review the chapter materials in a simple and interesting way. An instructor can use

these features as the basis for a lively in-class discussion or encourage students to use them
for self-study and assessment before completing homework assignments.
Also in every chapter, following the Chapter Summary, appears a new ExamPrep section that includes two Issue Spotters related to the chapter’s topics. These Issue Spotters
facilitate student learning and review of the chapter materials. In addition, the section
refers students to the text’s Web site for the answers to the Issue Spotters and for additional
study tools, such as Flashcards and Interactive Quizzes correlated to the chapter.

Beyond Our Borders
These features give students an awareness of the global legal environment by indicating how
international laws or the laws of other nations deal with specific legal concepts or topics
being discussed in the chapter. Each of these features concludes with a For Critical Analysis
question. Suggested answers to these questions are included in both the Instructor’s
Manual and the Answers Manual that accompany this text.

Landmark in the Law
This feature discusses a landmark case, statute, or other legal development that has had
a significant effect on business law. Each of these features has a section titled Application
to Today’s World, which indicates how the law discussed in the feature affects the legal


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landscape of today’s world. In addition, a Relevant Web Sites section directs students to
the book’s Companion Web site for links to additional information available online.

Two Questions with Sample Answers in Each Chapter
For those instructors who would like students to have sample answers available for some
of the chapter-ending questions, we have included two such questions in every chapter.

Each chapter includes a Hypothetical Question with Sample Answer that is answered in
Appendix E of the text and a Case Problem with Sample Answer that is based on an
actual case and answered on the text’s Web site. Students can compare their own answers
to the answers provided to determine whether they have applied the law correctly and to
learn what needs to be included when answering the end-of-chapter questions and case
problems. The sample answers to both types of questions are posted on the text’s Web site
(located at www.cengage.com/blaw/blt) for your convenience.

Ethical Issues
In addition to a chapter on ethics, chapter-ending ethical questions, and the Ethical
Considerations in many of the For Critical Analysis questions in cases presented in this
text, we have included special features called Ethical Issues. These features, which are
closely integrated with the text, open with a question addressing an ethical dimension of
the topic being discussed. They are intended to make sure students understand that ethics
is an integral part of a business law course.

Business Law Today on the Web
For this edition of Business Law Today, we have redesigned and streamlined the text’s Web
site so that users can easily locate the resources they seek. When you visit our Web site
at www.cengage.com/blaw/blt, you will find a broad array of teaching/learning resources,
including the following:
• Relevant Web sites for all of the Landmark in the Law features and the Classic Cases that
are presented in this text.
• Sample Answers to the Case Problems with Sample Answers and the Hypothetical Questions
with Sample Answers that appear at the end of every chapter.
• Answers to the Issue Spotters referenced in the ExamPrep section of every chapter.
• Answers to the even-numbered For Review questions that appear at the end of every
chapter.
• Videos referenced in the Video Questions that appear at the ends of selected chapters of
Business Law Today, Ninth Edition (available only with a passcode).

• Practical Internet Exercises for every chapter in the text (at least two per chapter) that
provide students with practical information on topics covered in the text and acquaint
students with the legal resources that are available online.
• Interactive quizzes for every chapter in this text that include a number of questions
related to each chapter’s contents.
• Key terms for every chapter in the text.
• Flashcards that provide students with an optional study tool to review the key terms in
every chapter.
• Appendix A: How to Brief Cases and Analyze Case Problems This useful appendix for
the book is also posted on the Web site.
• PowerPoint slides revised for this edition.
• Legal reference materials that offer links to selected statutes referenced in the text, a
Spanish glossary, and other important legal resources.


P R E FAC E TO T H E I N ST R U C TO R

xix

• Online Legal Research Guide: 2010–2011 Edition that includes hyperlinks to various
Web sites and tips for evaluating the information provided.
• Court case updates that present summaries of new cases from around the country that
specifically relate to the topics covered in the chapters of this text.

Business Law Digital Video Library
Business Law Today includes Video Questions at the end of selected chapters that can be used
as homework assignments, discussion starters, or classroom demonstrations. Each of these
questions directs students to the text’s Web site (at www.cengage.com/blaw/blt) to view a
video relevant to a topic covered in the chapter. This instruction is followed by a series of
questions based on the video. The questions are repeated on the Web site, when the student accesses the video. Suggested answers for all of the Video Questions are given in

both the Instructor’s Manual and the Answers Manual that accompany this text.
The videos are part of Business Law Digital Video Library, a compendium of more than
sixty-five video scenarios and explanations. An access code for the videos can be packaged
with each new copy of this textbook for no additional charge. If Business Law Digital Video
Library access did not come packaged with the textbook, it can be purchased online at
www.cengage.com/blaw/dvl.

Case Presentation and Special Pedagogy
In addition to the components of the Business Law Today teaching/learning package
described above, the Ninth Edition offers an effective case presentation and a number of
special pedagogical devices, including those described here.

Case Presentation and Format
For this edition, we have carefully selected recent cases for each chapter that not only provide on-point illustrations of the legal principles discussed in the chapter but also are of
high interest to students. The cases are numbered sequentially for easy referencing in class
discussions, homework assignments, and examinations. The vast majority of cases in this
text are new to the Ninth Edition.
Each case is presented in a special format, which begins with the case title and citation
(including parallel citations). Whenever possible, we also include a URL, just below the
case citation, that can be used to access the case online (a footnote to the URL explains how
to find the specific case at that Web site). We then briefly outline the facts of the dispute,
the legal issue presented, and the court’s decision. To enhance student understanding, we
paraphrase the reason for the court’s decision.
Each case concludes with one of the following:
• For Critical Analysis These questions require students to think about the court’s holding from a variety of different perspectives. For instance, a student might be asked to
consider the economic or social ramifications of a particular ruling. Suggested answers
to these questions are included in both the Instructor’s Manual and the Answers
Manual that accompany this text.
• What If the Facts Were Different? These questions ask the student to decide whether
a specified change in the facts of the case would alter the outcome of the case and how.

Suggested answers to these questions are included in both the Instructor’s Manual
and the Answers Manual that accompany this text.
• Why Is This Case Important? These questions, which are answered in the text, clearly set
forth the importance of the court’s decision in the specific case in the legal environment.


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Some of these questions focus specifically on why businesspersons today should heed
the court’s ruling in a particular case.
• Impact of This Case on Today’s Law For Classic Cases, we include these sections to
clarify the relevance of the case to modern law. We also have a section titled Relevant
Web Sites at the conclusion of each Classic Case that directs students to the Web site for
additional online resources.

Other Pedagogical Devices within Each Chapter
• Learning Objectives (a series of brief questions at the beginning of each chapter provide
a framework for the student as he or she reads through the chapter).
• Chapter Outline (an outline of the chapter’s first-level headings).
• Margin definitions.
• Margin On the Web features directing students to relevant Web sites where they will
find online articles, statutes, or other legal or information sources concerning a topic
being discussed in the text.
• Highlighted and numbered examples illustrating legal principles.
• Highlighted and numbered Case Examples that are new to this edition and provide
illustrations of legal principles in actual court cases.
• URLs for cases—Whenever possible, we have included URLs, just below the case citation, that can be used to access the cases presented in the text.
• Quotations—Many of the quotations are new to this edition.

• Exhibits and forms.
• Concept Summaries—Whenever key areas of law need additional emphasis, we provide
a concept summary to add clarity.
• Photographs (with critical-thinking questions) and cartoons.

Chapter-Ending Pedagogy
•
•
•
•

•
•
•

•

Key Terms (with appropriate page references).
Chapter Summary (in graphic format with page references).
ExamPrep (including two new Issue Spotters for each chapter).
For Review (the questions set forth in the chapter-opening Learning Objectives section
are presented again to aid the student in reviewing the chapter. Answers to the evennumbered questions for each chapter are provided on the text’s Web site).
Hypothetical Questions and Case Problems (which include a Hypothetical Question with Sample Answer, a Case Problem with Sample Answer, and A Question of Ethics in every chapter).
Critical Thinking and Writing Assignments for Business (including Critical Legal
Thinking and Video Questions in selected chapters).
Case Problem with Sample Answer (as discussed earlier, each chapter contains one of
these case problems, for which the answer has been provided on the text’s Web site at
www.cengage.com/blaw/blt).
Practical Internet Exercises for each chapter.


Unit-Ending Pedagogy— Cumulative Business Hypotheticals
Each unit in Business Law Today, Ninth Edition, concludes with a section titled Cumulative
Business Hypothetical. The section introduces a hypothetical business firm and then
asks a series of questions about how the law applies to various actions taken by the firm.
To answer the questions, the student must apply the laws discussed throughout the unit.
Suggested answers to the unit-ending cumulative questions are included in both
the Instructor’s Manual and the Answers Manual that accompany this text.


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Unit-Ending Pedagogy— Extended Case Studies
At the end of each unit is a two-page feature entitled Extended Case Study. This feature
focuses on a recent court case relating to a topic covered in the unit. Each feature opens
with an introductory section, which discusses the background and significance of the case
being presented. Then we present excerpts from the court’s majority opinion and from
a dissenting opinion in the case. The feature concludes with Questions for Analysis—a
series of questions that prompt the student to think critically about the legal, ethical, economic, global, or general business implications of the case. Suggested answers to these
questions are included in both the Instructor’s Manual and the Answers Manual that
accompany this text.

Supplemental Teaching Materials
This edition of Business Law Today is accompanied by an expansive number of teaching and
learning supplements. Individually and in conjunction with a number of our colleagues,
we have developed supplementary teaching materials that we believe are the best available
today. Each component of the supplements package is listed below.

Printed Supplements

• Instructor’s Manual (includes at least one additional case on point per chapter, answers
to all For Critical Analysis questions, Reviewing features, Video Questions, Cumulative
Business Hypotheticals, and Extended Case Studies. The Instructor’s Manual is also available
on the Instructor’s Resource CD-ROM, or IRCD, described below).
• Study Guide.
• A comprehensive Test Bank (also available on the IRCD).
• Answers Manual (includes answers to the Hypothetical Questions and Case Problems,
For Critical Analysis questions, and Video Questions in the text. Also available on
the IRCD.)
• Handbook on Critical Thinking in Business Law and the Legal Environment (an important resource that has been completely revised and updated for this edition).

Software, Video, and Multimedia Supplements
• Instructor’s Resource CD-ROM (IRCD)—The IRCD includes the following supplements: Instructor’s Manual, Answers Manual, Test Bank, Case-Problem Cases, Case
Printouts, ExamView, PowerPoint slides, Lecture Outline System, transparency masters,
Instructor’s Manual for the Drama of the Law video series, Handbook of Landmark Cases
and Statutes in Business Law and the Legal Environment, Handbook on Critical Thinking in
Business Law and the Legal Environment, and A Guide to Personal Law.
• Business Law Digital Video Library—Provides access to more than sixty-five videos
that spark class discussion and clarify core legal concepts. Access is available as an
optional package with each new text at no additional cost. If Business Law Digital Video
Library access did not come packaged with the textbook, it can be purchased online at
www.cengage.com/blaw/dvl.
• CengageNOW for Business Law Today (at an additional cost)—Arguably the most comprehensive online learning and assessment tool for business law and the legal environment on the market today. For more information, contact your South-Western/Cengage
Learning Sales Representative. For a demo of this complete online learning system, go
to www.cengage.com/tlc.


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• Global Economic Watch—An online portal that addresses issues raised by the most
recent global economic crisis and includes a global issues database, an overview and
timeline of events, and links to the latest news. For more information on how you can
access this new resource, please visit www.cengage.com/thewatch.

For Users of the Eighth Edition
We thought that those of you who have been using Business Law Today would like to know
some of the major changes that have been made for the Ninth Edition. In addition to the
changes noted below, you will find that most of the cases in this text are new to this edition.
Nearly every chapter has two new cases, and some chapters have three new cases. Each
chapter also has one, two, or even three new case problems.

New Features and Special Pedagogy
We have added the following entirely new elements for the Ninth Edition:
• Linking the Law features that relate legal principles to other business disciplines.
• Case Examples that are highlighted and numbered consecutively with the other in-text
examples to illustrate legal principles, but are based on the facts and decisions of actual
courts.
• ExamPrep sections in every chapter that include two Issue Spotters as well as references
to the Interactive Quizzes and Flashcards available on the text’s Web site.

Significantly Revised Chapters
Every chapter of the Ninth Edition has been revised as necessary to incorporate new developments in the law or to streamline the presentations. We have reorganized the chapters
for the Ninth Edition to facilitate testing. Other major changes and additions made for this
edition include the following:
• Chapter 5 (Intellectual Property and Internet Law)—The materials on intellectual property rights in the online environment have been thoroughly revised and updated. A new
subsection addresses the problem of counterfeit goods, and the discussion of domain
names and cybersquatting has been updated. Several recent Supreme Court cases are
discussed in the text and in the feature dealing with business process patents.

• Chapter 7 (Cyber Crime)—This chapter is entirely new to this edition and deals with
the growing problem of cyber crime, including many types of Internet fraud, identity
theft, phishing, cyberstalking, credit-card crime, hackers, piracy, spam, and online gambling. The chapter also covers some of the difficulties involved in prosecuting cyber
crime.
• Chapter 8 (Ethics and Business Decision Making)—This chapter has been substantially
revised and refocused to be more pragmatic. The chapter now includes a step-by-step
approach to making ethical business decisions, as well as several new features discussing how companies and management can deal with attacks on a company’s reputation.
• Chapters 9 through 14 (the Contracts unit)—We have merged our discussion of online
contracting and electronic signatures with our coverage of traditional contracts. We have
added more examples, case examples, updates throughout, and streamlined coverage.
• Chapters 15 through 22 (Commercial Transactions)—We have streamlined and reorganized our materials so that we have an entire unit that deals with commercial transactions and aspects of the Uniform Commercial Code. This new unit includes several
chapters on sales and lease law, as well as chapters on negotiable instruments, banking
and security interests, creditors’ rights and bankruptcy, and international law in the