04766i by CRBD-Biblioteca Digital

CONTENTS: OVERVIEW Preface

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THE LEGAL ENVIRONMENT 1 2 3 4

Introduction to Law Business Ethics and Social Responsibility Dispute Resolution Common Law, Statutory Law, and Administrative Law Constitutional Law Intentional Torts and Business Torts Negligence and Strict Liability Crime International Law

5 6 7 8 9

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Introduction to Contracts Agreement Consideration Legality Capacity and Consent Written Contracts Third Parties Performance and Discharge Remedies

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1 2 25 42 73 100 127 152 173 205

CONTRACTS 10 11 12 13 14 15 16 17 18

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233 234 255 279 299 318 342 363 382 403

22 23 24 25

Performance and Remedies Creating a Negotiable Instrument Liability for Negotiable Instruments Liability for Negotiable Instruments: Banks and Their Customers 26 Secured Transactions 27 Bankruptcy

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COMMERCIAL TRANSACTIONS

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19 Introduction to Sales 20 Ownership and Risk 21 Warranties and Product Liability

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581 606 642

AGENCY AND E M P L O Y M E N T L AW

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28 29 30 31

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Agency: The Inside Relationship Agency: The Outside Relationship Employment Law Labor Law

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B U S I N E S S O R G A N I Z AT I O N S

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32 Starting a Business: LLCs and Other Options 33 Partnerships 34 Life and Death of a Corporation 35 Corporate Management 36 Shareholders 37 Securities Regulation 38 Accountantsâ&#x20AC;&#x2122; Liability

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505 531 556

G O V E R N M E N T R E G U L AT I O N

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39 Antitrust 40 Consumer Law 41 Environmental Law

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Contents: Overview

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P R O P E RT Y A N D C Y B E R L AW

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Cyberlaw Intellectual Property Real Property Landlord-Tenant Personal Property and Bailment Planning for the Future: Estates and Insurance

Appendix A The Constitution of the United States

Appendix B Uniform Commercial Code

Glossary Table of Cases Index

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CONTENTS Preface

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THE LEGAL ENVIRONMENT Chapter 1 Introduction to Law Three Important Ideas about Law Power Importance Fascination Origins of Our Law English Roots The Oculist’s Case (1329) Law in the United States Sources of Contemporary Law Constitutions Statutes Common Law Administrative Law Other Sources of Law Classiﬁcations of Law Criminal and Civil Law Substantive and Procedural Law Public and Private Law Jurisprudence Law and Morality Legal Positivism Natural Law Legal Realism Working with the Book’s Features Analyzing a Case Kuehn v. Pub Zone Exam Strategy You Be the Judge You Be the Judge: James v. Meow Media Chapter Conclusion Exam Review

1 2 3 3 3 4 4 5 7 8 9 9 9 10 10 10 12 12 12 12 13 13 13 14 15 16 16 16 19 19 20 21 21

Additional Questions Internet Research Problem Chapter 2 Business Ethics and Social Responsibility Why Bother with Ethics? Society as a Whole Beneﬁts from Ethical Behavior Money Does Not Buy Happiness People Feel Better When They Behave Ethically Unethical Behavior Can Be Very Costly Ethical Behavior Is More Likely to Pay Off What Is Ethical Behavior? Analyzing the Ethics Checklist Applying the Ethics Checklist: Making Decisions Organization’s Responsibility to Society Exam Strategy Organization’s Responsibility to Its Customers Organization’s Responsibility to Its Employees Organization’s Responsibility to Its Shareholders Organization’s Responsibility Overseas Exam Strategy Employees’ Responsibility to Their Organization

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25 27 27 28 28 28 29 29 30 32 33 34 34 34 35 36 37 38

Chapter Conclusion Exam Review Additional Questions Internet Research Problem

38 39 40 41

Chapter 3 Dispute Resolution Three Fundamental Areas of Law Litigation versus Alternative Dispute Resolution Alternative Dispute Resolution

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Contents

Negotiation Mediation Arbitration Court Systems State Courts Federal Courts Exam Strategy Litigation Pleadings Stinton v. Robin’s Wood, Inc. Jones v. Clinton Exam Strategy Trial Adversary System Right to Jury Trial Voir Dire Pereda v. Parajon Opening Statements Burden of Proof Plaintiff’s Case Rules of Evidence Motion for Directed Verdict Defendant’s Case Closing Argument Jury Instructions Verdict Motions after the Verdict Appeals Hernandez v. Montville Township Board of Education Appeals Court Options Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 4 Common Law, Statutory Law and Administrative Law Common Law Bystander Cases Tarasoff v. Regents of the University of California Exam Strategy Statutory Law Bills Discrimination: Congress and the Courts Debate

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73 74 74 75 77 77 78 78 79

Statutory Interpretation Griggs v. Duke Power Co. Changing Times Voters’ Role Congressional Override The Other Player: Money Exam Strategy Administrative Law Background Classiﬁcation of Agencies The Administrative Procedure Act Doe v. Maryland Board of Social Workers Limits on Agency Power Statutory Control Political Control Judicial Review Fox Television Stations, Inc. v Federal Communications Commission Informational Control and the Public Exam Strategy

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93 94 95

Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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Chapter 5 Constitutional Law Government Power One in a Million Overview Separation of Powers Federalism Individual Rights Power Granted Congressional Power Exam Strategy Executive Power Judicial Power Kennedy v. Louisiana Protected Rights Incorporation First Amendment: Free Speech Texas v. Johnson You Be the Judge: Barnes v. Glen Theatre, Inc. Salib v. City of Mesa Exam Strategy

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Fifth Amendment: Due Process and the Takings Clause Kelo v. City of New London, Connecticut Fourteenth Amendment: Equal Protection Clause Exam Strategy Private Regulations Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 6 Intentional Torts and Business Torts Intentional Torts Defamation You Be the Judge: Yeagle v. Collegiate Times False Imprisonment Intentional Inﬂiction of Emotional Distress Jane Doe and Nancy Roe v. Lynn Mills Battery and Assault Exam Strategy Trespass, Conversion, and Fraud Exam Strategy Damages Compensatory Damages Punitive Damages Boeken v. Philip Morris, Incorporated Tort Reform and Exxon Valdez Exam Strategy Business Torts Tortious Interference with Business Relations Tortious Interference with a Contract Tortious Interference with a Prospective Advantage Carvel v. Noonan Privacy and Publicity Intrusion Commercial Exploitation Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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127 129 129 130 132 133 134 134 135 135 136 137 137 139 140 141 142 142 143 143 144 145 146 146 146 147 147 149 151

Chapter 7 Negligence and Strict Liability Negligence Duty of Due Care Hernandez v. Arizona Board of Regents Wiener v. Southcoast Childcare Centers, Inc. Exam Strategy Breach of Duty Factual Cause and Foreseeable Harm Exam Strategy Res Ipsa Loquitur You Be the Judge: Grifﬁth v. Valley of Sun Recovery, Inc. Injury Ra v. Superior Court Defenses Contributory and Comparative Negligence Assumption of the Risk Truong v Nguyen Strict Liability Ultrahazardous Activity New Jersey Department of Environmental Protection v. Alden Leeds, Inc. Exam Strategy Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 8 Crime Crime, Society, and Law Civil Law/Criminal Law Punishment The Prosecution’s Case Defenses Insanity You Be the Judge: Bieber v. People Crimes That Harm Business Larceny Fraud Exam Strategy Embezzlement Computer Crime United States v. Dragon Crimes Committed by Business

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Commonwealth v Angelo Todesca Corp. Punishing a Corporation Selected Crimes Committed by Business RICO United States v. Kennard Exam Strategy Constitutional Protections The Criminal Process The Fourth Amendment Exam Strategy The Fifth Amendment The Sixth Amendment The Eighth Amendment Ewing v. California Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 9 International Law MNEs and Power Trade Regulation Export Controls Import Controls Avenues In Leather, Inc. v. U.S. General Agreement on Tariffs and Trade (GATT) Exam Strategy United States—Import Prohibition of Certain Shrimp and Shrimp Products Regional Agreements International Sales Agreements Direct Sales Centrifugal Casting Machine Co., Inc. v. American Bank & Trust Co. Exam Strategy Indirect Sales through a Distributor You Be the Judge: Carnero v. Boston Scientiﬁc Corporation Licensing a Foreign Manufacturer Investing Abroad Repatriation of Proﬁts Expropriation Foreign Corrupt Practices Act United States v. King Exam Strategy Chapter Conclusion Exam Review

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Additional Questions Internet Research Problem

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CONTRACTS

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Chapter 10 Introduction to Contracts Contracts The Purpose of a Contract Judicial Activism versus Judicial Restraint Issues (and Answers) All Shapes and Sizes Contracts Deﬁned Development of Contract Law Davis v. Mason Types of Contracts Bilateral and Unilateral Contracts Express and Implied Contracts You Be the Judge: DeMasse v. ITT Corporation Executory and Executed Contracts Exam Strategy Valid, Unenforceable, Voidable, and Void Agreements Remedies Created by Judicial Activism Promissory Estoppel Norton v. Hoyt Quasi-Contract Novak v. Credit Bureau Collection Service Exam Strategy Sources of Contract Law Common Law Uniform Commercial Code Fallsview Glatt Kosher Caterers, Inc. v. Rosenfeld Exam Strategy Restatement (Second) of Contracts

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Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 11 Agreement Meeting of the Minds Offer Problems with Intent You Be the Judge: Cochran v. Norkunas

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Contents

Exam Strategy Problems with Deﬁniteness Baer v. Chase Exam Strategy UCC and Open Terms Termination of Offers Acceptance Mirror Image Rule UCC and the Battle of Forms Bayway Reﬁning Co. v. Tosco Corp. Exam Strategy Specht v. Netscape Communications Corporation Communication of Acceptance Soldau v. Organon, Inc. Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 12 Consideration A Bargain and an Exchange Kelsoe v. International Wood Products, Inc. Hamer v. Sidway Adequacy of Consideration Exam Strategy Mutuality of Obligations Illusory Promise You Be the Judge: Culbertson v. Brodsky Sales Law: Requirements and Output Contracts Exam Strategy Past Consideration Dementas v. Estate of Tallas Preexisting Duty You Be the Judge: Citizens Trust Bank v. White Exam Strategy Settlement of Debts Liquidated Debt Unliquidated Debt: Accord and Satisfaction Henches v. Taylor Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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Chapter 13 Legality Contracts That Violate a Statute Wagers Insurance You Be the Judge: Chem v. New York Life Insurance Company Exam Strategy Licensing Statutes Authentic Home Improvements v. Mayo Usury Contracts That Violate Public Policy Restraint of Trade King v. Head Start Family Hair Salons, Inc. Exam Strategy Exculpatory Clauses Ransburg v. Richards Exam Strategy Unconscionable Contracts Worldwide Insurance v. Klopp Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 14 Capacity and Consent Capacity Minors Star Chevrolet Co. v. Green Mentally Impaired Persons Reality of Consent Misrepresentation and Fraud Hoffman v. Stamper Sale of Goods Hess v. Chase Manhattan Bank, USA, N.A. Exam Strategy Mistake Donovan v. RRL Corporation Exam Strategy Duress Economic Duress You Be the Judge: In Re RLS Legal Solutions, L.L.C. Undue Inﬂuence Sepulveda v. Aviles Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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Chapter 15 Written Contracts Contracts That Must Be in Writing Agreements for an Interest in Land Baker v. Daves Exam Strategy Agreements That Cannot Be Performed within One Year You Be the Judge: Sawyer v. Mills Promise to Pay the Debt of Another Exception: The Leading Object Rule Promise Made by an Executor of an Estate Promise Made in Consideration of Marriage What the Writing Must Contain Signature Reasonable Certainty Exam Strategy Sale of Goods UCC §2-201(1)—The Basic Rule UCC §2-201(2)—The Merchants’ Exception Seton Co. v. Lear Corp. UCC §2-201(3)—Special Circumstances Specially Manufactured Goods Exam Strategy Parol Evidence Mayo v. North Carolina State University Exception: An Incomplete or Ambiguous Contract Misrepresentation or Duress Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 16 Third Parties Third Party Beneﬁciary Schauer v. Mandarin Gems of California, Inc. Exam Strategy Assignment and Delegation Exam Strategy Assignment Tenet Healthsystem Surgical, L.L.C. v. Jefferson Parish Hospital Service District No. 1 You Be the Judge: Wells Fargo Bank Minnesota v. BrooksAmerica Mortgage Corporation

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Delegation of Duties Exam Strategy Rosenberg v. Son, Inc.

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Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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Chapter 17 Performance and Discharge Discharge Defenses That Discharge Conditions How Conditions Are Created Types of Conditions Exam Strategy You Be the Judge: Anderson v. Country Life Ins. Co. Performance Strict Performance and Substantial Performance Strategic Resources Group v. Knight-Ridder, Inc. Exam Strategy Personal Satisfaction Contracts Good Faith Brunswick Hills Racquet Club Inc. v. Route 18 Shopping Center Associates Exam Strategy Time of the Essence Clauses Breach Material Breach O’Brien v. Ohio State University Anticipatory Breach Statute of Limitations Impossibility True Impossibility Commercial Impracticability and Frustration of Purpose Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 18 Remedies Breaching the Contract Identifying the “Interest” to Be Protected

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Contents

Expectation Interest Compensatory Damages Consequential Damages Hadley v. Baxendale You Be the Judge: Bi-Economy Market, Inc. v. Harleysville Ins. Co. of New York Incidental Damages Sale of Goods Exam Strategy Reliance Interest Reliance Damages and Promissory Estoppel Toscano v. Greene Music Law and Equity Restitution Interest Restitution in Cases of a Valid Contract Putnam Construction & Realty Co. v. Byrd Restitution in Cases of a Quasi-Contract Other Equitable Interests Speciﬁc Performance Exam Strategy Injunction Milicic v. Basketball Marketing Company, Inc. Reformation Special Issues of Damages Mitigation of Damages Nominal Damages Liquidated Damages Exam Strategy Punitive Damages Orkin Exterminating Company, Inc. v. Jeter Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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405 406 406 407 408 408 409 410 410 411 411 412 413 413 414 414 415 415 416 416 417 418 418 419 419 419 420 420 421 422 422 425 426

COMMERCIAL TRANSACTIONS

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Chapter 19 Introduction to Sales Development of Commercial Law The Code Today Harold and Maude, Revisited This Unit of the Text UCC Basics Code’s Purpose

428 429 430 431 431 432 432

Scope of Article 2 Mixed Contracts Merchants Good Faith and Unconscionability Contract Formation Formation Basics: Section 2-204 Jannusch v. Naffziger Statute of Frauds Rapoca Energy Company, L.P. v. Amci Export Corporation Exam Strategy Added Terms: Section 2-207 Superior Boiler Works, Inc. v. R. J. Sanders, Inc. Exam Strategy Open Terms: Sections 2-305 and 2-306 Mathis v. Exxon Corporation Exam Strategy Modification You Be the Judge: The Marley Cooling Tower Company v. Caldwell Energy & Environmental, Inc. Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 20 Ownership and Risk Legal Interest Identification, Title, and Insurable Interest Existence and Identification Exam Strategy Passing of Title Circuit City Stores, Inc. v. Commissioner of Revenue Insurable Interest Valley Forge Insurance Co. v. Great American Insurance Co. When the Seller Has Imperfect Title Bona Fide Purchaser People v. Simmons Exam Strategy Entrustment Exam Strategy Lindholm v Brant Creditor’s Rights Ordinary Sales Bulk Sales

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448 449 449 452 453 454 455 456 457 457 458 459 460 461 461 461 463 464 464 465 466 467 467 467

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Returnable Goods Risk of Loss Shipping Terms When the Parties Fail to Allocate the Risk When Neither Party Breaches Harmon v. Dunn Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 21 Warranties and Product Liability Product Liability Express Warranties Afﬁrmation of Fact or Promise Description of Goods Sample or Model Basis of Bargain Rite Aid Corp. v. Levy-Gray Exam Strategy Implied Warranties Implied Warranty of Merchantability Goodman v. Wenco Foods, Inc. Implied Warranty of Fitness for a Particular Purpose Two Last Warranties: Title and Infringement Disclaimers and Defenses Disclaimers Exam Strategy Remedy Limitations Privity Reed v. City of Chicago Buyer’s Misconduct Statute of Limitations and Notice of Breach Negligence You Be the Judge: Boumelhem v. Bic Corp. Strict Liability Uniroyal Goodrich Tire Company v. Martinez Tort Reform Exam Strategy Time Limits: Tort versus Contract Other Legislation Lemon Laws Consumer Protection Laws Magnuson-Moss Warranty Act

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478 479 479 479 480 480 480 481 482 482 483 484 484 485 486 486 487 488 489 490 491 492 492 493 494 496 498 499 499 500 500 500 500

Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 22 Performance and Remedies Good Faith Seller’s Obligations (and a Few Rights) Perfect Tender Rule Restrictions on the Perfect Tender Rule Zion Temple First Pentecostal Church of Cincinnati, Ohio, Inc. v. Brighter Day Bookstore & Gifts Exam Strategy You Be the Judge: Specialty Tires of America, Inc. v. The CIT Group/ Equipment Financing, Inc. Buyer’s Obligations (and a Few Rights) Inspection and Acceptance Lile v. Kiesel Remedies: Assurance and Repudiation Assurance Repudiation Seller’s Remedies Stop Delivery Identify Goods to the Contract Resale Exam Strategy Damages for Non-Acceptance Action for the Price Buyer’s Remedies Cover Hessler v. Crystal Lake Chrysler-Plymouth, Inc. Non-Delivery Acceptance of Non-Conforming Goods Incidental and Consequential Damages Smith v. Penbridge Associates, Inc. Speciﬁc Performance Liquidated Damages Exam Strategy Damage Limitations and Exclusions Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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509 510

512 513 514 514 516 516 516 517 517 517 517 518 518 519 520 520 521 521 522 522 522 523 523 524 525 525 525 528 530

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Chapter 23 Creating a Negotiable Instrument Commercial Paper Types of Negotiable Instruments Negotiability Requirements for Negotiability Exam Strategy Interpretation of Ambiguities You Be the Judge: Blasco v. Money Services Center Negotiation Exam Strategy Holder in Due Course Requirements for Being a Holder in Due Course Rosenbaum v. Bulow Hartford Accident & Indemnity Co. v. American Express, Co. Shelter Rule Defenses against a Holder in Due Course Exam Strategy Consumer Exception Scott v. Mayﬂower Home Improvement Corp. Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 24 Liability for Negotiable Instruments Introduction The Contract versus the Instrument Enforcing an Instrument Primary versus Secondary Liability The Payment Process You Be the Judge: Messing v. Bank of America Signature Liability Maker Drawer Drawee Harrington v. MacNab Indorser Accommodation Party In Re Couchot Agent Exam Strategy

531 532 533 535 536 538 538 539 540 541 541 542 543 545 546 546 549 549 550 551 551 553 555

556 557 557 558 558 558 559 560 560 560 561 561 562 563 564 564 565

Warranty Liability Basic Rules of Warranty Liability Transfer Warranties Comparison of Signature Liability and Transfer Warranties Presentment Warranties Wachovia Bank v. Foster Bancshares Exam Strategy Other Liability Rules Conversion Liability Impostor Rule Fictitious Payee Rule Employee Indorsement Rule Negligence You Be the Judge: Gulf States Section, PGA, Inc. v. Whitney National Bank of New Orleans Exam Strategy Crimes Discharge Discharge of the Obligor Discharge of an Indorser or Accommodation Party Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 25 Liability for Negotiable Instruments: Banks and Their Customers Introduction Who’s Who Checking Accounts The Bank’s Duty to Provide Information The Bank’s Duty to Pay Wrongful Dishonor Goldsmith Motors Corp. v. Chemical Bank Exam Strategy You Be the Judge: Matin v. Chase Manhattan Bank Seigel v. Merrill Lynch, Pierce, Fenner & Smith, Inc. Exam Strategy Expedited Funds Availability Act Electronic Banking

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Back to the Future Electronic Fund Transfer Act Broxton-King v. LaSalle Bank, N.A. Errors Consumer Liability for Unauthorized Transactions Exam Strategy Bank’s Liability System Malfunction Disclosure Kruser v. Bank of America Wire Transfers Privacy Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 26 Secured Transactions Revised Article 9: Terms and Scope Article 9 Revisions Scope of Revised Article 9 Attachment of a Security Interest Agreement Control and Possession In Re CFLC, Inc. Exam Strategy Value Debtor Rights in the Collateral Attachment to Future Property Perfection Nothing Less than Perfection Perfection by Filing Corona Fruits & Veggies, Inc. v. Frozsun Foods, Inc. Perfection by Possession or Control Layne v. Bank One Perfection of Consumer Goods Exam Strategy Perfection of Movable Collateral and Fixtures Protection of Buyers Buyers in Ordinary Course of Business Exam Strategy You Be the Judge: Conseco Finance Servicing Corp. v. Lee Buyers of Consumer Goods

593 593 594 595 596 596 596 597 597 597 598 600 601 601 603 605 606 607 608 609 611 611 611 612 613 613 613 614 614 614 615 617 619 620 621 623 623 624 625 625 626 626

Buyers of Chattel Paper, Instruments, and Documents Liens Priorities Among Creditors Filing versus Control or Possession Priority Involving a Purchase Money Security Interest Citizens Bank of Americus v. Federal Financial Services, Inc. Default and Termination Default Termination Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 27 Bankruptcy Overview of the Bankruptcy Code Rehabilitation Liquidation Chapter Description Goals Chapter 7 Liquidation Filing a Petition Trustee Creditors Automatic Stay Jackson v. Holiday Furniture Bankruptcy Estate Exam Strategy Payment of Claims Discharge In Re Stern In Re: John & Julie Hoffman Chapter 11 Reorganization Debtor in Possession Creditors’ Committee Plan of Reorganization Conﬁrmation of the Plan In Re Fox Discharge Small Business Bankruptcy Chapter 13 Consumer Reorganizations You Be the Judge: Marrama v. Citizens Bank Of Massachusetts Exam Strategy Beginning a Chapter 13 Case

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Plan of Payment Discharge Exam Strategy

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Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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AGENCY AND E M P L O Y M E N T L AW Chapter 28 Agency: The Inside Relationship Creating an Agency Relationship Consent Control Fiduciary Relationship Elson v. Koehr Elements Not Required for an Agency Relationship Duties of Agents to Principals Duty of Loyalty Otsuka v. Polo Ralph Lauren Corporation Abkco Music, Inc. v. Harrisongs Music, Ltd. Exam Strategy Reading Radio, Inc. v. Fink Other Duties of an Agent Exam Strategy Principal’s Remedies When the Agent Breaches a Duty Duties of Principals to Agents Duty to Reimburse the Agent Duty to Cooperate Terminating an Agency Relationship Termination by Agent or Principal Principal or Agent Can No Longer Perform Required Duties Change in Circumstances You Be the Judge: Gagnon v. Coombs Exam Strategy Effect of Termination Irrevocable Agency Relationship

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Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 29 Agency: The Outside Relationship Principal’s Liability for Contracts Authority Dickinson v. Charter Oaks Exam Strategy Estoppel Ratiﬁcation Exam Strategy Subagents Agent’s Liability for Contracts Fully Disclosed Principal Unidentiﬁed Principal Undisclosed Principal Van Damme v. Gelber Unauthorized Agent Principal’s Liability for Torts Employee Scope of Employment You Be the Judge: Kashin v. Kent O’Connor v. McDonald’s Restaurants of California, Inc. Negligent and Intentional Torts Doe v. Liberatore Physical or Nonphysical Harm Exam Strategy Agent’s Liability for Torts

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688 689 689 691 692 692 693 693 693 694 694 694 695 696 697 697 698 699 700 701 701 702 703 703 703

Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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Chapter 30 Employment Law Introduction Employment Security National Labor Relations Act Family and Medical Leave Act COBRA Common Law Protections Kozloski v. American Tissue Services Foundation Whistleblowing Exam Strategy

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Safety and Privacy in the Workplace Workplace Safety Employee Privacy Exam Strategy Financial Protection Fair Labor Standards Act Workers’ Compensation Social Security Pension Beneﬁts Employment Discrimination Equal Pay Act of 1963 Title VII You Be the Judge: Jespersen v. Harrah’s Teresa Harris v. Forklift Systems, Inc. Age Discrimination Smith v. City of Jackson Americans with Disabilities Act Toyota v. Williams Exam Strategy Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 31 Labor Law Unions Develop . . . and the Law Responds State Labor Law Labor Unions Today Organizing a Union Exclusivity You Be the Judge: Emporium Capwell Co. v. Western Additional Community Organization Organizing What Workers May Do What Employers May Do Progressive Electric, Inc. v. National Labor Relations Board Exam Strategy Hoffman Plastic Compounds, Inc. v. National Labor Relations Board Appropriate Bargaining Unit Collective Bargaining Subjects of Bargaining Duty to Bargain Exam Strategy Enforcement Brentwood Medical Associates v. United Mine Workers of America

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Concerted Action Strikes Replacement Workers Citizens Publishing and Printing Company v. National Labor Relations Board Picketing Lockouts Exam Strategy Regulating Union Affairs Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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B U S I N E S S O R G A N I Z AT I O N S Chapter 32 Starting a Business: LLCs and Other Options Sole Proprietorships Corporations Corporations in General Close Corporations S Corporations Exam Strategy Limited Liability Companies You Be the Judge: Ridgaway v. Silk Wyoming.com, LLC v. Lieberman BLD Products, LTC. v. Technical Plastics of Oregon, LLC Exam Strategy General Partnerships Limited Liability Partnerships Apcar v. Gaus Limited Partnerships and Limited Liability Limited Partnerships Exam Strategy Professional Corporations Joint Ventures Other Forms of Organization Business Trusts Cooperatives Franchises Kieland v. Rocky Mountain Chocolate Factory, Inc.

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Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 33 Partnerships Introduction Creating a Partnership Association Co-Owners of a Business for Proﬁt Love v. The Mail on Sunday Partnership by Estoppel Relationship between Partners and Outsiders Liability of the Partnership to Outsiders Paying the Debts of the Partnership Exam Strategy Relationship among Partners Financial Rights Hooper v. Hooper Management Rights Management Duties Moren v. Jax Restaurant Marsh v. Gentry Exam Strategy Terminating a Partnership Dissociation Exam Strategy Continuation of the Partnership Business Termination of the Partnership Business Jefferson Insurance Co. v. Curle Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 34 Life and Death of a Corporation Before the Corporation Is Formed Promoter’s Liability Exam Strategy Defective Incorporation You Be the Judge: Payer v. The Sgl Carbon, Llc Incorporation Process Where to Incorporate? Charter’s Required Provisions Charter’s Optional Provisions Rodriguez v. Loudeye Corporation

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After Incorporation Directors and Ofﬁcers Bylaws In Re Bigmar Shareholder Agreements Issuing Debt Foreign Corporations Exam Strategy Death of the Corporation Piercing the Corporate Veil Brooks v. Becker Exam Strategy Termination

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Chapter Conclusion Exam Review Additional Questions Internet Research Problem

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Chapter 35 Corporate Management Managers versus Shareholders: The Inherent Conflict Unocal Corp. v. Mesa Petroleum Co. Resolving the Conflict: The Business Judgment Rule Duty of Loyalty Lippman v. Shaffer Anderson v. Bellino Exam Strategy Duty of Care RSL Communications v. Bildirici Exam Strategy More Conflict: Takeovers Federal Regulation of Tender Offers: The Williams Act State Regulation of Takeovers Moore Corp. Ltd. v. Wallace Computer Services, Inc. Exam Strategy Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 36 Shareholders Introduction Rights of Shareholders Right to Information

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You Be the Judge: Chopra v. Helio Solutions, Inc. Right to Vote Exam Strategy Brehm v. Eisner Right to Dissent Right to Protection from Other Shareholders Michael L. Retzer v. Nancy B. Retzer Right to Monitor Exam Strategy Corporate Governance in Publicly Traded Companies: Sarbanes-Oxley and Stock Exchange Rules Enforcing Shareholder Rights Derivative Lawsuits In Re eBay, Inc. Shareholders Litigation Exam Strategy Direct Lawsuits Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 37 Securities Regulation Introduction The Securities and Exchange Commission What Is a Security? Securities Act of 1933 General Exemption Exempt Securities Exempt Transactions Exam Strategy Public Offerings You Be the Judge: EBC I, Inc. v. Goldman Sachs & Co. Sales of Restricted Securities Exam Strategy Liability Under the 1933 Act Rombach v. Chang Securities Exchange Act of 1934 General Provisions of the 1934 Act Liability Under the 1934 Act Stoneridge Investment Partners, LLC v. Scientiﬁc-Atlanta, Inc. Insider Trading

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United States v. O’Hagan Exam Strategy Foreign Corrupt Practices Act Blue Sky Laws Exemption from State Regulation State Regulation Facilitating State Regulation Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 38 Accountants’ Liability Introduction Audits Opinions Congress Responds to Enron: Sarbanes-Oxley Liability to Clients Contract Negligence Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP Fraud Breach of Trust Exam Strategy Liability to Third Parties Negligence Gary Ellis v. Grant Thornton Exam Strategy Fraud Liability for Qualiﬁed Opinions Securities Act of 1933 You Be the Judge: Rodney v. KPMG Peat Marwick Securities Exchange Act of 1934 Criminal Liability Arthur Andersen LLP v. United States Exam Strategy Other Accountant-Client Issues The Accountant-Client Relationship Accountant-Client Privilege Chapter Conclusion Exam Review Additional Questions Internet Research Problem

908 909 909 910 910 910 911 911 912 914 916 917 919 919 920 921 923 923 923 924 924 925 925 926 926 928 929 930 930 930 931 931 933 933 935 935 935 936 936 937 939 941

Contents

UNIT

G O V E R N M E N T R E G U L AT I O N

943

Chapter 39 Antitrust In the Beginning Sherman Act Chicago School Overview of Antitrust Laws Cooperative Strategies Horizontal Cooperative Strategies Fears v. Wilhelmina Model Agency, Inc. Exam Strategy Vertical Cooperative Strategies You Be the Judge: Camarda V. Snapple Distributors, Inc. Mergers and Joint Ventures United States v. Waste Management, Inc. Aggressive Strategies Monopolization Exam Strategy Predatory Pricing Tying Arrangements Exam Strategy Controlling Distributors and Retailers Resale Price Maintenance Leegin Creative Leather Products, Inc. v. Psks, Inc.

944 945 945 946 946 947 948 949 950 950

Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 40 Consumer Law Introduction Federal Trade Commission Sales Deceptive Acts or Practices You Be the Judge: Federal Trade Commission V. Business Card Experts, Inc. Unfair Practices Other Sales Practices Exam Strategy Consumer Credit Truth in Lending Act Fair Credit Billing Act Gray v. American Express Co.

952 952 953 954 954 955 956 957 958 958 960 960 962 962 964 965 966 967 967 968 968

969 970 970 972 973 973 978 978

Fair Credit Reporting Act Exam Strategy Fair and Accurate Credit Transactions Act Fair Debt Collection Practices Act You Be the Judge: Brown v. Card Service Center Equal Credit Opportunity Act Treadway v. Gateway Chevrolet Oldsmobile Inc. Consumer Leasing Act Exam Strategy Magnuson-Moss Warranty Act Consumer Product Safety Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 41 Environmental Law Introduction Environmental Protection Agency Air Pollution Clean Air Act You Be the Judge: Central Arizona Water Conservation District v. EPA New Sources of Pollution Acid Rain Automobile Pollution Soot Particles Air Toxics Global Warming Exam Strategy Water Pollution Clean Water Act South Florida Water Management District v. Miccosukee Tribe of Indians Wetlands Other Water Pollution Statutes Exam Strategy Waste Disposal Resource Conservation and Recovery Act Superfund Exam Strategy Chemicals Federal Insecticide, Fungicide, and Rodenticide Act Federal Food, Drug, and Cosmetic Act Food Quality Protection Act of 1996

xix

979 981 981 981 983 983 984 985 985 985 986 987 987 990 993 994 995 995 996 996 997 998 998 999 1000 1000 1001 1001 1002 1002 1003 1004 1005 1005 1006 1006 1008 1010 1010 1010 1011 1011

Contents

Toxic Substances Control Act Natural Resources National Environmental Policy Act The Lands Council v. Mcnair Endangered Species Act Gibbs v. Babbitt Chapter Conclusion Exam Review Additional Questions Internet Research Problem

UNIT

1011 1011 1011 1012 1013 1014 1016 1017 1019 1020

P R O P E RT Y A N D C Y B E R L AW

1021

Chapter 42 Cyberlaw Privacy Of Cookies and Caches Self Regulation of Online Privacy Government Regulation of Online Privacy United States of America v. Angevine You Be the Judge: Scott v Beth Israel Medical Center Inc. Exam Strategy Spam You Be the Judge: United States of America v. Cyberheat, Inc. Exam Strategy Internet Service Providers and Web Hosts: Communications Decency Act of 1996 Carafano v. Metrosplash.com, Inc. Exam Strategy Crime on the Internet Hacking Fraud Auctions

1022 1023 1024 1025

Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 43 Intellectual Property Introduction Patents Types of Patents

1025 1026 1028 1028 1030 1031 1032 1032 1033 1034 1034 1034 1035 1036 1038 1038 1040 1041 1042 1043 1044 1044

State Street Bank & Trust Co. v. Signature Financial Group, Inc. Requirements for a Patent Exam Strategy Patent Application and Issuance Copyrights Infringement First Sale Doctrine Fair Use You Be the Judge: Perfect 10, Inc. v. Google Inc. Digital Music and Movies Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. International Copyright Treaties Exam Strategy Trademarks Types of Marks Ownership and Registration Valid Trademarks Infringement Federal Trademark Dilution Act of 1995 Domain Names International Trademark Treaties Exam Strategy Trade Secrets Pollack v. Skinsmart Dermatology and Aesthetic Center P.C. Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 44 Real Property Nature of Real Property Freeman v. Barrs Estates in Real Property Freehold Estates Walton v. City of Red Bluff Non-Freehold Estates Concurrent Estates Exam Strategy London Terrace Towers, Inc. v. Davis Future Interests Nonpossessory Interests Easements You Be the Judge: Carvin v. Arkansas Power and Light

1045 1047 1047 1047 1050 1050 1050 1051 1053 1053 1054 1056 1056 1057 1057 1057 1058 1059 1059 1060 1061 1061 1061 1062 1063 1064 1064 1066 1067 1068 1069 1070 1070 1071 1072 1073 1074 1076 1077 1078 1079 1081

Contents

Proﬁt License Mortgage Exam Strategy Sale of Real Property Seller’s Obligations Concerning the Property Sales Contract and Title Examination Closing and Deeds Exam Strategy Recording Adverse Possession Entry and Exclusive Possession Open and Notorious Possession A Claim Adverse to the Owner Continuous Possession for the Statutory Period Ray v. Beacon Hudson Mountain Corp. Land Use Regulation Nuisance Law Zoning Eminent Domain Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 45 Landlord-Tenant Three Legal Areas Combined Lease Types of Tenancy Tenancy for Years Periodic Tenancy Tenancy at Will Tenancy at Sufferance Elwell v. Minor Landlord’s Duties Duty to Deliver Possession Quiet Enjoyment Duty to Maintain Premises Mishkin v. Young Harris v. Soley Tenant’s Duties Duty to Pay Rent Exam Strategy Duty to Use Premises for Proper Purpose Duty Not to Damage Premises Duty Not to Disturb Other Tenants

1082 1082 1082 1082 1083 1083 1083 1084 1085 1085 1086 1086 1086 1086 1087 1087 1088 1088 1089 1089 1090 1090 1093 1094 1095 1096 1096 1097 1097 1097 1098 1098 1098 1099 1099 1099 1100 1103 1104 1105 1105 1105 1106 1107 1107

Change in the Parties Sale of the Property Exam Strategy Assignment and Sublease Injuries Tenant’s Liability Landlord’s Liability You Be the Judge: McGuire v. K & G Management Co. You Be the Judge: Matthews v. Amberwood Associates Limited Partnership, Inc. Crime Exam Strategy Dickinson Arms-REO, L.P. v. Campbell Chapter Conclusion Exam Review Additional Questions Internet Research Problem Chapter 46 Personal Property and Bailment Gifts Intention to Transfer Ownership Delivery Inter Vivos Gifts and Gifts Causa Mortis Acceptance Exam Strategy You Be the Judge: Albinger v. Harris Found Property Franks v. Pritchett Accession Wrongful Accessions Mistaken Accessions Bailment Control Exam Strategy Mitchell v. Bank of America National Association Rights of the Bailee Duties of the Bailee Exculpatory Clauses Exam Strategy Tannenbaum v. New York Dry Cleaning, Inc. Rights and Duties of the Bailor Liability for Defects

xxi

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1111 1112 1113 1113 1114 1115 1117 1118

1119 1120 1120 1121 1122 1122 1122 1123 1124 1125 1126 1126 1127 1127 1127 1128 1128 1129 1129 1130 1131 1131 1132 1132

xxii

Contents

Common Carriers and Contract Carriers Innkeepers GNOC Corp. v. Powers

1133 1134 1134

Chapter Conclusion Exam Review Additional Questions Internet Research Problem

1135 1135 1138 1139

Chapter 47 Planning for the Future: Estates and Insurance Introduction to Estate Planning Deﬁnitions Purpose Probate Law Wills Legal Technicalities Spouse’s Share Children’s Share In re Estate of Josiah James Treloar, Jr. Amending a Will Intestacy Power of Attorney Probate Property Not Transferred by Will Anatomical Gifts Living Wills You Be the Judge: Washington v. Glucksberg Exam Strategy Trusts Advantages and Disadvantages Types of Trusts Trust Administration

1140 1141 1141 1142 1142 1142 1143 1144 1145 1145 1147 1147 1148 1148 1148 1148 1149 1150 1151 1151 1152 1152 1153

Termination Exam Strategy Introduction to Insurance Insurance Contract Offer and Acceptance Limiting Claims by the Insured Cummings v. American General Life Insurance Co. Bad Faith by the Insurer Goodson v. American Standard Insurance Company of Wisconsin Exam Strategy Types of Insurance Property Insurance Life Insurance Health Insurance Disability Insurance Liability Insurance Automobile Insurance Chapter Conclusion Exam Review Additional Questions Internet Research Problem

1153 1154 1154 1155 1155 1156 1157 1158 1159 1160 1060 1160 1160 1162 1162 1162 1163 1163 1163 1165 1167

Appendix A The Constitution of the United States

Appendix B Uniform Commercial Code

Glossary Table of Cases Index

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