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Unformatted text preview: L DEDICATION “It is an exciting time where the only limits you have are the size of your ideas and the degree of your dedication. ” —author unknown This book is dedicated to the more than 25,000 students that I have taught over the years at Temple University. —Samuel D. Hodge, Jr. ACKNOWLEDGMENTS “Tell everyone what you want to do and someone will want to help you do it. ” —W. Clement Stone This book is the product of a number of unselfish people who helped take an idea for a new course and turn it into a reality. This acknowledgment is a small token of my appreciation for that assistance and guidance. Therefore, many thanks are extended for the contributions by S. Jay Sklar, Kevin Fendl, Barbara Schneller, Michael Valenza, Joseph Beller, Avi Cohen and Terry Halbert, as well as the editorial and research assistance provided by Rachel Rempel. TABLE OF CONTENTS Part One: Law as the Foundation for the Business Enterprise...........................................................................1 Chapter 1: An Introduction to The Legal and Regulatory Environment of Business.........................................3 Section 1.1 Introduction............................................................................................ 3 Section 1.2 The Study of Business Law.....................................................................4 Section 1.3 The Players...............................................................................................5 Section 1.4 Case Analysis...........................................................................................7 Section 1.5 The Legislative Process.........................................................................12 Section 1.6 Elements of a Judicial Opinion..............................................................14 Section 1.7 Briefing of a Case..................................................................................15 Section 1.8 Status and Process..................................................................................21 Section 1.9 Christopher v. Roberts............................................................................25 Section 1.10 Precedent..............................................................................................29 Section 1.11 Sullivan v. Roberts...............................................................................31 Section 1.12 Classifications of Law..........................................................................36 Section 1.13 Corporate Governance.........................................................................38 Section 1.14 The Dog Bite Case...............................................................................39 Section 1.15 Legal Research.....................................................................................45 Section 1.16 Internet Research..................................................................................54 Section 1.17 The Feldman’s Will Alternative Problem 57 Section 1.18 Review Cases.......................................................................................63 Chapter 2: Business Ethics.................................................................................... 67 Section 2.1 An Overview of Ethics...........................................................................67 Section 2.2 Sources of Business Ethics....................................................................67 Section 2.3 Ethical Theories.....................................................................................77 Section 2.4 Kathy Roberts and Eastcoast Airlines....................................................79 Section 2.5 The Whistleblower.................................................................................83 Section 2.6 Ethics, Law and Privacy........................................................................88 Section 2.7 Drug Testing...........................................................................................90 Section 2.8 The Drug Testing of Tony Roberts.........................................................93 Section 2.9 Sexual Harassment...............................................................................100 Section 2.10 Sharon Rock v. Joseph Roberts..........................................................104 vi Table of Contents Section 2.11 International Business Ethics.............................................................111 Section 2.12 Problem Cases...................................................................................112 Section 2.13 Internet References............................................................................113 Chapter 3: The Courts..................................................................................................119 Section 3.1 The Federal Court System...................................................................119 Section 3.2 The State Court System...................................................................... 124 Section 3.3 The Jury System............................................................................... 127 Section 3.4 Jurisdiction........................................................................................ 129 Section 3.5 Venue ..................................................................................................134 Section 3.6 Standing...............................................................................................136 Section 3.7 Full Faith and Credit...........................................................................138 Section 3.8 Comity.................................................................................................140 Section 3.9 The Litigation Process.........................................................................142 Section 3.10 Alternative Dispute Resolution.........................................................143 Section 3.11 The Arbitration Clause......................................................................144 Section 3.12 Problem Cases...................................................................................150 Section 3.13 Internet References............................................................................151 Part Two: The Building Blocks of the Law for the Entrepreneur.....................................................................155 Chapter 4: Law of Contracts........................................................................................157 Section 4.1 Introduction.........................................................................................157 Section 4.2 Kinds of Contracts...............................................................................158 Section 4.3 The Elements of a Contract.................................................................164 Section 4.4 Offer....................................................................................................166 Section 4.5 Acceptance..........................................................................................167 Section 4.6 Consideration.................................................................................... 174 Section 4.7 Tony Roberts and the Engagement Ring 177 Section 4.8 Capacity.............................................................................................. 183 S ection 4.9 Legality...............................................................................................185 Section 4.10 Estelle Roberts v. Tri-County Golf Club 187 Section 4.11 Statute of Frauds................................................................................191 Section 4.12 Movie Contract..................................................................................193 Section 4.13 Uniform Commercial Code...............................................................199 Section 4.14 E-Contracts........................................................................................208 Section 4.15 Agency...............................................................................................210 Section 4.16 Problem Cases ................................................................................. 213 Section 4.17 Internet References............................................................................215 Table of Contents vii Chapter 5: Business Torts.............................................................................................219 Section 5.1 The Law of Torts..................................................................................219 Section 5.2 Negligence...........................................................................................220 Section 5.3 Duty of Care.........................................................................................220 Section 5.4 Tyler’s Sports Bar and Grill.................................................................233 Section 5.5 Breach of Duty.....................................................................................237 Section 5.6 Proximate Cause..................................................................................237 Section 5.7 Damages...............................................................................................239 Section 5.8 Defenses to a Negligence Action.........................................................241 Section 5.9 Imputed Negligence.............................................................................245 Section 5.10 Joe Roberts v. The Stallions...............................................................248 Section 5.11 Intentional Torts.................................................................................255 Section 5.12 Infliction of Emotional Distress.........................................................256 Section 5.13 Assault and Battery............................................................................257 Section 5.14 Invasion of Privacy............................................................................261 Section 5.15 Defamation.........................................................................................265 Section 5.16 False Imprisonment........................................................................... 270 Section 5.17 Tortious Interference with a Contract................................................272 Section 5.18 Fraud..................................................................................................273 Section 5.19 Trade Disparagement.........................................................................276 Section 5.20 Products Liability...............................................................................276 Section 5.21 Review Cases.....................................................................................280 Section 5.22 Internet References............................................................................282 Chapter 6: Property Law..............................................................................................285 Section 6.1 Introduction..........................................................................................285 Section 6.2 Ownership............................................................................................286 Section 6.3 The Joint Bank Account.......................................................................289 Section 6.4 Personal Property.................................................................................296 Section 6.5 Acquiring Title to Personal Property...................................................297 Section 6.6 Bailments.............................................................................................301 Section 6.7 Real Property.......................................................................................304 Section 6.8 Estates in Real Property.......................................................................305 Section 6.9 Leasehold Estates.................................................................................308 Section 6.10 Acquiring Title to Real Property........................................................312 Section 6.11 Zoning................................................................................................314 Section 6.12 Review Cases.....................................................................................317 Section 6.13 Internet References............................................................................319 viii Table of Contents Chapter 7: White Collar and Other Business Crimes...................................... 323 Section 7.1 Introduction.........................................................................................323 Section 7.2 An Overview of Criminal Law............................................................324 Section 7.3 Crimes.................................................................................................325 Section 7.4 Kathy’s Purse Snatch...........................................................................337 Section 7.5 White-Collar Crime.............................................................................343 Section 7.6 Criminal Liability for Business Entities...........................................354 Section 7.7 Tyler’s Liquor Problem.......................................................................357 Section 7.8 Police Investigation.............................................................................363 Section 7.9 Questioning of a Suspect.....................................................................363 Section 7.10 Commonwealth v. Christopher..........................................................365 Section 7.11 Search and Seizure............................................................................371 Section 7.12 The Raid of Tyler’s Sports Bar and Grill........................................373 Section 7.13 Problem Cases...................................................................................379 Section 7.14 Internet References............................................................................380 Chapter 8: Remedies Available in Court............................................................385 Section 8.1 An Overview.....................................................................................385 Section 8.2 Compensatory Damages......................................................................388 Section 8.3 Punitive Damages................................................................................391 Section 8.4 Nominal Damages .............................................................................393 Section 8.5 Liquidated Damages............................................................................395 Section 8.6 Roberts v. Eastcoast Airlines...............................................................396 Section 8.7 Injunction.............................................................................................401 Section 8.8 Restitution...........................................................................................403 Section 8.9 Recission and Reformation.................................................................405 Section 8.10 Declaratory Judgment........................................................................406 Section 8.11 Specific Performance.........................................................................408 Section 8.12 Microbrewery Purchase.....................................................................410 Section 8.13 Problem Cases...................................................................................417 Section 8.14 Internet References............................................................................418 Part Three: Corporate Governance.....................................................................421 Chapter 9: Corporate Governance and Business Organizations.....................................................................423 Section 9.1 Corporate Governance.........................................................................423 Section 9.2 Types of Entities..................................................................................424 Section 9.3 Sole Proprietorship............................................................................. 425 Section 9.4 Partnership.......................................................................................... 426 Section 9.5 The Loan for the Microbrewery..........................................................433 Section 9.6 Limited Partnership.............................................................................439 Table of Contents ix Section 9.7 Limited Liability Partnership...............................................................440 Section 9.8 Family Limited Liability Partnership................................................441 Section 9.9 Corporation..........................................................................................442 Section 9.10 Subchapter S Corporation..................................................................448 Section 9.11 Limited Liability Company................................................................449 Section 9.12 Franchises..........................................................................................449 Section 9.13 Tyler’s Sports Bar and Grill Franchise..............................................453 Section 9.14 Laws Regulating Businesses..............................................................461 Section 9.15 Review Questions..............................................................................470 Section 9.16 Internet References............................................................................472 Chapter 10: Employment law...................................................................................... 477 Section 10.1 Introduction........................................................................................477 Section 10.2 Selection of an Employee..................................................................477 Section 10.3 London v. Tyler’s Sports Bar and Grill..............................................481 Section 10.4 Liability..............................................................................................487 Section 10.5 Hiring, Retention, Training and Supervision....489 Section 10.6 Minimum Wage..................................................................................492 Section 10.7 Workplace Hazards............................................................................494 Section 10.8 Occupational Safety and Health Act..................................................495 Section 10.9 Workers’ Compensation.....................................................................498 Section 10.10 Rights of Privacy..............................................................................503 Section 10.11 Drug Testing in the Workplace.........................................................504 Section 10.12 Employee Benefits and Income Maintenance.............................................................................509 Section 10.13 Unemployment Compensation.........................................................511 Section 10.14 Unemployment Case........................................................................514 Section 10.15 At-Will Employees...........................................................................519 Section 10.16 Immigration......................................................................................523 Section 10.17 Review Questions............................................................................524 Section 10.18 Internet References..........................................................................528 Chapter 11: International Law....................................................
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