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iv Brief Contents

Unit Six Creditors’ Rights and Bankruptcy 557


Chapter 29 Creditors’ Rights and Remedies 558
Chapter 30 Secured Transactions 574
Chapter 31 Bankruptcy Law 598

Unit Seven AGENCY AND EMPLOYMENT  623


Chapter 32 Agency Formation and Duties 624
Chapter 33 Agency Liability to Third Parties and Termination 639
Chapter 34 Employment, Immigration, and Labor Law 658
Chapter 35 Employment Discrimination and Diversity 681

UNIT EIGHT BUSINESS ORGANIZATIONS  705


Chapter 36 Sole Proprietorships and Franchises 706
Chapter 37 Partnerships and Limited Liability Partnerships 720
Chapter 38 Other Organizational Forms for Small Businesses 740
Chapter 39 Corporate Formation and Financing 759
Chapter 40 Corporate Directors, Officers, and Shareholders 780
Chapter 41 Mergers and Takeovers 801
Chapter 42 Securities Law and Corporate Governance 816

UNIT NINE GOVERNMENT REGULATION  841


Chapter 43 Administrative Agencies 842
Chapter 44 Consumer Law 861
Chapter 45 Environmental Law 878
Chapter 46 Antitrust Law 893
Chapter 47 Professional Liability and Accountability 912

UNit Ten PROPERTY AND ITS PROTECTION  935


Chapter 48 Personal Property and Bailments 936
Chapter 49 Real Property and Landlord-Tenant Law 955
Chapter 50 Insurance 978
Chapter 51 Wills and Trusts 996

APPENDICES
A How to Brief Cases and Analyze Case Problems A–l
B The Constitution of the United States A–4
C The Uniform Commercial Code A–12
D The Sarbanes-Oxley Act of 2002 (Excerpts and Explanatory Comments) A–l59
E Answers to the Issue Spotters A–166
F Sample Answers for Business Case Problems with Sample Answer A–175

GLOSSARY G–l
TABLE OF CASES TC–1
INDEX 1–1

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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Contents

Unit One Chapter 4


The Legal Environment Business and the Constitution 74
Of Business 1
The Constitutional Powers of Government 74
Case Analysis Case 4.1 Family Winemakers of
Chapter 1 California v. Jenkins (2010) 77
Law and Legal Reasoning 2 Business and the Bill of Rights 79
Case 4.2 Doe v. Prosecutor, Marion County,
Business Activities and the Legal Environment 2 Indiana (2013) 82
Sources of American Law 3 Spotlight on Beer Labels
The Common Law Tradition 6 Case 4.3 Bad Frog Brewery, Inc. v. New York
Schools of Legal Thought 11 State Liquor Authority (1998) 84
Classifications of Law 12 Due Process and Equal Protection 88
How to Find Primary Sources of Law 13 Privacy Rights 90
How to Read and Understand Case Law 15
Chapter 5
Chapter 2 Business Ethics 95
Courts and Alternative
Business Ethics 95
Dispute Resolution 28 Case 5.1 Johnson Construction Co. v.
The Judiciary’s Role in American Government 28 Shaffer (2012) 97
Basic Judicial Requirements 29 Case 5.2 May v. Chrysler Group, LLC (2012) 99
Case Analysis Case 2.1 Mala v. Crown Bay Business Ethics and Social Media 100
Marina, Inc. (2013) 31 Ethical Principles and Philosophies 101
Spotlight on Gucci Making Ethical Business Decisions 104
Case 2.2 Gucci America, Inc. v. Case Analysis Case 5.3 Moseley v. Pepco Energy
Wang Huoqing (2011) 35 Services, Inc. (2011) 105
The State and Federal Court Systems 37 Global Business Ethics 107
Alternative Dispute Resolution 41 Unit One Focus on Ethics: Ethics and the Legal
Case 2.3 Cleveland Construction, Inc. v. Levco Environment of Business 113
Construction, Inc. (2012) 44
International Dispute Resolution 46
Unit Two
Torts and Crimes 117
Chapter 3
Court Procedures 50
Chapter 6
Procedural Rules 50
Pretrial Procedures 52
Torts 118
Case Analysis Case 3.1 Expresso Disposition Corp. 1 The Basis of Tort Law 118
v. Santana Sales & Marketing Group, Inc. Intentional Torts against Persons 120
(2013) 56 Case Analysis Case 6.1 McKee v. Laurion
Case 3.2 Blankenship v. Collier (2010) 58 (2013) 123
The Trial 62 Business Torts 127
Case 3.3 Downey v. Bob’s Discount Furniture Intentional Torts against Property 128
Holdings, Inc. (2011) 65 Unintentional Torts (Negligence) 130
Posttrial Motions 67 Classic Case 6.2 Palsgraf v. Long Island Railroad
The Appeal 68 Co. (1928) 133
Enforcing the Judgment 69 Defenses to Negligence 135

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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vi Contents

Spotlight on the Seattle Mariners Criminal Procedures 207


Case 6.3 Taylor v. Baseball Club of Seattle, Case 10.2 Messerschmidt v. Millender (2012) 208
LP (2006) 135 Classic Case 10.3 Miranda v. Arizona (1966) 209
Cyber Crime 212
Chapter 7 Unit Two Focus on Ethics:
Strict Liability and Product Liability 141 Ethics and Torts and Crimes 220

Strict Liability 141


Unit Three
Product Liability 142
Strict Product Liability 143
Contracts
Spotlight on Injuries from Vaccines and E-Contracts 223
Case 7.1 Bruesewitz v. Wyeth, LLC (2011) 143
Case Analysis Case 7.2 Wilson Sporting Goods Co. C h a p t e r 11
v. Hickox (2013) 146
Case 7.3 Johnson v. Medtronic, Inc. (2012) 148
Nature and Terminology 224
Defenses to Product Liability 151 An Overview of Contract Law 224
Case Analysis Case 11.1 Pan Handle Realty, LLC
Chapter 8 v. Olins (2013) 226
Intellectual Property Rights 156 Elements of a Contract 227
Types of Contracts 228
Trademarks and Related Property 156 Quasi Contracts 232
Classic Case 8.1 The Coca-Cola Co. v. Case 11.2 Seawest Services Association v.
The Koke Co. of America (1920) 156 Copenhaver (2012) 232
Patents 161 Interpretation of Contracts 234
Copyrights 164 Spotlight on Columbia Pictures
Case Analysis Case 8.2 Winstead v. Jackson Case 11.3 Wagner v. Columbia Pictures
(2013) 165 Industries, Inc. (2007) 235
Trade Secrets 169
International Protection for Intellectual Property 170 C h a p t e r 12
Case 8.3 Golan v. Holder (2012) 171
Agreement in
Chapter 9 Traditional and E-Contracts 240
Internet Law, Agreement 240
Social Media, and Privacy 177 Classic Case 12.1 Lucy v. Zehmer (1954) 241
Spotlight on A mazon.com
Internet Law 177 Case 12.2 Basis Technology Corp. v.
Spotlight on Internet Porn Amazon.com, Inc. (2008) 244
Case 9.1 Hasbro, Inc. v. Internet Entertainment Case Analysis Case 12.3 Gyabaah v. Rivlab
Group, Ltd. (1996) 180 Transportation Corp. (2013) 246
Copyrights in Digital Information 181 Agreement in E-Contracts 251
Case 9.2 Maverick Recording Co. v. Harper The Uniform Electronic Transactions Act 255
(2010) 183 International Treaties Affecting E-Contracts 256
Social Media 184
Case Analysis Case 9.3 In re O’Brien (2013) 185 C h a p t e r 13
Online Defamation 188 Consideration 260
Privacy 189
Elements of Consideration 260
C h a p t e r 10 Classic Case 13.1 Hamer v. Sidway (1891) 261
Criminal Law and Cyber Crime 194 Adequacy of Consideration 262
Agreements That Lack Consideration 262
Civil Law and Criminal Law 194 Case Analysis Case 13.2 Baugh v. Columbia Heart
Criminal Liability 196 Clinic, P.A. (2013) 263
Types of Crimes 198 Settlement of Claims 265
Case Analysis Case 10.1 People v. Whitmer Spotlight on Nike
(2013) 200 Case 13.3 Already, LLC v. Nike, Inc.
Defenses to Criminal Liability 204 (2013) 267
Exceptions to the Consideration Requirement 268
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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Contents vii

C h a p t e r 14 Third Party Beneficiaries 325


Capacity and Legality 273 Case Analysis Case 17.3 Lake County Grading Co.
v. Village of Antioch (2013) 328
Contractual Capacity 273
Legality 277
Case 14.1 Sturdza v. United Arab Emirates C h a p t e r 18
(2011) 278 Performance and Discharge
Spotlight on the Improv in Traditional and E-Contracts 333
Case 14.2 Comedy Club, Inc. v. Improv West
Conditions 333
Associates (2009) 280
Case 18.1 Pack 2000, Inc. v. Cushman (2011) 334
Case Analysis Case 14.3 Holmes v. Multimedia
Discharge by Performance 336
KSDK, Inc. (2013) 283
Classic Case 18.2 Jacob & Youngs v. Kent
(1921) 337
C h a p t e r 15
Case Analysis Case 18.3 Kohel v. Bergen Auto
Mistakes, Fraud, Enterprises, L.L.C. (2013) 338
and Voluntary Consent 290 Discharge by Agreement 340
Mistakes 290 Discharge by Operation of Law 342
Case 15.1 L&H Construction Co. v.
Circle Redmont, Inc. (2011) 291 C h a p t e r 19
Fraudulent Misrepresentation 293 Breach of Contract and Remedies 348
Case 15.2 Fazio v. Cypress/GR Houston I, LP
(2012) 294 Damages 348
Case Analysis Case 15.3 Cronkelton v. Guaranteed Case Analysis Case 19.1 Hallmark Cards, Inc. v.
Construction Services, LLC (2013) 296 Murley (2013) 349
Undue Influence 298 Classic Case 19.2 Hadley v. Baxendale
Duress 298 (1854) 352
Adhesion Contracts and Unconscionability 300 Equitable Remedies 355
Case 19.3 Emerick v. Cardiac Study Center, Inc.
C h a p t e r 16 (2012) 357
The Writing Requirement Recovery Based on Quasi Contract 358
Waiver of Breach 359
and Electronic Records 305 Contract Provisions Limiting Remedies 360
Writing Requirement: The Statute of Frauds 305 Appendix to Chapter 19:
Contracts That Require a Writing 306 Reading and Analyzing Contracts 364
Case Analysis Case 16.1 Salim v. Solaiman Unit Three Focus on Ethics: Contract Law
(2010) 306 and the Application of Ethics 370
Exceptions to the Writing Requirement 310
Case 16.2 NYKCool A.B. v. Pacific Fruit, Inc. Unit Four
(2013) 310
Sufficiency of the Writing 312
Domestic and International
Case 16.3 Beneficial Homeowner Service
Sales and Lease Contracts 373
Corporation v. Steele (2011) 313
The Parol Evidence Rule 314 Chapter 20
The Statute of Frauds in the International
Context 316
The Formation of
Sales and Lease Contracts 374
C h a p t e r 17 The Uniform Commercial Code 374
Third Party Rights 319 Case Analysis Case 20.1 Amaya v. Brater
(2013) 375
Assignments and Delegations 319
The Scope of Articles 2 (Sales) and 2A (Leases) 376
Case 17.1 Hosch v. Colonial Pacific Leasing Corp.
The Formation of Sales and Lease Contracts 380
(2012) 320
Case 20.2 WPS, Inc. v. Expro Americas, LLC
Spotlight on PC Magazine
(2012) 384
Case 17.2 Gold v. Ziff Communications Co.
Classic Case 20.3 Jones v. Star Credit Corp.
(2001) 323
(1969) 389

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viii Contents

Contracts for the International Sale of Goods 390 Chapter 24


Appendix to Chapter 20: International Law
An Example of a Contract for the International
in a Global Economy 453
Sale of Coffee 396
International Law 453
C h a p t e r 21 Case Analysis Case 24.1 Linde v. Arab Bank, PLC
Title, Risk, and Insurable Interest 400 (2013) 457
Doing Business Internationally 459
Identification 400 Regulation of Specific Business Activities 460
When Title Passes 402 International Dispute Resolution 463
Case 21.1 United States v. 2007 Custom Motorcycle Case 24.2 S & T Oil Equipment & Machinery, Ltd.
(2011) 402 v. Juridica Investments, Ltd. (2012) 463
Spotlight on Andy Warhol U.S. Laws in a Global Context 465
Case 21.2 Lindholm v. Brant (2007) 406 Spotlight on International Torts
Risk of Loss 407 Case 24.3 Kiobel v. Royal Dutch Petroleum
Case Analysis Case 21.3 Person v. Bowman Co. (2013) 466
(2013) 408 Unit Four Focus on Ethics: Domestic
Insurable Interest 412 and International Sales and Lease
Contracts 471
Chapter 22
Performance and Breach Unit Five
of Sales and Lease Contracts 417 Negotiable Instruments 475
Performance Obligations 417
Obligations of the Seller or Lessor 417 Chapter 25
Case Analysis Case 22.1 Wilson Sporting Goods The Function and Creation
Co. v. U.S. Golf and Tennis Centers, Inc.
(2012) 419
of Negotiable Instruments 476
Classic Case 22.2 Maple Farms, Inc. v. City School Types of Negotiable Instruments 476
District of Elmira (1974) 422 Case 25.1 Silicon Valley Bank v. Miracle Faith
Obligations of the Buyer or Lessee 423 World Outreach, Inc. (2013) 479
Anticipatory Repudiation 424 Requirements for Negotiability 481
Remedies of the Seller or Lessor 426 Case Analysis Case 25.2 Reger Development, LLC
Remedies of the Buyer or Lessee 428 v. National City Bank (2010) 484
Spotlight on Baseball Cards Spotlight on Casino Markers
Case 22.3 Fitl v. Strek (2005) 431 Case 25.3 Las Vegas Sands, LLC v.
Additional Provisions Affecting Remedies 432 Nehme (2011) 487
Dealing with International Contracts 434 Factors That Do Not Affect Negotiability 488

Chapter 23 Chapter 26
Warranties 439 Transferability and
Warranties of Title 439
Holder in Due Course 493
Express Warranties 440 Negotiation 493
Implied Warranties 441 Indorsements 494
Spotlight on DaimlerChrysler Case 26.1 In re Bass (2013) 494
Case 23.1 Shoop v. DaimlerChrysler Corp. Case Analysis Case 26.2 Hammett v. Deutsche
(2007) 442 Bank National Co. (2010) 497
Classic Case 23.2 Webster v. Blue Ship Tea Room, Miscellaneous Indorsement Problems 501
Inc. (1964) 444 Holder in Due Course (HDC) 502
Overlapping Warranties 446 Spotlight on Holder in Due Course
Warranty Disclaimers and Limitations on Case 26.3 Georg v. Metro Fixtures Contractors,
Liability 448 Inc. (2008) 504
Case Analysis Case 23.3 Roberts v. Lanigan Auto Holder through an HDC 507
Sales (2013) 448

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Contents ix

Chapter 27 Case 30.1 In re Baker (2012) 578


Liability, Defenses, and Discharge 512 Case 30.2 In re Camtech Precision
Manufacturing, Inc. (2011) 580
Signature Liability 512 The Scope of a Security Interest 584
Case 27.1 Jeanmarie v. Peoples (2010) 516 Priorities 586
Warranty Liability 519 Rights and Duties of Debtors and Creditors 588
Defenses and Limitations 522 Default 590
Case Analysis Case 27.2 Mills v. Chauvin Case Analysis Case 30.3 Smith v. Firstbank Corp.
(2013) 524 (2013) 592
Discharge 526
C h a p t e r 31
Chapter 28
Bankruptcy Law 598
Banking in the Digital Age 531
The Bankruptcy Code 598
Checks 531 Liquidation Proceedings 600
The Bank-Customer Relationship 533 Reorganizations 608
The Bank’s Duty to Honor Checks 533 Bankruptcy Relief under Chapter 13 and
Case Analysis Case 28.1 Afiriyie v. Bank of Chapter 12 610
America, N.A. (2013) 534 Case Analysis Case 31.1 In re Welsh (2013) 611
Case 28.2 Michigan Basic Property Insurance Case 31.2 Ransom v. FIA Card Services, N.A.
Association v. Washington (2012) 539 (2011) 613
The Bank’s Duty to Accept Deposits 542 Case 31.3 United Student Aid Funds, Inc. v.
Case 28.3 Cumis Mutual Insurance Society, Inc. v. Espinosa (2010) 614
Rosol (2011) 545 Unit Six Focus on Ethics:
Electronic Fund Transfers 547 Creditors’ Rights and Bankruptcy 621
E-Money and Online Banking 548
Unit Five Focus on Ethics:
Negotiable Instruments 553 Unit Seven
Agency and Employment 623
Unit Six
Creditors’ Rights Chapter 32
and Bankruptcy 557
Agency Formation and Duties 624
Agency Relationships 624
Chapter 29 Case 32.1 Coker v. Pershad (2013) 626
Creditors’ Rights and Remedies 558 Formation of the Agency Relationship 628
Laws Assisting Creditors 558 Case 32.2 Laurel Creek Health Care Center v.
Case 29.1 BHP Land Services, Inc. v. Bishop (2010) 628
Seymour (2011) 559 Duties of Agents and Principals 630
Mortgages 562 Case Analysis Case 32.3 Taser International, Inc.
Case Analysis Case 29.2 McLean v. JPMorgan v. Ward (2010) 632
Chase Bank, N.A. (2012) 564 Rights and Remedies of Agents and Principals 634
Suretyship and Guaranty 565
Spotlight on Personal Guaranties Chap ter 33
Case 29.3 Wilson Court Limited Partnership v. Agency Liability to Third Parties
Tony Maroni’s, Inc. (1998) 567 and Termination 639
Protection for Debtors 570
Scope of Agent’s Authority 639
Chapter 30 Spotlight on Apparent Authority
Case 33.1 Lundberg v. Church Farm, Inc.
Secured Transactions 574
(1986) 642
The Terminology of Secured Transactions 574 Liability for Contracts 644
Creation of a Security Interest 574 Case 33.2 Williams v. Pike (2011) 645
Perfection of a Security Interest 576 Liability for Torts and Crimes 647

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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x Contents

Case Analysis Case 33.3 Auer v. Paliath (2013) 649 Spotlight on Holiday Inns
Termination of an Agency 652 Case 36.3 Holiday Inn Franchising, Inc. v.
Hotel Associates, Inc. (2011) 715
Chapter 34
Employment, Immigration, Chap te r 37
and Labor Law 658 Partnerships and
Limited Liability Partnerships 720
Employment at Will 658
Case 34.1 Waddell v. Boyce Thompson Institute Basic Partnership Concepts 720
for Plant Research, Inc. (2012) 659 Partnership Formation and Operation 722
Wages, Hours, and Layoffs 660 Classic Case 37.1 Meinhard v.
Family and Medical Leave 662 Salmon (1928) 725
Worker Health and Safety 663 Dissociation of a Partner 728
Income Security 664 Partnership Termination 729
Employee Privacy Rights 666 Case 37.2 Russell Realty Associates v. Russell
Case 34.2 National Aeronautics and Space (2012) 730
Administration v. Nelson (2011) 668 Case Analysis Case 37.3 Estate of Webster v.
Immigration Law 669 Thomas (2013) 732
Labor Unions 672 Limited Liability Partnerships 733
Case Analysis Case 34.3 Services Employees Limited Partnerships 734
International Union v. National Union of
Healthcare Workers (2013) 674 Chapter 38
Other Organizational Forms
Chapter 35 for Small Businesses 740
Employment Discrimination The Limited Liability Company 740
and Diversity 681 Case Analysis Case 38.1 ORX Resources, Inc. v.
Title VII of the Civil Rights Act of 1964 681 BMW Exploration, LLC (2010) 741
Case Analysis Case 35.1 Dees v. United Rentals LLC Management and Operation 744
North America, Inc. (2013) 682 Case 38.2 Polk v. Polk (2011) 744
Case 35.2 Morales-Cruz v. University of Puerto Dissociation and Dissolution of an LLC 746
Rico (2012) 689 Case 38.3 Venture Sales, LLC v. Perkins
Discrimination Based on Age 691 (2012) 747
Case 35.3 Mora v. Jackson Memorial Foundation, Special Business Forms 748
Inc. (2010) 691 General Considerations for Small Business 750
Discrimination Based on Disability 693 Financial Capital 754
Defenses to Employment Discrimination 695
Affirmative Action 696 Chapter 39
Unit Seven Focus on Ethics: Corporate Formation and Financing 759
Agency and Employment 701
The Nature and Classification of Corporations 759
Case Analysis Case 39.1 Belmont v.
Unit Eight MB Investment Partners, Inc. (2013) 760
Business Organizations 705 Case 39.2 Rubin v. Murray (2011) 763
Corporate Formation 765
Corporate Powers 770
Chapter 36 Piercing the Corporate Veil 771
Sole Proprietorships and Franchises 706 Case 39.3 Brennan’s, Inc. v. Colbert (2012) 772
Corporate Financing 774
Sole Proprietorships 706
Case 36.1 Quality Car & Truck Leasing, Inc. v.
Sark (2013) 707
Chapter 40
Franchises 708 Corporate Directors,
Franchise Termination 712 Officers, and Shareholders 780
Case Analysis Case 36.2 Mac’s Shell Service, Inc. v.
Role of Directors and Officers 780
Shell Oil Products Co. (2010) 713
Duties and Liabilities of Directors and Officers 782

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Contents xi

Classic Case 40.1 Guth v. Loft, Inc. (1939) 785 Case 43.2 Mayo Foundation for Medical
The Role of Shareholders 787 Education and Research v. United States
Case Analysis Case 40.2 Case v. Sink & Rise, Inc. (2011) 851
(2013) 790 Enforcement and Adjudication 853
Rights of Shareholders 792 Case 43.3 Craker v. Drug Enforcement
Case 40.3 McCann v. McCann (2012) 795 Administration (2013) 855
Duties and Liabilities of Shareholders 796 Public Accountability 857

C h a p t e r 41 Chapter 44
Mergers and Takeovers 801 Consumer Law 861
Merger, Consolidation, and Share Exchange 801 Deceptive Advertising 861
Purchase of Assets 804 Case 44.1 Hypertouch, Inc. v. ValueClick, Inc.
Case Analysis Case 41.1 American Standard, Inc. (2011) 863
v. OakFabco, Inc. (2010) 804 Labeling and Packaging Laws 866
Purchase of Stock 805 Spotlight on Honda
Case 41.2 Air Products and Chemicals, Inc. v. Case 44.2 Paduano v. American Honda Motor
Airgas, Inc. (2011) 808 Co. (2009) 866
Termination 809 Sales 868
Major Business Forms Compared 811 Protection of Health and Safety 868
Credit Protection 870
Chapter 42 Case Analysis Case 44.3 Jerman v. Carlisle,
Securities Law and McNellie, Rini, Kramer & Ulrich, LPA
Corporate Governance 816 (2010) 873

The Securities and Exchange Commission 816 Chapter 45


The Securities Act of 1933 817
Case 42.1 Litwin v. Blackstone Group, LP
Environmental Law 878
(2011) 822 Common Law Actions 878
The Securities Exchange Act of 1934 823 Federal, State, and Local Regulations 879
Classic Case 42.2 SEC v. Texas Gulf Sulphur Co. Air Pollution 880
(1968) 824 Water Pollution 882
Case Analysis Case 42.3 City of Livonia Case 45.1 Entergy Corp. v. Riverkeeper, Inc.
Employees’ Retirement System and Local 295/ (2009) 883
Local 851 v. Boeing Co. (2013) 828 Case Analysis Case 45.2 United States v.
State Securities Laws 830 Lucas (2008) 884
Corporate Governance 830 Case 45.3 Sackett v. Environmental Protection
Online Securities Fraud 832 Agency (2012) 886
Unit Eight Focus on Ethics: Toxic Chemicals 888
Business Organizations 838 Hazardous Wastes 888

Chapter 46
Unit Nine
Government Regulation 841 Antitrust Law 893
The Sherman Antitrust Act 893
Section 1 of the Sherman Act 894
Chapter 43 Case Analysis Case 46.1 Leegin Creative Leather
Administrative Agencies 842 Products, Inc. v. PSKS, Inc. (2007) 897
The Practical Significance of Administrative Law 842 Section 2 of the Sherman Act 898
Agency Creation and Powers 843 Case 46.2 E.I. DuPont de Nemours and Co. v.
The Administrative Procedure Act 846 Kolon Industries (2011) 899
Case Analysis Case 43.1 Federal Communications The Clayton Act 902
Commission v. Fox Television Stations, Inc. Enforcement and Exemptions 905
(2009) 847 U.S. Antitrust Laws in the Global Context 906
Judicial Deference to Agency Decisions 850 Case 46.3 Carrier Corp. v. Outokumpu Oyj
(2012) 907

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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xii Contents

Chap te r 47 Case 49.2 Scarborough v. Rollins (2010) 965


Professional Liability Limitations on the Rights of Property Owners 967
Case Analysis Case 49.3 Town of Midland v.
and Accountability 912
Morris (2011) 967
Potential Liability to Clients 912 Zoning and Government Regulations 970
Case 47.1 Kelley v. Buckley (2011) 916 Landlord-Tenant Relationships 972
Potential Liability to Third Parties 917
Case Analysis Case 47.2 Perez v. Stern (2010) 919 Chapter 50
The Sarbanes-Oxley Act of 2002 920 Insurance 978
Potential Liability of Accountants Under Securities
Laws 922 Insurance Terminology and Concepts 978
Spotlight on Accountant’s Duty to Correct The Insurance Contract 980
Mistakes Case 50.1 Valero v. Florida Insurance Guaranty
Case 47.3 Overton v. Todman & Co., CPAs Association, Inc. (2011) 983
(2007) 925 Case 50.2 Woo v. Fireman’s Fund Insurance Co.
Confidentiality and Privilege 928 (2007) 985
Unit Nine Focus on Ethics: Types of Insurance 987
Government Regulation 932 Case Analysis Case 50.3 Estate of Luster v.
Allstate Insurance Co. (2010) 989

Unit Ten
C h a p t e r 51
Property and
Its Protection 935 Wills and Trusts 996
Wills 996
Case 51.1 In re Estate of Johnson (2011) 999
Chapter 48 Case 51.2 In re Estate of Melton (2012) 1001
Personal Property and Bailments 936 Case Analysis Case 51.3 Peterson v. Harrell
(2010) 1003
Personal Property versus Real Property 936
Intestacy Laws 1007
Case Analysis Case 48.1 APL Limited v.
Trusts 1008
Washington State Department of Revenue
Other Estate-Planning Issues 1012
(2010) 938
Unit Ten Focus on Ethics:
Acquiring Ownership of Personal Property 939
Property and Its Protection 1018
Classic Case 48.2 In re Estate of Piper
(1984) 940
Mislaid, Lost, and Abandoned Property 943 Appendices
Bailments 944 A How to Brief Cases and Analyze Case Problems A–l
Ordinary Bailments 945
B The Constitution of the United States A–4
Case 48.3 Bridge Tower Dental, P.A. v. Meridian
Computer Center, Inc. (2012) 948 C The Uniform Commercial Code A–12
Special Types of Bailments 949 D The Sarbanes-Oxley Act of 2002
(Excerpts and Explanatory Comments) A–l59
Chapter 49 E Answers to the Issue Spotters A–166
Real Property and
F Sample Answers for Business Case Problems with
Landlord-Tenant Law 955 Sample Answer A–175
The Nature of Real Property 955
Ownership and Other Interests in Real Property 956 Glossary G–l
Transfer of Ownership 961
Spotlight on Sales of Haunted Houses
Table of Cases TC–1
Case 49.1 Stambovsky v. Ackley (1991) 962 Index 1–1

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

9781285185248_00_fm_i-xxx.indd 12 8/28/13 2:33 PM


Concept Summaries

1.1 Sources of American Law 6 27.1 Signature Liability 520


1.2 The Common Law Tradition 10 27.2 Transfer Warranty Liability for Transferors
1.3 Schools of Jurisprudential Thought 13 Who Receive Consideration 521
2.1 Jurisdiction 34 28.1 Honoring Checks 541
2.2 Types of Courts 42 29.1 Remedies Available to Creditors 566
3.1 Pretrial Procedures 63 30.1 Creating and Perfecting a
Security Interest 584
3.2 Trial Procedures 68
30.2 Remedies of the Secured Party on
3.3 Posttrial Options 70
the Debtor’s Default 594
6.1 Intentional Torts against Persons 127
31.1 Forms of Bankruptcy Relief Compared 617
6.2 Intentional Torts against Property 130
32.1 Formation of the Agency Relationship 631
10.1 Types of Crimes 205
33.1 Authority of an Agent to Bind the Principal
11.1 Types of Contracts 232 and a Third Party 645
12.1 Methods by Which an Offer 33.2 Termination of an Agency 654
Can Be Terminated 249
38.1 Special Business Forms 750
13.1 Consideration 266
39.1 Classification of Corporations 766
14.1 Contracts by Minors 275
40.1 Roles of Directors and Officers 783
14.2 Contracts by Intoxicated Persons 276
40.2 Duties and Liabilities of Directors
14.3 Contracts by Mentally Incompetent and Officers 788
Persons 277
40.3 Role, Rights, and Liability of Shareholders 797
15.1 Voluntary Consent 301
41.1 Methods of Expanding Corporate Operations
1 7.1 Assignments and Delegations 326 and Interests 807
1 9.1 Equitable Remedies 359 47.1 Common Law Liability of Accountants
20.1 The Formation of Sales and and Other Professionals 921
Lease Contracts 391 47.2 Statutory Liability of Accountants
21.1 Delivery without Movement of the Goods 411 and Other Professionals 927
21.2 Risk of Loss When a Sales or 48.1 Acquisition of Personal Property 942
Lease Contract Is Breached 413 48.2 Mislaid, Lost, and Abandoned Property 944
22.1 Performance of Sales and Lease Contracts 425 48.3 Rights and Duties of the Bailee
23.1 Types of Warranties 447 and the Bailor 951
25.1 Requirements for Negotiability 489 49.1 Interests in Real Property 960
26.1 Types of Indorsements and Their Effect 500 51.1 Wills 1006
26.2 Rules and Requirements for HDC Status 508 51.2 Trusts 1011

xiii

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

9781285185248_00_fm_i-xxx.indd 13 8/28/13 2:33 PM


Exhibits

1–1 Areas of the Law That May Affect Business 16–4 The Parol Evidence Rule 316
Decision Making 4 17–1 Assignment Relationships 321
1–2 Equitable Maxims 7 17–2 Delegation Relationships 324
1–3 Procedural Differences between an Action at Law 17–3 Third Party Beneficiaries 328
and an Action in Equity 8
18–1 Contract Discharge 344
1–4 National Reporter System—Regional/Federal 16
19–1 Measurement of Damages—
1–5 How to Read Citations 17 Breach of Construction Contracts 352
1–6 A Sample Court Case 22 19–2 Remedies for Breach of Contract 357
2–1 Exclusive and Concurrent Jurisdiction 33 20–1 How Several Articles of the UCC
2–2 The State and Federal Court Systems 37 Can Apply to a Single Transaction 377
2–3 Geographic Boundaries of the 20–2 The Law Governing Contracts 377
U.S. Courts of Appeals and U.S. District Courts 40
20–3 Major Differences between
2–4 Basic Differences in the Traditional Forms Contract Law and Sales Law 388
of ADR 43
21–1 Void and Voidable Titles 405
3–1 Stages in a Typical Lawsuit 51
21–2 Contract Terms—Definitions 409
3–2 A Typical Complaint 53
22–1 A Letter-of-Credit Transaction 435
3–3 A Typical Summons 54
24–1 The Legal Systems of Selected Nations 455
3–4 Pretrial Motions 56
25–1 Basic Types of Negotiable Instruments 477
4–1 Protections Guaranteed by the Bill of Rights 80
25–2 A Typical Time Draft 478
8–1 Forms of Intellectual Property 170
25–3 A Typical Promissory Note 481
9–1 The Proposed Consumer Privacy Bill of Rights 190
25–4 A Typical Small Certificate of Deposit 482
10–1 Key Differences between
Civil Law and Criminal Law 195 26–1 A Blank Indorsement 494
10–2 Civil (Tort) Lawsuit and Criminal Prosecution 26–2 A Special Indorsement 496
for the Same Act 196 26–3 A Qualified Indorsement 496
10–3 Major Procedural Steps in a Criminal Case 211 26–4 “For Deposit Only” and “For Collection Only”
11–1 Classifications Based on Contract Formation 228 Indorsements 499
11–2 Enforceable, Voidable, Unenforceable, 26–5 Trust (Agency) Indorsements 499
and Void Contracts 231 26–6 Converting an Order Instrument to a
11–3 Rules of Contract Interpretation 234 Bearer Instrument and Vice Versa 500
12–1 A Click-On Agreement Sample 253 26–7 Taking for Value 503
12–2 The E-SIGN Act and the UETA 256 27–1 Time for Proper Presentment 514
14–1 Unconscionability 282 27–2 Defenses Against Liability
14–2 Contract Legality 285 on Negotiable Instruments 522

15–1 Mistakes of Fact 291 28–1 A Cashier’s Check 532


16–1 The One-Year Rule 308 28–2 An American Express Traveler’s Check 533
16–2 Collateral Promises 309 28–3 A Poorly Filled-Out Check 540
16–3 Business Contracts 28–4 The Check-Collection Process 544
and the Writing Requirement 312 29–1 Suretyship and Guaranty Parties 567

xiv

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Contents xv

30–1 Secured Transactions— 42–2 Comparison of Coverage, Application,


Concept and Terminology 575 and Liability under SEC Rule 10b-5 and
30–2 The Uniform Financing Statement 577 Section 16(b) 827
30–3 Types of Collateral 42–3 Some Key Provisions of the Sarbanes-Oxley Act
and Methods of Perfection 582 Relating to Corporate Accountability 833
30–4 Priority of Claims to a Debtor’s Collateral 589 43–1 Executive Departments
31–1 Collection and Distribution of Property and Important Subagencies 844
in Most Voluntary Bankruptcies 606 43–2 Selected Independent Regulatory Agencies 845
33–1 A Sample General Power of Attorney 640 43–3 The Process of
37–1 Common Terms Included Formal Administrative Adjudication 854
in a Partnership Agreement 723 44–1 Selected Areas of
37–2 A Comparison of General Partnerships Consumer Law Regulated by Statutes 862
and Limited Partnerships 735 45–1 Major Federal Environmental Statutes 880
39–1 Sample Articles of Incorporation 768
46–1 Exemptions to Antitrust Enforcement 906
39–2 How Do Stocks and Bonds Differ? 775
47–1 Key Provisions of the Sarbanes-Oxley Act of 2002
39–3 Types of Stocks 775 Relating to Public Accounting Firms 922
40–1 Directors’ Management Responsibilities 781
48–1 Degree of Care Required of a Bailee 947
40–2 Results of Cumulative Voting 792
50–1 Selected Insurance Classifications 979
41–1 Merger 801
50–2 Insurance Contract Provisions and Clauses 981
41–2 Consolidation 802
50–3 Typical Fire Insurance Policies 988
41–3 The Terminology of Takeover Defenses 806
51–1 Excerpts from Michael Jackson’s Will 997
41–4 Major Forms of Business Compared 811
42–1 Exemptions for Securities Offerings 51–2 Per Stirpes Distribution 1008
under the 1933 Securities Act 820 51–3 Per Capita Distribution 1009

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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

9781285185248_00_fm_i-xxx.indd 16 8/28/13 2:33 PM


Preface

The study of business law and, more generally, the tors the ability to add their own content in the
legal environment of business has universal appli- Learning Path with apps that integrate into the
cability. A student entering any field of business MindTap framework seamlessly with Learning
must have at least a passing understanding of busi- Management Systems (LMS).
ness law in order to function in the real world.
Additionally, students preparing for a career
in accounting, government and political science,
CengageNOW for Business Law:
economics, and even medicine can use much of Interactive Assignment System
the information they learn in a business law and CengageNOW™ is a powerful course management
legal environment course. In fact, every indi- tool that provides control and customization to
vidual throughout his or her lifetime can benefit optimize the student learning experience and pro-
from a knowledge of contracts, real property law, duce desired outcomes. The application features
landlord-tenant relationships, and other topics. a variety of question types to test simple reading
Consequently, we have fashioned this text as a use- comprehension, complex critical thinking, legal
ful “tool for living” for all of your students (includ- reasoning, and case analysis skills. CengageNOW
ing those taking the CPA exam). includes:
For the Thirteenth Edition, we have spent a
great deal of effort making this book more contem- • An Interactive book.
porary, exciting, and visually appealing than ever • Auto-graded homework with the following
before. We have also added many new features and consistent question types:
special pedagogical devices that focus on the legal, ° Worksheets—Interactive worksheets
ethical, global, and e-commerce environments, prepare students for class by ensuring
while addressing core curriculum requirements. reading and comprehension.
° Video Activities—Real-world video exer-
cises make business law engaging and
relevant.
Unique New Digital Brief Hypotheticals—These applications
°
Learning Systems provide students practice in spotting the
issue and applying the law in the context
Before we discuss the many new aspects of this of a short, factual scenario.
text, however, we wish to point out the exciting ° Case Problem Blueprints—Promote
new digital products offered in conjunction with deeper critical thinking and legal
the text. reasoning by guiding students step-by-
step through a case problem, building on
acquired knowledge to truly assess their
MindTap understanding of legal principles.
• Personalized Student Plan with multimedia
New for Business Law, Thirteenth Edition, MindTap
study tools and videos.
is a fully online, highly personalized learning
• Test Bank.
experience built on Cengage Learning content.
• Reporting and Assessment options.
MindTap combines student learning tools—such
as readings, multimedia, activities and assessments By using the optional CengageNOW system,
from CengageNOW™—into a singular Learning students can complete the assignments online
Path that guides students through their course. and can receive instant feedback on their answers.
Instructors can personalize the experience by Instructors can utilize CengageNOW to upload
customizing authoritative Cengage Learning con- their course syllabi, create and customize home-
tent and learning tools. MindTap offers instruc- work assignments, and keep track of their students’

xvii

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

9781285185248_00_fm_i-xxx.indd 17 8/28/13 2:33 PM


xviii Preface

progress. Instructors can also communicate with Complete Series of


their students about assignments and due dates,
and create reports summarizing the data for an Business Law Texts
individual student or for the whole class.
We also want instructors to know that there is now
an entire family of derivative texts based on these
CourseMate materials for instructors wishing to customize the
text for their purposes. (See www.cengagebrain.com
CourseMate for Business Law brings business law
or your local sales representative for more informa-
concepts to life with interactive learning, study, and
tion on the entire series of Business Law texts.) The
exam preparation tools that support the printed
series includes:
textbook. Built-in engagement tracking tools allow
you to assess the study activities of your students. • Business Law: Text and Cases, The First
Additionally, Business Law CourseMate includes Course includes the first twenty-four chap-
an interactive online textbook, which contains the ters of Business Law, plus four chapters on
complete content of the print textbook enhanced Agency and Employment, and four chapters
by the many advantages of a digital environment. on Business Organizations.
• Business Law: Text and Cases, An
Accelerated Course includes a total of nine-
Cengage Learning Testing teen chapters, all but eight of which combine
materials from chapters of Business Law. This
Powered by Cognero
text provides a brief version of the core con-
Cengage Learning Testing Powered by Cognero is a tent suitable for a one-semester course.
flexible, online system that allows you to do the • Business Law: Text and Cases,
following: Commercial Law for Accountants is
designed for those entering the field of
• Author, edit, and manage Test Bank content
accounting and includes topics from Business
from multiple Cengage Learning solutions.
Law that accountants need to know. It covers
• Create multiple test versions in an instant.
business organizations, agency, employment,
• Deliver tests from your LMS, your classroom,
negotiable instrument law, sales and lease
or wherever you want.
contracts, creditors’ rights and bankruptcy,
government regulation, property, and profes-
Start Right Away! Cengage Learning Testing Powered
sional liability.
by Cognero works on any operating system or browser.
• No special installs or downloads are needed.
• Create tests from school, home, the coffee What Is New in the
shop—anywhere with Internet access. Thirteenth Edition
What Will You Find Instructors have come to rely on the coverage,
• Simplicity at every step. A desktop-inspired accuracy, and applicability of Business Law. To
interface features drop-down menus and make sure that our text engages your students,
familiar intuitive tools that take you through solidifies their understanding of legal concepts,
content creation and management with ease. and provides the best teaching tools available, we
• Full-featured test generator. Create ideal now offer the following items either in the text or
assessments with your choice of fifteen ques- in conjunction with the text.
tion types—including true/false, multiple
choice, opinion scale/Likert, and essay). New Chapter on Internet Law,
Multi-language support, an equation editor
and unlimited metadata help ensure your
Social Media, and Privacy
tests are complete and compliant. For the Thirteenth Edition, we have included an
• Cross-compatible capability. Import and entirely new chapter (Chapter 9) entitled Internet
export content into other systems. Law, Social Media, and Privacy. Social media

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Preface xix

have entered the mainstream and become a part of contract is annotated so that students can quickly
everyday life for many businesspersons. Throughout see what each contract provision means.
the text, we recognize this trend by incorporating
the Internet and social media as they relate to the
topics under discussion. New Highlighted and
We also give the legal issues surrounding the Numbered Examples and
Internet, social media, and privacy special empha- Case in Point Illustrations
sis in this new chapter. This chapter examines some
Many instructors use cases and examples to illustrate
of the laws pertaining to the Internet, intellectual
how the law applies to business. For this edition, we
property, and privacy. It also discusses recent legal
have expanded both our in-text examples and our dis-
developments concerning the protection of social
cussion of case law by adding highlighted numbered
media passwords and the use of social media by
Examples and Cases in Point in every chapter.
employers and law enforcement.
These two features are uniquely designed and
consecutively numbered throughout each chapter
New Managerial Strategy Features for easy reference. Examples illustrate how the law
applies in a specific situation. Cases in Point pres-
For the Thirteenth Edition, we have created a
ent the facts and issues of an actual case and then
new feature entitled Managerial Strategy that
describe the court’s decision and rationale. The num-
focuses on the management aspects of business law.
bered Examples and Cases in Point features are inte-
Special emphasis is given to sustainability, ethical
grated throughout the text to help students better
trends, and changing managerial responsibilities.
understand how courts apply the principles in the
Each feature includes a short section entitled
real world.
Managerial Implications that provides con-
crete information for managers and connects the
topic under discussion to operating a business. New Spotlight Cases and
Each feature also concludes with two Business Spotlight Case Problems
Questions that prompt students to further exam-
ine the issues discussed. Suggested answers For the Thirteenth Edition of Business Law, cer-
to all the Business Questions are included tain cases and case problems have been carefully
in both the Instructor’s Manual and the chosen as exceptionally good teaching cases.
Answers Manual for this text. Spotlight Cases and Spotlight Case Problems
Topics examined in these features include: are labeled either by the name of one of the parties
or by the subject involved. Some examples include
• Budget Cuts for State Courts Can Affect Spotlight on Amazon, Spotlight on Apple, Spotlight on
Businesses (Chapter 2). the Seattle Mariners, Spotlight on Commercial Speech,
• Facing Breach of Contract Issues (Chapter 22). and Spotlight on Internet Porn.
• Changing Social Media Policies (Chapter 34). Instructors will find these Spotlight Cases use-
• Small Business Owners Now Have Recourse ful to illustrate the legal concepts under discus-
When Cyber Thieves Empty Their Bank sion. Students will enjoy studying these cases
Accounts (Chapter 38). because the parties are often familiar and the
cases involve interesting and memorable facts.
New Appendix to Chapter 19 Suggested answers to all case-ending ques-
tions and case problems are included in
Focuses on Reading and both the Instructor’s Manual and the
Analyzing Contracts Answers Manual for this text.
Because reading and analyzing contracts is such
a crucial skill for businesspersons, a special new New ExamPrep Section
Appendix to Chapter 19 has been added. This
appendix follows the last contracts chapter and
with Two Issue Spotters
explains how to read and analyze a contract. Then, For this edition, we have added a new section called
it presents an example of an employee noncom- ExamPrep at the conclusion of each chapter. The
petition and nondisclosure agreement. The sample section includes two new Issue Spotters related

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

9781285185248_00_fm_i-xxx.indd 19 8/28/13 2:33 PM


xx Preface

to the chapter’s topics that facilitate student Instructor’s Manual and the Answers Manual
learning and review of the materials. Suggested for this text.
answers to the Issue Spotters in every chapter are
provided in Appendix E at the end of the text.
New Case Analysis Cases with
Four Legal Reasoning Questions
New Legal Reasoning
In every chapter of the Thirteenth Edition of
Group Activities Business Law, we have included one longer case
For instructors who want their students to engage excerpt— labeled Case Analysis Case— followed
in group projects, each chapter of the Thirteenth by four Legal Reasoning Questions. The ques-
Edition includes a special new Legal Reasoning tions are designed to guide students’ analysis of the
Group Activity. Each activity begins by describ- case and build their legal reasoning skills. These
ing a business scenario and then requires each Case Analysis Cases may be used for case-briefing
group of students to answer a specific question assignments and are also tied to the Special Case
pertaining to the scenario based on the informa- Analysis questions found in every unit of the text
tion that they learned in the chapter. These proj- (one per unit). Suggested answers to the Legal
ects may be used in class to spur discussion or as Reasoning Questions are included in both
homework assignments. Suggested answers to the Instructor’s Manual and the Answers
the Legal Reasoning Group Activities are Manual for this text.
included in both the Instructor’s Manual
and the Answers Manual for this text.
Improved Ethics Coverage
For the Thirteenth Edition of Business Law, we have
New Insight Features significantly revised and updated the chapter on eth-
For the Thirteenth Edition, we have created new ics and business decision making (Chapter 5). The
Insight into [E-Commerce, Ethics, the Global chapter now presents a more practical, realistic, case-
Environment, or Social Media] features that study approach to business ethics and the dilemmas
appear in selected chapters. These features provide facing businesspersons today. It also provides step-by-
valuable insights into how the courts and the law step guidance for making ethical business decisions.
are dealing with specific issues. Each of these fea- The emphasis on ethics is reiterated in mate-
tures ends with a Legal Critical Thinking ques- rials throughout the text, particularly the Insight
tion that explores some cultural, environmental, into Ethics features, the Focus on Ethics features
or technological aspect of the issue. The following that conclude every unit, and the pedagogy that
are some of the topics explored in these features: accompanies selected cases and features. We also
discuss corporate governance issues as appro-
• Insight into E-Commerce—Do Computers priate in the corporate law chapters and in the
Have Free Speech Rights? (Chapter 4). Focus on Ethics feature concluding Unit Eight on
• Insight into Ethics—Warning Labels for business organizations. Finally, each chapter in the
Video Games (Chapter 7). text includes A Question of Ethics case problem
• Insight into the Global Environment— that provides a modern-day example of the kinds
Is It Legal to Resell Textbooks Purchased of ethical issues faced by businesspersons and
Abroad? (Chapter 8). explores the ways that courts can resolve them.
• Insight into Social Media—“Catfishing”:
Is That Online “Friend” Who You Think It Is?
(Chapter 15).
• Insight into E-Commerce—Smartphone- Additional Features
Based Payment Systems (Chapter 25). of This Text
• Insight into Social Media—Social
Media Estate Planning (Chapter 51).
Business Law, Thirteenth Edition, includes a num-
Suggested answers to the Legal Reasoning ber of pedagogical devices and special features,
Group Activities are included in both the including those discussed here.

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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Preface xxi

Emphasis on Business and the rule of law, determine how the rule applies to
on Critical Thinking the facts of the case, and describe the court’s con-
clusion. Instructors can assign these questions as
For the Thirteenth Edition, we have focused on homework or use them in class to elicit student
making the text more business related. To that participation and teach case analysis. Suggested
end, we have carefully chosen cases, features, and answers to the Special Case Analysis ques-
problems that are relevant to operating a busi- tions can be found in both the Instructor’s
ness. In addition, we recognize that today’s busi- Manual and the Answers Manual that
ness leaders must often think “outside the box” accompany this text.
when making business decisions. For this reason,
we have included numerous critical thinking and
legal reasoning elements in this text. Almost all Reviewing Features
of the features and cases presented in the text con- in Every Chapter
clude with some type of critical thinking question.
Cases may include one or more of the follow- In the Thirteenth Edition of Business Law, we con-
ing critical thinking questions: tinue to offer a Reviewing feature at the end of every
chapter to help solidify students’ understanding of
• What If the Facts Were Different? the chapter materials. Each Reviewing feature pres-
• The Ethical Dimension ents a hypothetical scenario and then asks a series
• The E-Commerce Dimension of questions that require students to identify the
• The Global Dimension issues and apply the legal concepts discussed in the
• The Legal Environment Dimension chapter.
These features are designed to help students
Suggested answers to all questions following
review the chapter topics in a simple and interest-
cases can be found in both the Instructor’s
ing way and see how the legal principles discussed
Manual and the Answers Manual that
in the chapter affect the world in which they live.
accompany this text.
An instructor can use these features as the basis
for in-class discussion or encourage students to use
them for self-study prior to completing homework
Managerial Implications
assignments. Suggested answers to the ques-
in Selected Cases tions posed in the Reviewing features can
In addition to the critical thinking questions, we be found in both the Instructor’s Manual
have included special case pedagogy at the end of and the Answers Manual that accompany
selected cases that have particular importance for this text.
business managers. This section, called Managerial
Implications, points out the significance of the
court’s ruling in the case for business owners and Concept Summaries
managers. When key areas of the law need additional empha-
sis, we provide a Concept Summary. These summa-
ries have always been a popular pedagogical tool
Special Case Analysis Questions in this text. It now includes more than fifty of these
For nearly every unit in the text, we also provide summaries, many of which have been expanded or
a Special Case Analysis question that is based on revised.
the Case Analysis Case excerpt in that chapter. The
Special Case Analysis questions are designed to build
students’ analytical skills and appear in the Business
Exhibits
Case Problems at the end of selected chapters. When appropriate, we also illustrate important
The Special Case Analysis questions test stu- aspects of the law in graphic form in exhibits. In
dents’ ability to perform IRAC (Issue, Rule, all, more than one hundred exhibits are featured in
Application, and Conclusion) case analysis. Business Law, Thirteenth Edition. Several of these
Students must identify the legal issue presented exhibits are new, and we have modified existing
in the chapter’s Case Analysis Case, understand exhibits to achieve better clarity.

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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good and kind. He says he will never leave me; that we must live together.
And he thinks he will always think so—poor boy! I have not the heart to tell
him that he will soon change.’
‘Why should he change? He may search far enough before he will find
such another home. If I were he, I would not change either. He is more to be
trusted than Oswald.’
‘Oh, you are mistaken. My boy is——’
‘I am not saying ill of him. If I ever wish to do that, I will not come to
his mother with it. But Oswald thinks more of himself. Where is he to-
night? He has left you alone, to bear all your loneliness, to think over
everything.’
‘You know I never taught my children that they were to keep by me. I
might have liked it, but I did not think it right. They are very, very good; but
no one can upbraid me with keeping them at my apron-strings.’
‘That is one thing I object to in women,’ said Mr. Beresford. ‘The most
sensible are so sensitive about those wretched little things that people say.
What does it matter what people say who know nothing? Do you think a
club is so much better than your apron-strings, as you call them? Why
should you care for such vulgar reproach?’
‘I don’t know why; we are made so, I suppose; and if women are
sensitive, you must know the best of men will talk about our apron-strings;
when all we are thinking of is what is best for the children—trembling,
perhaps, and wondering what is best—giving all our hearts to it—some
careless fool will spoil all we are planning with his old joke about our
apron-strings—or some wise man will do it. It is all the same. But, never
mind; I have locked up all my tremblings in my own mind, and left them
free.’
‘And you have not repented? You have more confidence in them now
than if you had been less brave. But I wish Oswald had stayed at home with
you to-night.’
‘Oh, you must not blame Oswald,’ she cried, doubly anxious not to have
her son blamed, and not to allow Cara’s father to conceive any prejudice
against him. ‘It is in the evening he sees his friends; he is always ready
when I want him—during the day. It would not be good for the boy to let
him shut himself up. Indeed, it is my own doing,’ said Mrs. Meredith,
smiling upon him, with one of those serene and confident lies which the
sternest moralist cannot condemn.
Mr. Beresford shook his head a little; but he could not undeceive the
mother about her son, any more than she could confess how well she was
aware of all Oswald’s selfishnesses. They were selfishnesses, to be sure; or,
at least, the outside world would naturally call them so. To her the boy’s
conduct bore a different appearance. He thought of himself—this was how
she explained it. And how natural that was for anyone so watched over and
cared for as he had been! Was it not, indeed, her fault, who had always
supplied every want, satisfied every wish she knew of, and trained him, so
to speak, to have everything his own way, and to think that every other way
should yield to his? It was her fault; and as he grew older, and his mind
enlarged, he would grow out of it. This, though with an uneasy twinge now
and then, Mrs. Meredith believed, and though as clear-sighted as anyone to
her boy’s faults, thought less hardly, and perhaps more truly, of them than
strangers did. But there was a little pause after this, and a sense in her mind
that she had not convinced this critic, who considered himself more clear-
sighted than Oswald’s mother, and internally half pitied, had smiled at her
blindness. If critics in general only knew! for who is so sharp-sighted to all
these imperfections as the parent who thus endeavours to convince them of
the excellence of a child!
‘Edward gives up India, then!’ said Mr. Beresford. ‘I do not wonder; but
it is a fine career, and with his connections and antecedents——’
Mrs. Meredith gave a little shiver. ‘Do you think he should still go?’ she
asked, anxiously. ‘Indeed, I have not persuaded him. I have held my tongue.
And he never liked the idea. He did it for duty only. But he does not mean
to sink into idleness—he will work here.’
‘At what will he work? The Bar? Every young man I ever meet is going
to the Bar. There will soon be nobody left to make the necessary mischief,
and provide work for them. But if a man wants a fine career, India is the
place. You are going to stay in this house, notwithstanding your old
adviser?’
‘It does not matter to me,’ she said. ‘I can be as happy in one house as
another. It is Edward who wishes it.’
‘And then, if he sees someone he likes—and marries, and leaves you in
the lurch? Boys who are independent so young are sure to marry young.’
She shook her head. ‘Ah! how I wish it might be so! I would forgive him
for leaving me—if only my boy was happy.’
Mr. Beresford got up, and walked about the room. It was nothing
extraordinary, but only a way he had, and did not suggest to his friend any
accès of excitement.
‘You think marriage, then, so much the happiest condition?’ he said.
Mrs. Meredith made a pause before she replied. ‘Is that the question?
How can I answer at my age, and in—the circumstances you know. We
have not to settle abstract happiness. Feelings of that kind die out, and I am
not the person to speak. I think a woman—at one time of life—loves her
children more than ever she loved man.’
‘Some women——’
‘But it is not marrying in the abstract. My boy would be happy if he
could get—what he wants. But he never will get that,’ she added, with a
sigh.
‘What is so tragic about Edward’s love affairs?’ he asked, half laughing;
‘is it ever so serious at two-and-twenty?’
‘Ah, you laugh! but you would not have laughed, at his age, if you had
seen someone you were fond of secured by—another—who was not half so
true a lover perhaps; or, at least, you thought so.’
‘No,’ he said, growing grave. ‘That was different, certainly.’ And the
mind of the man travelled suddenly off, like a flash of lightning, back to the
flowery land of youth, that lay so far behind. The mind of the woman took
no such journey. Her love had ended, not in the anguish of a death parting,
but in estrangement, and coldness, and indifference. She remained where
she was, thinking only, with a sigh, how willingly she would give a bit of
her life, if she could—a bit of her very heart—to get happiness for her boy;
yet believing that to make one happy would be to ruin the other, and
standing helpless between the two. This was the only complication in her
mind. But in this the complications were many. Why did she say this, and
send him back to the days of young romance and passion? just when his
mind was full of the calmer affections and expedients of middle age, and
the question whether—to secure such a tender companion as herself, whom
he loved in a way, and whose absence impoverished life beyond bearing—
he should endeavour to return into the traditions of the other love which
was past for him as for her. Was it her friendly, gentle hand, so unconscious
of what he was meditating, that put him thus back at a touch into the old
enchanted world, and showed him so plainly the angel at the gates of that
faded, unfading Paradise; an angel, not with any naming sword, but with the
stronger bar of soft uplifted hands! Impossible! So it was—and yet what
else could be?
CHAPTER XXXV.

ROGER’S FATE.

Roger Burchell had made two unsuccessful visits to the Square—the first
absolutely painful, the second disappointing. On both occasions he had
failed to see Cara, except surrounded by strangers, who were nothing, and
indeed less than nothing to him; and both times he had gone away resolute
that nothing should induce him to tempt fate again, and come back. But a
young man who is in love persuades himself with difficulty that fate is
against him. It seems so unlikely and incredible that such a thing should be;
and short of a distinct and unmistakable sentence, hope revives after the
shock of a mere repulse has a little worn off. And then Roger had heard that
Cara was coming back to the Hill, and his heart had risen. When she was
there again, within his reach, without ‘these fellows’ by, who had troubled
him, Cara, he flattered himself, would be to him as she used to be; and,
distance lending enchantment to his vision, it appeared to him that she had
been much kinder in those days than she ever really was, and that she must
have understood him, and had seriously inclined to hear what he had to say.
Soon he managed to persuade himself that Cara had never been cold, never
had been anything but sweet and encouraging, and that it was only her
surroundings which had led her far away from him, and forced the attention
which she would have much more willingly bestowed upon himself, the
companion of her youth. This idea brought a rush of tender feeling with it,
and resolution not to be discouraged—never to take an answer again but
from Cara herself. How likely that she might have wondered too why he did
not take the initiative, why he did not insist upon speaking to her, and
getting her own plain answer! From this to the thought that Cara was
looking out for him every Sunday—wondering, disappointed, and alarmed
that he did not come—was but a step; and then Roger made up his mind to
go again, to insist on seeing her, and to ask her—simply to ask her, neither
more nor less—for there was very little time to lose. In the autumn he was
going to India; already his importance had risen with all belonging to him.
Up to this moment he had been only one of the boys, more or less, wasting
money, and limiting the advantages of the others; but in autumn he would
have an income of his own, and would be independent. The sense of
importance went to his head a little. Had he met the Queen, I think that he
would have expected her Majesty to know that he was going out to India in
October. It was not that he was vain of himself or his prospects; but a man
with an income is very different from a man without that possession. This is
a fact which no one can doubt. It was late in April when he came to the
Square for the third time, and so fine a day that everybody had gone out,
except Cara, who was not well. When he was ushered into the drawing-
room, he found her seated in an easy chair, with a shawl round her. Though
it was very sunshiny outside, it was rather cold indoors. Miss Cherry, who
stood by with her bonnet on, and her prayer-book in her hand, had just
ordered the fire to be lighted, and Cara, with her cold, had crept close to it.
Miss Cherry was going to the afternoon service.
‘I shall not be long, my darling. You will not miss me,’ she was saying,
‘though I don’t like to leave you on my last day.’
‘Don’t say it is the last day—and look, here is Roger to keep me
company,’ said Cara. ‘He will sit with me while you are away.’
How glad he was, and how eager to promise!
Miss Cherry thought no more of poor Roger than if he had been a
cabbage. She thought it might be an amusement to her niece to hear his
little gossip about home; and though she saw through his eagerness, and
suspected his object, yet she was not alarmed for Cara. Poor blind moth,
coming to scorch his wings, she said to herself, with a half-amused pity.
She did not pay very much attention to what he might have to suffer.
Indeed, unless one has a special interest in the sufferer, such pangs always
awake more or less amusement in the mature bosom; and, tender-hearted as
Miss Cherry was, her mind was too full of other things to have much leisure
for Roger, who was, she thought, anyhow too shy and awkward to commit
himself. She had her mind full of a great many things. She was going away,
now that her brother was not going. But though she was anxious about her
old aunt, and her home, which she had left for so long a period, she was
anxious about Cara too, and did not know which of these opposing
sentiments dragged her most strongly to one side or the other. And then she
was angry with her brother—angry with him for staying, and angry that
there had been an occasion for his going away. She went to afternoon
church at that drowsiest hour, when, if the mind has any temptation to be
dejected, or to be cross, it is crosser and more downcast than at any other
moment, and attended a sleepy service in an old dingy chapel, one of the
few which are still to be found remaining, in which a scattered congregation
drowse in big pews, and something like a clerk still conducts the responses.
Miss Cherry had been used to this kind of service all her life, and in her
gentle obstinacy of conservatism clung to it, though it possessed very few
attractions. She said her own prayers very devoutly, and did her best to join
in the irregular chorus of the clerk; and she sat very erect in the high corner
of the pew, and gave an undivided attention to the sermon, sternly
commanding every stray thought out of the way. But the effort was not so
successful as the valour of the endeavour merited. Miss Cherry did not like,
as she said, to have the good effect all dissipated by worldly talk after a
good sermon (and was not every sermon good in intention at least—
calculated, if we would only receive its directions, to do good to the very
best of us?), and for this reason she was in the habit of avoiding all
conversation on her way from church. But her resolution could not stand
when she saw Mr. Maxwell coming towards her from the other side of the
street. He had not been at church, she feared; but yet she had a great many
things to ask him. She let him join her, though she liked to have her
Sundays to herself.
‘Yes, I hope Miss Charity is better,’ he said. ‘Her energy has come back
to her, and if the summer would really come—— I hear of another change,
which I can’t say surprises me, but yet—your brother then is not going
away?’
‘No—why should he?’ said Miss Cherry. It is one thing to find fault with
one’s brother, and quite another thing to hear him criticised by his friend.
‘I thought so,’ said Maxwell; ‘he has no stamina, no firmness. I suppose,
then, he has made up his mind?’
‘To what, Mr. Maxwell? He has made up his mind not to go away.’
‘And to all the consequences. Miss Cherry, you are not so simple as you
wish people to think. He means, of course, to marry again. I had hoped he
would have more sense—and better feeling.’
‘I don’t know why you should judge James so harshly,’ said Miss
Cherry, with spirit. ‘Many people marry twice, of whom nothing is said—
and when they do not, perhaps it is scarcely from good taste or feeling on
their part.’
‘You are kind,’ said the doctor, growing red, and wondering within
himself how the d—— could she know what he had been thinking of? Or
was it merely a bow drawn at a venture, though the arrow whistled so
close?
‘Whatever wishes I might have,’ he added, betraying himself, ‘are
nothing to the purpose. Your brother is in a very different position. He has a
pretty, sweet daughter, grown up, at a companionable age, to make a home
for him. What would he have? Such a man might certainly be content—
instead of compelling people to rake up the past, and ask unpleasant
questions.’
‘Questions about James? I don’t know what questions anyone could ask
about my brother——’
‘Well,’ said Maxwell, somewhat hotly; ‘I don’t like doing anything in
the dark, and you may tell Beresford, if you like, Miss Cherry, all that I
have to say, that I shall oppose it. I shall certainly oppose it. Never should I
have said a word, had he let things alone; but in this case, it will become my
duty.’
‘What will become your duty?’ said Miss Cherry, aghast.
He looked at her wondering face, and his own countenance changed. ‘It
is not anything to bother you about,’ he said. ‘It is—a nothing—a matter
between your brother and me.’
‘What is it?’ she said, growing anxious.
He had turned with her, and walked by her side in his vehemence. Now
that she had taken fright, he stopped short.
‘It is only that I have a patient to see,’ he said; ‘and I am glad to be able
to make your mind quite easy about Miss Beresford. She is twice as strong
as either you or I.’
And before she could say another word he had knocked at a door they
were passing, and left her, taking off his hat in the most ordinary way. What
did he mean? or was it nothing—some trifling quarrel he had got into with
James? Miss Cherry walked the rest of the way home, alone indeed and
undisturbed, but with a strange commotion in her mind. Was there
something serious behind these vague threatenings, or was he only
depressed and cross, like herself, from the troublesome influence of spring,
and of this east-windy day?
Meanwhile, Roger sat down in front of Cara’s fire, which was too warm,
and made him uncomfortable—for he had been walking quickly, and he had
no cold. He thought she looked pale, as she reclined in the big chair, with
that fleecy white shawl round her, and he told her so frankly.
‘It is living in town that has done it,’ he said. ‘When you come back to
the country you will soon be all right.’
‘It is only a cold,’ said Cara. ‘I don’t know now when we shall go to the
country. Aunt Cherry leaves us to-morrow.’
‘But you are coming too? Yes, you are! Miss Charity told my mother so.
In a few days——’
‘Ah, that was before papa changed his plans; he is not going abroad now
—so I stay at home,’ said Cara.
The young man started up from his seat in the sudden sting of his
disappointment. He was too unsophisticated to be able to control his
feelings. Still, he managed not to swear or rave, as Nature suggested. ‘Good
Heavens!’ was the only audible exclamation he permitted himself, which, to
be sure, is merely a pious ejaculation; though a lower ‘Confound!’ came
under his breath—but this Cara was not supposed to hear.
‘Home?’ he said, coming back after a walk to the window, when he had
partially subdued himself. ‘I should have thought the Hill, where you have
lived all your life, and where everybody cares for you, would have seemed
more like home than the Square.’
‘Do not be cross, Roger,’ said Cara. ‘Why should you be cross?’
Something of the ease of conscious domination was in her treatment of him.
She did not take the same high ground with Oswald or Edward; but this
poor boy was, so to speak, under her thumb, and, like most superior
persons, she made an unkind use of her power, and treated her slave with
levity. ‘You look as if you meant to scold me. There is a little red here,’ and
she put up her hand to her own delicate cheek, to show the spot, ‘which
means temper, and it is not nice to show temper, Roger, especially with an
old friend. I did not choose my home any more than my name. You might as
well say you should have thought I would prefer to be May, rather than
Cara.’
‘It is you who are unkind,’ said the poor young fellow. ‘Oh, Cara, if you
remember how we have played together, how long you have known me!
and this is my last summer in England. In six months—less than six months
—I shall be gone.’
‘I am very sorry,’ she said. ‘But why should you get up and stamp
about? That will not make things any better. Sit down and tell me about it.
Poor Roger! are you really going away?’
Now, this was not the tone he wished or expected; for he was far from
feeling himself to be poor Roger, because he was going away. Offended
dignity strove with anxious love in his mind, and he felt, with, perhaps, a
vulgar yet very reasonable instinct, that his actual dignity and importance
made the best foundation for his love.
‘It is not so much to be regretted, Cara, except for one thing. I shall enter
upon good pay at once. That is worth sacrificing something for; and I don’t
care so much, after all, for just leaving England. What does it matter where
a fellow is, so long as he is happy? But it’s about being happy that I want to
speak to you.’
‘I think it matters a great deal where one is,’ said Cara; but she refrained,
out of politeness to him, who had no choice in the matter, to sing the praises
of home. ‘I have been so used to people wandering about,’ she said,
apologetically; ‘papa, you know; but I am glad that you don’t mind; and, of
course, to have money of your own will be very pleasant. I am afraid they
will all feel it very much at the Rectory.’
‘Oh, they! they don’t care. It will be one out of the way. Ah, Cara, if I
only could think you would be sorry.’
‘Of course I shall be sorry, Roger,’ she said, with gentle seriousness.
‘There is no one I shall miss so much. I will think of you often in the
woods, and when there are garden parties. As you are going, I am almost
glad not to be there this year.’
‘Ah, Cara! if you would but say a little more, how happy you might
make me,’ said the young man, self-deceived, with honest moisture in his
eyes.
‘Then I will say as much more as you like,’ she said, bending forward
towards him with a little soft colour rising in her cheeks. ‘I shall think of
you always on Sundays, and how glad we used to be when you came; and if
you have time to write to me, I will always answer; and I will think of you
at that prayer in the Litany for those who travel by land and water.’
‘Something more yet—only one thing more!’ cried poor Roger, getting
down upon one knee somehow, and laying his hand on the arm of her chair.
His eyes were quite full, his young face glowing: ‘Say you love me ever so
little, Cara! I have never thought of anyone in my life but you. Whenever I
hoped or planned anything it was always for you. I never had a penny: I
never could show what I felt, anyhow: but now I shall be well enough off,
and able to keep——’
‘Hush!’ said Cara, half frightened; ‘don’t look so anxious. I never knew
you so restless before; one moment starting up and walking about, another
down on your knees. Why should you go down on your knees to me? Of
course I like you, Roger dear; have we not been like brother and sister?’
‘No!’ he said; ‘and I don’t want to be like brother and sister. I am so
fond of you, I don’t know what to say. Oh, Cara! don’t be so quiet as if it
didn’t matter. I shall be well off, able to keep a wife.’
‘A wife?—that is a new idea,’ she said, bewildered; ‘but you are too
young, Roger.’
‘Will you come with me, Cara?’ he cried, passing over, scarcely hearing,
in his emotion, the surprise yet indifference of this question. ‘Oh, Cara!
don’t say no without thinking! I will wait if you like—say a year or two
years. I shall not mind. I would rather wait fifty years for you than have
anyone else, Cara. Only say you will come with me, or even to me, and I
shall not mind.’
Cara sat quite upright in her chair. She threw her white shawl off in her
excitement. ‘Me?’ she said; ‘me?’ (That fine point of grammar often settles
itself summarily in excitement, and on the wrong side.) ‘You must be
dreaming,’ she said; ‘or am I dreaming, or what has happened? I don’t
know what you mean.’
He stumbled up to his feet red as the glow of the fire which had scorched
him, poor boy, as if his unrequited passion was not enough. ‘If I am
dreaming!’ he said, in the sharp sting of his downfall, ‘it is you who have
made me dream.’
‘I?’ said Cara, in her surprise (the grammar coming right as the crisis got
over); ‘what have I done? I don’t understand at all. I am not unkind. If there
was anything I could do to please you, I would do it.’
‘To please me, Cara?’ he cried, sinking again into submission. ‘To make
me happy, that is what you can do, if you like. Don’t say no all at once;
think of it at least; the hardest-hearted might do that.’
‘I am not hard-hearted,’ she said. ‘I begin to see what it is. We have both
made a mistake, Roger. I never thought this was what you were thinking;
and you have deceived yourself, supposing I knew. I am very, very sorry. I
will do anything—else——’
‘I don’t want anything else,’ he said, sullenly. He turned his back upon
her in the gloom and blackness of his disappointment. ‘What else is there
between young people like us,’ he said, bitterly. ‘My mother always says
so, and she ought to know. I have heard often enough of girls leading men
on—enticing them to make fools of themselves—and I see it is true now.
But I never thought it of you, Cara. Whatever others did, I thought you were
one by yourself, and nobody like you. But I see now you are just like the
rest. What good does it do you to make a fellow unhappy—to break his
heart?’ Here poor Roger’s voice faltered, the true feeling in him struggling
against the vulgar fibre which extremity revealed. ‘And all your smiling and
looking sweet, was it all for nothing?’ he said—‘all meaning nothing! You
would have done just the same for anybody else! What good does it do
you? for there’s nobody here to see how you have made a laughing-stock of
me.’
‘Have I made a laughing-stock of you? I am more ready to cry than to
laugh,’ said Cara, indignantly, yet with quivering lip.
‘I know what you will do,’ he said; ‘you will tell everybody—that is
what you will do. Oh, it’s a devilish thing in girls! I suppose they never feel
themselves, and it pleases their vanity to make fools of us. You will go and
tell those fellows, those Merediths, what a laugh you have had out of poor
Roger. Poor Roger! but you shan’t have your triumph, Miss Beresford,’
said the poor lad, snatching up his hat. ‘If you won’t look at me, there are
others who will. I am not so ridiculous as to be beneath the notice of
someone else.’
He made a rush to the door, and Cara sat leaning forward a little, looking
after him,—her blue eyes wide open, a look of astonishment, mingled with
grief, on her face. She felt wounded and startled, but surprised most of all.
Roger!—was it Roger who spoke so? When he got to the door he turned
round and looked back upon her, his lips quivering, his whole frame
trembling. Cara could scarcely bear the pitiful, despairing look in the lad’s
eyes.
‘Oh, Roger!’ she said; ‘don’t go away so. You can’t imagine I ever
laughed at you, or made fun of you—I?—when you were always the
kindest friend to me. Won’t you say “good-by” to me kindly? But never
mind—I shall see you often before you go away.’
And then, while he still stood there irresolute, not knowing whether to
dart away in the first wrathful impulse, or to come back and throw himself
at her feet, all these possibilities were made an end of in a moment by Miss
Cherry, who walked softly up the stairs and came in with her prayer-book
still in her hand. Roger let go his hold of the door, which he had been
grasping frantically, and smiled with a pale countenance as best he could to
meet the new-comer, standing out into the room to let her pass, and doing
all he could to look like any gentleman saying ‘good-by’ at the end of a
morning call. Cara drew the shawl again upon her shoulders, and wrapped
herself closer and closer in it, as if that was all she was thinking of. If they
had not been so elaborate in their precautions they might have deceived
Miss Cherry, whose mind was taken up with her own thoughts. But they
played their parts so much too well that her curiosity was aroused at once.
‘Are you going, Roger? You must stop first and have some tea. I daresay
Cara had not the good sense to offer you some tea; but John will bring it
directly when he knows I have come in. Is it really true, my dear Roger, that
you are going away? I am sure I wish you may have every advantage and
good fortune.’
She looked at him curiously, and he felt that she read him through and
through. But he could not make any attempt to make-believe with Miss
Cherry, whom he had known ever since he could remember. He muttered
something, he could not tell what, made a hurried dash at Cara’s hand,
which he crushed so that her poor little fingers did not recover for half an
hour; and then rushed out of the house. Miss Cherry turned to Cara with
inquiring eyes. The girl had dropped back into her chair, and had almost
disappeared in the fleecy folds of the shawl.
‘What have you been doing to Roger?’ she said. ‘Poor boy! If I had
known I would have warned him. Must there always be some mischief
going on whenever there are two together? Oh, child! you ought to have let
him see how it was; you should not have led him on!’
‘Did I lead him on? What have I done? He said so too,’ cried poor Cara,
unable to restrain her tears. She cried so that Miss Cherry was alarmed, and
from scolding took to petting her, afraid of the effect she had herself
produced.
‘It’s only a way of speaking,’ she said. ‘No, my darling, I know you did
not. If he said so, he was very unkind. Do not think of it any more.’
But this is always so much easier to say than to do.
CHAPTER XXXVI.

BETWEEN THE TWO.

Oswald’s spirits very soon recovered the shock of his father’s death. He
was as light-hearted as ever after that day when he had visited little Emmy
at the hospital. Perhaps the satisfaction of having done a good action was in
his mind, for he was permitted to send Emmy to the seaside to the abode of
another sisterhood there. Agnes undertook after all to make the proposal for
him, which was graciously accepted, though she herself received another
admonition from the Superior. Sister Mary Jane appointed a meeting with
the other culprit who had made this charitable offer. As usual, he was not
supposed to be at all in fault. He was allowed to enter the sacred convent
gates, and wait in St. Elizabeth (for so the Superior’s room was entitled) till
Sister Mary Jane made her appearance, who made all the arrangements, and
took his money with much gracious condescension, but said nothing about
his ambassadress. Neither did he say anything, though he looked up eagerly
every time the door opened, and made furtive investigations, as well as he
could, through the long bare passages, where all sorts of instruction were
going on. When he opened (as he had no right to do) one of the doors he
passed, he found it to be full of infants, who turned round en masse to his
great terror, and saluted him with a simultaneous bob. They knew their
manners if he did not. But nowhere could he see Agnes, and not a word
about her did these unfeeling Sisters utter. To tell truth, they both waited for
each other. Sister Mary Jane had little doubt that his real mission at the
‘House’ was to find out all he could from her, whereas he on his part had a
lively anticipation of being called to task for following and talking to the
governess. Oswald had something of the feeling of a schoolboy who has
escaped when he found that no explanation was asked from him, and this
was the only reason he gave to himself for not making those inquiries into
Agnes Burchell’s family which he felt it was now really necessary to make.
But why immediately? Let him make a little more ground with her first, and
establish his own position. It charmed him a great deal more to think of
winning her in this irregular way than to plan the proper formal approach to
her parents, and application for their consent. To go and hunt up an
unknown family and introduce himself to them in cold blood, and ask them,
‘Will you give me your daughter?’ was quite alarming to him. He put it off,
as it is so easy to do. Certainly it would be his duty to do it, one time or
other, if his suit prospered, and he was not much afraid of the non-success
of his suit. But to go to them once for all, and inform them of his
engagement with their daughter, would, he thought, be a less difficult
matter—and all the delightful romance of the strange wooing would be lost
should he adopt the other plan. He felt that he had got off when the door of
the House closed upon him without any questioning from Sister Mary Jane;
but on her side the feeling was different. She was disappointed. She had
guessed how things were going, though not that they had gone nearly so far,
and she had been convinced that the young stranger’s anxiety to see her
arose from his honourable desire to set everything on a proper footing. The
reader will perceive that Sister Mary Jane was too simple and too credulous.
She was half vexed at the idea of losing the girl whom she had grown fond
of, and half glad that Agnes had found a new life more suited to her than the
routine of the House, for Agnes, it was evident, had no ‘vocation,’ and she
did not doubt for a moment what Mr. Oswald Meredith’s real object was.
She had made up her mind to allow herself to be sounded, to yield forth
scraps of information diplomatically, and finally to divulge everything there
was to tell, and set the eager lover off to the rectory at the foot of the hill.
But Sister Mary Jane was much dismayed to be asked no questions at all on
the subject. She could not understand it, and all the disagreeable stories she
had ever heard of the wolves that haunt the neighbourhood of a fold came
into her mind and filled her with dismay. Instead of being honourable and
high-minded, as she had taken it for granted he must be, was he designing
and deceiving, according to the ideal of men who used to appear in all the
novels? Up to this moment Sister Mary Jane had felt disposed to laugh at
the Lothario of fiction. Was this that mythical personage in his improper
person? The result of the interview on her side was that she reproved poor
Agnes gently for a few days, and declined to allow her to go anywhere, and
would not make any reference whatever to little Emmy’s going to the
seaside. Yes, she was to go. Oh, certainly, everything was arranged; but not
a word about Emmy’s friend, whose liberality procured her this change.
Agnes felt her heart sink. She had expected at least to be questioned about
the young stranger who must, she felt convinced, have asked questions
about her, and the silence was hard to bear. Once more, indeed, she was
permitted to go out to see Emmy before she went away; but the lay Sister,
the porteress, was sent with her on some pretext or other. Thus it happened
that when Oswald appeared as usual, he found himself confronted by a
respectable visage of forty under the poke-bonnet which he had supposed to
enshrine that Perugino countenance to which he had addressed so many
uncompleted verses. To be sure, the Perugino face was close by, but the
dragon kept so near that nothing could be said. Oswald talked a little about
Emmy loudly, by way of deceiving the respectable attendant. Then he
ventured upon a few hurried words in a lower tone. ‘Is this an expedient of
the Sisters?’ he said, hastily. ‘Am I never to speak to you again? Do they
think they can send me away like this, and get the better of me? Never! You
need not think so. You may send me away, but no one else shall.’
‘Mr. Meredith, for heaven’s sake——’
‘I am taking care; but you don’t mean to cast me off, Agnes?’
She gave him a sudden look. Her face was full of emotion. Fright,
melancholy, wistfulness, inquiring wonder, were in her eyes. What did he
mean? Was he as true, as reverent, as real in his love, as he had said? He
could not have realised in his confident happiness and ability to do
everything he wished the sense of impotent dejected wondering, and the
indignation with herself, for thinking about it so, which were in Agnes’s
mind. But something in her eyes touched and stopped him in his eager
effort to continue this undertone of conversation, to elude the scrutiny of
her companion. ‘Good-by,’ she said, with a slight wave of her hand,
hurrying on. Oswald was overcome in spite of himself. He fell behind
instinctively, and watched her moving quickly along the street with the
other black shadow by her in the sunshine. For the moment he ceased to
think of himself and thought of her. Had it been for her comfort that he had
crossed her path? It had been the most delightful new existence and pursuit
to him—but to her? Oswald could not have imagined the waves of varied
feeling, the secret storms that had gone over Agnes in the quiet of the
convent, on account of those meetings and conversations; but he did
consciously pause and ask himself whether this which had been so pleasant
to him had been equally pleasant to her. It was but a momentary pause.
Then he went after her a little more slowly, not unselfish enough, even in
his new care for her, not to be rather anxious that Agnes should be aware
that he was there. And, who knows? perhaps it was more consolatory for
her when she half turned round, standing at the door of the House waiting
for admittance, to see him pass taking off his hat reverentially, and looking
at her with eyes half reproachful and tender, than it would have been had he
accepted the repulse she had given him, and put force upon himself and
stayed absolutely away. He had no intention of staying away. He meant to
continue his pursuit of her—to waylay her, to lose no possibility of getting
near her. He was pertinacious, obstinate, determined, even though it
annoyed her. Did it annoy her? or was there some secret pleasure in the
warm glow that came over her at sight of him? She hurried in, and swore to
herself not to think of this troublesome interruption of her quiet life any
more. It was over. Emmy was removed, and there was an end of it. She
would think of it no more; and with this determination Agnes hastened to
the girls in St. Cecilia, and never left off thinking of it till weariness and
youth together, making light of all those simple thorns in her pillow,
plunged her into softest sleep.
Oswald went to Cara to unburden his mind next day. He did not quite
know what his next step was to be. ‘I think it is all right,’ he said. ‘You
should have seen the look she gave me. She would not have given me a
look like that if she had not liked me. It set me wondering whether she was
as happy as—such a creature as she is ought to be. Would they scold her
badly because I followed her? You know what women do—would they be
hard upon her? But why? If I insisted upon being there it was not her fault.’
‘They would say it was her fault. They would say that if she had refused
to speak to you you would not have come back.’
‘But I should. I am not so easily discouraged. Oh, yes, perhaps if she had
looked as if she hated me; but, then,’ said Oswald, with complacence, ‘she
did not do that.’
‘Don’t be so vain,’ said Cara, provoked. ‘Oh, I hate you when you look
vain. It makes you look silly too. If she saw you with that imbecile look on
your face she would never take the trouble of thinking of you again.’
‘Oh, wouldn’t she?’ said Oswald, looking more vain than ever. ‘Because
you are insensible, that is not to say that other people are. Of course I
should pull up if I did not mean anything. But I do mean a great deal. I
never saw anyone like her. I told you she was like a Perugino—and you
should hear her talk. She is thrown away there, Cara. I am sure she never
was meant to be shut up in such a place, teaching a set of little wretches. I
told her so. I told her a wife was better than a Sister.’
‘Are you so very sure of that?’ cried Cara; for what she called the
imbecile look of vanity on Oswald’s handsome face had irritated her.
‘Would it be so very noble to be your wife, Oswald? Now tell me. You
would like her to look up to you, and think you very grand and clever. You
would read your poetry to her. You would like her to order you a very nice
dinner——’
‘Ye-es,’ said Oswald, ‘but if she smiled at me sweetly I should forgive
her the dinner; and she should do as she pleased; only I should like her, of
course, to please me.’
‘And you would take her to the opera, and to parties—and give up your
club, perhaps—and you would take a great deal of trouble in furnishing
your house, and altogether enjoy yourself.’
‘Very much indeed, I promise you,’ said the young man, rubbing his
hands.
‘And now she is not enjoying herself at all,’ said Cara; ‘working very
hard among the poor children, going to visit sick people in the hospital. Oh,
yes, there would be a difference! The wife would be much the most
comfortable.’
‘I don’t like girls to be satirical,’ said Oswald. ‘It puts them out of
harmony, out of drawing. Now she said something like that. She asked me
in her pretty way if it would be better to make one man happy than to serve
a great number of people, and take care of those that had nobody to take
care of them. That was what she said; but she did not laugh, nor put on a
satirical tone.’
‘That shows only that she is better than I am,’ said Cara, slightly angry
still; ‘but not that I am wrong. Your wife! it might be nice enough. I can’t
tell; but it would not be a great life—a life for others, like what, perhaps,
she is trying for now.’
‘You are complimentary, Cara,’ said Oswald, half offended. ‘After all, I
don’t think it would be such a very bad business. I shall take good care of
my wife, never fear. She shall enjoy herself. Don’t you know,’ he added
with a laugh, ‘that everybody thinks you and I are going to make it up
between us?’
Cara turned away. ‘You ought not to let anyone think so,’ she said.
‘What harm does it do? It amuses everybody, keeping them on the
stretch for news. They think we are actually engaged. The times that
Edward has tried to get it out of me—all particulars—and my mother too. It
is far too good a joke not to keep it up.’
‘But, Oswald, I don’t like it. It is not right.’
‘Oh, don’t be so particular, Cara. I shall believe you are going to be an
old maid, like Aunt Cherry, if you are so precise. Why, what possible harm
can it do? It is only keeping them on the rack of curiosity while we are
laughing in our sleeves. Besides, after all, Cara mia, it is just a chance, you
know, that it did not come to pass. If it had not been for her, and that she
turned up just when she did——’
‘I am much obliged to you, Oswald. You think, then, that it all depends
upon you, and that the moment it pleased you to throw your handkerchief
——’
‘Do not be absurd, my dear child. You know I am very fond of you,’ said
Oswald, with such a softening in his voice, and so kind a look in his eyes,
that Cara was quite disarmed. He put his hand lightly upon her waist as a
brother might have done. ‘We have known each other all our lives—we
shall know each other all the rest of our lives. I tell you everything—you
are my little conscience keeper, my adviser. I don’t know what I should do
without you,’ he said; and, being of a caressing disposition, Oswald bent
down suddenly, and kissed the soft cheek which was lifted towards him.
There were two doors to the room—the one most generally used was in its
second division, the back drawing-room; but another door opened directly
out upon the staircase, and the two were standing, as it happened, directly in
front of this. By what chance it happened that Miss Cherry chose this door
to come in by, and suddenly, softly threw it open at this particular moment,
will never be known. There is something in such a salutation, especially
when at all ambiguous in its character, which seems to stir up all kinds of
malicious influences for its betrayal. The sudden action of Miss Cherry in
opening this door revealed the little incident not only to her but to Edward,
who was coming up the stair. Cara rushed to the other end of the room, her
lace scorching with shame; but Oswald, more used to the situation, stood
his ground, and laughed. ‘Ah, Aunt Cherry, are you really going?’ he said,
holding out his hand to her, while Edward stalked into the room like a
ghost. Of all the party, Oswald was the least discomposed. Indeed, it rather

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