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11th Edition
Business Law Today

S ta n da r d E d iti o n Te x t & Sum m arized C a ses
R o g e r Le R oy M i lle r
Institute for University Studies
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Printed in the United States of America

Print Number: 01 Print Year: 2015
Contents in Brief
Unit 1 The Legal Environment of Business 1 Unit 5 Business Organizations 657
1 The Legal Environment 2 26 Sole Proprietorships and Franchises 658
2 Constitutional Law 31 27 All Forms of Partnership 675
3 Courts and Alternative Dispute Resolution 55 28 Limited Liability Companies and Special Business Forms 697
4 Tort Law 89 29 Corporations 715
5 Product Liability 118 30 Investor Protection, Insider Trading,
6 Intellectual Property Rights 138 and Corporate Governance 747
7 Internet Law, Social Media, and Privacy 162
8 Criminal Law and Cyber Crime 184 Unit 6 Government Regulation 777
9 Business Ethics 216
31 Antitrust Law and Promoting Competition 778
32 Consumer and Environmental Law 802
Unit 2 Contracts and E-Contracts 243 33 Liability of Accountants and Other Professionals 830
10 Nature and Classification 244
11 Agreement 261 Unit 7 Property and Its Protection 855
12 Consideration, Capacity, and Legality 285
13 Defenses to Contract Enforceability 309 34 Personal Property and Bailments 856
14 Third Party Rights and Discharge 331 35 Real Property and Landlord-Tenant Law 877
15 Breach and Remedies 356 36 Insurance, Wills, and Trusts 899
16 International Law in a Global Economy 374
APPENDICES
Unit 3 Commercial Transactions 397 A How to Brief Cases and Analyze Case Problems A-1
17 The Formation of Sales and Lease Contracts 398 B The Constitution of the United States A-3
18 Performance and Breach of Sales and Lease Contracts 433 C The Uniform Commercial Code (Excerpts) A-11
19 Negotiable Instruments 460 D Answers to Issue Spotters A-130
20 Banking in the Digital Age 491 E Answers to Even-Numbered Learning
Objectives Check Questions A-136
21 Security Interests and Creditors’ Rights 514
F Sample Answers for Business Case Problems
22 Bankruptcy 541
with Sample Answer A-144
G Case Excerpts for Case Analysis Questions A-152
Unit 4 Agency and Employment Law 573 Glossary G-1
Table of Cases TC-1
23 Agency Relationships in Business 574
Index I-1
24 Employment, Immigration, and Labor Law 601
25 Employment Discrimination 629
iii
Contents
Unit 1 The Legal Environment of Business 1
Chapter 1 Chapter 3
The Legal Environment 2 Courts and Alternative Dispute Resolution 55
Business Activities and the Legal Environment 3 The Judiciary’s Role in American Government 56
Sources of American Law 5 Basic Judicial Requirements 56
Common Law Tradition 9 ◾◾ Landmark in the Law: Marbury v. Madison (1803) 57
◾◾ Adapting the Law to the Online Environment: Spotlight on Gucci: Case 3.1: Gucci America, Inc. v. Wang Huoqing 62
Can New Laws Prevent People from Wearing Google Glass? 12 The State and Federal Court Systems 64
◾◾ Landmark in the Law: Equitable Principles and Maxims 14 ◾◾ Managerial Strategy: Budget Cuts for State Courts
Classifications of Law 15 Can Affect Businesses 65
◾◾ Beyond Our Borders: National Law Systems 16 ◾◾ Beyond Our Borders: Islamic Law Courts Abroad and at Home 66
◾◾ Linking Business Law to Corporate Management: Following a State Court Case 69
Dealing with Administrative Law 18 Case 3.2: Brothers v. Winstead 72
Appendix to Chapter 1 22 ◾◾ Adapting the Law to the Online Environment:
Jurors’ Use of Wireless Devices and the Internet 76
Chapter 2 Courts Online 78

Alternative Dispute Resolution 78
Constitutional Law 31 Case 3.3: Cruise v. Kroger Co. 82
The Constitutional Powers of Government 32
◾◾ Landmark in the Law: Gibbons v. Ogden (1824) 33
Classic Case 2.1: Heart of Atlanta Motel v. United States 34
Business and the Bill of Rights 37
◾◾ Beyond Our Borders: The Impact of Foreign Law
on the United States Supreme Court 39
Spotlight on Beer Labels: Case 2.2: Bad Frog Brewery, Inc. v.
New York State Liquor Authority 41
◾◾ Adapting the Law to the Online Environment:
Should Threats Made on Facebook Be
Considered Free Speech? 43
Case 2.3: Holt v. Hobbs 45
iStockPhoto.com/DanBrandenburg
Due Process and Equal Protection 45

Privacy Rights 48
◾◾ Managerial Strategy: Marriage Equality
and the Constitution 49
◾◾ Business Application: Is “Pretexting” Illegal? 51
iv
Contents v
Chapter 4 Case 6.3: Inhale, Inc. v. Starbuzz Tobacco, Inc.

◾◾ Beyond Our Borders: The Resale of Textbooks
150
Tort Law 89 Purchased Abroad 153

Trade Secrets 154
The Basis of Tort Law 89
International Protections 156
Intentional Torts against Persons 92
◾◾ Linking Business Law to Marketing:
◾◾ Beyond Our Borders: “Libel Tourism” 95
Trademarks and Service Marks 158
Revenge Porn and Invasion of Privacy 98
Case 4.1: Revell v. Guido 100 Chapter 7
Intentional Torts against Property 102 Internet Law, Social Media, and Privacy 162
Case 4.2: Welco Electronics, Inc. v. Mora 104
Internet Law 162
Unintentional Torts (Negligence) 105
Spotlight on Internet Porn: Case 7.1: Hasbro, Inc. v. Internet
◾◾ Landmark in the Law: Palsgraf v. Long Island
Entertainment Group, Ltd. 166
Railroad Co. (1928) 108
Spotlight on the Seattle Mariners: Case 4.3: Taylor v. Baseball Copyrights in Digital Information 167
Club of Seattle, L.P. 109 ◾◾ Landmark in the Law: The Digital Millennium Copyright Act 168
Strict Liability 112 ◾◾ Adapting the Law to the Online Environment: E-Mail
Hacking at Sony Pictures—Can You Put the Cat Back
◾◾ Business Application: How Important Is Tort Liability
into the Bag? 169
to Business? 113
Social Media 171
Chapter 5 Online Defamation 175

Case 7.2: Yelp, Inc. v. Hadeed Carpet Cleaning, Inc. 175
Product Liability 118 Privacy 177
Product Liability 118 ◾◾ Beyond Our Borders: “The Right to Be Forgotten”
◾◾ Landmark in the Law: MacPherson v. Buick Motor Co. (1916) 120 in the European Union 177
Strict Product Liability 120 Case 7.3: Nucci v. Target Corp. 178
Spotlight on Injuries from Vaccinations: Case 5.1:

Bruesewitz v. Wyeth, LLC 121 Chapter 8
◾◾ Beyond Our Borders: Imposing Product Liability
as Far Away as China 122 Criminal Law and Cyber Crime 184
Case 5.2: Riley v. Ford Motor Co. 125 Civil Law and Criminal Law 184
◾◾ Managerial Strategy: When Is a Warning Legally Bulletproof? 127 Criminal Liability 187
Defenses to Product Liability 129 ◾◾ Managerial Strategy: The Criminalization
Case 5.3: Verost v. Mitsubishi Caterpillar Forklift America, Inc. 129 of American Business 189
◾◾ Linking Business Law to Corporate Management: Types of Crimes 190
Quality Control 133 Case 8.1: State of Minnesota v. Smith 191
Spotlight on White-Collar Crime: Case 8.2: People v. Sisuphan 194
Chapter 6 Defenses to Criminal Liability 197
Intellectual Property Rights 138 Constitutional Safeguards and Criminal Procedures 199
Case 8.3: State of Oklahoma v. Marcum 200
Trademarks 139
◾◾ Landmark in the Law: Miranda v. Arizona (1966) 203
CLASSIC CASE 6.1: Coca-Cola Co. v. Koke Co. of America 139
Cyber Crime 206
Patents 145 ◾◾ Beyond Our Borders: Hackers Hide in Plain Sight in Russia 208
Case 6.2: In re Imes 146 ◾◾ Adapting the Law to the Online Environment:
◾◾ Adapting the Law to the Online Environment: Malware Is Changing the Criminal Landscape 209
The Problem of Patent Trolls 148 ◾◾ Business Application: Protecting Your Company
Copyrights 149 against Hacking of Its Bank Accounts 211
vi Contents
Chapter 9 ◾◾ Adapting the Law to the Online Environment:

Should Employees Have a “Right of Disconnecting”? 228
Business Ethics 216 Case 9.3: Al-Dabagh v. Case Western Reserve University 229
Global Business Ethics 230
Business Ethics 216
◾◾ Beyond Our Borders: Bribery and the Foreign
Case 9.1: Scott v. Carpanzano 219
Corrupt Practices Act 232
Case 9.2: May v. Chrysler Group, LLC 220 ◾◾ Linking Business Law to Accounting and Finance:
Business Ethics and Social Media 221 Managing a Company’s Reputation 233
Approaches to Ethical Reasoning 222 Appendix to Chapter 9 238
Making Ethical Business Decisions 227 Unit One—Business Case Study with Dissenting Opinion:
Central Radio Co. v. City of Norfolk, Virginia 239
Unit 2 Contracts and E-Contracts 243

Chapter 10 Chapter 12
Nature and Classification 244 Consideration, Capacity, and Legality 285
An Overview of Contract Law 244 Consideration 285
Case 10.1: Pan Handle Realty, LLC v. Olins 246 ◾◾ Landmark in the Law: Hamer v. Sidway (1891) 287
Elements of a Contract 246 Spotlight on Nike: Case 12.1: Already, LLC v. Nike, Inc. 290
Types of Contracts 247 Promissory Estoppel 291
Case 10.2: Vukanovich v. Kine 250 Contractual Capacity 292
Quasi Contracts 252 Case 12.2: PAK Foods Houston, LLC v. Garcia 293
Interpretation of Contracts 253 Legality 295
Spotlight on Columbia Pictures: Case 10.3: Case 12.3: Holmes v. Multimedia KSDK, Inc. 301
Wagner v. Columbia Pictures Industries, Inc. 255 ◾◾ Managerial Strategy: Creating Liability Waivers
That Are Not Unconscionable 302
The Effect of Illegality 302
Chapter 11
Agreement 261
Agreement 261
Classic Case 11.1: Lucy v. Zehmer 262
Spotlight on Amazon.com: Case 11.2: Basis Technology
Corp. v. Amazon.com, Inc. 265
Can Your E-Mails or Instant Messages Create
a Valid Contract? 268
Case 11.3: Brown v. Lagrange Development Corp. 269
E-Contracts 271
iStockPhoto.com/Rawpixel
◾◾ Managerial Strategy: E-Mailed Credit Card Receipts 276

The Uniform Electronic Transactions Act 276
◾◾ Linking Business Law to Marketing:
Customer Relationship Management 280
Contents vii
Defenses to Contract Enforceability 309 Breach and Remedies 356
Voluntary Consent 309 Damages 356
Case 13.1: Cronkelton v. Guaranteed Construction Services, LLC 314 Case 15.1: Hallmark Cards, Inc. v. Murley 357
Case 13.2: Fazio v. Cypress/GR Houston I, LP 315 ◾◾ Landmark in the Law: Hadley v. Baxendale (1854) 361
◾◾ Adapting the Law to the Online Environment: “Catfishing”: Spotlight on Liquidated Damages: Case 15.2:
Is That Online “Friend” for Real? 317 Kent State University v. Ford 362
The Writing Requirement 318 Equitable Remedies 363
◾◾ Beyond Our Borders: The Statute of Frauds and Case 15.3: Clara Wonjung Lee, DDS, Ltd. v. Robles 364
International Sales Contracts 321
Recovery Based on Quasi Contract 366
Sufficiency of the Writing or Electronic Record 323 Contract Provisions Limiting Remedies 367
The Parol Evidence Rule 324 ◾◾ Business Application: What Do You Do
Case 13.3: Frewil, LLC v. Price 326 When You Cannot Perform? 369
Third Party Rights and Discharge 331 International Law in a Global Economy 374
Assignments 331 ◾◾ Beyond Our Borders: Border Searches
of Your Electronic Devices 375
Case 14.1: Bass-Fineberg Leasing, Inc. v. Modern Auto Sales, Inc. 334
International Law 375
Delegations 336
Case 16.1: Linde v. Arab Bank, PLC 377
Third Party Beneficiaries 338
Doing Business Internationally 379
Contract Discharge 341
Regulation of Specific Business Activities 381
Case 14.2: Kohel v. Bergen Auto Enterprises, LLC 344
◾◾ Adapting the Law to the Online Environment: When International Contracts 383
Do Changes in Social Media Terms of Service Constitute Case 16.2: Carlyle Investment Management LLC v.
a Breach of Contract? 345 Moonmouth Company SA 384
Case 14.3: Kolodin v. Valenti 349 Payment Methods 386
◾◾ Beyond Our Borders: Impossibility or Impracticability U.S. Laws in a Global Context 388
of Performance in Germany 351
Spotlight on International Torts: Case 16.3:
◾◾ Business Application: Dealing with Third Party Rights 352 Daimler AG v. Bauman 389
Unit Two—Business Case Study with Dissenting Opinion:
Braddock v. Braddock 394
Unit 3 Commercial Transactions 397

Chapter 17 Case 17.1: Nautilus Insurance Co. v. Cheran Investments LLC
400
The Formation of Sales Taxing Web Purchases 402
and Lease Contracts 398 The Formation of Sales and Lease Contracts 404
Case 17.2: C. Mahendra (N.Y.), LLC v. National Gold &
◾◾ Landmark in the Law: The Uniform Commercial Code 399 Diamond Center, Inc. 408
The Scope of Articles 2 and 2A 399 CLASSIC CASE 17.3: Jones v. Star Credit Corp. 414
viii Contents
Title and Risk of Loss 415

◾◾ Managerial Strategy: Commercial Use of Drones 417
Contracts for the International Sale of Goods 422
◾◾ Business Application: Who Bears the Risk of Loss—
the Seller or the Buyer? 424
Appendix to Chapter 17 429
Chapter 18
Performance and Breach of
Sales and Lease Contracts 433
iStockPhoto.com/kali9
Performance Obligations 434
Case 18.1: Garziano v. Louisiana Log Home Co. 435
Anticipatory Repudiation 441
Remedies for Breach 441
◾◾ Beyond Our Borders: The CISG’s Approach to
The Bank’s Duty to Honor Checks 495
Revocation of Acceptance 447
Case 20.2: Michigan Basic Property Insurance
Spotlight on Baseball Cards: Case 18.2: Fitl v. Strek 448
Association v. Washington 500
Warranties 449
The Bank’s Duty to Accept Deposits 501
CLASSIC CASE 18.3: Webster v. Blue Ship Tea Room, Inc. 452
Case 20.3: Shahin v. Delaware Federal Credit Union 502
◾◾ Landmark in the Law: Check Clearing in the 21st
Chapter 19 Century Act (Check 21) 503
Electronic Fund Transfers 506
Negotiable Instruments 460 Online Banking and E-Money 507
Types of Negotiable Instruments 460 ◾◾ Adapting the Law to the Online Environment:
Requirements for Negotiability 464 Pay with Your Smartphone 508
◾◾ Linking Business Law to Accounting and Finance:
Case 19.1: Alpacas of America, LLC v. Groome 466
Banking Risks 509
Case 19.2: Charles R. Tips Family Trust v. PB Commercial LLC 470
Transfer of Instruments 470
Case 19.3: In re Bass 472
Chapter 21
◾◾ Beyond Our Borders: Severe Restrictions Security Interests
on Check Indorsements in France 473
Holder in Due Course (HDC) 475
and Creditors’ Rights 514
Signature and Warranty Liability 478 Terminology of Secured Transactions 514
Defenses, Limitations, and Discharge 483 Creating and Perfecting a Security Interest 515
◾◾ Landmark in the Law: Federal Trade Commission Rule 433 485 Case 21.1: Royal Jewelers Inc. v. Light 516
517
Chapter 20 Secured Transactions Online
Scope of a Security Interest 522
Banking in the Digital Age 491 Priorities, Rights, and Duties 524
Checks 491 Default 527
The Bank-Customer Relationship 494 Case 21.2: Smith v. Firstbank Corp. 529
Case 20.1: Royal Arcanum Hospital Association of Kings Other Laws Assisting Creditors 530
County, Inc. v. Herrnkind 494 Case 21.3: HSBC Realty Credit Corp. (USA) v. O’Neill 534
Contents ix
Chapter 22 Chapter 7—Liquidation 547

Case 22.2: In re Cummings 558
Bankruptcy 541 Chapter 11—Reorganization 559
Mortgages 541 Bankruptcy Relief under Chapter 12 and Chapter 13 561
Spotlight on Foreclosures: Case 22.1: McLean v. JPMorgan Case 22.3: In re Welsh 563
Chase Bank, N.A. 544 ◾◾ Linking Business Law to Corporate Management:
Laws Assisting Debtors 545 What Can You Do to Prepare for a Chapter 11 Reorganization? 566
The Bankruptcy Code 546 Unit Three—Business Case Study with Dissenting Opinion:
First Bank v. Fischer & Frichtel, Inc. 570
◾◾ Landmark in the Law: The Bankruptcy Abuse Prevention
and Consumer Protection Act 547
Unit 4 Agency and Employment Law 573

Chapter 23 Liability in Agency Relationships 587
Case 23.3: Stonhard, Inc. v. Blue Ridge Farms, LLC 588
Agency Relationships in Business 574 ◾◾ Landmark in the Law: The Doctrine of Respondeat Superior 591
Agency Relationships 575 Termination of an Agency 592
Case 23.1: Asphalt & Concrete Services, Inc. v. Perry 577 ◾◾ Beyond Our Borders: Islamic Law and Respondeat Superior 593
◾◾ Business Application: How Can an Employer Use
Formation of an Agency 579
Independent Contractors? 596
Duties of Agents and Principals 581
Agent’s Authority 583
Chapter 24
What Happens When an Agent Breaches Company
Policy on the Use of Electronic Data? 585
Employment, Immigration, and Labor Law 601
Spotlight on Apparent Authority of Managers: Case 23.2: Employment at Will 601
Lundberg v. Church Farm, Inc. 586 Wages, Hours, Layoffs, and Leave 603
Case 24.1: Bailey v. TitleMax of Georgia, Inc. 605
◾◾ Beyond Our Borders: Brazil Requires Employers to Pay
Overtime for Use of Smartphones after Work Hours 606
Case 24.2: Ballard v. Chicago Park District 607
Health, Safety, and Income Security 608
Employee Privacy Rights 612
Social Media in the Workplace Come of Age 613
Immigration Law 615
Labor Unions 617
Case 24.3: Services Employees International Union v. National
iStockPhoto.com/michaeljung
Union of Healthcare Workers 619

◾◾ Managerial Strategy: Union Organizing Using
Your Company’s E-Mail System 621
◾◾ Business Application: How to Develop a Policy on Employee
Use of the Internet and Social Media 624
x Contents
Chapter 25 ◾◾ Beyond Our Borders: Sexual Harassment in Other Nations 640

Discrimination Based on Age 641
Employment Discrimination 629 Discrimination Based on Disability 642
Title VII of the Civil Rights Act 629 Defenses to Employment Discrimination 646
◾◾ Adapting the Law to the Online Environment: Affirmative Action 647
Hiring Discrimination Based on Social Media Posts 633 ◾◾ Linking Business Law to Corporate Management:
Case 25.1: Young v. United Parcel Service, Inc. 635 Human Resource Management 649
Case 25.2: Roberts v. Mike’s Trucking, Ltd. 637 Unit Four—Business Case Study with Dissenting Opinion:
Case 25.3: Morales-Cruz v. University of Puerto Rico 639 EEOC v. Greater Baltimore Medical Center, Inc. 653
Unit 5 Business Organizations 657

Chapter 26 Limited Partnerships 689
Case 27.3: DeWine v. Valley View Enterprises, Inc. 690
Sole Proprietorships and Franchises 658
Sole Proprietorships 659 Chapter 28
◾◾ Managerial Strategy: Cyber Thieves Empty
Small-Business Owners’ Bank Accounts 659 Limited Liability Companies
Case 26.1: Quality Car & Truck Leasing, Inc. v. Sark 661 and Special Business Forms 697
A Sole Proprietorship, Facebook Poker, and Bankruptcy 662 Limited Liability Companies 697
◾◾ Landmark in the Law: Limited Liability
Franchises 662
Company (LLC) Statutes 698
◾◾ Beyond Our Borders: Franchising in Foreign Nations 663
Case 28.1: Hodge v. Strong Built International, LLC 700
The Franchise Contract 665
◾◾ Beyond Our Borders: Limited Liability
Franchise Termination 667 Companies in Other Nations 701
Case 26.2: Century 21 Real Estate LLC v. All Professional Realty, Inc. 668
Spotlight on Holiday Inns: Case 26.3: Holiday Inn Franchising,
Inc. v. Hotel Associates, Inc. 669
◾◾ Business Application: What Problems Can
a Franchisee Anticipate? 671
Chapter 27
All Forms of Partnership 675
Basic Partnership Concepts 675
Formation and Operation 678
◾◾ Beyond Our Borders: Doing Business with Foreign Partners 679
iStockPhoto.com/dynasoar
Classic Case 27.1: Meinhard v. Salmon 681

Dissociation and Termination 684
Case 27.2: Estate of Webster v. Thomas 686
Limited Liability Partnerships 688
Contents xi
LLC Operation and Management 702 Shareholders 734

Case 28.2: Mekonen v. Zewdu 702 ◾◾ Beyond Our Borders: Derivative Actions in Other Nations 739
Dissociation and Dissolution of an LLC 704 Major Business Forms Compared 740
◾◾ Managerial Strategy: Can a Person Who Is Not a Member
705
of a Protected Class Sue for Discrimination?
Case 28.3: Venture Sales, LLC v. Perkins 706
Chapter 30
Special Business Forms 707 Investor Protection, Insider Trading,
◾◾ Business Application: How Do You Choose
between an LLC and an LLP? 711
and Corporate Governance 747
◾◾ Landmark in the Law: The Securities
and Exchange Commission 748
Chapter 29 Securities Act of 1933 748
Corporations 715 Case 30.1: Omnicare, Inc. v. Laborers District Council
Construction Industry Pension Fund 755
Nature and Classification 715 Securities Exchange Act of 1934 756
Case 29.1: Drake Manufacturing Co. v. Polyflow, Inc. 717 Classic Case 30.2: Securities and Exchange Commission v.
◾◾ Adapting the Law to the Online Environment: Imposing Texas Gulf Sulphur Co. 758
a 1930s Regulatory Law on Broadband Operators 719
Case 30.3: United States v. Newton 762
Formation and Financing 721
State Securities Laws 763
Corporate Powers 726
Corporate Governance 764
Case 29.2: Dog House Investments, LLC v. Teal Properties, Inc. 728 ◾◾ Beyond Our Borders: Corporate Governance in Other Nations 765
Directors and Officers 729 Unit Five—Business Case Study with Dissenting Opinion:
Classic Case 29.3: Guth v. Loft, Inc. 733 Notz v. Everett Smith Group, Ltd. 773
Unit 6 Government Regulation 777

Chapter 31 U.S. Antitrust Laws in the Global Context
◾◾ Beyond Our Borders: The EU’s Lengthy
794
Antitrust Law and Promoting Competition 778 Antitrust Proceedings 796

◾◾ Business Application: How Can You Avoid
The Sherman Antitrust Act 779 Antitrust Problems? 797
◾◾ Landmark in the Law: The Sherman Antitrust Act 779
Section 1 of the Sherman Act 781
Chapter 32
The Justice Department Goes After E-Book Pricing 783
Consumer and Environmental Law 802
Section 2 of the Sherman Act 785
Advertising, Marketing, and Sales 802
Case 31.1: McWane, Inc. v. Federal Trade Commission 787
Case 32.1: POM Wonderful, LLC v. Federal Trade Commission 804
Spotlight on Weyerhaeuser: Case 31.2: Weyerhaeuser Co. v.
Ross-Simmons Hardwood Lumber Co. 789
The FTC’s Guideline Regulating Astroturfing 806
The Clayton Act 790 Case 32.2: Lexmark International, Inc. v. Static Control
Case 31.3: Batson v. Live Nation Entertainment, Inc. 792 Components, Inc. 807
Enforcement and Exemptions 793 Labeling and Packaging 808
xii Contents
Toxic Chemicals and Hazardous Waste 822

◾◾ Business Application: The Proper Approach to
Using Credit Reporting Services 825
Chapter 33
Liability of Accountants
and Other Professionals 830
Potential Liability to Clients 831
◾◾ Landmark in the Law: The SEC Adopts Global
iStockPhoto.com/spxChrome
Accounting Rules 832
Case 33.1: In re B.L.H. 835
Potential Liability to Third Parties 836
Case 33.2: Perez v. Stern 839
The Sarbanes-Oxley Act 839
Potential Liability of Accountants under Securities Laws 841
Protection of Health and Safety 810
◾◾ Beyond Our Borders: Europe Bans Foods That Americans Eat 810 Spotlight on an Accountant’s Duty to Correct
Mistakes: Case 33.3: Overton v. Todman & Co., CPAs 844
Credit Protection 812
Potential Criminal Liability 845
Protecting the Environment 816
Confidentiality and Privilege 846
Air and Water Pollution 818
Unit Six—Business Case Study with Dissenting Opinion:
Case 32.3: United States v. O’Malley 820 Yates v. United States 852
Unit 7 Property and Its Protection 855

Personal Property and Bailments 856 Real Property and Landlord-Tenant Law 877
Personal Property versus Real Property 856 The Nature of Real Property 877
Case 34.1: Corbello v. DeVito 857 Ownership Interests and Leases 879
Acquiring Ownership of Personal Property 858 Case 35.1: Main Omni Realty Corp. v. Matus 881
◾◾ Adapting the Law to the Online Environment: Case 35.2: Baker v. Walnut Bowls, Inc. 885
The Exploding World of Digital Property 859
Transfer of Ownership 886
Classic Case 34.2: In re Estate of Piper 861
Spotlight on Sales of Haunted Houses: Case 35.3:
Mislaid, Lost, and Abandoned Property 863 Stambovsky v. Ackley 887
Bailments 865 Landlord-Tenant Relationships 891
Case 34.3: Bridge Tower Dental, P.A. v. Meridian
Computer Center, Inc. 869
◾◾ Business Application: What Should You Do
with Lost Property? 873
Contents xiii
Wills 907
Case 36.3: In re Estate of Melton 910
Social Media Estate Planning 913
Trusts 915
◾◾ Business Application: How Can You Manage Risk
in Cyberspace? 920
Unit Seven—Business Case Study with Dissenting Opinion:
Kovarik v. Kovarik 926
APPENDICES
A How to Brief Cases and Analyze Case Problems A-1
B The Constitution of the United States A-3
C The Uniform Commercial Code (Excerpts) A-11
D Answers to Issue Spotters A-130
E Answers to Even-Numbered Learning
Objectives Check Questions A-136
F Sample Answers for Business Case Problems
iStockPhoto.com/fstop123
with Sample Answer A-144
G Case Excerpts for Case Analysis Questions A-152
Glossary G-1
Table of Cases TC-1
Index I-1
Chapter 36
Insurance, Wills, and Trusts 899
Insurance 899
Case 36.1: Breeden v. Buchanan 902
Case 36.2: Valero v. Florida Insurance Guaranty Association, Inc. 905
Preface
T he study of business and the legal environment has universal applicability. A student
entering any field of business must have at least a passing understanding of business law
in order to function in the real world. Business Law Today, Eleventh Edition, provides
the information in an interesting and contemporary way. The Eleventh Edition continues its
established tradition of being the most up-to-date text on the market.
Instructors have come to rely on the coverage, accuracy, and applicability of Business Law
Today. This best-selling text engages your students, solidifies their understanding of legal
concepts, and provides the best teaching tools available. I have spent a great deal of effort
making this edition more contemporary, exciting, and visually appealing than ever before.
Special pedagogical devices within the text focus on legal, ethical, global, and corporate issues,
while addressing core curriculum requirements.
The Eleventh Edition incorporates the latest legal developments and United States Supreme
Court decisions. It also includes more than fifty new features and seventy new cases, hundreds
of new examples and case examples, new exhibits, learning objectives, margin definitions, and
case problems.
New Chapter on Internet Law, Social Media, and Privacy

For the Eleventh Edition, I have included an entirely new chapter (Chapter 7) entitled Internet
Law, Social Media, and Privacy. Social media have entered the mainstream and become a
part of everyday life for many businesspersons. Throughout the text, I recognize this trend
by incorporating the Internet and social media as they relate to the topics under discussion.
New Features
The Eleventh Edition of Business Law Today is filled with exciting new features including the
following:
• Twenty-three Adapting the Law to the Online Environment features examine cutting-
edge cyberlaw issues. Seventeen of these are new and cover topics such as Facebook
poker, hacking, patent trolls, paying with smartphones, revenge porn, and social
media.
• I have included twenty new Ethical Issues that focus on the ethical aspects of a topic
being discussed in order to emphasize that ethics is an integral part of a business law
course.
• I have also added six new Beyond Our Borders features (for a total of twenty-four)
that focus on the global legal environment and illustrate how other nations deal with
specific legal concepts being discussed.
• For this edition, I have created a new feature entitled Managerial Strategy that
focuses on the management aspects of business law. There are ten of these new
features throughout the text, covering such topics as the commercial use of drones,
marriage equality, and the use of company e-mail systems to organize a union.
• Fourteen Business Application features and eight Linking Business Law to [one of the
six functional fields of business] features are included at the end of selected chapters.
xv
xvi Preface
The Business Applications focus on practical considerations and offer checklists related
to the chapter’s contents, whereas the Linking Business Law features underscore how the
law relates to other fields of business.
• Eighteen Landmark in the Law features discuss a landmark case, statute, or other legal
development that has had a significant effect on business law.
New Cases and Case Problems

The Eleventh Edition of Business Law Today has new cases and case problems from 2015 and
2014 in every chapter. The new cases have been carefully selected to illustrate important points
of law and be of high interest to students and instructors. I have made it a point to find recent
cases that enhance learning and are simple enough for business law students to understand.
Certain cases and case problems have been carefully chosen as good teaching cases and
are designated as Spotlight Cases and Spotlight Case Problems. Some examples include
Spotlight on Apple, Spotlight on Beer Labels, Spotlight on Nike, and Spotlight on the Seattle Mariners.
Instructors will find these Spotlight decisions useful to illustrate the legal concepts under
discussion, and students will enjoy studying these cases because they involve interesting and
memorable facts. Other cases have been chosen as Classic Cases because they establish a legal
precedent in the particular area of law.
Each case concludes with a question, which may be called Critical Thinking, What If the
Facts Were Different? or Why Is This Case Important? Classic Cases conclude with an Impact of
This Case on Today’s Law section that clarifies how the case has affected the legal environment.
Suggested answers to all case-ending questions can be found in the Solutions Manual for this text.
Many New Highlighted and Numbered Case Examples

Many instructors use cases and examples to illustrate how the law applies to business. For
this edition of Business Law Today, I have added more than one hundred new highlighted
and numbered Examples, and more than one hundred new highlighted and consecutively
numbered Case Examples. Examples illustrate how the law applies in a specific situation. Case
Examples present the facts and issues of an actual case and then describe the court’s decision
and rationale. The numbered Examples and Case Examples features are integrated throughout
the text to help students better understand how courts apply the principles in the real world.
Critical Thinking and Legal Reasoning Elements

Critical thinking questions conclude most of the features and cases in this text. There is also a
Debate This question at the end of each chapter that requires students to think critically about
the rationale underlying the law on a particular topic.
Answers to all critical thinking questions, as well as to the Business Scenarios and Case
Problems at the end of every chapter, are presented in the Solutions Manual for the text. In
addition, the answers to one case problem in each chapter, called the Business Case Problem
with Sample Answer, appear in Appendix F.
The chapter-ending materials also include a separate section of questions that focus on
critical thinking and writing. This section always includes a Business Law Critical Thinking
Group Assignment and may also include the following:
• Critical Legal Thinking questions require students to think critically about some
aspect of the law discussed in the chapter.
• Business Law Writing questions require students to compose a written response to a
business-oriented critical-thinking question.
• Case Analysis Questions require students to read through a case excerpt in Appendix
G, brief the case, and then answer a series of questions relating to the case.
Preface xvii
Other Pedagogical Devices within Each Chapter

• Learning Objectives (questions at the beginning of each chapter and in the margin of
the text provide a framework for the student).
• Preventing Legal Disputes (integrated text sections offer practical guidance on how
businesspersons can avoid legal disputes and litigation in a particular area).
• Chapter Outline (an outline of the chapter’s first-level headings).
• Margin definitions.
• Highlighted and numbered Examples and Case Examples (illustrate legal principles).
• Quotations and Know This (margin features).
• Exhibits.
• Photographs (with critical thinking questions) and cartoons.
Chapter-Ending Pedagogy
• Reviewing . . . features (in every chapter).
• Debate This (a statement or question at the end of the Reviewing feature).
• Key Terms (with appropriate page references).
• Chapter Summary (in table format).
• Issue Spotters (in every chapter with answers in Appendix D).
• Learning Objectives Check (The Learning Objectives questions are presented again to
aid students in reviewing the chapter. For this edition, answers to the even-numbered
questions for each chapter are provided in Appendix E.)
• Business Scenarios and Case Problems (Every chapter includes a Business Case Problem
with Sample Answer answered in Appendix F, A Question of Ethics, and a Business Law
Critical Thinking Group Assignment. Selected chapters include a Spotlight Case Problem.)
Unit-Ending Pedagogy
Each of the seven units in the Eleventh Edition of Business Law Today concludes with the
following features (which are answered in the Solutions Manual):
• Business Case Study with Dissenting Opinion—This feature presents a court case
that relates to a topic covered in the unit. It opens with an introductory section,
discusses the case background and significance, and then provides excerpts from the
court’s majority opinion and from a dissenting opinion as well. The case study portion
ends with Questions for Analysis—a series of questions that prompt the student to
think critically about the legal, ethical, economic, international, or general business
implications of the case.
• Business Scenario—This feature presents a hypothetical business situation and then
asks a series of questions about how the law applies to various actions taken by the
firm. To answer the questions, the student must apply the laws discussed throughout
the unit.
• Group Project—The final portion of the unit-ending pedagogy is a Group Project
that requires students to work together to formulate answers based on materials they
learned in the previous chapters.
Supplements
Business Law Today, Eleventh Edition, provides a comprehensive supplements package designed
to make the tasks of teaching and learning more enjoyable and efficient. The following supple-
ments are available for instructors.
xviii Preface
MindTap Business Law for Business Law Today, Eleventh Edition

MindTap™ is a fully online, highly personalized learning experience built upon authoritative
Cengage Learning content. By combining readings, multimedia, activities, and assessments
into a singular Learning Path, MindTap guides students through their course with ease and
engagement. Instructors personalize the Learning Path by customizing Cengage Learning
resources and adding their own content via apps that integrate into the MindTap framework
seamlessly with Learning Management Systems.
The MindTap Business Law product provides a four-step Learning Path, Case Repository,
Adaptive Test Prep, and an Interactive eBook designed to meet instructors’ needs while also
allowing instructors to measure skills and outcomes with ease. Each and every item is assign-
able and gradable. This gives instructors the knowledge of class standings and concepts that
may be difficult. Additionally, students gain knowledge about where they stand—both indi-
vidually and compared to the highest performers in class.
Cengage Learning Testing Powered by Cognero

Cengage Learning Testing Powered by Cognero is a flexible, online system that allows instructors
to do the following:
• Author, edit, and manage Test Bank content from multiple Cengage Learning solutions.
• Create multiple test versions in an instant.
• Deliver tests from their Learning Management System (LMS), classroom, or wherever
they want.
Start Right Away! Cengage Learning Testing Powered by Cognero works on any operating
system or browser.
• Use your standard browser; no special installs or downloads are needed.
• Create tests from school, home, the coffee shop—anywhere with Internet access.
What Instructors Will Find
• Simplicity at every step. A desktop-inspired interface features drop-down menus and
familiar, intuitive tools that take instructors through content creation and management
with ease.
• Full-featured test generator. Create ideal assessments with a choice of fifteen question
types—including true/false, multiple choice, opinion scale/Likert, and essay. Multi-
language support, an equation editor, and unlimited metadata help ensure instructor
tests are complete and compliant.
• Cross-compatible capability. Import and export content into other systems.
Instructor’s Companion Web Site

The Instructor’s Companion Web Site contains the following supplements:
• Instructor’s Manual. Includes sections entitled “Additional Cases Addressing This Issue”
at the end of selected case synopses.
• Solutions Manual. Provides answers to all questions presented in the text, including
the Learning Objectives, the questions in each case and feature, the Issue Spotters, the
Business Scenarios and Case Problems, Critical Thinking and Writing Assignments, and the
unit-ending features. New for this edition, we also provide a set of Alternative Case
Problems for every chapter.
• Test Bank. A comprehensive test bank contains multiple-choice, true/false, and short
essay questions.
• Case-Problem Cases.
• Case Printouts.
• PowerPoint Slides.
Turn the Light ON
with MindTap!
Through personalized paths of dynamic assignments and applications, MindTap is a digital learning solution
that turns cookie cutter into cutting edge, apathy into engagement, and memorizers into higher-level thinkers.
With MindTap’s carefully curated material, you get the right content and groundbreaking tools you need. You can
personalize every element of your course—from rearranging the Table of Contents to inserting videos, cases, and
activities. You’ll save time and improve workflow by having everything in one place. And, with MindTap’s Progress
App, you can monitor student progress in real time.
Specifically for this Edition, you’ll find:

A pre-built learning path in MindTap that guides students through consistent learning activities to prepare,
engage, apply, and analyze business law content.
Worksheets - interactive online “worksheets” PREPARE Video Activities - real-world video exercises make
students for class, ensuring reading and comprehension. business law RELEVANT AND ENGAGING.
Brief Hypotheticals - these applications help students Case Problem Blueprints - promote deeper CRITICAL
spot the issue and APPLY the law in the context of a THINKING and legal reasoning by guiding students step
short, factual scenario. by step through a case problem.
Turn the page to learn more about our exciting NEW Case Repository,
Adaptive Test Prep, and the Interactive eBook.
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Case Repository
Now, within MindTap, you can search a library of cases from previous editions of your favorite
textbooks by relevant criteria and then incorporate those cases in the learning path for your students.
This exciting repository allows you to personalize your course and truly engage students, helping
them to reach higher levels of critical thinking.
Easily search by topic, and then refine your search by subtopic, to find case examples
of a specific legal concept.
Search by court or state to bring a local flavor or interest to your classroom.
Enjoy over 900 cases at your fingertips. All

new edition omitted cases will be added every
year, allowing the archive to continually grow.
Allows you to mix and match cases from

different textbooks.
Reduce
Exam Anxiety
with Adaptive
Test Prep
MindTap’s Adaptive Test Prep helps students study for exams with unlimited practice tests, quizzes,
and feedback aimed specifically at helping them understand the course concepts.
Students can create an unlimited number of practice tests using similar types of questions seen on exams and test
themselves on multiple chapters, by chapter, and by sub-topic levels. All practice test questions are book-specific and
students receive immediate feedback with a remediation path, called My Study Plan, based on questions they miss.
The feedback provided is available in up to three formats:
eBook link back to the reading
written remediation
video walk-throughs
These resources consist of robust explanations created by some of the best business law
educators in the country. My Study Plan also provides chapter level resources such as flashcards
and chapter summary reviews.
Turn the Light
on Engagement
with Interactive
eBook Activities
An eBook environment leads to more interaction with the material and a deeper learning
of Business Law concepts. MindTap offers interactive cases, interactive exhibits, and
video whiteboard explanations for the business law classroom.
Interactive Cases
Bring cases to life with an interactive environment that pulls students into the material. Instead of reading a
boxed case feature, these interactive cases ask questions throughout, provide detailed answers, help guide
students to a deeper understanding of the case, and enhance their legal reasoning skills. After reading the
case, students are asked application questions to assess their understanding at a broader level.
Interactive Exhibits
Select static exhibits from within the narrative are now interactive. Students can enjoy manipulating
figures and exhibits to better solidify their understanding of key concepts in the text. These activities
are sure to engage students in the learning process and encourage greater focus and participation.
Video Whiteboard Explanations

Bring key legal concepts to life, literally, with short, entertaining animations. Video whiteboard
explanations help students remember and learn key concepts with fun, real-world examples.
Each being 3 minutes or less, these videos are an exciting way to help students see how they’d
encounter these concepts in their own lives or in the near future when entering the business world.
Preface xxiii
Acknowledgments for Previous Editions

Since I began this project many years ago, numerous business law professors and users of Business Law Today have been kind
enough to help me revise the book, including the following:
John J. Balek Peter Clapp Nancy L. Hart James K. Miersma

Morton College, Illinois St. Mary’s College, California Midland College, Texas Milwaukee Area Technical Institute, Wisconsin
John Jay Ballantine Dale Clark Mo Hassan Susan J. Mitchell
University of Colorado, Boulder Corning Community College, New York Cabrillo College, California Des Moines Area Community College, Iowa
Lorraine K. Bannai Tammy W. Cowart Andy E. Hendrick Jim Lee Morgan
Western Washington University University of Texas, Tyler Coastal Carolina University, South Carolina West Los Angeles College, California
Marlene E. Barken Stanley J. Dabrowski Janine S. Hiller Jack K. Morton
Ithaca College, New York Hudson County Community College, New Jersey Virginia Polytechnic Institute & State University University of Montana
Laura Barnard Sandra J. Defebaugh Karen A. Holmes Annie Laurie I. Myers
Lakeland Community College, Ohio Eastern Michigan University Hudson Valley Community College, New York Northampton Community College, Pennsylvania
Denise A. Bartles, J.D. Patricia L. DeFrain Fred Ittner Solange North
Missouri Western State University Glendale College, California College of Alameda, California Fox Valley Technical Institute, Wisconsin
Daryl Barton Julia G. Derrick Susan S. Jarvis Jamie L. O’Brien
Eastern Michigan University Brevard Community College, Florida University of Texas, Pan American South Dakota State University
Merlin Bauer Joe D. Dillsaver Jack E. Karns Ruth R. O’Keefe
Mid State Technical College, Wisconsin Northeastern State University, Oklahoma East Carolina University, North Carolina Jacksonville University, Florida
Donna E. Becker Claude W. Dotson Sarah Weiner Keidan Robert H. Orr
Frederick Community College, Maryland Northwest College, Wyoming Oakland Community College, Michigan Florida Community College at Jacksonville
Richard J. Bennet Larry R. Edwards Richard N. Kleeberg George Otto
Three Rivers Community College, Connecticut Tarrant County Junior College, Solano Community College, California Truman College, Illinois
South Campus, Texas
Dr. Anne Berre Bradley T. Lutz Thomas L. Palmer
Schreiner University, Texas Jacolin Eichelberger Hillsborough Community College, Florida Northern Arizona University
Hillsborough Community College, Florida
Robert C. Bird Diane MacDonald David W. Pan
University of Connecticut George E. Eigsti Pacific Lutheran University, Washington University of Tulsa, Oklahoma
Kansas City, Kansas, Community College
Bonnie S. Bolinger Darlene Mallick Victor C. Parker, Jr.
Ivy Tech Community College, Florence E. Elliott-Howard Anne Arundel Community College, Maryland North Georgia College and State University
Wabash Valley Region, Indiana Stephen F. Austin State University, Texas
John D. Mallonee Donald L. Petote
Brad Botz Tony Enerva Manatee Community College, Florida Genesee Community College, New York
Garden City Community College, Kansas Lakeland Community College, Ohio
Joseph D. Marcus Francis D. Polk
Teresa Brady Benjamin C. Fassberg Prince George’s Community College, Maryland Ocean County College, New Jersey
Holy Family College, Pennsylvania Prince George’s Community College, Maryland
Woodrow J. Maxwell Gregory Rabb
Dean Bredeson Joseph L. Flack Hudson Valley Community College, New York Jamestown Community College, New York
University of Texas at Austin Washtenaw Community College, Michigan
Diane May Brad Reid
Lee B. Burgunder Jerry Furniss Winona State University, Minnesota Abilene Christian University, Texas
California Polytechnic University, San Luis Obispo University of Montana
Beverly McCormick Anne Montgomery Ricketts
Thomas D. Cavenagh Joan Gabel Morehead State University, Kentucky University of Findlay, Ohio
North Central College, Illinois Florida State University
William J. McDevitt Donald A. Roark
Bradley D. Childs Elizabeth J. Guerriero Saint Joseph’s University, Pennsylvania University of West Florida
Belmont University, Tennessee Northeast Louisiana University
John W. McGee Hugh Rode
Corey Ciocchetti Phil Harmeson Aims Community College, Colorado Utah Valley State College
University of Denver, Colorado University of South Dakota
xxiv Preface
Gerald M. Rogers Lou Ann Simpson Frederick J. Walsh Kay O. Wilburn

Front Range Community College, Colorado Drake University, Iowa Franklin Pierce College, New Hampshire The University of Alabama at Birmingham
Dr. William J. Russell Denise Smith James E. Walsh, Jr. John G. Williams, J.D.
Northwest Nazarene University, Idaho Missouri Western State College Tidewater Community College, Virginia Northwestern State University, Louisiana
William M. Rutledge Hugh M. Spall Randy Waterman James L. Wittenbach
Macomb Community College, Michigan Central Washington University Richland College, Texas University of Notre Dame, Indiana
Martha Wright Sartoris Catherine A. Stevens Jerry Wegman Eric D. Yordy
North Hennepin Community College, Minnesota College of Southern Maryland University of Idaho Northern Arizona University
Anne W. Schacherl Maurice Tonissi Edward L. Welsh, Jr. Joseph Zavaglia, Jr.
Madison Area Technical College, Wisconsin Quinsigamond Community College, Massachusetts Phoenix College, Arizona Brookdale Community College, New Jersey
Edward F. Shafer James D. Van Tassel Clark W. Wheeler
Rochester Community College, Minnesota Mission College, California Santa Fe Community College, Florida
Lance Shoemaker, J.D., Russell A. Waldon Lori Whisenant
M.C.P., M.A. College of the Canyons, California University of Houston, Texas
West Valley College, California
In addition, I give my thanks to the staff at Cengage Learning, especially Vicky True-Baker,
product manager; Michael Worls, product director; Rebecca von Gillern, managing content
developer; Leah Wuchnick, content developer; and Ann Borman, content project manager.
I also thank Katie Jergens in marketing; Michelle Kunkler, art director; and Anne Sheroff,
photo researcher. I would also like to thank the staff at Lachina, the compositor, for accurately
generating pages for this text and making it possible for me to meet my ambitious printing
schedule.
I give special thanks to Katherine Marie Silsbee for managing the project and providing
exceptional research and editorial skills. I also thank William Eric Hollowell, c o-author of
the Solutions Manual and Test Bank, for his excellent research efforts. I am grateful for the
copyediting services of Beverly Peavler and proofreading by Sue Bradley. I also thank Vickie
Reierson, Roxanna Lee, and Suzanne Jasin for their many efforts on this project and for helping
to ensure an error-free text.
Roger LeRoy Miller
Dedication
To John Allen,
The power of rational

analysis never weakens.
R.L.M.
iStockPhoto.com/DanBrandenburg
Unit 1
1 The Legal Environment
2 Constitutional Law
3 Courts and Alternative Dispute Resolution
4 Tort Law
The Legal Environment 5

6
7
Product Liability
Intellectual Property Rights
Internet Law, Social Media, and Privacy
of Business 8
9
Criminal Law and Cyber Crime
Business Ethics
CHAPTER OUTLINE
1
▪▪ Business Activities and
the Legal Environment
▪▪ Sources of American Law
iStockPhoto.com/Feverpitched
▪▪ Common Law Tradition

▪▪ Classifications of Law
The Legal Environment

LEARNING OBJECTIVES
The five Learning Objectives below
are designed to help improve your
understanding of the chapter. After
reading this chapter, you should be able
to answer the following questions:
1. What are four primary In the chapter-opening quotation, Clarence Darrow “Laws should be like
sources of law in the United asserts that law should be created to serve the public. clothes. They should
States? Because you are part of that public, the law is important
2. What is the common law
to you. In particular, those entering the world of busi- be made to fit the
tradition? ness will find themselves subject to numerous laws and people they are
government regulations. A basic knowledge of these laws meant to serve.”
3. What is a precedent? When
and regulations is beneficial—if not essential—to any-
might a court depart from
precedent?
one contemplating a successful career in today’s business Clarence Darrow
1857–1938
environment. (American lawyer)
4. What is the difference Although the law has various definitions, all of them
between remedies at law
are based on the general observation that law consists of
and remedies in equity?
enforceable rules governing relationships among individuals and between individuals and their
5. What are some important society. In some societies, these enforceable rules consist of unwritten principles of behav-
differences between civil law ior. In other societies, they are set forth in ancient or contemporary law codes. In the
and criminal law?
United States, our rules consist of written laws and court decisions created by modern
legislative and judicial bodies. Regardless of how such rules are created, they all have one
feature in common: they establish rights, duties, and privileges that are consistent with the val-
Law A body of enforceable rules
governing relationships among
ues and beliefs of a society or its ruling group.
individuals and between individuals In this introductory chapter, we look first at an important question for any student
and their society. reading this text: How do business law and the legal environment affect business decision
making? Next, we describe the basic sources of American law, the common law tradition,
and some schools of legal thought. We conclude the chapter with a discussion of some
general classifications of law.
CHAPTER 1: The Legal Environment 3
1–1 Business Activities and the Legal Environment

Laws and government regulations affect almost all business activities—from hiring and firing
decisions to workplace safety, the manufacturing and marketing of products, business financ-
ing, and more. To make good business decisions, businesspersons need to understand the
laws and regulations governing these activities.
Realize also that in today’s business world, simply being aware of what conduct can lead
to legal liability is not enough. Businesspersons must develop critical thinking and legal rea- Liability The state of being legally
soning skills so that they can evaluate how various laws might apply to a given situation and responsible (liable) for something,
determine the best course of action. Businesspersons are also pressured to make ethical deci- such as a debt or obligation.
sions. Thus, the study of business law necessarily involves an ethical dimension.
1–1a Many Different Laws May Affect a Single Business Transaction

As you will note, each chapter in this text covers a specific area of the law and shows how
the legal rules in that area affect business activities. Although compartmentalizing the law in
this fashion facilitates learning, it does not indicate the extent to which many different laws
may apply to just one transaction. Exhibit 1–1 illustrates the various areas of the law that may
influence business decision making.
EXAMPLE 1.1 When Mark Zuckerberg started Facebook as a Har-
vard student, he probably did not imagine all the legal challenges
his company would face as a result of his business decisions.
• Shortly after Facebook was launched, others claimed that
Zuckerberg had stolen their ideas for a social networking site.
Their claims involved alleged theft of intellectual property
(see Chapter 6), fraudulent misrepresentation (see Chapter
13), partnership law (see Chapter 27), and securities law (see
iStockPhoto.com/GYI NSEA
Chapter 30). Facebook ultimately paid a significant amount

($65 million) to settle those claims out of court.
• By 2015, Facebook had been sued repeatedly for violating
users’ privacy (such as by disseminating private information
to third parties for commercial purposes—see Chapters 4 and
7). In 2012 and 2014, lawsuits were filed against Facebook Mark Zuckerberg, founder of Facebook, has faced numerous
for violating users’ privacy (and federal laws) by tracking their legal challenges. These include privacy issues and the alleged
Web site usage and by scanning private messages for purposes theft of intellectual property. Can large Internet firms
of data mining and user profiling. Also in 2014, a suit was completely avoid such legal problems?
filed in Europe against Facebook alleging violations of EU laws
governing privacy and data use.
• Facebook’s business decisions have come under scrutiny by federal regulators, such as
the Federal Trade Commission (FTC) and the Securities and Exchange Commission
(SEC). The company settled a complaint filed by the FTC alleging that Facebook failed
to keep “friends” lists and other user information private. n
A key to avoiding business disputes is to think ahead when starting or running a

business or entering a contract. Learn what you can about the laws pertaining to that spe-
cific enterprise or transaction. Have some idea of the legal ramifications of your business deci-
sions, and seek the advice of a licensed attorney. When you need to choose an attorney, obtain
recommendations from friends, relatives, or business associates who have had long-standing
relationships with their attorneys.
4 UNIT ONE: The Legal Environment of Business
Exhibit 1–1 Areas of the Law That May Affect Business Decision Making
Contracts
Courts and
Sales
Court Procedures
Professional Negotiable
Liability Instruments
Business
Business Creditors’
Decision
Organizations Rights
Making
Intellectual
Agency Property
Torts E-Commerce
Product
Liability
1–1b Linking Business Law to the Six Functional Fields of Business

In all likelihood, you are taking a business law or legal environment course because you
intend to enter the business world, though some of you may plan to become attorneys. Many
of you are taking other business school courses and may therefore be familiar with the func-
tional fields of business listed below:
1. Corporate management.
2. Production and transportation.
3. Marketing.
4. Research and development.
5. Accounting and finance.
iStockPhoto.com/Minerva Studio
6. Human resource management.

One of our goals in this text is to show how legal concepts can be useful
for managers and businesspersons, whether their activities focus on man-
agement, marketing, accounting, or some other field. To that end, numer-
ous chapters, including this chapter, conclude with a special feature called
Why is basic knowledge of business law and the legal “Linking Business Law to [one of the six functional fields of business].” The
environment so important today? link between business law and accounting is so significant that we discuss
it in detail in Chapter 33.
1–1c The Role of the Law in a Small Business

Some of you may end up working in a small business or even owning and running one. The
small business owner/operator is the most general of managers. When you seek additional
Exhibit 1–2 Linking Business Law to the Management of a Small Business
Business Organization
What is the most appropriate business organizational form,
and what type of personal liability does it entail?
Taxation
How will the small business be taxed, and are there ways to reduce those taxes?
Intellectual Property
Does the small business have any patents or other intellectual
property that needs to be protected, and if so, what steps should the firm take?
Administrative Law
What types of government regulations apply to the
business, and what must the firm do to comply with them?
Employment
Does the business need an employment manual,
and does management have to explicitly inform employees of their rights?
Contracts, Sales, and Leases

Will the firm be regularly entering into contracts with others,
and if so, should it hire an attorney to review those contracts?
Accounting
Do the financial statements created by an accountant need to be verified for accuracy?
Finance
What are appropriate and legal ways to raise
additional capital so that the business can grow?
financing, you become a finance manager. When you “go over the books” with your book-
keeper, you become an accountant. When you decide on a new advertising campaign, you are
suddenly the marketing manager. When you hire employees and determine their salaries and
benefits, you become a human resources manager.
Just as the functional fields of business are linked to the law, so too are all of the different
managerial roles that a small-business owner/operator must perform. Exhibit 1–2 shows some
of the legal issues that may arise as part of the management of a small business. Large busi-
nesses face most of these issues, too.
Primary Source of Law A
1–2 Sources of American Law document that establishes the

law on a particular issue, such
as a constitution, a statute, an
There are numerous sources of American law. Primary sources of law, or sources that estab- administrative rule, or a court
lish the law, include the following: decision.
• The U.S. Constitution and the constitutions of the various states.

LEARNING OBJECTIVE 1 • Statutory law—including laws passed by Congress, state legislatures, and local
What are four primary sources governing bodies.
of law in the United States? • Regulations created by administrative agencies, such as the federal Food and Drug
Administration.
• Case law (court decisions).
We describe each of these important primary sources of law in the following pages. (See the
appendix at the end of this chapter for a discussion of how to find statutes, regulations, and
case law.)
Secondary Source of Law A Secondary sources of law are books and articles that summarize and clarify the primary
publication that summarizes or sources of law. Legal encyclopedias, compilations (such as Restatements of the Law, which sum-
interprets the law, such as a legal marize court decisions on a particular topic), official comments to statutes, treatises, articles
encyclopedia, a legal treatise, or an
article in a law review.
in law reviews published by law schools, and articles in other legal journals are examples of
secondary sources of law. Courts often refer to secondary sources of law for guidance in inter-
preting and applying the primary sources of law discussed here.
1–2a Constitutional Law

The federal government and the states have written constitutions that set forth the general
Constitutional Law The organization, powers, and limits of their respective governments. Constitutional law, which
body of law derived from the U.S. deals with the fundamental principles by which the government exercises its authority, is the
Constitution and the constitutions law as expressed in these constitutions.
of the various states.
The U.S. Constitution is the basis of all law in the United States. It provides a framework
for statutes and regulations, and thus is the supreme law of the land. A law in violation of the
U.S. Constitution, if challenged, will be declared unconstitutional and will not be enforced,
no matter what its source. Because of its paramount importance in the American legal sys-
tem, we discuss the U.S. Constitution at length in Chapter 2 and present its complete text in
Appendix B.
The Tenth Amendment to the U.S. Constitution reserves to the states all powers not granted
to the federal government. Each state in the union has its own constitution. Unless it conflicts
with the U.S. Constitution or a federal law, a state constitution is supreme within that state’s
borders.
1–2b Statutory Law

Laws enacted by legislative bodies at any level of government, such as the statutes passed by
Statutory Law The body of Congress or by state legislatures, make up the body of law generally referred to as statutory
law enacted by legislative bodies law. When a legislature passes a statute, that statute ultimately is included in the federal code
(as opposed to constitutional law, of laws or the relevant state code of laws.
administrative law, or case law).
Whenever a particular statute is mentioned in this text, we usually provide a footnote
Citation A reference to a showing its citation (a reference to a publication in which a legal authority—such as a statute
publication in which a legal or a court decision—or other source can be found). In the appendix following this chapter,
authority—such as a statute
or a court decision—or other
we explain how you can use these citations to find statutory law.
source can be found. Statutory law also includes local ordinances—regulations passed by municipal or county
governing units to deal with matters not covered by federal or state law. Ordinances com-
Ordinance A regulation enacted
by a city or county legislative body
monly have to do with city or county land use (zoning ordinances), building and safety codes,
that becomes part of that state’s and other matters affecting only the local governing unit.
statutory law. A federal statute, of course, applies to all states. A state statute, in contrast, applies only
within the state’s borders. State laws thus may vary from state to state. No federal statute may
violate the U.S. Constitution, and no state statute or local ordinance may violate the U.S. Con-
stitution or the relevant state constitution.
Uniform Laws During the 1800s, the differences among state laws frequently created dif-
ficulties for businesspersons conducting trade and commerce among the states. To counter
these problems, a group of legal scholars and lawyers formed the National Conference of
Commissioners on Uniform State Laws (NCCUSL, online at www.uniformlaws.org) in
1892 to draft uniform laws (“model statutes”) for the states to consider adopting. The Uniform Law A model law
NCCUSL still exists today and continues to issue uniform laws. developed by the National
Each state has the option of adopting or rejecting a uniform law. Only if a state legislature Conference of Commissioners on
Uniform State Laws for the states
adopts a uniform law does that law become part of the statutory law of that state. Furthermore, a
to consider enacting into statute.
state legislature may choose to adopt only part of a uniform law or to rewrite the sections that
are adopted. Hence, even though many states may have adopted a uniform law, those laws
may not be entirely “uniform.”
The Uniform Commercial Code (UCC) One of the most important uniform acts is the Uni-
form Commercial Code (UCC), which was created through the joint efforts of the NCCUSL
and the American Law Institute.1 The UCC was first issued in 1952 and has been adopted
in all fifty states,2 the District of Columbia, and the Virgin Islands.
The UCC facilitates commerce among the states by providing a uniform, yet flexible, set of
rules governing commercial transactions. Because of its importance in the area of commercial
law, we cite the UCC frequently in this text. We also present excerpts of the UCC in Appendix
C. From time to time, the NCCUSL revises the articles contained in the UCC and submits the
revised versions to the states for adoption.
1–2c Administrative Law

Another important source of American law is administrative law, which consists of the rules, Administrative Law The body
orders, and decisions of administrative agencies. An administrative agency is a federal, state, of law created by administrative
or local government agency established to perform a specific function. agencies in order to carry out their
duties and responsibilities.
Rules issued by various administrative agencies affect almost every aspect of a business’s
operations. Regulations govern a business’s capital structure and financing, its hiring and firing Administrative Agency A
procedures, its relations with employees and unions, and the way it manufactures and markets federal or state government
agency created by the legislature
its products. (See the Linking Business Law to Management feature at the end of this chapter.) to perform a specific function,
such as to make and enforce rules
Federal Agencies At the national level, numerous executive agencies exist within the cabinet pertaining to the environment.
departments of the executive branch. The Food and Drug Administration, for example, is an
agency within the U.S. Department of Health and Human Services. Executive agencies are sub-
ject to the authority of the president, who has the power to appoint and remove their officers.
“Laws and institutions,
There are also major independent regulatory agencies at the federal level, including the Fed-
eral Trade Commission, the Securities and Exchange Commission, and the Federal Commu- like clocks, must
nications Commission. The president’s power is less pronounced in regard to independent
agencies, whose officers serve for fixed terms and cannot be removed without just cause. occasionally be
cleaned, wound up,
State and Local Agencies There are administrative agencies at the state and local levels as and set to true time.”
well. Commonly, a state agency (such as a state pollution-control agency) is created as a par-
allel to a federal agency (such as the Environmental Protection Agency). Henry Ward Beecher
Just as federal statutes take precedence over conflicting state statutes, so do federal agency 1813–1887
(American clergyman
regulations take precedence over conflicting state regulations. Because the rules of state and and abolitionist)
local agencies vary widely, we focus here exclusively on federal administrative law.
Agency Creation Because Congress cannot possibly oversee the actual implementation of
all the laws it enacts, it delegates such tasks to agencies. Congress creates an administrative
1. This institute was formed in the 1920s and consists of practicing attorneys, legal scholars, and judges.
2. Louisiana has adopted only Articles 1, 3, 4, 5, 7, 8, and 9.
agency by enacting enabling legislation, which specifies the name, composition,

purpose, and powers of the agency being created.
EXAMPLE 1.2 The Federal Trade Commission (FTC) was created in 1914 by the
Federal Trade Commission Act.3 This act prohibits unfair and deceptive trade prac-
tices. It also describes the procedures the agency must follow to charge persons or
organizations with violations of the act, and it provides for judicial review (review
by the courts) of agency orders.
Other portions of the act grant the agency powers to “make rules and regula-
tions for the purpose of carrying out the Act,” and to conduct investigations of
business practices. In addition, the FTC can obtain reports from interstate corpora-
iStockPhoto.com/TerryJ
tions concerning their business practices, investigate possible violations of the act,
publish findings of its investigations, and recommend new legislation. The act also
empowers the FTC to hold trial-like hearings and to adjudicate (resolve judicially)
certain kinds of disputes involving its regulations. n
Note that the powers granted to the FTC incorporate functions associated with
Which federal agency oversees worker safety?
the legislative branch of government (rulemaking), the executive branch (investi-
gation and enforcement), and the judicial branch (adjudication). Taken together,
Enabling Legislation A statute these functions constitute the administrative process, which is the administration
enacted by Congress that authorizes of law by administrative agencies. The administrative process involves rulemaking, enforce-
the creation of an administrative ment, and adjudication.
agency and specifies the name,
composition, purpose, and powers Rulemaking A major function of an administrative agency is rulemaking—formulating new
of the agency being created. regulations. When Congress enacts an agency’s enabling legislation, it confers the power to
Adjudicate To render a judicial make legislative rules, or substantive rules, which are legally binding on all businesses.
decision. Adjudication is the The Administrative Procedure Act (APA)4 imposes strict procedural requirements that agen-
trial-like proceeding in which an cies must follow in legislative rulemaking and other functions. EXAMPLE 1.3 The Occupational
administrative law judge hears Safety and Health Act authorized the Occupational Safety and Health Administration (OSHA) to
and resolves disputes involving an
develop and issue rules governing safety in the workplace. When OSHA wants to formulate rules
administrative agency’s regulations.
regarding safety in the steel industry, it has to follow specific procedures outlined by the APA. n
Administrative Process The
procedure used by administrative Legislative Rules. Legislative rulemaking under the APA typically involves the following three
agencies in administering the law. steps (referred to as notice-and-comment rulemaking).
Rulemaking The process by 1. Notice of the proposed rulemaking. The notice must be published in the Federal Register, a
which an administrative agency daily publication of the U.S. government.
formally adopts a new regulation
or amends an old one. 2. A comment period. The agency must allow ample time for interested parties to comment in
writing on the proposed rule. The agency takes these comments into consideration when
Legislative Rule An
administrative agency rule that
drafting the final version of the regulation.
carries the same weight as a 3. The final rule. Once the agency has drafted the final rule, it is published in the Federal
congressionally enacted statute. Register. (See the appendix at the end of this chapter for an explanation of how to find
agency regulations.)
Interpretive Rule A nonbinding Interpretive Rules. Administrative agencies also issue interpretive rules that are not legally
rule or policy statement issued binding but simply indicate how an agency plans to interpret and enforce its statutory author-
by an administrative agency that ity. The APA does not apply to interpretive rulemaking. EXAMPLE 1.4 The Equal Employment
explains how it interprets and
Opportunity Commission periodically issues interpretive rules indicating how it plans to
intends to apply the statutes it
enforces. interpret the provisions of certain statutes, such as the Americans with Disabilities Act. These
informal rules provide enforcement guidelines for agency officials. n
Enforcement and Investigation Agencies often enforce their own rules and have both inves-
tigatory and prosecutorial powers. Agencies investigate a wide range of activities, including
coal mining, automobile manufacturing, and the industrial discharge of pollutants into the
environment.
3. 15 U.S.C. Sections 45–58.

4. 5 U.S.C. Sections 551–706.
In an investigation, an agency can request that individuals or organizations hand over

specified books, papers, electronic records, or other documents. In addition, agencies may
conduct on-site inspections, although a search warrant is normally required for such inspec-
tions.5 Sometimes, a search of a home, an office, or a factory is the only means of obtaining
evidence needed to prove a regulatory violation.
After investigating a suspected rule violation, an agency may decide to take action against
an individual or a business. Most administrative actions are resolved through negotiated set-
tlement at their initial stages without the need for formal adjudication. If a settlement cannot
be reached, though, the agency may issue a formal complaint and proceed to adjudication.
Adjudication Agency adjudication involves a trial-like hearing before an administrative law Administrative Law Judge
judge (ALJ). Hearing procedures vary widely from agency to agency. After the hearing, the ALJ (ALJ) One who presides over an
administrative agency hearing and
renders a decision in the case. The ALJ can fine the charged party or prohibit the party from
has the power to administer oaths,
carrying on some specified activity. take testimony, rule on questions of
Either the agency or the charged party may appeal the ALJ’s decision to the commission evidence, and make determinations
or board that governs the agency. If the party fails to get relief there, appeal can be made to a of fact.
federal court. Courts give significant weight (deference) to an agency’s judgment and interpre-
tation of its rules, though, and typically uphold the ALJ’s decision unless it is unreasonable. If
neither side appeals the case, the ALJ’s decision becomes final.
Do administrative agencies exercise too much authority? Administrative agencies, such

as the Federal Trade Commission, combine in a single governmental entity functions normally
divided among the three branches of government. They create rules, conduct investigations,
and prosecute and pass judgment on violators. Yet administrative agencies’ powers often go
unchecked by the other branches. Some businesspersons have suggested that it is unethical for
agencies—which are not even mentioned in the U.S. Constitution—to wield so many powers.
Although agency rulemaking must comply with the requirements of the Administrative
Procedure Act (APA), the act applies only to legislative, not interpretive, rulemaking. In addition,
the APA is largely procedural and aimed at preventing arbitrariness. It does little to ensure that
the rules passed by agencies are fair or correct—or even cost effective. On those rare occasions
when an agency’s ruling is challenged and later reviewed by a court, the court cannot reverse
the agency’s decision unless the agency exceeded its authority or acted arbitrarily. Courts typi-
cally are reluctant to second-guess an agency’s rules, interpretations, and decisions. Moreover,
once an agency has final regulations in place, it is difficult to revoke or alter them.
1–2d Case Law and Common Law Doctrines

The rules of law announced in court decisions constitute another basic source of American
law. These rules of law include interpretations of constitutional provisions, of statutes enacted
by legislatures, and of regulations created by administrative agencies. Today, this body of
judge-made law is referred to as case law. Case law—the doctrines and principles announced Case Law The rules of law
in cases—governs all areas not covered by statutory law or administrative law and is part of announced in court decisions. Case
our common law tradition. We look at the origins and characteristics of the common law tra- law interprets statutes, regulations,
constitutional provisions, and other
dition in some detail in the pages that follow.
case law.
1–3 Common Law Tradition LEARNING OBJECTIVE 2

Because of our colonial heritage, much American law is based on the English legal system. What is the common law
Knowledge of this tradition is crucial to understanding our legal system today because judges tradition?
in the United States still apply common law principles when deciding cases.
5. In some heavily regulated industries, such as the sale of firearms or liquor, agencies can conduct searches without obtaining a
warrant.
1–3a Early English Courts

After the Normans conquered England in 1066, William the Conqueror and his successors
began the process of unifying the country under their rule. One of the means they used to do
this was the establishment of the king’s courts, or curiae regis. Before the Norman Conquest,
disputes had been settled according to the local legal customs and traditions in various regions
of the country. The king’s courts sought to establish a uniform set of rules for the country as
Common Law The body of law a whole. What evolved in these courts was the beginning of the common law—a body of
developed from custom or judicial general rules that applied throughout the entire English realm. Eventually, the common law
decisions in English and U.S. courts,
tradition became part of the heritage of all nations that were once British colonies, including
not attributable to a legislature.
the United States.
Courts developed the common law rules from the principles underlying judges’ decisions
in actual legal controversies. Judges attempted to be consistent, and whenever possible, they
based their decisions on the principles suggested by earlier cases. They sought to decide sim-
ilar cases in a similar way and considered new cases with care because they knew that their
decisions would make new law. Each interpretation became part of the law on the subject and
Precedent A court decision that served as a legal precedent—that is, a court decision that furnished an example or authority
furnishes an example or authority for deciding subsequent cases involving identical or similar legal principles or facts.
for deciding subsequent cases In the early years of the common law, there was no single place or publication where court
involving identical or similar facts.
opinions, or written decisions, could be found. Beginning in the late thirteenth and early
fourteenth centuries, however, portions of significant decisions from each year were gathered
LEARNING OBJECTIVE 3 together and recorded in Year Books. The Year Books were useful references for lawyers and
What is a precedent? When judges. In the sixteenth century, the Year Books were discontinued, and other reports of cases
might a court depart from became available. (See the appendix to this chapter for a discussion of how cases are reported,
precedent? or published, in the United States today.)
1–3b Stare Decisis

The practice of deciding new cases with reference to former decisions, or precedents, even-
tually became a cornerstone of the English and U.S. judicial systems. The practice forms a
Stare Decisis A common law doctrine called stare decisis6 (“to stand on decided cases”).
doctrine under which judges are
obligated to follow the precedents The Importance of Precedents in Judicial Decision Making Under the doctrine of stare
established in prior decisions. decisis, judges are obligated to follow the precedents established within their jurisdictions.
(The term jurisdiction refers to a geographic area in which a court or courts have the power to
apply the law—see Chapter 3.) Once a court has set forth a principle of law as being applica-
ble to a certain set of facts, that court must apply the principle in future cases involving similar
facts. Courts of lower rank (within the same jurisdiction) must do likewise. Thus, stare decisis
has two aspects:
1. A court should not overturn its own precedents unless there is a strong reason to do so.
2. Decisions made by a higher court are binding on lower courts.
Binding Authority Any source Controlling precedents in a jurisdiction are referred to as binding authorities. A binding
of law that a court must follow when authority is any source of law that a court must follow when deciding a case. Binding author-
deciding a case. ities include constitutions, statutes, and regulations that govern the issue being decided, as
well as court decisions that are controlling precedents within the jurisdiction. United States
Supreme Court case decisions, no matter how old, remain controlling until they are overruled
KNOW THIS by a subsequent decision of the Supreme Court, by a constitutional amendment, or by con-
gressional legislation.
Courts normally must follow the
rules set forth by higher courts in Stare Decisis and Legal Stability The doctrine of stare decisis helps the courts to be more
efficient because if other courts have carefully reasoned through a similar case, their legal
deciding cases with similar fact
patterns. 6. Pronounced stahr-ee dih-si-sis.
reasoning and opinions can serve as guides. Stare decisis also makes the law
more stable and predictable. If the law on a given subject is well settled,
someone bringing a case to court can usually rely on the court to make a
decision based on what the law has been.
Departures from Precedent Although courts are obligated to follow prec-

edents, sometimes a court will depart from the rule of precedent. If a court
Staff/AFP/Getty Images
decides that a precedent is simply incorrect or that technological or social
changes have rendered the precedent inapplicable, the court may rule con-
trary to the precedent. Cases that overturn precedent often receive a great
deal of publicity.
CASE EXAMPLE 1.5 In Brown v. Board of Education of Topeka,7 the United
Why would this scene not have been likely before
States Supreme Court expressly overturned precedent when it concluded
1954?
that separate educational facilities for whites and blacks, which had been
upheld as constitutional in numerous previous cases,8 were inherently
unequal. The Supreme Court’s departure from precedent in the Brown decision received a
tremendous amount of publicity as people began to realize the ramifications of this change in
the law. n
When There Is No Precedent At times, a case may raise issues that have not been raised
before in that jurisdiction, so the court has no precedents on which to base its decision. Tech-
nological advances such as the one discussed in this chapter’s Adapting the Law to the Online
Environment feature often raise new legal issues, for example.
When deciding such cases, called “cases of first impression,” courts often look at prec-
edents established in other jurisdictions for guidance. Precedents from other jurisdictions,
because they are not binding on the court, are referred to as persuasive authorities. A court Persuasive Authority Any
may also consider other factors, including legal principles and policies underlying previous legal authority or source of law that
court decisions or existing statutes, fairness, social values and customs, public policy, and data a court may look to for guidance but
need not follow when making its
and concepts drawn from the social sciences. decision.
Remedy The relief given to an
1–3c Equitable Remedies and Courts of Equity innocent party to enforce a right
A remedy is the means given to a party to enforce a right or to compensate for the violation of or compensate for the violation of
a right.
a right. EXAMPLE 1.6 Elena is injured because of Rowan’s wrongdoing. If Elena files a lawsuit
and is successful, a court can order Rowan to compensate Elena for the harm by paying her a Plaintiff One who initiates a
certain amount. The compensation is Elena’s remedy. n lawsuit.
The kinds of remedies available in the early king’s courts of England were severely restricted.
If one person wronged another, the king’s courts could award either money or property,
including land, as compensation. These courts became known as courts of law, and the reme- LEARNING OBJECTIVE 4
dies were called remedies at law. Even though this system introduced uniformity in the settling What is the difference
of disputes, when a person wanted a remedy other than economic compensation, the courts between remedies at law
of law could do nothing, so “no remedy, no right.” and remedies in equity?
Remedies in Equity Equity is a branch of law—founded on notions of justice and fair dealing—
that seeks to supply a remedy when no adequate remedy at law is available. When individuals
could not obtain an adequate remedy in a court of law, they petitioned the king for relief. Most
of these petitions were referred to the chancellor, an adviser to the king who had the power to
grant new and unique remedies. Eventually, formal chancery courts, or courts of equity, were
established. The remedies granted by the chancery courts were called remedies in equity.
Plaintiffs (those bringing lawsuits) had to specify whether they were bringing an “action at
law” or an “action in equity,” and they chose their courts accordingly. EXAMPLE 1.7 A plaintiff
7. 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954).

8. See Plessy v. Ferguson, 163 U.S. 537, 16 S.Ct. 1138, 41 L.Ed. 256 (1896).
ADAPTING THE LAW TO THE online ENVIRONMENT

Can New Laws Prevent People from
Wearing Google Glass?
that such driving bans are unenforceable. A
G oogle Glass is a wearable computer.

Basically, it’s a Bluetooth-enabled,
hands-free device that allows wearers to take
police officer has no way of knowing whether
a passing driver was using, as opposed to
simply wearing, Google Glass.
iStockPhoto.com/Wavebreak
photos and videos, surf the Internet, and do
The Pirated Movie Problem
other things through voice commands. For
Pirated movies offered free on the Internet
the most part, Google Glass devices have
have greatly affected revenues for movie
been sold to consumers. One result has been
production companies and movie theaters.
legal problems, including problems involv-
Not surprisingly, movie theater owners are
ing privacy issues, safety while driving, and
Under what circumstances could a user on the lookout for camouflaged, hand-held
movie pirating.
of Google Glass be violating the right cameras during screenings of movies. When
Invasion of Privacy? to privacy of others? an AMC theater in Columbus, Ohio, noticed
Privacy advocates point out that it is much a customer wearing a Google Glass device, it
easier to film or photograph others secretly that it would not allow facial recognition contacted the Motion Picture Association of
with wearable video technology than with applications on Glass. America (MPAA), which then contacted the
cameras or even cell phones. The more In any event, the doctrine of a reasonable federal Department of Homeland Security.
people use wearable video technology, expectation of privacy is going to be chal- An hour into the movie, the Glass wearer was
the greater the problem will become. The lenged because of Google Glass. If Glass is removed from the theater by Immigration
so-called sacred precincts of private life will ubiquitous, can any of us have a reasonable and Customs Enforcement (ICE) officers. He
increasingly be violated. This issue came up expectation of privacy when we are in public was released when an officer connected his
over a hundred years ago with the creation of places? Glass to a computer, which showed that no
low-cost cameras. Initially, there were wide- Driving While Watching video of the movie had been taken.
spread bans on cameras at b eaches.a Today, When a San Diego policeman pulled over a Both the MPAA and the AMC theater
numerous bars and restaurants are banning motorist for speeding, she was also cited for chain stated that wearing “devices with
Google Glass. Corporations are concerned “driving with a monitor visible to driver.” Cal- recording capabilities is not appropriate
that employees wearing Google Glass can ifornia law prohibits in-vehicle video displays at movie theaters.” Note, though, that any
more easily photograph documents that that are visible to the vehicles’ drivers.b The restrictions on Google Glass and similar
reveal trade secrets. charge was thrown out because of a lack of wearable devices will be more difficult to
What about facial recognition software evidence that the device was in operation at enforce as more individuals use prescription
in Google Glass? Such an application could the time of the purported offense. lenses in such devices.
allow anyone to get personal information A number of states have introduced leg-
about another person just by looking at the islation that would restrict the use of Google
person through a Google Glass headset. Cr itical Thin k i n g
Glass while driving. All such legislation spec-
Even Congress has made inquiries about this ifies the prohibited activity as “using” wear- ▪▪ What benefits could wearers of Google
possibility. In response, Google announced able devices, such as Google Glass. William & Glass obtain from using facial recognition
Mary law professor Adam Gershowitz argues technology?
a. Samuel D. Warren and Louis D. Brandeis, “The Right
to Privacy,” Harvard Law Review 4 (December 15,
1890): 193–220. b. California Vehicle Code Section 27602.
Defendant One against whom might ask a court of equity to order the defendant (the person against whom a lawsuit is brought)
a lawsuit is brought or the accused to perform within the terms of a contract. A court of law could not issue such an order because
person in a criminal proceeding. its remedies were limited to the payment of money or property as compensation for damages.
A court of equity, however, could issue a decree for specific performance—an order to per-
form what was promised. A court of equity could also issue an injunction, directing a party to
do or refrain from doing a particular act. In certain cases, a court of equity could allow for the
rescission (cancellation) of the contract, thereby returning the parties to the positions that they
held prior to the contract’s formation. n Equitable remedies will be discussed in greater detail
KNOW THIS
in the chapters covering contracts. Even though courts of law
and equity have merged, the
The Merging of Law and Equity Today, in most states, the courts of law and equity have
merged, and thus the distinction between the two courts has largely disappeared. A plaintiff
principles of equity still apply,
may now request both legal and equitable remedies in the same action, and the trial court and courts will not grant an
judge may grant either form—or both forms—of relief. equitable remedy unless the
The distinction between legal and equitable remedies remains significant, however, because remedy at law is inadequate.
a court normally will grant an equitable remedy only when the remedy at law (monetary dam-
ages) is inadequate. To request the proper remedy, a businessperson (or her or his attorney)
must know what remedies are available for the specific kinds of harms suffered. Exhibit 1–3
summarizes the procedural differences (applicable in most states) between an action at law
and an action in equity.
Equitable Principles and Maxims Over time, the courts have developed a number of
equitable principles and maxims that provide guidance in deciding whether plaintiffs should be Equitable Principles and
granted equitable relief. Because of their importance, both historically and in our judicial system Maxims General propositions
today, these principles and maxims are set forth in this chapter’s Landmark in the Law feature. or principles of law that have to do
with fairness (equity).
1–3d Schools of Legal Thought

How judges apply the law to specific cases, including disputes relating to the business world,
depends on their philosophical approaches to law, among other things. The study of law, often
referred to as jurisprudence, includes learning about different schools of legal thought and Jurisprudence The science or
discovering how each school’s approach to law can affect judicial decision making. philosophy of law.
The Natural Law School Those who adhere to the natural law theory believe that a higher, Natural Law The oldest school
or universal, law exists that applies to all human beings and that written laws should imitate of legal thought, based on the belief
these inherent principles. If a written law is unjust, then it is not a true (natural) law and need that the legal system should reflect
not be obeyed. universal (“higher”) moral and
ethical principles that are inherent
The natural law tradition is one of the oldest and most significant schools of jurispru- in human nature.
dence. It dates back to the days of the Greek philosopher Aristotle (384–322 b.c.e.), who
distinguished between natural law and the laws governing a particular nation. According to
Aristotle, natural law applies universally to all humankind.
The notion that people have “natural rights” stems from the natural law tradition. Those
who claim that certain nations, such as China and North Korea, are depriving many of their
citizens of their human rights are implicitly appealing to a higher law that has universal
applicability.
The question of the universality of basic human rights also comes into play in the context of
international business operations. For instance, U.S. companies that have operations abroad
Exhibit 1–3 P
rocedural Differences between an Action
at Law and an Action in Equity
PROCEDURE ACTION AT LAW ACTION IN EQUITY
Initiation of lawsuit By filing a complaint By filing a petition
Decision By jury or judge By judge (no jury)
Result Judgment Decree
Remedy Monetary damages Injunction, specific performance,
or rescission
often hire foreign workers as employees. Should the same laws that protect U.S. employees
apply to these foreign employees? This question is rooted implicitly in a concept of universal
rights that has its origins in the natural law tradition.
Legal Positivism In contrast, positive, or national, law (the written law of a given society at
a particular point in time) applies only to the citizens of that nation or society. Those who
Legal Positivism A school adhere to legal positivism believe that there can be no higher law than a nation’s positive law.
of legal thought centered on the According to the positivist school, there is no such thing as “natural rights.” Rather, human
assumption that there is no law rights exist solely because of laws. If the laws are not enforced, anarchy will result. Thus,
higher than the laws created by a
whether a law is morally “bad” or “good” is irrelevant. The law is the law and must be obeyed
national government. Laws must be
obeyed, even if they are unjust, to
until it is changed—in an orderly manner through a legitimate lawmaking process.
prevent anarchy. A judge with positivist leanings probably would be more inclined to defer to an existing
law than would a judge who adheres to the natural law tradition.
Historical School A school of The Historical School The historical school of legal thought emphasizes the evolutionary
legal thought that looks to the past process of law by concentrating on the origin and history of the legal system. This school looks
to determine what the principles of to the past to discover what the principles of contemporary law should be. The legal doctrines
contemporary law should be.
that have withstood the passage of time—those that have worked in the past—are deemed
best suited for shaping present laws. Hence, law derives its legitimacy and authority from
adhering to the standards that historical development has shown to be workable.
Followers of the historical school are more likely than those of other schools to adhere
strictly to decisions made in past cases.
Landmark in the Law Equitable Principles and Maxims
4. Equity will not suffer a wrong to be allowed under a statute of limitations has
without a remedy. (Equitable relief will be expired, no action can be brought, no matter
awarded when there is a right to relief how strong the case was originally.
I n medieval England, courts of equity were

expected to use discretion in supplement-
ing the common law. Even today, when the
and there is no adequate remedy at law.)
5. Equity regards substance rather than form.
Application to Today’s World The
equitable maxims listed here underlie many
(Equity is more concerned with fairness of the legal rules and principles that are com-
same court can award both legal and equi- and justice than with legal technicalities.)
table remedies, it must exercise discretion. monly applied by the courts today—and that
Students of business law should know that 6. Equity aids the vigilant, not those who rest you will read about in this book. For instance,
courts often invoke equitable principles and on their rights. (Equity will not help those in the contracts materials you will read about
maxims when making their decisions. Here who neglect their rights for an unreason- the doctrine of promissory estoppel. Under this
are some of the most significant equitable able period of time.) doctrine, a person who has reasonably and sub-
principles and maxims: The last maxim has come to be known as stantially relied on the promise of another may
the equitable doctrine of laches. The doctrine be able to obtain some measure of recovery,
1. Whoever seeks equity must do equity. (Any- even though no enforceable contract exists. The
one who wishes to be treated fairly must arose to encourage people to bring lawsuits
while the evidence was fresh. If they failed to court will estop (bar) the one making the prom-
treat others fairly.) ise from asserting the lack of a valid contract
do so, they would not be allowed to bring a
2. Where there is equal equity, the law must lawsuit. What constitutes a reasonable time, as a defense. The rationale underlying the doc-
prevail. (The law will determine the of course, varies according to the circum- trine of promissory estoppel is similar to that
outcome of a controversy in which the stances of the case. expressed in the fourth and fifth maxims listed.
merits of both sides are equal.) Time periods for different types of
3. One seeking the aid of an equity court cases are now usually fixed by statutes of
must come to the court with clean hands. limitations—that is, statutes that set the
(Plaintiffs must have acted fairly and maximum time period during which a cer-
honestly.) tain action can be brought. After the time
Legal Realism In the 1920s and 1930s, a number of jurists and scholars, known as legal
realists, rebelled against the historical approach to law. Legal realism is based on the idea that Legal Realism A school of legal
law is just one of many institutions in society and that it is shaped by social forces and needs. thought that holds that the law is
This school reasons that because the law is a human enterprise, judges should look beyond only one factor to be considered
when deciding cases and that social
the law and take social and economic realities into account when deciding cases. and economic circumstances should
Legal realists also believe that the law can never be applied with total uniformity. Given that also be taken into account.
judges are human beings with unique experiences, personalities, value systems, and intellects,
different judges will obviously bring different reasoning processes to the same case. Female
judges, for instance, might be more inclined than male judges to consider whether a decision
might have a negative impact on the employment of women or minorities.
1–4 Classifications of Law

The law may be broken down according to several classification systems. One classification
system divides law into substantive law (all laws that define, describe, regulate, and create Substantive Law Law that
legal rights and obligations) and procedural law (all laws that establish the methods of enforc- defines, describes, regulates, and
ing the rights established by substantive law). creates legal rights and obligations.
EXAMPLE 1.8 A state law that provides employees with the right to workers’ compensa- Procedural Law Law that
tion benefits for any on-the-job injuries they sustain is a substantive law because it creates establishes the methods of
legal rights (workers’ compensation laws will be discussed in Chapter 24). Procedural laws, enforcing the rights established
by substantive law.
in contrast, establish the method by which an employee must notify the employer about
an on-the-job injury, prove the injury, and periodically submit additional proof to continue
receiving workers’ compensation benefits. Note that a law concerning workers’ compensation
may contain both substantive and procedural provisions. n
Another classification system divides law into federal law and state law. Still another system
distinguishes between private law (dealing with relationships between persons) and public
law (addressing the relationship between persons and their governments). Frequently, people
use the term cyberlaw to refer to the emerging body of law that governs transactions con- Cyberlaw An informal term
ducted via the Internet, but cyberlaw is not really a classification of law. Rather, it is an infor- used to refer to all laws governing
mal term used to describe traditional legal principles that have been modified and adapted to electronic communications and
transactions, particularly those
fit situations that are unique to the online world. Throughout this book, you will read about
conducted via the Internet.
how the law is evolving to govern specific legal issues that arise in the online context.
Civil Law The branch of law
1–4a Civil Law and Criminal Law dealing with the definition and
enforcement of all private or public
Civil law spells out the rights and duties that exist between persons and between persons and rights, as opposed to criminal
their governments. It also specifies the relief available when a person’s rights are violated. matters.
Typically, in a civil case, a private party sues another private party to make sure that the other
party complies with a duty or pays for the damage caused by the failure to comply with a duty. LEARNING OBJECTIVE 5
EXAMPLE 1.9 If a seller fails to perform a contract with a buyer, the buyer may bring a lawsuit
What are some important
against the seller. The purpose of the lawsuit will be either to compel the seller to perform as
differences between civil law
promised or, more commonly, to obtain monetary damages for the seller’s failure to perform. n
and criminal law?
The government can also bring civil lawsuits against private parties in many situations.
Much of the law that we discuss in this text—including contract law and tort law—is civil
law. Note that civil law is not the same as a civil law system. As you will read shortly, a civil law Civil Law System A system of
system is a legal system based on a written code of laws. (See this chapter’s Beyond Our Borders law derived from Roman law that is
feature for a discussion of the different legal systems used in other nations.) based on codified laws (rather than
on case precedents).
Criminal law has to do with wrongs committed against society for which society demands
redress. Criminal acts are proscribed by local, state, or federal government statutes. Thus, Criminal Law The branch of law
criminal defendants are prosecuted by public officials, such as a district attorney (D.A.), on that defines and punishes wrongful
actions committed against the
behalf of the state, not by their victims or other private parties. public.
Whereas in a civil case the object is to obtain a remedy (such as monetary damages) to
compensate the injured party, in a criminal case the object is to punish the wrongdoer in an
attempt to deter others from similar actions. Penalties for violations of criminal statutes consist
of fines and/or imprisonment—and, in some cases, death.
1–4b National and International Law

Although the focus of this book is U.S. business law, increasingly businesspersons in this
country engage in transactions that extend beyond our national borders. In these situations,
BEYOND OUR BORDERS

National Law Systems
of legal guidance, those decisions are not of Islam. Islam is both a religion and a way of
binding precedents (stare decisis does not life. Sharia is a comprehensive code of princi-
D espite their varying cultures and cus-

toms, almost all countries have laws
governing torts, contracts, employment,
apply).
Common Law and

ples that governs the public and private lives
of Islamic persons and directs many aspects
of their day-to-day lives, including politics,
and other areas. Two types of legal systems Civil Law Systems Today economics, banking, business law, contract
predominate around the globe today. One is Exhibit 1–4 lists some countries that follow law, and social issues.
the common law system of England and the either the common law system or the civil Although sharia affects the legal codes
United States, which we have discussed else- law system. Generally, countries that were of many Muslim countries, the extent of its
where. The other system is based on Roman once colonies of Great Britain have retained impact and its interpretation vary widely.
civil law, or “code law,” which relies on the their English common law heritage. The civil In some Middle Eastern nations, aspects of
legal principles enacted into law by a legisla- law system, which is used in most conti- sharia have been codified in modern legal
ture or governing body. nental European nations, has been retained codes and are enforced by national judicial
in the countries that were once colonies of systems.
Civil Law Systems those nations. In the United States, the state
Although national law systems share many of Louisiana, because of its historical ties to
commonalities, they also have distinct dif- France, has in part a civil law system, as do Cr itical Thin k i n g
ferences. In a civil law system, the primary Haiti, Québec, and Scotland.
source of law is a statutory code, and case ▪▪ Does the civil law system offer any
precedents are not judicially binding, as Islamic Legal Systems advantages over the common law system,
they normally are in a common law system. A third, less prevalent legal system is com- or vice versa? Explain.
Although judges in a civil law system common in Islamic countries, where the law is
monly refer to previous decisions as sources often influenced by sharia, the religious law
Exhibit 1–4 The Legal Systems of Selected Nations

CIVIL LAW COMMON LAW
Argentina Indonesia Australia Nigeria
Austria Iran Bangladesh Singapore
Brazil Italy Canada United Kingdom
Chile Japan Ghana United States
China Mexico India Zambia
Egypt Poland Israel
Finland South Korea Jamaica
France Sweden Kenya
Germany Tunisia Malaysia
Greece Venezuela New Zealand
the laws of other nations or the laws governing relationships among nations may come into
play. For this reason, those who pursue a career in business today should have an understand-
ing of the global legal environment (discussed further in Chapter 16).
National Law The law of a particular nation, such as the United States or Sweden, is national National Law Law that pertains
law. National law, of course, varies from country to country because each country’s law reflects to a particular nation (as opposed to
the interests, customs, activities, and values that are unique to that nation’s culture. Even international law).
though the laws and legal systems of various countries differ substantially, broad similarities
do exist.
International Law In contrast to national law, international law applies to more than one
nation. International law can be defined as a body of written and unwritten laws observed by International Law The law that
independent nations and governing the acts of individuals as well as governments. It is a mix- governs relations among nations.
ture of rules and constraints derived from a variety of sources, including the laws of individual
nations, customs developed among nations, and international treaties and organizations. Each
nation is motivated not only by the need to be the final authority over its own affairs, but also
by the desire to benefit economically from trade and harmonious relations with other nations.
In essence, international law is the result of centuries-old attempts to strike a balance between
these competing needs.
The key difference between national law and international law is that government author-
ities can enforce national law. If a nation violates an international law, however, enforcement
is up to other countries or international organizations, which may or may not choose to act. If
persuasive tactics fail, the only option is to take coercive actions against the violating nation.
Coercive actions range from the severance of diplomatic relations and boycotts to, as a last
resort, war. We will examine the laws governing international business transactions in later
chapters (including the chapter on international law and the chapters covering contracts for
the sale and lease of goods).
Reviewing . . . The Legal Environment

Suppose that the California legislature passes a law that severely restricts carbon dioxide emissions of
automobiles in that state. A group of automobile manufacturers files a suit against the state of Califor-
nia to prevent enforcement of the law. The automakers claim that a federal law already sets fuel econ-
omy standards nationwide and that these standards are essentially the same as carbon dioxide emission
standards. According to the automobile manufacturers, it is unfair to allow California to impose more
stringent regulations than those set by the federal law. Using the information presented in the chapter,
answer the following questions.
1. Who are the parties (the plaintiffs and the defendant) in this lawsuit?
2. Are the plaintiffs seeking a legal remedy or an equitable remedy? Why?
3. What is the primary source of the law that is at issue here?
4. Read through the appendix that follows this chapter, and then answer the following question: Where
would you look to find the relevant California and federal laws?
Debate This
▪▪ Under the doctrine of stare decisis, courts are obligated to follow the precedents established in their
jurisdiction unless there is a compelling reason not to do so. Should U.S. courts continue to adhere
to this common law principle, given that our government now regulates so many areas by statute?
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tree, destroyed by the attacks of the white ant, had fallen, and
afforded us fire-wood to prepare our supper: to seek it at any
distance would have been dangerous at that time in the evening, on
account of the lions, and the little grass which was gathered for our
horses was furnished by the space within sight of our tents. Our
animals were brought as close to us as possible, and we kept up
fires the greater part of the night; a few roaring salutations, and
those principally from the elephant and jackal, were the only
disturbance that we met with.
We proceeded on our course on the following day, winding with
the river; in several places we had the bank clear of trees and
covered with verdure for some hundreds of yards, and the stream
nearly as broad as the Thames at Richmond. Towards noon the
wood became much thicker, no pathway was to be discovered, and
our guide declared, that where we were he had not the least idea. A
little further on, we came to a complete stoppage; brambles were
wound round the before thickly-clustered branches of tulloh and
prickly acacias; and on removing, with great difficulty, some of those,
we found the treacherous grass underneath merely covering
blaquas, large, deep, and well staked, capable of receiving and
destroying a Tuarick with his maherhy. In endeavouring to find a
passage at a short distance, Dr. Oudney was very nearly
precipitated, horse and all, into one of these graves for the quick. We
were absolutely afraid to move; and Omar Gana, who declared these
fortifications indicated our being near to some town, which was thus
prepared against the Mungowy, desired me to fire a gun, in order to
bring some of the inhabitants to serve as our guide: accordingly two
sturdy negroes came to our assistance, who, after eying us through
the trees and ascertaining who we were, conducted us to the village,
which, although at no great distance, would have foiled all our efforts
to discover: the avenues were completely barricadoed on every side,
the paths cut up, and these blaquas so scattered in all directions,
that even with a guide, and going one by one, it was with the
greatest difficulty we avoided them.
Arrived at the village, which was called Wallad, of so miserable a
description that it could not even furnish a jar of milk, notwithstanding
we produced both needles and beads,—a new difficulty arose; for
although the camels were sought after and brought in safe by the
people, yet my servant Columbus, who was behind on a mule, did
not make his appearance: we were in considerable anxiety, both on
account of the wild beasts and these pits, which were almost equally
frightful. Our alarm was a good deal increased when, after having
sent people in every direction, giving them pistols, and desiring them
to fire signals, and not return without him, the people of the village
came running to the jujube tree under which we were resting, to tell
us that Columbus and the mule had fallen into one of these blaquas,
and that they believed the mule was dead. We hastened to the spot,
and found the poor mule indeed very near it: she was sticking on
four stakes, one in her flank, and two in her hind quarter, with her
knees dreadfully torn by struggling. Had she been a larger and
heavier animal, nothing could have saved her: the man had, by a
violent exertion, thrown himself out, how he knew not, almost as
soon as he fell in, and had escaped with his leg only bruised. He
said he had lost his way hours before, and had climbed to the top of
several tamarind-trees, in order to discover traces of our route,
without success: once he thought he heard a gun, but having only
two charges of powder with him, he kept them as a defence against
the wild animals at night, and was afraid to answer the signal.
After all our difficulties, it was some comfort at length to find that
the sheikh was within only a few hours’ march of us, on the south
side of the river; and in the evening we determined on joining him.
Again, therefore, crossing the Yeou at a dry spot, we came to the
outskirts of the Bornou camp, on the banks of a large water called
Dummasak, about five miles distant from the ford: at the river we
again saw the footmarks of a very large lion, and also those of a
hippopotamus. It was after sunset when we arrived, and passing
through numerous groups of the Kanemboo spearmen, who were
lying about without any tents or covering, we came to the open
space where the sheikh’s tent and the huts of his principal people
were fixed. On learning that we had arrived, he desired our tents
might be placed near Mady Gana, the manager of his household,
who brought us his congratulations, and at the same time a very
good supper of Guinea fowl, and a kind of paste, made of wheat
flour, called ftat, which is considered a great delicacy. Our joy can
with difficulty be imagined at learning here the arrival of a package
from England, by a kafila of merchants from Fezzan. The pleasure of
hearing of our country and friends, the greatest enjoyment our
situation allowed us, we had been for a length of time deprived of;
and this, added to our being entirely destitute of provisions of every
kind, determined us to return to Kouka on the following morning. This
our decision we desired might be made known to the sheikh, but,
from some cause or other, the information was not communicated to
him; and, to our great surprise, by daylight he moved off, and we
found ourselves again alone without a guide, and without even
knowing what the sheikh’s wishes were with respect to our
proceedings. This was a fresh dilemma; and upon the whole we
were worse off than the day before, for the sheikh’s negro was
always a protection, and we were now at the tail of an undisciplined
army, at least demi-savage, without any knowledge of the road. After
three hours’ deliberation, and no intelligence arriving from the
sheikh, we decided on making our way to Kouka alone; and having
picked up a straggler, who assured us he knew the country, and left
our wounded mule in the care of some people in the neighbouring
village of huts, we loaded our fire-arms afresh, and commenced our
route. We had proceeded, however, but a few hundred yards on our
road, when Omar Gana, mounted on a miserable horse and in great
distress, came up to us, entreating that we would follow the sheikh
as quickly as possible; that on inquiring of him where we were, and
finding that he had quitted us, he, the sheikh, had been in a violent
passion; had struck him from his horse, which he desired might be
taken from him; had directed him to return and bring us up to the
army without delay.
We had now nothing to do but to obey; and, therefore, turning
round our camels, after a four hours’ march in the heat of the day,
we arrived a second time at the lake Muggaby, which we had left
only three days before. Some spots on the road were extremely
picturesque, by nature; and this beauty of the scene was increased
by the groups of naked warriors, with their shields, resting in different
places on the borders of the lake; while hundreds of others were in
the water, spearing the fish, which they struck, and brought to shore
with very surprising dexterity: some of the fish were as large as
good-sized salmon, but shaped like a bream. Fires were lighted by
their companions on the shore, and rows of from fifty to one hundred
were staked, or strung on a line made of grass, extended from two
sticks, and most excellently and expeditiously roasted.
Muggaby, with its still dark-blue surface, had, at the time we came
on it, an appearance highly interesting: the margin, and the shallow
waters, were crowded with horses feeding, and men bathing. In the
centre, the hippopotami were constantly throwing up their black
muzzles, spouting with water; and the wood, which at the south-west
end had caught fire, and blazed to the very clouds, gave a glare to
all around which made the scene almost terrific.
We now commenced our march with the Bornou army, in which
but little order is preserved previous to coming near the enemy:
every one appears to know, that at a certain point the assembly is to
take place; and the general instructions seem to be to every one to
make the best of his own way. The sheikh takes the lead, and close
after him comes the sultan of Bornou, who always attends him on
these occasions, although he never fights. The former is preceded
by five flags, two green, two striped, and one red, with extracts from
the Koran written on them in letters of gold, and attended by about a
hundred of his chiefs and favourite slaves. A negro, high in
confidence, rides close behind him, bearing his shield jacket of mail,
and wearing his skull-cap of steel; he also bears his arms. Another,
mounted on a swift maherhy, and fantastically dressed with a straw
hat and ostrich feathers, carries his timbrel or drum, which it is the
greatest misfortune and disgrace to lose in action. On the expedition
which cost the sultan Denhamah, the late sultan of Bornou, his life,
the timbrel and the sheikh were supposed to have fallen in a sudden
rush of Begharmis; almost every one near him suffered. The people,
however, firmly believe that he was saved by a miracle; they say, “he
became invisible; that the Begharmi chiefs scoured the field, calling
out for the sheikh; that his drum sounded at intervals, but could not
be seen, any more than their leader.” Close in the rear of the
maherhies follow the eunuchs and the harem; the sheikh takes but
three wives, who are mounted, astride, on small trained horses, each
led by a boy-slave, or eunuch,—their heads and figures completely
enveloped in brown silk bornouses, and a eunuch riding by the side
of each.
From a Sketch by Major Denham. Engraved by E. Finden.
A FAVORITE OF THE SERAGLIO

ACCOMPANYING A MILITARY EXPEDITION.
Published Feb. 1826, by John Murray, London.
The sultan of Bornou has five times as many attendants, and his
harem is three times as numerous: he is attended, also, by men
bearing trumpets (frumfrum), of hollow wood, ten and twelve feet
long; with these a kind of music is constantly kept up. As this
instrument is considered an appendage of royalty alone, the sheikh
has no frumfrums; the keigomha, or standard-bearer, rides in front of
him, carrying a very long pole, hung round, at the top, with strips of
leather and silk of various colours, in imitation, probably, of the
bashaw’s tigue, or tails; and two ride on each side of him called
Meestrumha Dundelmah, carrying immense spears, with which they
are supposed to defend their sultan in action, whose dignity would
be infringed upon by defending himself; but the spears are so hung
round with charms, and the bearers so abominably unwieldy, that the
idea of such weapons being of any use in the hands of such warriors
is absurd. Indeed the grotesque appearance of the whole of this
prince’s train, with heads hung round with charms, and resembling
the size and shape of a hogshead; their protruding stomachs, and
wadded doublets, are ridiculous in the extreme.
The town of Kabshary, where we halted, had been nearly
destroyed by the Mungowy. On attacking a place, it is the custom of
the country instantly to fire it; and as they are all composed of straw
huts only, the whole is shortly devoured by the flames. The
unfortunate inhabitants fly quickly from the destructive element, and
fall immediately into the hands of their no less merciless enemies,
who surround the place: the men are quickly massacred, and the
women and children lashed together, and made slaves. Rhamadan,
one of the sheikh’s chiefs, a slave from Soudan, had been stationed
here for the last fifteen days, and under his protection the survivors
of the attack had returned, and were already rebuilding their
dwellings. The huts are convenient, and, from the abundance of long
straw which the overflowed grounds near the river furnished them,
are better built, and withstand the rain better, than those of Kouka:
they are divided on the inside by mats, which the women make with
great neatness; they have all of them a door of plaited straw in a
frame of wood; and some of the habitations of the principals have a
wall of mats round them, leaving an inclosure, in which is sometimes
a second hut for the female slaves, and the cow or goats which
supply them with milk. These unfortunate people seldom think of
defending their habitations, but rather give them up, and by that
means gain time to escape themselves, should the attack not be
made in the night, and the whole set fire to, before they have time to
fly. The Kabsharians had long been in dread of a visit from the
people of Munga, and, on their approach, the greater part of them
had retreated to the banks of the river, to the north-west of the town,
which are there extremely high; and they had made a strong post, by
digging blaquas, and placing pointed crossed stakes in trenches,
which rendered their retreat nearly inaccessible.
June 1.—The sun had scarcely risen this morning, when the
sheikh was on horseback inspecting his favourite troops, the
Kanemboo infantry: a hollow space under some sandhills, called
Cornamaree, was chosen, about a quarter of a mile from the camp,
and the whole was conducted with a good deal of order and system.
He was attended to the ground by the four sultans who accompanied
the expedition under his orders, and a circle was formed by the
Arabs and the Bornou horse. The sheikh’s principal slaves and
commanders were dispersed in different parts, habited in their
scarlet bornouses with gold lace, and surrounded also by their
followers. His own dress was, as usual, neat and simple: two white
figured muslin tobes, very large, with a bornouse of the same colour,
and a Cashemere shawl for a turban, composed his dress; over the
whole, across his shoulders, hung the sword which, as he repeatedly
said, “the sultan Inglese had sent him.” He was mounted on a very
beautiful bright bay horse from Mandara, and took his station on the
north side of the circle; while the Kanemboos were drawn up on the
opposite extremity in close column, to the number of nine thousand.
On the signal being made for them to advance, they uttered a yell, or
shriek, exceeding any thing in shrillness I ever heard; then
advanced, by tribes of from eight hundred to one thousand each.
They were perfectly naked, with the exception of a rather fantastical
belt of the goat or sheep’s skin, with the hair outwards, round their
middles, and a few gubkas (narrow strips of cloth, the money of the
country), round their heads, and brought under the nose; their arms
are a spear and shield, with a dagger on the left arm reversed,
secured by a ring which goes on the wrist, the point running up the
arm, and the handle downwards. The shields are made of the wood
of the fogo, a tree which grows in the shallow waters of the great
lake, and are so extremely light, as to weigh only a few pounds; the
pieces of wood of which it is formed are bound together by thongs of
the hide of bullocks with the hair on, which is also carried along the
edge of the outside of the shield in vandykes and forms an
ornament; they are something the shape of a gothic window, and
most of them slightly convex. Under cover of these, the Kanemboo
attack the bowmen with great order, and at a slow pace. Their
leaders are mounted, and are distinguished merely by a tobe of dark
blue, and a turban of the same colour.
On nearing the spot where the sheikh had placed himself they
quickened their pace, and, after striking their spears against their
shields for some seconds, which had an extremely grand and
stunning effect, they filed off to the outside of the circle, where they
again formed, and awaited their companions, who succeeded them
in the same order. There appeared to be a great deal of affection
between these troops and the sheikh; he spurred his horse onwards
into the midst of some of the tribes as they came up, and spoke to
them, while the men crowded round him, kissing his feet, and the
stirrups of his saddle. It was a most pleasing sight; he seemed to feel
how much his present elevation was owing to their exertions, while
they displayed a devotion and attachment deserving and denoting
the greatest confidence. I confess I was considerably disappointed at
not seeing these troops engage, although more than compensated
by the reflection of the slaughter that had been prevented by that
disappointment.
On seeing the sheikh after this inspection, he asked me what I
thought of his Kanemboos: I could not help expressing my pleasure
at their orderly and regular appearance, and he smiled when I
assured him that I thought with such troops as these he need fear
but little the attempts of the Arabs and Fezzaneers. Rhamadan, who
had been stationed at Kabshary since the burning of the town, gave
me an account of a second attack made by the Mungowy since his
arrival. He had about two hundred and fifty people with him, amongst
whom were about a dozen Arabs in the sheikh’s service, who had
guns. Eight or nine hundred of Munga people made their
appearance by daylight one morning, principally to try the strength of
their enemies, which it was, of course, Rhamadan’s business to
prevent their ascertaining. He succeeded in driving them back,
although not without some loss, quite to the inclosed country, where
they had greatly the advantage of him, and killed nearly thirty of his
men with their arrows. Rhamadan now practised a ruse de guerre,
by which means he destroyed nearly half the force of his enemies:—
He appeared to give up the chase, and retired with his party; towards
evening, however, he moved round by the river to a watering-place,
where he expected the Mungowy would go to drink and refresh
themselves, and rushing upon them unperceived, slaughtered
upwards of four hundred.
From a Sketch by Major
Engraved by E. Finden.
Denham’s.
KANEMBOO
MUNGA BOWMAN.
SPEARMAN.
IN THE SERVICE OF THE SHEIKH OF BORNOU.
Published Feb. 1826, by John Murray, London.
June 3.—A reconnoitring party of cavalry went out soon after

daylight with Rhamadan and Dauood (David) at their head. About
three in the afternoon they began to return, bringing with them
women and children of both sexes, to the amount of eight hundred:
one Shouaa, a friend of mine, brought a poor woman with four
children, two in her arms, and two on the father’s horse, who had
been stabbed for defending those he held most dear upon earth.
They also brought a number of very fine horses, and several
hundred bullocks and sheep. The poor wretches, on being brought to
the sheikh’s tents, uttered the most piteous cries, and, after looking
at them, he desired that they might all be released: saying,—“God
forbid that I should make slaves of the wives and children of any
Musselman! Go back; tell the wicked and powerful chiefs, who urge
your husbands to rebel and to kafir, that I shall quickly be with them;
and it is them I will punish, not the innocent and the helpless.”
June 4.—We found to the south a very pretty lake, embosomed in
a thick wood, and the town Bassecour, with from fifteen hundred to
two thousand inhabitants; and, on crossing it, saw two other
populous towns, called Caroom and Batily; and again, nearer the
river, which was about four miles from Bassecour, several others. I
did not return until after sunset, when the positions of the Kanemboo,
who always are on duty on the side nearest the enemy, afforded
some very picturesque groups. They have a regular chain of posts,
or pickets, consisting of five or six men each, extending from the
main body to some one of the tribes, who always act as an advance,
about two miles in front, and cover the whole front of the army. They
lie very snugly under the shelter of their shields, which protect them
both from wind and rain, as well as the arrows of their foes. One or
two of each party are always on the look out, and their peculiar
watch-cry is passed from one sentry to the other, at every half hour
or oftener, the whole night through. On the least disturbance taking
place in the camp, or horses breaking loose, after a sudden storm,
the whole body strike their shields, and set up a yell, to show that
they are awake to the circumstance: this also is their tattoo, may be
heard for miles, and answers the blowing of the sheikh’s horn for the
last prayers at Ashèa.
June 5.—Many hundreds of the Munga people now came in,
bowing to the ground, and throwing sand upon their heads, in token
of submission. At night every thing was prepared for our marching to
the capital, leaving the women, camels, and baggage, at this place;
but the people sent word, that if the sheikh remained where he was,
they would come to him, and surrender themselves.
June 6.—Several towns sent their chiefs, and submitted in this
manner,—bringing peace-offerings, on the sheikh’s swearing
solemnly not to molest them farther; but Malem Fanaamy, a fighi of
great talent, the cause of the rebellion of these people, refused to
come, because he feared to lose his head, and offering, at the same
time, two thousand slaves, one thousand bullocks, and three
hundred horses, to the sheikh, as the price for peace[33]. The offer
was refused: the sheikh’s object being the subjection of this
rebellious chief, and not his death or plunder.
We had, the night before, attempted to send off two rockets, but
which, to my great disappointment, as well as the sheikh’s, had
failed: they had been carelessly carried, and the composition had
fallen out of them. This evening he sent “to beg that I would try two
more, and, please God, make them go better.” I replied, “that I would
do my best;” and, most fortunately, they succeeded to my wish. They
were, indeed, a beautiful sight, as the night was extremely dark, and
created exceeding wonder. Some of the messengers, who had come
from the towns to the west, fell on their faces, and began to pray
most fearfully when the rockets burst in their descent. This evening,
also, Malem Fanaamy had sent his son, a man of about thirty,
handsomely attended, who also witnessed this wonderful exhibition.
The following day, Malem Fanaamy himself made his
appearance. His people had become clamorous, and, having no
alternative, he came superbly mounted on a white horse, with full
one thousand followers, and, dismounting at the door of the sheikh’s
tent, humbled himself to the dust, and would have poured sand on
his head, but this was by the sheikh’s order prevented, and the fighi
brought into his presence. As is the custom on these occasions, he
came in poor habiliments, and with an uncovered head. The sheikh
received his submission, and, when he really expected to hear the
order for his throat to be cut, he was clothed with eight handsome
tobes, and his head made as big as six with turbans from Egypt.
June 11.—The feast of the Aide having arrived, and the
Rhamadan finished, the new moon was ushered in by loud shouts,
and by the firing of guns, and our last rocket was sent up in honour
of the feast. It was preceded by a volley fired by my negroes with two
carabines, and two brace of pistols, with my own gun, which gave
great pleasure; for certainly never were people so enamoured of
gunpowder and smoke. By sunrise all the troops were under arms,
and the sheikh and all the chiefs mounted, and dressed in their finest
bornouses, rode round the camp, and prayed at a short distance.
The chiefs of two Munga towns came in to-day, but brought no
tribute. We visited the sheikh in the evening, to congratulate him on
the Rhamadan being over. He asked a great many questions,
particularly about printing; and, addressing me, said:—“Why did you
not bring plenty of rockets? They are the most wonderful things I
ever saw.” At night we had a dreadful storm, and we were witnesses
of a curious custom which the natives have, of digging an immense
hole immediately after rain, and, when they come to the dry sand,
getting into the hole, and lying down to avoid the damp earth.
June 15.—To avoid the excessive heat of the tents, as we were
still to be stationary, we rode to the town Gomsee, before the sun
had gained sufficient power to be oppressive, and passed nearly the
whole of the forenoon in the corner of the hut of a woman, who had
come to the tents the day before for medicine. She had been
troubled with ringworms for ten years: she recognised me on my
entering the town, which I merely intended passing through, in order
to gain the shade of some large tamarind-trees and mangoes that
grow close to the lake; but she was so anxious that I should come to
her house, that I could not refuse. Her husband was one of the
principal persons, and their huts rather superior to the rest. In an
inclosure of mats were three huts, one for the man, and the two
others for his wife and slaves. I took possession of the former; when,
after a repast of milk, and a kind of thick drink, made of a paste from
the gussub flour, with honey and pepper, I had visits from at least
one hundred of the inhabitants, male and female. This is nearly the
last of the Bornou towns westwards. Although the men of Bornou are
not warriors, nor the women favoured by nature, they are certainly a
kind, inoffensive race; and in one hour were as intimate with me, as
if I had been amongst them for years. It was decreed, however, that
we were not to part quite such good friends. At noon my host brought
in a very beautiful wild bull-skin, with water, on which he begged I
would “sully” (pray), and, on my refusal, the usual investigation took
place, which ended in my attendant explaining to them, “that I did not
sully;” that is, “that I was not Mislem:” upon which, “Kerdie, Kerdie,”
was whispered about. The women held up their hands, and the men
retired to a distance, and I found my popularity rapidly decrease.
No kafila is permitted to enter Kouka during the sheikh’s absence,
nor dare the merchants offer any goods for sale till they have his
permission. On this account, one consisting of ten merchants from
Soudan was ordered to encamp at a short distance from us, and
await the movements of the army. They had nearly a hundred
slaves, the greater part female, and girls of from twelve to eighteen
years of age, some of them from Nyffee, and still further to the west,
of a deep copper colour, and beautifully formed; but few of these
were ironed. The males, who were mostly young, were linked
together in couples, by iron rings round their legs; yet they laughed,
and seemed in good condition.
It is a common practice with the merchants to induce one slave to
persuade his companions, that on arriving at Tripoli they will be free,
and clothed in red, a colour all negroes are passionately fond of; by
which promises they are induced to submit quietly, until they are too
far from their homes to render escape possible but at the risk of
starvation. If the hundreds, nay thousands, of skeletons that whiten
in the blast between this place and Mourzuk, did not, of themselves,
tell a tale replete with woe, the difference of appearance in all slaves
here (where they are fed tolerably), and the state in which they
usually arrive in Fezzan, would but too clearly prove the acuteness
of the sufferings which commence on their leaving the negro country.
A circumstance happened during the last two days, which created
a great sensation amongst the chiefs; and while it proved that
absolute power in the person of the sheikh was not unaccompanied
by a heart overflowing with feelings of mercy and moderation, it also
displayed many amiable qualities in his untutored and unenlightened
subjects. Barca Gana, his general, and his favourite, a governor of
six large districts, the man whom he delighted to honour, who had
more than fifty female slaves, and twice the number of male, was
taught a lesson of humility that made me feel exceedingly for him. In
giving presents to the chiefs, the sheikh had inadvertently sent him a
horse which he had previously promised to some one else, and on
Barca Gana being requested to give it up, he took such great
offence, that he sent back all the horses which the sheikh had
previously given him, saying that he would in future walk or ride his
own. On this the sheikh immediately sent for him, had him stripped in
his presence, and the leather girdle put round his loins; and, after
reproaching him with his ingratitude, ordered that he should be
forthwith sold to the Tibboo merchants, for he was still a slave. The
favourite, thus humbled and disgraced, fell on his knees, and
acknowledged the justness of his punishment. He begged for no
forgiveness for himself, but entreated that his wives and children
might be provided for, out of the riches of his master’s bounty. But on
the following day, when preparations were made for carrying this
sentence into effect, the Kaganawha (black Mamelukes), and
Shouaa chiefs about the sheikh’s person, fell at his feet, and
notwithstanding the haughtiness of Barca Gana’s carriage to them
since his advancement, entreated to a man pardon for his offences,
and that he might be restored to favour. The culprit appearing at this
moment to take leave, the sheikh threw himself back on his carpet,
wept like a child, and suffered Barca Gana, who had crept close to
him, to embrace his knees, and calling them all his sons, pardoned
his repentant slave. No prince of the most civilized nation can be
better loved by his subjects than this chief; and he is a most
extraordinary instance, in the eastern world, of fearless bravery,
virtue, and simplicity. In the evening, there was great and general
rejoicing. The timbrels beat; the Kanemboos yelled, and struck their
shields; every thing bespoke joy: and Barca Gana, in new tobes and
a rich bornouse, rode round the camp, followed by all the chiefs of
the army.
June 18.—We commenced our return to Kouka, after an
expedition to me very interesting, and one in which the sheikh had
displayed a vast deal of tact and good management; for although he
threatened the extermination of the Munga people, yet nothing could
have been more injurious to his interests than carrying such threats
into execution, had he, indeed, been sufficiently strong to have done
so. They are a powerful people, and can bring twelve thousand
bowmen into the field; their arrows are much longer than those of the
Felatahs, and they have a way of poisoning them more fatally than
those people. A nation possessing such a force as this amongst his
own people,—who, from their situation on the frontier, were
constantly exposed to the attacks both of the Felatahs and the
Tuaricks, and by being more accustomed to warfare, were
consequently better troops than any in the kingdom of Bornou,—it
became a matter of great importance to the sheikh to conciliate by
fair means, if it were practicable, and he was perfectly alive to the
policy of such a proceeding. The Mungowy nearly all fight on foot,
while Bornou may not improperly be called an equestrian nation. The
infantry here, however, as in our own quarter of the globe, most
commonly decide the fortune of war; and the sheikh’s former
successes may be greatly, if not entirely, attributed to the
courageous efforts of the Kanem spearmen, in leading the Bornou
horse into the battle, who, without such a covering attack, would
never be brought to face the arrows of their enemies. No use had
ever yet been made of the accession of strength to Bornou by its
junction with the Munga people, and the sheikh had this in view
when he planned the present expedition. All these considerations
had their weight with him, as well as the numerical force with which
he had to contend, and he availed himself of the superstition of the
people, and his own fame as a Malem (writer), to do that which,
probably, by the effect of his arms alone, it might have been difficult
to accomplish. He is reported to have spent three successive nights
in writing charms: the effects of which were, that the spears of some
of the enemies’ chiefs were found in the morning blunted and
hacked, whole quivers of arrows were found broken also, and their
arms changed from one hut to another; other chiefs were seized with
sickness, and all with fear. My rockets are also said to have struck
terror indescribable into the hearts of the Mungowy. Their chief,
Malem Fanaamy, declared, “that to withstand a sheikh of the Koran
who performed such miracles was useless, and, at the same time,
haram (sin).” This confession of his inability to contend with El
Kanemy determined the people to submit.
Some of the Munga people were brought to me; they were
completely Bornou, and had all the simplicity, good nature, and
ugliness, which are the particular characteristics of that people.
Malem Fanaamy himself was a sort of lusus naturæ; Nature had set
a peculiar mark upon him, by covering one side of his face with a
thick beard, while on the other not a hair was to be seen. This of
itself, amongst a people so utterly ignorant, was sufficient to gain him
disciples, who were ready to believe him gifted with superior powers.
In these untraversed climes, a very little learning indeed is sufficient
to raise a man’s fame and fortune to the highest pitch. Persons who
have been to Mecca, of the meanest capacities, who amuse them
with tales of the countries and people they have seen on the road,
are treated with the greatest respect, and always provided for;
indeed every house is open to them: and any European travelling in
these countries might acquire an influence by these means, which
would enable him to carry all his objects into effect with great facility.
On the 19th of June we returned to Kabshary, and found that
great progress had been made in rebuilding the town. The sheikh
gave a sum of money towards completing the work, and exempted
the inhabitants from tribute for a season; and all, therefore, was
rejoicing. The Alowany Shouaas are here in very great force. We
had some visits from the women in the evening, who were really
beautiful; and although of a sort of dingy copper colour, are here
called white, and consequently held in but little estimation by the
natives—black, and black only, being considered by them as
desirable. I bathed this morning in the Gambarou, while poor Dr.
Oudney rested on the banks: live muscles are in plenty, and we
found some very pearly oyster-shells at the bottom of the river.
While we remained at Kabshary, we encountered another violent
storm, and were much amused at the economy of the Shouaas when
the storm approached. I saw all were extremely busy digging holes
in the sand with their spears, evidently too small for them to get into
themselves, and we were not a little surprised at seeing them
presently bury their shirts and trowsers two or three feet deep in the
sand, which, on the rain subsiding, they dug up, and put on, quite
dry, with an air of great comfort and satisfaction. They never are
affected by thus exposing their naked bodies to the fury of the
tempest, while we, who were always covered, had colds, agues, and
pains, that they were entirely free from.
We had news to-day that the people of Waday had, with a large
army, visited Begharmi, that persecuted country, and again pillaged
all the towns; and also that our huts had been broken into at Kouka,
and some, if not all, of our property stolen. The first report turned out
a false one, but the second, to our sorrow, was too true. Hillman had
been confined fifteen days to his bed with ague, and during this time,
in the night, the robbery was effected.
June 23.—We proceeded on our return, and again pitched our
tents on the banks of the Muggaby. In all the woods are flocks of wild
animals, called by the Bornouese korookoo, and by the Arabs el
buger-achmer, the red bullock: some of these were disturbed to-day,
and one got into the midst of our horsemen; it has immense horns,
and is something between the ox and the antelope. Spears were
struck at him without number, but he effected his escape, carrying off
several sticking in his flesh. The horses were exceedingly alarmed,
and many of their riders measured their lengths on the sand. The
two kafilas from Soudan passed us to-day, on their way to Kouka;
they consisted of one hundred and fifty slaves, with about twenty
merchants and their servants, and thirty camels. Most of the people
ran to the outskirts of the camp to see them pass, it being the
custom, on these occasions, to dress out these poor victims of the
most cruel avarice that certainly ever entered into the breast of man,
in rags of different colours, only to be taken from them again on the
procession being over. The merchants, who gratify their vanity the
most in this way, lose, it is said, fewer slaves; but I observed several
of these before me, whose unbidden tears flowed down their cheeks
as they drew their mantle close round them, seeming to wish by that
means to stifle their misery with the appearance of it.
It was intended this evening to have killed an hippopotamus, an
animal which exists in great numbers in the lake on the borders of
which we were encamped, but a violent thunder-storm, to our great
disappointment, prevented our witnessing so novel a species of
sport. The flesh is considered a great delicacy. On the morrow we
had a full opportunity of convincing ourselves that these uncouth and
stupendous animals are very sensibly attracted by musical sounds,
even though they should not be of the softest kind: as we passed
along the borders of the lake Muggaby at sunrise, they followed the
drums of the different chiefs the whole length of the water,
sometimes approaching so close to the shore, that the water they
spouted from their mouths reached the persons who were passing
along the banks. I counted fifteen at one time sporting on the
surface; and my servant Columbus shot one of them in the head,
when he gave so loud a roar, as he buried himself in the lake, that all
the others disappeared in an instant.

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