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iv Brief Contents
Unit Six Creditors’ Rights and Bankruptcy 557

Chapter 29 Creditors’ Rights and Remedies 558
Chapter 30 Secured Transactions 574
Chapter 31 Bankruptcy Law 598
Unit Seven AGENCY AND EMPLOYMENT 623

Chapter 32 Agency Formation and Duties 624
Chapter 33 Agency Liability to Third Parties and Termination 639
Chapter 34 Employment, Immigration, and Labor Law 658
Chapter 35 Employment Discrimination and Diversity 681
UNIT EIGHT BUSINESS ORGANIZATIONS 705

Chapter 36 Sole Proprietorships and Franchises 706
Chapter 37 Partnerships and Limited Liability Partnerships 720
Chapter 38 Other Organizational Forms for Small Businesses 740
Chapter 39 Corporate Formation and Financing 759
Chapter 40 Corporate Directors, Officers, and Shareholders 780
Chapter 41 Mergers and Takeovers 801
Chapter 42 Securities Law and Corporate Governance 816
UNIT NINE GOVERNMENT REGULATION 841

Chapter 43 Administrative Agencies 842
Chapter 44 Consumer Law 861
Chapter 45 Environmental Law 878
Chapter 46 Antitrust Law 893
Chapter 47 Professional Liability and Accountability 912
UNit Ten PROPERTY AND ITS PROTECTION 935

Chapter 48 Personal Property and Bailments 936
Chapter 49 Real Property and Landlord-Tenant Law 955
Chapter 50 Insurance 978
Chapter 51 Wills and Trusts 996
APPENDICES
A How to Brief Cases and Analyze Case Problems A–l
B The Constitution of the United States A–4
C The Uniform Commercial Code A–12
D The Sarbanes-Oxley Act of 2002 (Excerpts and Explanatory Comments) A–l59
E Answers to the Issue Spotters A–166
F Sample Answers for Business Case Problems with Sample Answer A–175
GLOSSARY G–l
TABLE OF CASES TC–1
INDEX 1–1
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Contents
Unit One Chapter 4

The Legal Environment Business and the Constitution 74
Of Business 1
The Constitutional Powers of Government 74
Case Analysis Case 4.1 Family Winemakers of
Chapter 1 California v. Jenkins (2010) 77
Law and Legal Reasoning 2 Business and the Bill of Rights 79
Case 4.2 Doe v. Prosecutor, Marion County,
Business Activities and the Legal Environment 2 Indiana (2013) 82
Sources of American Law 3 Spotlight on Beer Labels
The Common Law Tradition 6 Case 4.3 Bad Frog Brewery, Inc. v. New York
Schools of Legal Thought 11 State Liquor Authority (1998) 84
Classifications of Law 12 Due Process and Equal Protection 88
How to Find Primary Sources of Law 13 Privacy Rights 90
How to Read and Understand Case Law 15
Chapter 5
Chapter 2 Business Ethics 95
Courts and Alternative
Business Ethics 95
Dispute Resolution 28 Case 5.1 Johnson Construction Co. v.
The Judiciary’s Role in American Government 28 Shaffer (2012) 97
Basic Judicial Requirements 29 Case 5.2 May v. Chrysler Group, LLC (2012) 99
Case Analysis Case 2.1 Mala v. Crown Bay Business Ethics and Social Media 100
Marina, Inc. (2013) 31 Ethical Principles and Philosophies 101
Spotlight on Gucci Making Ethical Business Decisions 104
Case 2.2 Gucci America, Inc. v. Case Analysis Case 5.3 Moseley v. Pepco Energy
Wang Huoqing (2011) 35 Services, Inc. (2011) 105
The State and Federal Court Systems 37 Global Business Ethics 107
Alternative Dispute Resolution 41 Unit One Focus on Ethics: Ethics and the Legal
Case 2.3 Cleveland Construction, Inc. v. Levco Environment of Business 113
Construction, Inc. (2012) 44
International Dispute Resolution 46
Unit Two
Torts and Crimes 117
Chapter 3
Court Procedures 50
Chapter 6
Procedural Rules 50
Pretrial Procedures 52
Torts 118
Case Analysis Case 3.1 Expresso Disposition Corp. 1 The Basis of Tort Law 118
v. Santana Sales & Marketing Group, Inc. Intentional Torts against Persons 120
(2013) 56 Case Analysis Case 6.1 McKee v. Laurion
Case 3.2 Blankenship v. Collier (2010) 58 (2013) 123
The Trial 62 Business Torts 127
Case 3.3 Downey v. Bob’s Discount Furniture Intentional Torts against Property 128
Holdings, Inc. (2011) 65 Unintentional Torts (Negligence) 130
Posttrial Motions 67 Classic Case 6.2 Palsgraf v. Long Island Railroad
The Appeal 68 Co. (1928) 133
Enforcing the Judgment 69 Defenses to Negligence 135
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vi Contents
Spotlight on the Seattle Mariners Criminal Procedures 207

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

Unit Three
Product Liability 142
Strict Product Liability 143
Contracts
Spotlight on Injuries from Vaccines and E-Contracts 223
Case 7.1 Bruesewitz v. Wyeth, LLC (2011) 143
Case Analysis Case 7.2 Wilson Sporting Goods Co. C h a p t e r 11
v. Hickox (2013) 146
Case 7.3 Johnson v. Medtronic, Inc. (2012) 148
Nature and Terminology 224
Defenses to Product Liability 151 An Overview of Contract Law 224
Case Analysis Case 11.1 Pan Handle Realty, LLC
Chapter 8 v. Olins (2013) 226
Intellectual Property Rights 156 Elements of a Contract 227
Types of Contracts 228
Trademarks and Related Property 156 Quasi Contracts 232
Classic Case 8.1 The Coca-Cola Co. v. Case 11.2 Seawest Services Association v.
The Koke Co. of America (1920) 156 Copenhaver (2012) 232
Patents 161 Interpretation of Contracts 234
Copyrights 164 Spotlight on Columbia Pictures
Case Analysis Case 8.2 Winstead v. Jackson Case 11.3 Wagner v. Columbia Pictures
(2013) 165 Industries, Inc. (2007) 235
Trade Secrets 169
International Protection for Intellectual Property 170 C h a p t e r 12
Case 8.3 Golan v. Holder (2012) 171
Agreement in
Chapter 9 Traditional and E-Contracts 240
Internet Law, Agreement 240
Social Media, and Privacy 177 Classic Case 12.1 Lucy v. Zehmer (1954) 241
Spotlight on A mazon.com
Internet Law 177 Case 12.2 Basis Technology Corp. v.
Spotlight on Internet Porn Amazon.com, Inc. (2008) 244
Case 9.1 Hasbro, Inc. v. Internet Entertainment Case Analysis Case 12.3 Gyabaah v. Rivlab
Group, Ltd. (1996) 180 Transportation Corp. (2013) 246
Copyrights in Digital Information 181 Agreement in E-Contracts 251
Case 9.2 Maverick Recording Co. v. Harper The Uniform Electronic Transactions Act 255
(2010) 183 International Treaties Affecting E-Contracts 256
Social Media 184
Case Analysis Case 9.3 In re O’Brien (2013) 185 C h a p t e r 13
Online Defamation 188 Consideration 260
Privacy 189
Elements of Consideration 260
C h a p t e r 10 Classic Case 13.1 Hamer v. Sidway (1891) 261
Criminal Law and Cyber Crime 194 Adequacy of Consideration 262
Agreements That Lack Consideration 262
Civil Law and Criminal Law 194 Case Analysis Case 13.2 Baugh v. Columbia Heart
Criminal Liability 196 Clinic, P.A. (2013) 263
Types of Crimes 198 Settlement of Claims 265
Case Analysis Case 10.1 People v. Whitmer Spotlight on Nike
(2013) 200 Case 13.3 Already, LLC v. Nike, Inc.
Defenses to Criminal Liability 204 (2013) 267
Exceptions to the Consideration Requirement 268
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Contents vii
C h a p t e r 14 Third Party Beneficiaries 325

Capacity and Legality 273 Case Analysis Case 17.3 Lake County Grading Co.
v. Village of Antioch (2013) 328
Contractual Capacity 273
Legality 277
Case 14.1 Sturdza v. United Arab Emirates C h a p t e r 18
(2011) 278 Performance and Discharge
Spotlight on the Improv in Traditional and E-Contracts 333
Case 14.2 Comedy Club, Inc. v. Improv West
Conditions 333
Associates (2009) 280
Case 18.1 Pack 2000, Inc. v. Cushman (2011) 334
Case Analysis Case 14.3 Holmes v. Multimedia
Discharge by Performance 336
KSDK, Inc. (2013) 283
Classic Case 18.2 Jacob & Youngs v. Kent
(1921) 337
C h a p t e r 15
Case Analysis Case 18.3 Kohel v. Bergen Auto
Mistakes, Fraud, Enterprises, L.L.C. (2013) 338
and Voluntary Consent 290 Discharge by Agreement 340
Mistakes 290 Discharge by Operation of Law 342
Case 15.1 L&H Construction Co. v.
Circle Redmont, Inc. (2011) 291 C h a p t e r 19
Fraudulent Misrepresentation 293 Breach of Contract and Remedies 348
Case 15.2 Fazio v. Cypress/GR Houston I, LP
(2012) 294 Damages 348
Case Analysis Case 15.3 Cronkelton v. Guaranteed Case Analysis Case 19.1 Hallmark Cards, Inc. v.
Construction Services, LLC (2013) 296 Murley (2013) 349
Undue Influence 298 Classic Case 19.2 Hadley v. Baxendale
Duress 298 (1854) 352
Adhesion Contracts and Unconscionability 300 Equitable Remedies 355
Case 19.3 Emerick v. Cardiac Study Center, Inc.
C h a p t e r 16 (2012) 357
The Writing Requirement Recovery Based on Quasi Contract 358
Waiver of Breach 359
and Electronic Records 305 Contract Provisions Limiting Remedies 360
Writing Requirement: The Statute of Frauds 305 Appendix to Chapter 19:
Contracts That Require a Writing 306 Reading and Analyzing Contracts 364
Case Analysis Case 16.1 Salim v. Solaiman Unit Three Focus on Ethics: Contract Law
(2010) 306 and the Application of Ethics 370
Exceptions to the Writing Requirement 310
Case 16.2 NYKCool A.B. v. Pacific Fruit, Inc. Unit Four
(2013) 310
Sufficiency of the Writing 312
Domestic and International
Case 16.3 Beneficial Homeowner Service
Sales and Lease Contracts 373
Corporation v. Steele (2011) 313
The Parol Evidence Rule 314 Chapter 20
The Statute of Frauds in the International
Context 316
The Formation of
Sales and Lease Contracts 374
C h a p t e r 17 The Uniform Commercial Code 374
Third Party Rights 319 Case Analysis Case 20.1 Amaya v. Brater
(2013) 375
Assignments and Delegations 319
The Scope of Articles 2 (Sales) and 2A (Leases) 376
Case 17.1 Hosch v. Colonial Pacific Leasing Corp.
The Formation of Sales and Lease Contracts 380
(2012) 320
Case 20.2 WPS, Inc. v. Expro Americas, LLC
Spotlight on PC Magazine
(2012) 384
Case 17.2 Gold v. Ziff Communications Co.
Classic Case 20.3 Jones v. Star Credit Corp.
(2001) 323
(1969) 389
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viii Contents
Contracts for the International Sale of Goods 390 Chapter 24

Appendix to Chapter 20: International Law
An Example of a Contract for the International
in a Global Economy 453
Sale of Coffee 396
International Law 453
C h a p t e r 21 Case Analysis Case 24.1 Linde v. Arab Bank, PLC
Title, Risk, and Insurable Interest 400 (2013) 457
Doing Business Internationally 459
Identification 400 Regulation of Specific Business Activities 460
When Title Passes 402 International Dispute Resolution 463
Case 21.1 United States v. 2007 Custom Motorcycle Case 24.2 S & T Oil Equipment & Machinery, Ltd.
(2011) 402 v. Juridica Investments, Ltd. (2012) 463
Spotlight on Andy Warhol U.S. Laws in a Global Context 465
Case 21.2 Lindholm v. Brant (2007) 406 Spotlight on International Torts
Risk of Loss 407 Case 24.3 Kiobel v. Royal Dutch Petroleum
Case Analysis Case 21.3 Person v. Bowman Co. (2013) 466
(2013) 408 Unit Four Focus on Ethics: Domestic
Insurable Interest 412 and International Sales and Lease
Contracts 471
Chapter 22
Performance and Breach Unit Five
of Sales and Lease Contracts 417 Negotiable Instruments 475
Performance Obligations 417
Obligations of the Seller or Lessor 417 Chapter 25
Case Analysis Case 22.1 Wilson Sporting Goods The Function and Creation
Co. v. U.S. Golf and Tennis Centers, Inc.
(2012) 419
of Negotiable Instruments 476
Classic Case 22.2 Maple Farms, Inc. v. City School Types of Negotiable Instruments 476
District of Elmira (1974) 422 Case 25.1 Silicon Valley Bank v. Miracle Faith
Obligations of the Buyer or Lessee 423 World Outreach, Inc. (2013) 479
Anticipatory Repudiation 424 Requirements for Negotiability 481
Remedies of the Seller or Lessor 426 Case Analysis Case 25.2 Reger Development, LLC
Remedies of the Buyer or Lessee 428 v. National City Bank (2010) 484
Spotlight on Baseball Cards Spotlight on Casino Markers
Case 22.3 Fitl v. Strek (2005) 431 Case 25.3 Las Vegas Sands, LLC v.
Additional Provisions Affecting Remedies 432 Nehme (2011) 487
Dealing with International Contracts 434 Factors That Do Not Affect Negotiability 488
Chapter 23 Chapter 26
Warranties 439 Transferability and
Warranties of Title 439
Holder in Due Course 493
Express Warranties 440 Negotiation 493
Implied Warranties 441 Indorsements 494
Spotlight on DaimlerChrysler Case 26.1 In re Bass (2013) 494
Case 23.1 Shoop v. DaimlerChrysler Corp. Case Analysis Case 26.2 Hammett v. Deutsche
(2007) 442 Bank National Co. (2010) 497
Classic Case 23.2 Webster v. Blue Ship Tea Room, Miscellaneous Indorsement Problems 501
Inc. (1964) 444 Holder in Due Course (HDC) 502
Overlapping Warranties 446 Spotlight on Holder in Due Course
Warranty Disclaimers and Limitations on Case 26.3 Georg v. Metro Fixtures Contractors,
Liability 448 Inc. (2008) 504
Case Analysis Case 23.3 Roberts v. Lanigan Auto Holder through an HDC 507
Sales (2013) 448
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Contents ix
Chapter 27 Case 30.1 In re Baker (2012) 578

Liability, Defenses, and Discharge 512 Case 30.2 In re Camtech Precision
Manufacturing, Inc. (2011) 580
Signature Liability 512 The Scope of a Security Interest 584
Case 27.1 Jeanmarie v. Peoples (2010) 516 Priorities 586
Warranty Liability 519 Rights and Duties of Debtors and Creditors 588
Defenses and Limitations 522 Default 590
Case Analysis Case 27.2 Mills v. Chauvin Case Analysis Case 30.3 Smith v. Firstbank Corp.
(2013) 524 (2013) 592
Discharge 526
C h a p t e r 31
Chapter 28
Bankruptcy Law 598
Banking in the Digital Age 531
The Bankruptcy Code 598
Checks 531 Liquidation Proceedings 600
The Bank-Customer Relationship 533 Reorganizations 608
The Bank’s Duty to Honor Checks 533 Bankruptcy Relief under Chapter 13 and
Case Analysis Case 28.1 Afiriyie v. Bank of Chapter 12 610
America, N.A. (2013) 534 Case Analysis Case 31.1 In re Welsh (2013) 611
Case 28.2 Michigan Basic Property Insurance Case 31.2 Ransom v. FIA Card Services, N.A.
Association v. Washington (2012) 539 (2011) 613
The Bank’s Duty to Accept Deposits 542 Case 31.3 United Student Aid Funds, Inc. v.
Case 28.3 Cumis Mutual Insurance Society, Inc. v. Espinosa (2010) 614
Rosol (2011) 545 Unit Six Focus on Ethics:
Electronic Fund Transfers 547 Creditors’ Rights and Bankruptcy 621
E-Money and Online Banking 548
Unit Five Focus on Ethics:
Negotiable Instruments 553 Unit Seven
Agency and Employment 623
Unit Six
Creditors’ Rights Chapter 32
and Bankruptcy 557
Agency Formation and Duties 624
Agency Relationships 624
Chapter 29 Case 32.1 Coker v. Pershad (2013) 626
Creditors’ Rights and Remedies 558 Formation of the Agency Relationship 628
Laws Assisting Creditors 558 Case 32.2 Laurel Creek Health Care Center v.
Case 29.1 BHP Land Services, Inc. v. Bishop (2010) 628
Seymour (2011) 559 Duties of Agents and Principals 630
Mortgages 562 Case Analysis Case 32.3 Taser International, Inc.
Case Analysis Case 29.2 McLean v. JPMorgan v. Ward (2010) 632
Chase Bank, N.A. (2012) 564 Rights and Remedies of Agents and Principals 634
Suretyship and Guaranty 565
Spotlight on Personal Guaranties Chap ter 33
Case 29.3 Wilson Court Limited Partnership v. Agency Liability to Third Parties
Tony Maroni’s, Inc. (1998) 567 and Termination 639
Protection for Debtors 570
Scope of Agent’s Authority 639
Chapter 30 Spotlight on Apparent Authority
Case 33.1 Lundberg v. Church Farm, Inc.
Secured Transactions 574
(1986) 642
The Terminology of Secured Transactions 574 Liability for Contracts 644
Creation of a Security Interest 574 Case 33.2 Williams v. Pike (2011) 645
Perfection of a Security Interest 576 Liability for Torts and Crimes 647
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x Contents
Case Analysis Case 33.3 Auer v. Paliath (2013) 649 Spotlight on Holiday Inns
Termination of an Agency 652 Case 36.3 Holiday Inn Franchising, Inc. v.
Hotel Associates, Inc. (2011) 715
Chapter 34
Employment, Immigration, Chap te r 37
and Labor Law 658 Partnerships and
Limited Liability Partnerships 720
Employment at Will 658
Case 34.1 Waddell v. Boyce Thompson Institute Basic Partnership Concepts 720
for Plant Research, Inc. (2012) 659 Partnership Formation and Operation 722
Wages, Hours, and Layoffs 660 Classic Case 37.1 Meinhard v.
Family and Medical Leave 662 Salmon (1928) 725
Worker Health and Safety 663 Dissociation of a Partner 728
Income Security 664 Partnership Termination 729
Employee Privacy Rights 666 Case 37.2 Russell Realty Associates v. Russell
Case 34.2 National Aeronautics and Space (2012) 730
Administration v. Nelson (2011) 668 Case Analysis Case 37.3 Estate of Webster v.
Immigration Law 669 Thomas (2013) 732
Labor Unions 672 Limited Liability Partnerships 733
Case Analysis Case 34.3 Services Employees Limited Partnerships 734
International Union v. National Union of
Healthcare Workers (2013) 674 Chapter 38
Other Organizational Forms
Chapter 35 for Small Businesses 740
Employment Discrimination The Limited Liability Company 740
and Diversity 681 Case Analysis Case 38.1 ORX Resources, Inc. v.
Title VII of the Civil Rights Act of 1964 681 BMW Exploration, LLC (2010) 741
Case Analysis Case 35.1 Dees v. United Rentals LLC Management and Operation 744
North America, Inc. (2013) 682 Case 38.2 Polk v. Polk (2011) 744
Case 35.2 Morales-Cruz v. University of Puerto Dissociation and Dissolution of an LLC 746
Rico (2012) 689 Case 38.3 Venture Sales, LLC v. Perkins
Discrimination Based on Age 691 (2012) 747
Case 35.3 Mora v. Jackson Memorial Foundation, Special Business Forms 748
Inc. (2010) 691 General Considerations for Small Business 750
Discrimination Based on Disability 693 Financial Capital 754
Defenses to Employment Discrimination 695
Affirmative Action 696 Chapter 39
Unit Seven Focus on Ethics: Corporate Formation and Financing 759
Agency and Employment 701
The Nature and Classification of Corporations 759
Case Analysis Case 39.1 Belmont v.
Unit Eight MB Investment Partners, Inc. (2013) 760
Business Organizations 705 Case 39.2 Rubin v. Murray (2011) 763
Corporate Formation 765
Corporate Powers 770
Chapter 36 Piercing the Corporate Veil 771
Sole Proprietorships and Franchises 706 Case 39.3 Brennan’s, Inc. v. Colbert (2012) 772
Corporate Financing 774
Sole Proprietorships 706
Case 36.1 Quality Car & Truck Leasing, Inc. v.
Sark (2013) 707
Chapter 40
Franchises 708 Corporate Directors,
Franchise Termination 712 Officers, and Shareholders 780
Case Analysis Case 36.2 Mac’s Shell Service, Inc. v.
Role of Directors and Officers 780
Shell Oil Products Co. (2010) 713
Duties and Liabilities of Directors and Officers 782
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Contents xi
Classic Case 40.1 Guth v. Loft, Inc. (1939) 785 Case 43.2 Mayo Foundation for Medical
The Role of Shareholders 787 Education and Research v. United States
Case Analysis Case 40.2 Case v. Sink & Rise, Inc. (2011) 851
(2013) 790 Enforcement and Adjudication 853
Rights of Shareholders 792 Case 43.3 Craker v. Drug Enforcement
Case 40.3 McCann v. McCann (2012) 795 Administration (2013) 855
Duties and Liabilities of Shareholders 796 Public Accountability 857
C h a p t e r 41 Chapter 44
Mergers and Takeovers 801 Consumer Law 861
Merger, Consolidation, and Share Exchange 801 Deceptive Advertising 861
Purchase of Assets 804 Case 44.1 Hypertouch, Inc. v. ValueClick, Inc.
Case Analysis Case 41.1 American Standard, Inc. (2011) 863
v. OakFabco, Inc. (2010) 804 Labeling and Packaging Laws 866
Purchase of Stock 805 Spotlight on Honda
Case 41.2 Air Products and Chemicals, Inc. v. Case 44.2 Paduano v. American Honda Motor
Airgas, Inc. (2011) 808 Co. (2009) 866
Termination 809 Sales 868
Major Business Forms Compared 811 Protection of Health and Safety 868
Credit Protection 870
Chapter 42 Case Analysis Case 44.3 Jerman v. Carlisle,
Securities Law and McNellie, Rini, Kramer & Ulrich, LPA
Corporate Governance 816 (2010) 873
The Securities and Exchange Commission 816 Chapter 45

The Securities Act of 1933 817
Case 42.1 Litwin v. Blackstone Group, LP
Environmental Law 878
(2011) 822 Common Law Actions 878
The Securities Exchange Act of 1934 823 Federal, State, and Local Regulations 879
Classic Case 42.2 SEC v. Texas Gulf Sulphur Co. Air Pollution 880
(1968) 824 Water Pollution 882
Case Analysis Case 42.3 City of Livonia Case 45.1 Entergy Corp. v. Riverkeeper, Inc.
Employees’ Retirement System and Local 295/ (2009) 883
Local 851 v. Boeing Co. (2013) 828 Case Analysis Case 45.2 United States v.
State Securities Laws 830 Lucas (2008) 884
Corporate Governance 830 Case 45.3 Sackett v. Environmental Protection
Online Securities Fraud 832 Agency (2012) 886
Unit Eight Focus on Ethics: Toxic Chemicals 888
Business Organizations 838 Hazardous Wastes 888
Chapter 46
Unit Nine
Government Regulation 841 Antitrust Law 893
The Sherman Antitrust Act 893
Section 1 of the Sherman Act 894
Chapter 43 Case Analysis Case 46.1 Leegin Creative Leather
Administrative Agencies 842 Products, Inc. v. PSKS, Inc. (2007) 897
The Practical Significance of Administrative Law 842 Section 2 of the Sherman Act 898
Agency Creation and Powers 843 Case 46.2 E.I. DuPont de Nemours and Co. v.
The Administrative Procedure Act 846 Kolon Industries (2011) 899
Case Analysis Case 43.1 Federal Communications The Clayton Act 902
Commission v. Fox Television Stations, Inc. Enforcement and Exemptions 905
(2009) 847 U.S. Antitrust Laws in the Global Context 906
Judicial Deference to Agency Decisions 850 Case 46.3 Carrier Corp. v. Outokumpu Oyj
(2012) 907
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xii Contents
Chap te r 47 Case 49.2 Scarborough v. Rollins (2010) 965

Professional Liability Limitations on the Rights of Property Owners 967
Case Analysis Case 49.3 Town of Midland v.
and Accountability 912
Morris (2011) 967
Potential Liability to Clients 912 Zoning and Government Regulations 970
Case 47.1 Kelley v. Buckley (2011) 916 Landlord-Tenant Relationships 972
Potential Liability to Third Parties 917
Case Analysis Case 47.2 Perez v. Stern (2010) 919 Chapter 50
The Sarbanes-Oxley Act of 2002 920 Insurance 978
Potential Liability of Accountants Under Securities
Laws 922 Insurance Terminology and Concepts 978
Spotlight on Accountant’s Duty to Correct The Insurance Contract 980
Mistakes Case 50.1 Valero v. Florida Insurance Guaranty
Case 47.3 Overton v. Todman & Co., CPAs Association, Inc. (2011) 983
(2007) 925 Case 50.2 Woo v. Fireman’s Fund Insurance Co.
Confidentiality and Privilege 928 (2007) 985
Unit Nine Focus on Ethics: Types of Insurance 987
Government Regulation 932 Case Analysis Case 50.3 Estate of Luster v.
Allstate Insurance Co. (2010) 989
Unit Ten
C h a p t e r 51
Property and
Its Protection 935 Wills and Trusts 996
Wills 996
Case 51.1 In re Estate of Johnson (2011) 999
Chapter 48 Case 51.2 In re Estate of Melton (2012) 1001
Personal Property and Bailments 936 Case Analysis Case 51.3 Peterson v. Harrell
(2010) 1003
Personal Property versus Real Property 936
Intestacy Laws 1007
Case Analysis Case 48.1 APL Limited v.
Trusts 1008
Washington State Department of Revenue
Other Estate-Planning Issues 1012
(2010) 938
Unit Ten Focus on Ethics:
Acquiring Ownership of Personal Property 939
Property and Its Protection 1018
Classic Case 48.2 In re Estate of Piper
(1984) 940
Mislaid, Lost, and Abandoned Property 943 Appendices
Bailments 944 A How to Brief Cases and Analyze Case Problems A–l
Ordinary Bailments 945
B The Constitution of the United States A–4
Case 48.3 Bridge Tower Dental, P.A. v. Meridian
Computer Center, Inc. (2012) 948 C The Uniform Commercial Code A–12
Special Types of Bailments 949 D The Sarbanes-Oxley Act of 2002
(Excerpts and Explanatory Comments) A–l59
Chapter 49 E Answers to the Issue Spotters A–166
Real Property and
F Sample Answers for Business Case Problems with
Landlord-Tenant Law 955 Sample Answer A–175
The Nature of Real Property 955
Ownership and Other Interests in Real Property 956 Glossary G–l
Transfer of Ownership 961
Spotlight on Sales of Haunted Houses
Table of Cases TC–1
Case 49.1 Stambovsky v. Ackley (1991) 962 Index 1–1
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Concept Summaries
1.1 Sources of American Law 6 27.1 Signature Liability 520

1.2 The Common Law Tradition 10 27.2 Transfer Warranty Liability for Transferors
1.3 Schools of Jurisprudential Thought 13 Who Receive Consideration 521
2.1 Jurisdiction 34 28.1 Honoring Checks 541
2.2 Types of Courts 42 29.1 Remedies Available to Creditors 566
3.1 Pretrial Procedures 63 30.1 Creating and Perfecting a
Security Interest 584
3.2 Trial Procedures 68
30.2 Remedies of the Secured Party on
3.3 Posttrial Options 70
the Debtor’s Default 594
6.1 Intentional Torts against Persons 127
31.1 Forms of Bankruptcy Relief Compared 617
6.2 Intentional Torts against Property 130
32.1 Formation of the Agency Relationship 631
10.1 Types of Crimes 205
33.1 Authority of an Agent to Bind the Principal
11.1 Types of Contracts 232 and a Third Party 645
12.1 Methods by Which an Offer 33.2 Termination of an Agency 654
Can Be Terminated 249
38.1 Special Business Forms 750
13.1 Consideration 266
39.1 Classification of Corporations 766
14.1 Contracts by Minors 275
40.1 Roles of Directors and Officers 783
14.2 Contracts by Intoxicated Persons 276
40.2 Duties and Liabilities of Directors
14.3 Contracts by Mentally Incompetent and Officers 788
Persons 277
40.3 Role, Rights, and Liability of Shareholders 797
15.1 Voluntary Consent 301
41.1 Methods of Expanding Corporate Operations
1 7.1 Assignments and Delegations 326 and Interests 807
1 9.1 Equitable Remedies 359 47.1 Common Law Liability of Accountants
20.1 The Formation of Sales and and Other Professionals 921
Lease Contracts 391 47.2 Statutory Liability of Accountants
21.1 Delivery without Movement of the Goods 411 and Other Professionals 927
21.2 Risk of Loss When a Sales or 48.1 Acquisition of Personal Property 942
Lease Contract Is Breached 413 48.2 Mislaid, Lost, and Abandoned Property 944
22.1 Performance of Sales and Lease Contracts 425 48.3 Rights and Duties of the Bailee
23.1 Types of Warranties 447 and the Bailor 951
25.1 Requirements for Negotiability 489 49.1 Interests in Real Property 960
26.1 Types of Indorsements and Their Effect 500 51.1 Wills 1006
26.2 Rules and Requirements for HDC Status 508 51.2 Trusts 1011
xiii
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Exhibits
1–1 Areas of the Law That May Affect Business 16–4 The Parol Evidence Rule 316
Decision Making 4 17–1 Assignment Relationships 321
1–2 Equitable Maxims 7 17–2 Delegation Relationships 324
1–3 Procedural Differences between an Action at Law 17–3 Third Party Beneficiaries 328
and an Action in Equity 8
18–1 Contract Discharge 344
1–4 National Reporter System—Regional/Federal 16
19–1 Measurement of Damages—
1–5 How to Read Citations 17 Breach of Construction Contracts 352
1–6 A Sample Court Case 22 19–2 Remedies for Breach of Contract 357
2–1 Exclusive and Concurrent Jurisdiction 33 20–1 How Several Articles of the UCC
2–2 The State and Federal Court Systems 37 Can Apply to a Single Transaction 377
2–3 Geographic Boundaries of the 20–2 The Law Governing Contracts 377
U.S. Courts of Appeals and U.S. District Courts 40
20–3 Major Differences between
2–4 Basic Differences in the Traditional Forms Contract Law and Sales Law 388
of ADR 43
21–1 Void and Voidable Titles 405
3–1 Stages in a Typical Lawsuit 51
21–2 Contract Terms—Definitions 409
3–2 A Typical Complaint 53
22–1 A Letter-of-Credit Transaction 435
3–3 A Typical Summons 54
24–1 The Legal Systems of Selected Nations 455
3–4 Pretrial Motions 56
25–1 Basic Types of Negotiable Instruments 477
4–1 Protections Guaranteed by the Bill of Rights 80
25–2 A Typical Time Draft 478
8–1 Forms of Intellectual Property 170
25–3 A Typical Promissory Note 481
9–1 The Proposed Consumer Privacy Bill of Rights 190
25–4 A Typical Small Certificate of Deposit 482
10–1 Key Differences between
Civil Law and Criminal Law 195 26–1 A Blank Indorsement 494
10–2 Civil (Tort) Lawsuit and Criminal Prosecution 26–2 A Special Indorsement 496
for the Same Act 196 26–3 A Qualified Indorsement 496
10–3 Major Procedural Steps in a Criminal Case 211 26–4 “For Deposit Only” and “For Collection Only”
11–1 Classifications Based on Contract Formation 228 Indorsements 499
11–2 Enforceable, Voidable, Unenforceable, 26–5 Trust (Agency) Indorsements 499
and Void Contracts 231 26–6 Converting an Order Instrument to a
11–3 Rules of Contract Interpretation 234 Bearer Instrument and Vice Versa 500
12–1 A Click-On Agreement Sample 253 26–7 Taking for Value 503
12–2 The E-SIGN Act and the UETA 256 27–1 Time for Proper Presentment 514
14–1 Unconscionability 282 27–2 Defenses Against Liability
14–2 Contract Legality 285 on Negotiable Instruments 522
15–1 Mistakes of Fact 291 28–1 A Cashier’s Check 532

16–1 The One-Year Rule 308 28–2 An American Express Traveler’s Check 533
16–2 Collateral Promises 309 28–3 A Poorly Filled-Out Check 540
16–3 Business Contracts 28–4 The Check-Collection Process 544
and the Writing Requirement 312 29–1 Suretyship and Guaranty Parties 567
xiv
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Contents xv
30–1 Secured Transactions— 42–2 Comparison of Coverage, Application,

Concept and Terminology 575 and Liability under SEC Rule 10b-5 and
30–2 The Uniform Financing Statement 577 Section 16(b) 827
30–3 Types of Collateral 42–3 Some Key Provisions of the Sarbanes-Oxley Act
and Methods of Perfection 582 Relating to Corporate Accountability 833
30–4 Priority of Claims to a Debtor’s Collateral 589 43–1 Executive Departments
31–1 Collection and Distribution of Property and Important Subagencies 844
in Most Voluntary Bankruptcies 606 43–2 Selected Independent Regulatory Agencies 845
33–1 A Sample General Power of Attorney 640 43–3 The Process of
37–1 Common Terms Included Formal Administrative Adjudication 854
in a Partnership Agreement 723 44–1 Selected Areas of
37–2 A Comparison of General Partnerships Consumer Law Regulated by Statutes 862
and Limited Partnerships 735 45–1 Major Federal Environmental Statutes 880
39–1 Sample Articles of Incorporation 768
46–1 Exemptions to Antitrust Enforcement 906
39–2 How Do Stocks and Bonds Differ? 775
47–1 Key Provisions of the Sarbanes-Oxley Act of 2002
39–3 Types of Stocks 775 Relating to Public Accounting Firms 922
40–1 Directors’ Management Responsibilities 781
48–1 Degree of Care Required of a Bailee 947
40–2 Results of Cumulative Voting 792
50–1 Selected Insurance Classifications 979
41–1 Merger 801
50–2 Insurance Contract Provisions and Clauses 981
41–2 Consolidation 802
50–3 Typical Fire Insurance Policies 988
41–3 The Terminology of Takeover Defenses 806
51–1 Excerpts from Michael Jackson’s Will 997
41–4 Major Forms of Business Compared 811
42–1 Exemptions for Securities Offerings 51–2 Per Stirpes Distribution 1008
under the 1933 Securities Act 820 51–3 Per Capita Distribution 1009
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9781285185248_00_fm_i-xxx.indd 16 8/28/13 2:33 PM

Preface
The study of business law and, more generally, the tors the ability to add their own content in the
legal environment of business has universal appli- Learning Path with apps that integrate into the
cability. A student entering any field of business MindTap framework seamlessly with Learning
must have at least a passing understanding of busi- Management Systems (LMS).
ness law in order to function in the real world.
Additionally, students preparing for a career
in accounting, government and political science,
CengageNOW for Business Law:
economics, and even medicine can use much of Interactive Assignment System
the information they learn in a business law and CengageNOW™ is a powerful course management
legal environment course. In fact, every indi- tool that provides control and customization to
vidual throughout his or her lifetime can benefit optimize the student learning experience and pro-
from a knowledge of contracts, real property law, duce desired outcomes. The application features
landlord-tenant relationships, and other topics. a variety of question types to test simple reading
Consequently, we have fashioned this text as a use- comprehension, complex critical thinking, legal
ful “tool for living” for all of your students (includ- reasoning, and case analysis skills. CengageNOW
ing those taking the CPA exam). includes:
For the Thirteenth Edition, we have spent a
great deal of effort making this book more contem- • An Interactive book.
porary, exciting, and visually appealing than ever • Auto-graded homework with the following
before. We have also added many new features and consistent question types:
special pedagogical devices that focus on the legal, ° Worksheets—Interactive worksheets
ethical, global, and e-commerce environments, prepare students for class by ensuring
while addressing core curriculum requirements. reading and comprehension.
° Video Activities—Real-world video exer-
cises make business law engaging and
relevant.
Unique New Digital Brief Hypotheticals—These applications
°
Learning Systems provide students practice in spotting the
issue and applying the law in the context
Before we discuss the many new aspects of this of a short, factual scenario.
text, however, we wish to point out the exciting ° Case Problem Blueprints—Promote
new digital products offered in conjunction with deeper critical thinking and legal
the text. reasoning by guiding students step-by-
step through a case problem, building on
acquired knowledge to truly assess their
MindTap understanding of legal principles.
• Personalized Student Plan with multimedia
New for Business Law, Thirteenth Edition, MindTap
study tools and videos.
is a fully online, highly personalized learning
• Test Bank.
experience built on Cengage Learning content.
• Reporting and Assessment options.
MindTap combines student learning tools—such
as readings, multimedia, activities and assessments By using the optional CengageNOW system,
from CengageNOW™—into a singular Learning students can complete the assignments online
Path that guides students through their course. and can receive instant feedback on their answers.
Instructors can personalize the experience by Instructors can utilize CengageNOW to upload
customizing authoritative Cengage Learning con- their course syllabi, create and customize home-
tent and learning tools. MindTap offers instruc- work assignments, and keep track of their students’
xvii
9781285185248_00_fm_i-xxx.indd 17 8/28/13 2:33 PM

xviii Preface
progress. Instructors can also communicate with Complete Series of

their students about assignments and due dates,
and create reports summarizing the data for an Business Law Texts
individual student or for the whole class.
We also want instructors to know that there is now
an entire family of derivative texts based on these
CourseMate materials for instructors wishing to customize the
text for their purposes. (See www.cengagebrain.com
CourseMate for Business Law brings business law
or your local sales representative for more informa-
concepts to life with interactive learning, study, and
tion on the entire series of Business Law texts.) The
exam preparation tools that support the printed
series includes:
textbook. Built-in engagement tracking tools allow
you to assess the study activities of your students. • Business Law: Text and Cases, The First
Additionally, Business Law CourseMate includes Course includes the first twenty-four chap-
an interactive online textbook, which contains the ters of Business Law, plus four chapters on
complete content of the print textbook enhanced Agency and Employment, and four chapters
by the many advantages of a digital environment. on Business Organizations.
• Business Law: Text and Cases, An
Accelerated Course includes a total of nine-
Cengage Learning Testing teen chapters, all but eight of which combine
materials from chapters of Business Law. This
Powered by Cognero
text provides a brief version of the core con-
Cengage Learning Testing Powered by Cognero is a tent suitable for a one-semester course.
flexible, online system that allows you to do the • Business Law: Text and Cases,
following: Commercial Law for Accountants is
designed for those entering the field of
• Author, edit, and manage Test Bank content
accounting and includes topics from Business
from multiple Cengage Learning solutions.
Law that accountants need to know. It covers
• Create multiple test versions in an instant.
business organizations, agency, employment,
• Deliver tests from your LMS, your classroom,
negotiable instrument law, sales and lease
or wherever you want.
contracts, creditors’ rights and bankruptcy,
government regulation, property, and profes-
Start Right Away! Cengage Learning Testing Powered
sional liability.
by Cognero works on any operating system or browser.
• No special installs or downloads are needed.
• Create tests from school, home, the coffee What Is New in the
shop—anywhere with Internet access. Thirteenth Edition
What Will You Find Instructors have come to rely on the coverage,
• Simplicity at every step. A desktop-inspired accuracy, and applicability of Business Law. To
interface features drop-down menus and make sure that our text engages your students,
familiar intuitive tools that take you through solidifies their understanding of legal concepts,
content creation and management with ease. and provides the best teaching tools available, we
• Full-featured test generator. Create ideal now offer the following items either in the text or
assessments with your choice of fifteen ques- in conjunction with the text.
tion types—including true/false, multiple
choice, opinion scale/Likert, and essay). New Chapter on Internet Law,
Multi-language support, an equation editor
and unlimited metadata help ensure your
Social Media, and Privacy
tests are complete and compliant. For the Thirteenth Edition, we have included an
• Cross-compatible capability. Import and entirely new chapter (Chapter 9) entitled Internet
export content into other systems. Law, Social Media, and Privacy. Social media
9781285185248_00_fm_i-xxx.indd 18 8/28/13 2:33 PM

Preface xix
have entered the mainstream and become a part of contract is annotated so that students can quickly
everyday life for many businesspersons. Throughout see what each contract provision means.
the text, we recognize this trend by incorporating
the Internet and social media as they relate to the
topics under discussion. New Highlighted and
We also give the legal issues surrounding the Numbered Examples and
Internet, social media, and privacy special empha- Case in Point Illustrations
sis in this new chapter. This chapter examines some
Many instructors use cases and examples to illustrate
of the laws pertaining to the Internet, intellectual
how the law applies to business. For this edition, we
property, and privacy. It also discusses recent legal
have expanded both our in-text examples and our dis-
developments concerning the protection of social
cussion of case law by adding highlighted numbered
media passwords and the use of social media by
Examples and Cases in Point in every chapter.
employers and law enforcement.
These two features are uniquely designed and
consecutively numbered throughout each chapter
New Managerial Strategy Features for easy reference. Examples illustrate how the law
applies in a specific situation. Cases in Point pres-
For the Thirteenth Edition, we have created a
ent the facts and issues of an actual case and then
new feature entitled Managerial Strategy that
describe the court’s decision and rationale. The num-
focuses on the management aspects of business law.
bered Examples and Cases in Point features are inte-
Special emphasis is given to sustainability, ethical
grated throughout the text to help students better
trends, and changing managerial responsibilities.
understand how courts apply the principles in the
Each feature includes a short section entitled
real world.
Managerial Implications that provides con-
crete information for managers and connects the
topic under discussion to operating a business. New Spotlight Cases and
Each feature also concludes with two Business Spotlight Case Problems
Questions that prompt students to further exam-
ine the issues discussed. Suggested answers For the Thirteenth Edition of Business Law, cer-
to all the Business Questions are included tain cases and case problems have been carefully
in both the Instructor’s Manual and the chosen as exceptionally good teaching cases.
Answers Manual for this text. Spotlight Cases and Spotlight Case Problems
Topics examined in these features include: are labeled either by the name of one of the parties
or by the subject involved. Some examples include
• Budget Cuts for State Courts Can Affect Spotlight on Amazon, Spotlight on Apple, Spotlight on
Businesses (Chapter 2). the Seattle Mariners, Spotlight on Commercial Speech,
• Facing Breach of Contract Issues (Chapter 22). and Spotlight on Internet Porn.
• Changing Social Media Policies (Chapter 34). Instructors will find these Spotlight Cases use-
• Small Business Owners Now Have Recourse ful to illustrate the legal concepts under discus-
When Cyber Thieves Empty Their Bank sion. Students will enjoy studying these cases
Accounts (Chapter 38). because the parties are often familiar and the
cases involve interesting and memorable facts.
New Appendix to Chapter 19 Suggested answers to all case-ending ques-
tions and case problems are included in
Focuses on Reading and both the Instructor’s Manual and the
Analyzing Contracts Answers Manual for this text.
Because reading and analyzing contracts is such
a crucial skill for businesspersons, a special new New ExamPrep Section
Appendix to Chapter 19 has been added. This
appendix follows the last contracts chapter and
with Two Issue Spotters
explains how to read and analyze a contract. Then, For this edition, we have added a new section called
it presents an example of an employee noncom- ExamPrep at the conclusion of each chapter. The
petition and nondisclosure agreement. The sample section includes two new Issue Spotters related
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xx Preface
to the chapter’s topics that facilitate student Instructor’s Manual and the Answers Manual
learning and review of the materials. Suggested for this text.
answers to the Issue Spotters in every chapter are
provided in Appendix E at the end of the text.
New Case Analysis Cases with
Four Legal Reasoning Questions
New Legal Reasoning
In every chapter of the Thirteenth Edition of
Group Activities Business Law, we have included one longer case
For instructors who want their students to engage excerpt— labeled Case Analysis Case— followed
in group projects, each chapter of the Thirteenth by four Legal Reasoning Questions. The ques-
Edition includes a special new Legal Reasoning tions are designed to guide students’ analysis of the
Group Activity. Each activity begins by describ- case and build their legal reasoning skills. These
ing a business scenario and then requires each Case Analysis Cases may be used for case-briefing
group of students to answer a specific question assignments and are also tied to the Special Case
pertaining to the scenario based on the informa- Analysis questions found in every unit of the text
tion that they learned in the chapter. These proj- (one per unit). Suggested answers to the Legal
ects may be used in class to spur discussion or as Reasoning Questions are included in both
homework assignments. Suggested answers to the Instructor’s Manual and the Answers
the Legal Reasoning Group Activities are Manual for this text.
included in both the Instructor’s Manual
and the Answers Manual for this text.
Improved Ethics Coverage
For the Thirteenth Edition of Business Law, we have
New Insight Features significantly revised and updated the chapter on eth-
For the Thirteenth Edition, we have created new ics and business decision making (Chapter 5). The
Insight into [E-Commerce, Ethics, the Global chapter now presents a more practical, realistic, case-
Environment, or Social Media] features that study approach to business ethics and the dilemmas
appear in selected chapters. These features provide facing businesspersons today. It also provides step-by-
valuable insights into how the courts and the law step guidance for making ethical business decisions.
are dealing with specific issues. Each of these fea- The emphasis on ethics is reiterated in mate-
tures ends with a Legal Critical Thinking ques- rials throughout the text, particularly the Insight
tion that explores some cultural, environmental, into Ethics features, the Focus on Ethics features
or technological aspect of the issue. The following that conclude every unit, and the pedagogy that
are some of the topics explored in these features: accompanies selected cases and features. We also
discuss corporate governance issues as appro-
• Insight into E-Commerce—Do Computers priate in the corporate law chapters and in the
Have Free Speech Rights? (Chapter 4). Focus on Ethics feature concluding Unit Eight on
• Insight into Ethics—Warning Labels for business organizations. Finally, each chapter in the
Video Games (Chapter 7). text includes A Question of Ethics case problem
• Insight into the Global Environment— that provides a modern-day example of the kinds
Is It Legal to Resell Textbooks Purchased of ethical issues faced by businesspersons and
Abroad? (Chapter 8). explores the ways that courts can resolve them.
• Insight into Social Media—“Catfishing”:
Is That Online “Friend” Who You Think It Is?
(Chapter 15).
• Insight into E-Commerce—Smartphone- Additional Features
Based Payment Systems (Chapter 25). of This Text
• Insight into Social Media—Social
Media Estate Planning (Chapter 51).
Business Law, Thirteenth Edition, includes a num-
Suggested answers to the Legal Reasoning ber of pedagogical devices and special features,
Group Activities are included in both the including those discussed here.
9781285185248_00_fm_i-xxx.indd 20 8/28/13 2:33 PM

Preface xxi
Emphasis on Business and the rule of law, determine how the rule applies to
on Critical Thinking the facts of the case, and describe the court’s con-
clusion. Instructors can assign these questions as
For the Thirteenth Edition, we have focused on homework or use them in class to elicit student
making the text more business related. To that participation and teach case analysis. Suggested
end, we have carefully chosen cases, features, and answers to the Special Case Analysis ques-
problems that are relevant to operating a busi- tions can be found in both the Instructor’s
ness. In addition, we recognize that today’s busi- Manual and the Answers Manual that
ness leaders must often think “outside the box” accompany this text.
when making business decisions. For this reason,
we have included numerous critical thinking and
legal reasoning elements in this text. Almost all Reviewing Features
of the features and cases presented in the text con- in Every Chapter
clude with some type of critical thinking question.
Cases may include one or more of the follow- In the Thirteenth Edition of Business Law, we con-
ing critical thinking questions: tinue to offer a Reviewing feature at the end of every
chapter to help solidify students’ understanding of
• What If the Facts Were Different? the chapter materials. Each Reviewing feature pres-
• The Ethical Dimension ents a hypothetical scenario and then asks a series
• The E-Commerce Dimension of questions that require students to identify the
• The Global Dimension issues and apply the legal concepts discussed in the
• The Legal Environment Dimension chapter.
These features are designed to help students
Suggested answers to all questions following
review the chapter topics in a simple and interest-
cases can be found in both the Instructor’s
ing way and see how the legal principles discussed
Manual and the Answers Manual that
in the chapter affect the world in which they live.
accompany this text.
An instructor can use these features as the basis
for in-class discussion or encourage students to use
them for self-study prior to completing homework
Managerial Implications
assignments. Suggested answers to the ques-
in Selected Cases tions posed in the Reviewing features can
In addition to the critical thinking questions, we be found in both the Instructor’s Manual
have included special case pedagogy at the end of and the Answers Manual that accompany
selected cases that have particular importance for this text.
business managers. This section, called Managerial
Implications, points out the significance of the
court’s ruling in the case for business owners and Concept Summaries
managers. When key areas of the law need additional empha-
sis, we provide a Concept Summary. These summa-
ries have always been a popular pedagogical tool
Special Case Analysis Questions in this text. It now includes more than fifty of these
For nearly every unit in the text, we also provide summaries, many of which have been expanded or
a Special Case Analysis question that is based on revised.
the Case Analysis Case excerpt in that chapter. The
Special Case Analysis questions are designed to build
students’ analytical skills and appear in the Business
Exhibits
Case Problems at the end of selected chapters. When appropriate, we also illustrate important
The Special Case Analysis questions test stu- aspects of the law in graphic form in exhibits. In
dents’ ability to perform IRAC (Issue, Rule, all, more than one hundred exhibits are featured in
Application, and Conclusion) case analysis. Business Law, Thirteenth Edition. Several of these
Students must identify the legal issue presented exhibits are new, and we have modified existing
in the chapter’s Case Analysis Case, understand exhibits to achieve better clarity.
9781285185248_00_fm_i-xxx.indd 21 8/28/13 2:33 PM

Another random document with
no related content on Scribd:
MICHAEL IVANOVITCH KALININ
AND THE
PEASANTS
There have been two presidents of the Russian Socialist Federated
Soviet Republic; only recently we have become vaguely aware of
one of them. Ever since the Bolshevik coup d’ état America has
spoken of the Soviet Government as “the government of Lenin and
Trotsky.” America was right in so far as these men enjoy immense
power, and wrong in so far as she imagined it would have been
possible at any time, and less so now, for either of these men or both
of them to have abruptly changed the government’s policy from right
to left or left to right without first receiving indisputable orders from
the masses.
Relatively, Lenin has more power than Lloyd George and Trotsky
considerably less; while President Kalinin, who began his office as
little more than a figure-head, has been saved from the emptiness of
such a position because he is so symbolic of the growing power of
the peasants. Already more power has been bestowed upon him
through the course of events than perhaps he himself realizes.
Surely when he set out in his painted train on his first journey
through the provinces three years ago, he could hardly have
foreseen his place in history as one of the greatest influences in
molding the new state.
Kalinin’s growing influence is a true barometer of public opinion or, to
be more exact, of the reassertion of public opinion. And it is
interesting to note that while many of the stars in the Communist sky
are considerably dimmed by the ascendancy of Kalinin, Premier
Lenin’s position is only made stronger. This is because the new
pressure from below is for compromise, and public men go down
under retreat much faster than when their banners are flying
triumphantly in advance. Lenin is practical enough to understand the
advantages of a well-ordered retreat above those of a rout; he will
save all he can of the Socialist state instead of abandoning it on the
fields of battle.
It was the question of private property which became the vital issue
in 1920 inside and outside of Russia. The abolition of private
property was made possible by a determined, conscious minority. It
was re-established by the pressure of a slow-moving, solid,
unconscious majority; that majority was the peasants. I do not mean
that the peasants are now actually in control of the state. I merely
wish to point out that they already hold the balance of power and that
they move towards control with the crushing surety of a glacier. They
hold, strategically, the same position that the Bolsheviks did under
Kerensky, but they will never pursue the same tactics; they will
assume power gradually just because they are the majority; it is only
a minority which must act with dramatic haste, counting on brains,
daring and psychological moments.
It was logical that the first President should have been a man who
represented the city workers and the second President, a peasant;
for in such wise did the revolution settle itself.
Most of the Communists did not approve of Kalinin’s election. Lenin
alone sensed the proper time to place a peasant as nominal head of
the Soviets; a peasant who should begin as Master of Ceremonies
and who, in his peasant’s garb and with his peasant’s tongue, should
bring Lenin’s ideas to the people; a peasant who would never cease
being a peasant and who would come back to Lenin and say, “This
and this they will have, here they cannot follow and there they will
lead.” Lenin gazed at Russia through Kalinin’s eyes as one gazes in
a crystal.
In 1917 when the Bolsheviks seized control of the state, a delicate
little man called Jacob Michaelovitch Sverdlov, a chemist by
profession and a revolutionist by conviction, was Chairman of the
Central Executive Committee of the Workers and Soldiers Deputies;
this meant that he controlled the Red Guards, the conscious workers
and the revolting soldiers; it meant he held a position of such
tremendous authority that he could not be ignored by anybody. So
when the first Council of the People’s Commissars was formed,
which is really no other than the cabinet of the Russian Government,
Sverdlov was the first person taken into consideration by them. And
in order to find a place for him they created the office of President.
When he accepted that office he gave up his direct control and
became but one voice in a group. Nevertheless, all through the
barricade days he continued to act as the spokesman in the cabinet
for the Petrograd workers who were, for at least the first year, a
power above the cabinet.
In the winter of 1918 Sverdlov died of typhus and was buried on the
Red Square in Moscow.
During the time Sverdlov was president the government was in
continual difficulty with the peasants. They resisted the government’s
requisitioning expeditions, retreated within themselves and almost
ignored the central power until the provinces were in a continual
state of guerilla warfare. They managed their local Soviets with little
or no thought of the Moscow Government. Civil war continued and,
with the aid of France and England, grew apace; hard dark days
settled over Russia. Sverdlov looked about for an entering wedge
which would somehow pierce the way to an eventual understanding
and co-operation with the local and central Soviets. In this search
Sverdlov discovered Kalinin. Kalinin was already immensely popular
with the peasants; he had been on every Land Committee of
importance since the beginning of the first revolution, under both
Miliukov and Kerensky. During his term of office Sverdlov used
Kalinin as a mediator in many difficult situations and Lenin watched
his work with interest. An old Communist explained Kalinin’s election
in these words: “He was a ‘find’ of Sverdlov’s, but it was Lenin alone
who realized that days might come when he would be invaluable in
holding Russia together.” Those days have come; they came with
the tightening of the blockade and continued with the famine.
Kalinin is a Communist, a brand of Communist differing as much
from Zinoviev or Litvinov as Borah differs from Hughes or Hughes
differs from Root; yet Hughes and Borah and Root are Republicans
steeped to the bone in party discipline, rampaging now and then, but
never dreaming of breaking away from the party. Kalinin believes in
a kind of Communism, modified enough to suit the peasants, and
Zinoviev believes in a kind of Communism that is suited, at any time,
only for the advanced and conscious city proletariat.
Kalinin was born in the little village of Volost and still calls it his
home, still has his little strip of land there. He was brought up
religiously, and understands what the Church means to a devout
Russian and never throws aspersions on it. Though not religious
himself, he tolerates religion with the grave tolerance which never
offends.
His old mother is outspokenly anti-Bolshevik, yet very much likes to
have her say in the Volost Soviet. She is angry with the Bolsheviks
because they are not religious. She scolds her son and pretends that
she is not at all flattered because he is President of Russia and
obviously believes that no honor is too great for him. She is always
glad to talk to visitors about him and goes on monotonously
repeating the same ideas in the manner of the aged: “No, I am not
surprised,” she will say, “that Michael Ivanovitch has gone so far. He
was always studious, sitting up reading by candle-light after
everyone else was in bed. And he was always saying to me, ‘Don’t
bother me, mother, I’ve got lots of work to do.’ That’s the way he
talks to me now when I lecture him about religion. But he’s a good
son and kind to everybody ... only he certainly ought to think more
about God.”
I don’t believe that Kalinin is ambitious; I think he would like nothing
so much as to go back to his farm and live there the simple life of the
village. When Lenin convinced him that it was his duty to be the
voice of the peasants, he accepted the post in the quiet way of a
man who has no thought of personal glory. There is nothing in his
record that would prove him to be anything but entirely unselfish, and
I have seen him when he was like one inspired. During the Kronstadt
revolt he walked into that hostile city as he might walk into the mouth
of a cannon. Yet no one dared or desired to harm him!
Kalinin is an old revolutionist. In his early youth he found himself
unable to tolerate, without protest, the tyranny of the Tsar’s
government which manifested itself in such brutal cruelty towards the
peasants. He has always been desperately poor, a real proletarian
peasant, hoping to be rid one day of his endless debts and support
himself and his family honorably and decently. He was forced
through poverty to go to the city, where he worked in factories in
winter; only the summers he spent with his family. These winters in
the city, where he was thrown in contact with city workers, gave him
an understanding of the psychology and desires of the city workers
as well as of the peasants.
He was exiled to Siberia but not to hard labor, and he spent this
enforced and only leisure of his life rounding out his education;
mixing the classics with his dreams of freedom for Russia.
Kalinin’s wife is an educated, energetic peasant, who has by her own
ability become a figure of importance in her village; capable and
strong and intelligent, she has managed her tiny farm just a little
better than her neighbors and has been elected President of the
Volost Soviet. It is a position of which she is immensely proud.
Madame Kalinin is an individualist; a modern feminist of the type of
professional woman who, in America, insists on keeping her name
and continuing her work after marriage. During the last three years
she has been so busy that she has had no time to visit Moscow.
Kalinin, on his rare vacations, has had to go to her. If she ever does
visit Moscow she will surely wear her kerchief and her sheepskin
coat. No doubt supercilious Russians are already saying that “Main
Street has arrived in Moscow,” just as we have been saying since
March, 1921, that “just folks” are in the White House.
And there is a curious similarity between President Harding and
President Kalinin; both were elected to represent the average citizen.
In Russia average citizens are peasants—a ninety per cent average.
Both presidents go about their home towns slapping fellow citizens
on the back. Both were elected as figureheads for a party and both
have already proven themselves a little more forceful and important
than the party reckoned.
If Russia continues in the path where it is now, in fifty years the
Kalinins will have become Hardings, at home in silk hats and frock
coats, as well as in sheepskins and high boots. But it is hard to
predict where Russia is going or where the world is going.
When Kalinin rides through the provinces on his propaganda train
carrying stocks of literature, a motion picture apparatus and his
official seal, with the outside “done” by some futurist artist in garish
colors and depicting a millennium in which Kalinin would not be at
home, he is “Comrade” Kalinin to the whole train; he takes his meals
with the train crew, the porters and the secretaries; all share alike.
But the remarkable thing is that when he gets back to Moscow he
makes no effort to shake the dust of the provinces from his boots, he
rather makes a point of remaining distinctly a villager. He receives
you in his Moscow office wearing the same old mended spectacles,
the same threadbare coat and, I am sure, the same heart and mind.
He brings the country along with him, invades the city with it,
permeates it, overcomes it....
This attitude is characteristic not only of Kalinin, it is characteristic of
any peasant. I have often noted the delegates at the Congresses.
They are neither shy nor bewildered, they sit solemnly in their places
in the great hall, pondering all that Lenin says of trade or
reconstruction, approving or disapproving; getting closer every day
to the idea that Russia is theirs.
It is generally believed that the line between the city workers and the
peasants is wide and irreconcilable, whereas there is actually no line
at all. The city workers are only peasants who have gone to the city
just as Kalinin did, when they could not make a living in the villages.
Russian peasants never get over being farmers. Last winter I came
upon an excellent example: Some three hundred skilled Russian
mechanics from Detroit arrived in Moscow; they were sorely needed
in the Russian factories. Without a single exception they refused to
remain in the city! And when they learned that they might be
conscripted and forced to stay they fled hurriedly in every direction.
With one voice they exclaimed, “We came home to the land!”
Naturally, the government was in despair; officials were at a loss as
to what measures could be taken to bring pressure and a sense of
duty upon the returning Russians. Orators were sent to argue with
the next group, but without success. The only solution the
government found workable was to organize them before they
arrived; to see that they brought tools from America and came with
the definite idea of remaining in the cities for a fixed period; for only
the country is real to the peasant, the city is forever an artificial,
unhealthy invention.
Kalinin’s office in Moscow is not in the Kremlin. To get into the
Kremlin requires too much red tape. Therefore, while the President
eats in the Kremlin dining-room which is just an ordinary Soviet
mess-room, and sits in the Councils of the People’s Commissars, he
receives his army of callers in an ordinary office building in the heart
of the city. One needs no pass or credentials to get in; one needs
simply to walk up a flight of stairs, open a door and emerge into a
large bare reception room full of noisy peasants; here he inevitably
turns up.
I have often thought that Kalinin’s office is the most curious place in
which I have ever been in my life; it has the atmosphere of a Russian
railway train deep in the heart of the provinces where every
passenger talks to every other passenger and where formality is not
just overlooked or forgotten but has simply never existed.
All day long he receives the never-ending string of peasants in the
manner of a village priest, giving consolation and advice—and
something more solid and satisfying than a prayer, for he is obligated
to make an immediate decision in each case on hand or a promise
that it shall be taken up through his office. Under no circumstances
can he appear indifferent or helpless.
I remember arriving early one morning to find about twenty peasants
ahead of me. When Kalinin came in everyone got up and there was
a sudden general stampede in his direction and a sort of clamor
which arises in any Russian household over any sort of argument.
Kalinin’s voice could be distinctly heard above the others shouting,
“Comrades, comrades, I must take you in turn.” Then, as he crossed
the floor towards his private office, a frail, middle-aged woman sitting
near the door burst into tears. I can see him now with his narrow
Slav eyes, his broad nose and rumpled hair, his work-knotted hands
and faded blouse, stopping to look through his spectacles at the
woman before him, kindly, sympathetic, puzzled....
I think that he knew even before he began to question her that hers
was one of those unavoidable, personal tragedies that are part of
change and war and revolution. She had owned a big country house,
but the peasants had taken it when they divided the land and they
had allotted her but two rooms to live in. She was humiliated,
discouraged and resentful. She cried out, forgetting that Kalinin was
also a peasant, “I can’t bear to see those creatures using my pretty
things, walking with great muddy boots in my house. My soul is in
that house!”
Kalinin shook his head. He seemed willing and even anxious to help
her but he seemed more like a doctor in that moment than an
executive. Very gently he asked her to remember that two rooms
were more than most people had now in Russia, that these were
difficult times; even so they would go over the case together if she
would wait her turn. But no sooner had he closed the door than
every peasant in the room began addressing the bewildered woman.
They said that she should be ashamed of such petty complaints and
accused her of asking for “special privileges.” The widest range of
arguments were put forward, from the man who had lost a cow and
considered the government responsible to the woman whose two
sons had been killed at the front.
I was not so much interested in the arguments as in the remarkably
true reflection which the scene presented of what had happened all
over Russia. I had never realized before how completely submerged
the upper classes had become; how ruthless and inevitable was the
vast upward surge of the peasantry. Here was this woman, one time
barishna (lady), crushed and defeated in her own village, finding the
same thought in Moscow as in Nizhni-Novgorod or Kazan or Baku.
When Kalinin called her she went forward but one could see that she
had already given up hope and would not fight any further; perhaps
for the first time the real significance of the revolution had become
clear to her.
It is hard for Americans, where a peasant population has never
existed, to realize the position of the peasants in a revolution. They
are the rock in the whirlpool. They are the great levellers, the great
destroyers as well as the great builders. In Russia they pulled down
everything about them and they were not always gentle in their
wrath. Often they ruined wilfully and needlessly. In the cities,
practically no buildings were destroyed and no treasures looted, but
in the provinces men often remembered the knout with red flames of
fire and even with death.
Because the peasants’ desires are simple, the world is apt to give
them credit for a deep, political wisdom which they do not possess
and while there is no doubt about their taking the business of
government seriously, their inexperience often leads them into grave
blunders. It was the peasants, and not the Communists, who most
stubbornly opposed recognition of the foreign debts. It was the
peasants who demanded from every government since the Tsar’s,
schools, hospitals and protection from invasion, but who always
resented the most ordinary and reasonable tax put upon them by the
central authorities. Until Kalinin had educated them they were wont
to ask like children, “Aren’t we free now? Can’t we be left alone?”
The great irony about the rising of the peasants is that they were the
first to abandon the very equality they fought for. The equalization of
property in the provinces was brought about through the workings of
peasant proletariat organizations known as Committees of the Poor,
which not only divided the estates of the rich landlords but broke the
power of the kulaks (rich peasants). When the whole country was
reduced to the same status, the peasants were faced with the
necessity of a great decision. There were no longer rich peasants or
proletarian peasants but only what is known in Russia as the
“middle” farmers. The question of how to maintain such an equality
now arose. The Communists urged them to abandon the idea of
private property and work the land in communes, pointing out that
any other course must inevitably lead to the re-establishment of all
the old values and a new bourgeoisie. But the peasants were afraid
of this new and untried road of Socialism. Their demands for trade,
silver money, the opening of markets and stores, are ample evidence
that they have turned back on to the old familiar road of capitalism. If
Russia had been an industrial instead of an agricultural country, the
decision of the masses might have been quite otherwise.
Even our own presidents know the value of a lecture tour in a
national crisis. In our immediate political past, we have the memory
of presidents who took “issues” to the people, but it is hard to
conceive of a Chief Executive lecturing almost steadily for over two
years. Yet that is even a short estimate of the time actually spent by
Kalinin in going from one end of Russia to the other, shuttling in and
out of Moscow.
His meetings were more like tribunals, people’s courts, than ordinary
political assemblies. The peasants gathered at the railway stations,
in the village squares or even in the fields. They heard what he had
to say and then he heard them. They argued, complained,
demanded, compromised. Always some sort of understanding was
arrived at. This was partly due to Kalinin’s wonderful tact, his almost
divine reasonableness which never allowed an argument to develop
into a quarrel. And partly because he knows the peasant mind which
is easily touched by stories of suffering, by flattery or tears, but
impossible to move by threats. But fundamentally, the secret of
Kalinin’s success is due to the fact that he himself is a peasant and
no walls of caste can exist between him and the people.
I can illustrate this feeling of complete contact best by the story of an
actual occurrence in a remote province. It happened in what are now
known as the worst of the “requisitioning days” when the Soviets
were holding hundreds of miles of battle front and the peasants were
taxed almost beyond endurance.
One day a Lettish officer, who was also a Commissar in some Red
Army division, arrived in a remote village and rang the church bell to
summon the people. He read a list of the goods to be requisitioned.
This village had been taxed only a short time before and there were
murmurs of dissatisfaction in the crowd, murmurs which grew into
roars. Then happened one of those savage, elemental tragedies
which even we in America have never been able to eliminate from
our national life. Threats against the Commissar were followed by
sudden violence; he was literally trampled to death.
The Lettish officer had been accompanied by a young peasant
soldier, who had been a sort of orderly to him for nearly a year. In the
struggle the boy escaped. All night he lay weeping and thinking of
his dead comrade. The officer had taken an interest in him, had
taught him to read and write and imbued him with the ideals of the
Red Army. The peasant boy had been an orphan, lonely and
unhappy and a victim of brutality. He thought now of the dead man
as he thought of a saint, and by the time morning came he had
resolved on a curiously brave act. Creeping into the church he rang
the bell; the crowd gathered, and he mounted the platform and
began to tell them of the dead man and the Red Army. It was not
hard for him to explain that unless the Red Army was supported, the
White forces would very soon take away by main force the very food
they now refused to their brothers. It did not take very long to
convince the crowd of peasants, and not only to convince them but
to reduce them to tears. They gave all that the peasant boy asked,
and more than that, they went solemnly in a procession to the fresh
grave of the man they had murdered, laid wreaths upon it, and paid
homage, saying: “Brother, forgive us, we could not see your heart.”
This feeling accounts for the lack of resentment towards Kalinin
when he goes into the famine area. He walks among the starving
peasants, saying, “Who lies down, dies. I know, I have hungered, I
am one of you.”
In prosperous districts he uses the same tactics in overcoming
opposition to collections for the famine. Whenever he finds local
Soviet officials unwilling to part with their last surplus grain, he
mournfully exclaims, “Ah, well, I am sorry to hear this! Last week I
saw with my own eyes thousands dying of hunger. They were
peasants like ourselves and they were calling to us to help. Will you
send me back now with empty hands?” The peasants can never
resist his appeal; it comes too close to them, it is like refusing one’s
father.
While the peasants were not able to bring themselves to renounce
their title to the land, they have otherwise quite whole-heartedly
accepted many broad formulas of the Socialists. They unanimously
approved of revolutionary Russia’s offer to the world in 1917 to build
a peace on the basis of “no annexations, no indemnities and the
right of self-determination.” It is a curious and sad reality that the
richer nations become and the more cultured, the less they find it
possible to comprehend such a simple recipe for justice and
brotherly love. The world was too educated or too selfish or too
frightened to accept Russia’s magnanimous offer. And how much
agony and bloodshed it might have saved!
The Russian peasants, who for so many centuries have struggled
and sacrificed themselves to possess the land, are strangely lacking
in national pride, as we know it. They are not envious of other
countries. They could not conceive of an aggressive policy. If you
say to them that America is far richer and more progressive than
Russia, they will tell you they are very glad to hear it and are glad
you are happy. They ask of the foreigner only to be let alone and not
to send any more White generals against them; they ask to be
allowed to develop their own political institutions. Obviously our only
duty is to help them through their terrible struggle against the great
famine which has come upon them like a curse through no sins of
their own.
It is no miracle that President Kalinin can go freely about Russia, for
no one is thinking of assassinating him. What would it profit enemies
of Soviet Russia to kill a peasant like Kalinin? Are there not a million
Kalinins? To sweep the Kalinins out of Russian political life would be
like sweeping back the sea. To destroy the Soviets would be to
destroy Russia. Even Sir Paul Dukes, of the British Secret Service,
agrees that Soviets are the natural offspring of the revolution,
conceived years ago under the Tsardom. Michael Ivanovitch Kalinin
reflects the new Russia more faithfully than any other Government
official.
MADAME ALEXANDRA KOLLONTAI
AND THE
WOMAN’S MOVEMENT
KOLLONTAI
MADAME ALEXANDRA KOLLONTAI
AND THE
WOMAN’S MOVEMENT
Madame Alexandra Kollontai believes that everything which exalts is
good; being a feminist, she exalts women. She tells women that they
are capable of a new freedom, beautiful and unexampled. She is so
carried away by her enthusiasm that she is unmindful of how easily
wings are broken in this age of steel. But if her inspiration, which
aims to lift women to the skies, lifts them only from their knees to
their feet, there will be nothing to regret. Civilization, in its snail-like
progress, is only stirred to move its occasional inch by the burning
desire of those who will to move it a mile. And when faith is pure
enough it does not demand realization.
Kollontai is like a sculptor working on some heroic figure of woman
and always wondering a little why the slim, inspired, unmaternal
figure of her dreams is forever melting back into a heavy, earthy
figure of Eve.
It often happens that a character is best portrayed by conversations
which show the manner of mind. In this chapter I have quoted
Madame Kollontai at some length because she is the only articulate
voice of the new order for women which has been so greatly
misunderstood outside of Russia; that order which claims that by
consecrating oneself to the state one lives truer to oneself and to
others.
As champion of her sex, she cries to the women of Russia: “Cast off
your chains! Do not be slaves to religion, to marriage, to children.
Break these old ties, the state is your home, the world is your
country!”
And who are the women she thus extolls? They are the women of
the factories and the fields; the women who sweep the streets, who
scrub, who carry heavy burdens, who plow and weave and drudge.
Will they be able to follow her to such heights? By our logic, no, but
Kollontai preaches a new logic for Russia.
Besides, we must consider just what she means by “casting off
chains.” I have heard her say all this another way and it did not
sound so lofty or impossible. To an individualist, it did not even
sound attractive. Last summer she admonished a women’s congress
in this manner: “We must build a new society in which women are
not expected to drudge all day in kitchens. We must have, in Russia,
community restaurants, central kitchens, central laundries—
institutions which leave the working woman free to devote her
evenings to instructive reading or recreation. Only by breaking the
domestic yoke will we give women a chance to live a richer, happier
and more complete life.”
The material which Kollontai is so passionately attempting to mould
is the peasant mind. It seems to me that peasant women are
naturally slow-moving and stolidly honest and will accept only as
much of Kollontai’s philosophy as they find compatible with or
necessary to the immediate situation; not because they are lacking
in spirituality, for they are capable of deep religious fervor, but simply
because much of it would be inharmonious and artificial to their
normal development. At present her mission is to awaken them so
that they may build a truth of their own which need by no means be a
lesser truth than Kollontai’s. If she attempts to make them swallow
her formula intact she will certainly fail. If she compromises as Lenin
compromises and as Kalinin does, she will perform for Russia a
never-to-be-forgotten task. To-day everything has been melted down
in the crucible of the revolution. The only banner-bearer who counts
is the one who will give to the great mass of those emerging into the
new day the broad fundamental things of life.
Madame Kollontai is the only woman who has ever been a member
of the Russian Cabinet. She puts forth the argument that women
have more conscience than men and therefore do not attempt to
obtain offices which they are not fitted for by previous training, and
that this is the reason woman’s influence is so slight in Russia to-
day. But her history refutes her theory. She herself was particularly
fitted for the position of Minister of Welfare. Her record was splendid.
She lost her post because she was a woman and allowed her love
for her husband to interfere with her political judgment.
Early in 1918, Madame Kollontai, who was the widow of a Tsarist
officer, married Fedore Dubenko, the picturesque leader of the
turbulent Kronstadt sailors. Dubenko is a handsome, daring young
man, some years her junior. Shortly after the wedding Dubenko was
arrested. He had entrusted certain ships under his command to
officers of the old régime who had pretended loyalty to the Soviets,
but who had turned the ships over to the Germans without a
struggle. Certainly Dubenko had no intention of betraying the
revolution, he was merely trying to make use of skilled officers, of
whom there was a pressing dearth. Nevertheless, he was held
responsible.
While he was in prison awaiting trial, Kollontai made rather violent
and conspicuous protests both publicly and privately. As a result she
was removed from office. Revolutionists have no tolerance for
romance among their leaders during critical moments; they place the
revolution far above personal relationship. From the beginning they
looked with disapproving eyes upon Kollontai’s infatuation for
Dubenko.
When Dubenko was released, Kollontai went abroad and spent
some months in Sweden. On her return she threw herself into a new
work—that of educating her own sex to take an active part in politics.
Rightly speaking, there never was a woman’s movement in Russia
until after the revolution. Equal suffrage came first and political
education afterwards. This condition appears particularly curious
when one recalls that, during some years before the revolution, even
more women than men were sent to Siberia for plots against the
Tsar’s government. Yet when the revolution came women sank
mysteriously into the background. Russians explain this by various
theories. One was that Russian women possess the fervor
necessary to martyrs, but little of the balance needed for practical
reconstructive work. Personally, I think it is entirely a matter of
experience and education, for it is evident that women enter politics
everywhere with great hesitancy. Even in America where equal
suffrage has been a fact in some states for many years, we have
only one or two women to point to as having attained political
prominence.
Madame Kollontai possesses much charm. She is slim and pretty
and vivacious. With a little too much the manner of a public speaker
she talks so easily on any subject, even to reporters, that it almost
gives an impression of insincerity. Her open mind is in reality an
evidence of the kind of sincerity which has no fear of publicity. She
likes Americans and knows more about this country than most
Russians. But she has not always known. Some years ago, when
lecturing here, she happened to be in Paterson during the great
strike there. When she saw the workers marching through the
streets, she rushed into a room full of people and exclaimed: “A
revolution has begun!” Last year, in speaking of America, she said it
was the country least agitated by revolutionary thought.
Like all enthusiastic Communists, she follows Lenin’s lead in striving
to westernize Russia. One day she very greatly surprised me by
saying, “Why don’t you write a series of articles about America?
Write for Russia about America as you now write for America about
Russia.”
“What good will it do?” I asked.
“A great deal,” she replied. “It is time Russia got acquainted with
America. Because of the old censorship we never learned the value
of reporters. And now that we are through forever with isolation,
except when it is forced upon us, we ought to acquaint ourselves
thoroughly with other countries. The women ought to know, for
example, how American women got suffrage and what part women
take in public affairs. We ought to know the status of the immigrants
and of the Negroes, how you solve your unemployment problems,
the status of farmers, of city workers, the percentage of wealth
controlled by rich people. We ought to know about your schools and
colleges. It ought to be explained to us just what the real difference
is between the Republican and the Democratic Party and how much
influence the Socialist Party has. Yes, there are a thousand things
we ought to know.”
I did not write the articles, but in explaining American ideas and
institutions to Kollontai it somehow placed my country in a curious
new light in my own eyes. I began to realize that things which have
grown quite ordinary and familiar to us may appear entirely absurd
and unreasonable to foreigners. Kollontai said that she hoped
Russia would some day have reporters in America cabling home as
busily as our reporters do from Russia. Russians, she thought, have
in so many ways remained ridiculously provincial in spite of their
ideas on internationalism.
Her feminist heart was deeply touched when I told her about a group
of American women who had paraded on Fifth Avenue carrying
signs of protest against the blockade. Tears came to her eyes. “You
can’t imagine,” she said, “how much courage such a little act of
sympathy gives us. What a pity that the story of those women is not
known in Russia and not read by every peasant mother.”
She was openly indignant about the stories circulated abroad that
Russian women were “nationalized” When we first discussed this
rumor she refused to believe that anybody in America could have
seriously considered it, but when I explained about the Overman
Committee and other official and semi-official affairs, she flew into a
rage against the narrowness and prejudices of some of our
statesmen. She claimed that the simplest peasant would not believe
such indecent lies against American women. “Your senators,” she
said, “could very well have acquainted themselves with the real facts
about our women, who have always taken such a glorious part in
every movement for emancipation.
“American men,” continued Madame Kollontai, “are known the world
over as kind and chivalrous. But chivalry can be a little old-fashioned

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Business Law: Text and Cases 15th Edition Kenneth W.

Unit Six Creditors’ Rights and Bankruptcy 557

Unit Seven AGENCY AND EMPLOYMENT 623

UNIT EIGHT BUSINESS ORGANIZATIONS 705

UNIT NINE GOVERNMENT REGULATION 841

UNit Ten PROPERTY AND ITS PROTECTION 935

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Unit One Chapter 4

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Spotlight on the Seattle Mariners Criminal Procedures 207

Strict Liability 141

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

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Contracts for the International Sale of Goods 390 Chapter 24

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Chapter 27 Case 30.1 In re Baker (2012) 578

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The Securities and Exchange Commission 816 Chapter 45

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

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1.1 Sources of American Law 6 27.1 Signature Liability 520

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

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

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progress. Instructors can also communicate with Complete Series of

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