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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
9781285185248_00_fm_i-xxx.indd 15 8/28/13 2:33 PM

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:
No camera obscura ever photographed a face so distinctly, and no
curious eyes ever took in the details of the scene more perfectly.
In addition to the two lady teachers who bore a part in the early
education of James Blaine, there are four men who held a
conspicuous place as instructors in the neighboring country school
he attended, and who are remembered with gratitude to-day. These
are Albert G. Booth, Joshua V. Gibbons, Solomon Phillips, and
Campbell Beall. Mr. Booth is still living, and has doubtless rejoiced
many times that he did his foundation work so well.
Mr. Booth was one of those patient, careful, devoted workers who do
good, honest work.
Joshua V. Gibbons bore a striking likeness to Abraham Lincoln.
When an old man, he visited Mr. Blaine in Congress, at the time he
was Speaker of the House. Mr. Blaine invited him to a seat beside
him, in the Speaker’s desk. It was a worthy honor to a noble teacher,
a moment of thrilling interest to the great national assembly, and
attracted universal attention.
Mr. Gibbons was a man of heavy, strong mind, and forceful
personality, and made himself deeply and strongly felt in the
progress of young Blaine’s mental growth. He did solid, accurate,
and enduring work.
Homely people, as a general thing, have quite a fund of native
goodness, a sort of genial love and sympathy, to atone for physical
defects. Such seemed to be the case with the man who so
resembled Mr. Lincoln, and it drew all hearts to him. There was no
rod or ruler in school so long as he taught, and no need of any. Such
things are generally used in the school-room or family to supply
deficiencies of wisdom, tact, and genuine ability. He simply won their
love and respect, and it was their joy to give it. He taught them, also,
things outside of the books, and told them plenty of good,
wholesome stories. One day, in speaking about the heathen being
away round on the other side of the world, he simply remarked,—“Of
course you know the world is round,” but of course they did not.
The great eyes of James dilated, but he said nothing. He could not
help thinking and taking a child’s view of it when school was out. It
did not hurt much to fall down four or five times as he went home
that night, with his eyes upturned toward the Heavens, and the great
thought revolving in his brain. The first question his mother heard
was,—
“Is this world round, anyhow, and how is it round?”
“Yes, my child,” and the old story of the ship was told, and he was
examining the picture in the atlas when his father came in, and he
was sounded and agreed with the assured fact of science; and that
night when he went up the hill to grandfather’s house to recite
Plutarch, first of all he asked,—
“Grandpa, did you know this world was round?”
Grandpa took him up in his great arms, and told him all about it, and
showing him through the window the great round haystack, on
whose top and sides there was room for twenty boys like him without
falling off, and how “the earth keeps turning around and around all
the time, and a great power holds people on, just as the roots hold
the trees, so no one can fall off,—and the fact is, it is so big, and
large, and round, and wide, they cannot fall off,” Jimmy thought he
saw it and felt that it must be so.
But the next week when he went to Pittsburgh with Uncle Will, on the
steamer, he was looking all the way for proof that the world was
round.
But what puzzled the boy fully as much, was the grave assertion,
made without proof, that the sun does not move, when he knew that
it did rise and set. Grandpa, and his parents, and Uncle Will, had to
hold court every day until these questions were all settled, the
testimony all in, and the dreams of the young learner reflected other
scenes.
His youth had a great sorrow. No grandson was ever loved and
petted and cared for and helped in a thousand ways as his
Grandfather Gillespie had helped and loved and cared for him.
Though a man of affairs, and carrying on business operations on a
large scale and in distant parts, he loved his home and all about him,
and took special pride in this boy. The heart of James was truly won.
It was his special joy to be up at grandfather’s. It was not the big red
apple-tree, nor the great clock on the stairs, nor the old rusty sabre
and flint-lock musket, and the many relics of the Revolution that
attracted him, but grandfather himself.
But grandfather did not get up, one morning, and the doctor was
there, and nobody went to work, and there was general alarm. The
delirium of fever was on him, but his strong constitution resisted its
ravages of inward fire for days and weeks. Now he went there
oftener, walked more softly, asked more eagerly. It all seemed so
very strange. There was his great chair vacant, and the hand that
had so often lain on his head seemed void of touch and power now.
Everything seemed to stop. Books had nothing in them now; papers
were unopened. The world grew darker and darker, until one black
night, amid a terrific storm, word came that grandfather had just died,
and father and mother would not be home for some time. The sun
seemed to set to James, and he cried himself to sleep, while the
other children bewailed their loss.
The morrow was bright and clear, but full of sadness, and as he
looked upon the dear old man lying there, and felt his cold face and
hand,—he had never seen death before,—he was filled with wonder.
The loss, indeed, was great to him. But his memory was an
inspiration, and knowing what grandpa would have him do, he
returned to his study with renewed energy and to feel more than ever
the worth and power of books the departed one had prized so highly.
Solomon Phillips was a Quaker and a farmer, but a man of strong,
powerful intellect, honest as the day was long, painstaking and
persevering. Mathematics were his special delight. It is a triumph of
skill in teaching to love a hard, difficult science so as to get others to
love it, also. In this he succeeded. He felt its worth and power. He
would divide 0 by 1 (zero by one), and get infinity, and sit and gaze
out into its clear, white depths; and reversing the process he would
divide one by zero, and get the same result, and again gaze upon
the white depths of a world most beautiful to thought, in its clear,
unclouded, not nothingness, but somethingness, and that something
infinity. He seemed almost to worship at the shrine of this kingly
science, and would tell again and again how brilliant and beautiful,
and with what delightful accuracy, the labyrinths of the most gnarled
and vexed problems opened to him.
This was the man to give Master James his great lift in preparation
for college.
He followed promptly wherever the Quaker master led the way.
Week after week, and month after month, and term after term, the
drill went on. There were no bounds or limits then, as in academies
now, so these were passed as ships pass the equator, or railroad
trains pass state or county lines. Hard study was the work of the
hour, but hard study made work easy, and this was the secret, of all
his progress,—constant study brought constant victory.
When his Grandfather Gillespie died, his father took up the drill in
history, and Hume’s England was gone over carefully, beside
Marshall’s Life of Washington and a volume of Macaulay’s Essays
which he got hold of as a young boy.
His father had a fine, large library, in which he delved by day and
night, and aroused his son not only by example to constant
application, but also by persistent pressure. Here is the real key to
that early career of youthful days so thoroughly utilized,—the father’s
intelligent watchfulness, and careful method, and constant direction.
Only gauge the wheel to the stream, and the grist to the wheel, and
there will be no danger.
The father determined his son should be educated to the utmost,
and planned and wrought accordingly. No time was lost, and no
undue haste made; it was the persistency of constant pressure that
won the day.
His boyhood was a happy, healthy period. He could swim across to
Brownsville, discarding both ferry and bridge.
He went nutting with the boys, as is their wont when autumn days
are on the woods, and Nature, glorified with a thousand tints of
foliage, is, in the poet’s sombre language, “in the sere and yellow
leaf.” Black walnuts, butternuts, shellbarks, hickory nuts, and
chestnuts rewarded their search, and gladdened winter evenings
with their cheer.
There was nothing unnatural about young Blaine. He was no
prodigy; no marvel, except of industry and constant training. He was
simply a fair exhibition of what a good average boy, well endowed
with pluck and brains may become in the hands of good teachers,
and under the guidance of intelligent love and the unyielding
pressure of a strong paternal will. What his Eulogy says of Garfield is
equally true of himself:—“He came of good stock on both sides;—
none better, none braver, none truer. There was in it an inheritance
of courage, of manhood, and of imperishable love of liberty, of
undying adherence to principle.”
Mr. Blaine could also speak of himself as “fifth in descent from those
who would not endure the oppression of the Stuarts,” and had fought
under Prince Charles in the affair of 1715 and 1723.
So satisfactory had been his progress thus far in the school, that the
plan of his education involved, in 1841, sending him to Lancaster,
Ohio, where for one term he was in a school taught by a younger
brother of Lord Lyons, so long our Minister from England, who
according to English law inherited nothing from his father’s estates,
the eldest brother receiving all; and so he made his home in the New
World, and worthily engaged in training future presidents of the great
Republic.
During his term in Lancaster his home was in the family of Hon.
Thos. Ewing, his mother’s cousin. Mr. Ewing was a United States
Senator when James was born, and entered the Cabinet of
President Harrison the year before James’s appearance there as
student, as Secretary of the Treasury, and in 1849 in Taylor’s
Cabinet as Secretary of the Interior, both of whom died soon after
their inauguration. In 1849 Governor Ford appointed him to the
Senate in the place of Hon. Thomas Corwin, who entered Fillmore’s
Cabinet.
This first and only term of school away from home and out of that
little country school-house in preparation for college, under the
broadening influences of such a home and the inspiration of such a
teacher, was a long stride forward toward the desired goal. It was a
great journey in those days for a boy only eleven years old to make,
but it added another large chapter to his already wide range of
knowledge and experience.
The other James, only a year younger, was living with his mother in
the woods of Orange, in the same state of Ohio, improving the
modest privileges of school, and maturing slowly, the winter James
G. Blaine spent at Lancaster in the spacious home of that distant
relative who had enjoyed all the high honors of the government, next
to the presidency.
These boys were probably not over one hundred miles apart that
winter, and both at school,—investing more largely in themselves
than in all besides, using themselves as capital, their own powers
and endowments. Surely no course is wiser, as their careers amply
prove. It is gathering what is outside that one may get out what is
inside, that is the process of education; not getting what is outside
regardless of what is within, that may be developed into treasures of
transcendent worth, more valuable than the contents of forest and
mine.
American history furnishes few examples of the practical value of
cultivated brain more illustrious and potent than James A. Garfield
and James G. Blaine, and each the opposite in temperament and
opportunity, but both brought up on a farm, and both getting their first
start up the hill of knowledge in a country school.
Where are the two boys who, forty or fifty years from now, will take
the helm of state and guide the ponderous ship farther on her
tireless voyage?
No ever-recurring problem for the nation’s wisdom and the nation’s
choice, is greater than this one problem of presidents. It is the
nation’s offer of greatness and renown to any boy who, through long
years of patient and persistent endeavor, will seek full and honorable
preparation for the prize she proffers.
The brief stay at Lancaster was soon over, and James once more
harnessed into the old régime at home, with Campbell Beall for
teacher, in the same old house that seven years before he entered, a
boy of five years old.
In one year he is to pass his examination to enter Washington and
Jefferson College, in the village of Washington, their shire-town of
three thousand inhabitants, twenty-four miles away. Will he be
ready? Much depends on Campbell Beall, much on his father, and
much on himself.
The common English branches are well wrought over, languages
and mathematics have come to be a delight, and in the old
atmosphere, and the old ways, with the old inspiration on him,
progress comes anew. Lines of reading from the library are kept up;
the papers and magazines are not neglected; political matters are
settled; bad news comes in from every quarter; Tyler is at the head
of affairs; Ewing has sent in his scathing letter of resignation as
Secretary of the Treasury, charging him with violating every promise
the Whig party made to the people; but there is no campaign, no
voting to be done, so the thing is settled.
Mr. Beall proves a good teacher. The Latin begun at Lancaster is
renewed at home, and so the winter goes by. Time seems literally to
be alive and drifts like the snow as it goes rushing by. As Benj. F.
Taylor has it:—
“How the winters are drifting like flakes of snow,
And the summers, like buds between;
And the year, in its sheaf, so they come and they go
On the river’s breast, with its ebb and its flow,
As it glides thro’ the shadow and sheen.”
Father, mother, teacher, Uncle Will, all seem convinced that James
can pass and enter college; so, though only thirteen years of age, his
father takes him in the carriage, and they drive over to Washington.
It is a great experience for older heads, but for one so young, a
veritable epoch in his history.
It does not take long to convince the president that he has drawn a
prize, and he is entered with about forty other bright, smart boys, for
the Freshman class in the autumn. After three months of vacation,
the great work is to begin in real earnest, and the stuff those boys
are made of is to be thoroughly tried and tested.
There was none of the hard, rough, and bitter experience in his
boyhood days and early manhood to which so many of our nation’s
great men were subjected. He had none of the long and desperate
struggles with poverty and adversity which hung on Mr. Garfield’s
early years. He knew nothing, by experience, of the privations and
hardships through which Mr. Lincoln came to the high honors of the
nation and the world, but sprang from the second generation after
the Revolutionary war, and from a long line of ancestors who had
been large land-owners and gentlemen, in the sense of wealth and
education, as well as in that finely cultivated.
III.
IN COLLEGE.
HE summer of 1843 was bright with the anticipations of

college life to the eager boy. Manhood seemed dawning
upon him, in all its glory. Since his examinations, the great
Dr. McConaughy had grasped his hand so kindly and
drawn him to his side; then putting his arm around him had said, as
he brushed the long, light hair from his forehead,—
“You are a brave boy; I am glad to see you and know you. We shall
have a good place ready for you September third, and I shall be glad
to see you in my home.”
The president of Washington and Jefferson College could appreciate
to the full the fact before him, that this boy, without the aid of high
school or academy, was more than ready for the studies and honors
of college.
Washington and Jefferson College
The three months of summer were not lost. A general review was
had, and particular attention paid to toning him up physically. He
would plunge into the river and swim to his heart’s content; dash
away on horse-back for a good ride; go over to Brownsville, where
they all did their trading, on errands, and regularly for the papers and
magazines; go on excursions up and down the river, and, withal,
help in the field, especially at harvest-time, and fill up regular hours
with his best endeavors at study. So that he was not rusty and
broken in habit, when September came; and it came very soon. His
going to college was quite an event for the community. The
neighbors took pride in it, for James was greatly beloved. His
exploits with books were known to all. Teachers had reported his
progress and rejoiced in it.
It took a long while to say all the good-byes, but early Monday
morning he was off, and soon nicely settled in a good boarding-
place, and when the great bell rang out the beginning of new school-
year, James G. Blaine was in his place taking in the situation in all its
magnitude and interest.
There were one hundred and seventy-five scholars present, all boys
and young men. There was a young ladies’ school, or seminary, in
another part of the town, but they were entirely separated, and boys
and girls were not mingled together, as now in some of our colleges.
James devoted himself strictly to study, and retired promptly at ten
o’clock each night. He found himself in a large class of bright,
energetic students, full of pranks, jokes, and fun, but still boys of
nerve, and pluck, and ample brain; boys who had been well fitted for
the task before them, many of them in the preparatory department of
the institution itself, so that they were familiar with the place, and had
known each other for several years. They were not long in finding
that the new boy, who came from down near the big bridge, knew
about Greek and Latin grammars, and could read without difficulty
when his turn came.
He did not have the town-boy sort of look that many of the others
had, but his good manners, and kind, easy ways made them feel and
acknowledge that he was a little gentleman, anyhow. His mother had
never neglected her boy, and his father, being a professional man,
knew the joy and worth of being a gentleman; and, if they had done
but little, his grandfather had planted seeds of kindness in him
enough to produce a bountiful harvest. He moulded and shaped his
ways and manners to the clear, strong model that was never wanting
in the old Scottish clans and seems to remain in the very blood and
very atmosphere of life and character.
There was nothing brusque or acrid about him. He took on and wore
the air and atmosphere of the enlightened, quiet, and cultured home-
life in which he was brought up. He was modest and retiring, there
for a purpose, and devoted to its accomplishment. It was not hard,
distasteful work to him, but a loved and longed-for opportunity. He
had no ills or aches to nurse, or trouble him. He felt greatly the
absence from home. But he was not off in Ohio now, only four and
twenty miles from old, familiar Indian Hill farm. But his books
absorbed him; study roused and cheered him; competition electrified
and nerved him. Nothing would sting him like missing a question, or
any petty failure. But these were few and simple. He took first rank at
once, and held it steadily to the end.
His life at college was a comparatively quiet one. He never appeared
upon a public exhibition, although he entered the societies, and took
part in debates, read essays, contributed to the college paper, and
delivered orations.
He was rather retiring in his disposition, and sought rather to be a
worshiper at the shrine of knowledge, than as is so often the case,
be worshiped.
The quiet reticence and reserve referred to may strike some, owing
to their knowledge of his dashing brilliancy of later years. But as a
surprise, the modest, unobtrusive habit was happily conducive to
study, and served as a guard against many of the intrusions of a
student’s life. While kind and affable, he was not of the hail-fellow-
well-met order. But he was not a recluse,—no monk with monkish
ways. He was a student, through and through, and he loved study; it
satisfied him and served his aspirations.
He was a boy no longer; he had come to himself, to self-
consciousness; a consciousness of his powers, to a recognition of
his own personal identity. Manhood was fast coming on him; he was
out of childhood. It was a new world in thought to him, and life at
college a new world in fact. He was respected and honored and
trusted now, in a sense different from being loved and petted and
cared for at home. There was not so much praise, but more power in
it. He was on his own responsibility now, and must rely largely upon
his own resources. Manliness was the needful quality. It was
everywhere in demand. At study it was the prelude to victory; in the
recitation-room it was the well-poised harbinger of success, and in
association with others it always won. This was just the quality that
those who loved him had sought to develop in him, and they had not
failed. He would take hold of the hardest task with a marvelous
energy of resolve. His will was a strong feature of his personality. It
was an element of power that served him now. He had reached a
long-sought height and was pushing on.
Good teachers are not long in finding good scholars in a new class.
They look for them as a miner watches for gold, and prize them as
highly. There was such a teacher in the faculty at Washington, and to
Professor Murray Mr. Blaine feels a deep and lasting debt of
gratitude.
Like all good teachers, he felt the dignity and power of his
profession. He could help the weakest into strength, and put a
window in the darkest mind by his varied questionings, illustrations,
suggestions, and explanations. He was quiet, but forceful, genial, but
severe if laziness or wanton disregard showed its hydra head. In his
own peculiar way, by virtue of an immense personality, he would light
up and enthuse a whole class-room.
The Professor found in young Blaine a pupil to his mind, and James
found in the teacher just the man of his heart. He learned to love
him. A genuine teacher can incarnate himself in his pupils, just as
Napoleon seemed to reproduce himself in his armies, firing them
with his spirit, arming them with his purpose, so that they would
move with the solid impetuosity of his own daring, scaling the Alps,
triumphing at Austerlitz, until they came to look, and breathe, and act
him out long after; but Professor Murray was training men and
citizens of the great Republic. His was a solemn, sacred work, of
grave responsibility. It was worthy of life and manhood’s strength and
prime, as the great ideals which burned in the heat of his glowing life
fully assured him.
To sit in such a light, to dwell in such a presence, was to be lead
over the fields of conquest by the hand of Alexander after he had
conquered the world. No wonder this man is loved and honored, and
his memory cherished sacredly.
Outside of the regular college course, Mr. Blaine read through the
New Testament in Greek with him three times. This was a Sunday
Bible-class exercise, and shows how deeply his mind became
imbued with the truths of the Christian religion, which have since
made him a devoted member of the Congregational Church in
Augusta, Maine.
James was no book-worm in college. He was a severe, close
student. This was his chief business there. He was on his honor, and
loved his work, and so did it well.
Prof. E. B. Neely, superintendent of schools in St. Joseph, Mo., an
old class-mate, says of him:—
“James G. Blaine was always looked up to as a leader, by his class-
mates, being universally recognized as such. While a close student,
he was genial in his habits, and decidedly popular with all, being the
very reverse of what is known as a book-worm.”
This is just what those who know him now have reason to expect
was the case, and yet it is very remarkable, from the fact that he was
seventeen and a half years of age when he graduated, and in a large
class of thirty-three, seventeen of whom entered the Christian
ministry.
At the end he was one of those to divide the honors of his class, and
here again we are indebted to Professor Neely.
“Third, by reference to my class-book you will see that at the time he
graduated Mr. Blaine was given the second of the three honors of
the occasion. The first, the Latin salutatory, was delivered by Jno. C.
Hervey, of Virginia; the second, English salutatory, by James G.
Blaine, of Pennsylvania; and the third, Greek salutatory, by T. W.
Porter, of Pennsylvania.”
When Mr. Blaine graduated he delivered a masterly oration, most of
which he can speak to-day, after a lapse of thirty-seven years. The
subject was,—“The Rights and Duties of American Citizens.” How
fitting such a theme for such a man, and how admirably it shows his
trend of mind!
During his course at college, in 1844, occurred the great campaign
of Henry Clay. It had been Mr. Blaine’s privilege to meet Mr. Clay,
and he took the liveliest interest conceivable in the contest. He was a
very positive man, decided and aggressive, especially in his political
opinions. Of course the great question of the day was debated in the
college-society, and Mr. Blaine was on hand. He usually was on such
occasions, and had a large part in the discussion. He was so well
read in the history of the country and of parties, had entered so into
the merits of the campaign of General Harrison, four years before,
that with all his growth and acquisitions since, he was well qualified
to take his position and maintain it against all who chose a tilt with
him. His was the force of accumulated strength, the weight of
reserved power. He was so full of his subject, that it seemed to
require no effort to bring out the facts and figures and formulate the
arguments that demolished his antagonist. He joined, as if by
instinct, the fresh young Whig party of progress and of power. Clay
was their idol, and this was the hour of his destiny. No young life was
ever given with more ardent devotion to any cause than did the
young collegian give heart and thought, sympathy and endeavor, to
the star so surely rising. He lead in the fight among the boys, and
won the day; and wherever voice or influence could reach, he
energized others with the wholesome truths of political equity,
justice, and common sense that filled his soul. No wonder his theme
on Commencement day was so near the nation’s life. It was near his
heart, and so his first great triumph was celebrated by considering,
back in those times of the slave-power, Rights and Duties of
American Citizenship.
Washington and Jefferson College was famous in those days for
sending forth great men. It was a great institution of the times.
Indeed, it was two colleges united. Jefferson College had been
located at Connersburgh, some four miles distant, and was merged
into Washington College at Washington.
This gave increased advantage in picked teachers, fuller
endowment, larger classes, and better appliances. To go to such an
institution, a mere boy and a total stranger, and take the lead and
keep it through his entire course, argues for the mental power and
furnishing of the boy, as well as his other qualities of heart and
character. He led his class in mathematics, as a fellow-student
testifies, and thus showed the unabated influence of his old Quaker
teacher, Solomon Phillips.
The college-library was a great resort for him, a sort of second
home. Here he could delve, with no thought of time or weariness. It
was his delight and joy. Books seemed a part of him; he was seldom
without them, and yet he utilized, by good mental digestion and
strong powers of assimilation, the substance of what he read. He
ranged over a wide field, principally of English works then, as works
of American authors were comparatively few. Indeed, it is only within
the last quarter of a century the sneer, “Who reads an American
book?” has ceased to sting. Vacation was his busiest time with
books. He was never empty, but always full.
But all his study and meditation; all his reading, thought, and
observation; all he had gleaned, gathered, and garnered from books,
teachings, and associations; all that had come to him from
newspapers, periodicals, travel, great men, found their fitting and
powerful culmination in the great oration he delivered on
Commencement day, in June, 1847. It was sound and convincing,
patriotic and manly, and would do credit to any graduate to-day,
though twice his age. It was the key-note of a life-long career, which
has ever since been urging in a most potent way the rights, and
discharging the duties of American citizenship.
IV.
TEACHING IN KENTUCKY.
HE world opened grandly to young Blaine at his graduation.

His college course had been a triumph, his reception home
an ovation. The heart of the great class beat with his; their
hopes were justly high, and high especially for him whom
they had learned to love and honor. His power to make friends and
hold them was remarkable. Those who knew him best loved him
most.
One who knew so much of the world must see some of it, and as yet
he had traveled but little; but a good rest is taken, and the summer
spent at home. Old, familiar scenes are viewed through larger eyes.
Books are reviewed, fresh volumes read; the news, home and
foreign, is seized with a new avidity by one whose business of life is
just beginning. As yet, though, he has not been earning money, he
has gained something he can never lose, and that can never be
stolen or borrowed from him. It is his fortune; his father’s wise plan
has been carried out, and he is ready for business now. A call comes
for a teacher in Blue Licks Military Academy, at Georgetown,
Kentucky, and he is selected and recommended by the faculty for
the place. He has never taught an hour. Shall he go? He knows
enough, has good command of himself, and from careful
observation, a fair knowledge of methods. He believes he can do it,
for, as yet, he has never failed, and has always been able to make
himself understood, whether in private conversations and
discussions, or society debates in college.
The question is decided. He is to receive a salary of five hundred
dollars a year, while boys of his age are working for eight and ten
dollars a month. It is a man’s work. He is to start September first,
and he will not be eighteen years old until January. There is not a
hair on his face. But there is a man within, strong in manly powers,
and rich in stores of knowledge.
He had a fine address, clear and strong of speech, large lustrous
eyes, fine conversational powers, and in all respects, of good
appearance. His youth was in his favor, since it made his
accomplishments all the more marvelous. He had been well written
up and highly recommended before going, so that anticipations were
high on both sides.
It was harder than ever to say good-bye, especially for mother and
son, but it must be done. They recalled the time when their
ancestors left native land across the seas, to come to this country,
and were reconciled. His father and Uncle Will tried the name of
Professor on him before he started, and it seemed to fit, though at
first it startled him. It weighed him down with the gravity of his
position, and drove the last remnant of pedantry from him. He
declined a tall hat and discarded a cane. He was simple, genuine,
and true, and went for just what he was worth.
The trip to Pittsburgh, and down the river to Louisville, and out to
Georgetown by public conveyance, was full of interest to him,
because it was his country he was seeing. A steam-boat explosion,
and talk of an insurrection among the negroes, made him a little
nervous. But the fact that he was going to the state of Henry Clay,
gave him a sort of home feeling, and made him feel they were his
sort of folks, and then some of the students were from down that
way, and he had met several of the public men from Kentucky,
besides Mr. Clay.
There happened to be an old Jacksonian Democrat in the stage-
coach, who had been attracted to the young professor by his manly
bearing, his quiet urbanity, which cost him no effort, and especially
by his politeness in giving a lady from the Blue Grass region a back
seat, insisting “that she take it” in a most gentlemanly manner, while
he took a far less comfortable one, riding backward. This brought
him face to face with a full-blooded Kentuckian of the old type.
“You are a native of the soil, I take it, sir?”
“Yes, sir, but not of this state.”
“Of what state, may I ask?”
“The Keystone state of Pennsylvania, sir,” with a suppressed air of
pride.
“Indeed, then you are from the North?”
“Yes, sir.”
“Clay has a good many friends up there, has he not?”
“Yes, sir, a great many.”
“Well, it was an awful whipping he got.”
“Yes, and he did not deserve it.”
“Didn’t deserve it?”
“I think not; he is a royal man, and would have made an excellent
president, in my judgment.”
“If he had not been a Whig; that spoils him. Strange how much good
and smartness a man may have, and not have good sense.”
“But he has good sense, in my judgment, if you will pardon me.”
“Young man, slavery is a Divine institution. That is fixed; the Bible
decides that!”
These words were said with great emphasis.
“Then what of the Declaration of Independence; does that conflict
with the Bible? Is that a Divine institution?”
The man was puzzled, but finally said,—
“Well, the Bible don’t have to agree with everything.”
James had just finished the study of the Constitution, of Political
Economy, of Moral Science, was thoroughly posted regarding
political parties and all the great questions of the day, and slavery
had a black, villanous look to him. Some of the sights he had
witnessed had roused his blood, and taking it altogether he was
ready for quite a campaign.
He had never been placed under any particular restraint, but had
talked right out the best he knew how, and so followed the person up
who encountered him pretty closely, until the questions were all
answered to their satisfaction, and a few difficult ones asked to his
satisfaction. But when the identical lady whom he had favored with a
seat, asked right out,—“Would you marry a nigger?” he seemed
lifted from his moorings all at once, and replied almost instantly,
without inspecting his words,—“No, ma’am, would you?” A fair
amount of indignation was in the air, without any perceptible delay,
and sundry epithets, so common in those days, such as “nigger-
lover,” “nigger-stealer,” and “black abolitionist,” found expression.
James’ only apology was,—
“Madame, I only asked you the very respectful and lady-like question
you had so kindly asked me.”
“I admire your courage and independence of character, sir,” said a
young lady opposite, with some warmth, who, though rather large,
and with a look of rare intelligence, and a voice of peculiar
sweetness and volume, was evidently still in her teens,—possibly
sweet sixteen, in its fullest glory.
The driver stopped at the foot of a big hill, and, as was their privilege,
several passengers got out to walk up the hill. James was among
their number. It was a real relief to be in the open air.
“Give us your hand, young man,” said a fellow-passenger, as the
stage passed on. “I like yer pluck; brains is good, but it ain’t much
without pluck. I tell you, you sot the truth right home that time. You
are a right smart kind of a boy. Do they raise meny sich up in the old
Keystone or Yellowstone—What did you call it? I reckon that that
Missis was right down put out when you axed her what she axed
you. But, then, they do say a heap of jokers don’t like to be joked.
But my rule is, tit-for-tat. I tell you, a little nip and tuck now and then

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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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HE summer of 1843 was bright with the anticipations of

HE world opened grandly to young Blaine at his graduation.

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