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Busi n e ss L aw
Te x t a nd C a se s

Fifteenth Edition

Kenneth W. Clarkson
University of Miami

Roger LeRoy Miller


Institute for University Studies
Arlington, Texas

Australia • Brazil • Mexico • Singapore • United Kingdom • United States

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Business Law: Text and Cases, © 2021, 2018 Cengage Learning, Inc.
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Kenneth W. Clarkson Unless otherwise noted, all content is © Cengage.
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Brief Contents

Unit One The Legal Environment of Business 1


Chapter 1 Law and Legal Reasoning 2
Chapter 2 Business and the Constitution 26
Chapter 3 Ethics in Business 44
Chapter 4 Courts and Alternative Dispute Resolution 65
Chapter 5 Court Procedures 86

Unit Two Torts and Crimes 111


Chapter 6 Tort Law 112
Chapter 7 Strict Liability and Product Liability 134
Chapter 8 Intellectual Property Rights 150
Chapter 9 Internet Law, Social Media, and Privacy 170
Chapter 10 Criminal Law and Cyber Crime 187

Unit Three Contracts and E-Contracts 215


Chapter 11 Nature and Terminology 216
Chapter 12 Agreement 231
Chapter 13 Consideration 250
Chapter 14 Capacity and Legality 263
Chapter 15 Mistakes, Fraud, and Voluntary Consent 280
Chapter 16 The Writing Requirement 294
Chapter 17 Third Party Rights 309
Chapter 18 Performance and Discharge 324
Chapter 19 Breach of Contract and Remedies 339

Unit Four Domestic and International Sales and Lease Contracts 359
Chapter 20 Sales and Lease Contracts 360
Chapter 21 Title, Risk, and Insurable Interest 386
Chapter 22 Performance and Breach of Sales and Lease Contracts 403
Chapter 23 Warranties 424
Chapter 24 International and Space Law 437

Unit Five Negotiable Instruments 461


Chapter 25 Negotiable Instruments 462
Chapter 26 Transferability and Holder in Due Course 478
Chapter 27 Liability, Defenses, and Discharge 496
Chapter 28 Banking 514

iii
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iv Br ief Con t ent s

Unit Six Creditors’ Rights and Bankruptcy 537


Chapter 29 Creditors’ Rights and Remedies 538
Chapter 30 Secured Transactions 554
Chapter 31 Bankruptcy Law 577

Unit Seven Agency and Employment 603


Chapter 32 Agency Formation and Duties 604
Chapter 33 Agency Liability and Termination 620
Chapter 34 Employment, Immigration, and Labor Law 639
Chapter 35 Employment Discrimination 662

Unit Eight Business Organizations 687


Chapter 36 Small Businesses and Franchises 688
Chapter 37 All Forms of Partnerships 703
Chapter 38 Limited Liability Companies and Special Business Forms 723
Chapter 39 Corporate Formation and Financing 739
Chapter 40 Corporate Directors, Off icers, and Shareholders 759
Chapter 41 Mergers and Takeovers 778
Chapter 42 Investor Protection, Insider Trading, and Corporate Governance 794

Unit Nine Government Regulation 821


Chapter 43 Administrative Agencies 822
Chapter 44 Consumer Law 839
Chapter 45 Environmental Protection 856
Chapter 46 Antitrust Law 871
Chapter 47 Professional Liability and Accountability 890

Unit Ten Property and Its Protection 915


Chapter 48 Personal Property and Bailments 916
Chapter 49 Real Property and Landlord-Tenant Law 935
Chapter 50 Insurance 957
Chapter 51 Wills and Trusts 973

Appendices
A How to Brief Cases and Analyze Case Problems A–1
B Answers to the Issue Spotters A–4
C Sample Answers for Business Case Problems with Sample Answer A–13

Glossary G–1
Table of Cases TC–1
Index I–1

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Contents

Unit One Chapter 4


The Legal Environment of Business 1 Courts and Alternative Dispute Resolution 65
The Judiciary’s Role in American Government 65
Chapter 1 Basic Judicial Requirements 66
Case Analysis 4.1 Mala v. Crown Bay Marina, Inc. 68
Law and Legal Reasoning 2 Spotlight on Gucci
Business Activities and the Legal Environment 2 Case 4.2 Gucci America, Inc. v. Wang Huoqing 70
Sources of American Law 3 The State and Federal Court Systems 73
The Common Law Tradition 6 Case 4.3 Johnson v. Oxy USA, Inc. 74
■ Ethics Today: Stare Decisis versus Spider-Man 9 ■ Managerial Strategy: Should You Consent to Have Your
Schools of Legal Thought 11 Business Case Decided by a U.S. Magistrate Judge? 76
Classifications of Law 12 Alternative Dispute Resolution 79
How to Find Primary Sources of Law 13 International Dispute Resolution 82
How to Read and Understand Case Law 16
Chapter 5
Chapter 2 Court Procedures 86
Business and the Constitution 26 Procedural Rules 86
The Constitutional Powers of Government 26 Pretrial Procedures 88
Classic Case 2.1 Heart of Atlanta Motel v. United States 28 ■ Digital Update: Using Social Media for Service of
Business and the Bill of Rights 30 Process 90
■ Digital Update: Does Everyone Have a Constitutional Right Case Analysis 5.1 Espresso Disposition Corp. 1 v. Santana Sales
to Use Social Media? 32 & Marketing Group, Inc. 91
Case 2.2 Animal Legal Defense Fund v. Wasden 33 Case 5.2 Lewis v. Twenty-First Century Bean Processing 93
Spotlight on Beer Labels Case 5.3 Klipsch Group, Inc. v. ePRO E-Commerce Limited 96
Case 2.3 Bad Frog Brewery, Inc. v. New York State The Trial 99
Liquor Authority 35 Posttrial Motions 101
Due Process and Equal Protection 39 The Appeal 102
Privacy Rights 40 Enforcing the Judgment 103
Unit One Task-Based Simulation 107
Unit One Application and Ethics:
Chapter 3
“Arbitration, No Class Actions” 108
Ethics in Business 44
Ethics and the Role of Business 44 Unit Two
■ Digital Update: Should Employees Have a “Right of
Disconnecting”? 47 Torts and Crimes 111
Case 3.1 Al-Dabagh v. Case Western Reserve University 48
Ethical Principles and Philosophies 49 Chapter 6
Sources of Ethical Issues in Business Decisions 52
Tort Law 112
Case 3.2 Watson Laboratories, Inc. v. State of Mississippi 53
Making Ethical Business Decisions 55 The Basis of Tort Law 112
Business Ethics on a Global Level 58 Intentional Torts against Persons 113
■ Ethics Today: Applying the IDDR Framework 59 Case Analysis 6.1 Blake v. Giustibelli 115
Appendix to Chapter 3: The Costco Code of Ethics 64 ■ Digital Update: Revenge Porn and Invasion of Privacy 119

v
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vi Con t ent s

Intentional Torts against Property 122 Chapter 10


Unintentional Torts—Negligence 124 Criminal Law and Cyber Crime 187
Case 6.2 Bogenberger v. Pi Kappa Alpha Corporation, Inc. 125
Defenses to Negligence 128 Civil Law and Criminal Law 187
Spotlight on the Seattle Mariners Criminal Liability 189
Case 6.3 Taylor v. Baseball Club of Seattle, LP 129 ■ Digital Update: Using Twitter to Cause Seizures—
A Crime? 189
Case 10.1 United States v. Crabtree 190
Chapter 7
■ Managerial Strategy: The Criminalization of American
Strict Liability and Product Liability 134 Business 192
Strict Liability 134 Types of Crimes 193
Product Liability 135 Spotlight on White-Collar Crime
Case Analysis 7.1 Schwarck v. Arctic Cat, Inc. 136 Case 10.2 People v. Sisuphan 195
Strict Product Liability 137 Defenses to Criminal Liability 199
Case 7.2 Stange v. Janssen Pharmaceuticals, Inc. 140 Criminal Procedures 201
■ Managerial Strategy: When Is a Warning Legally Cyber Crime 204
Bulletproof? 142 Case Analysis 10.3 United States v. Warner 205
Defenses to Product Liability 143 Unit Two Task-Based Simulation 211
Case 7.3 VeRost v. Mitsubishi Caterpillar Forklift America, Inc. 144 Unit Two Application and Ethics:
One of the Biggest Data Breaches Ever 212
Chapter 8
Intellectual Property Rights 150
Unit Three
Trademarks and Related Property 150 Contracts and E-Contracts 215
Classic Case 8.1 The Coca-Cola Co. v. The Koke
Co. of America 150
Case 8.2 Headspace International, LLC v. Podworks Corp. 152 Chapter 11
■ Global Insight: ALEVE versus FLANAX—Same Pain Killer, Nature and Terminology 216
But in Different Countries 154
Patents 157 An Overview of Contract Law 216
Copyrights 159 Elements of a Contract 217
Case Analysis 8.3 Winstead v. Jackson 161 Case Analysis 11.1 Weston v. Cornell University 218
Trade Secrets 164 Types of Contracts 219
International Protection for Intellectual Property 164 Case 11.2 Boswell v. Panera Bread Co. 220
Quasi Contracts 223
Interpretation of Contracts 225
Chapter 9
Spotlight on Columbia Pictures
Internet Law, Social Media, and Privacy 170 Case 11.3 Wagner v. Columbia Pictures Industries, Inc. 226
Internet Law 170
Spotlight on Internet Porn Chapter 12
Case 9.1 Hasbro, Inc. v. Internet Entertainment
Agreement 231
Group, Ltd. 173
Copyrights in Digital Information 174 Elements of Agreement 231
■ Digital Update: Riot Games, Inc., Protects Its Online Video Classic Case 12.1 Lucy v. Zehmer 232
Game Copyrights 175 Spotlight on Amazon.com
Case 9.2 BMG Rights Management (US), LLC v. Cox Case 12.2 Basis Technology Corp. v. Amazon.com, Inc. 234
Communications, Inc. 176 ■ Digital Update: Can Your E-Mails or Instant Messages
Social Media 178 Create a Valid Contract? 238
Online Defamation 180 Agreement in E-Contracts 240
Other Actions Involving Online Posts 181 Case 12.3 Bailey v. Kentucky Lottery Corp. 242
Case Analysis 9.3 David v. Textor 182 U.S. Laws Affecting E-Contracts 245
Privacy 183 International Treaties Affecting E-Contracts 247

Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Copyright 2021 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.
C o n te n ts vii

Chapter 13 Chapter 17
Consideration 250 Third Party Rights 309
Elements of Consideration 250 Assignments and Delegations 309
Classic Case 13.1 Hamer v. Sidway 250 Case 17.1 Bass-Fineberg Leasing, Inc. v. Modern Auto Sales, Inc. 312
Case 13.2 Cincinnati Reds, LLC v. Testa 252 Case 17.2 Mirandette v. Nelnet, Inc. 314
Agreements That Lack Consideration 254 Third Party Beneficiaries 316
Settlement of Claims 256 Case Analysis 17.3 Bozzio v. EMI Group, Ltd. 317
Spotlight on Nike
Case 13.3 Already, LLC v. Nike, Inc. 257 Chapter 18
Exceptions to the Consideration Requirement 258 Performance and Discharge 324
Conditions 324
Chapter 14
Discharge by Performance 325
Capacity and Legality 263 Classic Case 18.1 Jacob & Youngs v. Kent 327
Contractual Capacity 263 Case Analysis 18.2 Kohel v. Bergen Auto Enterprises, L.L.C. 328
Case 14.1 PAK Foods Houston, LLC v. Garcia 264 Discharge by Agreement 330
Legality 268 Case 18.3 DWB, LLC v. D&T Pure Trust 332
Case 14.2 Kennedy v. Shave Barber Co. 270 Discharge by Operation of Law 333
Case Analysis 14.3 Holmes v. Multimedia KSDK, Inc. 273 ■ Ethics Today: When Is Impossibility of Performance a
■ Managerial Strategy: Creating Liability Waivers That Are Valid Defense? 334
Not Unconscionable 275
Chapter 19
Chapter 15 Breach of Contract and Remedies 339
Mistakes, Fraud, Damages 339
and Voluntary Consent 280 Case Analysis 19.1 Baird v. Owens Community College 340
Spotlight on Liquidated Damages
Mistakes 280
Case 19.2 Kent State University v. Ford 344
Fraudulent Misrepresentation 282
Case 15.1 McCullough v. Allstate Property and Casualty
Equitable Remedies 345
Case 19.3 Cipriano Square Plaza Corp. v. Munawar 346
Insurance Co. 282
Case Analysis 15.2 Cronkelton v. Guaranteed Construction
Recovery Based on Quasi Contract 349
Services, LLC 285
Waiver of Breach 350
■ Digital Update: “Catfishing” and Fraudulent
Contract Provisions Limiting Remedies 351
Unit Three Task-Based Simulation 355
Misrepresentation 287
Unit Three Application and Ethics:
Case 15.3 Fazio v. Cypress/GR Houston I, LP 288
Nondisclosure Agreements 356
Undue Influence 289
Duress 289
Adhesion Contracts and Unconscionability 290
Unit Four
Chapter 16 Domestic and International
The Writing Requirement 294 Sales and Lease Contracts 359
The Statute of Frauds 294
Contracts That Require a Writing 294 Chapter 20
Case Analysis 16.1 Sloop v. Kiker 295
Exceptions to the Writing Requirement 298
Sales and Lease Contracts 360
Sufficiency of the Writing 300 The Uniform Commercial Code 360
Case 16.2 Moore v. Bearkat Energy Partners, LLC 301 The Scope of Articles 2 (Sales) and 2A (Leases) 361
The Parol Evidence Rule 302 ■ Digital Update: Taxing Web Purchases 363
Case 16.3 Frewil, LLC v. Price 303 The Formation of Sales and Lease Contracts 365
The Statute of Frauds in the International Context 305 Case 20.1 Toll Processing Services, LLC v. Kastalon, Inc. 365

Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
viii Con t ent s

Case 20.2 C. Mahendra (N.Y.), LLC v. National Gold & Diamond Doing Business Internationally 442
Center, Inc. 369 ■ Ethics Today: Is It Ethical (and Legal) to Brew “Imported”
Classic Case 20.3 Jones v. Star Credit Corp. 375 Beer Brands Domestically? 443
Contracts for the International Sale of Goods 376 Regulation of Specific Business Activities 445
Appendix to Chapter 20 An Example of a Contract for the Case 24.2 Changzhou Trina Solar Energy Co., Ltd. v. United
International Sale of Coffee 382 States International Trade Commission 446
International Dispute Resolution 448
Chapter 21 U.S. Laws in a Global Context 449
Title, Risk, and Insurable Interest 386 Spotlight on International Torts
Case 24.3 Daimler AG v. Bauman 449
Identification 386 Space Law 451
Case Analysis 21.1 BMW Group, LLC v. Castle Oil Corp. 387 Unit Four Task-Based Simulation 456
When Title Passes 388 Unit Four Application and Ethics:
■ Managerial Strategy: Commercial Use of Drones 389 Success in Global Commerce 457
Case 21.2 Louisiana Department of Revenue v. Apeck
Construction, Inc. 389
Spotlight on Andy Warhol Case 21.3 Lindholm v. Brant 393 Unit Five
Risk of Loss 395 Negotiable Instruments 461
Insurable Interest 399

Chapter 22 Chapter 25
Performance and Breach Negotiable Instruments 462
of Sales and Lease Contracts 403 Types of Negotiable Instruments 462
Case 25.1 Silicon Valley Bank v. Miracle Faith
Obligations of the Seller or Lessor 403
World Outreach, Inc. 465
Case 22.1 All the Way Towing, LLC v. Bucks County
International, Inc. 405
Requirements for Negotiability 466
Case Analysis 25.2 OneWest Bank, FSB v. Nunez 468
Obligations of the Buyer or Lessee 409
Remedies of the Seller or Lessor 411 Factors That Do Not Affect Negotiability 472
Case 25.3 Charles R. Tips Family Trust v.
Remedies of the Buyer or Lessee 413
PB Commercial, LLC 473
Case Analysis 22.2 Genesis Health Clubs, Inc. v. LED Solar &
Light Co. 416
Spotlight on Baseball Cards Chapter 26
Case 22.3 Fitl v. Strek 418 Transferability and
Additional Provisions Affecting Remedies 419 Holder in Due Course 478
Dealing with International Contracts 420
Negotiation 478
Chapter 23 Indorsements 479
Case 26.1 In re Bass 479
Warranties 424 Case Analysis 26.2 AS Peleus, LLC v. Success, Inc. 481
Warranties of Title 424 Holder in Due Course (HDC) 486
Express Warranties 425 Case 26.3 Jarrell v. Conerly 488
Implied Warranties 427 Holder through an HDC 491
Classic Case 23.1 Webster v. Blue Ship Tea Room, Inc. 429
Overlapping Warranties 431 Chapter 27
Warranty Disclaimers and Limitations on Liability 432 Liability, Defenses, and Discharge 496
Case Analysis 23.2 Roberts v. Lanigan Auto Sales 432
Signature Liability 496
Chapter 24 Case Analysis 27.1 Envision Printing, LLC v. Evans 499
Warranty Liability 502
International and Space Law 437 Defenses and Limitations 505
International Law 437 Case 27.2 Mills v. Chauvin 507
Case 24.1 Rubin v. Islamic Republic of Iran 441 Discharge 510

Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
C o n te n t s ix

Chapter 28 Chapter 31
Banking 514 Bankruptcy Law 577
Checks 514 The Bankruptcy Code 577
The Bank-Customer Relationship 516 Liquidation Proceedings 578
The Bank’s Duty to Honor Checks 517 Case 31.1 In re Anderson 584
Case Analysis 28.1 Legg v. West Bank 517 ■ Ethics Today: Should There Be More Relief for Student
Case 28.2 Horton v. JPMorgan Chase Bank, N.A. 521 Loan Defaults? 587
The Bank’s Duty to Accept Deposits 523 Case 31.2 In re Cummings 588
Case 28.3 Shahin v. Delaware Federal Credit Union 525 Reorganizations 589
Electronic Fund Transfers 528 Bankruptcy Relief under Chapter 12 and Chapter 13 591
Online Banking and E-Money 529 Case 31.3 In re Chamberlain 593
■ Digital Update: Electronic Payment Systems Are Reducing Unit Six Task-Based Simulation 599
the Use of Checks 530 Unit Six Application and Ethics:
Unit Five Task-Based Simulation 533 Federal Student Loans—Default and Discharge 600
Unit Five Application and Ethics:
Virtual Currency—Is It Safe? 534
Unit Seven
Agency and Employment 603
Unit Six
Creditors’ Rights and Bankruptcy 537 Chapter 32
Agency Formation and Duties 604
Agency Relationships 604
Chapter 29
■ Ethics Today: Is It Fair to Classify Uber and Lyft Drivers as
Creditors’ Rights and Remedies 538 Independent Contractors? 606
Laws Assisting Creditors 538 Formation of the Agency Relationship 607
Case Analysis 29.1 Picerne Construction Corp. v. Villas 539 Case 32.1 Riedel v. Akron General Health System 608
Mortgages 542 Duties of Agents and Principals 610
■ Ethics Today: Creditors’ Rights When Debtors Move to Spotlight on Taser International
Another State 543 Case 32.2 Taser International, Inc. v. Ward 611
Case 29.2 Banc of California, N.A. v. Madhok 545 Case Analysis 32.3 NRT New England, LLC v. Jones 614
Suretyship and Guaranty 547 Rights and Remedies of Agents and Principals 616
Case 29.3 HSBC Realty Credit Corp. (USA) v. O’Neill 548
Protection for Debtors 550 Chapter 33
Agency Liability and Termination 620
Chapter 30 Scope of Agent’s Authority 620
Spotlight on Apparent Authority of Managers
Secured Transactions 554 Case 33.1 Lundberg v. Church Farm, Inc. 622
The Terminology of Secured Transactions 554 Case 33.2 Dearborn West Village Condominium
Creation of a Security Interest 554 Association v. Makki 623
Case 30.1 Royal Jewelers, Inc. v. Light 555 Liability for Contracts 625
■ Digital Update: Secured Transactions—Escrow Services Liability for Torts and Crimes 627
Online 557 ■ Global Insight: Islamic Law and Respondeat Superior 629
Perfection of a Security Interest 557 Case Analysis 33.3 M.J. v. Wisan 631
The Scope of a Security Interest 562 Termination of an Agency 633
Case 30.2 In re Tusa–Expo Holdings, Inc. 563
Priorities 566 Chapter 34
Rights and Duties of Debtors and Creditors 569 Employment, Immigration, and Labor Law 639
Default 569
Case 30.3 SunTrust Bank v. Monroe 571 Employment at Will 639
Case 34.1 Caterpillar, Inc. v. Sudlow 640

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

Wages, Hours, and Layoffs 642 Chapter 37


■ Ethics Today: Is It Fair to Dock Employees’ Pay for All Forms of Partnerships 703
Bathroom Breaks? 643
Case 34.2 Encino Motorcars, LLC v. Navarro 643 Basic Partnership Concepts 703
Family and Medical Leave 645 Case 37.1 Harun v. Rashid 704
Health, Safety, and Income Security 646 Formation and Operation 706
Employee Privacy Rights 649 Classic Case 37.2 Meinhard v. Salmon 708
Immigration Law 650 Dissociation and Termination 711
Labor Unions 652 Case Analysis 37.3 Shamburger v. Shamburger 714
■ Managerial Strategy: Union Organizing Using a Company’s Limited Liability Partnerships 715
E-Mail System 655 Limited Partnerships 716
Case Analysis 34.3 Contemporary Cars, Inc. v. National ■ Ethics Today: Should an Innocent General Partner Be Jointly
Labor Relations Board 655 Liable for Fraud? 719

Chapter 35 Chapter 38
Employment Discrimination 662 Limited Liability Companies
Title VII of the Civil Rights Act 662
and Special Business Forms 723
■ Digital Update: Hiring Discrimination Based on Social The Limited Liability Company 723
Media Posts 666 Case 38.1 Hodge v. Strong Built International, LLC 725
Case Analysis 35.1 Bauer v. Lynch 667 LLC Management and Operation 727
Case 35.2 Young v. United Parcel Service, Inc. 668 ■ Managerial Strategy: Can a Person Who Is Not a Member
Case 35.3 Franchina v. City of Providence 672 of a Protected Class Sue for Discrimination? 728
Discrimination Based on Age 673 Case 38.2 Schaefer v. Orth 729
Discrimination Based on Disability 675 Dissociation and Dissolution of an LLC 730
Discrimination Based on Military Status 677 Case Analysis 38.3 Reese v. Newman 731
Defenses to Employment Discrimination 678 Special Business Forms 733
Affirmative Action 679
Unit Seven Task-Based Simulation 683
Chapter 39
Unit Seven Application and Ethics:
Health Insurance and Small Business 684 Corporate Formation and Financing 739
The Nature and Classification of Corporations 739
■ Digital Update: Programs That Predict Employee
Unit Eight
Misconduct 741
Business Organizations 687 Case 39.1 Drake Manufacturing Co. v. Polyflow, Inc. 741
Case Analysis 39.2 Pantano v. Newark Museum 743
Case 39.3 Greenfield v. Mandalay Shores
Chapter 36
Community Association 746
Small Businesses and Franchises 688 Corporate Formation and Powers 748
General Considerations for Small Businesses 688 ■ Global Insight: Does Cloud Computing Have a
Sole Proprietorships 689 Nationality? 751
Case Analysis 36.1 A. Gadley Enterprises, Inc. v. Department of Piercing the Corporate Veil 751
Labor and Industry Office of Unemployment Compensation Corporate Financing 753
Tax Services 690
■ Digital Update: A Sole Proprietorship, Facebook Poker, and Chapter 40
Bankruptcy 692 Corporate Directors, Off icers, and
Franchises 693
Shareholders 759
Franchise Termination 696
Case 36.2 S&P Brake Supply, Inc. v. Daimler Trucks North Role of Directors and Officers 759
America, LLC 696 Duties and Liabilities of Directors and Off icers 762
Spotlight on Holiday Inns Case 40.1 Oliveira v. Sugarman 764
Case 36.3 Holiday Inn Franchising, Inc. v. Hotel Classic Case 40.2 Guth v. Loft, Inc. 765
Associates, Inc. 698 The Role of Shareholders 767

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C o n te n t s xi

Rights of Shareholders 770 Chapter 44


Case 40.3 Hammoud v. Advent Home Medical, Inc. 772 Consumer Law 839
Duties and Liabilities of Shareholders 774
Advertising, Marketing, and Sales 839
Case 44.1 POM Wonderful, LLC v. Federal
Chapter 41
Trade Commission 840
Mergers and Takeovers 778 ■ Digital Update: Regulating “Native” Ads on the
Merger, Consolidation, and Share Exchange 778 Internet 843
Case Analysis 41.1 In re Trulia, Inc. Stockholder Case 44.2 Haywood v. Massage Envy Franchising, LLC 844
Litigation 780 Labeling and Packaging Laws 846
Purchase of Assets 782 Protection of Health and Safety 847
Case 41.2 Heavenly Hana, LLC v. Hotel Union & Hotel Credit Protection 848
Industry of Hawaii Pension Plan 784 Case Analysis 44.3 Santangelo v. Comcast Corp. 850
Purchase of Stock 785
Corporate Termination 787 Chapter 45
Major Business Forms Compared 788 Environmental Protection 856
Chapter 42 Common Law Actions 856
Federal, State, and Local Regulations 857
Investor Protection, Insider Trading, and
Case Analysis 45.1 Friends of Animals v. Clay 857
Corporate Governance 794 ■ Global Insight: Can a River Be a Legal Person? 860
The Securities Act of 1933 794 Air Pollution 860
■ Managerial Strategy: The SEC’s Pay-Ratio Disclosure Case 45.2 United States v. O’Malley 862
Rule 796 Water Pollution 864
■ Digital Update: Investment Crowdfunding—Regulations Toxic Chemicals and Hazardous Waste 866
and Restrictions 798
Case 42.1 Omnicare, Inc. v. Laborers District Council Chapter 46
Construction Industry Pension Fund 800
Antitrust Law 871
The Securities Exchange Act of 1934 802
Classic Case 42.2 SEC v. Texas Gulf Sulphur Co. 803 The Sherman Antitrust Act 871
Case 42.3 Singer v. Reali 807 Section 1 of the Sherman Act 872
State Securities Laws 809 Section 2 of the Sherman Act 875
Corporate Governance 810 Case Analysis 46.1 McWane, Inc. v. Federal
Unit Eight Task-Based Simulation 816 Trade Commission 877
Unit Eight Application and Ethics: The Clayton Act 878
Business Start-Ups Online 817 Case 46.2 Candelore v. Tinder, Inc. 879
Enforcement and Exemptions 882
Case 46.3 TransWeb, LLC v. 3M Innovative Properties Co. 883
Unit Nine U.S. Antitrust Laws in the Global Context 884
Government Regulation 821 ■ Digital Update: The European Union Issues Record Fines
Against Google in Antitrust Case 886

Chapter 43
Administrative Agencies 822 Chapter 47
Professional Liability and
The Practical Significance of Administrative Law 822
Accountability 890
Agency Creation and Powers 823
Case 43.1 Simmons v. Smith 826 Potential Liability to Clients 890
The Administrative Process 828 ■ Ethics Today: What Are an Attorney’s Responsibilities for
Case 43.2 Craker v. Drug Enforcement Administration 831 Protecting Data Stored in the Cloud? 891
Judicial Deference to Agency Decisions 832 Potential Liability to Third Parties 894
Case Analysis 43.3 Olivares v. Transportation Case Analysis 47.1 Perez v. Stern 896
Security Administration 833 The Sarbanes-Oxley Act 897
Public Accountability 835 Case 47.2 Laccetti v. Securities and Exchange Commission 898

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xii Cont en t s

Potential Liability of Accountants under ■ Ethics Today: Should Eminent Domain Be Used to Promote
Securities Laws 901 Private Development? 949
Confidentiality and Privilege 904 Zoning and Government Regulations 950
Case 47.3 Commonwealth of Pennsylvania v. Landlord-Tenant Relationships 952
Schultz 905
Unit Nine Task-Based Simulation 910 Chapter 50
Unit Nine Application and Ethics: Insurance 957
Climate Change 911
Insurance Terminology and Concepts 957
Case 50.1 Breeden v. Buchanan 959
Unit Ten The Insurance Contract 960
Property and Its Protection 915 Case 50.2 Cannon v. Farm Bureau Insurance Company 964
Types of Insurance 966
Chapter 48
Chapter 51
Personal Property and Bailments 916 Wills and Trusts 973
Personal Property versus Real Property 916
Wills 973
Acquiring Ownership of Personal Property 917
Case 51.1 In re Navarra 976
■ Digital Update: The Exploding World of Digital
Case Analysis 51.2 Peterson v. Harrell 978
Property 917
■ Digital Update: Social Media Estate Planning 981
Classic Case 48.1 In re Estate of Piper 919
Intestacy Laws 981
Mislaid, Lost, and Abandoned Property 920
Trusts 984
Case 48.2 State of Washington v. Preston 923
Case 51.3 Dowdy v. Dowdy 985
Bailments 924
Other Estate-Planning Issues 989
Ordinary Bailments 925
Unit Ten Task-Based Simulation 994
Case Analysis 48.3 Zissu v. IH2 Property Illinois, L.P. 928
Unit Ten Application and Ethics:
Special Types of Bailments 930
Business Planning for Divorce 995

Chapter 49
Appendices
Real Property and Landlord-Tenant Law 935 A How to Brief Cases and Analyze Case Problems A–1
The Nature of Real Property 935 B Answers to the Issue Spotters A–4
Ownership and Other Interests in Real Property 937 C Sample Answers for Business Case Problems with
Case 49.1 In the Matter of the Estate of Nelson 938 Sample Answer A–13
Transfer of Ownership 942
Spotlight on Sales of Haunted Houses
Case 49.2 Stambovsky v. Ackley 943 Glossary G–1
Case Analysis 49.3 Montgomery County v. Bhatt 946 Table of Cases TC–1
Limitations on the Rights of Property Owners 948 Index I–1

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Concept Summaries

1.1 Sources of American Law 5 25.1 Requirements for Negotiability 474


1.2 The Common Law Tradition 11 26.1 Types of Indorsements and Their Effect 484
1.3 Schools of Jurisprudential Thought 13 26.2 Requirements for HDC Status 492
4.1 Jurisdiction 72 27.1 Signature Liability 503
4.2 Types of Courts 78 28.1 Basic Rules for Honoring Checks 524
5.1 Pretrial Procedures 98 29.1 Remedies Available to Creditors 546
5.2 Trial Procedure 101 30.1 Creating Security Interest 557
5.3 Posttrial Options 103 30.2 Perfecting a Security Interest 563
6.1 Intentional Torts against Persons 121 30.3 Remedies of the Secured Party on the
6.2 Intentional Torts against Property 124 Debtor’s Default 573
7.1 Defenses to Product Liability 147 31.1 Forms of Bankruptcy Relief Compared 595
10.1 Types of Crimes 199 32.1 Formation of the Agency Relationship 610
11.1 Types of Contracts 224 33.1 Authority of an Agent to Bind the Principal
and a Third Party 625
12.1 Methods by Which an Offer
Can Be Terminated 237 33.2 Agency Termination by Operation of Law 635
13.1 Consideration 254 35.1 Coverage of Employment Discrimination Laws 678
13.2 Settlement of Claims 259 38.1 Special Business Forms 735
14.1 Contracts by Minors 266 39.1 Classification of Corporations 747
14.2 Contracts by Intoxicated Persons 267 40.1 Roles of Directors and Officers 762
14.3 Contracts by Mentally Incompetent Persons 268 40.2 Duties and Liabilities of Directors and Officers 767
15.1 Factors That May Indicate a Lack of 40.3 Role, Rights, and Liability of Shareholders 775
Voluntary Consent 291 41.1 Merger, Consolidation, and Share Exchange 783
17.1 Assignment and Delegations 316 41.2 Purchases of Assets and Purchases of Stock 785
19.1 Equitable Remedies 350 47.1 Common Law Liability of Accountants and
20.1 Offer, Acceptance, and Consideration under Other Professionals 898
the UCC 372 47.2 Statutory Liability of Accountants and
20.2 The Parol Evidence Rule 375 Other Professionals 904
21.1 Delivery without Movement of the Goods 397 48.1 Acquisition of Personal Property 921
21.2 Risk of Loss When a Sales or Lease Contract 48.2 Mislaid, Lost, and Abandoned Property 921
Is Breached 399 48.3 Rights and Duties of the Bailee and the Bailor 931
22.1 Obligations of the Seller or Lessor 409 51.1 Wills 982
23.1 Warranties of Title and Express Warranties 426 51.2 Trusts 988

xiii
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Exhibits

1–1 Areas of the Law That Can Affect Business 18–1 Conditions of Performance 325
Decision Making 3 18–2 Discharge by Performance 330
1–2 Equitable Maxims 7 18–3 Contract Discharge 335
1–3 Procedural Differences between an Action at Law 19–1 Measure of Damages—Breach of
and an Action in Equity 7 Construction Contracts 342
1–4 National Reporter System—Regional/Federal 15 19–2 Remedies for Breach of Contract 349
1–5 How to Read Citations 17 20–1 The Law Governing Contracts 362
1–6 A Sample Court Case 20 20–2 Major Differences between Contract Law
2–1 Protections Guaranteed by the Bill of Rights 31 and Sales Law 373
2–2 Federal Legislation Relating to Privacy 41 21–1 Void and Voidable Titles 392
3–1 An Analysis of Ethical Approaches to the 21–2 Contract Terms—Definitions 396
Sample Dilemma 57 22–1 The Perfect Tender Rule and Its Exceptions 406
4–1 Exclusive and Concurrent Jurisdiction 70 22–2 Obligations of the Buyer or Lessee 410
4–2 The State and Federal Court Systems 73 22–3 A Letter-of-Credit Transaction 421
4–3 Geographic Boundaries of the U.S. Courts of Appeals 23–1 Types of Implied Warranties 427
and U.S. District Courts 77 24–1 The Legal Systems of Selected Nations 439
4–4 Basic Differences in the Traditional Forms of ADR 80 24–2 Examples of International Principles and
5–1 Stages in a Typical Lawsuit 87 Doctrines 442
5–2 A Typical Complaint 89 25–1 Basic Types of Negotiable Instruments 463
5–3 Pretrial Motions 91 25–2 A Typical Time Draft 464
8–1 Forms of Intellectual Property 165 25–3 A Typical Promissory Note 466
10–1 Key Differences between Civil Law and 25–4 A Sample Certificate of Deposit 467
Criminal Law 187 26–1 A Blank Indorsement 479
10–2 Civil (Tort) Lawsuit and Criminal Prosecution for the 26–2 A Special Indorsement 481
Same Act 188 26–3 A Qualified Indorsement 482
10–3 Major Procedural Steps in a Criminal Case 203 26–4 “For Deposit Only” and “For ­Collection
11–1 Classifications Based on Contract Formation 219 Only” Indorsements 483
11–2 Enforceable, Voidable, Unenforceable, and 26–5 Trust (Agency) Indorsements 484
Void Contracts 223 26–6 Converting an Order Instrument to a Bearer
11–3 Rules of Contract Interpretation 225 Instrument and Vice Versa 485
12–1 A Click-On Agreement Sample 242 26–7 Taking for Value 487
12–2 The E-SIGN Act and the UETA  246 27–1 Time for Proper Presentment 498
13–1 Consideration in Bilateral and 27–2 Transfer Warranty Liability for Transferors Who
Unilateral Contracts 252 Receive Consideration 504
13–2 Examples of Agreements That Lack 27–3 Defenses against Liability on Negotiable
Consideration 256 Instruments 505
14–1 Unconscionability 272 28–1 A Cashier’s Check 515
14–2 Contract Legality 276 28–2 An American Express Traveler’s Check 516
15–1 Mistakes of Fact 281 28–3 The Check-Collection Process 527
16–1 The One-Year Rule 297 29–1 Methods of Avoiding Foreclosure 544
16–2 Collateral Promises 298 29–2 Suretyship and Guaranty Parties 547
16–3 Business Contracts and the Writing Requirement 300 30–1 Secured Transactions—Concept and Terminology 555
16–4 The Parol Evidence Rule 305 30–2 A Sample Uniform Financing Statement Form 558
17–1 Assignment Relationships 310 30–3 Selected Types of Collateral and Methods
17–2 Delegation Relationships 313 of Perfection 562
17–3 Third Party Beneficiaries 320 30–4 Priority of Claims to a Debtor’s Collateral 568

xiv
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E x h i b i ts xv

31–1 Collection and Distribution of Property in Most 42–3 Some Key Provisions of the Sarbanes-Oxley Act Relating
Voluntary Bankruptcies 586 to Corporate Accountability 812
32–1 Duties of the Agent 611 43–1 Executive Departments and Important
32–2 Duties of the Principal 613 Subagencies 824
33–1 A Sample General Power of Attorney 621 43–2 Selected Independent Regulatory Agencies 825
33–2 Termination by Act of the Parties 633 43–3 The Formal Administrative Agency
34–1 Good Faith versus Bad Faith in Adjudication ­Process 830
Collective Bargaining 657 44–1 Selected Areas of Consumer Law Regulated
36–1 The FTC’s Franchise Rule Requirements 694 by Statutes 840
37–1 Provisions Commonly Included in a 45–1 Major Federal Environmental Statutes 858
Partnership Agreement 706 45–2 Environmental Impact Statements 861
37–2 A Comparison of General Partnerships and 45–3 Pollution-Control Equipment Standards under the
Limited Partnerships 717 Clean Air Act and the Clean Water Act 865
38–1 Management of an LLC 727 46–1 Required Elements of a Sherman Act Violation 872
38–2 Provisions Commonly Included in an LLC 46–2 Exemptions to Antitrust Enforcement 885
Operating Agreement 729 47–1 Three Basic Rules of an Accountant’s Liability to
39–1 How Do Stocks and Bonds Differ? 753 Third Parties 896
39–2 Common and Preferred Stocks 754 47–2 Key Provisions of the Sarbanes-Oxley Act Relating to
40–1 Directors’ Management Responsibilities 760 Public Accounting Firms 900
40–2 Results of Cumulative Voting 770 48–1 Degree of Care Required of a Bailee 927
41–1 Merger 778 49–1 Interests in Real Property 942
41–2 Consolidation 779 50–1 Selected Insurance Classifications 958
41–3 The Terminology of Takeover Defenses 786 50–2 Insurance Contract Provisions and Clauses 961
41–4 Major Forms of Business Compared 789 50–3 Typical Fire Insurance Policies 967
42–1 Exempt Transactions under the 1933 51–1 Excerpts from Michael Jackson’s Will 974
Securities Act 797 51–2 Per Stirpes Distribution 983
42–2 Comparison of Coverage, Application, and Liability 51–3 Per Capita Distribution 984
under SEC Rule 10b-5 and Section 16(b) 805 51–4 A Revocable Living Trust Arrangement 985

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Preface

The study of business law and the legal environment of completely new framework for helping students (and
business has universal applicability. A student entering businesspersons) make ethical decisions. We present
any field of business must have at least a passing under- The IDDR Approach in Chapter 3 (Ethics in Busi-
standing of business law in order to function in the real ness). This s­ystematic approach provides students with a
world. Business Law, Fifteenth Edition, provides the clear step-by-step process to analyze the legal and ethical
information that students need in an interesting and implications of decisions that arise in everyday business
contemporary way. operations.
Additionally, students preparing for a career in The new IDDR Approach uses four logical steps:
accounting, government and political science, econom- • Step 1: Inquiry
ics, and even medicine can use much of the informa- • Step 2: Discussion
tion they learn in a business law and legal environment • Step 3: Decision
course. In fact, every individual throughout his or her • Step 4: Review
lifetime can benefit from knowledge of contracts, real Students can remember the first letter of each step easily
property law, landlord-tenant relationships, and other by using the phrase: “I Desire to Do Right.”
business law topics. Consequently, we have fashioned
this text as a useful “tool for living” for all of your stu- Completely Revised Chapter 3 on Ethics in
dents (including those taking the CPA exam). Business A newly revised Chapter 3 details each IDDR
The Fifteenth Edition of this best-selling text is more step’s goals and then provides a Sample Scenario to help
modern, exciting, and visually appealing than ever before. students apply this new approach to ethical decision mak-
We have added many new features, cases, concept sum- ing. In addition to introducing the IDDR Approach, we
maries, and exhibits. The text also contains h ­ undreds of have made Chapter 3 more current and more practical,
highlighted and numbered Cases in Point and E ­ xamples, and reduced the amount of theoretical ethical principles
as well as a number of new case problems and unit- it presents. The chapter now focuses on real-life applica-
ending Task-Based Simulations. Special pedagogical tion of ethical principles.
elements within the text focus on legal, ethical, global,
and corporate issues while addressing core curriculum New A Question of Ethics throughout Text
requirements. After Chapter 3, to reinforce the application of the
IDDR Approach, students are asked to use its various
steps when answering each chapter’s A Question of Ethics.
To challenge students in analyzing the ethical angles in
Highlights of the Fifteenth Edition today’s business legal environment, each of the A Question
of Ethics problems have been updated throughout the text
Instructors have come to rely on the coverage, accuracy, and are based on a 2017, 2018 or 2019 case.
and applicability of Business Law. To make sure that our
text engages your students, solidifies their understanding
of legal concepts, and provides the best teaching tools A Variety of Exciting Features
available, we offer the following. The Fifteenth Edition of Business Law is filled with
numerous features specifically designed to cover current
The IDDR Approach: legal topics of high interest.
Each feature is related to a topic discussed in the text
A New Emphasis on Ethics and ends with Critical Thinking or Business Questions.
The ability of businesspersons to reason through ethi- Suggested answers to all of the Critical Thinking and
cal issues is now more important than ever. For the Business Questions are included in the Answers Manual
Fifteenth Edition of Business Law, we have created a for this text.

xvii
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xviii P ref ace

1. Ethics Today. These features focus on the ethical Social media have entered the mainstream and become
aspects of a topic discussed in the text to empha- a part of everyday life for many businesspersons. In this
size that ethics is an integral part of a business law special chapter, we give particular emphasis to the legal
course. Examples include the following: issues surrounding the Internet, social media, and privacy.
• Applying the IDDR Framework (Chapter 3) We also recognize this trend throughout the text by incor-
• Is It Ethical (and Legal) to Brew “Imported” Beer porating the Internet and social media as they relate to the
Brands Domestically? (Chapter 24) topics under discussion.
• Should There Be More Relief for Student Loan
Defaults? (Chapter 31)
• Is It Fair to Classify Uber and Lyft Drivers as Coverage of Topics
Independent Contractors? (Chapter 32) on the Revised CPA Exam
2. Global Insight. These features illustrate how other
nations deal with specific legal concepts to give In 2016, the American Institute of CPAs (AICPA) issued
­students a sense of the global legal environment. its final report on “Maintaining the Relevance of the
Subjects include the following: Uniform CPA Exam.” In addition to more focus on criti-
• Aleve versus Flanax—Same Pain Killer, but in cal thinking, authentic applications, and problem solv-
Different Countries (Chapter 8) ing, the content of the exam will change to some extent.
• Islamic Law and Respondeat Superior (Chapter 33) The Fifteenth Edition of Business Law incorporates
• Does Cloud Computing Have a Nationality? information on the new topics on the CPA exam, specifi-
(Chapter 39) cally addressing the following:
• Can a River Be a Legal Person (Chapter 45) • Agency law (worker classification and duties of
3. Digital Update. These features are designed to principals and agents)
examine cutting-edge cyberlaw topics, such as the • Employment law (Affordable Care Act)
following: • Business organizations (corporate governance
• Does Everyone Have a Constitutional Right to issues, including Sarbanes-Oxley compliance
Use Social Media? (Chapter 2) and criminal liability for organizations and
• Should Employees Have a “Right of Disconnecting”? management)
(Chapter 3)
• Revenge Porn and Invasion of Privacy (Chapter 6) In addition, the Fifteenth Edition continues to cover top-
• Riot Games, Inc., Protects Its Online Video ics that are essential to new CPAs who are working with
Game Copyrights (Chapter 9) sophisticated business clients, regardless of whether the
• “Catfishing” and Fraudulent Misrepresentation CPA exam covers these topics.
(Chapter 15) We recognize that today’s business leaders must often
• Hiring Discrimination Based on Social Media think “outside the box” when making business decisions.
Posts (Chapter 35) For this reason, we strongly emphasize business and criti-
4. Managerial Strategy. These features emphasize cal thinking elements throughout the text. We have care-
the management aspects of business law and the fully chosen cases, features, and problems that are rel-
legal environment. Topics include the following: evant to business operations. Almost all of the features
• Should You Consent to Have Your Business Case and cases conclude with some type of critical thinking
Decided by a U.S. Magistrate Judge? (Chapter 4) question. For those teaching future CPAs, this is con-
• When Is a Warning Legally Bulletproof? sistent with the new CPA exam’s focus on higher-order
(Chapter 7) skills, such as critical thinking and problem solving.
• The Criminalization of American Business
(Chapter 10)
• Commercial Use of Drones (Chapter 21) Highlighted and Numbered Examples and
• The SEC’s Pay-Ratio Disclosure Rule (Chapter 42) Case in Point Illustrations
Many instructors use cases and examples to illustrate how
Entire Chapter on Internet Law, the law applies to business. Students understand legal
concepts better in the context of their real-world applica-
Social Media, and Privacy tion. Therefore, for this edition of Business Law, we have
The Fifteenth Edition again includes a whole chapter expanded the number of highlighted numbered Examples
(Chapter 9) on Internet Law, Social Media, and Privacy. and Cases in Point in every chapter.

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Another random document with
no related content on Scribd:
same time that it does not undervalue any of God’s commands. Now
this mark Christianity has, and Judaism wants. The former teaches
expressly, That without holiness no man shall see the Lord, and that
for the want of it no external ceremonies can compensate. Further,
Christianity knows of no violent methods of propagating the truth. It
nowhere tells its followers, when they have the power, to compel all
men to embrace its doctrines, or to put them to death if they refuse.
It has not a criminal code written in blood, and prescribing floggings
of rebellion, or even death, for a mere ceremonial offence. It does
not allow each individual teacher to torment the people by
excommunication and anathema at his pleasure. And lastly, it does
not misrepresent God as an unjust and partial judge, who confines
the benefits of revelation to one small nation, and sentences the
overwhelming majority of mankind to unholiness and unhappiness. If
ever Judaism should attain to universal dominion, and the principles
of Judaism be brought into action, the whole Gentile world would be
doomed to misery and ignorance. By pronouncing that amongst
Gentiles there is no marriage-tie, it would rob them of all domestic
peace. By sentencing every Gentile reader of the Bible to death, it
would deprive them of all the consolations and instructions of the
Word of God, and by forbidding them to keep a Sabbath, it would, so
far as it could, annihilate every token of God’s care and loving-
kindness. The triumph of Christianity, on the contrary, and the full
development of all its principles, would fill the world with peace, and
joy, and happiness. The fundamental principles of Christianity,
namely, that the Messiah has died for the sins of the whole world,
sets forth God as the tender father who cares for all his children, and
therefore teaches all men to regard one another as fellow-heirs of
the same eternal salvation. It does not deny that Israel has peculiar
privileges as a nation, but fully acknowledges that “they are still
beloved for the fathers’ sakes,” and that they are yet to be the
benefactors of the human race as they were of old. But it asserts, at
the same time, that God is not the God of the Jews only, but of the
Gentiles also, and thus makes it possible for Jew and Gentile to love
each other. The only foundation for the peace and unity of all nations
is the recognition of God as the Father of all, and this foundation is
the very corner-stone of Christianity, whilst it neither does nor can
form any part of the fabric of Judaism. Christianity teaches that the
first and great commandment is, Thou shalt love the Lord thy God
with all thy heart; and the second is, Thou shalt love thy neighbour
as thyself; and teaches, at the same time, that all men are our
neighbours. Judaism teaches that circumcision is the greatest of all
the commandments, and that none but Jews and proselytes are
neighbours. Thus Judaism divides, whilst Christianity tends to unite,
all the children of men in the bands of peace. It has only one
principle of God’s dealings to men, and that principle is love; and one
principle for the guiding of man’s conduct to men, and that is love
also. Let not the Jewish reader think that we Gentiles wish to ascribe
any merit to ourselves, as if by our own wit or wisdom we had found
out a religious system superior to anything that Israel had been able
to devise. Far from it; we acknowledge again, as we did in the first
number, that we are only disciples of one part of the Jewish nation.
From the Jews Christianity came to us. It has been a light to lighten
us Gentiles, but we acknowledge its Divine Author as the glory of his
people Israel. All we mean by instituting the comparison is, to show
those who still adhere to the oral law, that there is another Jewish
religion infinitely superior, and more like that of Moses and the
Prophets. And we appeal confidently to every reader of these papers
to decide whether the New Testament or the Talmud is the better
book, and to say which is the most agreeable to the will of God as
revealed to their forefathers. We earnestly call upon them to make
the decision, and to deliver themselves from that unmerited weight of
odium which has rested upon them for centuries; and from that still
more dreadful evil, the displeasure of Almighty God, which has
followed them ever since they forsook the Old Paths wherein their
fathers walked.
It is time for those, at least, who profess to abhor certain parts of the
Talmud and oral law, to justify their professions by consistent
conduct. If they wish people to believe them when they profess love
and charity towards all men, they must begin by repudiating the
authority of the oral law, and renouncing the worship of the
synagogue. How can we possibly believe that those are sincere in
their professions to men, who declare that they are insincere in their
worship of the heart-searching God? Every man who uses the
prayers of the synagogue, there confesses himself to God as a
believer in the oral law, and consequently ready to execute all its
decrees of cruelty, fraud, and persecution—ready, when he has the
power, to convert all nations with the sword. That is his profession in
the synagogue; when, then, he comes forth from the solemn act of
Divine worship, and tells me that he is liberal and charitable, and that
he abhors persecution, how can I possibly believe him? There is
falsehood somewhere, and the only possible mode of removing this
appearance is by a public renunciation of the oral law, and an
erasure of those passages in the public prayers which affirm its
Divine authority. This all truly liberal-minded Jews owe to
themselves, to the Christian public, to their brethren, and, above all,
to their God. To themselves they owe it, because so long as their
words and their deeds contradict each other, a mist hangs over
them. To the Christian public they owe it, for they must naturally
desire to know the principles of those with whom they are connected.
To their brethren they owe it, for this is the only way of delivering the
nation from the calamities of centuries. To their God they owe it, for
by the blasphemies of the oral law, His character is misrepresented,
and His name blasphemed.
THE END.
INDEX.

Abarbanel, 124
Aben Ezra, 123
Abraham at the door of hell, 450
Adam, 136
Agadah, recognized in Jewish Prayer-book, 3
Ahijah, the Shilonite, fable about, 352
Almsgiving, Rabbinic, 302
merit of, 307
Amhaaretz, meaning of the word, 458
disqualifications of, 459
may be robbed and slain with impunity, 461
lawful to kill, 6
Amulets, virtues of, 183
Angels carry up the sound of the horn at new year, 267
Angels, of the waves, 197
Angel, evil, 229
Angels ministering, 164
Apostates, to be killed, 36
Arbah, Turim, 112
Astrology, taught and practised, 175
Atonement, day of, 279
itself an atonement, 279
repentance an, 279
a cock killed as an, 283
death an, 299

Baptism necessary to a proselyte, 304


Bar Kochav, 222
Bechai, 142
Behemoth, legend of, 128, &c.
Bither, the city of, 216

Cain, 138
Catechism, Bavarian Jewish, 25
gives a false view of Judaism, 26
Charity, Rabbinic, 112
Charm, Rabbinic, for a bleeding of the nose, 192
for the bite of a mad dog, 193
for a storm at sea, 196
for the bite of a scorpion, 200
Charms allowed on the Sabbath-day, 200
Charm for bed time, 201
Christianity, a Jewish religion, 1
Christianity, the religion of the New Testament, 2
Christians considered as idolaters, 419
not counted amongst the pious of the nations, 4
not in a state of salvation, 4
Circumcision equivalent to all the commandments, 451
meritoriousness of, 450
Cock, killing a cock as atonement, 283
Commandments, 442; 162
Cruelty, Rabbinic, 8, 99, 209
to women, 377

Dead, Rabbinic mourning for, 428


prayers for the, 295
Death, an atonement, 299
Demons, asking counsel of, 203
Deniers of the law, three classes of, 4
Deputies, French Jewish, 24
Deuteronomy xvii. 8, &c., explained, 11
Dispensation, Rabbinic, from oaths, 434
Divorce, Rabbinic, doctrine of, 373
Drunkenness allowed on feast of Purim, 47

Edomites, Christians called, 123


Eleazar, Rabbi, 6
Elijah, the Prophet, conversation of, with R. Jose, 323
Epicureans, 4
to be killed, 36
Epicurean, reader in synagogue suspected of being, 127
Evasion, Rabbinic, 80, 83, 107, 225, 235
Excommunication for not washing hands, 75
Rabbinic, 239
laws concerning, with respect to the unlearned and learned, 239
injustice of, 239

Fast on the ninth of Av, 216


Fasting, merit of, 264
Fire, not to be extinguished, 102
Flogging of rebellion, 99, 211, 228, 383, 386, 420
Friday, Good, 87

Gentile, who studies the law, guilty of death, 22


who keeps a Sabbath-day, guilty of death, 22
good advice not to be given to, 33
woman not to be helped in child-bed, 33
not neighbour, 34
lost property not to be restored to, 35
Daniel punished for giving good advice to, 33
who wishes to turn Jew, 63
a Jew not publicly to receive alms from, 306
Sabbath not to be profaned to save a Gentile’s life, 212, 214
food regarded as carrion, 383
food not to be eaten, 383, 416
wine unlawful, 419
he that steals from, only to pay the principal, 34
wine, to drink, worse than fornication, 424
Gentiles, idolatrous, to be exterminated, 42
to be converted by force, 42
idolatrous, not to be suffered in the land of Israel, 28
Gentile, drowning, not to be delivered, 30
Gentiles, duties towards, 24
not brethren, 26
not neighbours, 26
not to be greeted except from fear, 10, 26, 28
condemned for transgressing the command about tabernacles,
288
still have the defilement of the serpent, 156
cursing the, on the feast of Passover, 120, 121, 122
no pious, now, 67
marriage of, not binding, 58
and dogs, 107
Gershom, R., anathema by, 366

Hands, laying on of, 328


washing of, 71
Heathen, who are not in a state of salvation, 5
High Priest, an unlearned man, 7
Hilchoth Accum, 28, 33
Avadim, 21
Avel, 428
Berachoth, 71, 73
Deoth, 113
Genevah, 34
Gezelah, 34
Girushin, 375
Gittin, 374
Iom Tov, 116
Ishuth, 366
Issure Biah, 64
Kiddush Hachodesh, 100
Maakaloth Asuroth, 419
Mamrim, 335
Matt’noth Aniim, 304
Megillah, 48
Mikvaoth, 72
M’lachim, 22, 25
P’riah u’r’viah, 7
Rotzeach, 32, 33
Sanhedrin, 172, 342
Sh’vuoth, 436
Taanith, 216
Talmud Torah, 17, 148
T’phillah, 2, 128
T’shuvah, 4, 247
Hillel, the elder, 187
Holyday, how to make fire on, 106
Holydays, additional, prescribed by the rabbies, 98, 101

Jeremiah unjustly condemned, 13


Jewish-German, 283
Jews persecuted in Spain and Portugal, 42
Illegitimate, a learned man takes precedence of High Priest, 7
Intolerance, Talmudic, 28-39
Ioma, 19
Jonathan, son of Uzziel, 187
Jost’s history, 125
Isaac, merit of offering, 271
Jubilee, year of, 66
Judaism the religion of the oral law, 2
and of the Jewish Prayer-book, 2
and Christianity cannot both be true, 3
a false religion, 465
its authors wicked men, 467
Judgment, Rabbinic, idea of the final, 287

Karo, R. Joseph, 17
K’hillath Shlomoh, 282
Kiddushin, 19
Kimchi, 93

Leaven, putting away of, 80


Legends, 127-167
Levi, family of, still known, 312
privileges of, in the synagogue, 313
David, 134
Leviathan, legend of, 128, &c.
Levites, scriptural privileges of, 311
Liberty, religious, first taught by Jesus Christ, 46
Luck, good, 182

Magic allowed by Talmud, 168-174


Maimonides, 25, et passim
intolerance, 26
Meat, lawful and unlawful, 397
in milk, laws concerning, 404
contrary to Scripture, 404, 405
Medrash Rabba, 153
Merit of ancestors, 285
Merit, doctrine of, 247, &c.
Messiah, already come, 387
Miracles, Rabbinic, 203
Mishna, recognised in Jewish Prayer-book, 3
Mixture, Rabbinic, command of, 116
Muktzeh, 103

Napoleon, 24
New Year, Jewish, 247
New Year, judgment at, 247
prayers for, 264
merit and advantage of blowing the horn on, 266
Noachidæ, 25, 41
who they are, 55
seven commandments of, 56
may transgress commandments, 57
murderer of, not to be put to death, 62
unintentionally killing a Jew, to be put to death, 61
when received, 67
how received, 68

Oral law opposed to the Word of God in duty to parents, 9, 10


a mixed system of good and evil, 16
how much time to be devoted to the study of, 16
women and children not to study, 18
perpetual and unchangeable, 53
precepts of, given to Moses, 161
Oaths, Rabbinic dispensation from, 435, 450

Parable of Good Samaritan illustrated, 29


Parents, if in captivity, to be redeemed after the Rabbi, 9
duty to, according to oral law, 9
Passover, rites of, 79
Christ our, 91
four cups of, 96
Pentecost prayers, 145
Pesachim, treatise, 6
Pharisees, enemies of the Lord Jesus, 9
bad men, 8
Physician, Jewish, not to cure idolaters, 33
Pirke, Eleazer, 137
Planets, 175
Polygamy, allowed, 366
Poor, Rabbinic, oppression of the, 97
Rabbinic religion not for the, 237
Rabbinic cruelty to, 414, 429
Power, Rabbinic, to excommunicate, 239
Prayer-book, Jewish, acknowledges and teaches the authority of the
Talmud, 2, 3
Jewish, full of legends, 127-167
Priests, scriptural office of, 310
Proselytes, sojourning, 26
how to be instructed, 63
baptism of, 304
Purgatory, Rabbinic, 296
Purim, feast of, 47

Rabbi, duty to, goes before duty to parents, 9, 10


fear of, as the fear of God, 11
reverence due to, 15
whosoever despises a, to be excommunicated, 15
not to forgive a public affront, 243
method of creating a, 328
Rabbies not agreed, 399, 400
Rabbinic charity, 112
evasion, 107, 110
order, novelty of, 328
power to excommunicate, 239
acknowledgments that Messiah is born, 389-393
Ramban, 142
Rome called Edom, 123
Rosh Hashanah, 298
Saadiah Gaon, 162
Sabbath, unlawful for a Gentile to keep a, 22
laws of, 104, 114-119
spirits cannot be cited on, 141
damned have rest on, 141
Sabbath-day, amulets on, 184
Sabbath, laws concerning, 285-290
lamp, reward for, 229
moving things on, 232
merit of keeping the, 224
jurisdictions, 232
Salvation, who are excluded from, by the oral law, 4
Sambation, 139
Sanhedrin, not infallible, 8
great council of, 168
members of, magicians, 168
understood seventy languages, 168
all handsome men, 171
pillar of the oral law, 335
a later, may reverse the decision of a former, 335
not a Divine institution, 337
of Greek origin, 341
greater and lesser, 343
business of, 345
death to those who rebelled against, 344
contrary to Scripture, 345
Parisian, 366
Satan deceived by the blowing of the horn in the month of Elul, 266
Scapegoat, 280
Schoolmasters, Rabbinic, 315
Scripture, women not bound to study, 18
not to be studied so much as the Talmud, 16
when not to be studied at all, 17
Sepher Jetzirah, 181
Schulchan Aruch, 7
Sinai, 163
Slaughtering, laws concerning, 380
laws of, 396
Slaves exempt from the duty of studying the law of God, 17
unlawful to teach, 21
regarded as beasts, 431
Souls of all Israel at Sinai, 152
Sotah, 76
Stars, influence of, 175
Study of the law equivalent to all the commandments, 51

Tabernacles, feast of, 287


merit of, 287
prayers for the feast of, 295
Talmud, recognised in Jewish Prayer-book, 3
legends of, 128, 167
Tradition, Rabbinic argument for overthrow, 11
no unbroken train of, 350
Treatise, Avodah Zarah, 291
Bava Bathra, 187
Berachoth, 161
Gittin, 192
Moed Katon, 175
Shabbath, 157
Succah, 180
Z’vachin, 150
Turnus Rufus, 140, 216
Unlearned man, lawful to kill, 6
the wives and daughters of, not to be taken as wives, 6
to be accounted as beasts, 6
man, unlawful for, to eat meat, 7

Van Oven, Joshua, Esq., Manual of Judaism, 465


Venus planet, 177
Washing of hands, 71
to neglect, as bad as fornication, 76
who neglects, excommunicated, 75
Wine, Gentile, unlawful, 419
Woman, insane, to be turned out, 377
Women, exempt from the duty to study the law, 17
do not receive the same reward as a man, 18
not to be taught the law, 18
minds of, not equal to the study of the law, 18
command of Moses, respecting, 21
duties of, prescribed in New Testament, 22
Rabbinic degradation of, 359
cannot give testimony, 360
not regarded as part of the congregation, 361
World to come, who are excluded from, 4
all Israel has a share in, 64
Rabbinic opinions about, 129

Printed at the Operative Institution, Palestine Place, Bethnal Green,


London.

Footnotes
1. Published originally January 15, 1836.
2. Joreh Deah, sec. 246.

3. Literally, ‫תיפלות‬. In the translation of this word we follow the


interpretation of the Joreh Deah, which renders it ‫דבר עבירה‬.
This is obviously not the place to discuss the other opinions of
the Rabbies.

4. See Kiddushin, fol. 29, col. 2.

5. Joma., fol. 66, col. 2.

6. Fol. 59, col. 1.

7. Transactions of Parisian Sanhedrin, p. 178.

8. Lehrbuch der Mosaischen Religion. München, 1826, page 150.

9. We quote the passage as we find it. Noachides is here taken


for the seven commandments of the children of Noah, contrary
to the usual acceptation of the word.

10. Hilchoth Accum, c. x. 1.

11. Hilchoth Rotzeach, c. xii. 15. See also Bava Bathra, fol. iv. col.
1., about the middle of the page, where the punishment of
Daniel is more fully discussed.

12. Jost. volume vii. p. 91.

13. Hilchoth Rotzeach, c. iv. 10.

14. Dr. Jost’s Geschichte der Israeliten, vol. vii. p. 93.

15. Instead of ‫ לנד‬alone, there is another reading, ‫לנד׳׳‬, the tribunal.

16. Jewish Prayer-book, p. 152.

17. The British Jews of Burton-street Synagogue have expunged


from their prayers the intolerance here complained of.
18. See Jost’s Geschichte, vol. i. 70 and 153.

19. This alludes to ‫בהמות‬. See Job xl. 15, &c. D. Levi.

20. According to Rashi.

21. According to Rashi, one who goes from house to house to get
alms.

22. Rashi says a man who is liberal in almsgiving.

23. The only explanation which Rashi gives of these words is ‫לחש‬
‫“ הוא‬It is a charm.”

24. Literally, ‫“ לחש הוא‬It is a charm.”—Rashi.

25. The Bareitha.

26. Such as a key, a ring, or a knife.—Rashi.

27. Hilchoth Shabbath and Hilchoth Eruvin extend from fol. 140 to
fol. 226.

28. That is, if the Sabbath commence before he can get to a


resting place.

29. ‫דחמור אתה מצווה על שביתתו ולא דנכרי ׃‬


For thou art commanded respecting the resting of the ass, but
not respecting that of the Gentile.

30. Isaac.

31. “Alluding to Isaac’s being bound; and thus considered as if he


had been offered, and his body burnt to ashes on the altar.”
(Levi’s note.)

32. See the Machsor for the Day of Atonement, in ‫אז מלפני בראשית‬
and for the Passover, in ‫ברה דודי‬.
33. ‫ ולא למהר דאינו יכול לעשותם לעולם הבא ׃‬, ‫היים לעשותם בעולם הזה‬

34. Literally, “a stranger.”

35. Compare Deut. xiii. 13, and Hilchoth Accum, c. iv.

36. This number was originally published December 23, 1836.

37. “A Manual of Judaism,” by Joshua Van Oven, Esq.,


M.R.C.S.L., London, 1835. Page 22.
Transcriber’s Notes:
Footnotes have been collected at the end of the text, and are
linked for ease of reference.
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