What Is New in the Eleventh Edition

The study of business law and, more generally, the
Insight into Ethics, and Insight into the Global
legal environment of business has universal applica-
Environment. These features, which appear in
bility.A student entering virtually any field of business
selected chapters, provide valuable insights into how
must have at least a passing understanding of busi-
the courts and the law are dealing with specific contem-
ness law in order to function in the real world.
porary issues. Each of these features ends with a critical-
Additionally, students preparing for a career in
thinking question that explores some cultural,
accounting, government and political science, eco-
environmental, political, social, or technological aspect
nomics,and even medicine can use much of the infor-
of the issue.
mation they learn in a business law and legal
1. Insight into E-Commerce—When the topic
environment course. In fact, every individual through-
involves some new technology or how the
out his or her lifetime can benefit from a knowledge
Internet is affecting a particular area of law, we
of contracts, real property law, landlord-tenant rela-
include an Insight into E-Commerce feature. For
tionships, and other topics. Consequently, we have
example, Chapter 1 contains an Insight into
fashioned this text as a useful “tool for living” for all of
E-Commerce feature on How the Internet Is
your students (including those taking the CPA exam).
Expanding Precedent, Chapter 8 has a feature on
For the Eleventh Edition,we have spent a great deal
Search Engines Versus Copyrights, and Chapter 41
of effort making this book more contemporary, excit-
includes a feature on Moving Company
ing, and visually appealing than ever before to encour-
Information to the Internet.
age your students to learn the law. We have also
2. Insight into Ethics—When the topic has ethical
designed many new features and special pedagogical
implications, we include an Insight into Ethics fea-
devices that focus on the legal, ethical, global, and
ture. For example, Chapter 2’s Insight into Ethics
e-commerce environments, while addressing core cur-
feature is entitled Implications of an Increasingly
riculum requirements.
Private Justice System, Chapter 14’s feature
addresses Internet Click Fraud, and Chapter 51’s
What Is New in the Eleventh Edition
feature covers An Auditor’s Duty to Correct Certified
Opinions.
Instructors have come to rely on the coverage, accu-
3. Insight into the Global Environment—
racy, and applicability of Business Law. To make sure
Because business transactions today are increas-
that our text engages your students’ interests, solidifies
ingly global, we have also included a feature that
their understanding of the legal concepts presented,
discusses global implications or explains how for-
and provides the best teaching tools available,we now
eign nations deal with a particular topic. For exam-
offer the following items either in the text or in con-
ple, there is an Insight into the Global Environment
junction with the text.
feature in Chapter 5 titled Breach of Trust Issues Hit
New Insight Features
Major German Corporations, one in Chapter 19 on
International Use and Regulation of the Internet,and
For the Eleventh Edition,we have created three special
one in Chapter 42 on Moving Your Small Business
new Insight features—Insight into E-Commerce,
Online: Seller Beware.

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ii
Two Critical-Thinking Questions at the
Analysis questions and the questions in the Reviewing
End of Every Case Presented in This Text
features, which are described next.
In every chapter of the Tenth Edition of West’s Business
New Special Case Analysis Questions
Law, we included one longer case excerpt followed by
two case-ending questions designed to guide students’
Through the years, instructors have frequently
analysis of the case and help build their legal reason-
requested that we teach their business law students
ing skills.For the Eleventh Edition,we continue to offer
how to analyze case law. We discuss the fundamental
one longer excerpt—now labeled an Extended
topic of how to read and understand case law in
Case—with two critical-thinking questions in every
Chapter 1 and cover How to Brief Cases and Analyze
chapter. These extended cases may be used for case-
Case Problems in Appendix A.For this edition,we have
briefing assignments and are also tied to the Special
gone one step further: in selected chapters of the text,
Case Analysis questions found in every unit of the text.
we provide a Special Case Analysis question that is
Because of the popularity of the case-ending ques-
based on the Extended Case excerpt in that chapter.
tions, for this edition, we’ve also included two ques-
The Special Case Analysis questions are part of the
tions for all cases. In addition to the What If the Facts
Questions and Case Problems that appear at the end of
Were Different? questions and Impact of This Case on
the chapter. We offer one of these special questions for
Today’s Law sections that appeared in the Tenth
every unit in the text to build students’ analytical skills.
Edition,we’ve devised an entirely new set of questions.
The Special Case Analysis questions test students’ abil-
These new Dimension questions focus on meeting
ity to perform IRAC (Issue, Rule, Application, and
aspects of your curriculum requirements, including:
Conclusion) case analysis. Students must identify the
legal issue presented in the chapter’s extended case,
• The Ethical Dimension
understand the rule of law, determine how the rule
• The E-Commerce Dimension
applies to the facts of the case,and describe the court’s
• The Global Dimension
conclusion. Instructors can assign these questions as
homework or can use them in class to elicit student
• The Legal Environment Dimension
participation and teach case analysis.
Suggested answers to all questions following
cases can be found in both the Instructor’s
Reviewing Features in Every Chapter
Manual and the Answers Manual that accom-
pany this text. (The full title of this manual is Answers
For the Eleventh Edition of Business Law, we have
to Questions and Case Problems and Alternate Problem
included a new and improved feature at the end of
Sets with Answers.)
every chapter that helps solidify students’ understand-
ing of the chapter materials. The feature appears just
Greater Emphasis on
before the Terms and Concepts and is entitled
Critical Thinking and Legal Reasoning
Reviewing [chapter topic]. Each of these features pres-
ents a hypothetical scenario and then asks a series of
Today’s business leaders are often required to think
questions that require students to identify the issues
“outside the box”when making business decisions.For
and apply the legal concepts discussed in the chapter.
this reason, we have added a number of critical-
These features are designed to help students review
thinking elements for the Eleventh Edition that
the chapter topics in a simple and interesting way and
are designed to challenge students’ understanding of
see how the legal principles discussed in the chapter
the materials beyond simple retention.Your students’
affect the world in which they live. An instructor can
critical-thinking and legal reasoning skills will be
use these features as the basis for in-class discussion or
increased as they work through the numerous peda-
encourage students to use them for self-study prior to
gogical devices within the book. Almost every feature
completing homework assignments. Suggested
and every case presented in the text conclude with
answers to the questions posed in the Reviewing
some type of critical-thinking question. These ques-
features can be found in both the Instructor’s
tions include For Critical Analysis,What If the Facts Were
Manual and the Answers Manual that accom-
Different? and the Ethical, E-Commerce, Global, and
pany this text.
Legal Environment Dimension questions discussed
The Reviewing features are also tied to a new set of
previously. They also include the new Special Case
questions for each chapter in the Web-based

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iii
CengageNOW system, to be discussed next. Students
5. Application and Analysis—The final set of four
can read through the scenario in the text and then
questions for each chapter is new and is linked to
answer the four Applications and Analysis questions
the Reviewing features (discussed previously) that
online. By using the CengageNOW system, stu-
appear in every chapter of the text. The student is
dents will receive instant feedback on their
required to read through the hypothetical scenario,
answers to these questions, and instructors will
analyze the facts presented, identify the issues in
obtain automatically graded assignments that
dispute, and apply the rules discussed in the chap-
enable them to assess students’ understanding of
ter to answer the questions.
the materials.
6. Essay Questions—In addition to the multiple-
choice questions available on CengageNOW, we
Improved Content and Features
now also provide essay questions that allow stu-
on CengageNOW for Business Law:
dents to compose and submit essays online.
Interactive Assignment System
Students’ essays are automatically recorded to the
For those instructors who want their students to learn
gradebook, which permits instructors to quickly
how to identify and apply the legal principles they
and easily evaluate the essays and record grades.
study in this text, we have created new content and
7. Video Questions—CengageNOW also now
improved the features of our Web-based product for this
includes links to the Digital Video Library for
edition. The system provides interactive, automatically
Business Law so that students can access and view
graded assignments for every chapter and unit in this
the video clips and answer questions related to the
text. For each of the fifty-two chapters, we have devised
topics in the chapter.
different categories of multiple-choice questions that
8. Cumulative Questions for Each Unit—In addi-
stress different aspects of learning the chapter materi-
tion to the questions relating to each chapter, the
als. By using the optional CengageNOW system, stu-
CengageNOW system provides a set of cumulative
dents can complete the assignments from any location
questions, entitled “Synthesizing Legal Concepts,”
via the Internet and can receive instant feedback on
for each of the eleven units in the text.
why their answers to questions were incorrect or cor-
9.
rect (if the instructor wishes to allow feedback).
Additional Advantages of CengageNOW—
Instructors can customize the system to meet their own
Instructors can utilize the system to upload their
specifications and can track students’ progress.
course syllabi, create and customize homework
assignments, keep track of their students’ progress,
1. Chapter Review Questions—The first set of ten
communicate with their students about assignments
to fifteen questions reviews the basic concepts and
and due dates, and create reports summarizing the
principles discussed in the chapter. These ques-
data for an individual student or for the whole class.
tions often include questions based on the cases
presented in the text.
Expanded Ethics Coverage and New
2. Brief Hypotheticals—The next group of seven to
Questions of Ethics in Every Chapter
ten questions emphasizes spotting the issue and
identifying the rule of law that applies in the con-
For the Eleventh Edition of Business Law, we have sig-
text of a short factual scenario.
nificantly revised and updated the chapter on ethics
and business decision making (Chapter 5). The chap-
3. Legal Reasoning—The third category includes
ter now presents a more practical, realistic, case-study
five questions that require students to analyze the
approach to business ethics and the dilemmas facing
factual situation provided and apply the rules of
businesspersons today. The emphasis on ethics is reit-
law discussed in the chapter to arrive at an answer.
erated in materials throughout the text,particularly the
4. IRAC Case Analysis—The next set of four ques-
Focus on Ethics features that conclude every unit, the
tions for each chapter requires students to perform
Insight into Ethics features, and the pedagogy that
all the basic elements of legal reasoning (identify
accompanies selected cases and features.We also dis-
the issue, determine the rule of law, apply the rule
cuss corporate governance issues as appropriate
to the facts presented, and arrive at a conclusion).
within the ethics chapter, the corporations chapters,
These questions are based on the Extended Case
and the Focus on Ethics feature that concludes Unit
excerpts that appear in each chapter.
Eight on business organizations.

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iv
For this edition,we have also added A Question of
• Internet exercises for every chapter in the text (at
Ethics based on a case from 2006 or 2007 to
least two per chapter). These exercises have been
every chapter of the text. These problems provide
refocused to provide more practical information to
modern-day examples of the kinds of ethical issues
business law students on topics covered in the
faced by businesspersons and the ways courts typi-
chapters and to acquaint students with the legal
cally resolve them.
resources that are available online.
• Interactive quizzes for every chapter in this text.
More on the Sarbanes-Oxley Act of 2002
• Glossary terms for every chapter in the text.
In a number of places in this text, we discuss the
• Flashcards that provide students with an optional
Sarbanes-Oxley Act of 2002 and the corporate scan-
study tool to review the key terms in every chapter.
dals that led to the passage of that legislation. For
example, Chapter 5 contains a section examining the
• PowerPoint slides that have been revised for this
requirements of the Sarbanes-Oxley Act relating to
edition.
confidential reporting systems. In Chapter 41, we dis-
• Legal reference materials including a “Statutes”
cuss this act in the context of securities law and pre-
page that offers links to the full text of selected
sent an exhibit (Exhibit 41–4) containing some of the
statutes referenced in the text, a Spanish glossary,
key provisions of the act relating to corporate account-
and links to other important legal resources avail-
ability with respect to securities transactions. Finally, in
able for free on the Web.
Chapter 51, we again look at provisions of the
• Law on the Web features that provide links to
Sarbanes-Oxley Act as they relate to public accounting
the URLs that appear at the end of every chapter in
firms and accounting practices.
the text.
Because the act is a topic of significant concern in
today’s business climate, we also include excerpts and
• Link to CengageNOW for Business Law:
explanatory comments on the Sarbanes-Oxley Act of
Interactive Assignment System with different
2002 as Appendix H. Students and instructors alike will
types of questions related to every chapter in the
find it useful to have the provisions of the act immedi-
text and one set of cumulative questions for each
ately available for reference.
unit in the text.
• Link to our Digital Video Library that offers a
Business Law on the Web
compendium of more than sixty-five video scenar-
ios and explanations.
For the Eleventh Edition of Business Law, we have
• Online Legal Research Guide that offers com-
redesigned and streamlined the text’s Web site so
plete yet brief guidance to using the Internet and
that users can easily locate the resources they seek.
evaluating information obtained from the Internet.
When you visit our Web site at academic.cengage.
As an online resource, it now includes hyperlinks
com/blaw/clarkson, you will find a broad array of
to the Web sites discussed for click-through
teaching/learning resources, including the following:
convenience.
• Relevant Web sites for all of the Emerging Trends
• Court case updates that present summaries of
features that are presented in this text.
new cases from various West legal publications, are
• Sample answers to the Case Problem with
continually updated, and are specifically keyed to
Sample Answer, which appears in the Questions
chapters in this text.
and Case Problems at the end of every chapter. This
problem/answer set is designed to help your stu-
A Comprehensive
dents learn how to answer case problems by
acquainting them with model answers to selected
Digital Video Library
problems. In addition, we offer the answers to the
For this edition of Business Law, we have included
hypothetical Questions with Sample Answers on the
special Video Questions at the end of selected chap-
Web site as well as in the text (Appendix I).
ters. Each of these questions directs students to the
• Videos referenced in the new Video Questions (dis-
text’s Web site (at academic.cengage.com/blaw/
cussed shortly) that appear in selected chapters of
clarkson) to view a video relevant to a topic covered
this edition of Business Law.
in the chapter. This is followed by a series of ques-

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v
tions based on the video. The questions are again
ture asks the student to identify her or his position on
repeated on the Web site, when the student accesses
the issue. Some examples of these features are:
the video. An access code for the videos can be
• Tort Reform (Chapter 6).
packaged with each new copy of this textbook for no
•
additional charge. If Digital Video Library access did
Are Online Fantasy Sports Gambling? (Chapter 13).
not come packaged with the textbook, students can
• A Shareholder Access Rule (Chapter 39).
purchase it online at academic.cengage.com/
• Should the EPA Take the Threat of Global Warming
blaw/dvl.
into Account? (Chapter 45).
These videos can be used for homework assign-
ments, discussion starters, or classroom demonstra-
Concept Summaries
tions and are useful for generating student interest.
Some of the videos are clips from actual movies,
Whenever key areas of the law need additional
such as The Jerk and Bowfinger. By watching a video
emphasis, we provide a Concept Summary. These sum-
and answering the questions, students will gain an
maries have always been a popular pedagogical tool
understanding of how the legal concepts they have
in this text. There are now more than fifty of these sum-
studied in the chapter apply to the real-life situation
maries, many of which have been modified to achieve
portrayed in the video. Suggested answers for all
greater clarity.
of the Video Questions are given in both the
Exhibits
Instructor’s Manual and the Answers Manual
that accompany this text. The videos are part of
When appropriate, we also illustrate important aspects
our Digital Video Library, a compendium of more
of the law in graphic form in exhibits. In all, more than
than sixty-five video scenarios and explanations.
one hundred exhibits are featured in Business Law,
Eleventh Edition. For this edition, we have added eight
Additional Special
new exhibits, and we have modified existing exhibits
Features of This Text
to achieve better clarity. Some examples of the new
exhibits are:
We have included in Business Law, Eleventh Edition, a
• Exhibit 2–3 Basic Differences in the Traditional
number of pedagogical devices and special features,
Forms of ADR
including those discussed here.
• Exhibit 8–2 Existing Generic Top Level Domain
Emerging Trends
Names
• Exhibit 26–2 Defenses against Liability on Negotiable
Presented throughout this text are a number of fea-
Instruments
tures titled Emerging Trends. These features examine
new developments in business law and the legal envi-
• Exhibit 38–1 Offshore Low-Tax Jurisdictions
ronment and their potential effect on businessper-
• Exhibit 39–1 Directors’ Management Responsibilities
sons. Here are some examples of these features:
• Exhibit 41–1 Basic Functions of the SEC
• E-Discovery and Cost-Shifting (Chapter 3).
• Stand-Your-Ground Laws (Chapter 9).
An Effective Case Format
• Removing Class-Action Lawsuits to the Federal
For this edition, we have carefully selected recent
Courts (Chapter 23).
cases that not only provide on-point illustrations of
the legal principles discussed in the chapter but also
• New Issues in Online Privacy and Employment
are of high interest to students. In all, more than 70
Discrimination (Chapter 34).
percent of the cases in the Eleventh Edition are from
Contemporary Legal Debates
2006 or 2007.
As mentioned, for this edition we have included
Contemporary Legal Debates features are also inter-
one Extended Case per chapter that is presented
spersed throughout this edition of Business Law. These
entirely in the court’s language and does not include
features introduce the student to a controversial issue
any paraphrased section on the case’s background
that is now being debated within the legal community.
and facts or the decision and remedy. The remaining
A Where Do You Stand? section concluding each fea-
cases in each chapter appear in our usual Business

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vi
Law format, which now includes two case-ending
options for questions in each category (true/false,mul-
questions for every case in this edition of the text.We
tiple choice, essay).
also provide bracketed definitions for any terms in the
opinion that might be difficult for students to under-
Questions and Case Problems
stand. Cases may include one or more of the following
with Sample Answers
sections, a few of which have already been described:
In response to those instructors who would like stu-
• Company Profiles—Certain cases include a pro-
dents to have sample answers available for some of
file describing the history of the company involved
the questions and case problems, we have included
to give students an awareness of the context of the
two questions with sample answers in each chapter.
case before the court. Some profiles include the
The Question with Sample Answer is a hypothetical
URL for the company’s Web site.
question for which students can access a sample
• What If the Facts Were Different?—One case
answer in Appendix I at the end of the text. Every
in each chapter concludes with this special sec-
chapter also has one Case Problem with Sample
tion.The student is asked to decide whether a spec-
Answer that is based on an actual case and answered
ified change in the facts of the case would alter its
on the text’s Web site (located at academic.
outcome. Suggested answers to these ques-
cengage.com/blaw/clarkson). Students can com-
tions are included in both the Instructor’s
pare the answers provided to their own answers to
Manual and the Answers Manual that
determine whether they have done a good job of
accompany this text.
responding to the question and to learn what should
• The Ethical [E-Commerce, Global, or Legal
be included when answering the end-of-chapter ques-
Environment] Dimension—As discussed previ-
tions and case problems.
ously, these special new questions ask students to
explore different aspects of the issues of the case
The Most Complete Supplements
and help instructors meet core curriculum require-
ments for business law. Suggested answers to
Package Available Today
these questions are included in both the
This edition of Business Law is accompanied by a vast
Instructor’s
Manual
and the Answers
number of teaching and learning supplements. We
Manual that accompany this text.
have already mentioned the CengageNOW for
• International Considerations—These sections
Business Law: Interactive Assignment System and the
let your students know how the particular issue
supplemental resources available on the text’s Web
before the court is treated in other countries.
site at academic.cengage.com/blaw/clarkson. In
• Impact of This Case on Today’s Law—
addition, there are numerous other supplements,
Because many students are unclear about how
including those listed below, that make up the com-
some of the older cases presented in this text affect
plete teaching/learning package for the Eleventh
today’s court rulings,we include a special section at
Edition. For further information on the Business Law
the end of landmark and classic cases that clarifies
teaching/learning package, contact your local sales
the relevance of the particular case to modern law.
representative or visit the Business Law Web site.
Two Test Banks Available
Printed Supplements
To provide instructors with even greater flexibility in
• Instructor’s Manual—Includes case synopses,
teaching, we offer two separate test banks, each with a
additional cases addressing the issue for selected
complete set of questions for every chapter of Business
cases, background information, teaching sugges-
Law, Eleventh Edition.These two test banks have been
tions, and lecture enhancements, as well as sug-
significantly revised and many new questions added.
gested answers to all the case-ending and
Those instructors who would like to alternate the tests
feature-ending questions, the questions in the
they give their students each semester can now do so
Reviewing features at the end of each chapter,
without having to create additional testing materials.In
and additional materials on the Focus on Ethics
addition, instructors who would like to pick and
sections at the end of each unit. (Also available on
choose from the questions offered have twice as many
the Instructor’s Resource CD, or IRCD.)

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vii
• Study Guide—Includes essay questions and sam-
• Digital Video Library—Provides access to more
ple CPA exam questions.
than sixty-five videos, including the Drama of the
• Two comprehensive Test Banks—Test Bank 1
Law videos and video clips from actual Hollywood
and Test Bank 2 each contain approximately 1,040
movies. Access to our Digital Video Library is avail-
multiple-choice questions with answers, more
able in an optional package with each new text at
than 1,040 true/false questions with answers, and
no additional cost. If the Digital Video Library
two short essay questions per chapter (104 in each
access did not come packaged with the textbook,
Test Bank). Additionally, there is one question for
your students can purchase it online at academic.
every Emerging Trends and Contemporary Legal
cengage.com/blaw/dvl.
Debates feature, and two multiple-choice ques-
• Videos—Qualified adopters using this text have
tions for each Focus on Ethics section. (Also avail-
access to the entire library of videos in VHS format,
able on the IRCD.)
a vast selection covering most business law issues.
For more information about these videotapes, visit
• Answers to Questions and Case Problems
academic.cengage.com/blaw/vl.
and Alternate Problem Sets with Answers—
Provides answers to all the questions and case
problems presented in the text, including the new
For Users of the Tenth Edition
Special Case Analysis questions, A Question of
First of all, we want to thank you for helping make
Ethics, and Video Questions, as well as suggested
Business Law the best-selling business law text in
answers to all the case-ending questions, feature-
America today. Second,we want to make you aware of
ending questions, and the questions in the
the numerous additions and changes that we have
Reviewing features at the end of each chapter.
made in this edition—many in response to comments
(Also available on the IRCD.)
from reviewers. For example, we have added more
Software, Video,
examples and incorporated the latest United States
and Multimedia Supplements
Supreme Court decisions throughout the text as appro-
priate. We have substantially revised and reorganized
• Instructor’s Resource CD-ROM ( IRCD)—The
the business organizations unit (Unit Eight), particu-
IRCD includes the following supplements:
larly the chapters on corporations (Chapter 38 through
Instructor’s Manual, Answers Manual, Test Bank 1
40), which have been changed to be more in line with
and Test Bank 2, Case-Problem Cases, Case
the reality of modern corporate law. We have simpli-
Printouts, Lecture Outline System, PowerPoint
fied and streamlined the chapter on securities law
slides, ExamView, Instructor’s Manual for the Drama
(Chapter 41), and we have revised and reorganized
of the Law video series, Handbook of Landmark
the property chapters (Chapters 47 and 48).
Cases and Statutes in Business Law and the Legal
Environment, Handbook on Critical Thinking and
Significantly Revised Chapters
Writing in Business Law and the Legal Environment,
and A Guide to Personal Law.
Every chapter of the Eleventh Edition has been revised
as necessary to incorporate new developments in the
• ExamView Testing Software (also available on
law or to streamline the presentations. A number of
the IRCD).
new trends in business law are also addressed in the
• Lecture Outline System (also available on the
cases and special features of the Eleventh Edition.
IRCD).
Other major changes and additions made for this edi-
• PowerPoint slides (also available on the IRCD).
tion include the following:
• WebTutor Advantage and WebTutor Toolbox—
• Chapter 2 (Courts and Alternative Dispute
Feature chat, discussion groups, testing, student
Resolution)—To provide greater clarity on impor-
progress tracking,and business law course materials.
tant foundational issues, many parts of this chapter
were reworked, including the discussions of per-
• Case-Problem Cases (available only on the IRCD).
sonal jurisdiction, Internet jurisdiction, standing to
• Transparency acetates (available only on the
sue, and appellate review. A chart was added to
IRCD).
illustrate the differences among various methods of
• Westlaw®—Ten free hours for qualified adopters.
alternative dispute resolution, and we present a

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viii
2006 United States Supreme Court decision on arbi-
2006 trademark decision in Menashe v. V Secret
tration clauses. In addition, the discussion of elec-
Catalogue, Inc. is also included). A subsection
tronic filing systems and online dispute resolution
on counterfeit goods and a 2006 law addressing
was updated. An Insight into Ethics feature was
counterfeit goods has been added to the trade-
added to discuss how the use of private judges is
mark section. The materials on domain names,
affecting the justice system.
cybersquatting,and licensing have been revamped.
The section on patents was expanded and new
• Chapter 3 (Court Procedures)—The section on
examples were added. The discussion of file-
electronic evidence and discovery issues has been
sharing was updated, and a 2007 case is presented
updated to include the federal rules that took effect
in which Sony Corporation brought a successful
in 2006.
suit for copyright infringement against an individ-
• Chapter 4 (Constitutional Authority to Regulate
ual who had downloaded eight songs. The chapter
Business)—The chapter has been thoroughly
also includes updated information on international
revised and updated to incorporate recent United
treaties protecting intellectual property and an
States Supreme Court decisions,such as the case on
Insight into E-Commerce feature on Search Engines
Internet wine shipments and the dormant com-
versus Copyright Owners.
merce clause. New examples have been added
• Chapter 9 (Criminal Law and Cyber Crime)—New
throughout, and the materials reworked to focus on
materials on identity theft and criminal spamming
business context. The chapter includes discussions
laws were added, and the existing materials were
of the USA Patriot Act’s effect on constitutional
streamlined to focus more on corporate criminal
rights and recent decisions on preemption, unpro-
liability. An updated discussion of sentencing
tected speech, freedom of religion, and privacy
guidelines is included, and the discussion of
rights. A Contemporary Legal Debates feature
defenses to criminal charges was revised. An
addresses whether State Regulation of Internet
Emerging Trends feature covers Stand-Your-Ground
Prescription Transactions Violates the Dormant
Laws (state laws allowing the use of deadly force in
Commerce Clause.
homes and vehicles to thwart violent crimes such
• Chapter 5 (Ethics and Business Decision Making)—
as robbery, carjacking, and sexual assault).
This chapter has been significantly revised and now
• Chapters 10 through 19 (the Contracts unit)—
includes a new section that provides step-by-step
Throughout this unit, we have added more exam-
guidance on making ethical business decisions.
ples to clarify and enhance our already impressive
Several new cases were added, and an Insight into
contract law coverage. We have also included
the Global Environment feature addresses ethical
more up-to-date information and new features
issues faced by German corporations.
on topics likely to generate student interest, such
• Chapter 6 (Intentional Torts)—A discussion of the
as the Contemporary Legal Debates feature
compensatory and punitive damages available in
entitled Are Online Fantasy Sports Gambling? (in
tort actions was added, and a Contemporary Legal
Chapter 13) and the feature on Internet Click Fraud
Debates feature addresses Tort Reform. Two cases
(in Chapter 14). We have changed the titles of
from 2007 are included, one on the scope of an
Chapters 14 and 15 to clearly describe the contents
Internet service provider’s immunity for online
of each chapter in plain English (for example, the
defamation and the other on invasion of privacy.
title “Mistakes, Fraud, and Voluntary Consent”
New subsections discuss trends in appropriation
replaces the former title “Genuineness of Assent”).
(right of publicity) claims and abusive or frivolous
We have chosen cases, problems, and examples for
litigation.
this unit that garner student interest, such as the
Mike Tyson example in Chapter 16, and have
• Chapter 8 (Intellectual Property and Internet
revised the text to improve clarity and reduce
Law)—The materials on intellectual property
legalese.
rights have been thoroughly revised and updated
to reflect the most current laws and trends. Several
• Chapters 20 through 23 (the unit on Domestic and
recent United States Supreme Court cases are pre-
International Sales and Lease Contracts)—We have
sented (the 2007 patent decision, KSR International
streamlined and simplified our coverage of the
Co. v. Teleflex, Inc., is the Extended Case, and the
Uniform Commercial Code.We have added numer-

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ix
ous new examples throughout the unit to increase
and updated to improve the flow and clarity, and
student comprehension. Because no state has
provide more practical information and recent
adopted the 2003 amendments to Articles 2 and 2A,
examples. In Chapter 35 (Sole Proprietorships and
we eliminated references to these amendments
Franchises), we added a section on the Franchise
throughout the chapters.
Rule that includes the 2007 amendments to the
• Chapters 24 through 27 (the unit on Negotiable
rule. In Chapter 36 (Partnerships and Limited
Instruments)—We have updated this unit through-
Liability Partnerships), we added several examples,
out to accommodate the reality of digital banking
reworked the section on fiduciary duties, and clari-
and funds transfers. In Chapter 24, we added an
fied the materials on dissociation. The most signifi-
Insight into the Global Environment feature explor-
cant changes to the unit were made in the
ing the negotiability of checks in other nations.We
corporations chapters (Chapters 38 through 40).
added a new Concept Summary in Chapter 25 and
Chapter 38 now includes a more updated discus-
replaced the Concept Summary on defenses in
sion of promotional activities, and the materials on
Chapter 26 with a more visually appealing exhibit
incorporation procedures were completely revised
on the same topic. In Chapter 27, we revised the
to reflect current state laws. New sections were
materials to incorporate the Check-Clearing in the
added on offshore low-tax jurisdictions, venture
21st Century Act (Check 21 Act) and included an
capital, and private equity financing. In Chapter 39,
Emerging Trends feature discussing how Using
we added coverage of the landmark case Guth v.
Digital Cash Facilities Money Laundering.
Loft (on the duty of loyalty), a new exhibit, and
updated materials on Sarbanes-Oxley. We also
• Chapters 28 through 30 (the unit on Creditors’
added discussions of various committees of the
Rights and Bankruptcy)—This unit has been
board of directors, corporate sentencing guide-
revised to be more up to date and comprehensible.
lines, and proxies, including new e-proxy rules.The
Chapter 29 (Secured Transactions) was substan-
topic of shareholder voting concerning executive
tially reorganized to clarify the general rules of pri-
pay is discussed,and a Contemporary Legal Debates
ority and the exceptions to those rules. The
feature explores the possibility of A Shareholder
bankruptcy law chapter (Chapter 30) is based on
Access Rule. Chapter 40 has been revised to include
law after the 2005 Reform Act and includes
share exchanges, clarify successor liability, improve
updated dollar amounts of various provisions of the
coverage of appraisal rights, and rework the mate-
Bankruptcy Code.
rial on tender offers. We include discussion of
• Chapter 33 (Employment and Labor Law) and
takeover defenses and directors’ fiduciary duties.
Chapter 34 (Employment Discrimination)—These
The chapter on securities law (Chapter 41) was
two chapters covering employment law have been
revamped to make this difficult topic more under-
thoroughly updated to include discussions of legal
standable to students. The chapter now includes
issues facing employers today. Chapter 33 includes
a new exhibit and overview of the functions of
updated minimum wage figures and Social Security
the Securities and Exchange Commission and a
and Medicare percentages. It also discusses over-
practical explanation of the Howey test. We also
time rules and provides the most current informa-
provide a simplified list of contents of a registration
tion on unionization, strikes, and employment
statements and an updated discussion of the regis-
monitoring. Chapter 34 now includes the latest
tration process that clarifies current rules on a free
developments and United States Supreme Court
writing prospectus. The final chapter in this unit
decisions,such as a decision that applied Title VII of
(Chapter 42 on Law for Small Businesses) has also
the Civil Rights Act of 1964 to an employer with
been considerably revised to address practical con-
fewer than fifteen employees and another that set
siderations, such as choosing to do business as a
the standard of proof for retaliation claims.The text
limited liability company, protecting trademarks,
discussion of burden of proof in unintentional dis-
and avoiding liability. It also includes a feature on
crimination cases has been revised and clarified.A
what businesspersons should consider before mov-
feature examines New Issues in Online Privacy and
ing their small business online.
Employment Discrimination.
• Chapter 43 (Administrative Law)—This chapter has
• Chapters 35 through 42 (the Business Organizations
been reworked to focus on the practical signifi-
unit)—This unit has been substantially reorganized
cance of administrative law for businesspersons. A

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x
new section was added on the Administrative
ing, relevant product market, and relevant geo-
Procedures Act,and another section addresses how
graphic market.
the courts give Chevron deference to agency rules.
• Chapters 47 and 48 (the Property unit)—We reor-
Informal agency actions are covered, and a new
ganized and reworked the materials in the two prop-
subsection discusses the exhaustion doctrine.
erty chapters as reviewers requested. Chapter 47
• Chapter 45 (Environmental Law)—The materials
now begins with a section discussing the differ-
on air pollution and the subsection on wetlands
ences between personal and real property, and why
have been updated. All of the cases in the chapter
the law makes this distinction. The materials on
are from the United States Supreme Court, and a
forms of property ownership (such as fee simple
Contemporary Legal Debates feature discusses the
and joint tenancy) were moved from the personal
2007 Supreme Court decision in Massachusetts v.
property chapter (Chapter 47 ) to the real property
Environmental Protection Agency relating to global
chapter (48). The coverage of bailments was
warming.
updated and simplified. Chapter 48 also includes
• Chapter 46 (Antitrust Law)—We added new exam-
more information on real estate sales contracts,
ples and coverage of leading cases throughout the
including listing agreements, escrow agreements,
chapter, particularly in the discussions of price fix-
marketable title, title searches, and title insurance.
Acknowledgments for Previous Editions
Since we began this project many years ago,a sizable number of business law professors and others have helped
us in various phases of the undertaking.The following reviewers offered numerous constructive criticisms, com-
ments, and suggestions during the preparation of all previous editions.
Jeffrey E. Allen
Heidi Boerstler
Thomas Crane
University of Miami
University of Colorado at Denver
University of Miami
Judith Anshin
Lawrence J. Bradley
Kenneth S. Culott
Sacramento City College
University of Notre Dame
University of Texas at Austin
Thomas M. Apke
Doug Brown
Larry R. Curtis
California State University,
Montana State University
Iowa State University
Fullerton
Kristi K. Brown
Richard Dalebout
Raymond August
University of Texas at Austin
Brigham Young University
Washington State University
William J. Burke
William H. Daughtrey, Jr.
William Auslen
University of Massachusetts,
Virginia Commonwealth
San Francisco City College
Lowell
University
Mary B. Bader
Kenneth Burns
Michele A. Dunkerley
Moorhead State University
University of Miami
University of Texas at Austin
Frank Bagan
Daniel R. Cahoy
O. E. Elmore
County College of Morris
Pennsylvania State University
Texas A&M University
John J. Balek
Jeanne A. Calderon
Robert J. Enders
Morton College, Illinois
New York University
California State Polytechnic
Michael G. Barth
Joseph E. Cantrell
University, Pomona
University of Phoenix
DeAnza College, California
Michael Engber
David L. Baumer
Donald Cantwell
Ball State University
North Carolina State University
University of Texas at Arlington
David A. Escamilla
Barbara E. Behr
Robert Chatov
University of Texas at Austin
Bloomsburg University of
State University of New York,
Frank S. Forbes
Pennsylvania
Buffalo
University of Nebraska at Omaha
Robert B. Bennett, Jr.
Robert J. Cox
Joe W. Fowler
Butler University
Salt Lake Community College
Oklahoma State University

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