Solution manual
The legal and regulatory environment of business
19th edition by Marisa A. Pagnattaro Daniel R. Cahoy
All Chapters 1-22 Covered
,ThenLegalnandnRegulatorynEnvironmentnofnBusiness,n19thnEditionnBynMarisanPagnattaro,n
DanielnCahoy,nJulienManningnMagid,nPeternShedd
Chaptern1-22
Chapter 1 La n n
w as a Foundation for Business
n n n n n
LearningnObjectives
Thenpurposenofnthisnchapternisntonintroducenthenstudentsntonthensubjectnofnlawnandntonsomenclas
sificationsnofnitsnsubjectnmatter.nInnaddition,nitnisndesignedntoninstillninnthemnrespectnfornthenrolen
ofnthen―rulenofnlaw‖ninnthensocietynandnthatnthenjudicialnsystemnisnthenmostnimportantnstabilizing
nforceninnsociety.nItnshouldncreatenannawarenessnthatnlawnisnanfoundationnfornthenprivatenmarketn
andn―property‖nasnanlegalnconceptnunderpinsnthatnmarketnandncontributesntonthenmaximumnwea
lthnofnnationsnthroughnproductivity.nThisnchapternalsondescribesnstarendecisis,nbasicnsourcesnofnt
henAmericannlaw,nandnsanctionsnthatncannbenimposednwhennthenlawnisnnotnfollowed.
References
• Bethell,nTom,nThenNoblestnTriumphn(1999).
• Bernstein,nWilliamnJ.,nThenFirstnofnPlenty.nMcGraw-Hilln(2004).
• Driegel,nBlandine,nThenStatenandnthenRulenofnLaw.nPrincetonnU.nPressn(1995).
• Friedman,nLawrencenM.,nAmericannLaw,n2dned.nNortonn(1998).
• Harnett,nBertram,nLaw,nLawyersnandnLaymen:nMakingnSensenofnthenAmericannLegaln
System.nSannDiego:nHarcourtnBracenJovanovichn(1984).
• Helpman,nElhanan,nThenMysterynofnEconomicnGrowth.nBelknapnPressn(2004).
• Holmes,nThenCommonnLaw.nLittle,nBrownnandnCompanyn(1922).
• Kelman,nM.,nAnGuidentonCriticalnLegalnStudies.nHarvardn(1988).
• Pound,nAnnIntroductionntonthenPhilosophynofnLaw.nYalenUniversitynPressn(1922).
• Reed,nO.nLee,n―Law,nthenRulenofnLaw,nandnProperty,‖nAmericannBusinessnLawnJournal,nVol.n
, 38n(2001).
• Reed,nO.nLee,n―Nationbuildingn101:nReductionismninnProperty,nLiberty,nandnCorporaten
Governance,‖n36nVanderbiltnJournalnofnTransitionalnLawn673n(2003).
• ThenSpiritnofnthenCommonnLaw.nMarshallnJonesnCo.n(1921).
, TeachingnOutline
I. Introduction
A. WhynLawnandnRegulationsnArenFundamentalnFoundationsnfornBusinessn(LOn1-1)
Emphasize:
• Thatnbynstudyingnthenlegalnandnregulatorynenvironmentnofnbusiness,nstudentsnwillngainna
nnunderstandingnofnbasicnlegalnvocabularynandngainnthenabilityntonidentifynproblematicnsi
tuationsnthatncouldnresultninnliability.
• Thatnbecausenofnthenpositivenrolenlawyersncannplay,ntheynarenincreasinglynbeingnaskednt
onjoinncorporatenboards.
• Sidebarn1.1ntitledn‗SustainabilitynandnIntegrity:nCautionarynTalesnofnLegalnLiability.‘
II. Law,nthenRulenofnLaw,nandnProperty
A. Law
Emphasize:
• Thensimplendefinitionnofnlaw.nItncannbenelaboratednbynobservingnthatnlawnisnanrule-
based,nstate-enforcednformalnorderingnsystemnwithnmoralnelements.
• Thatnadequatenlawnandnlegalninstitutesnpromotenthencertaintynandntrustnnecessarynforn
complex,nlong-
termnbusinessnarrangements.nInnanneconomicnsense,ntheynlowernthencostsnofntransacti
ngnbusiness.
AdditionalnMattersnfornDiscussion:
• Discussnthatnlawnformalizesnvaluesnandntraditionsnandnthatnlawnisnmorenneededninnanlarg
e,nheterogeneousnmodernnnationnthanninnansmaller,nhomogeneousnnation.nComparenthen
U.S.nandnJapan.
• Itnisnnotntoonearlyninnthisnchapterntonasknstudentsnwhethernornnotnlacknofnlawnandnstri
ctnregulationnfacilitatedntheneconomicncrashnandnrecessionnthatnbeganninn2008.
• Asknstudentsntoncommentnonnhownmistrustnofnlawnandnlawmakersnprecipitatednthe
―OccupynWallnStreet‖nandnothern―Occupy…‖nmovementsnthatnaroseninn2011.
• DiscussnhownthenlawnimpactsnthenCOVIDn19nrestrictionsnonnbusinessesnopeningninn2020.
B. ThenRulenofnLaw
Emphasize:
• Thatnundernanrulenofnlaw,nlawsnarengenerallynandnequallynapplicable.
• Thatnlacknofnthenrulenofnlawninternationallynhasnproducednhundredsnofncallsnfornitninnthe
The legal and regulatory environment of business
19th edition by Marisa A. Pagnattaro Daniel R. Cahoy
All Chapters 1-22 Covered
,ThenLegalnandnRegulatorynEnvironmentnofnBusiness,n19thnEditionnBynMarisanPagnattaro,n
DanielnCahoy,nJulienManningnMagid,nPeternShedd
Chaptern1-22
Chapter 1 La n n
w as a Foundation for Business
n n n n n
LearningnObjectives
Thenpurposenofnthisnchapternisntonintroducenthenstudentsntonthensubjectnofnlawnandntonsomenclas
sificationsnofnitsnsubjectnmatter.nInnaddition,nitnisndesignedntoninstillninnthemnrespectnfornthenrolen
ofnthen―rulenofnlaw‖ninnthensocietynandnthatnthenjudicialnsystemnisnthenmostnimportantnstabilizing
nforceninnsociety.nItnshouldncreatenannawarenessnthatnlawnisnanfoundationnfornthenprivatenmarketn
andn―property‖nasnanlegalnconceptnunderpinsnthatnmarketnandncontributesntonthenmaximumnwea
lthnofnnationsnthroughnproductivity.nThisnchapternalsondescribesnstarendecisis,nbasicnsourcesnofnt
henAmericannlaw,nandnsanctionsnthatncannbenimposednwhennthenlawnisnnotnfollowed.
References
• Bethell,nTom,nThenNoblestnTriumphn(1999).
• Bernstein,nWilliamnJ.,nThenFirstnofnPlenty.nMcGraw-Hilln(2004).
• Driegel,nBlandine,nThenStatenandnthenRulenofnLaw.nPrincetonnU.nPressn(1995).
• Friedman,nLawrencenM.,nAmericannLaw,n2dned.nNortonn(1998).
• Harnett,nBertram,nLaw,nLawyersnandnLaymen:nMakingnSensenofnthenAmericannLegaln
System.nSannDiego:nHarcourtnBracenJovanovichn(1984).
• Helpman,nElhanan,nThenMysterynofnEconomicnGrowth.nBelknapnPressn(2004).
• Holmes,nThenCommonnLaw.nLittle,nBrownnandnCompanyn(1922).
• Kelman,nM.,nAnGuidentonCriticalnLegalnStudies.nHarvardn(1988).
• Pound,nAnnIntroductionntonthenPhilosophynofnLaw.nYalenUniversitynPressn(1922).
• Reed,nO.nLee,n―Law,nthenRulenofnLaw,nandnProperty,‖nAmericannBusinessnLawnJournal,nVol.n
, 38n(2001).
• Reed,nO.nLee,n―Nationbuildingn101:nReductionismninnProperty,nLiberty,nandnCorporaten
Governance,‖n36nVanderbiltnJournalnofnTransitionalnLawn673n(2003).
• ThenSpiritnofnthenCommonnLaw.nMarshallnJonesnCo.n(1921).
, TeachingnOutline
I. Introduction
A. WhynLawnandnRegulationsnArenFundamentalnFoundationsnfornBusinessn(LOn1-1)
Emphasize:
• Thatnbynstudyingnthenlegalnandnregulatorynenvironmentnofnbusiness,nstudentsnwillngainna
nnunderstandingnofnbasicnlegalnvocabularynandngainnthenabilityntonidentifynproblematicnsi
tuationsnthatncouldnresultninnliability.
• Thatnbecausenofnthenpositivenrolenlawyersncannplay,ntheynarenincreasinglynbeingnaskednt
onjoinncorporatenboards.
• Sidebarn1.1ntitledn‗SustainabilitynandnIntegrity:nCautionarynTalesnofnLegalnLiability.‘
II. Law,nthenRulenofnLaw,nandnProperty
A. Law
Emphasize:
• Thensimplendefinitionnofnlaw.nItncannbenelaboratednbynobservingnthatnlawnisnanrule-
based,nstate-enforcednformalnorderingnsystemnwithnmoralnelements.
• Thatnadequatenlawnandnlegalninstitutesnpromotenthencertaintynandntrustnnecessarynforn
complex,nlong-
termnbusinessnarrangements.nInnanneconomicnsense,ntheynlowernthencostsnofntransacti
ngnbusiness.
AdditionalnMattersnfornDiscussion:
• Discussnthatnlawnformalizesnvaluesnandntraditionsnandnthatnlawnisnmorenneededninnanlarg
e,nheterogeneousnmodernnnationnthanninnansmaller,nhomogeneousnnation.nComparenthen
U.S.nandnJapan.
• Itnisnnotntoonearlyninnthisnchapterntonasknstudentsnwhethernornnotnlacknofnlawnandnstri
ctnregulationnfacilitatedntheneconomicncrashnandnrecessionnthatnbeganninn2008.
• Asknstudentsntoncommentnonnhownmistrustnofnlawnandnlawmakersnprecipitatednthe
―OccupynWallnStreet‖nandnothern―Occupy…‖nmovementsnthatnaroseninn2011.
• DiscussnhownthenlawnimpactsnthenCOVIDn19nrestrictionsnonnbusinessesnopeningninn2020.
B. ThenRulenofnLaw
Emphasize:
• Thatnundernanrulenofnlaw,nlawsnarengenerallynandnequallynapplicable.
• Thatnlacknofnthenrulenofnlawninternationallynhasnproducednhundredsnofncallsnfornitninnthe
