SOLUTION MANUAL
The Legal Environment of Business, 14th Edition
by Roger E. Meiners, Chapters 1 - 22, Complete
,TABLE OF CONTENTS
➢ Chapter 1. Today’s Business Environment: Law and Ethics
➢ Chapter 2. The Court Systems
➢ Chapter 3. Trials and Resolving Disputes
➢ Chapter 4. The Constitution: Focus on Application to Business
➢ Chapter 5. Criminal Law and Business
➢ Chapter 6. Elements of Torts
➢ Chapter 7. Business Torts and Product Liability
➢ Chapter 8. Real and Personal Property
➢ Chapter 9. Intellectual Property
➢ Chapter 10. Contracts
➢ Chapter 11. Domestic and International Sales
➢ Chapter 12. Business Organizations
➢ Chapter 13. Negotiable Instruments, Credit, and Bankruptcy
➢ Chapter 14. Agency and the Employment Relationship
➢ Chapter 15. Employment and Labor Regulations
➢ Chapter 16. Employment Discrimination
➢ Chapter 17. The Regulatory Process
➢ Chapter 18. Securities Regulation
➢ Chapter 19. Consumer Protection
➢ Chapter 20. Antitrust Law
➢ Chapter 21. Environmental Law
➢ Chapter 22. The International Legal Environment of Business
,CHAPTER 1
Table of Contents
Answer to Discussion Question .................................................................................................................... 1
Answers to Case Questions........................................................................................................................... 1
Answers to Ethics and Social Questions ....................................................................................................... 3
Answer to Discussion Question
Should the common law maxim “Ignorance of the law is no excuse” apply to an immigrant who speakslittle English
and was not educated in the United States? How about for a tourist who does not speak English? Everyone knows
criminal acts are prohibited, but what about subtler rules that differ across countries and so may be
misunderstood by foreigners?
Answer: It is generally true that ignorance of the law is no excuse. Citizens are deemed to have constructive
knowledge of the law. Yet, as well known as this rule is, it is surprising how often it is proffered as an excuse.
(A Westlaw search cases finds hundreds of examples). Examples include: Deluco v. Dezi (Conn. Super) (lack of
knowledge regarding the state‘s usury laws is no excuse for the inclusion of an illegal interest rate in a sales
contract); and Plumlee v. Paddock (ignorance of thefact that the subject matter of the contract was illegal
was not excuse). The courts have provided a small exception to the rule when it comes to people in lack of
English language skills. Consider Flanery v. Kuska, (defendant did not speak English was advised by a friend
that an answer to a complaint was not required); Ramon v. Dept. of Transportation, (no English and an
inability to understand the law required for an excuse); Yurechko v. County of Allegheny, (Ignorance and with
the fact that the municipality suffered no hardship in late lawsuit filing was an excuse).
Answers to Case Questions
1. Facts from an English judge’s decision in 1884: “The crew of an English yacht .....................were cast away in
a storm on the high seas . . . and were compelled to put into an open boat. .................. They had no supply
of water and no supply of food. . . . That on the eighteenth day . . . they .................. suggested that one
should be sacrificed to save the rest. . . . That next day . . . they . . . went to the boy ..................... put a knife
into his throat and killed him . . . the three men fed upon the body ................of the boy for four days; [then]
the boat was picked up by a passing vessel, and [they] were rescued. . . . and committed for trial. . . .
if the men had not fed upon the body of the boy they would probably not have survived to be sopicked
up and rescued, but would ....................... have died of famine. The boy, being in a much weaker
condition, was likely to have died before them .............. The real question in this case [is] whether killing
under the conditions set forth .......... be or be not murder.” Do you consider the acts to be immoral?
[Regina v. Dudley and Stephens, 14 Queens Bench Division 273 (1884)]
Answer: This points out that the legal system has limits. Its acceptability is dictated by legal culture--which
determines whether law will be enforced, obeyed, avoided, or abused. It is limited by the informal rules of
the society--its customs and values. One limit is the extent to which society will allow the formal rules to be
imposed when a crime is committed in odd circumstances. Here there was an intentional murder. Does the
motive for the murder, the effort to save several lives by sacrificing one
, life, make it a crime that should be punished? Not all crimes are treated the same. It also raisesquestions about
the desirability of not giving judges flexibility in sentencing.
There was a precedent for a light sentence in this case in U.S. law: U.S. v. Holmes, 20 F. Cas. 360 (No. 15383)
(C.C.E.D. Pa. 1842). The case involved a sinking ocean liner. Several passengers madeit to the only lifeboat,
which was far too overcrowded. The captain decided to save the women and children and threw several men
overboard. The lifeboat was rescued. The grand jury refused to indict the captain from murder, only for
manslaughter. He got a six month sentence.
The British judge in the case here imposed the death penalty upon the person who survived. The judge
found it difficult to rule that every man on board had the right to make law by his own hand. The Crown
reduced the sentence to six months.
2. Smoking is a serious health hazard. Cigarettes are legal. Should cigarette manufacturers be liable for the
serious illnesses and untimely deaths caused by their unavoidably dangerous products, eventhough they post
a warning on the package and consumers voluntarily assume the health risks by smoking? [Cipollone v.
Liggett Group, Inc., 505 U.S. 504 (1992)]
Answer: The general rule that exists now is that since the government has ordered the posting of warninglabels
on cigarettes, and since the dangers of smoking are well known, consumers have been warned and are not
due compensation if they kill themselves by smoking. The Cippoline case, since reviewed by the Supreme
Court, appears to be of limited impact since the victim was adjudged to have become addicted to cigarettes
before the warning label was ordered in 1964. If cigarette makers were held responsible for all health
problems associated with cigarettes, then, like alcohol and other dangerous products, the damages would
likely be so high it would effectively ban the products. Presumably, in a free society if adults are clearly
informed of the risks of products that cannot be made safe, they accept the risk. Tobacco and alcohol
producers cannot take the dangers out of the products except at the margin by encouraging responsible
drinking and the like. Are drugs like cocaine different?
3. Two eight-year-old boys were seriously injured when riding Honda mini-trail bikes. The boys were riding on
public streets, ran a stop sign, and were hit by a truck. The bikes had clear warning labels on the front stating
they were only for off-road use. The manual stated the bikes were not to be usedon public streets. The
parents sued Honda. The supreme court of Washington said one basic issue existed: “Is a manufacturer liable
when children are injured while riding one of its mini-trail bikes on apublic road in violation of manufacturer
and parental warnings?” Is it unethical to make products like mini-trail bikes children will use when we know
accidents like this will happen? [Baughn v. Honda Motor Co., 727 P.2d 655 Sup. Ct, Wash., (1986)]
Answer: The court found no liability for the manufacturers. There was no defect; the product was safe for
intended use. Safety instructions were clear; the parents let the boys ride the bikes. Anything can be
dangerous--baseballs are dangerous when they hit the head, swings are dangerous when kids jumpout of
them; there is only so much that can be done to make the government the ―national nanny‖ as the
Washington Post once said about excessive consumer protection. Parents must accept a high degree of
responsible for their own children.
4. Johnson Controls adopted a “fetal protection policy” that women of childbearing age could not work in the
battery-making division of the company. Exposure to lead in the battery operation could cause harm to
unborn babies. The company was concerned about possible legal liability for injury sufferedby babies of
mothers who had worked in the battery division. The Supreme Court held the company policy was illegal. It
was an “excuse for denying women equal employment opportunities.” Is the Court forcing the company to be
unethical by allowing pregnant women who ignore the warnings to expose their babies to the lead? [United
Auto Workers v. Johnson Controls, 499 U.S. 187 (1991)]
Answer: The Court held it a form of sex discrimination to prevent women of child-bearing age from holding the
more dangerous jobs. The company argued that it did this to protect itself from possibleliability in case of
damage to babies and that the decision was ethical. The replacements for these workers were often men
or more senior women, who tended to be higher income workers, so this
The Legal Environment of Business, 14th Edition
by Roger E. Meiners, Chapters 1 - 22, Complete
,TABLE OF CONTENTS
➢ Chapter 1. Today’s Business Environment: Law and Ethics
➢ Chapter 2. The Court Systems
➢ Chapter 3. Trials and Resolving Disputes
➢ Chapter 4. The Constitution: Focus on Application to Business
➢ Chapter 5. Criminal Law and Business
➢ Chapter 6. Elements of Torts
➢ Chapter 7. Business Torts and Product Liability
➢ Chapter 8. Real and Personal Property
➢ Chapter 9. Intellectual Property
➢ Chapter 10. Contracts
➢ Chapter 11. Domestic and International Sales
➢ Chapter 12. Business Organizations
➢ Chapter 13. Negotiable Instruments, Credit, and Bankruptcy
➢ Chapter 14. Agency and the Employment Relationship
➢ Chapter 15. Employment and Labor Regulations
➢ Chapter 16. Employment Discrimination
➢ Chapter 17. The Regulatory Process
➢ Chapter 18. Securities Regulation
➢ Chapter 19. Consumer Protection
➢ Chapter 20. Antitrust Law
➢ Chapter 21. Environmental Law
➢ Chapter 22. The International Legal Environment of Business
,CHAPTER 1
Table of Contents
Answer to Discussion Question .................................................................................................................... 1
Answers to Case Questions........................................................................................................................... 1
Answers to Ethics and Social Questions ....................................................................................................... 3
Answer to Discussion Question
Should the common law maxim “Ignorance of the law is no excuse” apply to an immigrant who speakslittle English
and was not educated in the United States? How about for a tourist who does not speak English? Everyone knows
criminal acts are prohibited, but what about subtler rules that differ across countries and so may be
misunderstood by foreigners?
Answer: It is generally true that ignorance of the law is no excuse. Citizens are deemed to have constructive
knowledge of the law. Yet, as well known as this rule is, it is surprising how often it is proffered as an excuse.
(A Westlaw search cases finds hundreds of examples). Examples include: Deluco v. Dezi (Conn. Super) (lack of
knowledge regarding the state‘s usury laws is no excuse for the inclusion of an illegal interest rate in a sales
contract); and Plumlee v. Paddock (ignorance of thefact that the subject matter of the contract was illegal
was not excuse). The courts have provided a small exception to the rule when it comes to people in lack of
English language skills. Consider Flanery v. Kuska, (defendant did not speak English was advised by a friend
that an answer to a complaint was not required); Ramon v. Dept. of Transportation, (no English and an
inability to understand the law required for an excuse); Yurechko v. County of Allegheny, (Ignorance and with
the fact that the municipality suffered no hardship in late lawsuit filing was an excuse).
Answers to Case Questions
1. Facts from an English judge’s decision in 1884: “The crew of an English yacht .....................were cast away in
a storm on the high seas . . . and were compelled to put into an open boat. .................. They had no supply
of water and no supply of food. . . . That on the eighteenth day . . . they .................. suggested that one
should be sacrificed to save the rest. . . . That next day . . . they . . . went to the boy ..................... put a knife
into his throat and killed him . . . the three men fed upon the body ................of the boy for four days; [then]
the boat was picked up by a passing vessel, and [they] were rescued. . . . and committed for trial. . . .
if the men had not fed upon the body of the boy they would probably not have survived to be sopicked
up and rescued, but would ....................... have died of famine. The boy, being in a much weaker
condition, was likely to have died before them .............. The real question in this case [is] whether killing
under the conditions set forth .......... be or be not murder.” Do you consider the acts to be immoral?
[Regina v. Dudley and Stephens, 14 Queens Bench Division 273 (1884)]
Answer: This points out that the legal system has limits. Its acceptability is dictated by legal culture--which
determines whether law will be enforced, obeyed, avoided, or abused. It is limited by the informal rules of
the society--its customs and values. One limit is the extent to which society will allow the formal rules to be
imposed when a crime is committed in odd circumstances. Here there was an intentional murder. Does the
motive for the murder, the effort to save several lives by sacrificing one
, life, make it a crime that should be punished? Not all crimes are treated the same. It also raisesquestions about
the desirability of not giving judges flexibility in sentencing.
There was a precedent for a light sentence in this case in U.S. law: U.S. v. Holmes, 20 F. Cas. 360 (No. 15383)
(C.C.E.D. Pa. 1842). The case involved a sinking ocean liner. Several passengers madeit to the only lifeboat,
which was far too overcrowded. The captain decided to save the women and children and threw several men
overboard. The lifeboat was rescued. The grand jury refused to indict the captain from murder, only for
manslaughter. He got a six month sentence.
The British judge in the case here imposed the death penalty upon the person who survived. The judge
found it difficult to rule that every man on board had the right to make law by his own hand. The Crown
reduced the sentence to six months.
2. Smoking is a serious health hazard. Cigarettes are legal. Should cigarette manufacturers be liable for the
serious illnesses and untimely deaths caused by their unavoidably dangerous products, eventhough they post
a warning on the package and consumers voluntarily assume the health risks by smoking? [Cipollone v.
Liggett Group, Inc., 505 U.S. 504 (1992)]
Answer: The general rule that exists now is that since the government has ordered the posting of warninglabels
on cigarettes, and since the dangers of smoking are well known, consumers have been warned and are not
due compensation if they kill themselves by smoking. The Cippoline case, since reviewed by the Supreme
Court, appears to be of limited impact since the victim was adjudged to have become addicted to cigarettes
before the warning label was ordered in 1964. If cigarette makers were held responsible for all health
problems associated with cigarettes, then, like alcohol and other dangerous products, the damages would
likely be so high it would effectively ban the products. Presumably, in a free society if adults are clearly
informed of the risks of products that cannot be made safe, they accept the risk. Tobacco and alcohol
producers cannot take the dangers out of the products except at the margin by encouraging responsible
drinking and the like. Are drugs like cocaine different?
3. Two eight-year-old boys were seriously injured when riding Honda mini-trail bikes. The boys were riding on
public streets, ran a stop sign, and were hit by a truck. The bikes had clear warning labels on the front stating
they were only for off-road use. The manual stated the bikes were not to be usedon public streets. The
parents sued Honda. The supreme court of Washington said one basic issue existed: “Is a manufacturer liable
when children are injured while riding one of its mini-trail bikes on apublic road in violation of manufacturer
and parental warnings?” Is it unethical to make products like mini-trail bikes children will use when we know
accidents like this will happen? [Baughn v. Honda Motor Co., 727 P.2d 655 Sup. Ct, Wash., (1986)]
Answer: The court found no liability for the manufacturers. There was no defect; the product was safe for
intended use. Safety instructions were clear; the parents let the boys ride the bikes. Anything can be
dangerous--baseballs are dangerous when they hit the head, swings are dangerous when kids jumpout of
them; there is only so much that can be done to make the government the ―national nanny‖ as the
Washington Post once said about excessive consumer protection. Parents must accept a high degree of
responsible for their own children.
4. Johnson Controls adopted a “fetal protection policy” that women of childbearing age could not work in the
battery-making division of the company. Exposure to lead in the battery operation could cause harm to
unborn babies. The company was concerned about possible legal liability for injury sufferedby babies of
mothers who had worked in the battery division. The Supreme Court held the company policy was illegal. It
was an “excuse for denying women equal employment opportunities.” Is the Court forcing the company to be
unethical by allowing pregnant women who ignore the warnings to expose their babies to the lead? [United
Auto Workers v. Johnson Controls, 499 U.S. 187 (1991)]
Answer: The Court held it a form of sex discrimination to prevent women of child-bearing age from holding the
more dangerous jobs. The company argued that it did this to protect itself from possibleliability in case of
damage to babies and that the decision was ethical. The replacements for these workers were often men
or more senior women, who tended to be higher income workers, so this
