SOLUTION MANUAL
m
The Legal Environment of Business, 14th Edition
m m m m m m
by Roger E. Meiners, Chapters 1 - 22, Complete
m m m m m m m m
,TABLE OF CONTENTS
m m m
➢ Chapterm1.mToday’smBusinessmEnvironment:mLawmandmEthics
➢ Chapterm2.mThemCourtmSystems
➢ Chapterm3.mTrialsmandmResolvingmDisputes
➢ Chapterm4.mThemConstitution:mFocusmonmApplicationmtomBusiness
➢ Chapterm5.mCriminalmLawmandmBusiness
➢ Chapterm6.mElementsmofmTorts
➢ Chapterm7.mBusinessmTortsmandmProductmLiability
➢ Chapterm8.mRealmandmPersonalmProperty
➢ Chapterm9.mIntellectualmProperty
➢ Chapterm10.mContracts
➢ Chapterm11.mDomesticmandmInternationalmSales
➢ Chapterm12.mBusinessmOrganizations
➢ Chapterm13.mNegotiablemInstruments,mCredit,mandmBankruptcy
➢ Chapterm14.mAgencymandmthemEmploymentmRelationship
➢ Chapterm15.mEmploymentmandmLabormRegulations
➢ Chapterm16.mEmploymentmDiscrimination
➢ Chapterm17.mThemRegulatorymProcess
➢ Chapterm18.mSecuritiesmRegulation
➢ Chapterm19.mConsumermProtection
➢ Chapterm20.mAntitrustmLaw
➢ Chapterm21.mEnvironmentalmLaw
➢ Chapterm22.mThemInternationalmLegalmEnvironmentmofmBusiness
,CHAPTER 1 m
Table of Contents
m m
AnswermtomDiscussionmQuestion ................................................................................................................... 1
AnswersmtomCasemQuestions ......................................................................................................................... 1
AnswersmtomEthicsmandmSocialmQuestions..................................................................................................... 3
Answer to Discussion Question
m m m
Shouldmthemcommonmlawmmaximm“Ignorancemofmthemlawmismnomexcuse”mapplymtomanmimmigrantmwhomspeaksmlittlem
EnglishmandmwasmnotmeducatedminmthemUnitedmStates?mHowmaboutmformamtouristmwhomdoesmnotmspeakmEnglish?mE
veryonemknowsmcriminalmactsmaremprohibited,mbutmwhatmaboutmsubtlermrulesmthatmdiffermacrossmcountriesmandmsom
maymbemmisunderstoodmbymforeigners?
Answer:mItmismgenerallymtruemthatmignorancemofmthem lawmismnomexcuse.mCitizensmaremdeemedmtomhavemconstructiv
emknowledgemofmthemlaw.mYet,masmwellmknownmasmthismrulemis,mitmismsurprisingmhowmoftenmitmismprofferedmas
manmexcuse.m(Am Westlawmsearchmcasesmfindsmhundredsmofmexamples).mExamplesminclude:mDelucomv.mDezim(C
onn.mSuper)m(lackmofmknowledgemregardingmthemstate‘smusurymlawsmismnomexcusemformtheminclusionmofmanmill
egalminterestmrateminmamsalesmcontract);mandmPlumleemv.mPaddockm(ignorancemofmthemfactmthatmthemsubjectm
mattermofmthemcontractmwasmillegalmwasmnotmexcuse).mThemcourtsmhavemprovidedmamsmallmexceptionmtomthe
mrulemwhenmitmcomesmtompeopleminmlackm ofmEnglishm languagem skills.mConsidermFlanerymv.mKuska,m(defendantm
didmnotmspeakmEnglishmwasmadvisedmbymamfriendmthatmanmanswermtomamcomplaintmwasmnotmrequired);mRamo
nmv.mDept.mofmTransportation,m(nomEnglishmandmanminabilitymtomunderstandmthemlawmrequiredmformanmexcuse
);mYurechkomv.mCountymofmAllegheny,m(Ignorancemandmwithmthemfactmthatmthemmunicipalitymsufferedmnomhard
shipminmlatemlawsuitmfilingmwasmanmexcuse).
Answers to Case Questions
m m m
1. FactsmfrommanmEnglishmjudge’smdecisionminm1884:m“ThemcrewmofmanmEnglishmyacht.............weremcastmawaymin
amstormmonmthemhighmseasm.m.m.mandmweremcompelledmtomputmintomanmopenmboat. ....... Theymhadmnomsupply
ofmwatermandmnomsupplymofmfood.m.m.m.mThatmonmthemeighteenthmdaym.m.m.mthey ...... suggestedmthatmone
shouldmbemsacrificedmtomsavemthemrest.m.m.m.mThatmnextmdaym.m.m.mtheym.m.m.mwentmtomthemboy ..... putmamknife
intomhismthroatmandmkilledmhimm.m.m.mthemthreemmenmfedmuponmthembody ......ofmthemboymformfourmdays;m[then]
themboatmwasmpickedmupmbymampassingmvessel,mandm[they]mweremrescued.m.m.m.mandmcommittedmformtrial.m.m.m.
ifmthemmenmhadmnotmfedmuponmthembodymofmthemboymtheymwouldmprobablymnotmhavemsurvivedmtombemsom
pickedmupmandmrescued,mbutmwould ........ havemdiedmofmfamine.mThemboy,mbeingminmammuchmweaker
condition,mwasmlikelymtomhavemdiedmbeforemthem ......... Themrealmquestionminmthismcasem[is]mwhethermkilling
undermthemconditionsmsetmforth ....... bemormbemnotmmurder.”mDomyoumconsidermthemactsmtombemimmoral?
[Reginamv.mDudleymandmStephens,m14mQueensmBenchmDivisionm273m(1884)]
Answer:mThismpointsmoutmthatmthemlegalmsystemmhasmlimits.mItsmacceptabilitymismdictatedmbymlegalmculture--
whichmdeterminesmwhethermlawmwillmbemenforced,mobeyed,mavoided,mormabused.mItmismlimitedmbymtheminform
almrulesmofmthemsociety--
itsmcustomsmandmvalues.mOnemlimitmismthemextentmtomwhichmsocietymwillmallowmthemformalmrulesmtombemimpos
edmwhenmamcrimemismcommittedminmoddmcircumstances.mHeremtheremwasmanmintentionalmmurder.mDoesmthem
motivemformthemmurder,mthemeffortmtomsavemseveralmlivesmbymsacrificingmone
, life,mmakemitmamcrimemthatmshouldmbempunished?mNotmallmcrimesmaremtreatedmthemsame.mItmalsomraisesmquestio
nsmaboutmthemdesirabilitymofmnotmgivingmjudgesmflexibilityminmsentencing.
TheremwasmamprecedentmformamlightmsentenceminmthismcaseminmU.S.mlaw:m U.S.mv.mHolmes,m20mF.mCas.m360m(No.
m15383)m(C.C.E.D.mPa.m1842).mThemcaseminvolvedmamsinkingmoceanmliner.mSeveralmpassengersmmademitmtomthem
onlymlifeboat,mwhichmwasmfarmtoomovercrowded.mThemcaptainmdecidedmtomsavemthemwomenmandmchildrenman
dmthrewmseveralm menmoverboard.mThemlifeboatm wasmrescued.mThem grandm jurymrefusedm tomindictmthemcaptain
m fromm murder,m onlymform manslaughter.m Hem gotmamsixm monthmsentence.
ThemBritishmjudgeminmthemcasemheremimposedmthemdeathmpenaltymuponmthempersonmwhomsurvived.mThemj
udgemfoundmitmdifficultmtomrulemthatmeverymmanmonmboardmhadmthemrightmtommakemlawmbymhismownmhan
d.mThemCrownmreducedmthemsentencemtomsixmmonths.
2. Smokingmismamseriousmhealthmhazard.mCigarettesmaremlegal.mShouldmcigarettemmanufacturersmbemliablemformt
hemseriousmillnessesmandmuntimelymdeathsmcausedmbymtheirmunavoidablymdangerousmproducts,mevenmthoughmt
heympostmamwarningmonmthempackagemandmconsumersmvoluntarilymassumemthemhealthmrisksmbymsmoking?m[Ci
pollonemv.mLiggettmGroup,mInc.,m505mU.S.m504m(1992)]
Answer:mThemgeneralmrulemthatmexistsmnowmismthatmsincemthemgovernmentmhasmorderedmthempostingmofmwarningml
abelsmonmcigarettes,mandmsincemthemdangersmofmsmokingmaremwellmknown,mconsumersmhavembeenmwarnedma
ndmaremnotmduemcompensationmifmtheymkillmthemselvesmbymsmoking.mThem Cippolinemcase,msincemreviewedmb
ymthemSuprememCourt,mappearsmtombemofmlimitedmimpactmsincemthem victimmwasmadjudgedmtomhavembecomem
addictedmtomcigarettesmbeforemthemwarningmlabelmwasmorderedminm1964.mIfmcigarettemmakersmweremheldmres
ponsiblemformallmhealthmproblemsmassociatedmwithmcigarettes,mthen,mlikemalcoholmandmothermdangerousmpro
ducts,mthemdamagesmwouldmlikelymbemsomhighmitmwouldmeffectivelymbanmthemproducts.mPresumably,minmamfre
emsocietymifmadultsmaremclearlyminformedmofmthemrisksmofmproductsmthatmcannotmbemmademsafe,mtheymaccept
mthemrisk.mTobaccomandmalcoholmproducersm cannotmtakemthemdangersmoutmofm themproducts mexceptm atmthemm
arginmbymencouragingmresponsiblemdrinkingmandmthemlike.mAremdrugsmlikemcocainemdifferent?
3. Twomeight-year-oldmboysmweremseriouslyminjuredmwhenmridingmHondammini-
trailmbikes.mThemboysmweremridingmonmpublicmstreets,mranmamstopmsign,mandmweremhitmbymamtruck.mThembikesm
hadmclearmwarningmlabelsmonmthemfrontmstatingmtheymweremonlymformoff-
roadmuse.mThemmanualmstatedmthembikesmweremnotmtombemusedmonmpublicmstreets.mThemparentsmsuedmHonda.m
ThemsuprememcourtmofmWashingtonmsaidmonembasicmissuemexisted:m“Ismammanufacturermliablemwhenmchildrenm
areminjuredmwhilemridingmonemofmitsmmini-
trailmbikesmonmampublicmroadminmviolationmofmmanufacturermandmparentalmwarnings?”mIsmitmunethicalmtommake
mproductsmlikemmini-
trailmbikesmchildrenmwillmusemwhenmwemknowmaccidentsmlikemthismwillmhappen?m[Baughnmv.mHondamMotormCo.
,m727mP.2dm655mSup.mCt,mWash.,m(1986)]
Answer:mThemcourtmfoundmnomliabilitymformthemmanufacturers.mTheremwasmnomdefect;mthemproductmwasmsafemform
intendedmuse.mSafetyminstructionsmweremclear;mthemparentsmletmthemboysmridemthembikes.mAnythingmcanmbemd
angerous--
baseballsmaremdangerousmwhenmtheymhitmthemhead,mswingsmaremdangerousmwhenmkidsmjumpmoutmofmthem;mt
heremismonlymsommuchmthatmcanmbemdonemtommakemthemgovernmentmthem―nationalmnanny‖masmthemWashin
gtonmPostmoncemsaidmaboutmexcessivemconsumermprotection.mParentsmmustmacceptmamhighmdegreemofmrespo
nsiblemformtheirmownmchildren.
4. JohnsonmControlsmadoptedmam“fetalmprotectionmpolicy”mthatmwomenmofmchildbearingmagemcouldmnotmworkmin
mthembattery-
makingmdivisionmofmthemcompany.mExposuremtomleadminmthembatterymoperationmcouldmcausemharmmtomunborn
mbabies.mThemcompanymwasmconcernedmaboutmpossiblemlegalmliabilitymforminjurymsufferedm
bymbabiesmofmmoth
ersmwhomhadmworkedminmthembatterymdivision.mThemSuprememCourtmheldmthemcompanympolicymwasmillegal.mItm
wasmanm“excusemformdenyingmwomenmequalmemploymentmopportunities.”mIsmthemCourtmforcingmthemcompany
mtombemunethicalmbymallowingmpregnantmwomenmwhomignoremthemwarningsmtomexposemtheirmbabiesmtomtheml
ead?m[UnitedmAutomWorkersmv.mJohnsonmControls,m499mU.S.m187m(1991)]
m
The Legal Environment of Business, 14th Edition
m m m m m m
by Roger E. Meiners, Chapters 1 - 22, Complete
m m m m m m m m
,TABLE OF CONTENTS
m m m
➢ Chapterm1.mToday’smBusinessmEnvironment:mLawmandmEthics
➢ Chapterm2.mThemCourtmSystems
➢ Chapterm3.mTrialsmandmResolvingmDisputes
➢ Chapterm4.mThemConstitution:mFocusmonmApplicationmtomBusiness
➢ Chapterm5.mCriminalmLawmandmBusiness
➢ Chapterm6.mElementsmofmTorts
➢ Chapterm7.mBusinessmTortsmandmProductmLiability
➢ Chapterm8.mRealmandmPersonalmProperty
➢ Chapterm9.mIntellectualmProperty
➢ Chapterm10.mContracts
➢ Chapterm11.mDomesticmandmInternationalmSales
➢ Chapterm12.mBusinessmOrganizations
➢ Chapterm13.mNegotiablemInstruments,mCredit,mandmBankruptcy
➢ Chapterm14.mAgencymandmthemEmploymentmRelationship
➢ Chapterm15.mEmploymentmandmLabormRegulations
➢ Chapterm16.mEmploymentmDiscrimination
➢ Chapterm17.mThemRegulatorymProcess
➢ Chapterm18.mSecuritiesmRegulation
➢ Chapterm19.mConsumermProtection
➢ Chapterm20.mAntitrustmLaw
➢ Chapterm21.mEnvironmentalmLaw
➢ Chapterm22.mThemInternationalmLegalmEnvironmentmofmBusiness
,CHAPTER 1 m
Table of Contents
m m
AnswermtomDiscussionmQuestion ................................................................................................................... 1
AnswersmtomCasemQuestions ......................................................................................................................... 1
AnswersmtomEthicsmandmSocialmQuestions..................................................................................................... 3
Answer to Discussion Question
m m m
Shouldmthemcommonmlawmmaximm“Ignorancemofmthemlawmismnomexcuse”mapplymtomanmimmigrantmwhomspeaksmlittlem
EnglishmandmwasmnotmeducatedminmthemUnitedmStates?mHowmaboutmformamtouristmwhomdoesmnotmspeakmEnglish?mE
veryonemknowsmcriminalmactsmaremprohibited,mbutmwhatmaboutmsubtlermrulesmthatmdiffermacrossmcountriesmandmsom
maymbemmisunderstoodmbymforeigners?
Answer:mItmismgenerallymtruemthatmignorancemofmthem lawmismnomexcuse.mCitizensmaremdeemedmtomhavemconstructiv
emknowledgemofmthemlaw.mYet,masmwellmknownmasmthismrulemis,mitmismsurprisingmhowmoftenmitmismprofferedmas
manmexcuse.m(Am Westlawmsearchmcasesmfindsmhundredsmofmexamples).mExamplesminclude:mDelucomv.mDezim(C
onn.mSuper)m(lackmofmknowledgemregardingmthemstate‘smusurymlawsmismnomexcusemformtheminclusionmofmanmill
egalminterestmrateminmamsalesmcontract);mandmPlumleemv.mPaddockm(ignorancemofmthemfactmthatmthemsubjectm
mattermofmthemcontractmwasmillegalmwasmnotmexcuse).mThemcourtsmhavemprovidedmamsmallmexceptionmtomthe
mrulemwhenmitmcomesmtompeopleminmlackm ofmEnglishm languagem skills.mConsidermFlanerymv.mKuska,m(defendantm
didmnotmspeakmEnglishmwasmadvisedmbymamfriendmthatmanmanswermtomamcomplaintmwasmnotmrequired);mRamo
nmv.mDept.mofmTransportation,m(nomEnglishmandmanminabilitymtomunderstandmthemlawmrequiredmformanmexcuse
);mYurechkomv.mCountymofmAllegheny,m(Ignorancemandmwithmthemfactmthatmthemmunicipalitymsufferedmnomhard
shipminmlatemlawsuitmfilingmwasmanmexcuse).
Answers to Case Questions
m m m
1. FactsmfrommanmEnglishmjudge’smdecisionminm1884:m“ThemcrewmofmanmEnglishmyacht.............weremcastmawaymin
amstormmonmthemhighmseasm.m.m.mandmweremcompelledmtomputmintomanmopenmboat. ....... Theymhadmnomsupply
ofmwatermandmnomsupplymofmfood.m.m.m.mThatmonmthemeighteenthmdaym.m.m.mthey ...... suggestedmthatmone
shouldmbemsacrificedmtomsavemthemrest.m.m.m.mThatmnextmdaym.m.m.mtheym.m.m.mwentmtomthemboy ..... putmamknife
intomhismthroatmandmkilledmhimm.m.m.mthemthreemmenmfedmuponmthembody ......ofmthemboymformfourmdays;m[then]
themboatmwasmpickedmupmbymampassingmvessel,mandm[they]mweremrescued.m.m.m.mandmcommittedmformtrial.m.m.m.
ifmthemmenmhadmnotmfedmuponmthembodymofmthemboymtheymwouldmprobablymnotmhavemsurvivedmtombemsom
pickedmupmandmrescued,mbutmwould ........ havemdiedmofmfamine.mThemboy,mbeingminmammuchmweaker
condition,mwasmlikelymtomhavemdiedmbeforemthem ......... Themrealmquestionminmthismcasem[is]mwhethermkilling
undermthemconditionsmsetmforth ....... bemormbemnotmmurder.”mDomyoumconsidermthemactsmtombemimmoral?
[Reginamv.mDudleymandmStephens,m14mQueensmBenchmDivisionm273m(1884)]
Answer:mThismpointsmoutmthatmthemlegalmsystemmhasmlimits.mItsmacceptabilitymismdictatedmbymlegalmculture--
whichmdeterminesmwhethermlawmwillmbemenforced,mobeyed,mavoided,mormabused.mItmismlimitedmbymtheminform
almrulesmofmthemsociety--
itsmcustomsmandmvalues.mOnemlimitmismthemextentmtomwhichmsocietymwillmallowmthemformalmrulesmtombemimpos
edmwhenmamcrimemismcommittedminmoddmcircumstances.mHeremtheremwasmanmintentionalmmurder.mDoesmthem
motivemformthemmurder,mthemeffortmtomsavemseveralmlivesmbymsacrificingmone
, life,mmakemitmamcrimemthatmshouldmbempunished?mNotmallmcrimesmaremtreatedmthemsame.mItmalsomraisesmquestio
nsmaboutmthemdesirabilitymofmnotmgivingmjudgesmflexibilityminmsentencing.
TheremwasmamprecedentmformamlightmsentenceminmthismcaseminmU.S.mlaw:m U.S.mv.mHolmes,m20mF.mCas.m360m(No.
m15383)m(C.C.E.D.mPa.m1842).mThemcaseminvolvedmamsinkingmoceanmliner.mSeveralmpassengersmmademitmtomthem
onlymlifeboat,mwhichmwasmfarmtoomovercrowded.mThemcaptainmdecidedmtomsavemthemwomenmandmchildrenman
dmthrewmseveralm menmoverboard.mThemlifeboatm wasmrescued.mThem grandm jurymrefusedm tomindictmthemcaptain
m fromm murder,m onlymform manslaughter.m Hem gotmamsixm monthmsentence.
ThemBritishmjudgeminmthemcasemheremimposedmthemdeathmpenaltymuponmthempersonmwhomsurvived.mThemj
udgemfoundmitmdifficultmtomrulemthatmeverymmanmonmboardmhadmthemrightmtommakemlawmbymhismownmhan
d.mThemCrownmreducedmthemsentencemtomsixmmonths.
2. Smokingmismamseriousmhealthmhazard.mCigarettesmaremlegal.mShouldmcigarettemmanufacturersmbemliablemformt
hemseriousmillnessesmandmuntimelymdeathsmcausedmbymtheirmunavoidablymdangerousmproducts,mevenmthoughmt
heympostmamwarningmonmthempackagemandmconsumersmvoluntarilymassumemthemhealthmrisksmbymsmoking?m[Ci
pollonemv.mLiggettmGroup,mInc.,m505mU.S.m504m(1992)]
Answer:mThemgeneralmrulemthatmexistsmnowmismthatmsincemthemgovernmentmhasmorderedmthempostingmofmwarningml
abelsmonmcigarettes,mandmsincemthemdangersmofmsmokingmaremwellmknown,mconsumersmhavembeenmwarnedma
ndmaremnotmduemcompensationmifmtheymkillmthemselvesmbymsmoking.mThem Cippolinemcase,msincemreviewedmb
ymthemSuprememCourt,mappearsmtombemofmlimitedmimpactmsincemthem victimmwasmadjudgedmtomhavembecomem
addictedmtomcigarettesmbeforemthemwarningmlabelmwasmorderedminm1964.mIfmcigarettemmakersmweremheldmres
ponsiblemformallmhealthmproblemsmassociatedmwithmcigarettes,mthen,mlikemalcoholmandmothermdangerousmpro
ducts,mthemdamagesmwouldmlikelymbemsomhighmitmwouldmeffectivelymbanmthemproducts.mPresumably,minmamfre
emsocietymifmadultsmaremclearlyminformedmofmthemrisksmofmproductsmthatmcannotmbemmademsafe,mtheymaccept
mthemrisk.mTobaccomandmalcoholmproducersm cannotmtakemthemdangersmoutmofm themproducts mexceptm atmthemm
arginmbymencouragingmresponsiblemdrinkingmandmthemlike.mAremdrugsmlikemcocainemdifferent?
3. Twomeight-year-oldmboysmweremseriouslyminjuredmwhenmridingmHondammini-
trailmbikes.mThemboysmweremridingmonmpublicmstreets,mranmamstopmsign,mandmweremhitmbymamtruck.mThembikesm
hadmclearmwarningmlabelsmonmthemfrontmstatingmtheymweremonlymformoff-
roadmuse.mThemmanualmstatedmthembikesmweremnotmtombemusedmonmpublicmstreets.mThemparentsmsuedmHonda.m
ThemsuprememcourtmofmWashingtonmsaidmonembasicmissuemexisted:m“Ismammanufacturermliablemwhenmchildrenm
areminjuredmwhilemridingmonemofmitsmmini-
trailmbikesmonmampublicmroadminmviolationmofmmanufacturermandmparentalmwarnings?”mIsmitmunethicalmtommake
mproductsmlikemmini-
trailmbikesmchildrenmwillmusemwhenmwemknowmaccidentsmlikemthismwillmhappen?m[Baughnmv.mHondamMotormCo.
,m727mP.2dm655mSup.mCt,mWash.,m(1986)]
Answer:mThemcourtmfoundmnomliabilitymformthemmanufacturers.mTheremwasmnomdefect;mthemproductmwasmsafemform
intendedmuse.mSafetyminstructionsmweremclear;mthemparentsmletmthemboysmridemthembikes.mAnythingmcanmbemd
angerous--
baseballsmaremdangerousmwhenmtheymhitmthemhead,mswingsmaremdangerousmwhenmkidsmjumpmoutmofmthem;mt
heremismonlymsommuchmthatmcanmbemdonemtommakemthemgovernmentmthem―nationalmnanny‖masmthemWashin
gtonmPostmoncemsaidmaboutmexcessivemconsumermprotection.mParentsmmustmacceptmamhighmdegreemofmrespo
nsiblemformtheirmownmchildren.
4. JohnsonmControlsmadoptedmam“fetalmprotectionmpolicy”mthatmwomenmofmchildbearingmagemcouldmnotmworkmin
mthembattery-
makingmdivisionmofmthemcompany.mExposuremtomleadminmthembatterymoperationmcouldmcausemharmmtomunborn
mbabies.mThemcompanymwasmconcernedmaboutmpossiblemlegalmliabilitymforminjurymsufferedm
bymbabiesmofmmoth
ersmwhomhadmworkedminmthembatterymdivision.mThemSuprememCourtmheldmthemcompanympolicymwasmillegal.mItm
wasmanm“excusemformdenyingmwomenmequalmemploymentmopportunities.”mIsmthemCourtmforcingmthemcompany
mtombemunethicalmbymallowingmpregnantmwomenmwhomignoremthemwarningsmtomexposemtheirmbabiesmtomtheml
ead?m[UnitedmAutomWorkersmv.mJohnsonmControls,m499mU.S.m187m(1991)]
