Essentials
,
,Business Law I Essentials
,OpenStax
Rice University
6100 Main Street MS-375
Houston, Texas 77005
To learn more about OpenStax, visit https://openstax.org.
Individual print copies and bulk orders can be purchased through our website.
©2019 Rice University. Textbook content produced by OpenStax is licensed under a Creative Commons
Attribution 4.0 International License (CC BY 4.0). Under this license, any user of this textbook or the textbook
contents herein must provide proper attribution as follows:
- If you redistribute this textbook in a digital format (including but not limited to PDF and HTML), then you
must retain on every page the following attribution:
“Access for free at openstax.org.”
- If you redistribute this textbook in a print format, then you must include on every physical page the
following attribution:
“Access for free at openstax.org.”
- If you redistribute part of this textbook, then you must retain in every digital format page view (including
but not limited to PDF and HTML) and on every physical printed page the following attribution:
“Access for free at openstax.org.”
- If you use this textbook as a bibliographic reference, please include
https://openstax.org/details/books/business-law-i-essentials in your citation.
For questions regarding this licensing, please contact .
Trademarks
The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, OpenStax CNX logo,
OpenStax Tutor name, Openstax Tutor logo, Connexions name, Connexions logo, Rice University name, and
Rice University logo are not subject to the license and may not be reproduced without the prior and express
written consent of Rice University.
B&W PAPERBACK BOOK ISBN-13 978-1-975076-62-7
DIGITAL VERSION ISBN-13 978-1-947172-78-4
ORIGINAL PUBLICATION YEAR 2019
10 9 8 7 6 5 4 3 2 1
,OPENSTAX
OpenStax provides free, peer-reviewed, openly licensed textbooks for introductory college and Advanced
Placement® courses and low-cost, personalized courseware that helps students learn. A nonprofit ed tech
initiative based at Rice University, we’re committed to helping students access the tools they need to complete
their courses and meet their educational goals.
RICE UNIVERSITY
OpenStax, OpenStax CNX, and OpenStax Tutor are initiatives of Rice University. As a leading research
university with a distinctive commitment to undergraduate education, Rice University aspires to path-breaking
research, unsurpassed teaching, and contributions to the betterment of our world. It seeks to fulfill this
mission by cultivating a diverse community of learning and discovery that produces leaders across the
spectrum of human endeavor.
PHILANTHROPIC SUPPORT
OpenStax is grateful for our generous philanthropic partners, who support our vision to improve educational
opportunities for all learners.
Laura and John Arnold Foundation The Maxfield Foundation
Arthur and Carlyse Ciocca Charitable Foundation Burt and Deedee McMurtry
Ann and John Doerr Michelson 20MM Foundation
Bill & Melinda Gates Foundation National Science Foundation
Girard Foundation The Open Society Foundations
Google Inc. Jumee Yhu and David E. Park III
The William and Flora Hewlett Foundation Brian D. Patterson USA-International Foundation
Rusty and John Jaggers The Bill and Stephanie Sick Fund
The Calvin K. Kazanjian Economics Foundation Robin and Sandy Stuart Foundation
Charles Koch Foundation The Stuart Family Foundation
Leon Lowenstein Foundation, Inc. Tammy and Guillermo Treviño
, Study where you want, what
you want, when you want.
When you access College Success in our web view, you can use our new online
highlighting and note-taking features to create your own study guides.
Our books are free and flexible, forever.
Get started at openstax.org/details/books/business-law-i-essentials
Access. The future of education.
openstax.org
, TABLE OF CONTENTS
Preface 1
1 American Law, Legal Reasoning, and the Legal System 3
1.1 Basic American Legal Principles 3
1.2 Sources and Types of Law 5
1.3 Important Business Laws and Regulations 7
2 Disputes and Dispute Settlement 15
2.1 Negotiation 15
2.2 Mediation 19
2.3 Arbitration 22
3 Business Ethics and Social Responsibility 31
3.1 Business Ethics 31
3.2 Social Responsibility 35
4 Business and the United States Constitution 43
4.1 Commerce Clause 43
4.2 Constitutional Protections 47
5 Criminal Liability 53
5.1 Common Business Crimes 53
5.2 Civil vs: Criminal Liability 57
6 The Tort System 63
6.1 Intentional Torts and Negligence 63
6.2 Product and Strict Liability 67
7 Contract Law 75
7.1 Consideration and Promissory Estoppel 75
7.2 Capacity and Legality 78
, 7.3 Breach of Contract and Remedies 80
8 Sales Contracts 85
8.1 The Nature and Origins of Sales Contracts 85
8.2 Warranties and Sales Contracts 91
9 Employment and Labor Law 97
9.1 Employment, Worker Protection, and Immigration Law 97
9.2 Labor Law 101
9.3 Equal Opportunity in Employment 105
10 Government Regulation 113
10.1 Administrative Law 113
10.2 Regulatory Agencies 117
11 Antitrust Law 123
11.1 History of Antitrust Law 123
11.2 Antitrust Laws 127
12 Unfair Trade Practices and the Federal Trade Commission 133
12.1 Unfair Trade Practices 133
12.2 The Federal Trade Commission 136
13 International Law 141
13.1 Introduction to International Law 141
13.2 Sources and Practice of International Law 145
14 Securities Regulation 151
14.1 Liability Under the Securities Act 151
14.2 The Framework of Securities Regulation 154
This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
,Index 167
, This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
,
,Business Law I Essentials
,OpenStax
Rice University
6100 Main Street MS-375
Houston, Texas 77005
To learn more about OpenStax, visit https://openstax.org.
Individual print copies and bulk orders can be purchased through our website.
©2019 Rice University. Textbook content produced by OpenStax is licensed under a Creative Commons
Attribution 4.0 International License (CC BY 4.0). Under this license, any user of this textbook or the textbook
contents herein must provide proper attribution as follows:
- If you redistribute this textbook in a digital format (including but not limited to PDF and HTML), then you
must retain on every page the following attribution:
“Access for free at openstax.org.”
- If you redistribute this textbook in a print format, then you must include on every physical page the
following attribution:
“Access for free at openstax.org.”
- If you redistribute part of this textbook, then you must retain in every digital format page view (including
but not limited to PDF and HTML) and on every physical printed page the following attribution:
“Access for free at openstax.org.”
- If you use this textbook as a bibliographic reference, please include
https://openstax.org/details/books/business-law-i-essentials in your citation.
For questions regarding this licensing, please contact .
Trademarks
The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, OpenStax CNX logo,
OpenStax Tutor name, Openstax Tutor logo, Connexions name, Connexions logo, Rice University name, and
Rice University logo are not subject to the license and may not be reproduced without the prior and express
written consent of Rice University.
B&W PAPERBACK BOOK ISBN-13 978-1-975076-62-7
DIGITAL VERSION ISBN-13 978-1-947172-78-4
ORIGINAL PUBLICATION YEAR 2019
10 9 8 7 6 5 4 3 2 1
,OPENSTAX
OpenStax provides free, peer-reviewed, openly licensed textbooks for introductory college and Advanced
Placement® courses and low-cost, personalized courseware that helps students learn. A nonprofit ed tech
initiative based at Rice University, we’re committed to helping students access the tools they need to complete
their courses and meet their educational goals.
RICE UNIVERSITY
OpenStax, OpenStax CNX, and OpenStax Tutor are initiatives of Rice University. As a leading research
university with a distinctive commitment to undergraduate education, Rice University aspires to path-breaking
research, unsurpassed teaching, and contributions to the betterment of our world. It seeks to fulfill this
mission by cultivating a diverse community of learning and discovery that produces leaders across the
spectrum of human endeavor.
PHILANTHROPIC SUPPORT
OpenStax is grateful for our generous philanthropic partners, who support our vision to improve educational
opportunities for all learners.
Laura and John Arnold Foundation The Maxfield Foundation
Arthur and Carlyse Ciocca Charitable Foundation Burt and Deedee McMurtry
Ann and John Doerr Michelson 20MM Foundation
Bill & Melinda Gates Foundation National Science Foundation
Girard Foundation The Open Society Foundations
Google Inc. Jumee Yhu and David E. Park III
The William and Flora Hewlett Foundation Brian D. Patterson USA-International Foundation
Rusty and John Jaggers The Bill and Stephanie Sick Fund
The Calvin K. Kazanjian Economics Foundation Robin and Sandy Stuart Foundation
Charles Koch Foundation The Stuart Family Foundation
Leon Lowenstein Foundation, Inc. Tammy and Guillermo Treviño
, Study where you want, what
you want, when you want.
When you access College Success in our web view, you can use our new online
highlighting and note-taking features to create your own study guides.
Our books are free and flexible, forever.
Get started at openstax.org/details/books/business-law-i-essentials
Access. The future of education.
openstax.org
, TABLE OF CONTENTS
Preface 1
1 American Law, Legal Reasoning, and the Legal System 3
1.1 Basic American Legal Principles 3
1.2 Sources and Types of Law 5
1.3 Important Business Laws and Regulations 7
2 Disputes and Dispute Settlement 15
2.1 Negotiation 15
2.2 Mediation 19
2.3 Arbitration 22
3 Business Ethics and Social Responsibility 31
3.1 Business Ethics 31
3.2 Social Responsibility 35
4 Business and the United States Constitution 43
4.1 Commerce Clause 43
4.2 Constitutional Protections 47
5 Criminal Liability 53
5.1 Common Business Crimes 53
5.2 Civil vs: Criminal Liability 57
6 The Tort System 63
6.1 Intentional Torts and Negligence 63
6.2 Product and Strict Liability 67
7 Contract Law 75
7.1 Consideration and Promissory Estoppel 75
7.2 Capacity and Legality 78
, 7.3 Breach of Contract and Remedies 80
8 Sales Contracts 85
8.1 The Nature and Origins of Sales Contracts 85
8.2 Warranties and Sales Contracts 91
9 Employment and Labor Law 97
9.1 Employment, Worker Protection, and Immigration Law 97
9.2 Labor Law 101
9.3 Equal Opportunity in Employment 105
10 Government Regulation 113
10.1 Administrative Law 113
10.2 Regulatory Agencies 117
11 Antitrust Law 123
11.1 History of Antitrust Law 123
11.2 Antitrust Laws 127
12 Unfair Trade Practices and the Federal Trade Commission 133
12.1 Unfair Trade Practices 133
12.2 The Federal Trade Commission 136
13 International Law 141
13.1 Introduction to International Law 141
13.2 Sources and Practice of International Law 145
14 Securities Regulation 151
14.1 Liability Under the Securities Act 151
14.2 The Framework of Securities Regulation 154
This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
,Index 167
, This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
