SOLUTION MANUAL Dynamic Business Law: The Essentials, 5th Edition Kubasek, Browne, All Chapters 1-25) with Correct Answers

SOLUTION MANUAL
Dynamic Business Law: The Essentials,
5th Edition Kubasek, Browne, All Chapters 1-25),

,TABLE OF CONTENTS
t t t




PARTt1:tThetLegaltEnvironmenttoftBusinesst
Cth.t1tAntIntroductionttotthetFundamentalstoftDynamictBusinesstLawt
Ch.t2tBusinesstEthicstandtSocialtResponsibilityt
Ch.t3tThetU.S.tLegaltSystemtandtAlternativetDisputetResolutiont
Ch.t4tAdministrativetLawt
Ch.t5tConstitutionaltLawt
Ch.t6tCriminaltLawtandtBusinesst
Ch.t7tTorttLawt
Ch.t8tReal,tPersonal,tandtIntellectualtPropertyt


PARTt2:tContracttLawt
Ch.t9tIntroductionttotContractstandtAgreementt
Ch.t10tConsiderationt
Ch.t11tCapacitytandtLegalityt
Ch.t12tRealitytoftAssentt
Ch.t13tContractstintWritingtandtThird-PartytContractst
Ch.t14tDischargetandtRemediest


Partt3:tDomestictandtInternationaltSalestLawt
Ch.t15tFormationtandtPerformancetoftSalestandtLeasetContractst
Ch.t16tSalestandtLeasetContracts:tPerformance,tWarranties,tandtRemediest


PARTt4:tNegotiabletInstrumentstandtBankingt
Ch.t17tNegotiabletInstruments:tNegotiabilitytandtTransferabilityt
Ch.t18tHoldertintDuetCourse,tLiability,tandtDefensest


PARTt5:tCreditors'tRightstandtBankruptcyt

,Ch.t19tSecuredtTransactionstandtBankruptcyt


PARTt6:tAgencyt
Ch.t20tAgencytandtLiabilityttotThirdtPartiest


PARTt7:tBusinesstOrganizationst
Ch.t21tFormstoftBusinesstOrganizationt
Ch.t22tCorporations:tFormationtandtOrganizationt
Ch.t23tSecuritiestRegulationt


PARTt8:tGovernmenttRegulationt
Ch.t24tEmploymenttandtDiscriminationtLawt
Ch.t25tConsumertLawt

,Chapter 1 - An Introduction to Dynamic Business Law
t t t t t t t t




CHAPTERtOVERVIEW
ChaptertOnetlaystthetfoundationtfortthettextbook.tMaketsuretyoutlooktontthetpublisher‘stwebtsitetfortinformatio
ntaboutthowtbusinesstlawtintersectstwithtthetsixtfunctionaltareastoftbusiness.tThetauthorstencouragetstudentsttot
―connectttotthetcore,‖tandtremembertthetwaystintwhichtlawtintersectstwithtothertareastoftstudy,tincludingtcorpor
atetmanagement,tproductiontandttransportation,tmarketing,tresearchtandtdevelopment,taccountingtandtfinance,t
andthumantresourcetmanagement.

Thist manualt supportst thet ―connectingt tot thet core‖t themet byt givingt ideast fort assignmentst thatt encouragetstudent
sttotintegratettheirtbusinesstlawtknowledgetwithtknowledgettheytaretacquiringtfromttheirtothertbusinesstclasses.tT
hetmanualtalsotencouragestprofessorsttotimprovettheirtteachingtskills.tFinally,tthetmanualtsuggeststteachingtideast
fortbothtbeginningtandtexperiencedtteachers.

LEARNINGtOBJECTIVES
Aftertreadingtthistchapter,tstudentstwilltbetabletto:

1-1 Definetbusinesstlaw.
1-2 Relatetthetfunctionaltareastoftbusinessttotthetrelevanttareastoftbusinesstlawt1-
3tRecalltthetpurposestoftlaw.
1-4 Distinguishtamongttypestoftlaw.
1-5 Differentiatetbetweentsourcestoftthetlaw.
1-6 Identifytthetvarioustschoolstoftjurisprudence.

LECTUREtNOTEStWITHtDEFINITIONS
Intthetnews… Teachingttip:tForteachtchapter,tconsidertaskingtstudentsttotrelatetcurrenttnewstitemst
totmaterialtfromtthetchapter.

Int additiont tot ideast studentst comet upt witht ont theirt own,t considert weavingt intnewsts
toriestprovidedtbytthetMcGrawtHill.

FortChaptertOne,tMcGrawtHilltofferstthetfollowingtstories:

―SmokingtBan:tTobaccotTyrants:tGonetTootFar?tManytStatestAretPuttingtStrongertR
estrictionstontWheretYoutCantSmoke‖
 Havetstatestgonettootfartintbanningtsmoking?

,  Whoset interestst aret statet legislaturest lookingt outt fort int banningtsmoking?

―CollegetOfficertDealingstWithtLenderstScrutinized.‖
 Shouldtregulatorsttaketatmoretcarefultlooktattcollegetofficers?
 Whytcreatedtchangestintthetwaystcollegetofficerstinteracttwithtlenders?

1- Businesst lawt consistst oft thet enforceablet rulest oft conductt thatt governtcommercia
1t Definet businesstlaw. ltrelationships.
1- Businesstlawtappliesttotthetsixtfunctionaltareastoftbusiness:
2tRelatetthetfunctio  Corporatetmanagement
naltareastoftbusiness
ttotthetrelevanttarea
 Productiontandttransportation
stoftbusinesstlaw.  Marketing
 Researchtandtdevelopment
 Accountingtandtfinance
 Humantresourcetmanagement
1-  Providingtorder
3tRecalltthetpurp  Servingtastantalternativettotfighting
osestoftlaw.
 Facilitatingtatsensetthattchangetistpossible
 Encouragingtsocialtjustice
 Guaranteeingtpersonaltfreedoms
 Servingtastatmoraltguide
1- Onetwayttotclassifytlaw:
4tDistinguishtamongt Privatetlawtinvolvestdisputestbetweentprivatetindividualstortgroups.
typestoftlaw. Publict lawt involvest disputest betweent privatet individualst ort groupst andt theirtgover
nment.

Atsecondtwayttotclassifytlaw:
Civiltlawtinvolvestthetrightstandtresponsibilitiestinvolvedtintrelationshipstbetweentper
sonstandtbetweentpersonstandttheirtgovernment.
Criminalt lawt involvest incidentstint whicht someonet commitst ant actt againstt thetpublict
astatunit.

Teachingt tip:t Askt studentst tot givet ant examplet oft at factt situationt thatt ledt totbothtc
riminaltandtciviltlawsuits,te.g.,tthetO.J.tSimpsonttrials.
1- Sourcestoftbusinesstlawtare:
5tDifferentiatetbetw 1. Constitutions
eentsourcestoftthetla Constitutionalt lawt referst tot thet generalt limitst andt powerst oft governmentst aststated
w. tinttheirtwrittentconstitutions.

2. Statutestortlegislativetactions
3. Cases
Caset lawt (ort commont law)t ist thet collectiont oft legalt interpretationst madet bytjudges.
Staretdecisistmeanstcourtstaretrelyingtontprecedent.

Teachingt tip:t Thet firstt timet yourt studentst encountert ant appellatet caset int the

, readings,tshowtthemtwhattstaretdecisistlookstliketintthetcontexttoftatrealtcase.

4. Administrativetlaw
Administrativet lawt ist thet collectiont oft rulest andt decisionst madet bytadministrati
vetagencies.
5. Treaties
At treatyt ist at bindingt agreementt betweent twot statest ort internationaltorganization
s.
6.t Executivetorders
Antexecutivetordertistatdirectivetthattcomestfromtthetpresidentt ortstatetgovernor.

1- Schoolstoftjurisprudencetaretcommontguidesttotlegaltinterpretation.
6tIdentifytthetvario  Naturalt law—certaint ethicalt lawst andt principlest aret morallyt rightt and
ustschoolstoftjurisp ―above‖tthetlawstdevisedtbythumans.
rudence.
 Legalt Positivism—
assumest thet legitimatet politicalt authorityt deservestourtobediencetwhentittiss
uestatrule.
 IdentificationtwithtthetVulnerable—
emphasistontfairnesst andtlookingtouttfortthosetwithtthetleasttpower.
 HistoricaltSchool/Tradition—emphasistontthetusetoftstaretdecisis.
 LegaltRealism—judgestconsidertsocialtandteconomictconditions.
 Cost-benefittAnalysis—
maketcalculationsttotmaximizetthetratiotoftbenefitsttotcosts.

Teachingtttip:ttConsiderttusingtt―ThettCasettofttthettSpelunceanttExplorerstt(linktbelow)tt
otmaketthetschoolstoftjurisprudencetcometalive.
GlobaltandtCompa Attthistpointtintthettextbook,tstudentstshouldtmerelythavetantawarenesstthattglobaliz
rativetLaw ationthastaffectedtthetscopetoftbusinesstlaw.tConsequently,t wethighlighttthetdefinitio
nsttotthetfollowingtkeyttermstthattwillt cometuptlatertintthetbook:

 Trade,t i.e.t thet exchanget oft goodst ort services,t ont at globalt scalet hast ledttotthet
creationtofttradetagreementstthattservetastdetfactotrulestgoverningtthetglobaltb
usinesstenvironment.
 Comparativetlaw—
thetfieldtoftlawtthattstudiestandtcomparestlawstintdifferenttcountries.

AppendixtontCriticaltT Criticaltthinkingtincludestthetapplicationtoftevaluativetstandardsttotassesstthetqualityt
hinkingtandtBusiness ortthetreasoningtbeingtofferedttotsupporttthetconclusion.tCriticaltthinkerstwilltfollowt
thistpatterntoftcarefultthinkingtwhenttheytreadt antargument:
1. Findtthetfacts.
2. Looktfortthetissue.
3. Identifytthetjudge‘streasonstandtconclusion.
4. Locatetintthetdecisiontthetrulestoftlawtthattgoverntthetjudge‘streasoning.
5. Applytcriticaltthinkingttotthetreasoning.tEvaluatetthetreasoning.
 Looktfortpotentialtambiguity.
 Considertthetstrengthtoftanalogies.

,  Checktthetqualitytoftthetjudge‘streasoning.
 Decidetwhethertimportanttinformationtistmissing.
 Considertthetpossibilitytoftrivaltcauses.


TEACHINGtSKILLS:tBLOOM’StTAXONOMYtSETStTHEtSTAGEtTOtTHINKtABOUTt
THEtKINDStOFtQUESTIONStTOtASKtYOURtSTUDENTS
BenjamintBloom,tinthistTaxonomytoftEducationaltObjectives,*tdevelopedtathierarchytoftcognitivetfunctions.tHi
stworktsetstthetstagetfortteachersttotunderstandtwhytittistimportantttotthinktcarefullytabouttthetkindstoftquestionst
theytasktintclass.

ThetObjective Sampletquestions
Knowledge  Whattistbusinesstlaw?
Lowestt levelt oft learningt andt ist mostlyt memory.tThe  Whatt aretthetfourtelementstoftat negligencetclaim?
tstudenttrecognizestandtrecallstinformation.


Comprehension  Whatt ist yourt understandingt oft thet conceptt of
Lowest level of understanding. The staretdecisis?
studenttparaphrasestortexplainstsomething.  Whattdoestyourttextbooktmeantbytdeontology?

Application  Howt wouldt at naturalt lawt thinkert respondt totthi
Studenttdemonstratesthertunderstandingtoftabstracttrul stparticulartfacttpattern?
es,tprinciples,tort generalizationstbytusingtthemttotsolve  Uset at particulart casetrulettot determinet whethertthet
tlife-liketproblems. plaintifftwilltbetsuccessfultinthertclaim.
Analysis  Providetthetreasoningtfortthetfollowingtstatement:t
Studentt breakst downt at communicationt tot discovertth Alltcontractstdotnottneedttotbetintwritingttotbetenf
ethiddentstructuretastwelltastassumptions. orceable.
 Breaktdowntatparticulartjudge‘stopinionttotunderst
andtthetassumptionstthetjudgetistmaking.

Synthesis  Explain how two particular schools
Studentt creativelyt combinest elementst andt partst totfor oftjurisprudencetaretrelated.
mtatwholetnewtstructure.  Make a connection between duress
andtinsanity.
Evaluation  Identifyt andttexplaint attreasoningt flawt int thetjud
Highestt levelt oft learning.t Studentt makest at critical ge‘stargument.




*t BENJAMINt BLOOM,t TAXONOMYt OFt EDUCATIONALt OBJECTIVES:t THEt CLASSIFICATIONtO
FtEDUCATIONALtGOALSt(1954).

,ThetObjective Sampletquestions
judgmenttabouttthetvaluetoftthetcommunication.  Evaluatetthetfollowingtstatement:tArbitrationtandt
mediationtaretbettertformstoftdisputetresolutiontth
antlitigation.


TEACHINGtIDEAS
ConnectingttotthetCore  Considertaskingtstudentsttotkeeptat―ConnectingttotthetCore‖tjournal.tThro
ughouttthetsemester,tstudentstcantrelatetconceptsttheytaretlearningtinttheirt
businesstlawtclassttotmaterialttheytaretlearningtinttheirtothertbusinesstcours
es.
 Asktstudentsttottaketonetparticulartareatoftlawt(UsetExhibitt1-
1tastthetbasistforttopictchoices)tandtwritetatpapertthattexplainstintersectionst
betweentatparticulartareatoftlawtandtattleasttonetfunctionaltareatoftbusiness.
t Fort example,t at studentt couldt chooset consumert lawt andtwritetatpapert

thattlinkstatspecifictconsumertlawtissuettotcontenttfromttheirtmarketingtclas
s.
TeachingtBasics Exploretwebtsitestthattoffertinformationtabouttteachingtattthetcollegetlevel.

Harvardthastatgreattcenter.tTheirtcentertlinkstyouttotothertcenters.tIftyoutaretatnew
tteacher,tmaketsuretyoutlooktattthistsite‘stsampletsyllabi.


http://bokcenter.fas.harvard.edu/icb/icb.do

ThistsyllabusttutorialtattthetUniversitytoftMinnesotatistgreat—
ittprovidestsampletlanguagetyoutcantuse.

http://www1.umn.edu/ohr/teachlearn/
AdvancedtTeaching UsetthetCasetoftthetSpelunceantExplorersttotexploretthetschoolstoftjurisprudence.t
Thisthypotheticaltcasetexplorestthetdilemmatattrappedtteamtoftfivetspelunkerstfacest
whenttheythavettotdecidetwhetherttoteattonetofttheirtpartytintatquestttotsurvive.tOnc
etrescued,tthetcasetconsiderstwhethertthetsurvivingtspelunkerstaretguiltytoftmurder.

YoutcantgettatcopytoftthetcasetoftthetSpelunceantExplorerstthroughtthistwebtsite:

http://en.wikipedia.org/wiki/The_Case_of_the_Speluncean_Explorers

Oncetyoutgettatsensetoftthetcasetitself,texploretfurtherttotseetwhattkindstoftquestionst
youtcantasktintclass.

http://www.earlham.edu/~peters/writing/cse.htm#assignments




AtBESTtPRACTICEStTEACHINGtTIP
Peer-to-peertteaching. Thistteachingttechniquetcanthelptstudentstengagetmoretfullytwithtnewtconcepts
tthattaretreferencedtintthisttextbook.tWilberttJ.tMcKeachietstates

thatttheretarettwotfavorabletoutcomestfromthavingtstudentstplaytthetrole

,oftatteacher:

1.)tPeer-to-
peertteachingtcantstimulatetadditionaltlearningtbytthetstudenttwhot
istteaching,tsincetteachingtwilltrequiretgreatertpreparationtfortclass
.
2.)tPeertteachingtfacilitatestthetlearningtoftthosetbeingttaughttbythearin
gtinformationtfromtantindividualtothertthantthetregulartteacher.
McKeachietnotestthattittistessentialtthattfacultytmemberstsupervisetthetstude
nt-
ledtteachingtsession,tastthistmethodtoftteachingtmaytnottbetusefultiftstudentst
dotnotttaketthettasktseriously.tAtsubstantialtamounttofteducationtresearchtsu
pportstthetvaluetoftthistteachingtpractice.tIntatlegalteducationtarticle,tJ.B.tBigg
stalludesttotpeer-to-
peertteachingtastamongtthetmostteffectivetteachingtstrategiestfortengagingtstu
denttlearning:

―Thetbesttanswerttotthetquestion,t'Whattistthetmostteffectivetmethodt
oftteaching?",tistthattittdependstontthetgoal,tthetstudent,tthetcontent,ta
ndtthetteacher.tButtthetnexttbesttanswertis,t"Studentstteachingtothert
students."tTheretistatwealthtoftevidencetthattpeertteachingtistextremelyt
effectivetfortatwidetrangetoftgoals,tcontent,tandtstudentstoftdifferenttle
velstandtpersonalities‖t(144).

Totreadtmoretabouttpeer-to-peertteaching,tseetWilberttJ.tMcKeachie‘s
―TeachingtTips:tAtGuidebooktfortthetBeginningtCollegetTeacher‖tor
J.B.tBiggs‘t―TeachingtfortBettertLearning.‖
References:
WilberttJ.tMcKeachie,tTeachingtTips:tAtGuidebooktfortthetBeginningtColle
getTeacher,t7thted.,t1978.
J.B.tBiggs,tTeachingtfortBettertLearning,t2tLegaltEduc.tRev.t133t(1990-t1991).

, Chaptert2t-tBusinesstEthics

CHAPTERtOVERVIEW
ChaptertTwotexplainstthetfundamentalstoftbusinesstethicstandtsocialtresponsibility.tIttalsotprovidestatframeworkt
thattallowststudentsttotengagetwithtethicstandtsocialtresponsibilitytmaterial.t Thistframeworktistimportanttbecaus
etitttakestawaytstudents‘ttendencyttotbelievetquestionstoftethicstaretsimplytmatterstoftopinion.t Considertaskingtyo
urtstudentsttotusetthet―WPHtframework‖tthroughouttthetcourse.


LEARNINGtOBJECTIVES
Aftertreadingtthistchapter,tstudentstwilltbetabletto:

2-1tDistinguishtbetweentbusinesstethicstandtthetsocialtresponsibilitytoftbusiness.st2-
2tRecognizetthetrelationshiptbetweentbusinesstlawtandtbusinesstethics.
2-3tAnalyzetbusinesstdecisionstusingtthetWHtframework.t2-
4tAppendixt2A:tExplaintthettheoriestoftbusinesstethics.

LECTUREtNOTEStWITHtDEFINITIONS
Intthetnews… Teachingttip:tForteachtchapter,tconsidertaskingtstudentsttotrelatetcurrenttnews
titemsttotmaterialtfromtthetchapter.


Intadditionttotideaststudentstcometuptwithtonttheirtown,tconsidertweavingtintne
wststoriestprovidedtbytthettextbooktpublisher.

FortChaptertTwo,tMcGrawtHilltofferstthetfollowingtstory:

―Smoket&tMirrors:tTobaccotCompaniestHavetBeentSteadilytAddingtMoretNicot
inettotCigarettesttotMaketThemtMoretAddictive,tEspeciallyttotTeenagers.‖

 ApplytthetWPHtframeworkttotthetdecisionsttobaccotcompaniestaretma
king.
 Istitt―sociallytresponsible‖tforttobaccotcompaniesttotaddtnicotinettotcigar
ettes?
 Shouldtlegaltrulestprovidetadditionaltprotectionsttotvulnerabletcon
sumers,tsuchtastteenagers?

2- Ethicstistthetstudytandtpracticetoftdecisionstabouttwhattistgoodtortright.
1tDistinguishtbetweentbus
 Businesstethicstistthetapplicationtoftethicsttotspecialtproblemstandtopp
inesstethicstandtthetsocialt
ortunitiestexperiencedtbytbusinesspeople.tAntexampletoftatbusinesstethi
responsibilitytoftbusiness.
cstquestion:tIstthetcompanytintthetCasetOpenertdoingtthetrighttthingtwh
entittattemptsttotreducetthetcoststoftadvertisingtbytnottlistingtalltpossiblet
complicationstoftthetmedicinetfortthetconsumer?tAstexplainedtlatertintth
istchapterttheretaretseveraltwaystoftevaluatingtantethicaltdecision,tfortexa
mple,tthetGoldentRule,tthetPublictDisclosurettest,tortthetUniversalizatio
ntTest.tOnetreasonable
answer,tthus,tistcantbetprovidedtbytthetGoldentRule.tPresumably,tiftonet
weretthetconsumertoftatmedicine,tonetwouldtwantttotbe