Business Law Principles and Practices Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it 9e Business Law Principles and Practices Arnold J Goldman Law Firm of Goldman & Goldman William D Sigismond Monroe Community College Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it This is an electronic version of the print textbook Due to electronic rights restrictions, some third party content may be suppressed Editorial review has deemed that any suppressed content does not materially affect the overall learning experience The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it iv Business Law: Principles and Practices, Ninth Edition Arnold J Goldman and William D Sigismond Senior Vice President, LRS/Acquisitions & Solutions Planning: Jack W Calhoun Editorial Director, Business & Economics: Erin Joyner Editor-in-Chief: Rob Dewey Senior Acquisition Editor: Vicky True-Baker Developmental Editor: Sarah Blasco Editorial Assistant: Tristann Jones Marketing Brand Manager: Kristen Hurd Executive Marketing Communications Manager: Jason Lachapelle Marketing Coordinator: Ilyssa Harbatkin Art and Cover Direction, Production Management, and Composition: PreMediaGlobal Senior Media Editor: Kristen Meere © 2014, 2011 South-Western, Cengage Learning ALL RIGHTS RESERVED No part of this work covered by the copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be emailed to permissionrequest@cengage.com ExamView® is a registered trademark of eInstruction Corp Windows is a registered trademark of the Microsoft Corporation used herein under license Macintosh and Power Macintosh are registered trademarks of Apple Computer, Inc used herein under license Rights Acquisition Director: Audrey Pettengill © 2014 Cengage Learning All Rights Reserved Rights Acquisition Specialist, Text and Image: Amber Hosea Library of Congress Control Number: 2012952311 Manufacturing Planner: Kevin Kluck ISBN 13: 978-1-133-58656-2 Cover Image: ©Miao Liao/Shutterstock ISBN 10: 1-133-58656-2 South-Western 5191 Natorp Boulevard Mason, OH 45040 USA Cengage Learning is a leading provider of customized learning solutions with office locations around the globe, including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan Locate your local office at: www.cengage.com/global Cengage Learning products are represented in Canada by Nelson Education, Ltd For your course and learning solutions, visit www.cengage.com Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com Printed in the United States of America 7 17 16 15 14 13 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it Brief Contents Preface xxxi Acknowledgments P a r t Understanding Your Legal Environment Foundations of Law and the Role The Legal System in the United States and Its Personal, Business, Cyber Crimes and the American Tort Law: Traditional Torts and Cyber Torts Litigation and Alternatives for Settling Civil Disputes of Ethics in Business Constitutional Foundation Criminal Justice System P a r t Contracts 25 49 77 103 124 Contract Law: A Beginning Agreement: Offer and Acceptance Consideration Capacity 10 Legality 11 Memorialize Contracts in Writing—Statute of Frauds 126 138 155 169 183 201 v Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it vi Brief Contents 12 Transfer of Contract Rights and Duties 13 The Termination of Contracts: Discharge 14 The Termination of Contracts: Breach of Contract 214 227 P a r t Purchase, Sale, and Lease of Goods Under the UCC 15 Formation of Sales and Lease Contracts 16 The Sales Contract: Transfer of 17 The Sales Contract: Performance, Breach, and Remedies for Breach 292 18 Product Liability Law 306 Title and Risk of Loss 258 328 19 Nature and Types of Negotiable Instruments 20 Issue, Transfer, Indorsement, and Discharge of 21 Rights and Duties of Parties 22 Checks and the Banking System in the Twenty-First 256 277 P a r t Negotiable Instruments Negotiable Instruments Century 240 330 344 356 374 P a r t Agency, Employment, and Labor Law 396 23 Employer-Employee Relationship 24 Principal-Agent Relationship 25 Principal-Agent, Employer-Employee, and Third-Party Relationships 398 418 434 P a r t Business Organization and Regulation 26 Sole Proprietorships, Partnerships, and Limited Liability Organizations 444 446 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it Brief Contents 27 Corporations and Franchising 28 Government Regulation of Business 464 481 P a r t Real and Personal Property, Bailments, and 29 Basic Legal Concepts of Property 30 Renting Real Property 31 Buying and Selling Real Property 32 Nature and Types of Bailments 33 Wills, Intestacy, and Estate Planning P a r t Consumer and Creditor Protection Wills and Estate Planning 496 498 514 528 543 566 588 34 Protecting the Consumer and the Taxpayer 35 Protecting the Borrower 36 Protecting the Creditor P a r t Insurance 590 608 625 636 37 Property, Casualty, and Automobile Insurance 38 Personal Insurance 638 659 Appendix A Understanding Statutes and Court Decisions 673 Appendix B Doing Legal Research on the Internet 676 Appendix C Comparison Between Contract Law Under the Common Appendix D The Constitution of the United States 685 Law and Sales Law Under the UCC 678 Glossary 694 Index 709 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it vii Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 718 Index Holder in due course (HDIC) (Continued) good faith and, 363 liability of parties to negotiable instrument, 358–361 ordinary holder, 362 personal (limited) defenses, 365–367 shelter principle, 364 transition from holder to holder, 362–364 universal (real) defenses, 367 for value, 362–363 Holder(s) negotiable instrument, 346, 347 ordinary holder, 362 Holdings, 10 Holographic wills, 571 Home buying closing process, 536, 537f contract of sale, 530–532, 531f disclosure requirements, 536–537 earnest money, 532 financing, 532–533 title examination, 533–536 transfer of title, 538–540, 539f Homeowners insurance, 645, 646f Hospital insurance, 668 Hostile fire, 644 Hotelkeeper duties of, 558–559 liabilities of, 559–560, 559f lien, 631 rights of, 560 Hours, for workers, 414 Housing and Urban Development (HUD), 537 I Identified goods, 279, 280 Identity theft, 57–58 Illegal aliens, employment of, 415 Illegal contracts, 145, 184–197 exceptions to effect of, 185 offers and, 145 opposition to public policy of, 190–197 partially illegal contracts, 197 state statutes prohibiting, 186–190 types of, 185 Illegality common law vs UCC, 681 negotiable instruments, 368 Illness, discharge of contract through, 233 Implication of partnership, 450–451 Implied authority, 436 Implied consent, driving while intoxicate laws, 58–59 Implied contract, 132–133 employment termination, 404 Implied warranty, 317–318 disclaimer of, 317 Impossibility of offer, 145 of performance, 232–234 Impracticability of performance, 232–234 Income for fixed period, life insurance, 667 Income for life option, insurance, 667 Incontestability, life insurance, 664–665, 664f Incontestable clause, life insurance, 665 Incorporation, articles of, 467–468 Indemnification of agents, 427 defined, 640 Independent contractor, 404, 422 Indictment, 69, 69f Indorsee, 349 Indorsements, 347f, 349–352, 349f, 350f, 351f forgery of, 381–382 missing indorsement, 382–383 Indorser, 349 Infancy defense to crime, 62, 62f Infliction of emotional distress, 82–83 Informal contract, 132, 133f Infractions, 51 Infringement protection, 505 Inheritance, of property, 501 Initial appearance, in criminal court, 68, 69, 107t Initial hearing, in criminal court, 68 Injunction, 90 in breach of contract, 246 Injured party, product misuse by, 318 Injury, liability for, 192 In pari delicto, 184–185 Insanity as defense to crime, 62, 62f of offeror/offeree, 144 Insider trading, 56–57, 487 Insolvency, 618 delivery withholding, 302 Installment loans, 611 Instrument survey, 535, 535f Insurable interest, 641–642, 648, 663 Insurance agent, 640–641 Insurance and insurance policies, 641–643 See also Health insurance; Life insurance all-risk, 644 assignment, 649 automobile insurance, 649–655, 650f binder, 641 burglary, 644 cancellation/termination, 648 claims, 643 coinsurance clause, 647–648 coverage in, 642, 645–646 deductible clause, 642 defined, 640 disability, 413 exclusions, 642 extended coverage rider, 644 fire insurance, 643–644 floater policy, 644–645 health insurance, 414 homeowners policy, 645, 646f indemnification, 640 insurable interest, 641–642, 648 marine, 644 medical payments, 651 multiperil policy, 645 nature of, 640 no-fault insurance, 653 old age, 413 open coverage, 642 personal insurance, 660–670 personal liability, 644 property and casualty insurance, 643–645, 646f pro-rata liability, 647 prorated premium, 648 public liability, 644 purchasing, 640–641 removal of property, 646–647 risk increase clause, 647 short rate, 648 Social Security, 412–413 standard clauses, 645–649 survivors’, 413 theft, 644 title insurance, 534 unemployment, 413 vacancy, 647 valued coverage, 642 Insurance broker, 640–641 Insured, defined, 640 Insurer, defined, 640 Intangible property, 261 Intent, of offeror, 140, 272 Intentional misstatement, 248 Intentional tort, 80–90 defenses to, 90–91 Interest contract rate of credit interest, 618 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Index insurable, 641–642, 648 in real property sale, 205 security interest, 627–628 usury statutes and, 189 Interest only option, life insurance, 667 Interference with a business relationship, 88 Intermediate bank, 387 Intermediate courts of appeal federal, 39 gambling and gaming on, 187–188 state, 35–36 Internal Revenue Service, 38, 413 Internet electronic funds transfer, 390–392 e-sales contracts, 271–272 free speech and, 45–46 legal research using, 676–677 online dispute resolution, 120 Interrogatories, 112 Interstate commerce, 483 Inter vivos trust, 582 Intestacy, 575–576, 576f Intestate, 568 Intoxication, capacity and, 177 Intrastate commerce, 483 Invasion of privacy ethics and, 19 as tort, 85–87 Investigation, 66–67 Investor protection, 476 Involuntary bankrupt, 618 Issue, of transfer commercial paper, 346–348 J Joint and several Liability, 454 Joint and several liability, of partners, 454 Joint tenancy, 507 Joint venture, 460 Judge, role in legal system, 42–43 Judgment adjudicated, 116 in civil procedure, 107t, 116 against debtor, 630 default, 110 summary judgment, 111 Judgment lien, 631 “Judgment proof” defendant, small claims court, 34 Judgment proof lawsuits, 105 Judicial districts in federal court system, 38, 40f Judicial review, 43–44 Judiciary See also Courts legal system and role of, 42–43 role in legal system, 42–43 in United States, 26–29 Jurisdiction appellate, 27–28 in cyberspace, 29 defined, 27 general, 28 limited, 28 personal, 28–29 subject matter, 28 Jury trial civil procedure, 114–115 role in legal system, 42–43 Justice, administration of, contracts interfering with, 192 Justice of the peace, 31 Juvenile offenders, 62 See also Minors K Key-person insurance, 663 L Labeling standards, 599 Labor-management relations, 402–403 Labor Management Relations Act, 406 Labor union, 402 Land contract, 533 Landlord defined, 515 rights and duties, 518–519 Landlord-tenant relationship, 515 third party obligations, 523–524 Landrum-Griffin Act, 406 Lapse gift, 568 Larceny, 54 Law merchant, 15 Law(s) See also Ethics administrative regulations, 10f, 12 assignment by, 222–223 case law, 11 civil, 13–14, 14t common law, 8–9 constitutional law, 9–10, 10f court decisions, 11–12 criminal, 13–14, 14t defined, development of, 8–9 discharge of contract and change in, 232–236 equity and, 13–14, 14t history and purpose of, 5–6 719 legal system role in, 7, 7f legitimate functions of, 6–8 nature of, Roman law, uniform law, 15 United States sources of, 9–12 Lawsuits See also Alternative dispute resolution; Litigation anatomy of, 109–116 attorney’s fees, 109 decision to sue, 109 electronic filing, 121 emotional distress, 82 investigation, 108 online dispute resolution, 120–121 personal injury, 105–109, 106f, 107t product liability, 308 in U.S legal system, 44 Lease assignment of, 521 covenants in, 518 defined, 270–271 eviction, 519, 520f factual information in, 518 fair leasing information, 617 nature and elements of, 516–522, 517f by nonowners, 285–286 property destruction, 519–521 redecoration and repairs, 518–519 rent payment, 519 rights and duties in, 518–519 security deposit in, 519 sublease, 521 tax payments in, 518 termination of, 522–523 unconscionability in, 517 utility payments in, 518 Lease contract formation of, 270–271 risk of loss and, 279 Leased property care of, 518–519 destruction of, 519–521 Legacy gift, 568 Legal action, 44 Legal detriment, 157 Legality in contracts, 130 of contracts, 184–197 nature and general effect, 184–185 Legal rate of credit interest, 618 Legal remedies, 242–245 for torts, 96–97 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 720 Index Legal system accommodation of interests, 44 attorney’s role in, 41–42 constitutional framework for, 43–46 ethical disputes and, 22–23 judges’ role in, 42–43 judicial review, 43–44 jury’s role in, 42–43 litigation, 44 purposes of, 7, 7f separation of powers in, 43 statutes, acts, and ordinances, 10–11 Legislation, 10 employee health and safety, 410–411 employee privacy, 412 Lemon laws, 599 Lessee, defined, 267 Lessor, defined, 271 Leveraged buyout (LBO), 475 Liability See also Strict liability of agent, 437–439 for baggage loss, damage or delay, 603 for bailment, limiting of, 555 bodily injury, 650 contract liability, 435–439 of corporate directors, 472 of corporate officers, 473 corporation, 472 criminal liability, 440 exculpatory clauses, 191–192 insurance, 644–645, 649–650 for international flights, 603 joint and several, 454 for minors, 171 of minors, 174–175 of principal, 435–437 of product, 306–325 of professionals, 491 property damage, 649–650 pro-rata, 647 of stockholders, 470 tort liability, 436–437 vicarious, 436 warranty, 312–319 Libel, 83 Licensing business arrangements, 478 of professionals, 491 property, 501 statutes, contracts violating, 186–187 Lienholder, 631 Liens artisan, 631 bailee, 550 hotelkeepers’, 631 mechanic’s lien, 631 tax, 631 unpaid seller’s lien, 302 Life insurance defined, 661 endowment, 662 insurable interest, 663 payment of proceeds, 667 special purpose, 662–663 standard policy clauses, 664–667, 664f trust, 582 whole life, 661–662 Limited express warranty, 321–323, 322t Limited jurisdiction, 28 trial courts, 29, 35 Limited liability of common carriers, 560–562, 562f of hotelkeeper, 557–560 of stockholders, 470 Limited liability company (LLC), 458–459, 459f Limited liability partnership, 459 Limited partnership, 457–458 dissolution, 458 formation of, 457 roles, rights, and liability of, 458 Limited payment life insurance, 661 Limited warranty, 321–323, 322t Line of credit, 610 Liquid assets, 580 Liquidated claim, 161–162 Liquidated damages, 244 Listing contract, 530 Litigation alternatives to, 117–120 criminal procedure vs., 107t electronic filing, 121 investigation, 108 overview, 104–105 posttrial proceedings, 116 pretrial proceedings, 110–114 tort litigation, reform, 97–98 trial in, 114–115 in U.S legal system, 44 Living trust, 582 Living will, 576–579, 577f Lobbying, 192 Local administrative agencies, 12 Long-term care insurance, 670 Loss, risk of, 279–288, 281t Loss leader, 594 Lost property, 503 bailment for, 555 Loyalty, in principal-agent relationship, 425 Lump sum option (life insurance), 667 M Magistrate court, 31 Magnus-Moss Warranty Act of 1975, 321–323 Magnuson-Moss Warranty Act, 599 Mailbox rule defined, 147 e-sales contracts, 273 offer acceptance, 147 Major medical insurance, 668–669 Maker, of promissory note, 332, 333f, 335t Malicious prosecution, 87 Malpractice, negligence, 93 Managers, ethical issues for, 19–20 Marine insurance, 644 Marital deduction, 581 Market allocation, 484 Market price, 299 Marriage agreements harming, 193 contract for, 205–206 Material alteration, negotiable instruments, 368 Material breach, 226 Mechanic’s lien, 631 Mediation, 118–119 Medicaid, 669 Medical insurance, 668 Medical leave, 414 Medical payments insurance, 651 Medicare, 669 Medicare program, 413 Megan’s Laws, Memorandum, 207–208, 208f Mental distress, tort law and, 79 Mental health courts, 36–37 Mentally incompetent persons, 177–179 determined by court, 178 not determined by court, 179 Merchantable goods, 314 Merchants defined, 261 offeror as, 263 temporary possession by, 286–287 title relevance/risk of loss for, 279 written confirmation with, 269 Mergers, of corporations, 473–474, 473f Minitrials, 119 Minors criminal liability of, 62 emancipated minors, 174–175 employment standards, 414 exception right to disaffirm contract, 172–173 necessaries for, 174–175 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Index negotiable instruments and, 368 ratification by, 173 rights and obligations, 170–175 right to disaffirm contract, 171–172 tort liability of, 176 Miranda warnings, 67–68, 68f Mirror-image rule e-sales contracts, 273 offer acceptance, 146 sales contracts, 262, 265 Misdemeanor, 51 Mislaid property, 503 Misleading advertising, 593 Missing indorsement, 382 Misstatement, intentional, 248 Mistake of law, 35 in breach of contract, 250–251 in e-sales contracts, 273 Misuse of product, 323 Mitigation of damages, breach of contract, 243 Model Penal Code (MPC), 51 Modified life insurance, 661–662 Monopolies agreements creating, 196 prevention of, 483–484 Montreal Convention, 603 Moral consideration, 159 Mortgage assumption, 532 defined, 532 terms of, 533 Mortgage bond, 471 Mortgage commitment, 532 Mortgagee, 532 Mortgagor, 532 Motion, 110–111 Moveable property, 260 Multiperil insurance policy, 645 Mutual agreement, bailment as, 547 Mutual benefit bailments, 548–553 Mutual mistake, 250–251 N National Conference of Commissioners on Uniform State Law (NCCUSL), 260 National Environmental Policy Act, 489 National Labor Relations Act, 406 NCCUSL See National Conference of Commissioners on Uniform State Law (NCCUSL) Necessaries, minors’ liability for, 174–175 Necessity bailments by, 555 in principal-agent relationship, 424 as tort defense, 90 Negligence assumption of risk and, 94 comparative, 93–94 contributory, 93 defenses to, 93–94 exculpatory clauses, 191–192 gross negligence, 652 product liability and, 311–312 as tort, 92–93 Negotiable instruments accommodation parties, 370 alteration of, 353 bankruptcy and, 353 bearer, 340, 348, 348f breach of warranty, 367 cancellation of, 353 certificates of deposit, 332, 333f, 335t checks, 334–335, 335f defenses against holders of, 369f defined, 331–332 delivery, lack of, 366 discharge of, 352–353 dishonor of, 360 drafts, 334–335, 334f, 335t duress and, 366–367 Federal Trade Commission rule, 369–370 fixed amount of money, 338–339 forgery in, 367–368 fraud in, 365 holder, 346, 347 illegality of, 368 indorsements, 347f, 349–352, 349f, 350f, 351f issue and transfer, 346–348 language/omissions added to, 341 liability of parties, 358–361 limitations beyond written promise/ order, 340 material alteration, 368 minors and, 368 negotiability requirements, 336–340 notice of dishonor, 360–361 order instruments, 347–348, 347f overview, 331 payable on demand, time requirement, 339 payable to order/bearer, 340 payment and maturity, 365–366 personal (limited) defenses, 365–366 presentment for payment, 360 primary parties in, 358 promissory notes, 332, 333f, 335t secondary parties, 358–359 signature, 336–337 721 statute of limitations and, 353 transfer by negotiation, 346–348 transfer of assignment, 346–348 transition from holder to holder, in due course, 362–364 unauthorized completion, 366 unauthorized signature, 361 unconditional promise to pay, 337–338 universal (real) defenses, 365, 367 written form, 336 Negotiation in alternative dispute resolution, 119–120 preliminary, 141 requirements in negotiable instruments, 336–340 transfer by, 346–348 Net estate, 580 New York rule, assignments, 218 No-fault insurance, 653 Nominal consideration, 158 Nominal damages, 244 Nonacceptance of goods, 301–302 Noncompete clauses, 195 Nonconforming goods breach of warranty, buyers’ remedy for, 298 risk of loss and, 287 sales contracts, 264 Nonforfeiture rights, life insurance, 666 Nonliquid assets, 580 Nonmerchants, 261 Nonowners, sale or lease by, 285–287 Nonprofit corporation, 467 Nontrading partnership, 450 Nontransferable contract rights and duties, 219–220 No-par stock, 467 Norris-LaGuardia Act, 402, 406 Not guilty plea, 65f, 70 Notice of appearance, 109 of assignment, 217–218 of dishonor, 360–361 of eviction, 519, 520f partnership dissolution, 455 Novation, 219, 231–232 Nuclear Regulatory Agency, 489 Nuisance, as tort, 89–90 Nuncupative wills, 571 O Obedience, in principal-agent relationship, 425 Objective impossibility, discharge of contracts, 232 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 722 Index Objective theory of contracts, 140–141 Obligee, 218–219 Obligor, 216–218 Occupational Safety and Health Act, 410–411 Offer acceptance of, 146–150, 149t common law vs UCC, 678–681 communication of, 147–148, 149t in contracts, 128, 140–145 counteroffer, 143 death or insanity of offeror/offeree, 144 defined, 140 definiteness of, 141 illegality of, 145 impossibility of, 145 invitation to make, 141–142 online, e-sales, 272 options and, 144 rejection of, 143 revocation of, 143–144 sales contracts, 262–263 serious intent of, 140 Offeree acceptance by, 146 consideration, 266 in contracts, 128 defined, 140 sales contracts, 263, 364 Offeror acceptance communication to, 147–148, 149t communication of, 141 in contracts, 128 defined, 140 intent of, 140, 272 sales contracts, 264–265 Old age insurance, 413 Omnibus clause, automobile insurance, 652 One Year Rule, written contracts, 206–207 Online banking, 392 Online contracts, 150 Online defamation, 95 Online dispute resolution (ODR), 120 Online gaming, 187 companies, 188 Online legal research, 676–677 Online privacy, 95–96 Open coverage, 642 Open shop, 406 Operation of law bailments, 548 in principal-agent contract, 429–430 Option agreement, 144 Oral contracts admission in court of, 268–269 legal status of, 202 one year rule for, 206–207 real property sales, 205 sales contracts, 267–268 Order instruments, negotiation of, 347–348, 347f Orders to pay See Negotiable instruments Ordinances, 10 Ordinary holder, 362 Ordinary life insurance, 661–662 Organizational meeting, 468 Overdraft check, 377 Overlapping of warranties, 319 Ownership condominium, 508 cooperative, 507–508 of property, 506–508 time share, 508 P Packaging standards, 599 Parental liability, for minors, 175–176 Parking, bailments for, 552–553 Parole, 71 Parol evidence rule, 209–210, 270 Par stock, 467 Partially illegal contracts, 197 Participating preferred stock, 471 Parties, liability of, 359 Partners defined, 449 dormant, 450 duties of, 453 general, 450 joint and several liability, 454 liability of, 454–455 limited, 450 powers of, 453–454 rights of, 452–453 secret, 450 silent, 450 types of, 450 Partnership advantages/disadvantages, 449, 475t agreement, 450, 451f bankruptcy and, 455–456 defined, 449 express agreement, 450 formation of, 450–451 by implication, 450–451 joint and several liability, 454 nontrading, 450 operation of, 451–455 termination of, 455–456 trading, 450 types of, 450 Past consideration, 159–160 Patents defined, 504 infringement, 505 Payability requirements, negotiated instruments, 339 Payable to bearer, 340 Payable to order, 340 Pay-by-Internet, 391 Payee as indorsee, 349 of promissory note, 332, 333f, 335t Payer, as indorser, 349 Payment buyer obligations concerning, 262 for goods, 262 of negotiable instruments, 332, 333f, 352–353 part payment, on goods, 267–268 perfect tender rule and, 294–295 presentment for, 359–360 of rent, 519, 520f Payor bank, 387 Penal law See Criminal law Pensions, protection of, 413 Per capita distribution, 569 Peremptory challenge, 115 Perfect tender rule and, 294–295 Performance acceptance as, 264 by buyer, 296–297 course of, 270 in discharge of contract, 228–236 full performance, 228–229 impossibility/impracticability of, 232–234 legal tender of, 214 of sales contract, 293–297 by seller, 294 specific, in breach of contract, 245–246, 299–300 substantial performance, 229–230 Periodic tenancy, 516 Personal (limited) defenses, against holders of negotiable instrument, 365–367 Personal identification number (PIN), 391 Personal injury lawsuit, 105–109, 106f, 107t Personal insurance, 660–670 Personal jurisdiction, 28–29 Personal liability, 438–439 insurance, 644 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Index Personal property abandoned property, 501–502 acquiring rights in, 504–506 acquisition of, 501–504, 502f bailments, 545 computer technology and cyberlaw, 505–506 copyright, 505 defined, 499 escheat, 502 fair use, 506 gift of, 501 infringement, 505 mislaid, 503 patents, 504 tangible, 260 trademarks, 504–505 trespass on, 89 Personnel records, 402 Per stirpes distribution, 569 Petit jurors, 114 Petit larceny, 54 Petty offenses, 51 PIN See Personal identification number (PIN) Plain English law, understandable contracts, 596–597 Plaintiff, in civil procedure, 109 Pleadings, in civil procedure, 109 Pledge bailments, 550–551 in consideration, 163–164, 163f Pledgee, 550–551 Pledgor, 550–551 Point of sale (POS), electronic funds transfer, 391 Police, in criminal justice system, 66–67 Police power, 483 Policy, insurance, 640 Possession adverse, 503 of stolen property, 55 Postdated checks, 378 Posttrial proceedings, 116 Power of attorney, 422 in principal-agent relationship, 422, 423f Powers, of corporation, 472 Precedent court decisions, 11 defined, Preemptive right, 469 Preexisting contractual agreement, 160 Preexisting duty to pay debt, 160–162 to perform legal obligation, 162 Preferred stock, 470 Preliminary hearing, 65f, 68–69 in criminal procedure, 107t Preliminary negotiations, 141 Premiums annuity policy, 663 auto insurance, 654 endowment insurance, 662 insurance, 640, 648 life insurance, 661, 664f modified life insurance, 661–662 term insurance, 662 universal life insurance, 662 waiver of, 665–666 whole life insurance, 661–662 Prenuptial agreement, 206 Prepayment privilege, 533 Preponderance of evidence, 115 Prescription (real property), 503 Present sale, 289–290 Pretrial conference, 110, 113 Pretrial proceedings, 70 in civil procedure, 107t, 110–114 in criminal procedure, 107t Price fixing, 594 Price misrepresentation, 595 Pricing, fair, 594–595 Primary parties, 358 Principal, 421 contract liability of, 435–436 criminal liability of, 440 defined, 420 tort liability of, 436–437 undisclosed, agent acting for, 438 Principal-agent relationship, 377, 419–420, 420f communication in, 426 by contract, 422, 423f creation of, 422–424 fulfillment of purpose/lapse of time and termination of, 428 mutual agreement in, 428 by necessity, 424 obligations of, 425–427 operation of law in, 429–430 by ratification, 424 revocation of authority in, 428–429 subsequent destruction/illegality of, 430 termination of, 428–430 third parties and, 430–431 Privacy employees, 411–412 invasion of, 19 online, 95–96 Private carrier, 560 Private trial, 119 Privilege, as tort defense, 90 723 Privity, product liability and, 310 Privity of contract, breach of warranty and, 319 Probable cause, in arrest, 66 Probate, 574 Probation, 71 Product franchising, 477 Product–implications, consumer misuse of, 323 Product labeling and packaging, 599 Product liability defined, 308 development of law, 309–311 misuse by injured party, 318 negligence, 311–312 overview, 308–309 recoverable damages, 323–324 strict liability, 320–321 warranty, 312–319 Product standards, 598–600 Professional corporation, 466 Professional gamblers, 188 Professionals antitrust legislation, 484 licensing and liability, 491 Profit corporations, 466 Profits, on property, 501 Promisee, 156 Promises to charitable organizations, 163–165 offer as, 131, 131f statement of, 312–314 statute of limitations and, 165 Promise to pay See Negotiable instruments Promisor, 156 Promissory estoppel, 164 Promissory note, 332, 333f, 335t Property abandoned property, 501–502 accretion of, 504 acquisition of, 501–504, 502f adverse possession, 503 bailed property, return of, 546 bailee’s possession of, 545–546 bailment in destruction of, 547 community, 507 condemned property, 504, 520–521 condominium ownership, 508 cooperative ownership, 507–508 damage, liability insurance, 649–650 easements, 500–501, 510 eminent domain, 511 escheat, 502 exempt, 617 fixture, 500 forms of ownership, 506–508 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 724 Index Property (Continued) as gift or inheritance, 501 insurance, 646–647 intangible, 261 legal protection of, 7–8, 7f license, 501 lost property, 503 mislaid property, 503 moveable, 260 nature of, 499–501 owners’ interests in, 509 personal, 499 prescription, 503 profits, 501 purchase of, 501 real property, 500 rights acquisition, 504–506 tacking, 503 tangible, 260 tenancy, 506–507 theft of, 54 time sharing, 508 trespass on, 89 use restrictions on real property, 509–511 in wills, disposal limitations, 572 Property and casualty insurance, 643–645 Pro-rata liability, 647 Prorated premium, 648 Proximate cause, 644 Proxy, defined, 469 Public duty, contracts interfering with performance of, 192–193 Public enemy, act of, 557 Public liability insurance, 644 Public policy contracts opposed to, 190–197 illegal contracts and, 184–185 Puffing, 313, 594 Punitive damages, 22 breach of contract, 245 for torts, 97 Purchase acceptance of offer, 530–532, 531f of corporate stock, 474–475 of personal property, 501 of property, 501 Purchase money mortgage, 532 Purchase price, recovery to sue, 301 Q Qualified indorsement, 351–352, 351f Quasi contract, 134 Quiet enjoyment, covenants of, 521 Quitclaim deed, 538 R Racketeer Influenced and Corrupt Organizations Act (RICO), 61 Rain check coupons, 593 Ratification by minors, 173 principal-agent relationship by, 424 Real Estate Settlement Procedures Act (RESPA), 536 Real property accretion of, 504 acquisition of, 501–504, 502f adverse possession, 503 buying and selling of, 529–537 closing process for sale of, 536, 537f condemnation, 504, 520–521 contract of sale, 530–532, 531f deed, 501, 538–540, 539f defined, 500 disclosure concerning, 536–537 easements, 500–501, 510 eminent domain, 511 fee simple ownership, 509 financing for purchase of, 532–533 foreclosure action, 533 gift of, 501 inheritance of, 501 interest in, 206 land contract, 533 leasehold estate ownership, 509 licenses, 501 life estate ownership, 509 mortgage, 532–533 ownership of, 506–508 prepayment privilege, 533 prescription, 503 profits, 501 purchase of, 501 restrictions on use, 509–511 sale contract of interest in, 205 survey, 535, 535f tacking, 503 taxes on, 511 title examination, 533–536, 534f–535f transfer of title, 538–540, 539f trespass on, 89 wills, 510–511 zoning laws and regulations, 510 Reasonable care, in bailments, 549 Receipt of goods, 267 Receiving stolen property, 55 Reclamation of goods, 303 Recreational gamblers, 188 Reduced paid-up life insurance, 666 Regular charge account, 610 Regulation CC, 386 Reimbursement of agent, 427 Reinstatement clause, life insurance, 665 Rejection of offer, 143 Release document, 643 Remedies for breach of contract, 242–246, 293–303, 297t buyers’ remedies, 297t, 298–300 consumer protection law violations, 584-585, 600 for debtor’s default, 630 for employment discrimination, 409 equitable remedies, 245–246 legal remedies, 242–245 sellers’ remedies, 300–303 Removal for cause, 115 Rent, defined, 515 Renunciation by agent, 429 Replacement cost coverage, insurance, 642 Replevin, 299–300 Repossession, 630 Rescission, 231, 245 Residuary gift, 568 Respondeat superior, 436 Restatement of contracts, 135 Restatement of Torts, 308–309 Restrictive covenants, 509–510 Restrictive indorsement, 350–351, 350f Return of sale, 282–284 Revised Uniform Limited Partnership Act (RULPA), 457 Revised Uniform Partnership Act (RUPA), 456 Revocation of authority, 428–429 of offer, 143–144 of will, 573–574 Revolving charge account, 610 RICO See Racketeer Influenced and Corrupt Organizations Act (RICO) Right of survivorship, 507 Rights, assignment of, 216–218 Rights of parties, common law vs UCC, 684 Risk increase, insurance policies, 647 Risk of loss in absence of breach, 280–284 breach of contract and, 287–288 sales contracts, 279–289, 281t Robbery, defined, 52 Robinson-Patman Act, 485 Roman law, Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Index S Safety of agents, 427 of products, 311, 598–599 of workers, 410–411 Sale contracts See also Title, transfer of acceptance, 263–266 battle of forms in, 265 breach of, 266, 297–298 buyer obligations, 262 cancellation of, 300–301 and common law, 262, 263, 264 consideration, 266 enforceable oral sales contracts, 267–269 e-sales contracts, 272–273 formation of, 258–274 good faith in, 266 legal setting for, 260 offer, 262–263 oral contracts, 267–268 parol evidence rule, 270 payment obligations, 262 performance of, 293–297 present sale vs contract to sell, 279–280 privity of, 319 real property, 530–532, 531f remedies for breach, 293–303, 297t risk of loss and, 279–289, 281t specially manufactured goods, 268 statute of frauds, 266–267 statute of limitations, 266 title relevance and risk of loss, 279 unconscionability, 269–270 warranties in, 312–319 Sale(s) on approval, 282–284 bulk sales, 284 defined, 260 by merchants, 261 by nonmerchants, 261 by nonowners, 285–287 return, 282–284 of trade, restrictions, 193–195 Sales puffing, 594 Sample of goods, 314 Sarbanes-Oxley Act of 2002, 16, 488 Satisfaction in contract, 230, 232 Scope of agency, 437 Scope of authority, 435 Scope of employment, 437 Secondary parties, 358–359 Secret partners, 450 Secured credit, 610 Secured debt, 627–628 Secured transaction, 627–628 Securities Act of 1933, 486 Securities and Exchange Act of 1934 Section 10(b), Rule 10b-5, 56 Securities and Exchange Commission (SEC), 16, 486 Security agreement, 627–628 Security deposit, 519 Security interest, 627–628, 631 Self-defense, as criminal defense, 62f, 63 Seller perfect tender rule and, 294–295 performance by, 294 remedies for breach available to, 300–303 unpaid lien of, 302 Seniority, 410 Sentencing, 70–71 Separation of powers, 43 Serious illness, discharge of contract through, 233 Servicemembers Civil Relief Act, 523 Settlement of estate, 575 Settlement options, life insurance, 667 Sexual harassment, 20, 408–409 Shelter principle, 364 Sherman Act, 484, 490 Shipment contract, 282 Shoplifting, 54 false arrest and, 81–82 Short rate premium, 648 Signature requirement agents’ carelessness in signing, 438 e-sales and, 273 on negotiable instruments, 336–337 unauthorized signature, negotiable instrument, 361 Silence as acceptance, 149–150 Silence as concealment, 248 Silent partners, 450 Simpson, O J., Sixth Amendment, 42, 46 Slander, 83 Small claims court, 31–34 advantages of filing, 31–32 appeal, 33 collecting award, 33–34 court procedure, 33 filing a complaint, 32 limitation on amount of law suit, 32 making a winning case in, 34 Social Security Act, 412–413 Society, legal protection of, 7–8, 7f Sole proprietorship, 448–449, 475t Sole tenancy, 506 Special agents, 420 Special bailment, 556 725 common carriers, duties, liabilities, and rights, 560–562 defined, 556 hotelkeepers liabilities, duties, and rights, 557–560 strict liability exception, 556–557 Special indorsement, 350 Specially manufactured goods, 268 Special needs trust, 583 Special purpose insurance, 662–663 Specific legacy, 568 Specific performance, breach of contract, 245–246, 299–300 Sphere of influence, in workplace, 20 Stale check, 377 Standard fire insurance policy, 644 Standby trust, 582 Standing to sue, 27 Stare decisis, 11 State administration, agencies, 11–12 State court system, 29–37, 30f appellate courts, 35–36 commercial claims court, 35 court of final resort, 35–36 drug courts, 36 mental health courts, 36–37 small claims court, 31–34 trial courts, general jurisdiction, 35 trial courts, limited jurisdiction, 31 State criminal laws, 51 Statement of fact or promise, 312–314 State statutes, illegal contracts forbidden by, 186–190 Station in life rule, 174–175 Statute of frauds common law vs UCC, 682–684 contracts and, 202–211 debt payment and, 204 memorandum requirement, 207–208, 208f sales contracts, 266–267 Statute of limitations common law vs UCC, 682 discharge of contract, 234–236 negotiable instruments, 353 promises and, 165 sales contracts, 266 Statutes, 10–11 contracts expressly/impliedly forbidden by, 185 federal statutes, 10 gambling statutes, 187–188 laws as, 10–11 licensing statutes, 186–187 state statutes, 186–190 Sunday statutes, 190 understanding, 673–675 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 726 Index Stock callable preferred, 471 common, 470 convertible preferred, 471 cumulative preferred, 471 ownership, 467 participating preferred, 471 preferred, 470–471 tender offer for, 474 Stock certificate, 468, 468f Stockholders defined, 468 liability of, 470 rights of, 468–469 Stolen property, 55 Stoppage in transit, 302 Stop-payment order, 378–379 Storage, bailments for, 552–553 Straight life insurance, 661 Strict liability agreement to limit, 556 product liability and, 320–321 special bailments exception, 556–557 in tort, 94–95 Subject matter, mistakes about, 250–251 Subject matter jurisdiction, 28 Sublease, 521 Subpoena, in civil procedure, 115 Subrogation, 643 Substantial performance, 229–230 Substitute check, 389–390 Substitute contract, 232 Subtenant, 521 Suicide, 664f, 665 Summary judgment, 111 Summary jury trial, 119 Summons, in civil procedure, 109, 113f Sunday statutes, agreements violating, 190 Supreme Court See United States Supreme Court Surety, 629 Suretyship, 629 Surgical insurance, 668 Survey map, 535, 535f Survivors’ insurance, 413 Syndicate, 460 T Tacking, of property, 503 Taft-Hartley Act, 406 Tangible property, 260 Tape location map, 535, 535f Taxation of business, 485 estate planning and, 579–583 payment in leases of, 518 of real property, 511 Tax escalator clause, 518 Tax lien, 631 Taxpayers’ rights, 603–605, 604f–605f Temporary possession of goods, 286–287 Tenancy, 506–507 in common, 506 by entirety, 507 periodic, 516 at sufferance, 516 types of, 516 at will, 516 for years, 516 Tenant defined, 515 subtenant, 521 Tender offer, 474 Tender of performance, 228 Termination of contracts, 228–236, 229f of corporation, 473–474, 473f of insurance, 648 of lease, 522–523 of partnership, 455–456 Termination of contracts, 228–236, 229f, 241–252 See also Breach of contract Termination statement, 628 Term insurance, 662 Terms, of lease, 515 Testamentary capacity, 570 Testamentary trust, 582 Testate, 568 Testator/testatrix, 568 Textile Fiber Products Identification Act, 599 Theft, 54–58 defined, 54 insurance, 644 of trade secrets, 90 Third parties employer liability to, 435–437 landlord-tenant obligations, 523 principal liability to, 435–437 Threshold figure, 653 Time instruments See Negotiable instruments Time restrictions on negotiated instruments, 339 on offers, 142 Time sharing, 508 Title bailor’s retention of, 545 examination, 533–536, 534f–535f present sale vs contract to sell, 279–280 in sales contracts, relevance of, 279 search, 533 transfer of, 538–540, 539f void/voidable title, 285–286 warranty of, 316–317 Title insurance, 534 Title VII, Civil Rights Act of 1964, 407 Torrens system, 534 Tort law overview, 79 product liability and, 308–309, 320 Tort liability of agents, 439 of employees, 439 of principals, 436–437 Torts See also specific tort offenses classification of, 79–80 cyber torts, 95–96 defined, 79 illegal contracts as violation of, 186 intentional tort, 80–90 legal remedies for, 96–97 litigation reform, 97–98 minors’ liability for, 176 negligence as, 92–93 Restatement of, 308–309 strict liability in, 94–95 Totten trust, 582 Trade agreement restraints on, 193–195 usage of, 270 Trade acceptance, 334 Trade fixtures, 521 Trademark Revision Act of 1988, 504 Trademarks, 504–505 defined, 504 Trade secrets, 506 theft of, 90 Trading partnership, 450 Transfer negotiated transfer, 346–349 of rights and duties, contracts, 215–223 Transfer of negotiable instruments, assignment, 346–348 Transients, 558 Transportation See Air travelers; Automobiles; Carrier; Delivery Traveler’s checks, 385–386, 385f Treble damages, 491 Trespass, as tort, 89 Trial courts federal courts, 38–39 general jurisdiction, 35 limited jurisdiction, 35 state courts, 30 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Index Trials, 70 in civil procedure, 107t, 114–116 in criminal procedure, 107t judge and jury in, 42–43 minitrials, 119 private trial, 119 right to, 46 small claims court, 31–34 summary jury trial, 119 Trustee, 582 Trustor, 582 Trusts, 582–583 Truth in Lending Act, 595–596 Truth in Savings Act, 597 Tying arrangement, 485 U UCC See Uniform Commercial Code (UCC) Ultra vires, 471 Unanimous vote in partnership, 452 Unauthorized completion, 366 Unauthorized signature, negotiable instrument, 361 Unconditional promise, negotiable instruments, 337–338 Unconscionable contracts agreement, 196–197 leases, 517 sales contracts, 269–270 Under the influence, 62–63, 62f Undisclosed principal, agent acting for, 438 Undue influence in breach of contract, 249–250, 251 freedom from, in wills, 570 remedies, 251 Unemployment insurance, 413 Unenforceable contract, 132 Unethical behavior, in workplace, 16–19 Uniform Commercial Code (UCC), 15, 135, 501 acceptance under, 263–266 Article 3, 332 Article provisions, 260–261, 279, 280 breach of contract remedies, 300–303 bulk sales, 284 checks and the banking system, 376 common law and, 157, 262–265, 678–684 conforming goods, 264 consideration under, 266 contract law in, 215, 233 deed, 501 destination contract, 282 enforceable sales contracts, 267–269 e-sales contracts, 271–273 good faith in, 266 goods defined in, 260 lease contract guidelines, 270–271 merchant defined in, 261 negotiable instrument, transfer of, 345–355 negotiable instruments, 331–341 nonconforming goods, 264 nonmerchant sales, 261 nonowner sales or leases, 285–287 offer guidelines in, 262–263 online contracts and, 150, 271–273 oral contracts, 266–269 parol evidence rule, 209–210, 270 perfect tender rule, 294–295 remedies for breach of contract, 293–303, 297t risk of loss in, 279–289, 281t sale defined in, 260 sale of goods under, 147, 260 sales contract guidelines, 262–269 sales on approval or return, 282–284 shipment contract, 282 specially manufactured goods, 268 statute of frauds requirement, 267 statute of limitations, 266 title provisions in, 279 transfer of negotiable instrument, 345–355 unconscionability provisions, 196–197, 269–270 void/voidable title sales, 285–286 warranties in, 312–319 written contract, 269 Uniformed Services Employment and Reemployment Rights Act (USERRA), 415 Uniform Electronic Transactions Act, 271 Uniform law, 15 Uniform Limited Partnership Act (ULPA), 457 Uniform Partnership Act, 449, 451, 452, 453, 454, 455, 456 See also Revised Uniform Partnership Act (RUPA) Uniform Securities Act, 486 Unilateral contract, 131, 131f acceptance of, 146 Unilateral mistake, 250 Uninsured motorists insurance, 651 Unintentional torts, 92–93 Unions, 402 Union shop, 406 727 United States, judiciary in, 26–27 United States Constitution, 9–10 federal court rulings and, 38 judicial review in, 43–44 as legal system framework, 43–46 separation of powers, 43 United States Courts of Appeals, 36–40 United States District Courts, 38, 40f United States Supreme Court, 30f, 38, 39, 41 federal court structure, 30f, 38 United States Tax Court, 38 Universal (real) defenses, against holders of negotiable instrument, 367 Universal life insurance, 662 Unlawful Internet Gambling Act (2006), 188 Unlicensed persons, 186–187 Unliquidated claim, 161–162 Unordered goods, 595 Unpaid seller’s lien, 302 Unsecured credit, 610 Unsecured debt, 626–627 Usage of trade, 270 Usury laws, 618 agreements violating, 189 Utility payments, lease provision for, 518 V Vacancy, insurance, 647 Valid contract, 128–130, 129f Value, in negotiable instrument, 362–363 Valued coverage, 642 Variance, zoning, 510 Venture, 460 Verdict in civil trial, 116 in criminal trial, 65f, 70 Vesting (pensions), 413 Veterans’ benefits, 415 Vicarious liability, 436 Violations, 51 Visual pollution, 489 Void/voidable contract, 131 Void/voidable title sales, 285–286 Voir dire, 115 Voluntary bankrupt, 618 W Wages, 414 assignment, 627 Wages and Hours Law, 414 Wagner Act, 406 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net 728 Index Waiver breach of contract, 242 of premium clause, life insurance, 665–666 Wards, mentally ill persons as, 178 Warehouse operator, 552 Warehouse receipt, 552 Warranty automobile, 600 breach of, 298, 310t, 318–319, 367 deed, 539–540, 539f defined, 312 disclaimer of, 317 exclusion of, 317–318 express warranty, 312–314 full warranty, 321–322 of habitability, 518–519 implied warranty, 314–316 limited express warranty, 322f Magnuson-Moss Warranty Act, 321–323 overlapping of, 319 product liability and breach of, 310t, 318–319 of title, 316–317 Warsaw Convention, 603 Welfare, government regulation of, 488–490 Whistle-blower laws, 404 Whole life insurance, 661–662 Wills administration of, 574–575 changing or revoking, 573–574 codicils, 573 creation of, 572–573 defined, 568 estate planning and, 579–583 holographic, 571 intestacy, 575–576, 576f land use restrictions in, 510–511 limitations on property disposition in, 572 living wills and health care proxies, 576–579, 577f–578f nuncupative, 571 purpose of, 568–569, 569f revocation and changes, 573–574 sample, 569 special wills, 571 taxes and, 579–583 valid will requirements, 570–571 witnesses, 570–571 written form, 570 Witness, to will, 570–571 Wool Products Labeling Act, 599 Workers’ compensation, 412 Workplace ethics business codes of ethics, 22 challenges to, 19–20 ethical practices, 20–21 legal system and, 22–23 unethical behavior, 16–19 Works and services, bailment and, 549–550 Writ for debt, 627 Writ of certiorari, 39 Writ of habeas corpus, 39 Written contract, 133f consideration in, 157 electronic signatures, 209 e-sales and, 269 e-signatures for, 209 legal status of, 202 for marriage, 205–206 material alteration of, 236 merchant confirmation, 269 offer under, 262–263 One Year Rule for, 206–207 oral, status of, 202–203 parol evidence rule, 209–210 prenuptial agreement, 206 real property sale, 205 requirements for, 203–206 sufficiency of, 207–208 understandable contract, 596–597 Written law, 10 Written negotiable instruments, 336 Wrongful death, 87 Z Zoning laws, 10, 510 Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it www.downloadslide.net Copyright 2013 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s) Editorial review has deemed that any suppressed content does not materially affect the overall learning experience Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it ... any time if subsequent rights restrictions require it 9e Business Law Principles and Practices Arnold J Goldman Law Firm of Goldman & Goldman William D Sigismond Monroe Community College Australia... any time if subsequent rights restrictions require it iv Business Law: Principles and Practices, Ninth Edition Arnold J Goldman and William D Sigismond Senior Vice President, LRS/Acquisitions... r t Understanding Your Legal Environment Foundations of Law and the Role The Legal System in the United States and Its Personal, Business, Cyber Crimes and the American Tort Law: Traditional