Solution Manual for Business Law: Principles for Today's Commercial Environment, 5th Edition

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Chapter 1THE NATURE AND SOURCES OF LAWRESTATEMENTThis chapter provides the students with a look at the nature, origin and importance of individual rights and how thoserights are protected by laws and judicial process.The chapter provides a historical look at the evolution of rights ofindividuals and how technology requires that laws be revised to provide protection for those rights.Students are introduced to the various sources of law and their interrelationships.Constitutional law, statutory law,administrative regulation, and case law (along with the principle ofstare decisisand concept of precedent) areexplained along with the role and historical significance of common law.The nature and role of the uniform statelaws are explained along with a discussion of the distinction between substantive law and procedural law.Thedistinctions between legal and equitable remedies are also explained.STUDENT LEARNING OUTCOMESLO.1:Discuss the nature of lawand legal rights.LO.2:List the sources of law.LO.3:Describe the classifications of law.INSTRUCTOR’S INSIGHTSBreak the chapter down intothreecomponents–related Learning Outcomes are indicated in ():1.What is the nature of law and legal rights?(LO.1)Discuss the nature and origin of rights: legal rights; individual rights; right of privacyPresent the evolution of the protection of rights2.What are the sources of law?(LO.2)3.What are the classifications of law?(LO.3)Discuss the types of laws: substantive and proceduralCover the origins and current status of equitable reliefExplain uniform lawsCHAPTER OUTLINEI.What is the Nature of Law and Legal Rights?A.Legal rights are part of the law–principles that govern conduct and can be enforced in courts or byadministrative agenciesB.Individual rights1.Freedom of speech2.Right to due process3.Duties accompany rights

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C.The right of privacy1.An example of a legal right developed by courts2.Provides protections against unreasonable searches and seizures3.Privacy affords protection against intrusion by othersa.Educational privacy on grades–Buckley Amendmentb.Abortion stems from privacy rightc.Banking privacy rightsD.Privacy and technology1.New rules are needed as technology evolves2.E-mail, EDI3.Some criminal sanctionsCASE BRIEF:Fawcett v. Altieri960 N.Y.S.2d 592 (2013)FACTS:Gina L Fawcett (plaintiff) and her then-minor son, John, sued Sea High School and the parents ofNicholas Altieri(defendants)to recover damages for John’s eye injury that he sustained in analtercation with Nicholas during a tennis match with St. Joseph High School. The defendants madea discovery request for access to John’s social media accounts, including Facebook, MySpace,Friendster, Flickr, and others.Ms. Fawcett moved for protective order to prevent discovery of theinformation on these sites because John’s sites were not publicly available.ISSUE:Are social media accounts discoverable?HOLDINGANDREASONING:The court held that a variety of factors must be considered before granting broad access to socialmediaaccounts,includingprivacysettingsbytheholderoftheaccount,relevancyoftheinformation to the litigation, and protections afforded by the various social media sites.The court’sdecision provides the guidelines for determining whether the litigants insuchcases will beabletohave discovery access to each other’s social media sites.The parties will have to do depositionsand then renew the request once more factual information is available for the analysis of therequest for access.ANSWERS TO DISCUSSION QUESTIONS1.What are the interests that a court must balance in making decisions about discovery on social media accounts?The courts must balance the right of privacy vs. the right of the parties to know information posted that is relevantto the case, such as whether a plaintiff claiming physical injury has been shown involved in activities that defy theclaims of injuries.Also, the courts, as with tangible evidence, want to prevent a fishing expedition for evidenceand prevent the use of information about character that is not relevant to the case at hand, the damages, orinjuries.2.What are the court's concerns about how social media information will be used?That is might be used to justgenerally impeach someone’s integrity and is not relevant to the facts of the case.3.What will the parties in this case have to do before the court can rule on the motion?There will need to bedepositions so that that parties can ask each other questions about the information they want and what theybelieveis posted on these various sites.DISCUSSION POINTS:Ethics & the LawMaybe a Little Too “LinkedIn”This feature will generate great discussion among students.Most of them are encouraged by their colleges anduniversities to get on LinkedIn in order to establish connection and have a network of support.LinkedIn can be agreat resource, but what is on the page is publicly available and, for free.The premium service allows potential

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employers to get unvarnished information about applicants by checking with others who worked at the company atthe same time. Some interesting questions to think about are the fact that we have to resort to such means to get thetruth because we cannot get the truth from the references that applicants provide.Is this more of a question ofsolving a problem with references vs. whether employers should be permitted to use the information posted on thesite?All LinkedIn users have agreed to have their profiles available.The information is there–users are trying to hone itsuse or perhaps require notification when others are accessing information not generally available through the use ofthe site.For employers, there is the issue of possibly tainting the hiring process–they find out more information on someapplicants and not on others, which is disparate treatment and could result in inaccurate information and perhapscharges of discrimination because of different scrutiny given to different applicants.As usual, the law on privacy has not yet caught up to the nuances of information use and refinement on the Internet.DISCUSSION POINTS:E-Commerce & CyberlawA University's Access to Your ComputerDiscuss with the students college and university policies on use of campus servers.They have signed paperworkthat indicates they understand that the university monitors their use–indeed, the university is required to do so, so asnot to get cross-wise with copyright issues. Again, privacy rights are limited.II.What are the Sources of Law?A.Constitutional law–federal and state; historical developmentB.Statutory law–federal and stateC.AdministrativelawD.Private lawE.Case law, statutory interpretation, and precedent1.Statutory interpretation2.Principle ofstare decisis–precedent is followed unless there is a change in facts or need for change(e.g., separate but equal was abandoned)3.Common law is developed and refined by the courtsF.Other forms of law: treaties and executive ordersG.Uniform state laws1.Written generally2.Adopted on a state-by-state basis3.Use the Uniform Commercial Code as an example; also include the Uniform Consumer Credit CodeIII.What are the Classifications of Law?A.Substantive vs. proceduralExplain the concept of common law as the body of unwritten principles based primarily on the usages andcustoms of the community that were organized and enforced by the courts. Describe how it fits into the legalsystem of today and how it is often altered by statute.The common law is referred to often in subsequentreadings, and students tend to be confused about what it is, where it came from, and what role it plays intoday’s legal system.

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DISCUSSION POINTS:Sports&Entertainment LawWhen Players Break the Law and Owners Are OffensiveLeagues and professional sports teams have their own sets of private laws.For example, the NBA owners are thegoverning body for all teams.That body must approve sales of the franchise as well as location of arenas along withall the other game-related issues, such as rules, sanctions, and fines.Teams can discipline players, but so also can the league.Those private law sanctions can be taken to court, aswhen Tom Brady took his four-game suspension for deflate-gate to court.However, there was a union issue involvedin that situation and the federal courts have jurisdiction over labor disputes.B.Criminal law v. civil law1.One (criminal) is harm to society2.Other(civil) is harm to individuals3.The red light: ticket v. damages to othersC.Law vs. equity1.Initially remedies were separate2.Now remedies are provided by the same courts3.Injunctions–the red-soled designer shoesANSWERS TO QUESTIONS AND CASE PROBLEMS1.Privacy as a right. The right is the student’s and is one that allows students to have their grades remain private.The schools have a duty to ensure grades are not released to third parties without permission of the student.2.Sources of law.Statutory law such as ordinances, case law, precedent, common law, uniform state laws,constitutions, administrative regulations, treaties.3.Common law/sources of law.Statutes are codified law; the common law evolves by case precedent and hasexisted in unwritten form since England in some areas of law.4.Classifications of law.a.Proceduralb.Substantivec.Substantived.Procedural5.Uniform state laws. Law is not uniform throughout the United States because of a historical accident: the UnitedStates was never a single nation. As of now, there are 50 state governments and a federal government within thearea we call the United States. This means that 51 political bodies have the freedom to their own law (providedconstitutional rights are not violated). As a practical matter, this has not resulted in 51 different sets of rules oflaw because the common law has tended to dominate the legal system of most communities. As stated in thetext, the uniform laws have been a“nationalizing”force. It is likely that among areas that are truly“in business,”there will be greater uniformity in the near future. In contrast, as to other matters where the need for uniformity isnot as great, we can expect local variations in the law, encouraged by local economic and cultural differences.The Uniform Commercial Code and Uniform Partnership Act are examples of uniform laws.6.Privacy.Several issues should be raised:a.Terms and conditions of dorm residencyb.Access issues and safety issues

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There can be a right of privacy in a dorm room subject todiscloseduniversity policies, processes andprocedures.Just as landlords have access for emergencies, the university could have some limited accesswithout breaching privacy.7.Privacy.Professor Phelps is wrong.His musings on his employer’s e-mail system are not private.There is noexpectation of privacy and anything written can be reviewed by his employer.8.Precedent.Courts could disregard precedent when facts differ, circumstances change and social mores differ.Cases are examined for similarities as well as distinguishing factors.Courts don’t follow precedent whendifferences exist.9.Sources of law. A statute is passed by an elected body. A regulation is passed by an administrative agency. Anadministrative regulation is one passed by a federal or state agency.Its procedures for adoption are differentfrom a statute which is a law enacted by Congress, a state legislature or a city or county governing body.Statutes are generally passed by elected officials whereas regulations are the actions of appointed officials whoare government employees. Administrative regulations must be grounded in statutory authority.10.Law and equity. Equitable remediessuitable here; aninjunctionto stop the ad from being run.Legal remediesinclude money damagesfor use of Eminem's image. Now courts can award either legal or equitable remedies.Eminem and 8 Mile obtained an injunction against Audi–the company was prohibited from running the adbecause of a likelihood of confusion and the continuing problem of use of an image or likeness withoutpermission.Emphasize that only equitable remedies help Eminem and 8 Mile–damages cannot recoup for thecontinuing use.11.Types of laws.Local laws: zoning, dog licensing, bike licensing, traffic regulations, littering, loiteringFederal laws:securities laws, antitrust laws, federal income tax, Social Security, labor laws, equal employmentlaws, environmental lawsAll laws are limited by constitutional constraints and protections.For example, local laws cannot take awayrights afforded by the constitution.Federal laws also cannot violate constitutional rights.Later students willstudy preemption–areas that only the federal government can regulate under constitutional powers.12.Common law.Stare decisisis“Let the decision stand”or following case precedent.13.Law and precedent.The social media have resulted in many new laws (cyberbullying) as well as case law onissues such as whether Google, Yahoo, etc., must reveal identities.Throughout the remaining chapters you willstudy examples of issues evolving and precedent being set.These forms of social media have expanded greatly how widespread personal information is available to manywe would not necessarily voluntarily give it to.So, for example, when you are authorized as someone’s friend,you can click on the Facebook sites of their friends and obtain information without them realizing that so manyhave such access.Employers can gain information through a Google search and social media sites that youmight not volunteer.As a result, laws have developed to require elections on privacy controls for these sites.Other laws have developed to provide access to information about who is posting what on certain sites whencriminal activity results.14.Sources of law.In this example, the court making the decision will be required to draw on any property law(personal) in the state as well as the common law on property ownership.There may also be some ordinancesthat cover sporting events or finding property. If there are intellectual property rights in the baseball, then federallaw will apply.The areas of law that would govern would include state laws, statutes and case precedent on thetransfer of property rights.There might also be some ordinances that would govern conduct and rights at publicevents such as a baseball game as well as rights on lost property.

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15.Types of laws.The areas of law are private law (for her lease); state law for her CPA license renewal andincorporation; federal laws (Internal Revenue Code) for the knowledge and information for preparing the taxreturns, state and federal employment law will apply to her relationship with her employee–wages, overtime,workers compensation, unemployment compensation, equality in the workplace, etc.That relationship will alsohave private law as Janice develops office rules and procedures.Locallaw applies to any use of the buildingsand safety codes for the office and building.Credit and contract law (UCC and federal credit regulations) willapply to the contracts and purchases with Staples.LAWFLIXAnd Justice For All(1979) (R)An excellent film that gives an overview of the judicial system in Maryland. Rights, precedent and the role of lawyersare all topics for satire and analysis in the movie.A number of scenes could be used for class viewing:–Opening scene in which a defense lawyer (Al Pacino) fights to have a verdict set aside.–Closing scene in which Al Pacino delivers a passionate opening statement in which he turns on his client whohe believes to be a guilty man.–Scene in the middle in which Pacino’s friend and colleague fails to follow procedure which results in theincarceration and suicide ofPacino'sclient.Random Hearts(2000) (R)A movie that explores the issue of privacy when a couple is killed in an airplane crash.Their spouses grapple withtheir privacy in the public eye as well as obtaining information on the couple’s travel plans and relationship.To access additional videosthat illustrate business law concepts, visitwww.cengage.com/blaw/dvl.© 2017 Cengage Learning®.May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for useas permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learningmanagement system for classroom use.

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Chapter 2THE COURT SYSTEM AND DISPUTE RESOLUTIONRESTATEMENTA court is a government-established tribunal created to hear and decide matters brought before it.Courts havespecific types or classes of cases assigned to them and over which they have authority; referred to as jurisdiction.The types of jurisdiction include original jurisdiction which is the authority to conduct the first proceedings in the case.Appellate jurisdiction is the authority to review the proceedings of other courts. Courts can have broad authority overa variety of cases, or general jurisdiction as with a trial court, or can have special or limited jurisdiction as withjuvenile or probate courts.There are federal and state court systems.The federal court system consists of specialty courts such as tax courtand bankruptcy courts, a general trial court called federal district court, the U.S. court of appeals and the U.S.Supreme Court. State court systems have a general trial court, called a county, circuit or superior court, an appellatecourt, and a state supreme court.When a dispute is taken to court, it begins with a plaintiff filing a complaint.The defendant answers the complaint bydenying the allegations or counterclaiming.The parties may be represented by lawyers who are officers of the courttrained to represent others in the presentment of a case.Following the pleadings in a case, the parties begin discovery whereby they determine the facts of the case throughdepositions, requests for production and interrogatories.Based on the evidence obtained during discovery, the parties may move for summary judgmentwhich is a decisionin a case in which the facts are not in dispute.A trial begins with voir dire, or the process of questioning jurors for bias or arbitrary exclusion through the use ofperemptory challenges.The trial proceeds with opening statements and then the plaintiff's case.The order forquestioning witnesses is direct, cross-, redirect, and recross-examination.A directed verdict can be granted if theplaintiff's proof was insufficient to establish the elements of the case.Following a jury verdict, the losing party canmove for a judgment N.O.V. or a new trial.The collection of a judgment is obtained through execution on a writ ofexecution or garnishment.Other methods, besides litigation, that can be used to settle disputes are called alternative dispute resolution.Themethods of alternative dispute resolution include arbitration, mediation, medarb, reference to third person, associationtribunal, summary jury trial, rent-a-judge, minitrial, contract provisions and ombudsmen.These methods vary informality but are all non-judicial means for dispute resolution.STUDENT LEARNING OUTCOMESLO.1:Explain the federal and state court systems.LO.2:Describe court procedures.LO.3:List the forms of alternative dispute resolution and distinguish among them.INSTRUCTOR’S INSIGHTSBreak the chapter down into three components–related Learning Outcomes are indicated in ( ):1.What are the court systems and names of the various courts?(LO.1)Cover the federal court systemExplain generally how state court systems workDiscuss the types of courts and their jurisdiction

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2.How does a case go through a court?(LO.2)List the parties involved in a court caseExplain the initial steps in a law suitDescribe how a trial proceedsDiscuss the parties' options after a trial is finished3.What are the alternatives to litigation for dispute resolution?(LO.3)Explain arbitrationDiscuss mediationCover MedArbDefine and discuss reference to a third person, association tribunals, summary jury trials, rent-a-judge, mini-trial, contract provisions, and ombudsmen as alternative means of dispute resolutionCHAPTER OUTLINEI.What are the Court Systems and Names of the Various Courts?A.Types of courts1.Subject matter jurisdiction–courts have authority based on type of case2.Original jurisdiction–trial courts; where case is heard initially3.General jurisdiction–authority of broad subject matter in cases4.Limited or special jurisdiction–narrow scope of subject matter; e.g., probate, domestic relations,juvenile courts5.Appellate jurisdiction–court that reviews the work of other courtsa.Reversible error–mistake in lower court with the potential to affect the outcomeb.Court can affirm, reverse, or remandCASE BRIEF:Stanford v. V.F. Jeanswear, LP84 So.3d 825 (Miss. App. 2012)FACTS:Mary Kay Stanford (Stanford) was driving a truck for V.F. in late evening of February 7, 2006 whenshe began to feel nauseous.She pulled into a truck scale house to rest for the evening. Sheparked the truck, and as she attempted to climb into the sleeper compartment, she tripped over acooler. Stanford fell into the sleeper compartment and hit her head on the bed rail; the fall knockedher unconscious. Stanford's husband, William Stanford, who was riding with her, attempted torevive her. After she regained consciousness, William offered to take her to the emergency room.Stanford declined and decided to stay in the sleeper compartment and rest until morning.Stanfordcontacted V.F.dispatch and made the notifications to the company about her injury. The companyarranged for the two to return home.On February 8, 2006,Stanfordwent to Dr. Allie Prater for an evaluation of her injuries. Dr. Prater'snotesreflectthatStanford'schiefcomplaintswereblackouts,syncope,andslurredspeech.Stanford told Dr. Prater that her symptoms had begun one week prior to her visit. Dr. Prater's notesdo not mention Stanford's fall in the truck or that she was knocked unconscious. Dr. Praterdiagnosed Stanford withbenign essential hypertensionand ordered blood tests, an ultrasound, anda brain MRI.Upon receiving the test results, Dr. Prater referredStanfordto Dr. Glenn Crosby, a neurosurgeon.Before seeing Dr. Crosby, Stanford presented to Dr. Johnny Mitias, an orthopedic surgeon, onMarch 15, 2006. There was no mention of her fall in Dr. Mitias’s notes.In fact, he noted that“[t]here was no injury that started this.” Dr. Mitias diagnosed Stanford with right sciatica andordered physical therapy.On March 31, 2006,Dr. Crosby diagnosed Stanford with symptomaticcervical spondylosiswith

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osteophytecomplex and ordered physical therapy. The physical therapy aggravated Stanford'ssymptoms, so Dr. Crosby recommendeda cervicaldiskectomyand fusion at C3–4. Dr. CrosbyperformedtherecommendedsurgeriesonAugust8,2006.Aftersurgery,Stanfordbegancomplaining of pain in her left buttock and down her left leg. Dr. Crosby ordered a lumbar MRI,which revealed a large rupture of the lumbar spine at L4. On November 28, 2006, Dr. Crosbyperformed adiskectomyat the L4 level.Dr. Crosby's notes indicate that Stanford “had a fall this past year” that may have aggravated herback. However, Dr. Crosby's notes do not mention that Stanford suffered a fall at work until herfollow-up visit with Dr. Crosby on May 30, 2008. Dr. Crosby testified in his deposition that prior tothat visit, Stanford had not disclosed any history of an accident at work. However, he testified thatthe problems with her neck and back were probably related to her work injury.A hearing was held before an administrative judge (AJ), who denied Stanford's claim for workers'compensation benefits.Stanford appealed the AJ's decision to the Commission, which affirmed theAJ's decision. Stanford appealed the Commission's decision to the Circuit Court of Union County,and the circuit court affirmed the Commission's decision denying benefits. Stanford then appealed.ISSUE:Was the admission of the evidence about the cruise and horseback riding and hairy chest contestprejudicial and a basis for reversible error?HOLDING:No,REASONING:The evidence was damaging to Stanford’s case but wasnotprejudicial particularly given that theAJ let in all sorts of evidence for Stanford from family and friends.The court affirmed the denial ofworkers’ compensation benefits because the evidence indicated clearly that Stanford did not tell thedoctors about her work injury.The testimony about the cruise and the videos of horseback ridingwere damaging to Stanford’s case, but they did not indicate bias particularly because the AJ hadallowed evidence from Stanford’s husband, friends,and relatives about her condition.Becauseevidence is damaging to one party does not mean that it should not be admitted.ANSWERS TO DISCUSSION QUESTIONS1.What was the issue with Mary Kay Stanford and her doctors that was so significant?There were issues aboutprevious injuries and inconsistency in her stories and statements to doctors.2.What impact do you think the cruise and horseback riding video had on the case?That type of evidence can bedeterminative of the outcome because these kinds of activities show that the plaintiff was not as injured as sheclaimed.3.If evidence harms a party's case, is it biased and, therefore, must be withheld?No, the weight of the evidence isconsidered along with its prejudicial impact.That the evidence is harmful to a case does not mean it should beexcluded.B.Federal court system (See Figure 2-1)1.Federal district court(See Figure 2-2 in text)a.Trial courtb.General jurisdictioni.U.S. is a partyii.Cases between citizens of different states ($75,000 or more)iii.Cases arising under U.S. Constitution or statutec.Each state is at least one federal districtd.Specialty courtsi.Limited jurisdictionii.Bankruptcy, tax, Indian tribal court2.U.S. Court of Appealsa.Twelve geographic circuits (districts grouped together) plus one additional circuitb.One court of appeals per circuitc.Three-judge panel reviews cases

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3.U.S. Supreme Courta.Appellate jurisdictioni.U.S. Courts of Appealsii.State supreme courts when constitutional issue is involvedb.Review is granted pursuant towrit of certiorariprocessc.Trial court for ambassadors, public ministers, consuls and state vs. stateC.State court systems (See Figure 2-3 in text)1.General trial courts: civil and criminal jurisdiction2.Specialty courts–probate, family3.City,municipal, and justicecourts4.Small claims courts5.State appellate courts6.State supreme courtsII.How Does a Case Go Through a Court?–Court ProcedureA.Participants in the court system1.Plaintiffs–initiates proceeding (criminal case: prosecutor)2.Defendant–party against whom proceedings are brought3.Judge–presides over proceedings4.Jury–citizens sworn to reach a verdictB.Which law applies–conflicts1.Law of state in which court is located governs procedural questions2.Law of state in which contract was made governs3.Choice of law provisions in contracts governC.Initial steps in alawsuit1.Complaint–states cause of action–commencement of lawsuit2.Service of process–notifies defendant3.The defendant's response and the pleadingsa.Answer and/or counterclaim–also called the pleadingsb.Motion to dismiss–demurrerc.Deny4.Discovery–process of learning the evidence that exists prior to triala.Deposition–sworn testimony not in court room; can be used to impeach differing recollection ortestimony at trialb.Interrogatories–questions answered under oathc.Requests for production of documents–obtaining paper evidence

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5.Motion for summary judgment–asks for decision when facts are not in dispute6.Designation of expert witnessesD.The trial1.Jury selectiona.Voir direexamination–use Martha Stewart example from text and on website updateb.Challenge for cause–bias, conflictc.Peremptory or arbitrary challenge–lawyer need not give reason2.Opening statements3.Presentation of evidencea.Witnesses are examined by direct, cross-, re-direct, and recross-examinationb.Roles change according to who is presenting his/her case4.Motion for directed verdict granted if plaintiff did not establish caseDISCUSSION POINTS:Ethics & the LawHonesty, Lawyers, and BP ClaimsThe lawyers should have declared their conflicts of interest, which would have made them ineligible to participate inrepresenting claimants in some cases and required public disclosure in others.At a minimum, they all should havedisclosed their interests to the government supervising the claims office.They did not make the disclosures because they would have lost out on the amount to be collected from the funds.As the final report on the fund concluded, there were fraudulent claims, double payment, and conflicts of intereststhat resulted in abusive and nonexistent claims.DISCUSSION POINTS:Thinking Things ThroughWhy Do We Require Sworn Testimony?Discuss with students the inconsistency in the statements.The oath makes a difference in what is said. Discuss theethics of Microsoft’s differing positions.5.Closing argument or summation6.Motion for mistrialDISCUSSION POINTS:E-Commerce & CyberlawGoogle’s Impact onTrialsWhat are the implications of your Internet connections? Should you always disclose that you are friends withsomeone involved in the case during jury selection? Discuss how often Google has become an issue in cases.Discuss the importance of jurors using only the evidence presented.Discuss importance of following the Judges’cautions and being forthright.7.Jury instructions8.Jury verdict or mistrial if deadlocked9Motion for new trial or judgment N.O.V. (judgmentnon obstante verdicto)E.Posttrial procedures: Recovery1.Costs

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2.Attorney fees3.Execution of judgment and suit4.Writ of execution or writ of garnishmentIII.What are the Alternatives to Litigation for Dispute Resolution(ADR)? (See Figure 2-4 in text)A.Arbitration1.Means of avoiding expensive legal costs2.Federal Arbitration Act and Uniform Arbitration Act govern3.Arbitration can be mandatory or elective4.Scope of arbitration: as broad as possible5.Finality of arbitrationa.Usually provided for by the partiesb.If non-binding, any litigation begins anew for a trial de novoB.Mediation1.No authority to make a decision2.Third party is a go-between to facilitate communicationC.MedArb–party has authority to hear case and suggest resolution to each sideD.Expert panel: a method to focus in on technical issues and singular issues as in construction contractsE.Reference to third person: case is given to outsider(s)–ordinarily, parties agree thatthe decision is finalF.Association tribunals1.These groups have a board or committee to settle disputes2.The National Association of Home Builders requires arbitrationG.Summary jury trial: a dry run or mock trial to see how the case is perceivedH.Rent-a-Judge: an experienced judge is hired to hear the caseI.Minitrial: heart of dispute is heard; parties agree to limit issues of disputeJ.Contract provisions can set parameters of ADR, type of ADR, etc.ANSWERS TO QUESTIONS AND CASE PROBLEMS1.Trial process.Steps in litigation:1.Complaint by plaintiff2.Service of process on defendant3.Defendant's answer: deny, counterclaim, admit4.Discovery: depositions, interrogatories, requests for production5.Motion for summary judgment (if no factual issues)6.Triala.Jury selection: voir dire, challenge for cause, peremptory challengeb.Opening statementsc.Plaintiff's case: direct, cross, redirect, recross

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d.Motion for directed verdicte.Defendant's casef.Summationg.Jury instructionsh.Jury verdict or mistrial (deadlocked)i.Motion for new trial or judgmentj.Recovery: fees, execution, garnishment2.Arbitration.The benefits are, in theory, that alternatives are faster.However, these arbitration methods are nowdragging out nearly as much as a trial.ADR allows for no public hearing and all the problems that go along withthe media covering a contract dispute. These methods allow the parties to gain the perspective of an outsideparty, something that often needs to be done in order to move the parties forward in their negotiations.3.Jurisdiction.Ralph’s case will go to federal district court because it is a trial involving a violation of a federalstatute.4.Trial process.No. Jerry could be removed for cause. There is a conflict with his independence.5.Arbitration.The danger feared by the three developers is a real one. It would be better for them to agree tosubmit the matter to arbitration. Persons who were experienced with real estate developments and the law ofsuch developments could be selected as arbitrators; this would eliminate the potential dangers.6.Mandatory arbitration clauses.The U.S. Supreme Court held that the arbitration clause was valid because (1)there was strong federal policy favoring arbitration; and (2) the party challenging the validity of an arbitrationclause has the burden of showing that arbitration is an unsuitable method for resolving the dispute. In this case,Mrs. Randolph had alleged that the arbitration costs made pursuit of her remedies too expensive. However, shehad not presented evidence to indicate why arbitration would be more expensive than litigation.[Green TreeFinancial Corp. v.Randolph, 531 U.S.79]7.Expert witnesses; evidence.The answer can be found in theYatescase.When an expert does not discloseevidence that helps to evaluate his or her credibility, there has been a reversible error that is grounds forreversal.This information that the expert has been a defendant in a case and lost goes to their expertise andcredibility both.8.Types of courts.(a)Small claims court–original; limited(b)U.S. Bankruptcy court–original; limited(c)Federal district court–general; original(d)U.S. Supreme Court–appellate; original(e)Municipal court–limited; original(f)Probate court–limited; original(g)Federal or U.S. Court of Appeals–appellate9.Discovery.Yes, the Pension Fund would be entitled to have access to determine whether Mr. Ellison had saidanything that contradicted his public statements.The court did,in fact,allow the Pension Fund to have access.However, all but 15 of the e-mails had been destroyed. The court did not sanction Mr. Ellison, but it did allow thejury to have an instruction read that allowed them to presume that those e-mails contained information that wouldhave been adverse to Mr. Ellison.[Nursing Home Pension Fund, Local 144 v. Oracle Corp.,380 F.3d 1226 (9thCir.)]10.Federal Arbitration Act.Yes. When the seller delivered pursuant to the purchase order, it became bound by theterms of the purchase order, including the arbitration clause of that order. Because the buyer and seller werecorporations of different states, the contract between them related to an interstate transaction. The FederalArbitration Act was therefore applicable, and the arbitration agreement was made binding by the act. Both partieswere required to arbitrate the dispute.[Application of Mostek Corp.,502 N.Y.S.2d 181(App. Div.)]11.Arbitration/mandatory clauses.The presumption that arbitration clauses in contracts (hereina collectivebargaining agreement) are valid and enforceable does not extend to those statutory rights that parties to thecontract may have. In this situation, the employee had a clear right to pursue remedies under federal statute andby litigation. For that right to be waived and the case to go to arbitration, the contract must expressly provide thatthese statutory rights are waived.The waiver must be clear and unmistakable and, in this case, the languagewas not enough to indicate a waiver of right to litigation under the ADA.The arbitration clause in the unioncollective bargaining agreement is too general to indicate a waiver of rights. The court reversed and remandedthe case for trial.Distinguish for the students the difference between these litigation rights and generic statutoryprotections, such as in theGreen Treecase, that provide simple remedies and not a specific right of litigation.Also, point out that union, disability and labor issues have an extensive federal statutory scheme with rights,

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Solution Manual for Business Law: Principles for Today's Commercial Environment, 5th Edition - Page 15 preview image

protections and processes that would require more than a generic arbitration clause.[Wright v. UniversalMaritime Service Corp.,525 U.S. 70]12.Trial; jury selection.The lawyers can obtain information about prospective jurors through questionnaires as wellas the process ofvoir dire. Some of the background questions onvoir direare place of employment and whetherthey know any of the parties in the case.Mr. Guber could be excused because of his relationship with Ms.Ryder.The prosecuting attorney could find this out usingvoir dire, the process of questioning the jury panel forscreening them for bias, connection and relationship.The attorney could use a challenge for cause or aperemptory challenge.In the Ryder case, both sides let Mr. Guber remain and he served on the jury after hisassurances that he would be impartial. Ms. Ryder was found guilty of theft and burglary.She was sentenced tocommunity service and probation.[Rick Lyman, “For the Ryder Trial, a Hollywood Script,”New York Times,November 3, 2002, SL-1]13.Binding arbitration; finality.Generally arbitration awards are not set aside by courts.Unless there is fraudinvolved,thedecisionstandsevenwhenitappearsthatthearbitrator’sdecisionisverydifferentfromexpectations.Arbitrationissetasideonlyinrarecircumstances(misconduct)ofittheparties'agreement/contract allows for an appeal.14.Discovery evidence. Trial. On cross-examination, the lawyer can confront the witness on the business practice.15.ArbitrationArbitration agreements can be enforced under Federal Arbitration Act (FAA) without contraveningpolicies of congressional enactments giving employees specific protection against discrimination prohibited byfederal law.Section 1 of the Federal Arbitration Act (FAA) excludes from the Act's coverage "contracts of employment ofseamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C.§ 1. All but one of the Courts of Appeals which have addressed the issue interpret this provision as exemptingcontractsofemploymentof transportationworkers,but nototheremploymentcontracts,fromtheFAA'scoverage. A different interpretation has been adopted by the Court of Appeals for the Ninth Circuit, whichconstrues the exemption so that all contracts of employment are beyond the FAA's reach, whether or not theworker is engaged in transportation. It applied that rule to the instant case. The U.S. Supreme Court decided thatthe Ninth Circuit was wrong and that the better interpretation is to construe the statute, as most of the Courts ofAppeals have done, to confine the exemption to transportation workers. Adams is subject to arbitration and sucharbitration does not deprive him of his rights under the antidiscrimination laws.[Circuit City Stores, Inc. v.Adams,532 U.S. 105]© 2017 Cengage Learning®.May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part, except for useas permitted in a license distributed with a certain product or service or otherwise on a password-protected website or school-approved learningmanagement system for classroom use.

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Solution Manual for Business Law: Principles for Today's Commercial Environment, 5th Edition - Page 16 preview image

Chapter 3BUSINESS ETHICS, SOCIAL FORCES, AND THE LAWRESTATEMENTThis chapter provides the students, first, with a look at business ethics:What is business ethics?Why is businessethics important?How do I resolve ethical dilemmas?The concepts of positive law and natural law are coveredalong with notions of moral relativism and stakeholder theory.The importance of trust and reputation in businessethics and business financial performance is highlighted through examples and studies.Issues of business andsocial responsibility are also covered with discussions of Milton Friedman’s views as an economist on socialresponsibility in comparison to those of Body Shop International founder and philanthropist, Anita Roddick.The correlation between and among ethics, public policy and law is highlighted in this chapter with examples ofconsumer movements and laws passed in response to social forces.This discussion then facilitates furtherdiscussion of the purposes of law including protection of rights and preserving both stability and flexibility.Following a discussion of the categories of ethical breaches, simple models for analyzing ethical dilemmas areincludedtohelpthestudentsresolveissuespresentedinthechapter.ThemodelsincludethesimpleBlanchard/Peale three-question model (Is it legal?Is it balanced?How does it make me feel?), the front-page-of-the-newspaper-test, and Laura Nash’s model of breaking down the dilemma in order to confront cause, intention anddisclosure.STUDENT LEARNING OUTCOMESLO.1:Define business ethics.LO.2:Discuss why ethics are important in business.LO.3:Describe how to recognize and resolve ethical dilemmas.INSTRUCTOR’S INSIGHTSBreak the chapter down into three components–related Learning Outcomes are indicated in ( ):1.What is business ethics?(LO.1)Explain what business ethics isDiscuss the various ethical standards and schools of thoughtDescribe the business stakeholder theory and stakeholder analysisExplain Milton Friedman's view on social responsibility2.Why is business ethics important?(LO.2)TrustFinancial performanceReputationBusiness ethics and business regulation: public policy, law and ethics3.How to recognize and resolve ethical dilemmas.(LO.3)Categories of ethical behaviorResolving ethical dilemmasCHAPTER OUTLINEI.What is Business Ethics?A.Business ethics is balancing goal of profits with values of individuals and society

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