SOLUTION MANUAL xx
The Legal Environment of Business, 14th Edition
xx xx xx xx xx xx
by Roger E. Meiners, Chapters 1 - 22, Complete
xx xx xx xx xx xx xx xx
,TABLE OF CONTENTS
xx xx xx
Chapter 1. Today’s Business Environment: Law and Ethics
xx xx xx xx xx xx xx
Chapter 2. The Court Systems
xx xx xx xx
Chapter 3. Trials and Resolving Disputes
xx xx xx xx xx
Chapter 4. The Constitution: Focus on Application to Business
xx xx xx xx xx xx xx xx
Chapter 5. Criminal Law and Business
xx xx xx xx xx
Chapter 6. Elements of Torts
xx xx xx xx
Chapter 7. Business Torts and Product Liability
xx xx xx xx xx xx
Chapter 8. Real and Personal Property
xx xx xx xx xx
Chapter 9. Intellectual Property
xx xx xx
Chapter 10. Contracts
xx xx
Chapter 11. Domestic and International Sales
xx xx xx xx xx
Chapter 12. Business Organizations
xx xx xx
Chapter 13. Negotiable Instruments, Credit, and Bankruptcy
xx xx xx xx xx xx
Chapter 14. Agency and the Employment Relationship
xx xx xx xx xx xx
Chapter 15. Employment and Labor Regulations
xx xx xx xx xx
Chapter 16. Employment Discrimination
xx xx xx
Chapter 17. The Regulatory Process
xx xx xx xx
Chapter 18. Securities Regulation
xx xx xx
Chapter 19. Consumer Protection
xx xx xx
Chapter 20. Antitrust Law
xx xx xx
Chapter 21. Environmental Law
xx xx xx
Chapter 22. The International Legal Environment of Business
xx xx xx xx xx xx xx
,CHAPTER 1 xx
Table of Contents xx xx
Answer to Discussion Question ................................................................................................................... 1
xx xx xx
Answers to Case Questions.......................................................................................................................... 1
xx xx xx
Answers to Ethics and Social Questions...................................................................................................... 3
xx xx xx xx xx
Answer to Discussion Question xx xx xx
Should the common law maxim “Ignorance of the law is no excuse” apply to an immigrant who speakslittle
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x
English and was not educated in the United States? How about for a tourist who does not speak English?
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
Everyone knows criminal acts are prohibited, but what about subtler rules that differ across countries and so
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
may be misunderstood by foreigners?
xx xx xx xx xx
Answer: It is generally true that ignorance of the law is no excuse. Citizens are deemed to have constructive
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
knowledge of the law. Yet, as well known as this rule is, it is surprising how often it is proffered as an
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
excuse. (A Westlaw search cases finds hundreds of examples). Examples include: Deluco v. Dezi (Conn.
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
Super) (lack of knowledge regarding the state‘s usury laws is no excuse for the inclusion of an illegal
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
interest rate in a sales contract); and Plumlee v. Paddock (ignorance of thefact that the subject matter
xx xx xx xx xx xx xx xx xx xx xx xx xx x xx xx xx xx
of the contract was illegal was not excuse). The courts have provided a small exception to the rule
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
when it comes to people in lack of English language skills. Consider Flanery v. Kuska, (defendant did not
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
speak English was advised by a friend that an answer to a complaint was not required); Ramon v. Dept.
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
of Transportation, (no English and an inability to understand the law required for an excuse); Yurechko
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
v. County of Allegheny, (Ignorance and with the fact that the municipality suffered no hardship in late
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
lawsuit filing was an excuse).
xx xx xx xx xx
Answers to Case Questions xx xx xx
1. Facts from an English judge’s decision in 1884: “The crew of an English yacht..................were cast away in
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
a storm on the high seas . . . and were compelled to put into an open boat. ............ They had no supply
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
of water and no supply of food. . . . That on the eighteenth day . . . they ........... suggested that one
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
should be sacrificed to save the rest. . . . That next day . . . they . . . went to the boy............. put a knife
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
into his throat and killed him . . . the three men fed upon the body ...........of the boy for four days; [then]
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
the boat was picked up by a passing vessel, and [they] were rescued. . . . and committed for trial. . . .
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
if the men had not fed upon the body of the boy they would probably not have survived to be
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
sopicked up and rescued, but would...... have died of famine. The boy, being in a much weaker
xx x xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
condition, was likely to have died before them ........... The real question in this case [is] whether killing
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
under the conditions set forth ......... be or be not murder.” Do you consider the acts to be immoral?
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
[Regina v. Dudley and Stephens, 14 Queens Bench Division 273 (1884)]
xx xx xx xx xx xx xx xx xx xx
Answer: This points out that the legal system has limits. Its acceptability is dictated by legal culture--
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
whichdetermines whether law will be enforced, obeyed, avoided, or abused. It is limited by the informal
x xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
rules of the society--its customs and values. One limit is the extent to which society will allow the formal
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
rules to be imposed when a crime is committed in odd circumstances. Here there was an intentional
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
murder. Does the motive for the murder, the effort to save several lives by sacrificing one
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
, life, make it a crime that should be punished? Not all crimes are treated the same. It also raisesquestions
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x
about the desirability of not giving judges flexibility in sentencing.
xx xx xx xx xx xx xx xx xx xx
There was a precedent for a light sentence in this case in U.S. law: U.S. v. Holmes, 20 F. Cas. 360 (No.
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
15383) (C.C.E.D. Pa. 1842). The case involved a sinking ocean liner. Several passengers madeit to the only
xx xx xx xx xx xx xx xx xx xx xx xx xx xx x xx xx xx
lifeboat, which was far too overcrowded. The captain decided to save the women and children and
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
threw several men overboard. The lifeboat was rescued. The grand jury refused to indict the captain
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
from murder, only for manslaughter. He got a six month sentence.
xx xx xx xx xx xx xx xx xx xx xx
The British judge in the case here imposed the death penalty upon the person who survived.
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
The judge found it difficult to rule that every man on board had the right to make law by his own
xx x xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
hand.The Crown reduced the sentence to six months.
xx x xx xx xx xx xx xx xx
2. Smoking is a serious health hazard. Cigarettes are legal. Should cigarette manufacturers be liable for the
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
serious illnesses and untimely deaths caused by their unavoidably dangerous products, eventhough they
xx xx xx xx xx xx xx xx xx xx xx xx x xx
post a warning on the package and consumers voluntarily assume the health risks by smoking?
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
[Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)]
xx xx xx xx xx xx xx xx xx
Answer: The general rule that exists now is that since the government has ordered the posting of
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
warninglabels on cigarettes, and since the dangers of smoking are well known, consumers have been
xx x xx xx xx xx xx xx xx xx xx xx xx xx xx xx
warned and are not due compensation if they kill themselves by smoking. The Cippoline case, since
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
reviewed by the Supreme Court, appears to be of limited impact since the victim was adjudged to have
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
become addicted to cigarettes before the warning label was ordered in 1964. If cigarette makers were
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
held responsible for all health problems associated with cigarettes, then, like alcohol and other
xx xx xx xx xx xx xx xx xx xx xx xx xx xx
dangerous products, the damages would likely be so high it would effectively ban the products.
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
Presumably, in a free society if adults are clearly informed of the risks of products that cannot be made
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
safe, they accept the risk. Tobacco and alcohol producers cannot take the dangers out of the products
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
except at the margin by encouraging responsible drinking and the like. Are drugs like cocaine different?
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
3. Two eight-year-old boys were seriously injured when riding Honda mini-trail bikes. The boys were riding
xx xx xx xx xx xx xx xx xx xx xx xx xx xx
on public streets, ran a stop sign, and were hit by a truck. The bikes had clear warning labels on the
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
front stating they were only for off-road use. The manual stated the bikes were not to be usedon public
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x xx
streets. The parents sued Honda. The supreme court of Washington said one basic issue existed: “Is a
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
manufacturer liable when children are injured while riding one of its mini-trail bikes on apublic road in
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x xx xx
violation of manufacturer and parental warnings?” Is it unethical to make products like mini-trail bikes
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
children will use when we know accidents like this will happen? [Baughn v. Honda Motor Co., 727 P.2d
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
655 Sup. Ct, Wash., (1986)]
xx xx xx xx xx
Answer: The court found no liability for the manufacturers. There was no defect; the product was safe for
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
intended use. Safety instructions were clear; the parents let the boys ride the bikes. Anything can
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
bedangerous--baseballs are dangerous when they hit the head, swings are dangerous when kids
xx x xx xx xx xx xx xx xx xx xx xx xx xx
jumpout of them; there is only so much that can be done to make the government the ―national
xx x xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
nanny‖ asthe Washington Post once said about excessive consumer protection. Parents must accept a
xx xx x xx xx xx xx xx xx xx xx xx xx xx xx
high degree of responsible for their own children.
xx xx xx xx xx xx xx xx
4. Johnson Controls adopted a “fetal protection policy” that women of childbearing age could not work in
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
the battery-making division of the company. Exposure to lead in the battery operation could causeharm
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x
to unborn babies. The company was concerned about possible legal liability for injury sufferedby babies
xx xx xx xx xx xx xx xx xx xx xx xx xx xx x xx
of mothers who had worked in the battery division. The Supreme Court held the companypolicy was
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x xx
illegal. It was an “excuse for denying women equal employment opportunities.” Is the Court forcing the
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
company to be unethical by allowing pregnant women who ignore the warnings to expose their babies
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
to the lead? [United Auto Workers v. Johnson Controls, 499 U.S. 187 (1991)]
xx xx xx xx xx xx xx xx xx xx xx xx xx
Answer: The Court held it a form of sex discrimination to prevent women of child-bearing age from holding
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
the more dangerous jobs. The company argued that it did this to protect itself from possibleliability in
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx x xx
case of damage to babies and that the decision was ethical. The replacements for these workers were
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
often men or more senior women, who tended to be higher income workers, so this
xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
