PART 1

CHAPTER 1 THE NATURE AND SOURCES OF LAW 3

A. Nature of Law and Legal Rights 4 1. Legal Rights 4 2. Individual Rights 4 3. The Right of Privacy 4 CASE SUMMARY 5

4. Privacy and Technology 6 Ethics & the Law 6

E-Commerce & Cyberlaw 7

B. Sources of Law 7 5. Constitutional Law 7 6. Statutory Law 8 7. Administrative Law 8 8. Private Law 8 9. Case Law, Statutory Interpretation, and Precedent 8 10. Other Forms of Law: Treaties and Executive

Orders 9 11. Uniform State Laws 9 C. Classifications of Law 10 12. Substantive Law vs. Procedural Law 10 13. Criminal Law vs. Civil Law 10 Sports & Entertainment Law 10

14. Law vs. Equity 11 LawFlix 11

CHAPTER 2 THE COURT SYSTEM AND DISPUTE RESOLUTION 15

A. The Court System 16 1. The Types of Courts 16 CASE SUMMARY 17

2. The Federal Court System 18 3. State Court Systems 20 B. Court Procedure 22

4. Participants in the Court System 22 5. Which Law Applies—Conflicts of Law 22 6. Initial Steps in a Lawsuit 23 7. The Trial 24 Thinking Things Through 25

Ethics & the Law 27

8. Posttrial Procedures 27 C. Alternative Dispute Resolution (ADR) 27 9. Arbitration 27 10. Mediation 29 11. MedArb 29 12. Reference to a Third Person 29 E-Commerce & Cyberlaw 30

13. Association Tribunals 30 14. Summary Jury Trial 30 15. Rent-A-Judge 30 16. Minitrial 31 17. Judicial Triage 31 18. Contract Provisions 31 LawFlix 31

CHAPTER 3 BUSINESS ETHICS, SOCIAL FORCES, AND THE LAW 36

A. What Is Business Ethics? 37 1. The Law as the Standard for Business Ethics 37 2. The Notion of Universal Standards for Business

Ethics 38 3. Ethical Theories and Standards 38 Thinking Things Through 40

4. The Business Stakeholder Standard of Behavior 41 Ethics & the Law 42

B. Why Is Business Ethics Important? 42 5. The Importance of Trust 42 6. Business Ethics and Financial Performance 43 Ethics & the Law 44

7. The Importance of a Good Reputation 44 8. Business Ethics and Business Regulation: Public

Policy, Law, and Ethics 44 Ethics & the Law 46

C. How to Recognize and Resolve Ethical Dilemmas 48 9. Categories of Ethical Behavior 48 Ethics & the Law 49

Sports & Entertainment Law 50

10. Resolving Ethical Dilemmas 50

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E-Commerce & Cyberlaw 51

Ethics & the Law 52

LawFlix 53

CHAPTER 4 THE CONSTITUTION AS THE FOUNDATION OF THE LEGAL ENVIRONMENT 59

A. The U.S. Constitution and the Federal System 60 1. What a Constitution Is 60 2. The Branches of Government 60 B. The U.S. Constitution and the States 60 3. Delegated and Shared Powers 60 4. Other Powers 61 5. Federal Supremacy 62 CASE SUMMARY 62

C. Interpreting and Amending the Constitution 63 6. Conflicting Theories 63 7. Amending the Constitution 63 8. The Living Constitution 64 D. Federal Powers 65 9. The Power to Regulate Commerce 65 CASE SUMMARY 66

CASE SUMMARY 67

CASE SUMMARY 67

10. The Financial Powers 68 CASE SUMMARY 68

E. Constitutional Limitations on Government 69 11. Due Process 69 E-Commerce & Cyberlaw 70

12. Equal Protection of the Law 70 13. Privileges and Immunities 71 14. Protection of the Person 71 15. The Bill of Rights and Businesses as Persons 72 CASE SUMMARY 72

Thinking Things Through 73

LawFlix 73

CHAPTER 5 GOVERNMENT REGULATION OF COMPETITION AND PRICES 78

A. Power to Regulate Business 79 1. Regulation, Free Enterprise, and Deregulation 79 2. Regulation of Unfair Competition 79 B. Regulation of Horizontal Markets and Competitors 79 3. Regulation of Prices 79 4. Prevention of Monopolies and Combinations 80 Ethics & the Law 81

5. Boycotts and Refusals to Deal 81 6. Mergers among Competitors 82

E-Commerce & Cyberlaw 82

C. Regulation of the Supply Chain and Vertical Trade Restraints 83

7. Price Discrimination 83 CASE SUMMARY 83

8. Exclusive Dealings and Territories 84 9. Real Price Maintenance 84 CASE SUMMARY 85

CASE SUMMARY 85

10. Tying 86 11. Mergers along the Supply Chain 86 Sports & Entertainment Law 86

D. Remedies for Anticompetitive Behavior 87 12. Criminal Penalties 87 13. Civil Remedies 87 LawFlix 88

CHAPTER 6 ADMINISTRATIVE AGENCIES 92

A. Nature of the Administrative Agency 93 1. Purpose of Administrative Agencies 93 2. Uniqueness of Administrative Agencies 93 3. Open Operation of Administrative Agencies 94 B. Legislative Power of the Agency 95 4. Agency’s Regulations as Law 95 CASE SUMMARY 96

5. Agency Adoption of Regulations 97 E-Commerce & Cyberlaw 97

CASE SUMMARY 98

C. Executive Power of the Agency 99 6. Enforcement or Execution of the Law 100 Ethics & the Law 100

7. Constitutional Limitations on Administrative Investigation 100

D. Judicial Power of the Agency 101 8. The Agency as a Specialized Court 101 9. Punishment and Enforcement Powers of Agencies 102 10. Exhaustion of Administrative Remedies 103 11. Appeal from Administrative Action and Finality of

Administrative Determination 103 CASE SUMMARY 104

CASE SUMMARY 105

12. Liability of the Agency 106 LawFlix 107

CHAPTER 7 THE LEGAL ENVIRONMENT OF INTERNATIONAL TRADE 112

A. General Principles 113 1. The Legal Background 113

Contents xiii

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2. International Trade Organizations, Conferences, and Treaties 115

CASE SUMMARY 116

CASE SUMMARY 118

3. Forms of Business Organizations 119 CASE SUMMARY 121

B. Governmental Regulation 121 4. Export Regulations 121 5. Protection of Intellectual Property Rights 123 CASE SUMMARY 124

6. Antitrust 126 7. Securities and Tax Fraud Regulation in an

International Environment 128 CASE SUMMARY 129

8. Barriers to Trade 130 CASE SUMMARY 130

9. Relief Mechanisms for Economic Injury Caused by Foreign Trade 131

CASE SUMMARY 132

10. Expropriation 133 11. The Foreign Corrupt Practices Act 134 CASE SUMMARY 134

Ethics & the Law 135

LawFlix 135

CHAPTER 8 CRIMES 141

A. General Principles 142 1. Nature and Classification of Crimes 142 2. Basis of Criminal Liability 142 3. Responsibility for Criminal Acts 142 CASE SUMMARY 143

CASE SUMMARY 144

Thinking Things Through 148

4. Indemnification of Crime Victims 148 B. White-Collar Crimes 149 5. Conspiracies 149 6. Crimes Related to Production, Competition, and

Marketing 149 7. Money Laundering 149 8. Racketeering 150 9. Bribery 151 10. Commercial Bribery 151 11. Extortion and Blackmail 151 12. Corrupt Influence 152 13. Counterfeiting 152 Ethics & the Law 153

14. Forgery 153 15. Perjury 153 16. False Claims and Pretenses 153

17. Bad Checks 154 18. Credit Card Crimes 154 19. Embezzlement 155 20. Obstruction of Justice: Sarbanes-Oxley

(SOX) 155 21. Corporate Fraud: SOX 155 Sports & Entertainment Law 156

22. The Common Law Crimes 156 C. Criminal Law and the Computer 157 23. What Is a Computer Crime? 157 24. The Computer as Victim 158 25. Unauthorized Use of Computers 158 26. Computer Raiding 158 27. Diverted Delivery by Computer 159 E-Commerce & Cyberlaw 159

28. Economic Espionage by Computer 160 29. Electronic Fund Transfer Crimes 160 Ethics & the Law 160

30. Circumventing Copyright Protection Devices Via Computer 160

31. Spamming 161 D. Criminal Procedure Rights for Businesses 161 32. Fourth Amendment Rights for Businesses 161 CASE SUMMARY 162

33. Fifth Amendment Self-Incrimination Rights for Businesses 163

CASE SUMMARY 163

34. Due Process Rights for Businesses 164 CASE SUMMARY 165

LawFlix 165

CHAPTER 9 TORTS 170

A. General Principles 171 1. What Is a Tort? 171 2. Tort and Crime Distinguished 171 3. Types of Torts 171 B. Intentional Torts 173 4. Assault 173 5. Battery 173 CASE SUMMARY 173

6. False Imprisonment 173 CASE SUMMARY 174

7. Intentional Infliction of Emotional Distress 174 8. Invasion of Privacy 175 CASE SUMMARY 175

CASE SUMMARY 176

9. Defamation 177 CASE SUMMARY 177

10. Product Disparagement 179

xiv Contents

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11. Wrongful Interference with Contracts 179 12. Trespass 180 C. Negligence 180 13. Elements of Negligence 181 CASE SUMMARY 182

14. Defenses to Negligence 183 CASE SUMMARY 184

Sports & Entertainment Law 186

D. Strict Liability 186 Thinking Things Through 186

15. What Is Strict Liability? 187 16. Imposing Strict Liability 187 LawFlix 188

CHAPTER 10 INTELLECTUAL PROPERTY RIGHTS AND THE INTERNET 193

A. Trademarks and Service Marks 194 1. Introduction 194 2. International Registration 195 3. Registrable Marks 195 CASE SUMMARY 196

4. Remedies for Improper Use of Marks 197 5. Abandonment of Exclusive Right to Mark 197 6. Trade Dress Protection 197 7. Limited Lanham Act Protection of Product

Design 198 8. Prevention of Dilution of Famous Marks 199 9. Internet Domain Names and Trademark Rights 199 E-Commerce & Cyberlaw 200

B. Copyrights 201 10. Duration of Copyright 201 11. Copyright Notice 202 12. What Is Copyrightable? 202 13. Copyright Ownership and the Internet 202 14. Rights of Copyright Holders 203 15. Limitation on Exclusive Character

of Copyright 203 CASE SUMMARY 204

16. Secondary Liability for Infringement 205 Ethics & the Law 205

17. Digital Millennium Copyright Act 206 C. Patents 206 18. Types, Duration, and Notice 206 19. Patentability 207 CASE SUMMARY 209

20. Patentable Business Methods 209 CASE SUMMARY 209

21. Infringement 210 CASE SUMMARY 211

D. Secret Business Information 212 22. Trade Secrets 212 23. Loss of Protection 212 24. Defensive Measures 213 25. Criminal Sanctions 213 E. Protection of Computer Software and Mask Works 213 26. Copyright Protection of Computer Programs 213 27. Patent Protection of Programs 214 28. Trade Secrets 214 29. Restrictive Licensing 214 30. Semiconductor Chip Protection 215 LawFlix 216

CHAPTER 11 CYBERLAW 222

A. Types of Legal Issues in Cyberspace 223 1. What Is Cyberlaw? 223 2. What Are the Issues in Cyberlaw? 223 B. Employment Issues in Cyberspace 223 3. Employers Are Accountable for Employee Electronic

Content 223 4. Employer Monitoring: What’s Legal 224 CASE SUMMARY 225

5. Employer Screening of Applicants 225 Ethics & the Law 226