SOLUTIONS MANUAL & ANSWER GUIDE
Business Law Today: The Essentials
Text & Summarized Cases
13th Edition
Roger LeRoy Miller
ISBN: 978035763534
TABLE OF CONTENTS
Chapter 1. Legal and Constitutional Foundations of Business
Chapter 2. Courts and Alternative Dispute Resolution
Chapter 3. Ethics in Business
Chapter 4. Tort Law
Chapter 5. Intellectual Property Rights
Chapter 6. Internet Law, Social Media, and Privacy
Chapter 7. Criminal Law and Cyber Crime
Chapter 8. Agreement and Consideration in Contracts
,Chapter 9. Capacity, Legality, and Enforceability
Chapter 10. Contract Performance, Breach, and Remedies
Chapter 11. Sales and Lease Contracts
Chapter 12. Performance and Breach of Sales and Lease Contracts
Chapter 13. Negotiable Instruments
Chapter 14. Banking
Chapter 15. Creditors’ Rights and Bankruptcy
Chapter 16. Agency Relationships in Business
Chapter 17. Employment Law
Chapter 18. The Entrepreneur’s Options
Chapter 19. Corporations
Chapter 20. Investor Protection, Insider Trading, and Corporate Governance
Chapter 21. Antitrust Law and Promoting Competition
Chapter 22. Consumer Law
Chapter 23. Personal Property, Bailments, and Insurance
Chapter 24. Real Property and Environmental Law
Chapter 25. International and Space Law
CHAPTER 01: LEGAL AND CONSTITUTIONAL FOUNDATIONS OF BUSINESS
• Critical Thinking Questions in Features
• Adapting the Law to the Online Environment
• Critical Thinking Questions in Cases
• Case 1.1
• Case 1.2
• Case 1.3
• Chapter Review
• Practice and Review
• Practice and Review: Debate This
• Issue Spotters
• Business Scenarios and Case Problems
• Critical Thinking and Writing Assignments
• Critical Thinking Questions in Appendix Exhibit 1A–3
• Exhibit 1A–3
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
1. One observer has said that the American legal system should evaluate social media companies based on
how “they affect us as citizens, not only [on how] they affect us as consumers.” What is your opinion of
this statement?
Solution
The person who made this statement clearly sees a “citizen” as having different motivations and concerns
than a “consumer.” Presumably, a citizen is mostly concerned with the good of society as a whole, and
therefore would be open to the idea of government regulation that restricted the negative influence of social
media, regardless of the First Amendment. A consumer, by contrast, would be primarily concerned with
having a marketplace that offers the widest possible varieties of freedom (of choice, of speech, etc.) and
would for that reason be opposed to government regulation of social media. There is, however, an argument
to be made that the citizens that make up a society benefit when the marketplace of ideas—whether they
are subjectively “positive” or “negative”—is allowed to flourish in the absence of government regulation.
, 2. Tim Cook, Apple’s chief operating officer, has suggested that the United States Congress should pass a law
limiting the ability of Apple and other tech countries to keep consumer data private. Why would a business
executive make such a request?
Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal government.
After all, large companies such as Apple rely on favorable treatment from the government in regulatory
matters, international trade agreements, and many other areas. Also, large corporations such as Apple
sometimes gain an advantage over competitors when their industries are regulated. For example, Apple has
significant resources with which to lobby Congress for favorable treatment, and it is better positioned to
bear the costs of regulation than are other, smaller tech companies. Finally, Apple’s position as a champion
of consumer privacy would be damaged if it “caved” and changed its stance without being forced to do so
by a new federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What “dangerous conditions” might have prompted the city to enact the ordinances at issue in this case?
Why?
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale for their adoption,
stating essentially that a geographically small city has the right to restrict a business from operating within
the city when the restriction is for the safety of the city’s citizens and visitors.
The appellate court referred to “the dangerous conditions” created by the irresponsible driving behavior of
scooter renters, especially at night, amplified by the lack of training, supervision, and oversight practiced
by the rental scooter businesses that “existed throughout the entire city” as the basis for the city’s
regulation. The court paraphrased the expressive clauses in the ordinances more specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter drivers
seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested by scooters
that are being driven illegally and in areas where they are not permitted.
• The City’s residents and visitors are put in dangerous situations as a result of the improper use of scooters,
especially at night.
• City businesses have complained about numerous trespasses on their property by people driving scooters
while being disruptive
• City police have been unable to cope with the situation and essential police resources are being drained.
• The City has been unable to control the situation through less restrictive means.
2. What is the likely economic impact of the ordinances on the businesses in the city? Discuss.
Solution
With the exception of the scooter rental businesses, the effect on the city’s economy is likely to be positive
in light of the result in the Classy case.
The answer to the previous question contains the reasons in support of this outlook. With a ban on
motorized scooters, the “small and crowded” city is not likely to be “besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.” The streets, filled with “tens of thousands”
of tourists will not be “congested by scooters that are being driven illegally and in areas where they are not
permitted.” Residents and visitors will not be “put in dangerous situations as a result of the improper use of
scooters, especially at night.” There will be an end to the “numerous trespasses” on business property “by
people driving scooters while being disruptive.” And “essential police resources” will not be “drained,” at
least not by irresponsible scooter drivers and riders. All of which bodes well for business.
, Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, would the result
have been the same? Why or why not?
Solution
It is not likely that the result in this case would have been different even if the facts had involved a small,
private retail business that did not advertise nationally. The intended impact of the decision in Heart of
Atlanta was to uphold the constitutionality of the Civil Rights Act of 1964 and the power of Congress to
regulate interstate commerce to stop local discriminatory practices. In the Supreme Court’s opinion, “The
power of Congress to promote interstate commerce also includes the power to regulate the local incidents
thereof, including local activities in both the States of origin and destination, which might have a
substantial and harmful effect upon that commerce.”
Thus, if the case had involved a small, local retail business, the Court would have found participation in
interstate commerce based on the use of a phone, or a Facebook page (or other Web presence), or sales to
customers who traveled across state lines—or, as in Wickard v. Filburn, participation might have been
based on any transaction that might otherwise have occurred in interstate commerce.
Case 1.3
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government’s interests are advanced when certain ads are banned. For example, in the Bad Frog case,
the court acknowledged, by advising the state to restrict the locations where certain ads could be displayed,
that banning of “vulgar and profane” advertising from children’s sight arguably advanced the state’s
interest in protecting children from those ads.
2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would the court’s ruling
likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court’s decision in the case was, in part, that “the State’s
prohibition of the labels . . . does not materially advance its asserted interests in insulating children from
vulgarity . . . and is not narrowly tailored to the interest concerning children.” The court’s reasoning was
supported in part by the fact that children cannot buy beer. If the labels advertised toys, however, the
court’s reasoning might have been different.
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the state’s
highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, sued the state to
block enforcement of the law. Alderman asserted that the statute violated the equal protection clause
because it placed requirements on motorcyclists that were not imposed on other motorists. Using the
information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal protection
clause. Here, because the law applies only to motorcycle operators and passengers, it raises equal
protection issues.
2. What are the three levels of scrutiny that the courts use in determining whether a law violates the equal
protection clause?
Solution
Business Law Today: The Essentials
Text & Summarized Cases
13th Edition
Roger LeRoy Miller
ISBN: 978035763534
TABLE OF CONTENTS
Chapter 1. Legal and Constitutional Foundations of Business
Chapter 2. Courts and Alternative Dispute Resolution
Chapter 3. Ethics in Business
Chapter 4. Tort Law
Chapter 5. Intellectual Property Rights
Chapter 6. Internet Law, Social Media, and Privacy
Chapter 7. Criminal Law and Cyber Crime
Chapter 8. Agreement and Consideration in Contracts
,Chapter 9. Capacity, Legality, and Enforceability
Chapter 10. Contract Performance, Breach, and Remedies
Chapter 11. Sales and Lease Contracts
Chapter 12. Performance and Breach of Sales and Lease Contracts
Chapter 13. Negotiable Instruments
Chapter 14. Banking
Chapter 15. Creditors’ Rights and Bankruptcy
Chapter 16. Agency Relationships in Business
Chapter 17. Employment Law
Chapter 18. The Entrepreneur’s Options
Chapter 19. Corporations
Chapter 20. Investor Protection, Insider Trading, and Corporate Governance
Chapter 21. Antitrust Law and Promoting Competition
Chapter 22. Consumer Law
Chapter 23. Personal Property, Bailments, and Insurance
Chapter 24. Real Property and Environmental Law
Chapter 25. International and Space Law
CHAPTER 01: LEGAL AND CONSTITUTIONAL FOUNDATIONS OF BUSINESS
• Critical Thinking Questions in Features
• Adapting the Law to the Online Environment
• Critical Thinking Questions in Cases
• Case 1.1
• Case 1.2
• Case 1.3
• Chapter Review
• Practice and Review
• Practice and Review: Debate This
• Issue Spotters
• Business Scenarios and Case Problems
• Critical Thinking and Writing Assignments
• Critical Thinking Questions in Appendix Exhibit 1A–3
• Exhibit 1A–3
Critical Thinking Questions in Features
Adapting the Law to the Online Environment
1. One observer has said that the American legal system should evaluate social media companies based on
how “they affect us as citizens, not only [on how] they affect us as consumers.” What is your opinion of
this statement?
Solution
The person who made this statement clearly sees a “citizen” as having different motivations and concerns
than a “consumer.” Presumably, a citizen is mostly concerned with the good of society as a whole, and
therefore would be open to the idea of government regulation that restricted the negative influence of social
media, regardless of the First Amendment. A consumer, by contrast, would be primarily concerned with
having a marketplace that offers the widest possible varieties of freedom (of choice, of speech, etc.) and
would for that reason be opposed to government regulation of social media. There is, however, an argument
to be made that the citizens that make up a society benefit when the marketplace of ideas—whether they
are subjectively “positive” or “negative”—is allowed to flourish in the absence of government regulation.
, 2. Tim Cook, Apple’s chief operating officer, has suggested that the United States Congress should pass a law
limiting the ability of Apple and other tech countries to keep consumer data private. Why would a business
executive make such a request?
Solution
Cook may have wanted to end a controversy that puts Apple squarely at odds with the federal government.
After all, large companies such as Apple rely on favorable treatment from the government in regulatory
matters, international trade agreements, and many other areas. Also, large corporations such as Apple
sometimes gain an advantage over competitors when their industries are regulated. For example, Apple has
significant resources with which to lobby Congress for favorable treatment, and it is better positioned to
bear the costs of regulation than are other, smaller tech companies. Finally, Apple’s position as a champion
of consumer privacy would be damaged if it “caved” and changed its stance without being forced to do so
by a new federal law.
Critical Thinking Questions in Cases
Case 1.1
1. What “dangerous conditions” might have prompted the city to enact the ordinances at issue in this case?
Why?
Solution
As noted in the facts of the case, both ordinances at issue included an extensive rationale for their adoption,
stating essentially that a geographically small city has the right to restrict a business from operating within
the city when the restriction is for the safety of the city’s citizens and visitors.
The appellate court referred to “the dangerous conditions” created by the irresponsible driving behavior of
scooter renters, especially at night, amplified by the lack of training, supervision, and oversight practiced
by the rental scooter businesses that “existed throughout the entire city” as the basis for the city’s
regulation. The court paraphrased the expressive clauses in the ordinances more specifically:
• The City is geographically small and crowded and is being besieged by inexperienced scooter drivers
seeking amusement and driving in a dangerous manner.
• The City is a tourist destination frequented by tens of thousands, and its streets are congested by scooters
that are being driven illegally and in areas where they are not permitted.
• The City’s residents and visitors are put in dangerous situations as a result of the improper use of scooters,
especially at night.
• City businesses have complained about numerous trespasses on their property by people driving scooters
while being disruptive
• City police have been unable to cope with the situation and essential police resources are being drained.
• The City has been unable to control the situation through less restrictive means.
2. What is the likely economic impact of the ordinances on the businesses in the city? Discuss.
Solution
With the exception of the scooter rental businesses, the effect on the city’s economy is likely to be positive
in light of the result in the Classy case.
The answer to the previous question contains the reasons in support of this outlook. With a ban on
motorized scooters, the “small and crowded” city is not likely to be “besieged by inexperienced scooter
drivers seeking amusement and driving in a dangerous manner.” The streets, filled with “tens of thousands”
of tourists will not be “congested by scooters that are being driven illegally and in areas where they are not
permitted.” Residents and visitors will not be “put in dangerous situations as a result of the improper use of
scooters, especially at night.” There will be an end to the “numerous trespasses” on business property “by
people driving scooters while being disruptive.” And “essential police resources” will not be “drained,” at
least not by irresponsible scooter drivers and riders. All of which bodes well for business.
, Case 1.2
1. If this case had involved a small, private retail business that did not advertise nationally, would the result
have been the same? Why or why not?
Solution
It is not likely that the result in this case would have been different even if the facts had involved a small,
private retail business that did not advertise nationally. The intended impact of the decision in Heart of
Atlanta was to uphold the constitutionality of the Civil Rights Act of 1964 and the power of Congress to
regulate interstate commerce to stop local discriminatory practices. In the Supreme Court’s opinion, “The
power of Congress to promote interstate commerce also includes the power to regulate the local incidents
thereof, including local activities in both the States of origin and destination, which might have a
substantial and harmful effect upon that commerce.”
Thus, if the case had involved a small, local retail business, the Court would have found participation in
interstate commerce based on the use of a phone, or a Facebook page (or other Web presence), or sales to
customers who traveled across state lines—or, as in Wickard v. Filburn, participation might have been
based on any transaction that might otherwise have occurred in interstate commerce.
Case 1.3
1. Whose interests are advanced by the banning of certain types of advertising?
Solution
The government’s interests are advanced when certain ads are banned. For example, in the Bad Frog case,
the court acknowledged, by advising the state to restrict the locations where certain ads could be displayed,
that banning of “vulgar and profane” advertising from children’s sight arguably advanced the state’s
interest in protecting children from those ads.
2. If Bad Frog had sought to use the offensive label to market toys instead of beer, would the court’s ruling
likely have been the same? Explain your answer.
Solution
Probably not. The reasoning underlying the court’s decision in the case was, in part, that “the State’s
prohibition of the labels . . . does not materially advance its asserted interests in insulating children from
vulgarity . . . and is not narrowly tailored to the interest concerning children.” The court’s reasoning was
supported in part by the fact that children cannot buy beer. If the labels advertised toys, however, the
court’s reasoning might have been different.
Chapter Review
Practice and Review
A state legislature enacted a statute that required any motorcycle operator or passenger on the state’s
highways to wear a protective helmet. Jim Alderman, a licensed motorcycle operator, sued the state to
block enforcement of the law. Alderman asserted that the statute violated the equal protection clause
because it placed requirements on motorcyclists that were not imposed on other motorists. Using the
information presented in the chapter, answer the following questions.
1. Why does this statute raise equal protection issues instead of substantive due process concerns?
Solution
When a law or action limits the liberty of some persons but not others, it may violate the equal protection
clause. Here, because the law applies only to motorcycle operators and passengers, it raises equal
protection issues.
2. What are the three levels of scrutiny that the courts use in determining whether a law violates the equal
protection clause?
Solution
