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A s discussed in the previous chapter, the law of agency focuses on the special relationship that exists between a principal and an agent—how the relationship is formed and the duties the principal and agent assume once the relationship is established.This chapter deals with another important aspect of agency law— the liability of principals and agents to third parties We look first at the liability of principals for contracts formed by agents with third parties Generally, the liability of the principal will depend on whether the agent was authorized to form the contracts Scope of Agent’s Authority The liability of a principal to third parties with whom an agent contracts depends on whether the agent had the authority to enter into legally binding contracts on the principal’s behalf An agent’s authority can be either actual (express or implied) or apparent If an agent contracts outside the scope of his or her authority,the principal may still become liable by ratifying the contract Express Authority Express authority is authority declared in clear, direct, and definite terms Express authority can be given orally or in writing In most states, the equal dignity rule requires that if the contract being executed is or must be in writing, then the agent’s authority must also be in writing Failure to comply with the equal dignity rule can make a contract voidable at the option of the principal The law regards the contract at that point as a mere offer If the principal decides to accept the offer, the acceptance must be ratified, or affirmed, in writing Assume that Pattberg (the principal) orally asks Austin (the agent) to sell a ranch that Pattberg owns The second part of the chapter deals with an agent’s liability to third parties in contract and tort, and the principal’s liability to third parties because of an agent’s torts The chapter concludes with a discussion of how agency relationships are terminated Austin finds a buyer and signs a sales contract (a contract for an interest in realty must be in writing) on behalf of Pattberg to sell the ranch The buyer cannot enforce the contract unless Pattberg subsequently ratifies Austin’s agency status in writing.Once the contract is ratified, either party can enforce rights under the contract Modern business practice allows an exception to the equal dignity rule.An executive officer of a corporation, when acting for the corporation in an ordinary business situation, is not required to obtain written authority from the corporation In addition, the equal dignity rule does not apply when the agent acts in the presence of the principal or when the agent’s act of signing is merely perfunctory Thus, if Healy (the principal) negotiates a contract but is called out of town the day it is to be signed and orally authorizes Scougall to sign, the oral authorization is sufficient Power of Attorney Giving an agent a power of attorney confers express authority.1 The power of attorney is a written document and is usually notarized (A document is notarized when a notary public—a public official authorized to attest to the An agent who holds a power of attorney is called an attorneyin-fact for the principal The holder does not have to be an attorney-at-law (and often is not) 653 654 authenticity of signatures—signs and dates the document and imprints it with her or his seal of authority.) Most states have statutory provisions for creating a power of attorney A power of attorney can be special (permitting the agent to perform specified acts only), or it can be general (permitting the agent to transact all business for the principal).Because of the extensive authority granted to an agent by a general power of attorney (see Exhibit 32–1), it should be used with great caution and usually only in exceptional circumstances Ordinarily, a power of attorney terminates on EXHIBIT 32–1 • the incapacity or death of the person giving the power.2 Implied Authority An agent has the implied authority to what is reasonably necessary to carry out express authority and A durable power of attorney,however,continues to be effective despite the principal’s incapacity An elderly person,for example, might grant a durable power of attorney to provide for the handling of property and investments or specific health-care needs should he or she become incompetent (see Chapter 50) A Sample General Power of Attorney GENERAL POWER OF ATTORNEY Know All Men by These Presents: That I, _ , hereinafter referred to as PRINCIPAL, in the County of _ State of , do(es) appoint _ as my true and lawful attorney In principal's name, and for principal's use and benefit, said attorney is authorized hereby; (1) To demand, sue for, collect, and receive all money, debts, accounts, legacies, bequests, interest, dividends, annuities, and demands as are now or shall hereafter become due, payable, or belonging to principal, and take all lawful means, for the recovery thereof and to compromise the same and give discharges for the same; (2) To buy and sell land, make contracts of every kind relative to land, any interest therein or the possession thereof, and to take possession and exercise control over the use thereof; (3) To buy, sell, mortgage, hypothecate, assign, transfer, and in any manner deal with goods, wares and merchandise, choses in action, certificates or shares of capital stock, and other property in possession or in action, and to make, do, and transact all and every kind of business of whatever nature; (4) To execute, acknowledge, and deliver contracts of sale, escrow instructions, deeds, leases including leases for minerals and hydrocarbon substances and assignments of leases, covenants, agreements and assignments of agreements, mortgages and assignments of mortgages, conveyances in trust, to secure indebtedness or other obligations, and assign the beneficial interest thereunder, subordinations of liens or encumbrances, bills of lading, receipts, evidences of debt, releases, bonds, notes, bills, requests to reconvey deeds of trust, partial or full judgments, satisfactions of mortgages, and other debts, and other written instruments of whatever kind and nature, all upon such terms and conditions as said attorney shall approve GIVING AND GRANTING to said attorney full power and authority to all and every act and thing whatsoever requisite and necessary to be done relative to any of the foregoing as fully to all intents and purposes as principal might or could if personally present All that said attorney shall lawfully or cause to be done under the authority of this power of attorney is expressly approved Dated: /s / State of County of On State, personally appeared known to me to be the person to the within instrument and acknowledged that Witness my hand and official seal SS , before me, the undersigned, a Notary Public in and for said whose name (Seal) subscribed executed the same Notary Public in and for said State 655 accomplish the objectives of the agency.Authority can also be implied by custom or inferred from the position the agent occupies For example, Carlson is employed by Packard Grocery to manage one of its stores Packard has not expressly stated that Carlson has authority to contract with third persons Nevertheless, authority to manage a business implies authority to what is reasonably required (as is customary or can be inferred from a manager’s position) to operate the business This includes making contracts for hiring personnel, for buying merchandise and equipment, and even for advertising the products sold in the store In general, implied authority is authority customarily associated with the position occupied by the agent or authority that can be inferred from the express authority given to the agent to perform fully his or her duties For example, an agent who has authority to solicit orders for goods sold by the principal generally would not have the authority to collect payments for the goods unless the agent possesses the goods The test is whether it was reasonable for the agent to believe that she or he had the authority to enter into the contract in question Also note that an agent’s implied authority cannot contradict his or her express authority.Thus, if a principal has limited an agent’s authority—by forbidding a manger to enter contracts to hire additional workers, for example—then the fact that managers customarily would have such authority is irrelevant Apparent Authority and Estoppel Actual authority (express or implied) arises from what the principal makes clear to the agent Apparent authority, in contrast, arises from what the principal causes a third party to believe.An agent has apparent authority when the principal, by either word or action, causes a third party reasonably to believe that the agent has authority to act, even though the agent has no express or implied authority If the third party changes his or her position in reliance on the principal’s representations, the principal may be estopped (prevented) from denying that the agent had authority Apparent authority usually comes into existence through a principal’s pattern of conduct over time For example, Bain is a traveling salesperson with the authority to solicit orders for a principal’s goods Because she does not carry any goods with her, she normally would not have the implied authority to collect payments from customers on behalf of the principal Suppose that she does accept payments from Corgley Enterprises, however, and submits them to the principal’s accounting department for processing If the principal does nothing to stop Bain from continuing this practice, a pattern develops over time, and the principal confers apparent authority on Bain to accept payments from Corgley At issue in the following case was a question of apparent authority or, as the court referred to it,“ostensible agency.” C A S E 32.1 Ermoian v Desert Hospital Court of Appeal of California, Fourth District, Division 2, 2007 152 Cal.App.4th 475, 61 Cal.Rptr.3d 754 • Background and Facts In 1990, Desert Hospital in California established a comprehensive perinatal services program (CPSP) to provide obstetrical care to women who were uninsured (perinatal is often defined as relating to the period from about the twenty-eighth week of pregnancy to around one month after birth) The CPSP was set up in an office suite across from the hospital and named “Desert Hospital Outpatient Maternity Services Clinic.” The hospital contracted with a corporation controlled by Dr Morton Gubin, which employed Dr Masami Ogata, to provide obstetrical services In January 1994, Jackie Shahan went to the hospital’s emergency room because of cramping and other symptoms The emergency room physician told Shahan that she was pregnant and referred her to the clinic Shahan visited the clinic throughout her pregnancy On May 15, Shahan’s baby, named Amanda, was born with brain abnormalities that left her severely mentally retarded and unable to care for herself Her conditions could not have been prevented, treated, or cured in utero Amanda filed a suit in a California state court against the hospital and others, alleging “wrongful life.” She claimed that the defendants negligently failed to inform her mother of her abnormalities before her birth, depriving her mother of the opportunity to make an informed choice to terminate the pregnancy The court ruled in the defendants’ favor, holding, among other things, that the hospital was not liable because Drs Gubin and Ogata were not its employees CASE CONTINUES 656 CASE 32.1 CONTINUED Amanda appealed to a state intermediate appellate court, contending in part that the physicians were the hospital’s “ostensible agents.” IN THE LANGUAGE OF THE COURT KING, J [Judge] * * * * Agency may be either actual or ostensible [apparent] Actual agency exists when the agent is really employed by the principal Here, there was evidence that the physicians were not employees of the Hospital, but were physicians with a private practice who contracted with the Hospital to perform obstetric services at the clinic.The written contract between the Hospital and Dr Gubin’s corporation (which employed Dr Ogata) describes Dr Gubin and his corporation as “independent contractors with, and not as employees of, [the] Hospital.” [Maria Sterling, a registered nurse at the clinic and Shahan’s CPSP case coordinator] testified that Drs Gubin and Ogata, not the Hospital, provided the obstetric services to the clinic’s patients Donna McCloudy, a director of nursing [who set up the CPSP] at the Hospital, testified that while the Hospital provided some aspects of the CPSP services,“independent physicians * * * provided the obstetrical care * * * ” Based upon such evidence, the [trial] court reasonably concluded that the physicians were not the employees or actual agents of the Hospital for purposes of vicarious [indirect] liability Ostensible [apparent] agency on the other hand, may be implied from the facts of a particular case, and if a principal by his acts has led others to believe that he has conferred authority upon an agent, he cannot be heard to assert, as against third parties who have relied thereon in good faith, that he did not intend to confer such power * * * The doctrine establishing the principles of liability for the acts of an ostensible agent rests on the doctrine of estoppel The essential elements are representations by the principal,justifiable reliance thereon by a third party,and change of position or injury resulting from such reliance Before recovery can be had against the principal for the acts of an ostensible agent, the person dealing with an agent must so with belief in the agent’s authority and this belief must be a reasonable one Such belief must be generated by some act or neglect by the principal sought to be charged and the person relying on the agent’s apparent authority must not be guilty of neglect [Emphasis added.] * * * * Here, the Hospital held out the clinic and the personnel in the clinic as part of the Hospital Furthermore, it was objectively reasonable for Shahan to believe that Drs Gubin and Ogata were employees of the Hospital The clinic was located across the street from the Hospital It used the same name as the Hospital and labeled itself as an outpatient clinic.Numerous professionals at the clinic were employees of the Hospital [Carol Cribbs, a comprehensive perinatal health worker at the clinic] and Sterling indicated to Shahan that they were employees of the Hospital and that the program was run by the Hospital Sterling personally set up all of Shahan’s appointments at the main Hospital rather than giving Shahan a referral for the various tests Shahan was referred by individuals in the emergency room specifically to Dr Gubin.When she called for an appointment she was told by the receptionist that she was calling the Hospital outpatient clinic which was the clinic of Dr Gubin On days when Shahan would see either Dr Gubin or Dr Ogata at the clinic, she would also see either Cribbs or Sterling, whom she knew were employed by the Hospital * * * At her first appointment she signed a document titled “patient rights and responsibilities,” which would unambiguously lead a patient to the conclusion that the clinic “was a one-stop shop for the patient,” and that all individuals at the clinic were connected with the Hospital.All of Shahan’s contacts with the physicians were at the Hospital-run clinic Most, if not all, of the physician contacts occurred in conjunction with the provision of other services by either Sterling or Cribbs The entire appearance created by the Hospital, and those associated with it, was that the Hospital was the provider of the obstetrical care to Shahan • Decision and Remedy The state intermediate appellate court decided that, contrary to the lower court’s finding, Drs Gubin and Ogata were “ostensible agents of the Hospital.” The appellate court affirmed the lower court’s ruling, however, on Amanda’s “wrongful life” claim, concluding that the physicians were not negligent in failing to advise Shahan to have an elective abortion 657 CASE 32.1 CONTINUED • The Ethical Dimension Does a principal have an ethical responsibility to inform an unaware third party that an apparent (ostensible) agent does not in fact have authority to act on the principal’s behalf? • The E-Commerce Dimension Could Amanda have established Drs Gubin and Ogata’s apparent authority if Desert Hospital had maintained a Web site that advertised the services of the CPSP clinic and stated clearly that the physicians were not its employees? Explain ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Emergency Powers When an unforeseen emergency demands action by the agent to protect or preserve the property and rights of the principal, but the agent is unable to communicate with the principal, the agent has emergency power For example, Fulsom is an engineer for Pacific Drilling Company While Fulsom is acting within the scope of his employment, he is severely injured in an accident at an oil rig many miles from home Dudley, the rig supervisor, directs Thompson, a physician, to give medical aid to Fulsom and to charge Pacific for the medical services Dudley, an agent, has no express or implied authority to bind the principal, Pacific Drilling, for Thompson’s medical services Because of the emergency situation, however, the law recognizes Dudley as having authority to act appropriately under the circumstances contract without knowing all of the facts,the principal can rescind (cancel) the contract.3 The principal must affirm the agent’s act in its entirety The principal must have the legal capacity to authorize the transaction at the time the agent engages in the act and at the time the principal ratifies.The third party must also have the legal capacity to engage in the transaction The principal’s affirmation (ratification) must occur before the third party withdraws from the transaction The principal must observe the same formalities when approving the act done by the agent as would have been required to authorize it initially Concept Summary 32.1 on the next page summarizes the rules concerning an agent’s authority to bind the principal and a third party Ratification Ratification occurs when the principal affirms, or accepts responsibility for, an agent’s unauthorized act When ratification occurs, the principal is bound to the agent’s act, and the act is treated as if it had been authorized by the principal from the outset Ratification can be either express or implied If the principal does not ratify the contract,the principal is not bound, and the third party’s agreement with the agent is viewed as merely an unaccepted offer Because the third party’s agreement is an unaccepted offer, the third party can revoke it at any time, without liability, before the principal ratifies the contract The agent, however, may be liable to the third party for misrepresenting her or his authority The requirements for ratification can be summarized as follows: The agent must have acted on behalf of an identified principal who subsequently ratifies the action The principal must know all of the material facts involved in the transaction If a principal ratifies a Liability for Contracts Liability for contracts formed by an agent depends on how the principal is classified and on whether the actions of the agent were authorized or unauthorized Principals are classified as disclosed, partially disclosed, or undisclosed.4 A disclosed principal is a principal whose identity is known by the third party at the time the contract is made by the agent.A partially disclosed principal is a principal whose identity is not known by the third party,but the third party knows that the agent is or may be acting for a principal at the time the contract is made.An undisclosed principal is a principal whose If the third party has changed position in reliance on the apparent contract, however, the principal can rescind but must reimburse the third party for any costs Restatement (Second) of Agency, Section 658 CONCEPT SUMMARY 32.1 Authority of an Agent to Bind the Principal and a Third Party Authority of Agent Definition Effect on Principal and Third Party EXPRESS AUTHORITY Authority expressly given by the principal to the agent Principal and third party are bound in contract IMPLIED AUTHORITY Authority implied (1) by custom, (2) from the position in which the principal has placed the agent, or (3) because such authority is necessary if the agent is to carry out expressly authorized duties and responsibilities Principal and third party are bound in contract APPARENT AUTHORITY Authority created when the conduct of the principal leads a third party to believe that the principal’s agent has authority Principal and third party are bound in contract UNAUTHORIZED ACTS Acts committed by an agent that are outside the scope of his or her express, implied, or apparent authority Principal and third party are not bound in contract—unless the principal ratifies prior to the third party’s withdrawal identity is totally unknown by the third party, and the third party has no knowledge that the agent is acting in an agency capacity at the time the contract is made Authorized Acts If an agent acts within the scope of her or his authority, normally the principal is obligated to perform the contract regardless of whether the principal was disclosed, partially disclosed, or undisclosed.Whether the agent may also be held liable under the contract,however, depends on the disclosed, partially disclosed, or undisclosed status of the principal Disclosed or Partially Disclosed Principal A disclosed or partially disclosed principal is liable to a third party for a contract made by the agent If the principal is disclosed, an agent has no contractual liability for the nonperformance of the principal or the third party If the principal is partially disclosed, in most states the agent is also treated as a party to the contract, and the third party can hold the agent liable for contractual nonperformance.5 Undisclosed Principal When neither the fact of an agency relationship nor the identity of the principal is disclosed, the undisclosed principal is bound to Restatement (Second) of Agency, Section 321 perform just as if the principal had been fully disclosed at the time the contract was made When a principal’s identity is undisclosed and the agent is forced to pay the third party, the agent is entitled to be indemnified (compensated) by the principal.The principal had a duty to perform, even though his or her identity was undisclosed,6 and failure to so will make the principal ultimately liable Once the undisclosed principal’s identity is revealed, the third party generally can elect to hold either the principal or the agent liable on the contract Conversely, the undisclosed principal can require the third party to fulfill the contract, unless (1) the undisclosed principal was expressly excluded as a party in the written contract; (2) the contract is a negotiable instrument signed by the agent with no indication of signing in a representative capacity;7 or (3) the performance of the agent is personal to the contract, allowing the third party to refuse the principal’s performance If the agent is a gratuitous agent,and the principal accepts the benefits of the agent’s contract with a third party, then the principal will be liable to the agent on the theory of quasi contract (see Chapter 10) Under the Uniform Commercial Code (UCC),only the agent is liable if the instrument neither names the principal nor shows that the agent signed in a representative capacity [UCC 3–402(b)(2)] 659 Unauthorized Acts If an agent has no authority but nevertheless contracts with a third party, the principal cannot be held liable on the contract It does not matter whether the principal was disclosed, partially disclosed, or undisclosed The agent is liable, however For example, Scammon signs a contract for the purchase of a truck, purportedly acting as an agent under authority granted by Johnson In fact, Johnson has not given Scammon any such authority Johnson refuses to pay for the truck, claiming that Scammon had no authority to purchase it The seller of the truck is entitled to hold Scammon liable for payment If the principal is disclosed or partially disclosed, the agent is liable as long as the third party relied on the agency status.The agent’s liability here is based on the theory of breach of the implied warranty of authority, not on breach of the contract itself.8 The agent’s implied warranty of authority can be breached intentionally or by a good faith mistake.9 For example, Kilmer (the principal) is a reclusive artist who hires Higgs (the agent) to solicit offers for particular paintings from various galleries, but does not authorize him to enter into sales agreements Olaf, a gallery owner, desires to buy two of Kilmer’s paintings right away for an upcoming show.Higgs tells Olaf that he will draw up a sales contract By doing so, Higgs impliedly warrants that he has the authority to enter into sales contracts on behalf of Kilmer.If it later turns out that Kilmer does not wish to ratify the sales contract signed by Higgs, Olaf cannot hold Kilmer liable,but he can hold Higgs liable for breaching the implied warranty of authority Note that if the third party knows at the time the contract is made that the agent does not have authority, then the agent is not liable Similarly, if the agent expresses to the third party uncertainty as to the extent of her or his authority,the agent is not personally liable Actions by E-Agents Although standard agency principles once applied only to human agents,today these same agency principles are being applied to e-agents An electronic agent, or e-agent, is a semiautonomous computer program that is capable of executing specific tasks E-agents used in e-commerce include software that can search The agent is not liable on the contract because the agent was never intended personally to be a party to the contract If the agent intentionally misrepresents his or her authority, then the agent can also be liable in tort for fraud through many databases and retrieve only relevant information for the user The Uniform Electronic Transactions Act (UETA), which has been adopted at least in part by the majority of the states (see Chapter 19),includes several provisions relating to the principal’s liability for the actions of e-agents Section 15 of the UETA states that e-agents may enter into binding agreements on behalf of their principals Presumably, then—at least in those states that have adopted the act—the principal will be bound by the terms in a contract entered into by an e-agent.Thus,if you place an order over the Internet, the company (principal) whose system took the order via an e-agent cannot claim that it did not receive your order The UETA also stipulates that if an e-agent does not provide an opportunity to prevent errors at the time of the transaction, the other party to the transaction can avoid the transaction Therefore, if an e-agent fails to provide an on-screen confirmation of a purchase or sale, the other party can avoid the effect of any errors For example, Finig wants to purchase three each of three different items (a total of nine items).The e-agent mistakenly records an order for thirty-three of a single item and does not provide an on-screen verification of the order If thirty-three items are then sent to Finig, he can avoid the contract to purchase them Liability for Torts and Crimes Obviously, any person, including an agent, is liable for his or her own torts and crimes Whether a principal can also be held liable for an agent’s torts and crimes depends on several factors,which we examine here.In some situations, a principal may be held liable not only for the torts of an agent but also for the torts committed by an independent contractor Principal’s Tortious Conduct A principal conducting an activity through an agent may be liable for harm resulting from the principal’s own negligence or recklessness.Thus, a principal may be liable for giving improper instructions, authorizing the use of improper materials or tools, or establishing improper rules that result in the agent’s committing a tort For instance, if Jack knows that Lucy cannot drive but nevertheless tells her to use the company truck to deliver some equipment to a customer, he will be 660 liable for his own negligence to anyone injured by her negligent driving Principal’s Authorization of Agent’s Tortious Conduct Similarly, a principal who authorizes an agent to commit a tort may be liable to persons or property injured thereby, because the act is considered to be the principal’s For example, Selkow directs his agent,Warren, to cut the corn on specific acreage, which neither of them has the right to The harvest is therefore a trespass (a tort), and Selkow is liable to the owner of the corn Note that an agent acting at the principal’s direction can be liable as a tortfeasor (one who commits a wrong,or tort),along with the principal,for committing the tortious act even if the agent was unaware that the act was wrong Assume in the above example that Warren,the agent,did not know that Selkow lacked the right to harvest the corn.Warren can still be held liable to the owner of the field for damages, along with Selkow, the principal Liability for Agent’s Misrepresentation A principal is exposed to tort liability whenever a third person sustains a loss due to the agent’s misrepresentation.The principal’s liability depends on whether the agent was actually or apparently authorized to make representations and whether the representations were made within the scope of the agency The principal is always directly responsible for an agent’s misrepresentation made within the scope of the agent’s authority Assume that Bassett is a demonstrator for Moore’s products Moore sends Bassett to a home show to demonstrate the products and to answer questions from consumers Moore has given Bassett authority to make statements about the products If Bassett makes only true representations, all is fine; but if he makes false claims, Moore will be liable for any injuries or damages sustained by third parties in reliance on Bassett’s false representations Apparent Implied Authority When a princi- pal has placed an agent in a position of apparent authority—making it possible for the agent to defraud a third party—the principal may also be liable for the agent’s fraudulent acts For example, Frendak is a loan officer at First Security Bank In the ordinary course of the job, Frendak approves and services loans and has access to the credit records of all customers Frendak falsely represents to a borrower, McMillan, that the bank feels insecure about McMillan’s loan and intends to call it in unless McMillan provides additional collateral,such as stocks and bonds.McMillan gives Frendak numerous stock certificates, which Frendak keeps in her own possession and later uses to make personal investments The bank is liable to McMillan for losses sustained on the stocks even though the bank was unaware of the fraudulent scheme If, in contrast, Frendak had been a recently hired junior bank teller rather than a loan officer when she told McMillan that the bank required additional security for the loan, McMillan would not have been justified in relying on her representation In that situation, the bank normally would not be liable to McMillan for the losses sustained The following case focused on a partner’s potential liability for claims against the partnership arising from the torts of its manager The partner argued that he could not be liable because the manager did not have the apparent authority to commit torts Among those with claims against the firm was the partner’s mother C A S E 32.2 In re Selheimer & Co United States District Court, Eastern District of Pennsylvania, 2005 319 Bankr 395 • Background and Facts Selheimer & Company was formed as a partnership in 1967 to act as a securities broker-dealer, buying and selling stocks and bonds and providing other financial services, in Pennsylvania In 1994, during an investigation by the Securities and Exchange Commission (SEC), the firm closed.a Perry Selheimer, the managing partner, was charged with various crimes and pleaded guilty to mail fraud Other partners, including Edward Murphy, and the firm’s clients, including Murphy’s mother, Jeanne Murphy, filed claims with the Securities Investor Protection Corporation (SIPC) to be reimbursed for their losses The SIPC advanced more than $250,000 to pay these claims Because the firm had more a The SEC is a federal agency that regulates the activities of securities brokers and others See Chapter 41 661 CASE 32.2 CONTINUED than $1 million in claims outstanding, the SIPC petitioned the firm into involuntary bankruptcy in 2002 Because the firm had few assets, the SIPC asked the court to rule that the personal assets of the individual partners could be used to cover the liability.b The SIPC filed a motion for summary judgment on this issue Edward Murphy opposed the request IN THE LANGUAGE OF THE COURT STEPHEN RASLAVICH, Bankruptcy Judge * * * * * * * [I]n Pennsylvania a partner is jointly and severally [separately] liable for certain torts chargeable to the partnership [if those torts are committed within the ordinary course of the partnership business] * * * [Emphasis added.] * * * * Murphy maintains that he is not * * * liable for Selheimer’s acts because the record does not show that such conduct was within the ordinary course of business of the partnership * * * The record demonstrates that Selheimer & Co perpetrated its fraud under the guise of operating a brokerage firm The partnership was a registered securities broker-dealer that accepted [funds] from clients for investment purposes Instead, Selheimer embezzled those funds Selheimer’s criminal acts were performed within the normal operation of this partnership’s business Put another way, at the time Selheimer was defrauding clients, it was acting in the ordinary course of the partnership’s business The partnership is therefore liable for those acts of Mr Selheimer And if the partnership is liable for those debts, then individual partners, including Murphy, are jointly and severally liable as well * * * * Alternatively, Murphy argues that there is no evidence of partnership liability * * * because there is nothing to indicate that Selheimer was acting within the scope of his apparent authority when defrauding customers In this Commonwealth, the doctrine of apparent authority has been incorporated into the principles of agency law Apparent authority has been defined [in the Restatement (Second) of Agency, Section 8] as “the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from and in accordance with the other’s manifestations to third persons.” [According to the Restatement (Second) of Agency, Section 27, the] general rule governing the creation of apparent authority is: Except for the execution of instruments under seal or for the conduct of transactions required by statute to be authorized in a particular way, apparent authority to an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him Apparent authority exists when a principal, by words or conduct, leads people with whom the alleged agent deals to believe the principal has granted the agent authority he or she purports to exercise Apparent authority may result when a principal permits an agent to occupy a position [in] which, according to the ordinary experience and habits of mankind, it is usual for that occupant to have authority of a particular kind The nature and extent of an agent’s apparent authority is a question of fact for the fact-finder [Emphasis added.] Murphy misinterprets agency law when he argues that Selheimer lacked authority, express or apparent, to defraud clients His argument operates from the erroneous premise that the record must show that Selheimer & Co., as principal, gave Perry Selheimer, as agent, license to steal If that were so, then the doctrine of apparent authority would be eviscerated [gutted] What matters is whether Selheimer & Co was authorized to accept client funds for investment And the record shows that it certainly was: Selheimer & Co was a broker-dealer registered with the SEC Mr Selheimer formally admitted—pleaded guilty, in fact—to having committed “an abuse of trust” as to his clients Client confidence would not have been placed in him unless he held himself out as b As you will read in Chapter 36, in most states, the partners in a partnership are both jointly and severally (separately, or individually) liable for all partnership obligations CASE CONTINUES 662 CASE 32.2 CONTINUED an honest broker-dealer of financial investments; otherwise, clients simply would have taken their business elsewhere There is thus sufficient proof to support a finding that Selheimer was acting within his apparent authority when defrauding clients That, in turn, supports a finding of liability as to the partnership which may by assessed against Murphy • Decision and Remedy The court found that “Selheimer & Co is deficient; that Murphy was a partner of Selheimer & Co.; and that he is indirectly liable under Pennsylvania law for the acts of Perry Selheimer which are chargeable to Selheimer & Co.” on a theory of apparent authority The court issued a summary judgment “in a liquidated amount for the $251,158.12 in claims advanced by [the] SIPC and an additional $840,667 for the customer claim of Jeanne Murphy.” • What If the Facts Were Different? If Selheimer & Company had not had the authority to accept funds for investment, did not authorize its manager to accept such funds, and did not represent that the manager or the firm had this authority, would the outcome in this case have been different? Explain • The Global Dimension Suppose that Selheimer & Company handled accounts for a number of clients located in foreign nations Would these foreign clients be able to sue under U.S agency law and hold Murphy indirectly liable for the acts of his partner Selheimer? Why or why not? ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Misrepresentation Tort liability based on fraud requires proof that a material misstatement was made knowingly and with the intent to deceive An agent’s innocent mistakes occurring in a contract transaction or involving a warranty contained in the contract can provide grounds for the third party’s rescission of the contract and the award of damages.Moreover, justice dictates that when a principal knows that an agent is not accurately advised of facts but does not correct either the agent’s or the third party’s impressions, the principal is directly responsible to the third party for resulting damages.The point is that the principal is always directly responsible for an agent’s misrepresentation made within the scope of authority Innocent Liability for Agent’s Negligence Under the doctrine of respondeat superior,10 the principal-employer is liable for any harm caused to a third party by an agent-employee within the scope of employment This doctrine imposes vicarious liability, or indirect liability, on the employer—that is, liability without regard to the personal fault of the 10 Pronounced ree-spahn-dee-uht soo-peer-ee-your The doctrine of respondeat superior applies not only to employeremployee relationships but also to other principal-agent relationships in which the principal has the right of control over the agent employer for torts committed by an employee in the course or scope of employment.11 Third parties injured through the negligence of an employee can sue either that employee or the employer, if the employee’s negligent conduct occurred while the employee was acting within the scope of employment Rationale Underlying the Doctrine of Respondeat Superior At early common law, a servant (employee) was viewed as the master’s (employer’s) property.The master was deemed to have absolute control over the servant’s acts and was held strictly liable for them no matter how carefully the master supervised the servant The rationale for the doctrine of respondeat superior is based on the social duty that requires every person to manage his or her affairs, whether accomplished by the person or through agents, so as not to injure another Liability is imposed on employers because they are deemed to be in a better financial position to bear the loss The superior financial position carries with it the duty to be responsible for damages Generally, public policy requires that an injured person be afforded effective relief, and a business enterprise is usually better able to provide that relief than is an individual employee Employers normally 11 The theory of respondeat superior is similar to the theory of strict liability covered in Chapter I–24 as agent, 638 corporate governance and, 853, 882 crimes of, 775–776 duties of, 801–805, 882–883 interests of, shareholders’ interests and, 853 liability of, 187, 805 role of, 800 torts of, 775–776 Oil marketing, exemption of, from antitrust laws, 952 Oil Pollution Act (1990), 931 Omnibus clause, 1022 Omnibus Crime Control and Safe Streets Act (1968), 202 Omnibus Transportation Employee Testing Act (1991), 691n Online dispute resolution (ODR), 48 Operation of law agency formation by, 644–645 agency termination by, 667–668 contract discharge by, 345–349 offer termination by, 241–242 will revocation by, 1033–1034 Opinion(s) certified, 1060–1061 court, 16 decisions and, 21–22 See also Decision(s) defined, 21 expression of, 234 qualified, 1049–1050 statements of, 88–89, 126, 131, 290, 460, 884 types of, 21–22 unpublished, 16, 22–23 Option-to-cancel clauses, 256–257 Order(s) cease-and-desist, 681, 682, 906–907 charging, 742 defined, 491n final, 898 initial, 898 multiple product, 907 to pay, 487, 488–489 See also Check(s) unconditional, 492–493 payable to, 498 Order instrument(s) conversion of, to bearer instruments, 507–508 defined, 498 negotiating, 504 Ordinances, Organized Crime Control Act (1970), 192 Outsiders, SEC Rule 10b-5 and, 849 Ownership concurrent, 983–984 fee simple, 981–983 of property See Landowners; Personal property, ownership of; Property, ownership of; Real property, ownership interests in OxyContin, ethical problems with, 108 P Pac-Man, 825 Parent child’s emancipation from, 265 liability of, 269 Parent-subsidiary merger, 822 Paris Convention of 1883, 179 Parol evidence rule, 226n, 303, 312–316 exceptions to, 315–316 UCC and, 406–408 Partial performance detrimental reliance and, 240–241 exception to perfect tender rule and, 441–442 exception to Statute of Frauds and, 308–310, 406 Participation, corporate director’s right to, 799 Partner(s) See also Partnership(s) compensation of, 741 corporation as, 739 dissociation and, 746–748 duties of, 742–743, 882 general, 751, 755 incoming, 745–746 liabilities of, 661, 743–746 limited, 751–753, 755 rights of, 740–742 Partnership(s), 737–758 See also Partner(s) agency concepts and, 737 assets of, distribution of, 749 basic concepts regarding, 737–739 compared with other major forms of business organization, 831–832 defined, 737, 738 dissociation and, 746–748 dissolution of, 749 duration of, 739 as entity and aggregate, 738–739 essential elements of, 738 formation of, 739–740 joint ventures versus, 767–768 limited See Limited (special) partnership(s) management of, 740–741 operation of, 740–746 property ownership and, 738 termination of, 748–750 winding up of, 749 Party(ies) accommodation, 526 actions of agency termination and, 666–667 offer termination and, 239–241 agreement of, exception to perfect tender rule and, 439 conduct of, 221–222 third See Third party(ies) Past consideration, 254–256 Patents, 157, 160, 167–170, 586, 960, 1072 Payee(s) alternative or joint, 508–512 defined, 488, 544 fictitious, 528–529, 571 Payment(s) to bearer, 498–499 bounty, 852 buyer’s obligation to make, 443 at a definite time, 493–494, 496–498 on demand, 493–495 discharge by, 538, 539 lease I–25 lessee’s obligation to make, 443 lessor’s right to recover when due, 446 to order, 498 tender of, 539 Peer-to-peer (P2P) networking, 174 Penalty, 359 Pentagon, terrorist attack on, 205 See also Terrorists, terrorism Perfect tender rule, 439–442 Perfection of security interest, 588–595 See also Security interest(s) Performance agent’s duty of, 645 complete, 339 of contract, 218–219, 223, 437–445 course of, 228, 315–316, 408 discharge of contract by, 337, 338–343 impossibility of See Impossibility partial See Partial performance to the satisfaction of another, 341 substantial, 339–341, 360–361 tender of, 338–339 time for, 343 uncertain, 256 Person(s) foreign, 952 intentional torts against, 123–131 natural, 83, 92, 773 Personal property bailment of, 969 See also Bailment(s); Property, bailed conversion and, 135–136, 425n, 604, 966 converting real property to, 961 defined, 133, 960 exempted, 582, 603n intangible, 394, 960, 963, 969 ownership of, acquiring, 962–965 tangible, 394, 960, 969 trespass to, 133–135, 425n Personal-service contracts assignments and, 324 death or incapacity of party to, 346 delegations and, 326 objective impossibility of performance and, 346 specific performance and, 362 Personalty, 134, 960 See also Personal property Pesticides, 930, 931–933 Petition (declaration), 55n See also Complaint Petitioner, 9, 21, 71 Petty offenses, 186 Physical cash, 563 Piercing the corporate veil, 774, 786–789 Piercing the veil of anonymity, 139 PIN (personal identification number), 562 Plain meaning rule, 225–227 Plaintiff complaint of, 55–59 defined, 9, 21 Plant life, as real property, 981 Plea bargaining, 198 Pleading(s), 55–60 in the alternative, 364 defined, 55 Pledge, 594 Point-of-sale systems, 561 Poison pill, 824, 825 Pollution air, 923–927, 958 oil, 931 water, 928–931, 958 Pornography, 88, 90, 92, 706 Positivist school, Possession acquisition of personal property by, 962 adverse, 962, 986, 992–994 debtor in (DIP), 625 of debtor’s property, bankruptcy trustee’s right to, 618 delivery of, 969–970 landlord’s duty and, 997 exclusive, 982 peaceful, 603, 635 perfection of security interest by, 594 right of, bailee’s, 971 tenant’s right to retain, 997–998 Postal Reorganization Act (1970), 910 Postdating, 500 Potentially responsible party (PRP), 934 Power(s) of attorney, 642n, 653–654, 1043 emergency, 657 express, 786 implied, 786 market, 939 monopoly, 939, 944 Precedent, 10, 11, 22–23, 39 Predatory pricing (predatory bidding), 944, 946 Predominant-factor test, 395–396 Pregnancy, discrimination on basis of, 701 Pregnancy Discrimination Act (1978), 701 Prescription acquisitive, 993 See also Possession, adverse easement or profit created by, 986 Presentment defined, 494, 524 electronic, of checks, 559–560 payment upon, 494–495 proper, 524–525 warranties regarding, 530, 531–533 Pretext, 699 Pretrial conference, 64 Price(s) buyout, 747–748 discrimination and, 946–947 fixing, 940, 951, 952 predatory pricing (predatory bidding) and, 944, 946 purchase, seller’s right to recover, 446 Primary sources of law defined, 15 how to find, 15–21 Principal(s) agency termination by, 666–667 agent’s duties to, 645–648, 720–721 agent’s rights and remedies against, 649 bankruptcy of, agency termination and, 668 breach of contract by, 649 death or insanity of, agency termination and, 667 defined, 526, 638 I–26 disclosed, 657, 658 duties of, to agent, 648, 721 liability of, 526 partially disclosed, 657, 658 rights and remedies of, against agent, 649 torts of, 659–660 undisclosed, 657–658 Prior dealing, 228, 315–316, 407, 464, 481 Privacy Act (1974), 94 Privacy right(s) Constitution and, 94, 690 e-money activities and, 565–566 employee, 212, 689–691, 706–707 Internet and, 211 invasion of, 128–129 statutes affecting, 94–95 Private equity capital, 791–792 Private offering, 873 Private placement exemption, 843 Private Securities Litigation Reform Act (1995), 847, 1058, 1060–1061 Privilege, 127–128, 197 confidentiality and, 1062 Privity of contract, 321, 328, 464–465, 468, 1052, 1053, 1084 Pro se representation, 53 Probable cause, 91–92, 198, 202 Proceeds from disposition of collateral, 595, 606 Processing-plant arrangement, as type of franchise, 727 Product(s) See also Goods consumer, safety and, 916–917, 957–958 defects in, 470–474, 917 bailor’s duty to reveal, 972 misuse of, 474, 475 trademarks and, 164 unreasonably dangerous, 469–470 Product liability, 154, 458, 468–476 defenses to, 475–476 defined, 468 insurance and, 1022 lawsuit based upon, 124–125, 468 strict, 469–475 Production acquisition of personal property by, 962 cooperative, exemption of, from antitrust laws, 952 Professionals duty of, 147 liability of, 1048–1052 Profit(s) maximization of, 100, 119 as nonpossessory interest in land, 985–986 short-swing, 849 Promise(s) absolute, 337 collateral, 304, 306–307, 579 defined, 216, 491n enforceable without consideration, 259–261 illusory, 256 made in consideration of marriage, 304, 307–308, 312–313 to pay, 487, 489–490 See also Certificate(s), of deposit; Note(s) unconditional, 492–493 Promisor, promisee, 220 Promissory estoppel, 259 See also Reliance, detrimental charitable subscriptions and, 260 defined, 240 employment contracts and, 260–261 exception to Statute of Frauds and, 310 oral contracts and, 389 Property, 960–1006 abandoned, 968 after-acquired, 596 bailed bailee’s duty to return, 972–973 bailee’s right to use, 971 community, 617, 984 crimes involving, 188–189 disparagement of, 136 intellectual See Intellectual property intentional torts against, 133–136 lost, 965–966, 969, 1004 mislaid, 965, 969 ownership of partnership and, 738 transfer of, outside probate process, 1035 personal See Personal property real See Real property Prospectus defined, 838–839, 1059n free-writing, 840 red herring (preliminary), 840 Protected class(es) defined, 696 employment discrimination against members of See Employment discrimination, on basis of illegal contracts and, 281 Proximate cause, 147–149 Proxy(ies) defined, 806 e-, 838 Proxy materials, 806–807, 808, 838 Public figures defamation and, 128 parodies of, 126 Public policy contracts contrary to, 273–280 defined, 11 exception to employment-at-will doctrine based on, 260, 674–676 strict product liability and, 469 Publication defamation and, 126–127 of information placing person in false light, 128 of will, 1031 Puffery (puffing)(seller’s talk), 131, 290, 460 Purdue Pharma, LP, 108 Pure Food and Drugs Act (1906), 914 Purpose achievement of, agency termination and, 666 frustration of, 348–349 Q Quality mistake of, 286 slander of, 136 I–27 Quantum meruit, 224, 362, 363 Question(s) of fact, 39 federal, 34 of law, 39 Quid pro quo harassment, 701 Quitclaim deed, 991 Quo warranto proceeding, 785n Quorum, 799, 807 Quotas, 1074–1075 R Race BFOQ defense and, 712 discrimination on basis of, 280, 696, 699–700, 911, 1029, 1077 Ratification agency formation by, 642–643 of agent’s unauthorized act, 657 of contract, 223, 266, 269 defined, 269 express, 269 implied, 269 principal’s rescission (cancellation) of, 657 of signature, 527 “Rational basis” test, 94 Reacquisition, discharge by, 539 Reaffirmation of debt, 617, 620, 623–624 Real estate, realty See Land; Real property Real property, 980–1003 See also Land converting personal property to, 961–962 defined, 133, 960, 980 exempted, 582 goods associated with, 395 leased, rights in, transfer of, 998–999 nature of, 980–981 ownership interests in, 981–985 See also Real property, sale of limitations on, 994–997 nonpossessory, 985–986 transfer of, 344, 986–994 See also Real property, sale of rights in, assignments and, 325 sale of contract(s) for, 987–990 contingencies in, 988 option, 240 seal used in, 220n steps involved in, summarized, 988 Reasonable manner, 126, 438 Reasonable person standard, 124, 145, 187, 217, 341, 645 Reasonably foreseeable users, liability to, 1055 Reasoning, legal, 11–12 Rebuttable presumption, 296 Rebuttal, 69 Receiver in bankruptcy, 625 in liquidation, 830 Record(s) on appeal, 71 attribution and, 382 authentication of, 587 corporate book of, 869 defined, 381 sending and receiving, 383 Recourse, impairment of, discharge by, 539–540 Redemption, 578, 606, 620 Redlining, 1006 Reformation, 290, 362 Refusal(s) to deal, 940, 945 first, right of, 874 Registration of securities See Security(ies), registration of trademark, 159–160, 161, 870 Regulatory Flexibility Act (1980), 900, 901 Rehabilitation Act (1973), 710 Reimbursement principal’s duty of, 648 right of, 581 Rejection buyer’s right of, 440, 448–450 lessee’s right of, 440, 448–450 of offer, 241 Rejoinder, 69 Release, 258 from secured party, 602 Relevant market, 944–945 Reliance detrimental, 240–241, 259, 310, 389–390 See also Promissory estoppel justifiable, 130, 290, 294–295, 1052 Religion discrimination on basis of, 280, 696, 700, 911, 1077 ethical standards and, 103 freedom of, 83, 90–91, 1005 Remedy(ies) See also remedy entries following various breaches of contracts defined, election of, 364 exclusive, 452 judicial, 603 prejudgment, 575 Rent, 998 Reorganization, Chapter 11, 611, 612, 613, 619n, 621n, 624–626, 628n Replevin, 448 Reporters, reports, 10, 16, 17, 22 Res ipsa loquitur, 152 Resales, 445–446 Rescission of contract, 8, 254, 286, 290, 295, 296, 344, 458, 852, 911 See also Cancellation contract discharge by, 344 defined, 8, 254, 344, 359 mutual, 344, 359n new contract and, 254, 344 of ratification, 657 restitution and, 359–360 unilateral, 359n Rescue, duty and, 147 Research, cooperative, exemption of, from antitrust laws, 952 Residuary (residuum), 1028 I–28 Resource Conservation and Recovery Act (RCRA)(1976), 933–934 Respondeat superior, 662–665, 721–722, 775–776 Respondent, 9, 21 Responsible corporate officer doctrine, 187 Restatements of the Law, 14 See also individual restatements citations to, 19 as secondary source of law, Restatement (Second) of Agency, 638n Restatement of the Law of Contracts, 14, 217n Restatement (Second) of Contracts, 14, 217n, 373 Restatement (Second) of Torts, 469 Restatement (Third) of Torts: Products Liability, 470 Restitution, 359–360, 907–908 Restraint(s) against alienation, 325 on trade See also Antitrust law(s) contracts in, 273–277 defined, 938 horizontal, 939, 940–941 vertical, 939, 941–943 Retainer, 863 Revenue Act (1971), 1073 Revised Model Business Corporation Act (RMBCA), 739, 773 Revised Uniform Limited Partnership Act (RULPA), 751 Revised Uniform Principal and Income Act, 1042n Revocation See also Cancellation of agent’s authority, 666 of bankruptcy discharge, 623 of buyer’s or lessee’s acceptance of goods, 450 declaration of, 1033 defined, 239 of gift causa mortis, 964 of license, 133 of offer, 220, 239–240 of will, 1031–1034 RICO (Racketeer Influenced and Corrupt Organizations Act)(1970), 192–193, 1058n Right(s) airspace, 980–981 appraisal, 822–823 assignment of See Assignment(s) of first refusal, 874 fundamental, 93 of inspection See Inspection, right of “natural,” preemptive, 810 principle of, 103–104 of publicity, 130 of redemption, 578, 606, 620 subsurface, 980, 981 of survivorship, 984 vesting of, 328–329, 1019 voidable, 619 Right to Financial Privacy Act (1978), 566 Ripeness doctrine, 899 Risk assumption of, 149–151, 475 defined, 1008 foreseeability of, 145, 148–149, 187 of loss, 427–433 management of, 1008 obvious, 145–146, 213, 474 Rivers and Harbors Appropriations Act (1899), 928 Road shows, 840n Robbery, 188 Robinson-Patman Act (1936), 946 Rulemaking, 890, 892–894 Rules of construction, 408 S Safe Drinking Water Act (1974), 930–931 Safety consumer protection and, 914–917, 957–958 employee See Workplace, safety in Sale(s) on approval, 432 conditional, 431–432 consumer protection and, 909–910 defined, 394 door-to-door, 359n, 909–910 foreclosure and, 574–575, 577–578 mail-order, 910 by nonowners, 423 of ongoing business, covenants not to compete and, 273 online, 910 or return, 432 telephone, 910 warranties and See Warranty(ies) Sales contract(s), 392–484 See also Contract(s); Uniform Commercial Code,Article of acceptance in, 401–404 breach of, 401, 445–451 remedies for, 445–452 damages as, 325, 354, 446, 448, 450–451 See also Damages risk of loss and, 432 cancellation of buyer’s right to, 447, 910 seller’s right to, 445 consideration in, 254n, 404–405 defined, 393 formation of, 398–410 time of, 412 international See International contract(s) law governing, 395, 407 mirror image rule and, 241n, 243n, 402, 410 offer in, 399–401 See also Term(s) irrevocable, 410, 412 ongoing, duration of, 399–400 options and cooperation regarding performance of, 400 output, 400, 481 performance of, 437–445 requirements, 400, 481 rescission of, 344, 458 Sample court case, 22–26 Sarbanes-Oxley Act (Public Company Accounting Reform and Investor Protection Act)(2002), 99, 106, 204, 777, 809, 836, 849n, 850, 854–855, 882, 883, 884, 1048, 1055–1058, 1062, 1084 extraterritorial application of, 1076–1077 I–29 key provisions of, 856, 1057 Satisfaction accord and, 257–258 contract discharge by, 344–345 defined, 258, 345 Scienter, 294, 850, 1060 Searches and seizures, unreasonable, constitutional prohibition of, 83, 84, 91–92, 198, 684n, 691, 706, 775, 897 Second Amendment, 83 Secured party(ies) bankruptcy property distribution and, 620 defined, 586 duties of, 602–606 insurable interest of, 1011 release from, 602 remedies of, 602–606 rights of, 602–606, 1019 Secured transaction(s), 586–610 See also Secured party(ies); Security interest(s) defined, 586 terminology of, 586–587 Securities Act (1933), 836, 837–845, 857 violations of, 844–845, 1058–1059, 1061, 1062 Securities and Exchange Commission (SEC), 7, 104n, 108, 660n, 882, 883, 886, 888 acquiring corporation’s disclosures to, 824 attorneys’ disclosure of client information to, 884, 1062 creation of, 836 EDGAR (Electronic Data Gathering,Analysis and Retrieval) system of, 837 functions of, 836, 892 Internet used by, 837, 838–839 organization of, 836–837 provisions of, relating to proxies and shareholder proposals, 806–807 Regulation A of, 841–842 Regulation D, 842–843 Regulation FD of, 839 Rule 10b-5 of, 845–850 Section 16(b) compared with, 850 Rule 16b-3 of, 850 shareholder access and, 808 Securities Exchange Act (1934), 836, 843, 845–853 Section 10(b) of, 845–850 Section 16(b) of, 849–850 Rule 10b-5 compared with, 850 violations of, 850–853, 1058, 1059–1060, 1061, 1062 Securities Litigation Uniform Standards Act (1998), 847–849 Security(ies) See also Bond(s), corporate; Stock(s) defined, 789, 837–838 investing in foreign nations and, 1072–1073 registration of, 838–844 exemptions from, 840–844 small business and, 873 resales of, 842, 843–844 restricted, 842, 844 traded on exchanges, 104n unrestricted, 842 Security and Accountability for Every Port Act (2006), 274n Security interest(s), 489n, 575 conflicting, 598 creating, 587–588 defined, 459 perfection of, 588–595 purchase-money (PMSI), 594–595, 598n, 600, 604, 618n, 628 scope of, 595–597 warranty of title and, 459 Self-incrimination, compulsory, constitutional prohibition of, 83, 92, 197–198, 200–201, 775 Seller(s) breach by, 432, 447–451 duty of, to disclose, 989–990 goods held by, 430–431 insolvent, 423, 447 obligations of, 437, 438–442 place of business of, 438 remedies of, 445–447 residence of, 438 Seniority systems, 700, 713 Sentencing guidelines, 204 corporate, 776–777, 883 Sentencing Reform Act (1984), 204 Service mark, 157, 160, 163 Service of process, 56–59 Services, goods combined with, 395–396 Settlement(s) of claims, 257–259 family, 1034 of lawsuit, 55 negotiated, 897 Settlor, 1027 Seventh Amendment, 64, 83 Severance pay, 877 Sexual harassment, 701–705 Share(s) See also Stock(s) transfer of, 778–780, 811 treasury, 810 Share exchange, 822 Shareholder(s), 773 access of, 808–809 approval of, 822 corporate governance and, 853, 882 derivative suit of, 760n, 778n, 805, 812 interests of, corporate officers’ interests and, 853 liability of, 773–774, 780–781, 812–815 majority (controlling), 805, 812–815 meetings of, 806–807 minority, 805, 812–815 powers of, 806 proposals by, 806–807, 808–809 rights of, 778n, 809–812 role of, 805–809 voting by, 806n, 807–809 Shelter principle, 518–519 Sheriff’s deed, 991 Sherman Antitrust Act (1890), 273n, 938–946, 947–949, 950, 952 Shipment(s), 401 See also Delivery Short-form merger, 822 Sight draft, 488 Signature(s) I–30 debtor’s, 587 defined, 492, 523 digital, public-key infrastructure, 377 e- (electronic), 376–380, 381 forged, 533, 549–552 fraudulent, 913 handwritten, digitized, 377 merchant’s firm offer and, 400–401 on negotiable instruments liability for, 523–529 as requirement, 492 placement of, 492 required by Statute of Frauds, 310 required by UCC, 310 unauthorized, 527 on will, 1031 Signature dynamics, 377 Silence as acceptance, 243 misrepresentation by, 293–294 Sixth Amendment, 83, 198 Slander, 126–127, 136 Small business(s) appropriate business form for, selecting, 863–866 business plan for, 871–872 contracts and, 874–876 creation of, 868–869 employment issues and, 876–878 high costs of compliance with regulation and, 886–887 intellectual property of, 869–871 law for, 862–881 legal counsel for, 862–863 liability considerations and, 864, 875–876 raising financial capital for, 791–792, 871–873 See also Corporation(s), financing of tax considerations and, 864 Web site for, 865 Small Business Act (1958), 952 Small Business Administration (SBA), 612, 862, 871 National Enforcement Ombudsman at, 901 Small Business Regulatory Enforcement Fairness Act (SBREFA)(1996), 900–901 Small Corporate Offering Registration (SCOR), 873 Smart cards, 564 Social hosts, 153 Social Security, 638, 639, 641, 685, 725, 877 Social Security Act (OASDI)(1935), 685, 1084 Social Security Administration, 685 Sociological school, Software copyright protection for, 172 encryption, 173 file-sharing, 174–178 filtering, 90, 293, 690 patents for, 169–170 Sole proprietorships, 724–726 compared with other major forms of business organization, 831–832 Spam (junk e-mail), 139–140, 206, 690, 957 Specific devise, 1028 Specific performance, 9, 360–362 agent’s rights and, 649 buyer’s or lessee’s right to obtain, 447 under CISG, 454 contract for sale of land and, 308, 354, 360–361 defined, 8, 308, 360 personal-service contract and, 362 Speech commercial, 86–88, 775 freedom of, 83, 85–90, 126, 213–214, 690, 775 obscene, 90 political, corporate, 86, 775 privileged, 127–128 symbolic, 85–86 unprotected, 88–90 Spouse, surviving, 1035 Standard of proof in civil case, 70, 184 in criminal case, 70, 184, 202, 204 Standing to sue, 36–37, 899, 924–925, 1079n Starbucks Coffee Company, 410, 417–420 Stare decisis, 9–12, 1069 State(s) codes of, 15 constitutions of, 6, 95 courts of See State court systems immunity of, from lawsuits, 687n, 709–710 laws of governing e-signatures, 377 intestacy, 1027, 1035–1037, 1083–1084 prohibiting employment discrimination, 715 workers’ compensation, 280n, 638–639, 684–685, 1023 limits on, 84–85 powers of concurrent, 82 national government powers versus, 78 police, 77–78 regulatory See State(s), regulation by regulation by, 77–78 consumer protection, 1084 of environment, 922–923 of franchises, 728 global warming and, 82–83 of insurance industry, 1012, 1013 land-use, 1005–1006 prescription drugs and, 84–85 of securities, 856–857, 873 relations among, 78 State court systems, 37–40 appellate courts of, 37, 38–39 citations to, 18 decisions of, 15–16 illustrated, 37 supreme (highest) courts of, 15, 21, 31, 37, 38, 39–40, 72 Statement(s) bank, examination of, 551 continuation, 595 environmental impact (EIS), 922 of fact, 88–89, 126, 131, 884 financial, 1050 financing, 586, 588–589, 591–594 amendment of, 602 of future intent, 234 handwritten, 492 I–31 opening, 66 of opinion, 88–89, 126, 131, 290, 460, 884 proxy, 850 registration, 838–840 termination, 602 of value, 460 Statute(s) See also Law(s) arbitration, 43–45 assignments prohibited by, 324 contracts contrary to, 271–273 dram shop, 153 estray, 966–968 federal, of Frauds See Statute of Frauds Good Samaritan, 153 licensing, 84, 273 of limitations See Statute of limitations long arm, 31 as primary source of law, 6–7 recording, 991–992 of repose, 476 state, Statute of Frauds CISG and, 412 contracts within, 303–310, 579, 739, 874 summarized, 311 criticisms of, 390 exceptions to, 308–310 one-year rule and, 303, 304–306, 363 origins of, 303, 389 UCC and, 304, 308, 310, 396n, 405–406, 412 writing requirements of, 303–320, 642n sufficiency of writing and, 310–312 Statute of limitations, 93–94 contracts and, 345 debts barred by, 259–260 as defense to criminal liability, 197 against product liability, 476 defined, under UCC, 345n, 468, 552n warranties and, 345n, 468 Statutory law, 6–7 contracts and, 216 defined, finding, 15 Stock(s) (equity securities), 104n, 789–791 See also Share(s) bonds versus, 790 common, 789, 790–791 defined, 789 as intangible property, 960 preferred, 789, 791 purchase of, gaining control of corporation by, 824–825, 827 types of, summarized, 790 watered, 812 Stock options backdating, 107–108 defined, 853 Stop Counterfeiting in Manufactured Goods Act (SCMGA)(2006), 164 Stored-value cards, 563–564 Strict liability, 144, 153–154, 662n action against polluter based on, 921–922 common carriers and, 973–975 innkeepers and, 975–976 product liability and, 469–475 Strict scrutiny, 93 Strikes, 683 Strong-arm power, 618, 625 Subject matter, destruction of objective impossibility of performance and, 346 offer termination and, 241–242 Sublease, 999 Subpoena ad testificandum, 896–897 Subpoena duces tecum, 896–897 Subrogation, right of, 581 Subscriptions, charitable, 260 Summons, 56–59 Superfund (Comprehensive Environmental Response, Compensation, and Liability Act)(CERCLA)(1980), 934 Supervisors, sexual harassment by, 701–702 Supremacy clause, 82–83, 410 Supreme Court Reporter (S.Ct.)(West Group), 16 Surety, 578–579, 581–582 Suretyship, 578–579, 581–582 Surrender, discharge by, 539 Syllogism, 12 Syndicate (investment group), 768 T Takeovers, corporate, 824–825, 827 defenses to, terminology of, 825 Taking in good faith, HDC status and, 514–515 for value, 506 HDC status and, 513–514 without notice, HDC status and, 516–518 Tangible employment action, 702 Tariffs, 1074–1075 Tax, taxation congressional power and, 83 corporations and, 774–775, 864 double, 774, 864 export, 1073 franchise, 864 on imports, 1074–1075 information return and, 739 limited liability companies (LLCs) and, 759–760, 762 Medicare, 685, 725, 877 offshore low-tax jurisdictions and, 774–775 partnerships and, 739 property and, 960 S corporations and, 780 small business choices and, 864 Social Security, 638, 639, 641, 685, 725, 877 sole proprietorships and, 725 tariffs and, 1074–1075 “tort,” 124 unemployment, 639, 686, 877 withholding, 638, 641 Technology(ies) acceptance of offer and, 246 I–32 best available control (BACT), 929–930 best practical control (BPCT), 930 e-signature, 376–377 file-sharing, 174–178 innovation in, noncompete covenants and, 389 maximum achievable control (MACT), 926 Telecommuters, 678–679 Telemarketing, 908–909 Telemarketing and Consumer Fraud and Abuse Prevention Act (1994), 908 Telephone Consumer Protection Act (TCPA)(1991), 908 Tenancy in common, 738, 983–984 by the entirety, 984 fixed-term (for years), 984–985 joint, 738, 983, 984, 1035 periodic, 985, 999 at sufferance, 985 at will, 985 Tenant(s) defined, 997 interest of, transfer of, 999 in partnership, 742n Tender defined, 338 of delivery, 422, 430, 438 of payment, 539 of performance, 338–339 self-, 824 Tender offer, 824 Tenth Amendment, 6, 77, 83, 84 Term(s) additional, 402–404, 407 ambiguous, 228, 315, 407, 1015–1016 browse-wrap, 376 definiteness of, 232, 237–239 definitions of, 427, 428 generic, trademarks and, 163 handwritten, 500 open, 399–400 open delivery, 399 open payment, 399 open price, 399 open quantity, 400 Territorial restrictions, 941–942 Terrorists, terrorism attacks of September 11, 2001, 94, 205, 212 control of, sacrifice of civil liberties and, 212 digital cash facilities and, 564, 565 Testamentary disposition, 1027 Testate death, 1027 Testator, 1027 Testing the waters, 841–842 Theft cyber, 205 identity, 205, 913 of trade secrets, 192, 205, 720–721, 871n Third Amendment, 83, 690 Third party(ies) defined, 321 liability to of accountants and other professionals, 1052–1055, 1084 of agents and principals, 653–666 of attorneys, 1055 rights of, 321–336 Third party beneficiaries, 321, 328–333, 464–465 Thirteenth Amendment, 362n Time for acceptance of offer, 243–245 contract performance and, 343 definite, payment due at, 493–494, 496–498 effective, of perfection of security interest, 595 float, 561 lapse of agency termination and, 666 offer termination and, 241 proper presentment and, 524–525 reasonable, 126, 241, 266, 270, 343, 431, 438, 465n, 557n, 911 commercially, 432 for rejection of goods, 449 of sales contract formation, 412 of shipment, 443 travel, 663 UETA and, 383 wages and, 677 Time draft, 488 Time instrument(s), 487, 488 overdue, HDC status and, 516 Tippees, 849 Tipper/tippee theory, 849 Title(s) abstract of, 992 case, 21 defined, 394, 421 document of, 422, 975n good, 458 marketable, 992 passage of, 422–427 relativity of, 1004 slander of, 136 void, 423 voidable, 423–425 warranty of, 458–459 Title search, 992 Tobacco smokeless, 909 warning labels and, 909, 914 Tolling, 476 Tort(s), 11 business, 131–133 cyber, 136–140 defined, 122 exception to employment-at-will doctrine based on, 260, 674 intentional See Intentional torts law of, basis of, 122–123 lawsuit for, criminal prosecution for same act versus, illustrated, 186 of principal, 649 reform and, 124–125 toxic, 922 unintentional, 122 See also Negligence Tortfeasor, 123, 144, 660 Toxic chemicals, 931 I–33 Toxic substances, 933 Toxic Substances Control Act (1976), 933 Trade foreign, exemption of, from antitrust laws, 951 restraints on See Restraint(s) on trade usage of, 228, 315–316, 407, 464, 481 Trade associations, 940 Trade dress, 160, 163 Trade fixtures, 962 Trade libel, 136 Trade names, 164, 589, 592 Trade secrets, 157, 160, 178–179, 188, 191, 192, 205, 214, 388, 720–721, 870–871, 897, 1072 Trademarks, 157–164, 213–214, 332n, 865, 869–870, 960, 1072 Trading with the Enemy Act (1917), 1073 Transaction, 381 Transfer(s) fraudulent, 619–620 fund See Funds, transfer of of real property See Real property, ownership interests in, transfer of of rights to leased property, 998–999 of shares, 778–780, 811 wire, 563 Treaty, 1069 Trespass, 133–135, 425n Trial(s) civil procedures and before, 55–66, 67 during, 66–70 following, 70–73 standard of proof in, 70, 184 criminal, 202, 204 standard of proof in, 70, 184, 202, 204 by jury, right to, 64–65, 198 mini-, 47 summary jury (SJT), 47 Trial court(s) defined, 15 federal (district), 34, 40 state, 37, 38 TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, 179 Trover, 1004 Trust(s), 1027, 1037–1043 arrangement of, illustrated, 1039 business, 768, 938 charitable, 1039 constructive, 649, 1039–1040 defined, 1037 essential elements of, 1037–1038 express, 1038–1039 implied, 1039–1041 living (inter vivos), 1035, 1038, 1039 resulting, 1041 security interest and, 588 spendthrift, 1039 termination of, 1042–1043 testamentary, 1038–1039 Totten, 1039 voting, 808–809 Trust deed, 990n Trustee(s) bankruptcy, 612, 617, 618–620, 625 successor, 1038 of trust, 1037, 1041–1042 United States, 612 Truth-in-Lending Act (TILA)(1968), 293, 910–911, 914 Truth-in-Savings Act (TISA)(1991), 555 Twenty-seventh Amendment, 83n Tyco International, 99, 100, 882 Tying arrangement (tie-in sales agreement), 947–949 U Ultra vires doctrine, 786, 828 Ultramares rule, 1053–1055 Umbrella policy, 1021 Unconscionability, 254 of contracts or clauses, 277–280, 387–388, 1005 courts and, 298 defined, 277 genuineness of assent and, 296–298 prima facie, 452 procedural, 277–279 substantive, 279–280 under UCC, 277n, 298, 388, 408–410, 467–468, 482–483 warranties and, 467–468 Underwriter, 1008 Undue influence contract illegal through, 281 contract voidable through, 538 genuineness of assent and, 295–296 presumption of, 295–296 Unequivocal acceptance, 243 Uniform Arbitration Act, 43 Uniform Commercial Code (UCC), 216, 392–398 adoption of, Article (General Provisions) of, 7, 392–393 Article (Sales Contracts) of, 393, 458, 481 See also Sales contract(s) 2003 amendments to adoption of, 393 selected provisions of, listed, 394 definiteness of terms and, 237n E-SIGN Act and, 377 franchises under, 727 scope of, 393–397 UETA and, 381 Article 2A (Leases) of, 7, 458, 481, 973 See also Lease(s); Lease contract(s) E-SIGN Act and, 377 scope of, 398 UETA and, 381 Article (Negotiable Instruments) of, 7, 393, 486–487, 512n, 544, 570 Article (Bank Deposits and Collections) of, 7, 393, 486–487, 544, 570 Article 4A (Funds Transfers) of, 7, 393 commercial fund transfers governed by, 562 Article (Letters of Credit) of, 7, 393 Article (Bulk Transfers) of, 393 Article (Documents of Title) of, 393, 512n, 973, 975 Article (Investment Securities) of, 393, 512n I–34 Article (Secured Transactions) of, 7, 393, 574, 586, 602–606, 635 auctions under, 237n CISG compared with, 410, 412, 1069 citations to, 19 commercial reasonableness under, 399, 400, 437–438, 514, 571, 604–606 consumer protection under, 909 creation of, fictitious payee rule of, 528–529, 571 good faith and, 392–393, 399, 400, 404–405, 437–438, 481–482, 514, 570–572 imposter rule of, 528 liquidated damages under, 359n parol evidence rule and, 406–408 passage of title under, 422–427 periodic revisions of, 393 remedies for breach under cumulative nature of, 364, 603 election of, 364 limitation of, 365 rescission of contract under, 344 risk of loss under, 427–433 rules of construction under, 408 signature under, 310, 400n Statute of Frauds under, 304, 308, 310, 396n, 405–406, 412 statute of limitations under, 345n, 468, 552n unconscionability under, 277n, 298, 388, 408–410, 467–468, 482–483 waiver under, 258n warranties under, 458–468, 483 Uniform Consumer Credit Code, 909 Uniform Electronic Transactions Act (UETA), 244, 376n, 377, 381–383, 459n, 487, 491n, 659 Uniform Franchise Offering Circular (UFOC), 728 Uniform laws, 6–7 See also individual uniform laws Uniform Limited Liability Company Act (ULLCA), 759 Uniform Limited Partnership Act (ULPA), 751 Uniform Negotiable Instruments Law, 6–7, 392, 486 Uniform Partnership Act (UPA), 737 Uniform Prenuptial Agreements Act (UPAA), 308n Uniform Probate Code (UPC), 1027–1028 Uniform Residential Landlord and Tenant Act (URLTA), 997 Uniform Sales Act, 392 Uniform Securities Act, 857 Uniform Trade Secrets Act, 178 Uniform Trust Code, 1042n Union shop, 681 Unions, 681–683 United Nations Commission of, on International Trade Law, 1069 Convention of on Contracts for the International Sale of Goods See CISG on the Recognition and Enforcement of Foreign Arbitral Awards, 48, 380 on the Use of Electronic Communications in International Contracts, 380 General Assembly of, 1069 United States Bureau of the Census, 613, 862 United States Code (U.S.C.), 15 citation to, 19 “gaps” in, 612n United States Code Annotated (U.S.C.A.)(West), 15 United States Constitution See also Bill of Rights; individual amendments authority of government to regulate business under, 77–98 bankruptcy laws and, 611 commerce clause of, 79–82, 84–85, 824 compulsory self-incrimination prohibited by, 83, 92, 197–198, 200–201, 775 cruel and unusual punishment prohibited by, 83, 198 double jeopardy prohibited by, 83, 198, 775 due process clause of See Due process equal protection clause of, 92, 93–94, 713, 714–715 establishment clause of, 90–91 excessive bail or fines prohibited by, 83, 84–85, 198 export taxes prohibited by, 1073 federal courts under, 30, 34, 40, 41 free exercise clause of, 90, 91 full faith and credit clause of, 78 intellectual property protected by, 157 as primary source of law, privacy rights and, 94, 690 privileges and immunities clause of, 78, 775 protections guaranteed by, 198 See also individual protections supremacy clause of, 82–83, 410 as supreme law of the land, 6, 77, 82 takings clause of, 83, 995, 1005–1006 treaty ratification under, 1069 unreasonable searches and seizures prohibited by, 83, 84, 91–92, 198, 684n, 691, 706, 775, 897 United States Copyright Office, 171 United States Customs Service, 895 United States Department of Agriculture, 891 United States Department of Commerce, 891, 1073 United States Department of Defense, 891, 922 United States Department of Education, 891 United States Department of Energy, 891 United States Department of Health and Human Services, 891, 909 Food and Drug Administration of See Food and Drug Administration National Institute for Occupational Safety and Health of, 684 United States Department of Homeland Security, 891 United States Department of Housing and Urban Development, 891 United States Department of the Interior, 891, 922 United States Department of Justice (DOJ), 100, 108, 202, 891 antitrust laws enforced by, 887n, 950–951 export trading companies certified by, 951 merger guidelines of, 956 purchase of assets guidelines of, 823 securities law violations prosecuted by, 844 United States Department of Labor (DOL), 677, 678, 891 environmental matters regulated by, 922 Immigration Act of 1990 requirements and, 692 Labor Management Services Administration of, 686 I–35 Occupational Safety and Health Administration (OSHA) of, 684, 876, 886, 888, 896 United States Department of State, 891 United States Department of Transportation (DOT), 711, 891 United States Department of the Treasury, 564, 891 United States Department of Veterans’ Affairs, 891 United States Patent and Trademark Office (PTO), 159, 161, 167, 870 United States Postal Service, 244 United States Reports (U.S.), 16 United States Sentencing Commission, 204, 205, 776–777, 883 United States Statutes at Large, 15 United States Supreme Court, 4, 15, 30, 40, 72 appeals to, 41 decisions of, 11 guidelines of, regarding supervisor’ harassment of employees, 702 justices of, 21 petitions granted by, 41 rule of four of, 41 United States Trustee, 612 Unjust enrichment, 224–225, 293, 362 Unlawful Internet Gambling Enforcement Act (2006), 274n URLs (uniform resource locators), 20 USA Patriot Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism) Act (2001), 94–95, 212 Title III of, 564n Usage of trade, 228, 315–316, 407, 464, 481 Usury, 272 Utilitarianism, 104 V Value(s) cash surrender, 1015, 1019 fair, of land, 995 given by secured party, 587 good faith purchaser for, 423 legal, 250–251 mistake of, 286, 289 in negotiable instruments law, value of consideration in contract law versus, 513–514 statement of, 460 taking for, 506 HDC status and, 513–514 Vegetation, as real property, 981 Venture capital, venture capitalists, 791, 871–873 Venue, 35 Verdict directed, 69 jury, 70, 185 Vertical mergers, 950 Vertically integrated firms, 941 Vesting, 328–329, 1019 Violence Against Women Act (1994), 80n Vioxx, ethical problems with, 100 Virtual cash, 563 Virtual gaming currency, 565 Voir dire, 65 Voting lists, 807 W Wage(s) discrimination in, 700 under FLSA, 677 garnishment of, 576–577, 914 hours and, 677 minimum, 676–677 overtime and, 677–680 Waiver(s) of breach, 364–365 defined, 364–365 of notice, 606, 806n of service of process, 59 under UCC, 258n Walsh-Healey Act (1936), 676–677 War, agency termination and, 668 Warehouse companies, 975 Warehouse receipt, 422, 975n Warning(s) defects in, 472–474 ethical duty and, 147 gun makers and, 213 by landowner, 145–146 on tobacco products, 909, 914 Warrant(s) arrest, 202 general, 91 OSHA inspections without, 684n search, 91–92, 198, 684n, 896–897 stock, 810 Warranty(ies), 458–468 breach of as defense to liability on negotiable instrument, 537 recovery for, 530–531 statute of limitations and, 345n, 468 conflicting, 465–466 disclaimer of, 459, 467–468, 483 express, 459–460, 466, 467, 483 full, 465 implied See Implied warranty(ies) limited, 465 Magnuson-Moss Warranty Act and, 465 overlapping, 465–466 presentment, 530, 531–533 of title, 458–459 transfer, 530–531 unconscionability and, 467–468 Warranty deed, 991 Waste, 983 Water(s) drinking, 930–931 navigable, 928930 pollution of, 928–931, 958 Water Quality Act (1987), 928 Webb-Pomerene Act (1918), 951 West Group, 15, 16 Westlaw® (WL), 22 citation to, 20 I–36 defined, 16 Wetlands, 930 Whistleblower Protection Act (1989), 676 Whistleblowing, 674–676, 722, 1076 White knight, 825 Will(s), 1027–1035 codicil to, 1033 defined, 1027 gift made by (testamentary gift), 962, 1028–1029 holographic (olographic), 1031 laws governing, 1027–1028 living, 1043–1044 nuncupative (deathbed), 1031 partnership at, 739 probate of, 1027, 1034 revocation of, 1031–1034 rights under, 1034 sample, illustrated, 1028 valid, requirements for, 1029–1031 Will substitutes, 1035 Withdrawal, direct, 562 Witness(es) examination of, 69, 198 to will, 1031 Wool Products Labeling Act (1939), 909 Workers’ compensation insurance for, 1023 litigation versus, 685 small business and, 877 state laws governing, 280n, 638–639, 684–685, 1023 Working papers, 1056, 1058 Workouts, 625 Workplace See also Employee(s) electronic and other monitoring in, 690–691, 706–707 safety in, 638–639, 683–685 principal’s duty to provide, 648 “Works for hire,” 641–642 World Intellectual Property Organization (WIPO) Copyright Treaty of 1996, 173n, 179 World Trade Center, destruction of, by terrorists, 205 See also Terrorists, terrorism WorldCom, Inc., 99, 100, 1048 Writ(s) of attachment, 575 of certiorari, 41 of execution, 73, 575–576 “ref’d n.r.e.” (“refused, no reversible error”), 235n Writing requirement(s) for agency agreement and, 642n bailment agreement and, 970 confirmation between merchants and, 405 contract modification without consideration and, 405 contracts involving transfers of realty and, 344 merchant’s firm offer and, 400–401 negotiable instruments and, 491–492 partnership agreement and, 739 security interests and, 587 Statute of Frauds and See Statute of Frauds stop-payment order and, 548n wills and, 1031 subsequent, will revocation by, 1033 Wrongful interference, 131–133 Wrongful mental state (mens rea), 187 Y Year Books, 10 General Legal Resources FindLaw, which is a part of West Group, is one of the most comprehensive sources of free legal information You can access all federal and state cases, codes, and agency regulations, as well as journal articles, newsletters, and links to other useful sites and discussion groups The Legal Information Institute (LII) at Cornell Law School also is a great site for legal research and includes federal, state, and international law You can access materials by topic or by jurisdiction, or you can browse through one of its topical libraries The Equal Employment Opportunity Commission (EEOC) posts information on employment discrimination, EEOC regulations, compliance, and enforcement The Environmental Protection Agency offers information on environmental laws, regulations, and compliance assistance The U.S Small Business Administration assists in forming, financing, and operating small businesses The ’Lectric Law Library has general legal resources The U.S Department of Justice provides information on many areas of law, including civil rights, employment, crime, and immigration The Internet Law Library provides many legal resources relating to American and foreign law The Council of State Governments offers state news, information, legislation, and links to state home pages This site provides up-todate legal news articles and information, and has links to other legal news publications, including the National Law Journal The National Conference of Commissioners on Uniform State Laws posts the text of uniform laws (such as the Uniform Commercial Code) and information on state adoptions and pending state legislation Helpful Government Sites The U.S government’s official Web site provides links to every branch of the federal government, including federal agencies The Library of Congress has links to state and federal government resources, and the THOMAS system allows you to search through several legislative databases The Web site of the Securities and Exchange Commission offers a searchable electronic database (called EDGAR) of information about public companies Federal and State Courts This official site of the United States Supreme Court provides case opinions, orders, and other information about the Court, including its history, procedures, schedule, and transcripts of oral arguments This site offers in addition to United States Supreme Court opinions, a multimedia guide to the Court, including a virtual tour of the building and digital audio of selected oral arguments and Court decisions The U.S Government Printing Office posts official information from each of the three branches of the federal government, including publications such as the Code of Federal Regulations and the Federal Register The federal judiciary provides access to every federal court (including district courts, appellate courts, and bankruptcy courts) The U.S Patent and Trademark Office has a searchable database of patents and trademarks This site also provides general information and a way to check the status of pending applications The American Bankruptcy Institute is a good resource for bankruptcy court opinions, news, and other information The U.S Copyright Office provides information on copyrights and a searchable database of copyright records The National Center for State Courts offers links to the Web pages of all state courts
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