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Business Law and Strategy 1st Edition

Sean P. Melvin
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Table of Contents
1. Table of Contents and Preface
1. Title
2. Copyright
3. Dedication
4. About the Authors
5. Preface
1. From the Authors
2. Teaching Features Related to STRATEGY and CRITICAL
THINKING
3. Teaching Features Related to REINFORCEMENT
4. Other Program Features
6. Connect
1. FOR INSTRUCTORS
2. FOR STUDENTS
7. Acknowledgments
8. Brief Contents
9. Table of Contents
2. Unit One: Fundamentals of the Legal Environment of Business
1. Chapter 1: Legal Foundations and Thinking Strategically
1. Unit One: Fundamentals of the Legal Environment of Business
2. Introduction
3. Chapter Overview
4. Introduction to Law
5. Categories of Law
1. Language of the Law
2. Functions of Law
6. Law in Context: Business and Strategy
1. Business Swimming in a Sea of Law: Defining Strategy
2. Using Strategy in Legal Decisions
3. Role of Counsel
7. Primary Sources and Levels of American Law
1. Constitutional Law
2. Statutory Law
3. Administrative Law
4. Common Law
5. Law versus Equity
6. Secondary Sources of Law
8. Stare Decisis and Precedent
1. Stare Decisis and Business
9. Thinking Strategically
1. Four Categories
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 1.1 U.S. v. Alvarez 567 U.S. 709 (2012)
2. CASE SUMMARY 1.2 Sokoloff v. Harriman Estate
Development Corp., 754 N.E.2d 184 (N.Y. 2001)
3. CASE SUMMARY 1.3 Jones v. R. R. Donnelley & Sons
Co., 541 U.S. 369 (2004)
4. CASE SUMMARY 1.4 Kauffman-Harmon v. Kauffman, 36
P.3d 408 (Sup. Ct. Mont. 2001)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
2. Chapter 2: Business, Societal, and Ethical Contexts of Law
1. Introduction
2. Chapter Overview
3. The Relationships between Business Organizations, Law, and
Ethics
4. Ethical Decision-Making Regimes
1. Principles-Based Approach
2. Consequences-Based Approach
3. Contract-Based Approach
5. Corporate Social Responsibility
1. Major CSR Schools of Thought
2. CSR and Litigation
6. Values Management and Compliance Departments
1. Business Ethics Challenges in Values Management
2. Common Traits of Effective Values Management
3. Compliance Departments
7. Ethical Decision Making: A Manager’s Paradigm
8. Community-Based Nonprofit and Benefit Corporations
9. Thinking Strategically
1. Patently Unfair Behavior?
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 2.1 Dodge v. Ford Motor Co., 204 Mich.
459, 170 N.W. 668 (1919)
2. CASE SUMMARY 2.2 In re High-Tech Employee Antitrust
Litigation, U.S. District Court, Northern District of
California 11-cv-2509 (2013)
3. CASE SUMMARY 2.3 In re Volkswagen “Clean Diesel”
Marketing, Sales Practices, and Products Liability Litigation,
U.S. District Court, Northern District of California MDL No.
2672 CRB (2017)
4. CASE SUMMARY 2.4 Goswami v. American Collections
Enterprise, Inc., 377 F.3d 488 (5th Cir. 2004)
5. CASE SUMMARY 2.5 Luther v. Countrywide Home Loans
Servicing, 533 F.3d 1031 (9th Cir. 2008)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
3. Chapter 3: Business and the Constitution
1. Introduction
2. Chapter Overview
3. Structure of the Constitution
1. Federalism
2. Separation of Powers
4. Overview of Federal Powers
1. The Congress (Article I)
2. The President (Article II)
3. The Federal Courts (Article III)
5. Regulation of Commerce
1. Scope of the Commerce Power
2. Negative Commerce Clause
3. The Commerce Clause Today
6. The Bill of Rights
1. First Amendment (Freedom of Speech, Assembly, and
Religion)
2. Second Amendment (Arms)
3. Third Amendment (Housing of Soldiers)
4. Fourth Amendment (Search and Seizure)
5. Fifth Amendment (Procedural Fairness and Property Rights)
6. Sixth Amendment (Criminal Trials)
7. Seventh Amendment (Civil Trials)
8. Eighth Amendment (Bail, Fines, and Punishments)
9. Ninth Amendment (Unenumerated Rights)
10. Tenth Amendment (Federalism and Popular Sovereignty)
7. Due Process and Equal Protection
1. Due Process
2. Equal Protection
3. Standards of Review
8. An Important Digression: Amending the Constitution
9. Interpreting the Constitution: Originalism versus the Living
Constitution
1. Originalism
2. The Living Constitution
10. Thinking Strategically
1. The Constitution as a Commitment Device
11. Key Terms
12. Case Summaries
1. CASE SUMMARY 3.1 Brown v. Board of Education II, 394
U.S. 294 (1955)
2. CASE SUMMARY 3.2 Executive Order 10730
(Desegregation of Central High)
3. CASE SUMMARY 3.3 Title IX
4. CASE SUMMARY 3.4 State v. DeAngelo, 930 A.2d 1236
(N.J. Supreme Ct. 2007)
5. CASE SUMMARY 3.5 U.S. v. Alderman, 565 F.3d 641 (9th
Cir. 2009)
13. Chapter Review Questions
14. Quick Quiz Answers
15. Chapter Review Questions: Answers and Explanations
4. Chapter 4: The American Judicial System, Jurisdiction, and Venue
1. Introduction
2. Chapter Overview
3. Role and Structure of the Judiciary
4. State versus Federal Courts
1. State Courts
2. Federal Courts
5. Applying Precedent
1. Persuasive Value
2. Distinguishable Cases
6. Jurisdiction
1. Jurisdiction and Business Strategy
2. Overview of Jurisdiction
3. Subject Matter Jurisdiction: Authority over the Dispute
4. Personal Jurisdiction
5. Out-of-State Defendants
6. Injurious Effect
7. Physical Presence
8. Voluntary
9. Minimum Contacts and the Internet
7. Venue
8. Thinking Strategically
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 4.1 Bickford v. Onslow Memorial
Hospital Foundation, 855 A.2d 1150 (Me. 2004)
2. CASE SUMMARY 4.2 M/S Bremen v. Zapata Off-Shore
Co., 407 U.S. 1 (1972)
3. CASE SUMMARY 4.3 Mink v. AAAA Development LLC,
190 F.3d 333 (5th Cir. 1999)
4. CASE SUMMARY 4.4 Toys “R” Us, Inc. v. Step Two, S.A.,
318 F.3d 446 (3d Cir. 2003)
5. CASE SUMMARY 4.5 Estate of Weingeroff v. Pilatus
Aircraft, 566 F.3d 94 (3d Cir. 2009)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
5. Chapter 5: Resolving Disputes: Litigation and Alternative Dispute
Resolution
1. Introduction
2. Chapter Overview
3. Civil Litigation
1. Impact of Civil Litigation Business Planning
4. Stages of Litigation
1. Prelawsuit: Demand and Prelitigation Settlement
Negotiations
2. Pleadings Stage
3. Discovery Stage
4. Pretrial Conference
5. Trial
6. Posttrial Motions and Appeals
7. Collecting the Judgment
5. Alternative Dispute Resolution
1. Informal ADR
6. Formal ADR Methods
1. Arbitration
2. Employment and Labor Arbitration
3. Mediation
4. Expert Evaluation
5. Other Forms of ADR
7. Thinking Strategically
1. Online Dispute Resolution
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 5.1 Infinite Energy, Inc. v. Thai Heng
Chang, 2008 WL 4098329 (N.D. Fla. 2008)
2. CASE SUMMARY 5.2 Bridgestone Americas Holding, Inc.
v. Mayberry, 854 N.E.2d 355 (Ind. 2006)
3. CASE SUMMARY 5.3 Massachusetts v. U.S.
Environmental Protection Agency, 127 S. Ct. 1438 (2007)
4. CASE SUMMARY 5.4 Exxon Shipping Co. v. Exxon
Seamen’s Union, 11 F.3d 1189 (3d Cir. 1993)
5. CASE SUMMARY 5.5 Hooters of America, Inc. v. Phillips,
173 F.3d 933 (4th Cir. 1999)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
3. Unit Two: Contracts, Sales, and Leases
1. Chapter 6: Contracts: Overview, Definition, Categories, and Source of
Law
1. Unit Two: Contracts, Sales, and Leases
2. Introduction
3. Chapter Overview
4. The Nature and Application of Contracts
5. Elements of a Contract
6. Types of Contracts
7. Basic Contract Structure and Terminology
8. Drafting Contracts with a Strategically Qualified Attorney
9. Thinking Strategically
1. Ticketmaster’s Strategic Contracts
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 6.1 Chambers v. Travelers Companies,
668 F.3d 559 (8th Cir. 2012)
2. CASE SUMMARY 6.2 Biomedical Systems Corp. v. GE
Marquette Medical Systems, Inc., 287 F.3d 707 (8th Cir.
2002)
3. CASE SUMMARY 6.3 Forest Park Pictures v. Universal
Television Network, Inc., 683 F.3d 424 (2d Cir. 2012)
4. CASE SUMMARY 6.4 Rochon Corp. v. City of Saint Paul,
814 N.W.2d 365 (Minn. Ct. App. 2012)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
2. Chapter 7: Mutual Assent: Agreement and Consideration
1. Introduction
2. Chapter Overview
3. Mutual Assent
4. Requirements of an Offer
1. Objective Intent
2. Advertisements as an Offer
3. E-Contracts
4. Termination of an Offer
5. Action of the Parties
6. Operation of Law
5. Acceptance
1. Acceptance of an Offer: The Mailbox Rule
2. Mistake
6. Adequacy of Consideration
1. Legal Detriment
2. Amount and Type of Consideration
7. Agreements That Lack Consideration
1. Illusory Promises
2. Past Consideration
3. Promissory Estoppel
8. Thinking Strategically
1. What’s Your Negotiation Strategy?
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 7.1 Arizona Cartridge Remanufacturers
Association v. Lexmark, 421 F.3d 981 (9th Cir. 2005)
2. CASE SUMMARY 7.2 Biomedical Systems Corp. v. GE
Marquette Medical Systems, Inc., 287 F.3d 707 (8th Cir.
2002)
3. CASE SUMMARY 7.3 Reed’s Photo Mart, Inc. v. Monarch,
475 S.W.2d 356 (Tex. Civ. App. 1971)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
3. Chapter 8: Capacity and Legality
1. Introduction
2. Chapter Overview
3. Capacity
1. Minors
2. Mental Competency
3. Intoxicated Persons
4. Bright-Line Rules versus Flexible Standards
5. Legality
1. Statutes
2. Public Policy
3. Exceptions to the Nonenforcement Rule
6. Thinking Strategically
1. Forum Selection and Choice of Law Clauses
7. Key Terms
8. Case Summaries
1. CASE SUMMARY 8.1 Webster Street Partnership Ltd. v.
Sheridan, 368 N.W.2d 439 (Neb. 1985)
2. CASE SUMMARY 8.2 Faber v. Sweet Style Manufacturing
Corporation, 242 N.Y.S.2d 763 (N.Y. Sup. Ct., Nassau
County, 1963)
3. CASE SUMMARY 8.3 Biomedical Systems Corp. v. GE
Marquette Medical Systems, Inc., 287 F.3d 707 (8th Cir.
2002)
9. Chapter Review Questions
10. Quick Quiz Answers
11. Chapter Review Questions: Answers and Explanations
4. Chapter 9: Enforceability
1. Introduction
2. Chapter Overview
3. Enforceability of Contracts
4. Consent Defects
5. Misrepresentation and the Strategic Problem of Asymmetric
Information
1. Innocent Misrepresentation
2. Fraud
6. Additional Contract Defenses
1. Duress
2. Undue Influence
3. Unconscionability
7. The Statute of Frauds
8. Contract Interpretation and the Parol Evidence Rule
9. Thinking Strategically
1. Enforceability of Confidentiality Agreements and
Noncompete Clauses
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 9.1 Professional Bull Riders, Inc. v.
AutoZone, Inc., unpublished order and judgment dated
August 15, 2005 (10th Cir. 2005)
2. CASE SUMMARY 9.2 Alaska Packers’ Association v.
Domenico, 117 F. 99 (9th Cir. 1902)
3. CASE SUMMARY 9.3 Harley-Davidson Motor Co. v.
PowerSports, Inc., 319 F.3d 973 (7th Cir. 2003)
4. CASE SUMMARY 9.4 Tafel v. Lion Antique Investments &
Consulting Services, 773 S.E.2d 743, Supreme Court of
Georgia (2015)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
5. Chapter 10: Performance
1. Introduction
2. Chapter Overview
3. The Nature and Effect of Contract Conditions
4. Discharging Obligations through Good Faith Performance
5. Discharge by Mutual Agreement
1. Rescission
2. Accord and Satisfaction
3. Substitute Agreement
4. Novation
6. Discharge by Operation of Law
1. Impossibility
2. Impracticability
3. Frustration of Purpose
7. Thinking Strategically
1. Use of Conditions
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 10.1 Sechrest v. Forest Furniture Co.,
264 N.C. 216 (N.C. 1965)
2. CASE SUMMARY 10.2 1700 Rinehart, LLC v. Advance
America, Cash Advance Centers, etc., 5D09-3759 (Fla. 5th
DCA 2010)
3. CASE SUMMARY 10.3 Hearthstone, Inc. v. Dept. of
Agriculture, CBCA 3725 (2015)
4. CASE SUMMARY 10.4 Wooden v. Synovus Bank,
A13A0876 Ga. App. (2013)
5. CASE SUMMARY 10.5 Ed Wolfe Construction, Inc. v.
Richard Knight and Luann Knight, 2014 IL App (5th)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
6. Chapter 11: Breach and Remedies
1. Introduction
2. Chapter Overview
3. Breach Defined
1. Partial Breach
2. Anticipatory Repudiation
4. Remedies at Law (Money Damages)
1. Compensatory Damages
2. Consequential Damages
3. Restitution
4. Liquidated Damages
5. Equitable Remedies
1. Specific Performance
2. Injunctive Relief
3. Reformation
6. Duty to Mitigate
7. Thinking Strategically
1. Performance Assurances
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 11.1 Pepsi-Cola Co. v. Steak ’n Shake,
Inc., 981 F. Supp. 1149 (S.D. Ind. 1997)
2. CASE SUMMARY 11.2 DiFolco v. MSNBC, 622 F.3d 104
(2d Cir. 2010)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
7. Chapter 12: Contracts for the Sale of Goods: Overview of Article 2
1. Introduction
2. Chapter Overview
3. Introduction to the UCC
4. Purpose of Article 2 of the UCC
5. Default Rules
6. UCC Article 2 Coverage and Definitions
7. UCC and the Common Law
8. Thinking Strategically
1. The Sale of Goods over the Internet and the Shadow of the
Future
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 12.1 Advent Systems Ltd. v. Unisys
Corp., 925 F.2d 670 (3d Cir. 1991)
2. CASE SUMMARY 12.2 3L Communications LLC v.
Merola, 2013 WL 4803532, Court of Appeals of Tennessee
(2013)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
8. Chapter 13: Sales Contracts: Agreement, Consideration, and the
Statute of Frauds
1. Introduction
2. Chapter Overview
3. Formation of Agreement for Sale of Goods
1. Firm Offers by Merchants
2. Offers with Open Terms
3. A Word about Quantity
4. Other Open Terms
5. Acceptance
4. Consideration
5. The Battle of the Forms
1. Nonmerchant Transactions
2. Merchant Transactions
6. Statute of Frauds
7. Thinking Strategically
1. The Battle of the Forms
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 13.1 Movado Group, Inc. v.
Mozaffarian, 938 N.Y.S2d 27 (2012)
2. CASE SUMMARY 13.2 Hebberd-Kulow Enterprises, Inc. v.
Kelomar, Inc., Court of Appeals of California, 4th District
(2016)
3. CASE SUMMARY 13.3 Daitom, Inc. v. Pennwalt Corp.,
741 F.2d 1569 (10th Cir. 1984)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
9. Chapter 14: Title, Allocation of Risk, and Insurable Interest
1. Introduction
2. Chapter Overview
3. Identification of Goods
4. Issues Related to Title Transfers
1. Passing of Title
2. Good Faith Buyers
5. Insurable Interest
6. Risk of Loss
7. Thinking Strategically
1. Strategic Assessment of Shipping Terms
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 14.1 3L Communications v. Merola
d/b/a NY Telecom Supply, No. M2012- 02163-COA-R3-CV,
Court of Appeals of Tennessee (2013)
2. CASE SUMMARY 14.2 Frelinghuysen Morris Foundation
v. AXA Art Insurance, 603015 (2009)
3. CASE SUMMARY 14.3 Jacq Wilson et al. v. Brawn of
California, Inc., 132 Cal. App. 4th 549 (2005)
4. CASE SUMMARY 14.4 St. Paul Guardian Insurance
Company et al. v. Neuromed Medical Systems & Support,
GmbH et al., 00 Civ. 9344 (SHS) U.S. Dist. Ct., S.D.N.Y.
(2002)
5. CASE SUMMARY 14.5 Windows, Inc. v. Jordan Panel
Systems Corp., 177 F.3d 114 (1999)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
10. Chapter 15: Performance and Cure in Sales Contracts
1. Introduction
2. Chapter Overview
3. The UCC and Good Faith
4. Performance, Past Dealings, and Trade Practices
5. Obligations of the Seller
1. Perfect Tender
6. Rights of the Seller
1. Commercial Impracticability
7. Obligations and Rights of the Buyer
1. Buyer’s Right of Inspection: Acceptance or Rejection
2. Special Rules for Installment Contracts
8. Thinking Strategically
1. Notice and Remediation
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 15.1 Ner Tamid Congregation of North
Town v. Krivoruchko, 638 F. Supp. 2d 913 (N.D. III. 2009)
2. CASE SUMMARY 15.2 General Motors Corp. v. Acme
Refining Co., 513 F. Supp. 2d 906 (E.D. Mich. 2007)
3. CASE SUMMARY 15.3 Furlong v. Alpha Chi Omega
Sorority et al., 73 Ohio Misc.2d 26 (1993)
4. CASE SUMMARY 15.4 Zion Temple First Pentecostal
Church of Cincinnati v. Brighter Day Bookstore & Gifts and
Murphy Cap & Gown Co., 970 N.E.2d 441 (Ohio 2004)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
11. Chapter 16: Breach and Remedies in a Sales Transaction
1. Introduction
2. Chapter Overview
3. Definition of a Breach
1. Seller’s Breach
2. Buyer’s Breach
3. Important Breach-Related Dates
4. Seller’s Remedies
5. Buyer’s Remedies
6. Limitation of Remedies
7. Thinking Strategically
1. Reacting to a Potential Sales Contract Breach7
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 16.1 Glenn Distributors Corp. v. Carlisle
Plastics, Inc., 297 F.3d 294 (3d Cir. 2002)
2. CASE SUMMARY 16.2 S.W.B. New England, Inc. v.
R.A.B. Food Group, LLC, 2008 WL 540091 (S.D.N.Y.
2008)
3. CASE SUMMARY 16.3 Swan Lake Holdings, LLC v.
Yamaha Golf-Car Co., U.S. Dist. LEXIS 19684 (U.S. Dist.
Ct. North. Dist. Ind., S. Bend Div., 2011)
4. CASE SUMMARY 16.4 Huntsville Hospital v. Mortara
Instrument, 57 F.3d 1043 (11th Cir. 1995)
5. CASE SUMMARY 16.5 Aero Consulting Corp. v. Cessna
Aircraft Co., 867 F. Supp. 1480 (D. Kan. 1994)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
12. Chapter 17: UCC Article 2A: Lease Contracts
1. Introduction
2. Chapter Overview
3. Introduction to Article 2A of the UCC
4. UCC Article 2A Coverage
5. Some Basic Terminology: Lessors and Lessees
6. True Leases versus Secured Transactions
7. Warranties
8. Finance Leases
9. Leases That Must Be in Writing
10. Thinking Strategically
1. Lease or Own?
11. Key Terms
12. Case Summaries
1. CASE SUMMARY 17.1 Cucchi v. Rollins Protective
Services, 574 A.2d 565 (Pa. 1990)
2. CASE SUMMARY 17.2 Corporate Center Associates v.
Total Group and Office Outfitters, 462 N.W.2d 713 (Iowa
Ct. App. 1990)
3. CASE SUMMARY 17.3 Brankle Brokerage & Leasing, Inc.
v. Volvo Financial Services, 394 B.R. 906 (2008)
13. Chapter Review Questions
14. Quick Quiz Answers
15. Chapter Review Questions: Answers and Explanations
13. Chapter 18: Sales Warranties
1. Introduction
2. Chapter Overview
3. Types of Warranties
1. Express Warranties
2. Implied Warranties
4. Disclaimers and Limitations
5. Third-Party Rights
6. Magnuson-Moss Warranty Act
7. Thinking Strategically
1. Advertising and Express Warranties
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 18.1 Giles v. POM Wonderful, LLC, No.
10-32192 (Cir. Ct., 17th Jud. Cir., Broward County, Fla.,
filed August 6, 2010)
2. CASE SUMMARY 18.2 Mennonite Deaconess Home &
Hospital, Inc. v. Gates Engineering Co., 219 Neb. 303, 363
N.W.2d 155 (1985)
3. CASE SUMMARY 18.3 City of LaCrosse v. Schubert,
Schroeder & Associates, 72 Wis. 2d 38, 240 N.W.2d 124
(1976)
4. CASE SUMMARY 18.4 Consumers Power Co. v.
Mississippi Valley Structural Steel Co., 636 F. Supp. 1100
(E.D. Mich. 1986)
5. CASE SUMMARY 18.5 Webster v. Blue Ship Tea Room,
Inc., 198 N.E. 2d 309 (Supreme Judicial Court of
Massachusetts, 1964)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
4. Unit Three: Commercial Paper and Secured Transactions
1. Chapter 19: Definition, Creation, and Categories of Negotiable
Instruments
1. Unit Three: Commercial Paper and Secured Transactions
2. Introduction
3. Chapter Overview
4. Features of a Negotiable Instrument
1. Unconditional Promise
2. Order
3. Fixed Amount
4. In Writing and Signed
5. Payable to Order or to Bearer
6. Payable on Demand or at a Future Time
5. Types of Negotiable Instruments
1. Draft
2. Check
3. Certificate of Deposit (CD)
4. Promissory Note
6. Steps to Negotiate and Indorse an Instrument
1. Negotiation of Order Paper
2. Negotiation of Bearer Paper
7. Negotiable Instruments and Securitization in Debt Capital
Markets
8. Thinking Strategically
1. Negotiating Accounts Receivable
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 19.1 Cooperatieve Centrale Raiffeisen-
Boerenleenbank B.A. v. William H. Bailey, 710 F. Supp. 737
(C.D. Cal. 1989)
2. CASE SUMMARY 19.2 In re AppOnline, Inc., 321 B.R.
614; 2003 U.S. Dist. LEXIS 26258 (2003)
3. CASE SUMMARY 19.3 Blasco v. Money Services Center,
352 B.R. 888 (N. Dist. Ala. 2006)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
2. Chapter 20: Negotiation, Indorsements, and Holder in Due Course
1. Introduction
2. Chapter Overview
3. Negotiation
1. Holder
2. Negotiation and Transfer
4. Holder in Due Course (HDC) Status
1. Value
2. Good Faith
3. Without Notice
4. The Shelter Rule
5. Defenses and Third-Party Claims
1. Real Defenses
2. Personal Defenses
3. Claims in Recoupment
6. HDC and Consumers
1. Holder Rule
2. Requirements
7. Thinking Strategically
1. Preventing Fraud through Artificial Intelligence
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 20.1 Carter & Grimsley v. Omni
Trading, Inc., 716 N.E.2d 320 (Ill. App. Ct. 1999)
2. CASE SUMMARY 20.2 Any Kind Checks Cashed, Inc. v.
Talcott (Fla. Dist. Ct. App. 2002)
3. CASE SUMMARY 20.3 Zener v. Velde, 17 P.3d 296 (Idaho
Ct. App. 2000)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
3. Chapter 21: Liability, Defenses, and Discharge
1. Introduction
2. Chapter Overview
3. Liability on the Instrument
1. Primary Liability
2. Secondary Liability
4. Presentment
1. Instruments That Are Dishonored
5. Agency Issues
6. Warranty Liability
1. Transfer Warranties
2. Presentment Warranties
7. Defenses against Holders of Negotiable Instruments
8. Discharge
1. Discharge by Payment
2. Discharge by Tender
3. Discharge by Cancellation or Renunciation
4. Discharge by Material and Fraudulent Alteration
5. Discharge by Certification
6. Discharge by Acceptance Varying a Draft
7. Notice Requirement
9. Thinking Strategically
1. Judgment-Proof Defendants
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 21.1 Bank of Nichols Hills v. Bank of
Oklahoma, 196 P.3d 984 (Okla. Civ. App. 2008)
2. CASE SUMMARY 21.2 Flatiron Linen v. First American
State Bank, 23 P.3d 1209, Supreme Court of Colorado
(2001)
3. CASE SUMMARY 21.3 Cooper v. Union Bank, 507 P.2d
609, Supreme Court of California, (1973)
4. CASE SUMMARY 21.4 Cooper v. Union Bank, 507 P.2d
609, Supreme Court of California (1973)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
4. Chapter 22: Checks, Deposits, and Financial Institutions
1. Introduction
2. Chapter Overview
3. Checks in Commercial Transactions
4. Electronic Payment Systems
1. Debit Cards
2. Credit Cards
3. Automated Clearing House (ACH) Transactions
4. Electronic Funds Transfers (Wires)
5. Mobile Payment Apps and the Blockchain
1. Mobile Payment Apps
2. Blockchain
6. Fraud Rules Related to Checks and Electronic Payment Systems
7. Thinking Strategically
1. Stolen and Forged Business Checks
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 22.1 Wachovia Bank, N.A. v. Foster
Bankshares, Inc., 457 F.3d 619, 60 U.C.C. 2d 1126 (7th Cir.
2006)
2. CASE SUMMARY 22.2 Halifax Corp. v. First Union
National Bank, 26 Va. 91, 546 S.E.2d 696, 44 U.C.C. 2d 661
(2001)
3. CASE SUMMARY 22.3 TME Enterprises, Inc. v. Norwest
Corp., 124 Cal. App. 4th 1021 (2004)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
5. Chapter 23: Secured Transactions
1. Introduction
2. Chapter Overview
3. Classifications of Collateral in Secured Transactions
4. The Steps to Create a Security Interest
1. Enter into Contract with Lender That Defines and Creates
Security Interest
2. Attach a Security Interest to Property
5. Perfecting a Security Interest
1. Perfection by Filing
2. Perfection by Possession
3. Automatic Perfection
4. Perfection by Control
6. Priority among Creditors’ Claims to Collateral
7. The Consequences of a Borrower’s Default
8. Thinking Strategically
1. Assessing and Perfecting a Security Interest
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 23.1 In re Estate of Joseph M. Silver,
2003 Mich. App. LEXIS 1389
2. CASE SUMMARY 23.2 In re Pfautz, 264 B.R. 551 (W.D.
Miss. 2001)
3. CASE SUMMARY 23.3 In re Piknik Products Co., 346 B.R.
863 (Bankr. M.D. Ala. 2006)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
6. Chapter 24: Creditors’ Rights
1. Introduction
2. Chapter Overview
3. Personal Guaranties
4. Rights against Third Parties
1. Defenses
5. Liens
1. Judicial Liens
2. Statutory Liens
3. Consensual Liens
6. Collecting Unsecured Debts
1. Obtaining and Enforcing a Judgment
2. Garnishment
3. Levy
4. Discovery
5. Sale of Property
6. State Exemption Laws
7. Thinking Strategically
1. Using Statutory Liens
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 24.1 Anthony DeMarco & Sons
Nursery, LLC v. Maxim Construction Service Corp., 130
A.D.3d 1409 (N.Y. Sup. Ct. App. Div. 2015)
2. CASE SUMMARY 24.2 On the Level Enterprises, Inc. v. 49
East Houston LLC, 2013 NY Slip Op. 01614 [104 A.D.3d
500]
3. CASE SUMMARY 24.3 Assevero v. Rihan, 144 A.D.3d
1061 (App. Div. Sup. Ct. of NY 2016)
4. CASE SUMMARY 24.4 Barrie-Chivian v. Lepler, 87 Mass.
App. Ct. 683 (2015)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
7. Chapter 25: Alternatives for Insolvent Borrowers
1. Introduction
2. Chapter Overview
3. Workouts
1. Turnaround Advisors
2. Workout Models
3. Workouts versus Bankruptcy
4. Assignment for the Benefit of Creditors (ABC)
1. Assignment Agreement
2. Distribution
3. ABC Statutory Requirements
4. Shareholder and Director Approval
5. Out of Existence
6. Thinking Strategically
1. Turning It Around
7. Key Terms
8. Case Summaries
1. CASE SUMMARY 25.1 Sherwood Partners as ABC
Assignee of Thinklink v. Lycos, 394 F.3d 1198 (9th Cir.
2005)
2. CASE SUMMARY 25.2 Moecker v. Antoine et al., 845
So.2d 904 (Fla. Ct. App. 2003)
9. Chapter Review Questions
10. Chapter Review Questions: Answers and Explanations
8. Chapter 26: Bankruptcy
1. Introduction
2. Chapter Overview
3. Bankruptcy Code
1. Automatic Stay
2. Bankruptcy Trustee
4. Chapter 7: Liquidation
1. Bankruptcy Petition and Stay
2. Order for Relief and Trustee Appointment
3. Creditors’ Meeting and the Bankruptcy Estate
4. Distribution and Discharge
5. Chapter 11: Reorganization
1. Debtor in Possession
2. Strong-Arm Clause
3. Reorganization Plan
6. Chapter 13: Individual Repayment
1. The Fraud Exception
2. Bankruptcy Abuse Prevention and Consumer Protection Act
3. Other BAPCPA Requirements
7. Thinking Strategically
1. Strategic Bankruptcy
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 26.1 In re Fehrs, 391 B.R. 53 (Bankr. D.
Idaho, 2008)
2. CASE SUMMARY 26.2 Ellison v. Commissioner of Internal
Revenue Service, 385 B.R. 158 (S.D. W. Va. 2008)
3. CASE SUMMARY 26.3 In re Richie, 353 B.R. 569 (Bankr.
E.D. Wis. 2006)
4. CASE SUMMARY 26.4 In re Jones, 392 B.R. 116 (E.D. Pa.
2008)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
5. Unit Four: Business Entities
1. Chapter 27: Choice of Business Entity and Sole Proprietorships
1. Unit Four: Business Entities
2. Introduction
3. Chapter Overview
4. Choosing a Business Entity
1. Evolution of the Entity
5. Sole Proprietorships
1. Liability of Proprietor
6. Capitalization
7. Taxation
1. Management and Organization
8. Termination
9. Franchises: A Method Rather Than an Entity
1. Franchise Agreements
2. FTC Regulation
3. State Regulation
10. Thinking Strategically
1. Umbrella Insurance
11. Key Terms
12. Case Summaries
1. CASE SUMMARY 27.1 Vernon v. Schuster, 688 N.E.2d
1172 (lll. 1997)
2. CASE SUMMARY 27.2 Nazi v. Jerry’s Oil Co. (Tenn. Ct.
App. 2014)
3. CASE SUMMARY 27.3 Clayton v. Planet Travel Holdings,
Inc., 988 N.E.2d 1110 (Ill. App. Ct. 2013)
4. CASE SUMMARY 27.4 England v. Simmons, 757 S.E.2d
111 (Ga. 2014)
13. Chapter Review Questions
14. Quick Quiz Answers
15. Chapter Review Questions: Answers and Explanations
2. Chapter 28: Partnerships
1. Introduction
2. Chapter Overview
3. General Partnership Formation
4. Overview of the Revised Uniform Partnership Act (RUPA) and
the Uniform Partnership Act (UPA)
5. General Partnerships in the Context of Business
6. The Rights of Partners
1. Right to Share Profits and Losses Equally
2. Right to Partnership Property
3. Right to Co-manage the Business
4. Right to Indemnity
5. Right to Vote
6. Right to Be Informed
7. The Duties of Partners
1. Duty of Loyalty
2. Duty of Care
3. Duty of Good Faith
8. The Partnership Agreement
1. Capital Contributions
2. Property Provision
3. Profits and Losses
4. Salary
5. Management Rights
6. Buy-Sell Agreement
9. Limited Partnerships and Family Limited Partnerships
1. Formation
2. Personal Liability of Principals
3. Capitalization
4. Taxation of Partners and Partnership
5. Management and Operation of the Partnership
6. Family Limited Partnerships
10. Limited Liability Partnerships (LLPs)
1. Formation
2. Liability
3. Taxation
4. Capitalization
11. Partner Dissociation and Partnership Dissolution
1. Dissociation under the RUPA
2. Withdrawal under the RULPA
3. Other Events of Dissolution
12. Thinking Strategically
1. Partnership Formation
13. Key Terms
14. Case Summaries
1. CASE SUMMARY 28.1 Conklin v. Holland, 138 S.W.3d
215 (Tenn. Ct. App. 2003)
2. CASE SUMMARY 28.2 Rahemtulla v. Hassam, 539 F.
Supp. 2d 755 (M.D. Pa. 2008)
3. CASE SUMMARY 28.3 In re Spree.com Corp., 2001 WL
1518242 (Bankr. E.D. Pa. 2001)
15. Chapter Review Questions
16. Quick Quiz Answers
17. Chapter Review Questions: Answers and Explanations
3. Chapter 29: Limited Liability Companies
1. Introduction
2. Chapter Overview
3. Overview of the LLC
4. Laws Governing LLCs
5. Formation of the LLC
6. Capitalization of the LLC
7. The Operating Agreement
8. Limited Liability of the Owners
9. Taxation of the LLC
10. Dissolution versus Dissociation
11. Thinking Strategically
1. Choice of Business Entity
12. Key Terms
13. Case Summaries
1. CASE SUMMARY 29.1 Kaycee Land and Livestock v.
Flahive, 46 P.3d 323, Supreme Court of Wyoming (2002)
2. CASE SUMMARY 29.2 Emprise v. Rumisek, 26 Kan. App.
2d. 760, Court of Appeals of Kansas (2009)
3. CASE SUMMARY 29.3 Lamprecht v. Jordan, LLC, 75 P.3d
743, Supreme Court of Idaho (2003)
4. CASE SUMMARY 29.4 Lieberman v. Wyoming.com, LLC,
82 P.3d 274, Supreme Court of Wyoming (2004)
14. Chapter Review Questions
15. Quick Quiz Answers
16. Chapter Review Questions: Answers and Explanations
4. Chapter 30: Corporations: Formation and Organization
1. Introduction
2. Chapter Overview
3. Corporation as an Entity
4. Classifications of Corporations
1. Privately Held versus Publicly Held
2. Other Categories
5. Formation and Start-up Issues
1. Pre-incorporation Activity: Liability of Promoters
2. Choice of State of Incorporation
3. Tax Matters
4. Initial Organizational Meeting
5. Corporate Formalities
6. Sources of Financing
1. Debt
2. Equity
3. Venture Capital Firms
4. Public Offerings
7. Corporate Veil Protection
1. Piercing the Corporate Veil
2. Personal Guarantees
8. Shareholders, Directors, and Officers
1. Shareholders
2. Board of Directors
3. Officers
9. Fiduciary Duties of Officers, Directors, and Controlling
Shareholders
1. Duty of Care
2. Business Judgment Rule
3. Duty of Loyalty
10. Thinking Strategically
1. Strengthening Your Corporate Veil
11. Key Terms
12. Case Summaries
1. CASE SUMMARY 30.1 Miner v. Fashion Enterprises, Inc.,
794 N.E.2d 902 (Ill. App. Ct. 1999)
2. CASE SUMMARY 30.2 Village at Camelback Property
Owners Association v. Carr, 538 A.2d 528 (Pa. Super. 1988)
3. CASE SUMMARY 30.3 Goodman v. Darden, Doman &
Stafford Associates 670 P.2d 648 (Wa. 1983)
4. CASE SUMMARY 30.4 In re the Dow Chemical Company
Derivative Litigation, Cons. Civil Action No. 4349-CC. (De.
Ct. Chancery 2010)
13. Chapter Review Questions
14. Quick Quiz Answers
15. Chapter Review Questions: Answers and Explanations
5. Chapter 31: Corporate Transactions: Acquisitions and Mergers
1. Introduction
2. Chapter Overview
3. Types of Corporate Transactions
4. Some Strategic Aspects of Mergers and Acquisitions
5. Successor Liability
6. Fiduciary Duties
7. Hostile Takeovers
8. Nuts and Bolts of Corporate Transactions
9. Thinking Strategically
1. Successor Liability
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 31.1 Bernard v. Kee Manufacturing Co.,
Inc., 409 So. 2d 1047 (Fla. 1982)
2. CASE SUMMARY 31.2 Smith v. Van Gorkom, 488 A.2d
858 (Del. 1985)
3. CASE SUMMARY 31.3 In re Riverstone National, Inc.
Shareholder Litigation, C.A. No. 9796-VCG (Del. Ch. 2016)
4. CASE SUMMARY 31.4 Terry v. Penn Central Corp., 668
F.2d 188 (3d Cir. 1981)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
6. Unit Five: Regulation of Securities, Corporate Governance, and Financial
Markets
1. Chapter 32: Overview of the Securities Market: Definition, Categories,
and Regulation
1. Unit Five: Regulation of Securities, Corporate Governance, and
Financial Markets
2. Introduction
3. Chapter Overview
4. Fundamentals of Securities Transactions
5. Role of the Parties in a Securities Transaction
6. Defining a Security
1. Federal Securities Law
2. Modern Application of the Howey Test
3. Family Resemblance Test
4. Defining a Seller of Securities
5. Stock Market Games
6. Crowdfunding
7. Blue-Sky Laws: State Securities Law
7. Categories of Securities
1. Equity Instruments
2. Debt Instruments
3. Peer-to-Peer Lending
8. Securities Regulation
9. The Securities and Exchange Commission
1. EDGAR
10. State Regulation of Securities
1. Risk Capital Test
11. Thinking Strategically
1. Considering Legal Issues in Financing
12. Key Terms
13. Case Summaries
1. CASE SUMMARY 32.1 Mark v. FSC Securities
Corporation, 870 F.2d 331 (6th Cir. 1989)
2. CASE SUMMARY 32.2 SEC v. ETS Payphones, Inc., 408
F.3d 727 (11th Cir. 2005)
3. CASE SUMMARY 32.3 Eberhardt v. Waters, 901 F.2d 1578
(11th Cir. 1990)
4. CASE SUMMARY 32.4 Foltz v. U.S. News and World
Report, Inc., 627 F. Supp. 1143 (D.D.C. 1986)
14. Chapter Review Questions
15. Quick Quiz Answers
16. Chapter Review Questions: Answers and Explanations
2. Chapter 33: Regulation of Issuance: The Securities Act of 1933
1. Introduction
2. Chapter Overview
3. The Securities Act of 1933
4. The Process of a Public Offering
1. Preregistration Documentation
2. Registration
3. Filing the Registration Statement and Waiting Period
4. Postregistration
5. Exemptions from Registration
1. Regulation D: Private and Small Transactions
2. Accredited Investors
3. Rule 504: Smaller Offerings
4. Rule 506: Larger Private Placements
5. Regulation A: Large Exempt Offerings
6. Disclosures Required
6. Regulation of Crowdfunding
1. Rules for Issuers
2. Rules for Investors
7. Liability for Violations
1. Section 11: Misrepresentations in the Registration Statement
2. Section 12(a)(2): Misrepresentations in Public Offerings
3. Section 17(a): Liability for Negligent Misrepresentation
4. Penalties and Remedies
8. Safe Harbors and Other Defenses
1. Safe Harbors: The Private Securities Litigation Reform Act
of 1995
9. Materiality as a Defense
1. Bespeaks Caution Doctrine
10. Thinking Strategically
1. Facebook’s Special Purpose Vehicle
11. Key Terms
12. Case Summaries
1. CASE SUMMARY 33.1 In re The Vantive Corporation
Securities Litigation, 110 F. Supp. 2d 1209 (N.D. Cal. 2000)
2. CASE SUMMARY 33.2 Mark v. FSC Securities
Corporation, 870 F.2d 331 (6th Cir. 1989)
3. CASE SUMMARY 33.3 P. Stolz Family Partnership L.P. v.
Daum, 355 F.3d 92 (2d Cir. 2004)
4. CASE SUMMARY 33.4 Panther Partners v. Ikanos, 681
F.3d 114 (2d Cir. 2012)
13. Chapter Review Questions
14. Quick Quiz Answers
15. Chapter Review Questions: Answers and Explanations
3. Chapter 34: Regulation of Trading: The Securities Exchange Act of
1934
1. Introduction
2. Chapter Overview
3. The Securities Exchange Act of 1934
4. Reporting Companies
1. Mandatory Disclosures and Records
2. Section 13: Periodic Disclosure
3. Section 14: Proxies
4. Tender Offers
5. Delisting
5. Anti-Fraud Provisions
1. Material Fact
2. Right of Private Suit
6. Insider Trading
1. Traditional Insider Trading
2. Misappropriation Theory
3. Tipper-Tippee Liability
4. Personal Benefit Test
7. Section 16 Restrictions
1. Rule 10b-5 and Section 16 in Tandem
8. Scienter
9. Thinking Strategically
1. Noncompliance
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 34.1 Dirks v. SEC, 463 U.S. 646 (1983)
2. CASE SUMMARY 34.2 United States v. Nacchio, 519 F.3d
1140 (10th Cir. 2008)
3. CASE SUMMARY 34.3 United States v. Chestman, 947
F.2d 551 (2d Cir. 2008)
4. CASE SUMMARY 34.4 SEC v. Switzer et al., 503 F. Supp.
756 (W.D. Okla. 1984)
5. CASE SUMMARY 34.5 SEC v. Obus et al., 693 F.3d 276
(2d Cir. 2012)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
4. Chapter 35: Regulation of Corporate Governance
1. Introduction
2. Chapter Overview
3. Governance of Public Companies
1. The Enron Scandal
4. The Sarbanes-Oxley Act of 2002 (SOX Act)
1. Reforms in the Accounting Industry
2. Financial Reporting
3. Corporate Governance
4. Emergency Escrow
5. The Dodd-Frank Act
1. Troubled Assets Relief Program (TARP)
2. Financial Stability Oversight Council
3. Expansion of SEC Jurisdiction and Enforcement
4. Corporate Governance
5. Dodd-Frank Whistleblower Provisions
6. Thinking Strategically
1. Cybersecurity and Disclosures
7. Key Terms
8. Case Summaries
1. CASE SUMMARY 35.1 SEC v. Platforms Wireless, 617
F.3d 1072 (9th Cir. 2010)
2. CASE SUMMARY 35.2 Leon v. IDX Systems Corporation,
464 F.3d 951 (9th Cir. 2006)
3. CASE SUMMARY 35.3 In re Huffy Corp. Securities
Litigation, 577 F. Supp. 2d 968 (D.C. S.D. Ohio 2008)
4. CASE SUMMARY 35.4 Asadi v. GE Energy, 720 F.3d 620
(5th Cir. 2013)
9. Chapter Review Questions
10. Chapter Review Questions: Answers and Explanations
5. Chapter 36: Regulation of Financial Markets
1. Introduction
2. Chapter Overview
3. Types of Financial Markets
4. Primary and Secondary Capital Markets
5. The Main Parties in Capital Markets
6. The Strategic Problem of Systemic Risk
7. Dodd-Frank
1. Expanded SEC Jurisdiction and Enforcement
2. Financial Stability Oversight Council
3. CEO Pay Ratio Disclosure Rule
4. Say-on-Pay on Executive Compensation
5. Consumer Financial Protection Bureau
8. Whistleblower Protections
9. Thinking Strategically
1. Dodd-Frank and the Moral Hazard Problem
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 36.1 MetLife, Inc. v. Financial Stability
Oversight Council, 177 F. Supp. 3d 219 (2016) (sealed
opinion)
2. CASE SUMMARY 36.2 PHH Corporation v. Consumer
Financial Protection Board, 839 F.3d 1 (D.C. Cir. 2016)
3. CASE SUMMARY 36.3 Digital Realty Trust, Inc. v.
Somers, 583 U.S. __ (2018)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
7. Unit Six: Agency and Employment Law
1. Chapter 37: Agency Formation, Categories, and Authority
1. Unit Six: Agency and Employment Law
2. Introduction
3. Chapter Overview
4. Definitions and Sources of Agency Law
1. Agency Transactions
5. Creation of an Agency Relationship
1. Manifestation and Consent
2. Control
3. Formalities
6. Classification of Agents
1. Employee Agents
2. Independent Contractors
3. Gratuitous Agents
4. Employee Agents versus Independent Contractors: Direction
and Control
7. ABC Test
1. IRS Three-Prong Test
2. Liability for Misclassification
8. Termination of an Agency Relationship
1. Express Acts
2. Operation of Law
9. Thinking Strategically
1. Limiting Liability for Misclassification
10. Key Terms
11. Case Summaries
1. CASE SUMMARY 37.1 Futrell v. Payday California, Inc. et
al., 190 Cal. App. 4th 1419 (8th Div. 2010)
2. CASE SUMMARY 37.2 Harris v. Vector Marketing Corp.,
753 F. Supp. 2d 996 (D.C. N.D. Cal. 2009)
3. CASE SUMMARY 37.3 A. Gay Jensen Farms Co. v.
Cargill, Inc., 309 N.W.2d 285 (Minn. 1981)
4. CASE SUMMARY 37.4 Estrada v. FedEx Ground Package
System, Inc., 64 Cal. Rptr. 3d 327 (2007)
12. Chapter Review Questions
13. Quick Quiz Answers
14. Chapter Review Questions: Answers and Explanations
2. Chapter 38: Duties and Liabilities of Principals and Agents
1. Introduction
2. Chapter Overview
3. Principals, Agents, and Third Parties
4. A Principal’s Liability for the Agent’s Contracts
1. Actual Authority
2. Apparent Authority
3. Ratification
5. Agent’s Contract Liability to Third Parties
1. Fully Disclosed Agency
2. Partially Disclosed Agency
3. Undisclosed Agency
6. A Principal’s Liability for the Agent’s Torts
1. Physical Injury Requirement
2. Scope of Employment
3. Intentional Torts
4. Negligent Hiring Doctrine
5. Independent Contractors
7. Thinking Strategically
1. Employee Authority and Supplier Liability
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 38.1 Hannington v. University of
Pennsylvania, 809 A.2d 406 (Pa. Super. Ct. 2002)
2. CASE SUMMARY 38.2 Estrada v. FedEx Ground Package
System, Inc., 64 Cal. Rptr. 3d 327 (2007)
3. CASE SUMMARY 38.3 Edgewater Motels, Inc. v. A. J.
Gatzke and Walgreen Company, 277 N.W.2d 11 (Minn.
1979)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
3. Chapter 39: Employment at Will
1. Introduction
2. Chapter Overview
3. Employment-at-Will Doctrine
1. Express Contracts
2. Labor Contracts
4. Common Law Exceptions
1. Public Policy Exception
2. Implied Contracts
3. Covenant of Good Faith and Fair Dealing
4. Common Law Tort-Based Exceptions
5. Statutory Protections for At-Will Employees
1. False Claims Act
2. State Laws
6. Whistleblower Statutes
1. State Whistleblower Laws
2. Separate and Independent Defense
7. Thinking Strategically
1. Avoiding Implied Contracts
8. Key Terms
9. Case Summaries
1. CASE SUMMARY 39.1 Brundridge v. Fluor Federal
Services, Inc., 164 Wash. 2d 432 (2008)
2. CASE SUMMARY 39.2 Haynes v. Zoological Society of
Cincinnati, 652 N.E.2d 948 (Ohio Ct. App. 1995)
3. CASE SUMMARY 39.3 Gardner v. Loomis Armored, Inc.,
913 P.2d 377 (Wash. 1996)
10. Chapter Review Questions
11. Quick Quiz Answers
12. Chapter Review Questions: Answers and Explanations
4. Chapter 40: Employment Regulation and Labor Law
1. Introduction
2. Chapter Overview
3. The Fair Labor Standards Act and State Laws
1. Minimum Wage
2. Maximum Workweek and Overtime Compensation
3. Child Labor
4. State Laws
4. Retirement and Health Care Benefits
1. Regulation of Pensions and Retirement Accounts
2. Social Security Act
3. Health Care Benefits
5. Workers’ Compensation and Unemployment Benefits
1. Defenses to Workers’ Compensation Claims
2. Intentional Actions or Recklessness of the Employer
3. Course of Employment
4. Regulation of Workplace Safety
5. Unemployment Compensation
6. The Family and Medical Leave Act (FMLA)
1. FMLA Scope and Coverage
2. FMLA Protections
3. Key Employees
7. Employee Privacy
1. Monitoring of E-mail, Internet Usage, and Social Media
2. Telephone and Voicemail
3. Drug and Alcohol Testing
4. Polygraph Testing
8. Labor Laws and Union Membership
1. Labor Law
2. Labor Management Relations Act
3. Labor-Management Reporting and Disclosure Act
4. Union Formation
5. Collective Bargaining
6. Grievances
7. Strikes and Other Work Stoppages
9. Employment Licensing Requirements
10. Thinking Strategically
1. Employee Classification
11. Key Terms
12. Case Summaries
1. CASE SUMMARY 40.1 Sisco v. Quicker Recovery, Inc.,
180 P.3d 46 (Or. Ct. App. 2008)
2. CASE SUMMARY 40.2 Sullivan v. U.S. Postal Service,
2011-3220 (Fed. Cir. 2012)
3. CASE SUMMARY 40.3 Bonilla v. Baker Concrete
Construction, 487 F.3d 1340 (2007)
13. Chapter Review Questions
14. Quick Quiz Answers
15. Chapter Review Questions: Answers and Explanations
5. Chapter 41: Employment Discrimination
1. Introduction
2. Chapter Overview
3. Definitions and Sources of Law
1. Equal Employment Opportunity Commission (EEOC)
2. Asserting a Discrimination Claim
4. Primary Federal Workplace Antidiscrimination Statutes
1. Prescott v. WidgetCo
2. Title VII
3. Protected Classes
4. Sexual Orientation
5. Theories of Discrimination
5. Sexual Harassment
1. Theories of Sexual Harassment
2. Same-Sex Harassment
3. Vicarious Liability of Employers
4. Strict Liability for Harassment by Supervisor
5. Impact of #MeToo Movement
6. Remedies
7. Age Discrimination
1. Substantially Younger Requirement
8. Americans with Disabilities Act
1. Documented-Disability Requirement
2. ADA Amendments Act of 2008
3. “Regarded-as” Test
4. Qualified Individual
9. Equal Pay Act
1. Lilly Ledbetter Fair Pay Act of 2009
10. Employer Defenses
1. Faragher/Ellerth Defense
2. Business Necessity Defense
3. Bona Fide Occupation Qualification
4. Seniority
5. Employee Misconduct
11. Affirmative Action Programs
1. Legality
12. State Antidiscrimination Statutes
13. Thinking Strategically
1. Proactive Harassment Prevention Framework
14. Key Terms
15. Case Summaries
1. CASE SUMMARY 41.1 Dumas v. Union Pacific Railroad
Co., 294 Fed. App. 822 (5th Cir. 2008)
2. CASE SUMMARY 41.2 Harding v. Careerbuilder, LLC, 168
Fed. App. 535 (3d Cir. 2006)
3. CASE SUMMARY 41.3 U.S. Airways, Inc. v. Barnett, 535
U.S. 391 (2002)
4. CASE SUMMARY 41.4 Aquino v. Honda of America, Inc.,
158 F. App’x 667 (6th Cir. 2005)
16. Chapter Review Questions
17. Quick Quiz Answers
18. Chapter Review Questions: Answers and Explanations
8. Unit Seven: Regulatory Environment of Business
1. Chapter 42: Torts and Products Liability
1. Unit Seven: Regulatory Environment of Business
2. Introduction
3. Chapter Overview
4. Overview of Tort Law
1. Sources of Law
2. Products Liability
5. Tort Classification
6. Intentional Business-Related Torts
1. Defamation
2. Public Figure Standard
3. Privilege Defenses to Defamation
4. Trade Libel and Product Disparagement Laws
5. Fraudulent Misrepresentation
6. Negligent Misrepresentation
7. False Imprisonment
7. Business Competition Torts
1. Tortious Interference with Existing Contractual Relationship
2. Tortious Interference with Prospective Advantage
8. Negligence
1. Elements of Negligence
9. Defenses to Negligence Claims
1. Comparative Negligence
2. Assumption of the Risk
10. Strict Liability Torts
1. Abnormally Dangerous Activities
11. Products Liability
1. Negligence
2. Warranty
3. Strict Liability
4. Causation and Damages
5. Seller’s Defenses
12. Thinking Strategically
1. Managing Risk through Liability Waivers
13. Key Terms
14. Case Summaries
1. CASE SUMMARY 42.1 Mattison v. Johnston, 730 P.2d 286
(Ariz. App. 1986)
2. CASE SUMMARY 42.2 Maher v. Best Western Inn, 717 So.
2d 97 (Fla. App. 5th Dist. 1998)
3. CASE SUMMARY 42.3 Wurtzel v. Starbucks Coffee Co.,
257 F. Supp. 2d 520 (E.D.N.Y. 2003)
4. CASE SUMMARY 42.4 Coker v. Wal-Mart Stores, Inc., 642
So. 2d 774 (Fla. App. 1st Dist. 1994)
5. CASE SUMMARY 42.5 Burton v. MDC PGA Plaza Corp.,
78 So. 3d 732 (Fla. App. 4th Dist. 2012)
15. Chapter Review Questions
16. Quick Quiz Answers
17. Chapter Review Questions: Answers and Explanations
2. Chapter 43: Administrative Law
1. Introduction
2. Chapter Overview
3. Administrative Law in a Business Context
4. Sources of Administrative Law
1. The U.S. Constitution
2. Enabling Statutes
3. The Administrative Procedure Act (APA)
4. Common Law
5. Primary Functions of Administrative Agencies
1. Rulemaking
2. Licensing
3. Investigation and Enforcement
4. Adjudications
5. Administering Public Benefits
6. Limits on Administrative Agencies
1. Legislative Oversight
2. Executive Control
3. Judicial Review
4. Public Accountability
7. State Administrative Law
8. Thinking Strategically
1. Responding to an Administrative Investigation
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 43.1 American Medical Association v.
United States Internal Revenue Service, 887 F.2d 760 (7th
Cir. 1989)
2. CASE SUMMARY 43.2 Federal Express Corporation v.
Holowecki, 128 S. Ct. 1147 (2008)
3. CASE SUMMARY 43.3 Ranchers Cattlemen Action Legal
Fund United Stockgrowers of America v. U.S. Department
of Agriculture, 499 F.3d 1108 (9th Cir. 2007)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
3. Chapter 44: Consumer Protection
1. Introduction
2. Chapter Overview
3. State Lemon Laws
4. Deceptive Trade Practices
1. False Advertising
2. Telemarketing and the Do Not Call Registry
3. CAN-SPAM Act
4. Consumer Review Fairness Act of 2016
5. Food and Drug Safety
6. Automobiles
1. Odometers
7. Consumer Debt
1. Credit Transactions
2. Debt Collection
8. Thinking Strategically
1. Negative Online Reviews
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 44.1 Phoenix of Broward, Inc. v.
McDonald’s Corp., 489 F.3d 1156 (11th Cir. 2007)
2. CASE SUMMARY 44.2 Barrer v. Chase Bank USA, 566
F.3d 883 (9th Cir. 2009)
3. CASE SUMMARY 44.3 Myers v. LHR, Inc., 543 F. Supp.
2d 1215 (S.D. Cal. 2008)
4. CASE SUMMARY 44.4 U.S. v. Facebook, Inc., Case No.
19-cv-2184 (D.D.C. 2019)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
4. Chapter 45: Criminal Law and Procedure
1. Introduction
2. Chapter Overview
3. Criminal Law versus Criminal Procedure
4. Criminal Law and Civil Law
1. Burden of Proof
5. Criminal Liability
1. Act Requirement
2. Mental Requirement
3. Defenses
4. Types of Crimes
6. Criminal Law and Business Entities
1. Individual Liability for Business Crimes
2. Responsible Corporate Officers: The Park Doctrine
7. White-Collar Crime
1. Fraud
2. Ponzi Schemes
3. Conspiracy
4. Obstruction of Justice
5. Racketeer Influenced and Corrupt Organizations Act
6. Securities Crimes
7. Foreign Corrupt Practices Act
8. Computer Fraud and Abuse Act
8. The Criminal Justice System
1. Investigation
2. Adjudication
9. Criminal Procedure
1. Searches and Arrest
2. Expectation of Privacy
3. Plain View Doctrine
4. Search Incident to Arrest
5. Search of Business Premises
6. Self-Incrimination
7. Production of Business Records
10. Exclusionary Rule
1. Good Faith Exception
11. Thinking Strategically
1. Developing Corporate Compliance Programs
12. Key Terms
13. Case Summaries
1. CASE SUMMARY 45.1 Bear Stearns & Co. v. Wyler, 182 F.
Supp. 2d 679 (N.D. Ill. 2002)
2. CASE SUMMARY 45.2 Lamb v. Philip Morris, Inc., 915
F.2d 1024 (6th Cir. 1990)
3. CASE SUMMARY 45.3 United States v. Osborn, No. 3:12-
cr-00047-M (N.D. Tex. 2012)
4. CASE SUMMARY 45.4 State v. Yenzer, 195 P.3d 271 (Kan.
Ct. App. 2008)
14. Chapter Review Questions
15. Quick Quiz Answers
16. Chapter Review Questions: Answers and Explanations
5. Chapter 46: Insurance Law
1. Introduction
2. Chapter Overview
3. The Insurance Business
4. Types of Insurance Policies
5. Insurance Contracts
6. Insurance Pricing
7. Insurance Regulation
8. Thinking Strategically
1. Insurer’s Duty to Settle a Claim in Good Faith
9. Key Terms
10. Case Summaries
1. CASE SUMMARY 46.1 Balentine v. New Jersey Insurance
Underwriting Association, 966 A.2d 1098 (N.J. Super. Ct.
App. Div. 2009)
2. CASE SUMMARY 46.2 Eyeblaster, Inc. v. Federal
Insurance Co., 613 F.3d 797 (8th Cir. 2010)
3. CASE SUMMARY 46.3 Papudesu v. Medical Malpractice
Joint Underwriting Association of Rhode Island, 18 A.3d
495 (R.I. 2011)
11. Chapter Review Questions
12. Quick Quiz Answers
13. Chapter Review Questions: Answers and Explanations
6. Chapter 47: Environmental Law
1. Introduction
2. Chapter Overview
3. Impact of Environmental Law on Business
4. Origins and Sources of Environmental Law
5. Government Enforcement
6. Citizen Suit Provisions and Watchdog Groups
7. National Environmental Policy Act
1. NEPA Coverage and Procedures
2. Procedural Steps
8. The Clean Air Act
1. Stationary Sources of Air Pollution
2. Market-Based Approaches
3. Economic Incentive Theory
4. Mobile Sources of Air Pollution
9. Water Pollution Control
1. The Clean Water Act
2. Water Quality Regulation
3. Oil Spills
4. Drinking Water
10. Regulation of Solid Waste and Hazardous Materials Disposal
1. Resource Conservation and Recovery Act
2. Toxic Substances Control Act
11. Comprehensive Environmental Response, Compensation, and
Liability Act
1. Superfund
2. Removal and Remedial Responses
3. Liability of Principally Responsible Parties (PRPs)
4. Consent Decrees
5. Allocation of Liability
6. Defenses to Liability
12. Thinking Strategically
1. Avoiding Environmental Liability in Land Acquisitions
13. Key Terms
14. Case Summaries
1. CASE SUMMARY 47.1 Sierra Club v. El Paso Gold Mines,
Inc., 421 F.3d 1133 (10th Cir. 2005)
2. CASE SUMMARY 47.2 United States v. Southeastern
Pennsylvania Transportation Authority, 235 F.3d 817 (3d
Cir. 2000)
3. CASE SUMMARY 47.3 William Paxton v. Wal-Mart Stores,
Inc., 176 Ohio App. 3d 364 (2008)
4. CASE SUMMARY 47.4 Beverly E. Black and James A.
Black v. George Weston & Stroehmann Bakeries, Inc., U.S.
Dist. Ct. (W.D.N.Y. 2008)
5. CASE SUMMARY 47.5 No Spray Coalition, Inc. v. City of
New York, 2000 WL 1401458 (S.D.N.Y. 2000)
15. Chapter Review Questions
16. Quick Quiz Answers
17. Chapter Review Questions: Answers and Explanations
9. Unit Eight: Property
1. Chapter 48: Personal Property, Real Property, and Land Use Law
1. Unit Eight: Property
2. Introduction
3. Chapter Overview
4. Definition and Categories of Property
1. Tangible Property
5. Bailments
1. Leased Personal Property: UCC Article 2A
6. Real Property
1. Ownership Rights
2. Forms of Ownership Interests in Real Property
3. Sale of Real Property
4. Adverse Possession
7. Landlord-Tenant Law
1. Tenant Rights and Remedies
2. Landlord Rights and Remedies
8. Assignment and Subletting
9. Governmental Regulation of Land Use
1. Zoning Ordinances
2. Environmental Regulations
10. Eminent Domain
1. Procedure
2. Public Use
11. Thinking Strategically
1. Leveraging a Commercial Lease
12. Key Terms
13. Case Summaries
1. CASE SUMMARY 48.1 Singer Co. v. Stott & Davis Motor
Express, Inc. and Stoda Corp., 79 A.2d 227 (N.Y. App. Div.
1981)
2. CASE SUMMARY 48.2 Chaplin v. Sanders, 676 P.2d 431
(Wash. 1984)
3. CASE SUMMARY 48.3 Dayenian v. American National
Bank and Trust Co. of Chicago, 414 N.E.2d 1199 (Ill. App.
Ct. 1980)
4. CASE SUMMARY 48.4 Amoco Oil Co. v. Jones, 467
N.W.2d 357 (Minn. Ct. App. 1991)
5. CASE SUMMARY 48.5 Automobile Supply Co. v. Scene-
In-Action, 172 N.E. 35 (III. 1930)
14. Chapter Review Questions
15. Quick Quiz Answers
16. Chapter Review Questions: Answers and Explanations
2. Chapter 49: Wills, Trusts, and Estates
1. Introduction
2. Chapter Overview
3. Key Terms in Wills, Trusts, and Estates
1. Decedent
2. Estate
3. Last Will and Testament (Will)
4. Codicil
5. Executor
6. Intestacy
4. Freedom of Disposition
5. Probate
6. The Strategic Advantages of Trusts
1. Trusts
2. Probate Avoidance: Strategic Aspects of Trusts
7. Death Taxes
8. The Uniform Codes and the Restatements
9. Thinking Strategically
1. Prince’s Vault
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The “Essay on Man” has been praised and admired by men of the
most opposite beliefs, and men of no belief at all. Bishops and free-
thinkers have met here on a common ground of sympathetic
approval. And, indeed, there is no particular faith in it. It is a droll
medley of inconsistent opinions. It proves only two things beyond a
question: that Pope was not a great thinker; and that wherever he
found a thought, no matter what, he would express it so tersely, so
clearly, and with such smoothness of versification, as to give it an
everlasting currency. Hobbes’s unwieldy “Leviathan,” left stranded on
the shore of the last age and nauseous with the stench of its
selfishness—from this Pope distilled a fragrant oil with which to fill
the brilliant lamps of his philosophy, lamps like those in the tombs of
alchemists, that go out the moment the healthy air is let in upon
them. The only positive doctrine in the poem is the selfishness of
Hobbes set to music, and the pantheism of Spinoza brought down
from mysticism to commonplace. Nothing can be more absurd than
many of the dogmas taught in the “Essay on Man.”

The accuracy on which Pope prided himself, and for which he is


commended, was not accuracy of thought so much as of expression.
But the supposition is that in the “Essay on Man” Pope did not know
what he was writing himself. He was only the condenser and
epigrammatizer of Bolingbroke—a fitting St. John for such a gospel.
Or if he did know, we can account for the contradictions by
supposing that he threw in some of the commonplace moralities to
conceal his real drift. Johnson asserts that Bolingbroke in private
laughed at Pope’s having been made the mouthpiece of opinions
which he did not hold. But this is hardly probable when we consider
the relations between them. It is giving Pope altogether too little
credit for intelligence to suppose that he did not understand the
principles of his intimate friend.

Dr. Warburton makes a rather lame attempt to ward off the charge of
Spinozism from the “Essay on Man.” He would have found it harder
to show that the acknowledgment of any divine revelation would not
overthrow the greater part of its teachings. If Pope intended by his
poem all that the Bishop takes for granted in his commentary, we
must deny him what is usually claimed as his first merit—clearness.
If we did not, we grant him clearness as a writer at the expense of
sincerity as a man. Perhaps a more charitable solution of the
difficulty is that Pope’s precision of thought was not equal to his
polish of style.

But it is in his “Moral Essays” and part of his “Satires” that Pope
deserves the praise which he himself desired—

Happily to steer
From grave to gay, from lively to severe.
Correct with spirit, eloquent with ease,
Intent to reason, or polite to please.

Here Pope must be allowed to have established a style of his own, in


which he is without a rival. One can open upon wit and epigram at
every page.

In his epistle on the characters of woman, no one who has ever


known a noble woman will find much to please him. The climax of his
praise rather degrades than elevates:

O blest in temper, whose unclouded ray


Can make to-morrow cheerful as to-day,
She who can love a sister’s charms, or hear
Sighs for a daughter with unwounded ear,
She who ne’er answers till a husband cools,
Or if she rules him, never shows she rules,
Charms by accepting, by submitting sways,
Yet has her humor most when she obeys;
Let fops or fortune fly which way they will,
Disdains all loss of tickets, or codille,
Spleen, vapors, or smallpox, above them all;
And mistress of herself though china fall.
The last line is very witty and pointed; but consider what an ideal of
womanly nobleness he must have had who praises his heroine for
not being jealous of her daughter.

It is very possible that the women of Pope’s time were as bad as


they could be, but if God made poets for anything it was to keep
alive the traditions of the pure, the holy, and the beautiful. I grant the
influence of the age, but there is a sense in which the poet is of no
age, and Beauty, driven from every other home, will never be an
outcast and a wanderer while there is a poet-nature left; will never
fail of the tribute at least of a song. It seems to me that Pope had a
sense of the nice rather than of the beautiful. His nature delighted in
the blemish more than in the charm.

Personally, we know more about Pope than about any of our poets.
He kept no secret about himself. If he did not let the cat out of the
bag, he always contrived to give her tail a pinch so that we might
know she was there. In spite of the savageness of his satires, his
disposition seems to have been a truly amiable one, and his
character as an author was as purely fictitious as his style. I think
that there was very little real malice in him.

A great deal must be allowed to Pope for the age in which he lived,
and not a little, I think, for the influence of Swift. In his own province
he still stands unapproachably alone. If to be the greatest satirist of
individual men rather than of human nature; if to be the highest
expression which the life of court and the ball-room has ever found in
verse; if to have added more phrases to our language than any other
but Shakspeare; if to have charmed four generations makes a man a
great poet, then he is one. He was the chief founder of an artificial
style of writing which in his hand was living and powerful because he
used it to express artificial modes of thinking and an artificial state of
society. Measured by any high standard of imagination, he will be
found wanting; tried by any test of wit, he is unrivaled.

To what fatuities his theory of correctness led in the next generation,


when practised upon by men who had not his genius, I shall
endeavor to show in my next lecture.
LECTURE X
POETIC DICTION

(Friday Evening, February 9, 1855)

X
No one who has read any early poems, of whatever nation, can have
failed to notice a freshness in the language—a sort of game flavor,
as it were—that gradually wastes out of it when poetry becomes
domesticated, so to speak, and has grown to be a mere means of
amusement both to writers and readers, instead of answering a
deeper necessity in their natures. Our Northern ancestors
symbolized the eternal newness of song by calling it the Present,
and its delight by calling it the drink of Odin.

There was then a fierce democracy of words; no grades had then


been established, and no favored ones advanced to the Upper
House of Poetry. Men had a meaning, and so their words had to
have one, too. They were not representatives of value, but value
itself. They say that Valhalla was roofed with golden shields; that
was what they believed, and in their songs they called them golden
shingles. We should think shields the more poetical word of the two;
but to them the poetry was in the thing, and the thought of it and the
phrase took its life and meaning from them.

It is one result of the admixture of foreign words in our language that


we use a great many phrases without knowing the force of them.
There is a metaphoric vitality hidden in almost all of them, and we
talk poetry as Molière’s citizen did prose, without ever suspecting it.
Formerly men named things; now we merely label them to know
them apart. The Vikings called their ships sea-horses, just as the
Arabs called their camels ships of the desert. Capes they called sea-
noses, without thinking it an undignified term which the land would
resent. And still, where mountains and headlands have the luck to be
baptized by uncultivated persons, Fancy stands godmother. Old
Greylock, up in Berkshire, got his surname before we had State
geologists or distinguished statesmen. So did Great Haystack and
Saddle-Mountain. Sailors give good names, if they have no
dictionary aboard, and along our coasts, here and there, the word
and the thing agree, and therefore are poetical. Meaning and poetry
still cling to some of our common phrases, and the crow-foot,
mouse-ear, goat’s-beard, day’s-eye, heart’s-ease, snow-drop, and
many more of their vulgar little fellow-citizens of the wood and
roadsides are as happy as if Linnæus had never been born. Such
names have a significance even to one who has never seen the
things they stand for, but whose fancy would not be touched about a
pelargonium unless he had an acquired sympathy with it. Our
“cumulus” language, heaped together from all quarters, is like the
clouds at sunset, and every man finds something different in a
sentence, according to his associations. Indeed, every language that
has become a literary one may be compared to a waning moon, out
of which the light of beauty fades more and more. Only to poets and
lovers does it repair itself from its luminous fountains.

The poetical quality of diction depends on the force and intensity of


meaning with which it is employed. We are all of us full of latent
significance, and let a poet have but the power to touch us, we
forthwith enrich his word with ourselves, pouring into his verse our
own lives, all our own experience, and take back again, without
knowing it, the vitality which we had given away out of ourselves. Put
passion enough into a word, and no matter what it is it becomes
poetical; it is no longer what it was, but is a messenger from original
man to original man, an ambassador from royal Thee to royal Me,
and speaks to us from a level of equality. Pope, who did not scruple
to employ the thoughts of Billingsgate, is very fastidious about the
dress they come in, and claps a tawdry livery-coat on them, that they
may be fit for the service of so fine a gentleman. He did not mind
being coarse in idea, but it would have been torture to him to be
thought commonplace. The sin of composition which he dreaded
was,

Lest ten low words should creep in one dull line.

But there is no more startling proof of the genius of Shakspeare than


that he always lifts the language up to himself, and never thinks to
raise himself atop of it. If he has need of the service of what is called
a low word, he takes it, and it is remarkable how many of his images
are borrowed out of the street and the workshop. His pen ennobled
them all, and we feel as if they had been knighted for good service in
the field. Shakspeare, as we all know (for does not Mr. Voltaire say
so?), was a vulgar kind of fellow, but somehow or other his genius
will carry the humblest things up into the air of heaven as easily as
Jove’s eagle bore Ganymede.

Whatever is used with a great meaning, and conveys that meaning


to others in its full intensity, is no longer common and ordinary. It is
this which gives their poetic force to symbols, no matter how low
their origin. The blacksmith’s apron, once made the royal standard of
Persia, can fill armies with enthusiasm and is as good as the
oriflamme of France. A broom is no very noble thing in itself, but at
the mast-head of a brave old De Ruyter, or in the hands of that awful
shape which Dion the Syracusan saw, it becomes poetical. And so
the emblems of the tradesmen of Antwerp, which they bore upon
their standards, pass entirely out of the prosaic and mechanical by
being associated with feelings and deeds that were great and
momentous.

Mr. Lowell here read a poem by Dr. Donne entitled “The Separation.”
As respects Diction, that becomes formal and technical when poetry
has come to be considered an artifice rather than an art, and when
its sole object is to revive certain pleasurable feelings already
conventional, instead of originating new sources of delight. Then it is
truly earth to earth; dead language used to bury dead emotion in.
This kind of thing was carried so far by the later Scandinavian poets
that they compiled a dictionary of the metaphors used by the elder
Skalds (whose songs were the utterance of that within them which
would be spoken), and satisfied themselves with a new arrangement
of them. Inspiration was taught, as we see French advertised to be,
in six lessons.

In narrative and descriptive poetry we feel that proper keeping


demands a certain choice and luxury of words. The question of
propriety becomes one of prime importance here. Certain terms
have an acquired imaginative value from the associations they
awake in us. Certain words are more musical than others. Some
rhymes are displeasing; some measures wearisome. Moreover,
there are words which have become indissolubly entangled with
ludicrous or mean ideas. Hence it follows that there is such a thing
as Poetic Diction, and it was this that Milton was thinking of when he
spoke of making our English “search her coffers round.”

I will illustrate this. Longfellow’s “Evangeline” opens with a noble


solemnity:

This is the forest primeval; the murmuring pines and the hemlocks,
Bearded with moss and in garments green, indistinct in the twilight,
Stand like the Druids of eld, with voices sad and prophetic,
Stand like harpers hoar, with beards that rest on their bosoms.
Loud from its rocky caverns the deep-voiced neighboring ocean
Speaks, and in accents disconsolate answers the wail of the forest.

There is true feeling here, and the sigh of the pines is heard in the
verses. I can find only one epithet to hang a criticism on, and that is
the “wail of the forest” in the last line, which is not in keeping with the
general murmur. Now I do not suppose that the poet turned over any
vocabulary to find the words he wanted, but followed his own poetic
instinct altogether in the affair. But suppose for a moment, that
instead of being a true poet, he had been only a gentleman
versifying; suppose he had written, “This is the primitive forest.” The
prose meaning is the same, but the poetical meaning, the music, and
the cadence would be gone out of it, and gone forever. Or suppose
that, instead of “garments green,” he had said “dresses green”; the
idea is identical, but the phrase would have come down from its
appropriate remoteness to the milliner’s counter. But not to take such
extreme instances, only substitute instead of “harpers hoar,” the
words “harpers gray,” and you lose not only the alliteration, but the
fine hoarse sigh of the original epithet, which blends with it the
general feeling of the passage. So if you put “sandy beaches” in the
place of “rocky caverns,” you will not mar the absolute truth to
nature, but you will have forfeited the relative truth to keeping.

When Bryant says so exquisitely,

Painted moths
Have wandered the blue sky and died again,

we ruin the poetry, the sunny spaciousness of the image, without


altering the prose sense, by substituting

Have flown through the clear air.

But the words “poetic diction” have acquired a double meaning, or


perhaps I should say there are two kinds of poetic diction, the one
true and the other false, the one real and vital, the other mechanical
and artificial. Wordsworth for a time confounded the two together in
one wrathful condemnation, and preached a crusade against them
both. He wrote, at one time, on the theory that the language of
ordinary life was the true dialect of poetry, and that one word was as
good as another. He seemed even to go farther and to adopt the
Irishman’s notion of popular equality, that “one man is as good as
another, and a dale better, too.” He preferred, now and then, prosaic
words and images to poetical ones. But he was not long in finding
his mistake and correcting it. One of his most tender and pathetic
poems, “We are Seven,” began thus in the first edition:

A simple child, dear brother Jim.

All England laughed, and in the third edition Wordsworth gave in and
left the last half of the line blank, as it has been ever since. If the
poem had been a translation from the Turkish and had begun,

A simple child, dear Ibrahim,

there would have been nothing unpoetical in it; but the “dear brother
Jim,” which would seem natural enough at the beginning of a familiar
letter, is felt to be ludicrously incongruous at the opening of a poem.

To express a profound emotion, the simpler the language and the


less removed from the ordinary course of life the better. There is a
very striking example of this in Webster’s tragedy of “The Duchess of
Malfy.” The brother of the Duchess has procured her murder, and
when he comes in and sees the body he merely says:

“Cover her face; mine eyes dazzle; she died young.”

Horror could not be better expressed than in these few words, and
Webster has even taken care to break up the verse in such a way
that a too entire consciousness of the metre may not thrust itself
between us and the bare emotion he intends to convey.
In illustration, Mr. Lowell quoted from Shakspeare (“Henry V”),
Marlowe, Chapman, Dunbar, Beaumont and Fletcher, Waller, Young,
and Cawthorn.

These men [the poets of the eighteenth century] were perfectly


conscious of the fact that poetry is not produced under an ordinary
condition of the mind, and accordingly, when they begin to grind their
barrel-organs, they go through the ceremony of invoking the Muse,
talk in the blandest way of divine rages and sacred flames, and one
thing or another, and ask for holy fire to heat their little tea-urns with
as coolly as one would borrow a lucifer. They appeal ceremoniously
to the “sacred Nine,” when the only thing really necessary to them
was the ability to count as high as the sacred ten syllables that
constituted their verse. If the Muse had once granted their prayer, if
she had once unveiled her awful front to the poor fellows, they would
have hidden under their beds, every man John of them.

The eighteenth century produced some true poets, but almost all,
even of them, were infected by the prevailing style. I cannot find any
name that expresses it better than the “Dick Swiveller style.” As Dick
always called wine the “rosy,” sleep the “balmy,” and so forth, so did
these perfectly correct gentlemen always employ either a fluent
epithet or a diffuse paraphrasis to express the commonest emotions
or ideas. If they wished to say tea they would have done it thus:

Of China’s herb the infusion hot and mild.

Coffee would be

The fragrant juice of Mocha’s kernel gray,

or brown or black, as the rhyme demanded. A boot is dignified into

The shining leather that the leg encased.


Wine is

The purple honor of th’ ambrosial vine.

All women are “nymphs,” carriages are “harnessed pomps,” houses


are sumptuous or humble “piles,” as the case may be, and
everything is purely technical. Of nature there seems to have been
hardly a tradition.

But instead of attempting to describe in prose the diluent diction


which passed for poetic under the artificial system—which the
influence of Wordsworth did more than anything else to abolish and
destroy—I will do it by a few verses in the same style. Any subject
will do—a Lapland sketch, we will say:

Where far-off suns their fainter splendors throw


O’er Lapland’s wastes of uncongenial snow,
Where giant icebergs lift their horrent spires
And the blank scene a gelid fear expires,
Where oft the aurora of the northern night
Cheats with pale beams of ineffectual light,
Where icy Winter broods o’er hill and plain,
And Summer never comes, or comes in vain;
Yet here, e’en here, kind Nature grants to man
A boon congenial with her general plan.
Though no fair blooms to vernal gales expand,
And smiling Ceres shuns th’ unyielding land,
Behold, even here, cast up a monstrous spoil,
The sea’s vast monarch yields nutritious oil,
Escaped, perchance, from where the unfeeling crews
Dart the swift steel, and hempen coils unloose,
He whirls impetuous through the crimson tide,
Nor heeds the death that quivers in his side;
Northward he rushes with impulsive fin,
Where shores of crystal groan with ocean’s din,
Shores that will melt with pity’s glow more soon
Than the hard heart that launched the fierce harpoon.
In vain! he dies! yet not without avail
The blubbery bulk between his nose and tail.
Soon shall that bulk, in liquid amber stored,
Shed smiling plenty round some Lapland board.
Dream not, ye nymphs that flutter round the tray
When suns declining shut the door of day,
While China’s herb, infused with art, ye sip,
And toast and scandal share the eager lip.
Dream not to you alone that Life is kind,
Nor Hyson’s charms alone can soothe the mind;
If you are blest, ah, how more blest is he
By kinder fate shut far from tears and tea,
Who marks, replenished by his duteous hand,
Dark faces oleaginously expand;
And while you faint to see the scalding doom
Invade with stains the pride of Persia’s loom,
Happier in skins than you in silks perhaps,
Deals the bright train-oil to his little Lap’s.
LECTURE XI
WORDSWORTH

(Tuesday Evening, February 13, 1855)

XI
A few remarks upon two of the more distinguished poets of the
eighteenth century will be a fitting introduction to Wordsworth, and,
indeed, a kind of commentary on his poetry. Of two of these poets
we find very evident traces in him—Thomson and Cowper—of the
one in an indiscriminating love of nature, of the other in a kind of
domestic purity, and of both in the habit of treating subjects
essentially prosaic, in verse; whence a somewhat swelling wordiness
is inevitable.

Thomson had the good luck to be born in Scotland, and to be


brought up by parents remarkable for simplicity and piety of life.
Living in the country till he was nearly twenty, he learned to love
natural beauty, and must have been an attentive student of scenery.
That he had true instincts in poetry is proved by his making Milton
and Spenser his models. He was a man of force and originality, and
English poetry owes him a large debt as the first who stood out both
in precept and practice against the vicious artificial style which then
reigned, and led the way back to purer tastes and deeper principles.
He was a man perfectly pure in life; the associate of eminent and
titled personages, without being ashamed of the little milliner’s shop
of his sisters in Edinburgh; a lover of freedom, and a poet who never
lost a friend, nor ever wrote a line of which he could repent. The
licentiousness of the age could not stain him. His poem of “Winter”
was published a year before the appearance of the “Dunciad.”

Thomson’s style is not equal to his conceptions. It is generally


lumbering and diffuse, and rather stilted than lofty. It is very likely that
his Scotch birth had something to do with this, and that he could not
write English with that unconsciousness without which elegance is
out of the question—for there can be no true elegance without
freedom. Burns’s English letters and poems are examples of this.

But there are passages in Thomson’s poems full of the truest


feelings for nature, and gleams of pure imagination.

Mr. Lowell here read a passage from “Summer,” which, he said,


illustrated better than almost any other his excellences and defects.
It is a description of a storm, beginning:

At first heard solemn o’er the verge of Heaven


The tempest growls.

This is fustian patched with cloth of gold. The picture, fine as it is in


parts, is too much frittered with particulars. The poet’s imagination
does not seem powerful enough to control the language. There is no
autocratic energy, but the sentences are like unruly barons, each
doing what he likes in his own province. Many of them are prosaic
and thoroughly unpicturesque, and come under the fatal
condemnation of being flat. Yet throughout the passage,

The unconquerable genius struggles through

half-suffocated in a cloud of words.

But the metre is hitchy and broken, and seems to have no law but
that of five feet to the verse. There is no Pegasean soar, but the
unwieldy gallop of an ox. The imagination, which Thomson
undoubtedly had, contrasted oddly with the lumbering vehicle of his
diction. He takes a bushel-basket to bring home an egg in. In him
poetry and prose entered into partnership, and poetry was the
sleeping partner who comes down now and then to see how the
business is getting on. But he had the soul of a poet, and that is the
main thing.

Of Gray and Collins there is no occasion to speak at length in this


place. Both of them showed true poetic imagination. In Gray it was
thwarted by an intellectual timidity that looked round continually for
precedent; and Collins did not live long enough to discharge his mind
thoroughly of classic pedantry; but both of them broke away from the
reigning style of decorous frigidity. Collins’s “Ode to Evening” is
enough to show that he had a sincere love of nature—but generally
the scenery of both is borrowed from books.

In Cowper we find the same over-minuteness in describing which


makes Thomson wearisome, but relieved by a constant vivacity of
fancy which in Thomson was entirely wanting. But Cowper more
distinctly preluded Wordsworth in his delight in simple things, in
finding themes for his song in the little incidents of his own fireside
life, or his daily walks, and especially in his desire to make poetry a
means of conveying moral truth. The influence of Cowper may be
traced clearly in some of Wordsworth’s minor poems of pure fancy,
and there is one poem of his—that on “Yardly Oak”—which is almost
perfectly Wordsworthian. But Cowper rarely rises above the region of
fancy, and he often applied verse to themes that would not sing. His
poetry is never more than agreeable, and never reaches down to the
deeper sources of delight. Cowper was one of those men who,
wanting a vigorous understanding to steady the emotional part of his
nature, may be called peculiar rather than original. Great poetry can
never be made out of a morbid temperament, and great wits are
commonly the farthest removed from madness. But Cowper had at
least the power of believing that his own thoughts and pleasures
were as good, and as fit for poetry, as those of any man, no matter
how long he had enjoyed the merit of being dead.
The closing years of the eighteenth century have something in
common with those of the sixteenth. The air was sparkling with moral
and intellectual stimulus. The tremble of the French Revolution ran
through all Europe, and probably England, since the time of the great
Puritan revolt, had never felt such a thrill of national and indigenous
sentiment as during the Napoleonic wars. It was a time fitted to give
birth to something original in literature. If from the collision of minds
sparks of wit and fancy fly out, the shock and jostle of great events,
of world-shaping ideas, and of nations who do their work without
knowing it, strike forth a fire that kindles heart and brain and tongue
to more inspired conceptions and utterances.

It was fortunate for Wordsworth that he had his breeding in the


country, and not only so, but among the grandest scenery of
England. His earliest associates were the mountains, lakes, and
streams of his native district, and the scenery with which his mind
was stored during its most impressionable period was noble and
pure. The people, also, among whom he grew up were a simple and
hardy race, who kept alive the traditions and many of the habits of a
more picturesque time. There was also a general equality of
condition which kept life from becoming conventional and trite, and
which cherished friendly human sympathies. When death knocked at
any door of the hamlet, there was an echo from every fireside; and a
wedding dropped an orange blossom at every door. There was not a
grave in the little churchyard but had its story; not a crag or glen or
aged tree without its legend. The occupations of the people, who
were mostly small farmers and shepherds, were such as fostered
independence and originality of character. And where everybody
knew everybody, and everybody’s father had known everybody’s
father, and so on immemorially, the interest of man in man was not
likely to become a matter of cold hearsay and distant report. It was
here that Wordsworth learned not only to love the simplicity of
nature, but likewise that homely and earnest manliness which gives
such depth and sincerity to his poems. Travel, intercourse with
society, scholarly culture, nothing could cover up or obliterate those
early impressions. They widened with the range of his knowledge
and added to his power of expression, but they never blunted that
fine instinct in him which enables him always to speak directly to
men and to gentleman, or scholar, or citizen. It was this that enabled
his poetry afterwards to conquer all the reviews of England. The
great art of being a man, the sublime mystery of being yourself, is
something to which one must be apprenticed early.

Mr. Lowell here gave an outline of Wordsworth’s personal history and


character.

As a man we fancy him just in the least degree uninteresting—if the


horrid word must come out—why, a little bit of a bore. One must
regard him as a prophet in order to have the right kind of feeling
toward him; and prophets are excellent for certain moods of mind,
but perhaps are creatures

Too bright and good


For human nature’s daily food.

I fancy from what I have heard from those who knew him that he had
a tremendous prose-power, and that, with his singing-robes off, he
was dry and stiff as a figure-head. He had a purity of mind
approaching almost to prudery, and a pupil of Dr. Arnold told me he
had heard him say once at dinner that he thought the first line of
Keats’s ode to a “Grecian Urn” indecorous. The boys considered him
rather slow. There was something rocky and unyielding in his mind;
something that, if we found it in a man we did not feel grateful to and
respect, we should call hard. Even his fancy sometimes is glittering
and stiff, like crystallizations in granite. But at other times how tender
and delicate and dewy from very contrast, like harebells growing in a
crag-cleft!

There seem to have been two distinct natures in him—Wordsworth


the poet, and Wordsworth the man who used to talk about
Wordsworth the poet. One played a kind of Baruch to the other’s
Jeremiah, and thought a great deal of his master the prophet.
Baruch was terrifically uninspired, and was in the habit of repeating
Jeremiah’s poems at rather more length than was desired, selecting
commonly the parts which pleased him, Baruch, the best. Baruch
Wordsworth used to praise Jeremiah Wordsworth, and used to tell
entertaining anecdotes of him,—how he one day saw an old woman
and the next did not, and so came home and dictated some verses
on this remarkable phenomenon; and how another day he saw a
cow.

But in reading Wordsworth we must skip all the Baruch


interpolations, and cleave wholly to Jeremiah, who is truly inspired
and noble—more so than any modern. We are too near him,
perhaps, to be able wholly to separate the personal from the
poetical. I acknowledge that I reverence the noble old man both for
his grand life and his poems, that are worthy expressions of it. But a
lecturer is under bonds to speak what he believes to be the truth.
While I think that Wordsworth’s poetry is a thing by itself, both in its
heights and depths, something sacred and apart, I cannot but
acknowledge that his prosing is sometimes a gift as peculiar to
himself. Like old Ben Jonson, he apparently wished that a great deal
of what he wrote should be called “works.” Especially is this true of
his larger poems, like the “Excursion” and the “Prelude.” However
small, however commonplace the thought, the ponderous machine
of his verse runs on like a railway train that must start at a certain
hour though the only passenger be the boy that cries lozenges. He
seems to have thought that inspiration was something that could be
turned on like steam. Walter Savage Landor told me that he once
said to Wordsworth: “Mr. Wordsworth, a man may mix as much
poetry with prose as he likes, and it will make it the better; but the
moment he mixes a bit of prose with his poetry, it precipitates the
whole.” Wordsworth, he added, never forgave him.

There was a great deal in Wordsworth’s character that reminds us of


Milton; the same self-reliance, the same purity and loftiness of
purpose, and, I suspect, the same personal dryness of temperament
and seclusion of self. He seems to have had a profounder
imagination than Milton, but infinitely less music, less poetical faculty.
I am not entirely satisfied of the truth of the modern philosophy
which, if a man knocks another on the head, transfers all the guilt to
some peccant bump on his own occiput or sinciput; but if we
measure Wordsworth in this way, I feel as if he had plenty of
forehead, but that he wanted hind-head, and would have been more
entirely satisfactory if he had had one of the philo-something-or-
other.

It cannot be denied that in Wordsworth the very highest powers of


the poetical mind were associated with a certain tendency to the
diffuse and commonplace. It is in the Understanding (always prosaic)
that the great golden veins of his imagination are embedded. He
wrote too much to write always well; for it is not a great Xerxes army
of words, but a compact Greek ten thousand that march safely down
to posterity. He sets tasks to the divine faculty, which is much the
same as trying to make Jove’s eagle do the service of a clucking
hen. Throughout the “Prelude” and the “Excursion,” he seems
striving to bind the wizard imagination with the sand-ropes of dry
disquisition, and to have forgotten the potent spell-word which would
make the particulars adhere. There is an arenaceous quality in the
style which makes progress wearisome; yet with what splendors of
mountain-sunsets are we not rewarded! What golden rounds of
verse do we not see stretching heavenward, with angels ascending
and descending! What haunting melodies hover around us, deep
and eternal, like the undying barytone of the sea! And if we are
compelled to fare through sands and desert wilderness, how often
do we not hear airy shapes that syllable our names with a startling
personal appeal to our highest consciousness and our noblest
aspiration, such as we might wait for in vain in any other poet.

Take from Wordsworth all which an honest criticism cannot but allow,
and what is left will show how truly great he was. He had no humor,
no dramatic power, and his temperament was of that dry and
juiceless quality that in all his published correspondence you shall
not find a letter, but only essays. If we consider carefully where he
was most successful, we shall find that it was not so much in
description of natural scenery, or delineation of character, as in vivid
expression of the effect produced by external objects and events
upon his own mind. His finest passages are always monologues. He
had a fondness for particulars, and there are parts of his poems
which remind us of local histories in the undue importance given to
trivial matter. He was the historian of Wordsworthshire. This power of
particularization (for it is as truly a power as generalization) is what
gives such vigor and greatness to single lines and sentiments of
Wordsworth, and to poems developing a single thought or word. It
was this that made him so fond of the sonnet. His mind had not that
reach and elemental movement of Milton’s which, like the trade-
winds, gathered to itself thoughts and images like stately fleets from
every quarter; some, deep with silks and spicery, come brooding
over the silent thunders of their battailous armaments, but all swept
forward in their destined track, over the long billows of his verse,
every inch of canvas strained by the unifying breath of their common
epic impulse. It was an organ that Milton mastered, mighty in
compass, capable equally of the trumpet’s ardors, or the slim
delicacy of the flute; and sometimes it bursts forth in great crashes
through his prose, as if he touched it for solace in the intervals of his
toil. If Wordsworth sometimes puts the trumpet to his lips, yet he lays
it aside soon and willingly for his appropriate instrument, the pastoral
reed. And it is not one that grew by any vulgar stream, but that which
Apollo breathed through tending the flocks of Admetus, that which
Pan endowed with every melody of the visible universe, the same in
which the soul of the despairing nymph took refuge and gifted with
her dual nature, so that ever and anon, amid notes of human joy and
sorrow, there comes suddenly a deeper and almost awful tone,
thrilling us into dim consciousness of a forgotten divinity.

Of no other poet, except Shakspeare, have so many phrases


become household words as of Wordsworth. If Pope has made
current more epigrams of worldly wisdom, to Wordsworth belongs
the nobler praise of having defined for us, and given us for a daily
possession, those faint and vague suggestions of other-worldliness
of whose gentler ministry with our baser nature the hurry and bustle
of life scarcely ever allowed us to be conscious. He has won for
himself a secure immortality by a depth of intuition which makes only
the best minds at their best hours worthy, or indeed capable, of his
companionship, and by a homely sincerity of human sympathy which
reaches the humblest heart. Our language owes him gratitude for the

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