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Business Law: Text and Cases Kenneth
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Busi n e ss L aw
Te x t a nd C a se s
Fifteenth Edition
Kenneth W. Clarkson
University of Miami
Roger LeRoy Miller

Institute for University Studies
Arlington, Texas
Australia • Brazil • Mexico • Singapore • United Kingdom • United States
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Brief Contents
Unit One The Legal Environment of Business 1

Chapter 1 Law and Legal Reasoning 2
Chapter 2 Business and the Constitution 26
Chapter 3 Ethics in Business 44
Chapter 4 Courts and Alternative Dispute Resolution 65
Chapter 5 Court Procedures 86
Unit Two Torts and Crimes 111

Chapter 6 Tort Law 112
Chapter 7 Strict Liability and Product Liability 134
Chapter 8 Intellectual Property Rights 150
Chapter 9 Internet Law, Social Media, and Privacy 170
Chapter 10 Criminal Law and Cyber Crime 187
Unit Three Contracts and E-Contracts 215

Chapter 11 Nature and Terminology 216
Chapter 12 Agreement 231
Chapter 13 Consideration 250
Chapter 14 Capacity and Legality 263
Chapter 15 Mistakes, Fraud, and Voluntary Consent 280
Chapter 16 The Writing Requirement 294
Chapter 17 Third Party Rights 309
Chapter 18 Performance and Discharge 324
Chapter 19 Breach of Contract and Remedies 339
Unit Four Domestic and International Sales and Lease Contracts 359
Chapter 20 Sales and Lease Contracts 360
Chapter 21 Title, Risk, and Insurable Interest 386
Chapter 22 Performance and Breach of Sales and Lease Contracts 403
Chapter 23 Warranties 424
Chapter 24 International and Space Law 437
Unit Five Negotiable Instruments 461

Chapter 25 Negotiable Instruments 462
Chapter 26 Transferability and Holder in Due Course 478
Chapter 27 Liability, Defenses, and Discharge 496
Chapter 28 Banking 514
iii
iv Br ief Con t ent s
Unit Six Creditors’ Rights and Bankruptcy 537

Chapter 29 Creditors’ Rights and Remedies 538
Chapter 30 Secured Transactions 554
Chapter 31 Bankruptcy Law 577
Unit Seven Agency and Employment 603

Chapter 32 Agency Formation and Duties 604
Chapter 33 Agency Liability and Termination 620
Chapter 34 Employment, Immigration, and Labor Law 639
Chapter 35 Employment Discrimination 662
Unit Eight Business Organizations 687

Chapter 36 Small Businesses and Franchises 688
Chapter 37 All Forms of Partnerships 703
Chapter 38 Limited Liability Companies and Special Business Forms 723
Chapter 39 Corporate Formation and Financing 739
Chapter 40 Corporate Directors, Off icers, and Shareholders 759
Chapter 41 Mergers and Takeovers 778
Chapter 42 Investor Protection, Insider Trading, and Corporate Governance 794
Unit Nine Government Regulation 821

Chapter 43 Administrative Agencies 822
Chapter 44 Consumer Law 839
Chapter 45 Environmental Protection 856
Chapter 46 Antitrust Law 871
Chapter 47 Professional Liability and Accountability 890
Unit Ten Property and Its Protection 915

Chapter 48 Personal Property and Bailments 916
Chapter 49 Real Property and Landlord-Tenant Law 935
Chapter 50 Insurance 957
Chapter 51 Wills and Trusts 973
Appendices
A How to Brief Cases and Analyze Case Problems A–1
B Answers to the Issue Spotters A–4
C Sample Answers for Business Case Problems with Sample Answer A–13
Glossary G–1
Table of Cases TC–1
Index I–1
Contents
Unit One Chapter 4

The Legal Environment of Business 1 Courts and Alternative Dispute Resolution 65
The Judiciary’s Role in American Government 65
Chapter 1 Basic Judicial Requirements 66
Case Analysis 4.1 Mala v. Crown Bay Marina, Inc. 68
Law and Legal Reasoning 2 Spotlight on Gucci
Business Activities and the Legal Environment 2 Case 4.2 Gucci America, Inc. v. Wang Huoqing 70
Sources of American Law 3 The State and Federal Court Systems 73
The Common Law Tradition 6 Case 4.3 Johnson v. Oxy USA, Inc. 74
■ Ethics Today: Stare Decisis versus Spider-Man 9 ■ Managerial Strategy: Should You Consent to Have Your
Schools of Legal Thought 11 Business Case Decided by a U.S. Magistrate Judge? 76
Classifications of Law 12 Alternative Dispute Resolution 79
How to Find Primary Sources of Law 13 International Dispute Resolution 82
How to Read and Understand Case Law 16
Chapter 5
Chapter 2 Court Procedures 86
Business and the Constitution 26 Procedural Rules 86
The Constitutional Powers of Government 26 Pretrial Procedures 88
Classic Case 2.1 Heart of Atlanta Motel v. United States 28 ■ Digital Update: Using Social Media for Service of
Business and the Bill of Rights 30 Process 90
■ Digital Update: Does Everyone Have a Constitutional Right Case Analysis 5.1 Espresso Disposition Corp. 1 v. Santana Sales
to Use Social Media? 32 & Marketing Group, Inc. 91
Case 2.2 Animal Legal Defense Fund v. Wasden 33 Case 5.2 Lewis v. Twenty-First Century Bean Processing 93
Spotlight on Beer Labels Case 5.3 Klipsch Group, Inc. v. ePRO E-Commerce Limited 96
Case 2.3 Bad Frog Brewery, Inc. v. New York State The Trial 99
Liquor Authority 35 Posttrial Motions 101
Due Process and Equal Protection 39 The Appeal 102
Privacy Rights 40 Enforcing the Judgment 103
Unit One Task-Based Simulation 107
Unit One Application and Ethics:
Chapter 3
“Arbitration, No Class Actions” 108
Ethics in Business 44
Ethics and the Role of Business 44 Unit Two
■ Digital Update: Should Employees Have a “Right of
Disconnecting”? 47 Torts and Crimes 111
Case 3.1 Al-Dabagh v. Case Western Reserve University 48
Ethical Principles and Philosophies 49 Chapter 6
Sources of Ethical Issues in Business Decisions 52
Tort Law 112
Case 3.2 Watson Laboratories, Inc. v. State of Mississippi 53
Making Ethical Business Decisions 55 The Basis of Tort Law 112
Business Ethics on a Global Level 58 Intentional Torts against Persons 113
■ Ethics Today: Applying the IDDR Framework 59 Case Analysis 6.1 Blake v. Giustibelli 115
Appendix to Chapter 3: The Costco Code of Ethics 64 ■ Digital Update: Revenge Porn and Invasion of Privacy 119
v
vi Con t ent s
Intentional Torts against Property 122 Chapter 10

Unintentional Torts—Negligence 124 Criminal Law and Cyber Crime 187
Case 6.2 Bogenberger v. Pi Kappa Alpha Corporation, Inc. 125
Defenses to Negligence 128 Civil Law and Criminal Law 187
Spotlight on the Seattle Mariners Criminal Liability 189
Case 6.3 Taylor v. Baseball Club of Seattle, LP 129 ■ Digital Update: Using Twitter to Cause Seizures—
A Crime? 189
Case 10.1 United States v. Crabtree 190
Chapter 7
■ Managerial Strategy: The Criminalization of American
Strict Liability and Product Liability 134 Business 192
Strict Liability 134 Types of Crimes 193
Product Liability 135 Spotlight on White-Collar Crime
Case Analysis 7.1 Schwarck v. Arctic Cat, Inc. 136 Case 10.2 People v. Sisuphan 195
Strict Product Liability 137 Defenses to Criminal Liability 199
Case 7.2 Stange v. Janssen Pharmaceuticals, Inc. 140 Criminal Procedures 201
■ Managerial Strategy: When Is a Warning Legally Cyber Crime 204
Bulletproof? 142 Case Analysis 10.3 United States v. Warner 205
Defenses to Product Liability 143 Unit Two Task-Based Simulation 211
Case 7.3 VeRost v. Mitsubishi Caterpillar Forklift America, Inc. 144 Unit Two Application and Ethics:
One of the Biggest Data Breaches Ever 212
Chapter 8
Intellectual Property Rights 150
Unit Three
Trademarks and Related Property 150 Contracts and E-Contracts 215
Classic Case 8.1 The Coca-Cola Co. v. The Koke
Co. of America 150
Case 8.2 Headspace International, LLC v. Podworks Corp. 152 Chapter 11
■ Global Insight: ALEVE versus FLANAX—Same Pain Killer, Nature and Terminology 216
But in Different Countries 154
Patents 157 An Overview of Contract Law 216
Copyrights 159 Elements of a Contract 217
Case Analysis 8.3 Winstead v. Jackson 161 Case Analysis 11.1 Weston v. Cornell University 218
Trade Secrets 164 Types of Contracts 219
International Protection for Intellectual Property 164 Case 11.2 Boswell v. Panera Bread Co. 220
Quasi Contracts 223
Interpretation of Contracts 225
Chapter 9
Spotlight on Columbia Pictures
Internet Law, Social Media, and Privacy 170 Case 11.3 Wagner v. Columbia Pictures Industries, Inc. 226
Internet Law 170
Spotlight on Internet Porn Chapter 12
Case 9.1 Hasbro, Inc. v. Internet Entertainment
Agreement 231
Group, Ltd. 173
Copyrights in Digital Information 174 Elements of Agreement 231
■ Digital Update: Riot Games, Inc., Protects Its Online Video Classic Case 12.1 Lucy v. Zehmer 232
Game Copyrights 175 Spotlight on Amazon.com
Case 9.2 BMG Rights Management (US), LLC v. Cox Case 12.2 Basis Technology Corp. v. Amazon.com, Inc. 234
Communications, Inc. 176 ■ Digital Update: Can Your E-Mails or Instant Messages
Social Media 178 Create a Valid Contract? 238
Online Defamation 180 Agreement in E-Contracts 240
Other Actions Involving Online Posts 181 Case 12.3 Bailey v. Kentucky Lottery Corp. 242
Case Analysis 9.3 David v. Textor 182 U.S. Laws Affecting E-Contracts 245
Privacy 183 International Treaties Affecting E-Contracts 247
C o n te n ts vii
Chapter 13 Chapter 17
Consideration 250 Third Party Rights 309
Elements of Consideration 250 Assignments and Delegations 309
Classic Case 13.1 Hamer v. Sidway 250 Case 17.1 Bass-Fineberg Leasing, Inc. v. Modern Auto Sales, Inc. 312
Case 13.2 Cincinnati Reds, LLC v. Testa 252 Case 17.2 Mirandette v. Nelnet, Inc. 314
Agreements That Lack Consideration 254 Third Party Beneficiaries 316
Settlement of Claims 256 Case Analysis 17.3 Bozzio v. EMI Group, Ltd. 317
Spotlight on Nike
Case 13.3 Already, LLC v. Nike, Inc. 257 Chapter 18
Exceptions to the Consideration Requirement 258 Performance and Discharge 324
Conditions 324
Chapter 14
Discharge by Performance 325
Capacity and Legality 263 Classic Case 18.1 Jacob & Youngs v. Kent 327
Contractual Capacity 263 Case Analysis 18.2 Kohel v. Bergen Auto Enterprises, L.L.C. 328
Case 14.1 PAK Foods Houston, LLC v. Garcia 264 Discharge by Agreement 330
Legality 268 Case 18.3 DWB, LLC v. D&T Pure Trust 332
Case 14.2 Kennedy v. Shave Barber Co. 270 Discharge by Operation of Law 333
Case Analysis 14.3 Holmes v. Multimedia KSDK, Inc. 273 ■ Ethics Today: When Is Impossibility of Performance a
■ Managerial Strategy: Creating Liability Waivers That Are Valid Defense? 334
Not Unconscionable 275
Chapter 19
Chapter 15 Breach of Contract and Remedies 339
Mistakes, Fraud, Damages 339
and Voluntary Consent 280 Case Analysis 19.1 Baird v. Owens Community College 340
Spotlight on Liquidated Damages
Mistakes 280
Case 19.2 Kent State University v. Ford 344
Fraudulent Misrepresentation 282
Case 15.1 McCullough v. Allstate Property and Casualty
Equitable Remedies 345
Case 19.3 Cipriano Square Plaza Corp. v. Munawar 346
Insurance Co. 282
Case Analysis 15.2 Cronkelton v. Guaranteed Construction
Recovery Based on Quasi Contract 349
Services, LLC 285
Waiver of Breach 350
■ Digital Update: “Catfishing” and Fraudulent
Contract Provisions Limiting Remedies 351
Unit Three Task-Based Simulation 355
Misrepresentation 287
Unit Three Application and Ethics:
Case 15.3 Fazio v. Cypress/GR Houston I, LP 288
Nondisclosure Agreements 356
Undue Influence 289
Duress 289
Adhesion Contracts and Unconscionability 290
Unit Four
Chapter 16 Domestic and International
The Writing Requirement 294 Sales and Lease Contracts 359
The Statute of Frauds 294
Contracts That Require a Writing 294 Chapter 20
Case Analysis 16.1 Sloop v. Kiker 295
Exceptions to the Writing Requirement 298
Sales and Lease Contracts 360
Sufficiency of the Writing 300 The Uniform Commercial Code 360
Case 16.2 Moore v. Bearkat Energy Partners, LLC 301 The Scope of Articles 2 (Sales) and 2A (Leases) 361
The Parol Evidence Rule 302 ■ Digital Update: Taxing Web Purchases 363
Case 16.3 Frewil, LLC v. Price 303 The Formation of Sales and Lease Contracts 365
The Statute of Frauds in the International Context 305 Case 20.1 Toll Processing Services, LLC v. Kastalon, Inc. 365
viii Con t ent s
Case 20.2 C. Mahendra (N.Y.), LLC v. National Gold & Diamond Doing Business Internationally 442
Center, Inc. 369 ■ Ethics Today: Is It Ethical (and Legal) to Brew “Imported”
Classic Case 20.3 Jones v. Star Credit Corp. 375 Beer Brands Domestically? 443
Contracts for the International Sale of Goods 376 Regulation of Specific Business Activities 445
Appendix to Chapter 20 An Example of a Contract for the Case 24.2 Changzhou Trina Solar Energy Co., Ltd. v. United
International Sale of Coffee 382 States International Trade Commission 446
International Dispute Resolution 448
Chapter 21 U.S. Laws in a Global Context 449
Title, Risk, and Insurable Interest 386 Spotlight on International Torts
Case 24.3 Daimler AG v. Bauman 449
Identification 386 Space Law 451
Case Analysis 21.1 BMW Group, LLC v. Castle Oil Corp. 387 Unit Four Task-Based Simulation 456
When Title Passes 388 Unit Four Application and Ethics:
■ Managerial Strategy: Commercial Use of Drones 389 Success in Global Commerce 457
Case 21.2 Louisiana Department of Revenue v. Apeck
Construction, Inc. 389
Spotlight on Andy Warhol Case 21.3 Lindholm v. Brant 393 Unit Five
Risk of Loss 395 Negotiable Instruments 461
Insurable Interest 399
Performance and Breach Negotiable Instruments 462
of Sales and Lease Contracts 403 Types of Negotiable Instruments 462
Case 25.1 Silicon Valley Bank v. Miracle Faith
Obligations of the Seller or Lessor 403
World Outreach, Inc. 465
Case 22.1 All the Way Towing, LLC v. Bucks County
International, Inc. 405
Requirements for Negotiability 466
Case Analysis 25.2 OneWest Bank, FSB v. Nunez 468
Obligations of the Buyer or Lessee 409
Remedies of the Seller or Lessor 411 Factors That Do Not Affect Negotiability 472
Case 25.3 Charles R. Tips Family Trust v.
Remedies of the Buyer or Lessee 413
PB Commercial, LLC 473
Case Analysis 22.2 Genesis Health Clubs, Inc. v. LED Solar &
Light Co. 416
Spotlight on Baseball Cards Chapter 26
Case 22.3 Fitl v. Strek 418 Transferability and
Additional Provisions Affecting Remedies 419 Holder in Due Course 478
Dealing with International Contracts 420
Negotiation 478
Chapter 23 Indorsements 479
Case 26.1 In re Bass 479
Warranties 424 Case Analysis 26.2 AS Peleus, LLC v. Success, Inc. 481
Warranties of Title 424 Holder in Due Course (HDC) 486
Express Warranties 425 Case 26.3 Jarrell v. Conerly 488
Implied Warranties 427 Holder through an HDC 491
Classic Case 23.1 Webster v. Blue Ship Tea Room, Inc. 429
Overlapping Warranties 431 Chapter 27
Warranty Disclaimers and Limitations on Liability 432 Liability, Defenses, and Discharge 496
Case Analysis 23.2 Roberts v. Lanigan Auto Sales 432
Signature Liability 496
Chapter 24 Case Analysis 27.1 Envision Printing, LLC v. Evans 499
Warranty Liability 502
International and Space Law 437 Defenses and Limitations 505
International Law 437 Case 27.2 Mills v. Chauvin 507
Case 24.1 Rubin v. Islamic Republic of Iran 441 Discharge 510
C o n te n t s ix
Banking 514 Bankruptcy Law 577
Checks 514 The Bankruptcy Code 577
The Bank-Customer Relationship 516 Liquidation Proceedings 578
The Bank’s Duty to Honor Checks 517 Case 31.1 In re Anderson 584
Case Analysis 28.1 Legg v. West Bank 517 ■ Ethics Today: Should There Be More Relief for Student
Case 28.2 Horton v. JPMorgan Chase Bank, N.A. 521 Loan Defaults? 587
The Bank’s Duty to Accept Deposits 523 Case 31.2 In re Cummings 588
Case 28.3 Shahin v. Delaware Federal Credit Union 525 Reorganizations 589
Electronic Fund Transfers 528 Bankruptcy Relief under Chapter 12 and Chapter 13 591
Online Banking and E-Money 529 Case 31.3 In re Chamberlain 593
■ Digital Update: Electronic Payment Systems Are Reducing Unit Six Task-Based Simulation 599
the Use of Checks 530 Unit Six Application and Ethics:
Unit Five Task-Based Simulation 533 Federal Student Loans—Default and Discharge 600
Unit Five Application and Ethics:
Virtual Currency—Is It Safe? 534
Unit Seven
Agency and Employment 603
Unit Six
Creditors’ Rights and Bankruptcy 537 Chapter 32
Agency Formation and Duties 604
Agency Relationships 604
Chapter 29
■ Ethics Today: Is It Fair to Classify Uber and Lyft Drivers as
Creditors’ Rights and Remedies 538 Independent Contractors? 606
Laws Assisting Creditors 538 Formation of the Agency Relationship 607
Case Analysis 29.1 Picerne Construction Corp. v. Villas 539 Case 32.1 Riedel v. Akron General Health System 608
Mortgages 542 Duties of Agents and Principals 610
■ Ethics Today: Creditors’ Rights When Debtors Move to Spotlight on Taser International
Another State 543 Case 32.2 Taser International, Inc. v. Ward 611
Case 29.2 Banc of California, N.A. v. Madhok 545 Case Analysis 32.3 NRT New England, LLC v. Jones 614
Suretyship and Guaranty 547 Rights and Remedies of Agents and Principals 616
Case 29.3 HSBC Realty Credit Corp. (USA) v. O’Neill 548
Protection for Debtors 550 Chapter 33
Agency Liability and Termination 620
Chapter 30 Scope of Agent’s Authority 620
Spotlight on Apparent Authority of Managers
Secured Transactions 554 Case 33.1 Lundberg v. Church Farm, Inc. 622
The Terminology of Secured Transactions 554 Case 33.2 Dearborn West Village Condominium
Creation of a Security Interest 554 Association v. Makki 623
Case 30.1 Royal Jewelers, Inc. v. Light 555 Liability for Contracts 625
■ Digital Update: Secured Transactions—Escrow Services Liability for Torts and Crimes 627
Online 557 ■ Global Insight: Islamic Law and Respondeat Superior 629
Perfection of a Security Interest 557 Case Analysis 33.3 M.J. v. Wisan 631
The Scope of a Security Interest 562 Termination of an Agency 633
Case 30.2 In re Tusa–Expo Holdings, Inc. 563
Priorities 566 Chapter 34
Rights and Duties of Debtors and Creditors 569 Employment, Immigration, and Labor Law 639
Default 569
Case 30.3 SunTrust Bank v. Monroe 571 Employment at Will 639
Case 34.1 Caterpillar, Inc. v. Sudlow 640
x C on t ent s
Wages, Hours, and Layoffs 642 Chapter 37

■ Ethics Today: Is It Fair to Dock Employees’ Pay for All Forms of Partnerships 703
Bathroom Breaks? 643
Case 34.2 Encino Motorcars, LLC v. Navarro 643 Basic Partnership Concepts 703
Family and Medical Leave 645 Case 37.1 Harun v. Rashid 704
Health, Safety, and Income Security 646 Formation and Operation 706
Employee Privacy Rights 649 Classic Case 37.2 Meinhard v. Salmon 708
Immigration Law 650 Dissociation and Termination 711
Labor Unions 652 Case Analysis 37.3 Shamburger v. Shamburger 714
■ Managerial Strategy: Union Organizing Using a Company’s Limited Liability Partnerships 715
E-Mail System 655 Limited Partnerships 716
Case Analysis 34.3 Contemporary Cars, Inc. v. National ■ Ethics Today: Should an Innocent General Partner Be Jointly
Labor Relations Board 655 Liable for Fraud? 719
Employment Discrimination 662 Limited Liability Companies
Title VII of the Civil Rights Act 662
and Special Business Forms 723
■ Digital Update: Hiring Discrimination Based on Social The Limited Liability Company 723
Media Posts 666 Case 38.1 Hodge v. Strong Built International, LLC 725
Case Analysis 35.1 Bauer v. Lynch 667 LLC Management and Operation 727
Case 35.2 Young v. United Parcel Service, Inc. 668 ■ Managerial Strategy: Can a Person Who Is Not a Member
Case 35.3 Franchina v. City of Providence 672 of a Protected Class Sue for Discrimination? 728
Discrimination Based on Age 673 Case 38.2 Schaefer v. Orth 729
Discrimination Based on Disability 675 Dissociation and Dissolution of an LLC 730
Discrimination Based on Military Status 677 Case Analysis 38.3 Reese v. Newman 731
Defenses to Employment Discrimination 678 Special Business Forms 733
Affirmative Action 679
Unit Seven Task-Based Simulation 683
Chapter 39
Unit Seven Application and Ethics:
Health Insurance and Small Business 684 Corporate Formation and Financing 739
The Nature and Classification of Corporations 739
■ Digital Update: Programs That Predict Employee
Unit Eight
Misconduct 741
Business Organizations 687 Case 39.1 Drake Manufacturing Co. v. Polyflow, Inc. 741
Case Analysis 39.2 Pantano v. Newark Museum 743
Case 39.3 Greenfield v. Mandalay Shores
Chapter 36
Community Association 746
Small Businesses and Franchises 688 Corporate Formation and Powers 748
General Considerations for Small Businesses 688 ■ Global Insight: Does Cloud Computing Have a
Sole Proprietorships 689 Nationality? 751
Case Analysis 36.1 A. Gadley Enterprises, Inc. v. Department of Piercing the Corporate Veil 751
Labor and Industry Office of Unemployment Compensation Corporate Financing 753
Tax Services 690
■ Digital Update: A Sole Proprietorship, Facebook Poker, and Chapter 40
Bankruptcy 692 Corporate Directors, Off icers, and
Franchises 693
Shareholders 759
Franchise Termination 696
Case 36.2 S&P Brake Supply, Inc. v. Daimler Trucks North Role of Directors and Officers 759
America, LLC 696 Duties and Liabilities of Directors and Off icers 762
Spotlight on Holiday Inns Case 40.1 Oliveira v. Sugarman 764
Case 36.3 Holiday Inn Franchising, Inc. v. Hotel Classic Case 40.2 Guth v. Loft, Inc. 765
Associates, Inc. 698 The Role of Shareholders 767
C o n te n t s xi
Rights of Shareholders 770 Chapter 44

Case 40.3 Hammoud v. Advent Home Medical, Inc. 772 Consumer Law 839
Duties and Liabilities of Shareholders 774
Advertising, Marketing, and Sales 839
Case 44.1 POM Wonderful, LLC v. Federal
Chapter 41
Trade Commission 840
Mergers and Takeovers 778 ■ Digital Update: Regulating “Native” Ads on the
Merger, Consolidation, and Share Exchange 778 Internet 843
Case Analysis 41.1 In re Trulia, Inc. Stockholder Case 44.2 Haywood v. Massage Envy Franchising, LLC 844
Litigation 780 Labeling and Packaging Laws 846
Purchase of Assets 782 Protection of Health and Safety 847
Case 41.2 Heavenly Hana, LLC v. Hotel Union & Hotel Credit Protection 848
Industry of Hawaii Pension Plan 784 Case Analysis 44.3 Santangelo v. Comcast Corp. 850
Purchase of Stock 785
Corporate Termination 787 Chapter 45
Major Business Forms Compared 788 Environmental Protection 856
Chapter 42 Common Law Actions 856
Federal, State, and Local Regulations 857
Investor Protection, Insider Trading, and
Case Analysis 45.1 Friends of Animals v. Clay 857
Corporate Governance 794 ■ Global Insight: Can a River Be a Legal Person? 860
The Securities Act of 1933 794 Air Pollution 860
■ Managerial Strategy: The SEC’s Pay-Ratio Disclosure Case 45.2 United States v. O’Malley 862
Rule 796 Water Pollution 864
■ Digital Update: Investment Crowdfunding—Regulations Toxic Chemicals and Hazardous Waste 866
and Restrictions 798
Case 42.1 Omnicare, Inc. v. Laborers District Council Chapter 46
Construction Industry Pension Fund 800
Antitrust Law 871
The Securities Exchange Act of 1934 802
Classic Case 42.2 SEC v. Texas Gulf Sulphur Co. 803 The Sherman Antitrust Act 871
Case 42.3 Singer v. Reali 807 Section 1 of the Sherman Act 872
State Securities Laws 809 Section 2 of the Sherman Act 875
Corporate Governance 810 Case Analysis 46.1 McWane, Inc. v. Federal
Unit Eight Task-Based Simulation 816 Trade Commission 877
Unit Eight Application and Ethics: The Clayton Act 878
Business Start-Ups Online 817 Case 46.2 Candelore v. Tinder, Inc. 879
Enforcement and Exemptions 882
Case 46.3 TransWeb, LLC v. 3M Innovative Properties Co. 883
Unit Nine U.S. Antitrust Laws in the Global Context 884
Government Regulation 821 ■ Digital Update: The European Union Issues Record Fines
Against Google in Antitrust Case 886
Chapter 43
Administrative Agencies 822 Chapter 47
Professional Liability and
The Practical Significance of Administrative Law 822
Accountability 890
Agency Creation and Powers 823
Case 43.1 Simmons v. Smith 826 Potential Liability to Clients 890
The Administrative Process 828 ■ Ethics Today: What Are an Attorney’s Responsibilities for
Case 43.2 Craker v. Drug Enforcement Administration 831 Protecting Data Stored in the Cloud? 891
Judicial Deference to Agency Decisions 832 Potential Liability to Third Parties 894
Case Analysis 43.3 Olivares v. Transportation Case Analysis 47.1 Perez v. Stern 896
Security Administration 833 The Sarbanes-Oxley Act 897
Public Accountability 835 Case 47.2 Laccetti v. Securities and Exchange Commission 898
xii Cont en t s
Potential Liability of Accountants under ■ Ethics Today: Should Eminent Domain Be Used to Promote
Securities Laws 901 Private Development? 949
Confidentiality and Privilege 904 Zoning and Government Regulations 950
Case 47.3 Commonwealth of Pennsylvania v. Landlord-Tenant Relationships 952
Schultz 905
Unit Nine Task-Based Simulation 910 Chapter 50
Unit Nine Application and Ethics: Insurance 957
Climate Change 911
Insurance Terminology and Concepts 957
Case 50.1 Breeden v. Buchanan 959
Unit Ten The Insurance Contract 960
Property and Its Protection 915 Case 50.2 Cannon v. Farm Bureau Insurance Company 964
Types of Insurance 966
Chapter 48
Chapter 51
Personal Property and Bailments 916 Wills and Trusts 973
Personal Property versus Real Property 916
Wills 973
Acquiring Ownership of Personal Property 917
Case 51.1 In re Navarra 976
■ Digital Update: The Exploding World of Digital
Case Analysis 51.2 Peterson v. Harrell 978
Property 917
■ Digital Update: Social Media Estate Planning 981
Classic Case 48.1 In re Estate of Piper 919
Intestacy Laws 981
Mislaid, Lost, and Abandoned Property 920
Trusts 984
Case 48.2 State of Washington v. Preston 923
Case 51.3 Dowdy v. Dowdy 985
Bailments 924
Other Estate-Planning Issues 989
Ordinary Bailments 925
Unit Ten Task-Based Simulation 994
Case Analysis 48.3 Zissu v. IH2 Property Illinois, L.P. 928
Unit Ten Application and Ethics:
Special Types of Bailments 930
Business Planning for Divorce 995
Chapter 49
Appendices
Real Property and Landlord-Tenant Law 935 A How to Brief Cases and Analyze Case Problems A–1
The Nature of Real Property 935 B Answers to the Issue Spotters A–4
Ownership and Other Interests in Real Property 937 C Sample Answers for Business Case Problems with
Case 49.1 In the Matter of the Estate of Nelson 938 Sample Answer A–13
Transfer of Ownership 942
Spotlight on Sales of Haunted Houses
Case 49.2 Stambovsky v. Ackley 943 Glossary G–1
Case Analysis 49.3 Montgomery County v. Bhatt 946 Table of Cases TC–1
Limitations on the Rights of Property Owners 948 Index I–1
Concept Summaries
1.1 Sources of American Law 5 25.1 Requirements for Negotiability 474

1.2 The Common Law Tradition 11 26.1 Types of Indorsements and Their Effect 484
1.3 Schools of Jurisprudential Thought 13 26.2 Requirements for HDC Status 492
4.1 Jurisdiction 72 27.1 Signature Liability 503
4.2 Types of Courts 78 28.1 Basic Rules for Honoring Checks 524
5.1 Pretrial Procedures 98 29.1 Remedies Available to Creditors 546
5.2 Trial Procedure 101 30.1 Creating Security Interest 557
5.3 Posttrial Options 103 30.2 Perfecting a Security Interest 563
6.1 Intentional Torts against Persons 121 30.3 Remedies of the Secured Party on the
6.2 Intentional Torts against Property 124 Debtor’s Default 573
7.1 Defenses to Product Liability 147 31.1 Forms of Bankruptcy Relief Compared 595
10.1 Types of Crimes 199 32.1 Formation of the Agency Relationship 610
11.1 Types of Contracts 224 33.1 Authority of an Agent to Bind the Principal
and a Third Party 625
12.1 Methods by Which an Offer
Can Be Terminated 237 33.2 Agency Termination by Operation of Law 635
13.1 Consideration 254 35.1 Coverage of Employment Discrimination Laws 678
13.2 Settlement of Claims 259 38.1 Special Business Forms 735
14.1 Contracts by Minors 266 39.1 Classification of Corporations 747
14.2 Contracts by Intoxicated Persons 267 40.1 Roles of Directors and Officers 762
14.3 Contracts by Mentally Incompetent Persons 268 40.2 Duties and Liabilities of Directors and Officers 767
15.1 Factors That May Indicate a Lack of 40.3 Role, Rights, and Liability of Shareholders 775
Voluntary Consent 291 41.1 Merger, Consolidation, and Share Exchange 783
17.1 Assignment and Delegations 316 41.2 Purchases of Assets and Purchases of Stock 785
19.1 Equitable Remedies 350 47.1 Common Law Liability of Accountants and
20.1 Offer, Acceptance, and Consideration under Other Professionals 898
the UCC 372 47.2 Statutory Liability of Accountants and
20.2 The Parol Evidence Rule 375 Other Professionals 904
21.1 Delivery without Movement of the Goods 397 48.1 Acquisition of Personal Property 921
21.2 Risk of Loss When a Sales or Lease Contract 48.2 Mislaid, Lost, and Abandoned Property 921
Is Breached 399 48.3 Rights and Duties of the Bailee and the Bailor 931
22.1 Obligations of the Seller or Lessor 409 51.1 Wills 982
23.1 Warranties of Title and Express Warranties 426 51.2 Trusts 988
xiii
Exhibits
1–1 Areas of the Law That Can Affect Business 18–1 Conditions of Performance 325
Decision Making 3 18–2 Discharge by Performance 330
1–2 Equitable Maxims 7 18–3 Contract Discharge 335
1–3 Procedural Differences between an Action at Law 19–1 Measure of Damages—Breach of
and an Action in Equity 7 Construction Contracts 342
1–4 National Reporter System—Regional/Federal 15 19–2 Remedies for Breach of Contract 349
1–5 How to Read Citations 17 20–1 The Law Governing Contracts 362
1–6 A Sample Court Case 20 20–2 Major Differences between Contract Law
2–1 Protections Guaranteed by the Bill of Rights 31 and Sales Law 373
2–2 Federal Legislation Relating to Privacy 41 21–1 Void and Voidable Titles 392
3–1 An Analysis of Ethical Approaches to the 21–2 Contract Terms—Definitions 396
Sample Dilemma 57 22–1 The Perfect Tender Rule and Its Exceptions 406
4–1 Exclusive and Concurrent Jurisdiction 70 22–2 Obligations of the Buyer or Lessee 410
4–2 The State and Federal Court Systems 73 22–3 A Letter-of-Credit Transaction 421
4–3 Geographic Boundaries of the U.S. Courts of Appeals 23–1 Types of Implied Warranties 427
and U.S. District Courts 77 24–1 The Legal Systems of Selected Nations 439
4–4 Basic Differences in the Traditional Forms of ADR 80 24–2 Examples of International Principles and
5–1 Stages in a Typical Lawsuit 87 Doctrines 442
5–2 A Typical Complaint 89 25–1 Basic Types of Negotiable Instruments 463
5–3 Pretrial Motions 91 25–2 A Typical Time Draft 464
8–1 Forms of Intellectual Property 165 25–3 A Typical Promissory Note 466
10–1 Key Differences between Civil Law and 25–4 A Sample Certificate of Deposit 467
Criminal Law 187 26–1 A Blank Indorsement 479
10–2 Civil (Tort) Lawsuit and Criminal Prosecution for the 26–2 A Special Indorsement 481
Same Act 188 26–3 A Qualified Indorsement 482
10–3 Major Procedural Steps in a Criminal Case 203 26–4 “For Deposit Only” and “For Collection
11–1 Classifications Based on Contract Formation 219 Only” Indorsements 483
11–2 Enforceable, Voidable, Unenforceable, and 26–5 Trust (Agency) Indorsements 484
Void Contracts 223 26–6 Converting an Order Instrument to a Bearer
11–3 Rules of Contract Interpretation 225 Instrument and Vice Versa 485
12–1 A Click-On Agreement Sample 242 26–7 Taking for Value 487
12–2 The E-SIGN Act and the UETA 246 27–1 Time for Proper Presentment 498
13–1 Consideration in Bilateral and 27–2 Transfer Warranty Liability for Transferors Who
Unilateral Contracts 252 Receive Consideration 504
13–2 Examples of Agreements That Lack 27–3 Defenses against Liability on Negotiable
Consideration 256 Instruments 505
14–1 Unconscionability 272 28–1 A Cashier’s Check 515
14–2 Contract Legality 276 28–2 An American Express Traveler’s Check 516
15–1 Mistakes of Fact 281 28–3 The Check-Collection Process 527
16–1 The One-Year Rule 297 29–1 Methods of Avoiding Foreclosure 544
16–2 Collateral Promises 298 29–2 Suretyship and Guaranty Parties 547
16–3 Business Contracts and the Writing Requirement 300 30–1 Secured Transactions—Concept and Terminology 555
16–4 The Parol Evidence Rule 305 30–2 A Sample Uniform Financing Statement Form 558
17–1 Assignment Relationships 310 30–3 Selected Types of Collateral and Methods
17–2 Delegation Relationships 313 of Perfection 562
17–3 Third Party Beneficiaries 320 30–4 Priority of Claims to a Debtor’s Collateral 568
xiv
E x h i b i ts xv
31–1 Collection and Distribution of Property in Most 42–3 Some Key Provisions of the Sarbanes-Oxley Act Relating
Voluntary Bankruptcies 586 to Corporate Accountability 812
32–1 Duties of the Agent 611 43–1 Executive Departments and Important
32–2 Duties of the Principal 613 Subagencies 824
33–1 A Sample General Power of Attorney 621 43–2 Selected Independent Regulatory Agencies 825
33–2 Termination by Act of the Parties 633 43–3 The Formal Administrative Agency
34–1 Good Faith versus Bad Faith in Adjudication Process 830
Collective Bargaining 657 44–1 Selected Areas of Consumer Law Regulated
36–1 The FTC’s Franchise Rule Requirements 694 by Statutes 840
37–1 Provisions Commonly Included in a 45–1 Major Federal Environmental Statutes 858
Partnership Agreement 706 45–2 Environmental Impact Statements 861
37–2 A Comparison of General Partnerships and 45–3 Pollution-Control Equipment Standards under the
Limited Partnerships 717 Clean Air Act and the Clean Water Act 865
38–1 Management of an LLC 727 46–1 Required Elements of a Sherman Act Violation 872
38–2 Provisions Commonly Included in an LLC 46–2 Exemptions to Antitrust Enforcement 885
Operating Agreement 729 47–1 Three Basic Rules of an Accountant’s Liability to
39–1 How Do Stocks and Bonds Differ? 753 Third Parties 896
39–2 Common and Preferred Stocks 754 47–2 Key Provisions of the Sarbanes-Oxley Act Relating to
40–1 Directors’ Management Responsibilities 760 Public Accounting Firms 900
40–2 Results of Cumulative Voting 770 48–1 Degree of Care Required of a Bailee 927
41–1 Merger 778 49–1 Interests in Real Property 942
41–2 Consolidation 779 50–1 Selected Insurance Classifications 958
41–3 The Terminology of Takeover Defenses 786 50–2 Insurance Contract Provisions and Clauses 961
41–4 Major Forms of Business Compared 789 50–3 Typical Fire Insurance Policies 967
42–1 Exempt Transactions under the 1933 51–1 Excerpts from Michael Jackson’s Will 974
Securities Act 797 51–2 Per Stirpes Distribution 983
42–2 Comparison of Coverage, Application, and Liability 51–3 Per Capita Distribution 984
under SEC Rule 10b-5 and Section 16(b) 805 51–4 A Revocable Living Trust Arrangement 985
Preface
The study of business law and the legal environment of completely new framework for helping students (and
business has universal applicability. A student entering businesspersons) make ethical decisions. We present
any field of business must have at least a passing under- The IDDR Approach in Chapter 3 (Ethics in Busi-
standing of business law in order to function in the real ness). This systematic approach provides students with a
world. Business Law, Fifteenth Edition, provides the clear step-by-step process to analyze the legal and ethical
information that students need in an interesting and implications of decisions that arise in everyday business
contemporary way. operations.
Additionally, students preparing for a career in The new IDDR Approach uses four logical steps:
accounting, government and political science, econom- • Step 1: Inquiry
ics, and even medicine can use much of the informa- • Step 2: Discussion
tion they learn in a business law and legal environment • Step 3: Decision
course. In fact, every individual throughout his or her • Step 4: Review
lifetime can benefit from knowledge of contracts, real Students can remember the first letter of each step easily
property law, landlord-tenant relationships, and other by using the phrase: “I Desire to Do Right.”
business law topics. Consequently, we have fashioned
this text as a useful “tool for living” for all of your stu- Completely Revised Chapter 3 on Ethics in
dents (including those taking the CPA exam). Business A newly revised Chapter 3 details each IDDR
The Fifteenth Edition of this best-selling text is more step’s goals and then provides a Sample Scenario to help
modern, exciting, and visually appealing than ever before. students apply this new approach to ethical decision mak-
We have added many new features, cases, concept sum- ing. In addition to introducing the IDDR Approach, we
maries, and exhibits. The text also contains h undreds of have made Chapter 3 more current and more practical,
highlighted and numbered Cases in Point and E xamples, and reduced the amount of theoretical ethical principles
as well as a number of new case problems and unit- it presents. The chapter now focuses on real-life applica-
ending Task-Based Simulations. Special pedagogical tion of ethical principles.
elements within the text focus on legal, ethical, global,
and corporate issues while addressing core curriculum New A Question of Ethics throughout Text
requirements. After Chapter 3, to reinforce the application of the
IDDR Approach, students are asked to use its various
steps when answering each chapter’s A Question of Ethics.
To challenge students in analyzing the ethical angles in
Highlights of the Fifteenth Edition today’s business legal environment, each of the A Question
of Ethics problems have been updated throughout the text
Instructors have come to rely on the coverage, accuracy, and are based on a 2017, 2018 or 2019 case.
and applicability of Business Law. To make sure that our
text engages your students, solidifies their understanding
of legal concepts, and provides the best teaching tools A Variety of Exciting Features
available, we offer the following. The Fifteenth Edition of Business Law is filled with
numerous features specifically designed to cover current
The IDDR Approach: legal topics of high interest.
Each feature is related to a topic discussed in the text
A New Emphasis on Ethics and ends with Critical Thinking or Business Questions.
The ability of businesspersons to reason through ethi- Suggested answers to all of the Critical Thinking and
cal issues is now more important than ever. For the Business Questions are included in the Answers Manual
Fifteenth Edition of Business Law, we have created a for this text.
xvii
xviii P ref ace
1. Ethics Today. These features focus on the ethical Social media have entered the mainstream and become
aspects of a topic discussed in the text to empha- a part of everyday life for many businesspersons. In this
size that ethics is an integral part of a business law special chapter, we give particular emphasis to the legal
course. Examples include the following: issues surrounding the Internet, social media, and privacy.
• Applying the IDDR Framework (Chapter 3) We also recognize this trend throughout the text by incor-
• Is It Ethical (and Legal) to Brew “Imported” Beer porating the Internet and social media as they relate to the
Brands Domestically? (Chapter 24) topics under discussion.
• Should There Be More Relief for Student Loan
Defaults? (Chapter 31)
• Is It Fair to Classify Uber and Lyft Drivers as Coverage of Topics
Independent Contractors? (Chapter 32) on the Revised CPA Exam
2. Global Insight. These features illustrate how other
nations deal with specific legal concepts to give In 2016, the American Institute of CPAs (AICPA) issued
students a sense of the global legal environment. its final report on “Maintaining the Relevance of the
Subjects include the following: Uniform CPA Exam.” In addition to more focus on criti-
• Aleve versus Flanax—Same Pain Killer, but in cal thinking, authentic applications, and problem solv-
Different Countries (Chapter 8) ing, the content of the exam will change to some extent.
• Islamic Law and Respondeat Superior (Chapter 33) The Fifteenth Edition of Business Law incorporates
• Does Cloud Computing Have a Nationality? information on the new topics on the CPA exam, specifi-
(Chapter 39) cally addressing the following:
• Can a River Be a Legal Person (Chapter 45) • Agency law (worker classification and duties of
3. Digital Update. These features are designed to principals and agents)
examine cutting-edge cyberlaw topics, such as the • Employment law (Affordable Care Act)
following: • Business organizations (corporate governance
• Does Everyone Have a Constitutional Right to issues, including Sarbanes-Oxley compliance
Use Social Media? (Chapter 2) and criminal liability for organizations and
• Should Employees Have a “Right of Disconnecting”? management)
(Chapter 3)
• Revenge Porn and Invasion of Privacy (Chapter 6) In addition, the Fifteenth Edition continues to cover top-
• Riot Games, Inc., Protects Its Online Video ics that are essential to new CPAs who are working with
Game Copyrights (Chapter 9) sophisticated business clients, regardless of whether the
• “Catfishing” and Fraudulent Misrepresentation CPA exam covers these topics.
(Chapter 15) We recognize that today’s business leaders must often
• Hiring Discrimination Based on Social Media think “outside the box” when making business decisions.
Posts (Chapter 35) For this reason, we strongly emphasize business and criti-
4. Managerial Strategy. These features emphasize cal thinking elements throughout the text. We have care-
the management aspects of business law and the fully chosen cases, features, and problems that are rel-
legal environment. Topics include the following: evant to business operations. Almost all of the features
• Should You Consent to Have Your Business Case and cases conclude with some type of critical thinking
Decided by a U.S. Magistrate Judge? (Chapter 4) question. For those teaching future CPAs, this is con-
• When Is a Warning Legally Bulletproof? sistent with the new CPA exam’s focus on higher-order
(Chapter 7) skills, such as critical thinking and problem solving.
• The Criminalization of American Business
(Chapter 10)
• Commercial Use of Drones (Chapter 21) Highlighted and Numbered Examples and
• The SEC’s Pay-Ratio Disclosure Rule (Chapter 42) Case in Point Illustrations
Many instructors use cases and examples to illustrate how
Entire Chapter on Internet Law, the law applies to business. Students understand legal
concepts better in the context of their real-world applica-
Social Media, and Privacy tion. Therefore, for this edition of Business Law, we have
The Fifteenth Edition again includes a whole chapter expanded the number of highlighted numbered Examples
(Chapter 9) on Internet Law, Social Media, and Privacy. and Cases in Point in every chapter.
P re f a ce xix
Examples illustrate how the law applies in a specific sit- cases because they involve interesting and memo-
uation. Cases in Point present the facts and issues of an actual rable facts. Other cases have been chosen as Classic
case and then describe the court’s decision and rationale. Cases because they establish a legal precedent in a
These two features are uniquely designed and consecutively particular area of law.
numbered throughout each chapter for easy reference. 2. Critical Thinking Section. Each case concludes
The Examples and Cases in Point are integrated through- with a Critical Thinking section, which normally
out the text to help students better understand how courts includes two questions. The questions may address
apply legal principles in the real world. Legal Environment, E-Commerce, Economic, Envi-
ronmental, Ethical, Global, Political, or Technological
issues, or they may ask What If the Facts Were Dif-
Task-Based Simulations: ferent? Each Classic Case ends with an Impact of This
A New Unit-Ending Feature Case on Today’s Law discussion and a Critical Think-
ing question.
A new Task-Based Simulation feature concludes each of the
3. Longer Excerpts for Case Analysis. We have also
ten units in the Fifteenth Edition. This feature presents a
included one longer case excerpt in most chapters—
hypothetical business situation and then asks a series of
labeled Case Analysis—followed by three Legal
questions about how the law applies to various actions
Reasoning Questions. The questions are designed to
taken by the firm. To answer the questions, the students
guide students’ analysis of the case and build their
must apply the laws discussed throughout the unit.
legal reasoning skills. These Case Analysis cases may
In addition, each unit ends with an Application and
be used for case-briefing assignments.
Ethics feature that provides additional analysis on a topic
related to that unit and explores its ethics ramifications. Suggested answers to all case-ending questions and case
Each of the features ends with two questions—a Critical problems are included in the Answers Manual for this
Thinking question and an E thics Question. Some topics text.
covered include the following:
• One of the Biggest Data Breaches Ever (Unit 2) Business Case Problem with Sample Answer
• Nondisclosure Agreements (Unit 3)
• Virtual Currency—Is It Safe? (Unit 5) In response to those instructors who would like students
• Health Insurance and Small Business (Unit 7) to have sample answers available for some of the ques-
tions and case problems, we include a Business Case Prob-
Suggested answers to the questions in the new Task- lem with Sample Answer in each chapter. The Business
Based Simulation features (and the Application and Ethics Case Problem with Sample Answer is based on an actual
features) are included in the Answers Manual for this text. case, and students can find a sample answer at the end of
the text. Suggested answers to the Business Case Problems
with Sample Answers are provided in Appendix C and in
New Cases and Case Problems the Answers Manual for this text.
For the Fifteenth Edition of Business Law, we have added
more than a hundred new cases and case problems, most
from 2017, 2018, and 2019. The new cases and problems Exhibits and Concept Summaries
have been carefully selected to illustrate important points of We have spent considerable effort developing and design-
law and to be of high interest to students and instructors. ing all of the exhibits and concept summaries in this text
We have made it a point to find recent cases that enhance to achieve better clarity and more visual appeal.
learning and are relatively easy to understand.
1. Spotlight Cases and Classic Cases. Certain cases
and case problems that are exceptionally good Practice and Review
teaching cases are labeled as Spotlight Cases and In the Fifteenth Edition of Business Law, we offer a Practice
Spotlight Case Problems. Examples include Spotlight and Review feature at the end of every chapter to help solid-
on Amazon, Spotlight on Beer Labels, Spotlight on ify students’ understanding of the chapter materials. Each
Gucci, Spotlight on Nike, and Spotlight on the Seattle Practice and Review feature presents a hypothetical scenario
Mariners. Instructors will find these Spotlight and then asks a series of questions that require students to
Cases useful to illustrate the legal concepts under identify the issues and apply the legal concepts discussed in
discussion, and students will enjoy studying the the chapter.
xx Pref ace
These features are designed to help students review singular Learning Path, MindTap Business Law guides
the chapter topics in a simple and interesting way and students through their course with ease and engagement.
see how the legal principles discussed in the chapter af- Instructors can personalize the experience by customiz-
fect the world in which they live. An instructor can use ing Cengage Learning resources and adding their own con-
these features as the basis for in-class discussion or en- tent via apps that integrate into the MindTap framework
courage students to use them for self-study prior to com- seamlessly with Learning Management Systems (LMS).
pleting homework assignments. Suggested answers to The MindTap Business Law product provides a four-
the questions posed in the Practice and Review features step Learning Path, Case Repository, Adaptive Test Prep,
can be found in the Answers Manual for this text. and an Interactive eBook designed to meet instructors’
needs while also allowing instructors to measure skills
and outcomes with ease. Each and every item is assign-
Issue Spotters able and gradable. This gives instructors knowledge of
At the conclusion of each chapter, we have included a spe- class standings and students’ mastery or concepts that
cial section with two Issue Spotters related to the c hapter’s may be difficult. Additionally, students gain knowledge
topics. These questions facilitate student learning and about where they stand—both individually and com-
review of the chapter materials. Suggested answers to the pared to the highest performers in class.
Issue Spotters in every chapter are provided in Appendix B
and in the Answers Manual for this text.
Cengage Testing Powered by Cognero
Cengage Testing Powered by Cognero is a flexible, online
Time-Limited Group Assignment system that allows you to do the following:
For instructors who want their students to engage in
• Author, edit, and manage Test Bank content from
group projects, each chapter of the Fifteenth Edition
multiple Cengage Learning solutions.
includes a special Time-Limited Group Assignment. Each
• Create multiple test versions in an instant.
activity begins by describing a business scenario and then
• Deliver tests from your LMS, your classroom, or
poses several questions pertaining to the scenario. Each
wherever you want.
question is to be answered by a different group of stu-
dents based on the information in the chapter. These
projects may be used in class to spur discussion or as Start Right Away! Cengage Testing Powered by Cognero
homework assignments. Suggested answers to the Time- works on any operating system or browser.
Limited Group Assignments are included in the Answers • Use your standard browser; no special installs or
Manual for this text. downloads are needed.
• Create tests from school, home, the coffee shop—
anywhere with Internet access.
Supplements/Digital What Will You Find?

Learning Systems • Simplicity at every step. A desktop-inspired inter-
Business Law, Fifteenth Edition, provides a comprehen- face features drop-down menus and familiar intu-
sive supplements package designed to make the tasks of itive tools that take you through content creation
teaching and learning more enjoyable and efficient. The and management with ease.
following supplements and digital products are offered in • Full-featured test generator. Create ideal assess-
conjunction with the text. ments with your choice of fifteen question
types—including true/false, multiple choice,
opinion scale/Likert, and essay. Multi-language
MindTap for Business Law support, an equation editor, and unlimited meta-
MindTap™ for Business Law, Fifteenth Edition, is a fully data help ensure your tests are complete and
online, highly personalized learning experience built compliant.
upon Cengage Learning content. By combining read- • Cross-compatible capability. Import and export
ings, multimedia, activities, and assessments into a content to and from other systems.
P re f a ce xxi
Instructor’s Companion Website for remembering the individual steps: Inquiry,

Discussion, Decision, and Review.) A new Ethics
The Instructor’s Companion Website for the Fifteenth Edi- Today feature illustrates how to apply the IDDR
tion of Business Law contains the following supplements: framework. The step-by-step IDDR approach is
• Instructor’s Manual. Includes sections entitled then reiterated in the problems labeled A Question
“Additional Cases Addressing This Issue” at the of Ethics that appear in every subsequent chap-
end of selected case synopses. ter. There are five new Cases in Point, seven new
• Answers Manual. Provides answers to all ques- Examples, a new case, and four new case problems
tions presented in the text, including the questions in the chapter. A Digital Update feature explores
in each case and feature, the Practice and Review, whether employees have a right to disconnect
the Issue Spotters, the Business Scenarios and Case from their electronic devices after work hours. The
Problems, and the unit-ending Task-Based Simula- chapter concludes with a new Time-Limited Group
tion and Application and Ethics features. Assignment on corporate social responsibility.
• Test Bank. A comprehensive test bank that con- • Chapter 8 (Intellectual Property Rights)—The
tains multiple-choice, true/false, and short essay materials on intellectual property rights have
questions. been thoroughly revised and updated to reflect
• Case-Problem Cases. the most current laws and trends. A new Global
• Case Printouts. Insight feature discusses confusion in the context
• PowerPoint Slides. of trademark infringement. There are new Cases
• Lecture Outlines. in Point and Examples, as well as a new case and
• MindTap Integrated Syllabus. two new case problems.
• Chapter 9 (Internet Law, Social Media, and
rivacy)—This chapter, which covers legal issues
P
that are unique to the Internet, has been thor-
oughly revised and updated for the Fifteenth
For Users of the Previous Edition Edition. It includes a new case, four new Cases in
First of all, we want to thank you for helping make Point, and a new Digital Update feature on how
Business Law the best-selling business law text in copyright law applies to video games.
America today. Second, we want to make you aware of • Chapters 11 through 19 (Contracts and
the numerous additions and changes that we have made E-Contracts)—In this unit, we have added nine
in this edition—many in response to comments from new cases and fifteen new Cases in Point, along
reviewers. with new Examples and case problems. We have
Every chapter of the Fifteenth Edition has been also reworked exhibits, concept summaries, and
revised as necessary to incorporate new develop-
features. These updates clarify and enhance our
ments in the law or to streamline the presentations. already superb contract law coverage.
Other major changes and additions for this edition • Chapters 20 through 23 (the first three chapters
include the following: in the Domestic and International Sales and Lease
Contracts unit)—We have streamlined and sim-
• Chapter 2 (Business and the Constitution)—The plified our coverage of the Uniform Commercial
chapter has been revised and updated to be more Code and added three new cases, as well as four
business oriented. It has a new case, two new case new Cases in Point and one new Example. New
problems, and a new Digital Update feature on a case problems have also been added.
United States Supreme Court decision concerning • Chapter 24 (International and Space Law)—The
whether everyone has a constitutional right to use last chapter in the unit on Domestic and Interna-
social media. tional Sales and Lease Contracts includes a section
• Chapter 3 (Ethics in Business)—The chapter on space law—international and domestic. Two
contents have been revised and updated to be cases presented are new to this edition. There is
more practical for businesspersons. A new sec- an updated discussion of NAFTA (now called
tion introduces a systematic approach to resolv- USMCA) and on a United States Supreme Court
ing ethical issues called the IDDR Approach. (“I decision concerning the Alien Tort Statute. The
Desire to Do Right” is a useful mnemonic device chapter also includes an updated Ethics Today
xxii P ref ace
feature on the domestic brewing of imported decisions affecting employment issues throughout
beer brands. both chapters.
• Chapter 28 (Banking) This chapter reflects the • Chapters 36 through 42 (Business Organizations)—
realities of banking in today’s digital world. This unit has been revised and updated to improve
A new case is presented, along with a new Case flow and clarity. We provide more practical infor-
in Point, a new Example, and two new case mation and recent examples. We start with small
problems. A Digital Update feature explains how business forms, go on to partnerships, and then cover
electronic payment systems are reducing the use limited liability companies. We discuss corporations
of checks. in Chapters 39 through 42. There are new cases in
• Chapter 34 (Employment, Immigration, and every chapter and new Cases in Point throughout
Labor Law) and Chapter 35 (Employment the unit. In Chapter 39, a Global Insight feature
Discrimination)—These two chapters covering examines whether cloud computing has a nation-
employment law have been thoroughly updated to ality. The chapter on securities law (Chapter 42)
include discussions of legal issues facing employers has been substantially revised and updated due to
today. Chapter 34 has two new cases, three new the changes in Regulation A (Regulation A+). The
Cases in Point, one new Example, and two new chapter includes a new exhibit, two new Cases in
case problems. Features include an Ethics Today on Point, and a new Digital Update feature on invest-
whether employees should receive paid bathroom ment crowdfunding. A Managerial Strategy feature
breaks and a Managerial Strategy on union orga- discusses the SEC’s pay-ratio disclosure rule.
nizing using company e-mail systems. Chapter 35 • Chapter 48 (Personal Property and Bailments) and
has one new case, four new Cases in Point, a new Chapter 49 (Real Property and Landlord-Tenant
concept summary, and two new case problems. Law)—Each chapter includes a new case, as well as
A revised Digital Update feature discusses hiring a Classic Case or Spotlight Case. There are two new
discrimination based on social media posts. We Cases in Point, a new concept summary, and four
discuss relevant United States Supreme Court new case problems in these two chapters.
Acknowledgments for Previous Editions

Since we began this project many years ago, a sizable number of business law professors and others have helped us in
revising the book, including the following:
Jeffrey E. Allen Michael G. Barth Dean Bredeson
University of Miami University of Phoenix, Arizona University of Texas at Austin
Judith Anshin David L. Baumer Kylar William Broadus, Esq.
Sacramento City College, California North Carolina State University Lincoln University, Missouri
Thomas M. Apke Barbara E. Behr Doug Brown
California State University, Fullerton Bloomsburg University of Pennsylvania Montana State University
Robert B. Bennett, Jr. Kristi K. Brown

Raymond August
Butler University, Indiana University of Texas at Austin
Washington State University
Elizabeth K. Brunn, Esq.
William Auslen Robert C. Bird
University of Baltimore; University of
San Francisco City College, California University of Connecticut
Maryland University College
Mary B. Bader Heidi Boerstler William J. Burke
Moorhead State University, Kentucky University of Colorado Denver University of Massachusetts Lowell
Frank Bagan Maria Kathleen Boss Kenneth Burns
County College of Morris, New Jersey California State University, Los Angeles University of Miami
John J. Balek Lawrence J. Bradley Daniel R. Cahoy
Morton College, Illinois University of Notre Dame, Indiana Pennsylvania State University
P re f a ce xxiii
Rita Cain Maria Elena Ellison James M. Haine

University of Missouri-Kansas City Florida Atlantic University University of Wisconsin-Stevens Point
Jeanne A. Calderon Nena Ellison Gerard Halpern
New York University Florida Atlantic University University of Arkansas
Joseph E. Cantrell O. E. Elmore Christopher L. Hamilton
DeAnza College, California Texas A&M University Golden West College, California
Donald Cantwell Robert J. Enders JoAnn W. Hammer

University of Texas at Arlington California State Polytechnic University, University of Texas at Austin
Pomona Charles Hartman
Arthur J. Casey
Michael Engber Wright State University, Ohio
San Jose State University, California
Ball State University, Indiana Richard A. Hausler
Thomas D. Cavenagh
David A. Escamilla University of Miami School of Law, Florida
North Central College, Illinois
University of Texas at Austin Harry E. Hicks
Robert Chatov
Denise M. Farag Butler University, Indiana
University at Buffalo, New York
Linfield College, Oregon Janine S. Hiller
Corey Ciocchetti Virginia Polytechnic Institute and
University of Denver, Colorado James S. Fargason
Louisiana State University State University
Nanette C. Clinch Rebecca L. Hillyer
Frank S. Forbes
San Jose State University, California Chemeketa Community College, Oregon
University of Nebraska Omaha
Robert J. Cox E. Clayton Hipp, Jr.
Joe W. Fowler
Salt Lake Community College Clemson University, South Carolina
Oklahoma State University
Thomas Crane Anthony H. Holliday, Jr.
Stanley G. Freeman
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University of South Carolina
Angela Crossin Telford Hollman
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Florida State University
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Christ Gaetanos
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State University of New York at Fredonia
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Iowa State University Auburn University, Alabama
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Bob Garrett The University of North Carolina at
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William H. Daughtrey, Jr. Gary L. Giese Robert Jesperson
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Michael DeAngelis Thomas Gossman Debra M. Johnson
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James Doering John D. Grigsby Bryce J. Jones
University of Wisconsin-Green Bay Pennsylvania College of Technology Truman State University, Missouri
John V. Dowdy Dr. J. Keaton Grubbs Margaret Jones
University of Texas at Arlington Stephen F. Austin State University, Texas Missouri State University
Michele A. Dunkerley Patrick O. Gudridge Peter A. Karl III
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Julia M. Dunlap, Esq. Paul Guymon Jack E. Karns
University of California San Diego William Rainey Harper College, Illinois East Carolina University
Paul Dusseault Jacqueline Hagerott Anne E. Kastle
Herkimer College, New York Franklin University, Ohio Edmonds Community College, Washington
xxiv P ref ace
Tamra Kempf Woodrow J. Maxwell Dwight D. Murphey

University of Miami, Florida Hudson Valley Community College, Wichita State University, Kansas
Judith Kenney New York Daniel E. Murray
University of Miami, Florida Bruce E. May University of Miami School of Law, Florida
Barbara Kincaid University of South Dakota
Paula C. Murray
Southern Methodist University, Texas Diane May University of Texas at Austin
Carey Kirk Winona State University, Minnesota
Gregory J. Naples
University of Northern Iowa Gail McCracken Marquette University, Wisconsin
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George A. Nation III
University of Central Florida John W. McGee Lehigh University, Pennsylvania
Kurtis P. Klumb Texas State University
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Kathleen M. Knutson University of Nevada, Las Vegas
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Lisa Quinn Knych University of Texas at Austin
Jamie O’Brien
Syracuse University, Whitman School Roger E. Meiners University of Notre Dame, Indiana
of Management, New York University of Texas at Arlington
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Peter Kwiatkowski, Esq. Gerald S. Meisel California Lutheran University, California
Baldwin Wallace University, Ohio Bergen Community College, New Jersey
Michael J. O’Hara
Meg Costello Lambert Jennifer Merton, J.D. University of Nebraska Omaha
Oakland Community College— University of Massachusetts Amherst
Auburn Hills Campus, Michigan Rick F. Orsinger
Richard Mills College of DuPage, Illinois
Vonda M. Laughlin Cypress College, California
Carson-Newman University, Tennessee Daniel J. O’Shea
David Minars Hillsborough Community College, Florida
M. Alan Lawson City University of New York, Brooklyn
Mt. San Antonio College, California Thomas L. Palmer
Leo Moersen Northern Arizona University
Leslie E. Lenn The George Washington University,
St. Edward’s University, Texas Washington D.C. Charles M. Patten
The University of Wisconsin Oshkosh
Susan Liebeler Alan Moggio
Loyola University, California Illinois Central College Patricia Pattison
Texas State University
Robert B. Long Violet E. Molnar
Oakland Community College, Michigan Riverside City College, California Peyton J. Paxson
University of Texas at Austin
Stuart MacDonald James E. Moon
University of Central Oklahoma Meyer, Johnson & Moon, Minneapolis Carlton Perkins
Texas Southern University
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California State University, Fullerton University of Texas at Austin Darren A. Prum
Florida State University
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Triton College, Illinois Eastern Michigan University Ralph L. Quinones
University of Wisconsin Oshkosh
Gene A. Marsh Barry S. Morinaka
University of Alabama Baker College, Michigan Carol D. Rasnic
Virginia Commonwealth University
Michael Martin, J.D., M.B.A., LL.M. Melanie Morris
University of Northern Colorado, Raritan Valley Community College, Marvin H. Robertson
Monfort College of Business New Jersey Harding University, Arkansas
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University of Texas at Austin Los Angeles Southwest College, California Kennesaw State University, Georgia
P re f a ce xxv
Norberto Ruiz Robert D. Sprague William H. Walker

Chabot College, California University of Wyoming Indiana University–Purdue University
Gary K. Sambol Elisabeth Sperow Fort Wayne
Rutgers University, New Jersey California Polytechnic University, Diana Walsh
Rudy Sandoval San Luis Obispo County College of Morris, New Jersey
University of Texas at San Antonio Brenda Steuer Robert J. Walter
Sidney S. Sappington Lone Star College-North Harris University of Texas at El Paso
York College of Pennsylvania Campus, Texas
Gary Watson
Martha Sartoris Craig Stilwell California State University, Los Angeles
North Hennepin Community College, Michigan State University
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Minnesota Irwin Stotsky Clarkson University School of Business,
Barbara P. Scheller University of Miami School of Law, New York
Temple University, Pennsylvania Florida
John L. Weimer
S. Alan Schlact Larry Strate Nicholls State University, Louisiana
Kennesaw State University, Georgia University of Nevada, Las Vegas
Marshall Wilkerson
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University of Nevada, Las Vegas Sam Houston State University, Texas
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Ira Selkowitz Raymond Mason Taylor California State University,
University of Colorado Denver North Carolina State University Northridge
Roscoe B. Shain Thomas F. Taylor Arthur D. Wolfe
Austin Peay State University, Tennessee Campbell University, North Carolina Michigan State University
Bennett D. Shulman Ray Teske Elizabeth A. Wolfe
Lansing Community College, Michigan University of Texas at San Antonio University of Texas at Austin
S. Jay Sklar H. Allan Tolbert Daniel R. Wrentmore
Temple University, Pennsylvania Central Texas College Santa Barbara City College,
Dana Blair Smith Jesse C. Trentadue California
University of Texas at Austin University of North Dakota Eric D. Yordy
Michael Smydra Edwin Tucker Northern Arizona University
Oakland Community College— University of Connecticut Norman Gregory Young
Royal Oak Campus, Michigan Gary Victor California State Polytechnic University,
Arthur Southwick Eastern Michigan University, Pomona
University of Michigan Michigan Ronald C. Young
Sylvia A. Spade William H. Volz Kalamazoo Valley Community College,
University of Texas at Austin Wayne State University, Michigan Michigan
John A. Sparks David Vyncke Bob Zaffram
Grove City College, Pennsylvania Scott Community College, Iowa Erie Community College, New York
xxvi Pref ace
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quite impervious, but becoming—at any rate in the case of the larger
and more important pair—open previous to the final ecdysis. We
have mentioned the contradictory opinions of Réaumur and Dufour,
and will now add the views of some modern investigators. Oustalet
says[341] that there are two pairs of spiracles in the nymphs; the first
pair is quite visible to the naked eye, and is situate between pro- and
meso-notum; it is in the nymph closed by a membrane. The other
pair of spiracles is placed above the posterior pair of legs, is small
and completely closed. He does not state what stage of growth was
attained by the nymphs he examined. Palmén was of opinion that
not only thoracic but abdominal spiracles exist in the nymph,[342] and
that they are completely closed so that no air enters them; he says
that the spiracles have tracheae connected with them, that at each
moult the part closing the spiracles is shed with some of the tracheal
exuviae attached to it. The breathing orifices are therefore for a short
time at each ecdysis open, being subsequently again closed by
some exudation or secretion. This view of Palmén's has been
thought improbable by Hagen and Dewitz, who operated by placing
nymphs in alcohol or warm water and observing the escape of
bubbles from the spots where the supposed breathing orifices are
situate. Both these observers found much difference in the results
obtained in the cases of young and of old nymphs. Hagen concludes
that the first pair of thoracic spiracles are functionally active, and that
abdominal stigmata exist though functionless; he appears to be of
opinion that when the first thoracic stigma is closed this is the result
of the abutting against it of a closed trachea. Dewitz found[343] that
in the adult nymph of Aeschna the thoracic stigma is well developed,
while the other stigmata—to what number and in what position is not
stated—are very small. In a half-grown Aeschnid nymph he found
the thoracic stigma to be present in an undeveloped form. On
placing a full-grown nymph in alcohol, gas escaped from the stigma
in question, but in immature nymphs no escape of gas occurred
although they were subjected to a severe test. A specimen that,
when submitted to the above-mentioned immersion, emitted gas,
subsequently moulted, and thereafter air escaped from the spiracle
previously impervious. The observations of Hagen and Dewitz are
perhaps not so adverse to the views of Palmén as has been
supposed, so that it would not be a matter for surprise if Palmén's
views on this point should be shown to be quite correct.
The number of species of Odonata or Libellulidae that have been

described is somewhat less than two thousand, but constant
additions are made to the number, and when the smaller and more
fragile forms from the tropics are collected and worked out it will
probably be found that the number of existing species is somewhere
between five and ten thousand. They are distributed all over the
world, but are most numerous in species in the warmer regions, and
their predominance in any one locality is very much regulated by the
existence of waters suitable for the early stages of their lives.
A good work on the British Odonata is still a desideratum.[344] In

Britain about forty-six species are believed to be native. They are
said to be of late years less numerous than they used to be.
Notwithstanding their great powers of flight, dragon-flies are
destroyed by birds of various kinds; several hawks are said to be
very fond of them, and Merops persicus to line its nest with their
wings. The number of Insects killed by dragon-flies in places where
they are abundant must be enormous; the nymphs, too, are very
destructive in the waters they inhabit, so that dragon-flies have no
doubt been no mean factor in maintaining that important and delicate
balance of life which it is so difficult for us to appreciate. The nymphs
are no doubt cannibals, and this may perhaps be an advantage to
the species, as the eggs are sometimes deposited in large numbers
in a limited body of water, where all must perish if the nymphs did
not, after exhausting other food, attack one another. Martin, speaking
of the Odonata of the Département de l'Indre in France, says:[345]
"The eggs, larvae, and nymphs are the prey of several fishes,
snakes, newts, Coleoptera, aquatic Hemiptera, and of some diving
birds. Sometimes the destruction is on a considerable scale, and one
may notice the dragon-flies of some piece of water to diminish
gradually in numbers, while the animals that prey on them increase,
so that a species may for a time entirely disappear in a particular
spot, owing to the attacks of some enemy that has been specially
prosperous, and also eager in their pursuit. De Selys found that from
a pond filled with carp, roach, perch, and eels, several of the dragon-
fly denizens disappeared directly the bream was introduced." On the
other hand, there can be little doubt that the nymphs are sometimes
injurious to fish; it has been recorded that in a piscicultural
establishment in Hungary 50,000 young fishes were put into a pond
in spring; in the following autumn only fifty-four fish could be found,
but there were present an enormous quantity of dragon-fly nymphs.
Odonata are among the few kinds of Insects that are known to form
swarms and migrate. Swarms of this kind have been frequently
observed in Europe and in North America; they usually consist of
species of the genus Libellula, but species of various other genera
also swarm, and sometimes a swarm may consist of more than one
species. L. quadrimaculata is the species that perhaps most
frequently forms these swarms in Europe; a large migration of this
species is said to occur every year in the Charente inférieure from
north to south.[346] It is needless to say that the instincts and stimuli
connected with these migrations are not understood.
The nymphs are capable, under certain circumstances, of

accommodating themselves to very peculiar conditions of life. The
Sandwich Islands are extremely poor in stagnant waters, and yet
there exist in this remote archipelago several highly peculiar species
of Agrioninae. Mr. R. C. L. Perkins has recently discovered that the
nymphs of some of these are capable of maintaining their existence
and completing their development in the small collections of water
that accumulate in the leaves of some lilies growing on dry land.
These nymphs (Fig. 271) have a shorter mask than occurs, we
believe, in any other Odonata, and one would suppose that they
must frequently wait long for a meal, as they must be dependent on
stray Insects becoming immersed in these tiny reservoirs. The
cannibal habits of the Odonata probably stand these lily-dwellers in
good stead; Mr. Perkins found that there were sometimes two or
three nymphs of different sizes together, and we may suspect that it
sometimes goes hard with the smaller fry. The extension in the
length of the body of one of these lily-frequenting Agrions when it
leaves the water for its aerial existence is truly extraordinary.
Fig. 271.—Under side of Agrionid nymph, with short mask, living in

water in lilies. Hawaiian Islands. × 3.
The Odonata have no close relations with any other group of Insects.
They were associated by Latreille with the Ephemeridae, in a family
called Subulicornia. The members of the two groups have, in fact, a
certain resemblance in some of the features of their lives, especially
in the sudden change, without intermediate condition, from aquatic to
aerial life; but in all important points of structure, and in their
dispositions, dragon-flies and may-flies are totally dissimilar, and
there is no intermediate group to connect them. We have already,
said that the Odonata consist of two very distinct divisions—
Anisopterides and Zygopterides. The former group comprises the
subfamilies Gomphinae, Cordulegasterinae, Aeschninae,
Corduliinae, and Libellulinae,—Insects having the hinder wings
slightly larger than the anterior pair; while the Zygopterides consist of
only two subfamilies—Calepteryginae and Agrioninae; they have the
wings of the two pairs equal in size, or the hinder a little the smaller.
The two groups Gomphinae and Calepteryginae are each, in several
respects, of lower development than the others, and authorities are
divided in opinion as to which of the two should be considered the
more primitive. It is therefore of much interest to find that there exists
an Insect that shares the characters of the two primitive subfamilies
in a striking manner. This Insect, Palaeophlebia superstes (Fig. 272),
has recently been discovered in Japan, and is perhaps the most
interesting dragon-fly yet obtained. De Selys Longchamps refers it to
the subfamily Calepteryginae, on account of the nature of its wings;
were the Insect, however, deprived of these organs, no one would
think of referring Palaeophlebia to the group in question, for it has
the form, colour, and appearance of a Gomphine Odonate.
Moreover, the two sexes differ in an important character,—the form
of the head and eyes. In this respect the female resembles a
Gomphine of inferior development; while the male, by the shape and
large size of the ocular organs, may be considered to combine the
characters of Gomphinae and Calepteryginae. The Insect is very
remarkable in colour, the large eyes being red in the dead examples.
We do not, however, know what may be their colour during life, as
only one pair of the species is known, and there is no record as to
the life-history and habits. De Selys considers the nearest ally of this
Insect to be Heterophlebia dislocata, a fossil dragon-fly found in the
Lower Lias of England.
Fig. 272.—Palaeophlebia superstes. A, The Insect with wings of one

side and with two legs removed; B, front view of head of female;
C, of male. (After De Selys.)
Numerous fossil dragon-flies are known; the group is well

represented in the Tertiary strata, and specimens have been found in
amber. In strata of the Secondary age these Insects have been
found as far back as the Lower Lias; their remains are said to exist in
considerable variety in the strata of that epoch, and some of them to
testify to the existence at that period of dragon-flies as highly
specialised as those now living. According to Hagen[347]
Platephemera antiqua and Gerephemera simplex, two Devonian
fossils, may be considered as dragon-flies; the evidence as to this
appears inadequate, and Brongniart refers the latter Insect to the
family Platypterides, and considers Platephemera to be more allied
to the may-flies.
One of the most remarkable of the numerous discoveries lately
made in fossil entomology is the finding of remains of huge Insects,
evidently allied to dragon-flies, in the Carboniferous strata at
Commentry. Brongniart calls these Insects Protodonates,[348] and
looks on them as the precursors of our Odonata. Meganeura monyi
was the largest of these Insects, and measured over two feet across
the expanded wings. If M. Brongniart be correct in his restoration of
this giant of the Insect world, it much resembled our existing dragon-
flies, but had a simple structure of the thoracic segments, and a
simpler system of wing-nervures. On p. 276 we figured
Titanophasma fayoli, considered by Scudder and Brongniart as allied
to the family Phasmidae, and we pointed out that this supposed
alliance must at best have been very remote. This view is now taken
by M. Brongniart himself,[349] he having removed the Insect from the
Protophasmides to locate it in the Protodonates near Meganeura.
There appears to be some doubt whether the wings supposed to
belong to this specimen were really such, or belonged rather to
some other species.
CHAPTER XIX
AMPHIBIOUS NEUROPTERA CONTINUED—EPHEMERIDAE, MAY-FLIES
Fam. VII. Ephemeridae—May-flies.
Delicate Insects with atrophied mouth and small, short antennae;

with four membranous wings having much minute cross-veining;
the hinder pair very much smaller than the other pair, sometimes
entirely absent: the body terminated by three or two very
elongate slender tails. The earlier stages are passed through in
water, and the individual then differs greatly in appearance from
the winged Insect; the passage between the two forms is
sudden; the creature in its first winged state is a subimago,
which by shedding a delicate skin reveals the final form of the
individual.
Fig. 273.—Ephemera danica, male, Britain.
The may-flies are well known—in literature—as the types of a brief

and ineffective life. This supposed brevity relates solely to their
existence in the winged form. In the earlier stages the may-fly is so
unlike its subsequent self that it is not recognised as a may-fly by the
uninitiated. The total life of the individual is really quite as long as
that of most other Insects. The earlier stages and life-histories of
these Insects are of great importance. The perfect Insects are so
delicate and fragile that they shrivel much in drying, and are very
difficult to preserve in a condition suitable for study.
The mouth of the imago is atrophied, the trophi scarcely existing as

separate parts. Packard says that in Palingenia bilineata he could
discover no certain traces of any of the mouth-parts, but in
Leptophlebia cupida he found, as he thought, the rudiments of the
maxillae and labium, though not of the mandibles. The antennae are
always short, and consist of one or two thick basal joints succeeded
by a delicate needle-like segment, which, though comparatively long,
is not divided. The ocular organs are remarkable for their large size
and complex development; they are always larger in the male than
they are in the female. The compound eyes of the former sex are in
certain species, e.g. Cloëon (Fig. 274), quite divided, so that each
eye becomes a pair of organs of a different character; one part forms
a pillar facetted at its summit, while the other part remains as a true
eye placed on the side of the head; in front of these compound eyes
there are three ocelli. Thus the Insect comes to have three different
kinds of eyes, together seven in number.
Fig. 274.—Front of head of Cloëon, male. a, Pillared eye; b, sessile

eye; c, ocellus.
The prothorax is small, the pronotum being, however, quite distinct.

The mesothorax is very large; its notum forms by far the larger part
of the upper surface of the thoracic region, the metathorax being
small and different in structure, resembling in appearance a part of
the abdomen, so that the hind wings look as if they were attached to
a first abdominal segment. The mesosternum is also
disproportionately large in comparison with the homologous piece
preceding it, and with that following it. The pleural pieces are large,
but their structure and disposition are only very imperfectly
understood. The coxae are small and are widely separated, the
anterior being, however, more elongate and approximate than the
others. The other parts of the legs are slender; the number of joints
in the tarsi varies from five to one. The legs throughout the family
exhibit a considerable variety of structure, and the front pair in the
males of some species are remarkably long. The abdomen is usually
slender, and consists of ten segments; the terminal one bears three,
or two, very long flexible appendages. The first dorsal plate of the
abdomen is either wanting or is concealed to a considerable extent
by the metanotum. The wings are peculiar; the anterior pair vary a
great deal in their width, but are never very long in proportion to the
width; the hind pair are always disproportionately small, and
sometimes are quite wanting. The venation consists of a few, or of a
moderate number, of delicate longitudinal veins that do not pursue a
tortuous course, but frequently are gracefully curved, and form a
system of approximately similar curves, most of the veins being of
considerable length; close to the anterior margin of the wing there
are two or three sub-parallel veins. Frequently there are very
numerous fine, short cross-veinlets, but these vary greatly and may
be entirely wanting.
Fig. 275.—Wings of Ephemera danica. (After Eaton.)
The earlier stages of the life of Ephemeridae are, it is believed, in the

case of all the species, aquatic. May-flies, indeed, during the period
of their post-embryonic development are more modified for an
aquatic life than any other Insects, and are provided with a complex
apparatus of tracheal gills. The eggs are committed to the waters
without any care or foresight on the part of the parent flies, thus the
embryonic development is also aquatic; little, however, is known of it.
According to Joly[350] the process in Palingenia virgo is slow. The
larva on emerging from the egg has no respiratory system, neither
could Joly detect any circulation or any nervous system. The
creature on emergence is very like Campodea in form, possessing
long antennae and tails—caudal setae. Owing to the organisation
being inferior, the creature in its earlier stages is called a larvule; in
its later stages it is usually spoken of as a nymph, but the term larva
is also frequently applied to it. Soon the gills begin to appear in the
form of small tubular caeca placed in the posterior and upper angles
of the abdominal rings; in fifteen days the gills begin to assume their
characteristic form, are penetrated by tracheae, and the circulation
can be seen. The amount of growth accomplished after hatching
between March and September is but small.
Fig. 276.—Nymph of Cloëon dipterum.[351] Wing-sheath of left side,
gills of right side, removed; g, tracheal gills. (After Vayssière.)
Fig. 277.—Larvule of Cloëon dimidiatum. (After Lubbock.)
The metamorphosis of Cloëon has been described by Sir John

Lubbock; he informs us that the young creature undergoes a
constant and progressive development, going through a series of
more than twenty moults, each accompanied by a slight change of
form or structure. His observations were made on captured
specimens, so that it is not certain that what he calls[352] the first
stage is really such. He found no tracheae in the earliest stages; the
small first rudiments of the gills became visible in the third stage,
when there were no tracheae; the fourth instar possessed tracheae,
and they could be seen in the gills. The wing rudiments could first be
detected in the ninth and tenth stages. The changes of skin during
the winter months are separated by longer intervals than those
occurring at other periods of the year.
Fig. 278.—Adult nymph of Ephemera vulgata. (After Eaton.) Britain.
The nymphs differ greatly in the structure and arrangement of their

tracheal gills, and display much variety in their general form and
habits; some of them are very curious creatures. Pictet[353] divides
them in accordance with their habits into four groups: (1) Fossorial
larvae: these live in the banks of streams and excavate burrows for
shelter; they are of cylindrical form, possess robust legs, abundant
gills at the sides of the body, and frequently processes projecting
forwards from the head: examples, Ephemera (Fig. 278) and
Palingenia. (2) Flat larvae: these live attached to rocks, but run with
rapidity when disturbed; they prefer rapid streams, have the
breathing organs attached to the sides of the body and not reposing
on the back; they are exclusively carnivorous, while the fossorial
forms are believed to obtain their nutriment by eating mud: example,
Baëtis. (3) Swimming larvae: elongate delicate creatures, with feeble
legs, and with strongly ciliated caudal setae: example, Cloëon (Fig.
276). (4) Climbing larvae: these live in slowly-moving waters,
especially such as have much slimy mud in suspension, and they
have a habit of covering themselves with this mud sometimes to
such an extent as to become concealed by it: example,
Potamanthus.
Fig. 279.—Nymph of Oligoneuria garumnica, France. g2 and g7, two of
the dorsal tracheal gills. (After Vayssière.)
The anatomy of the nymphs has been treated by Vayssière,[354] who

arranges them in five groups in accordance with the conditions of the
tracheal gills: (1) The gills are of large size, are exposed and
furnished at the sides with respiratory fringes: example, Ephemera
(Fig. 278). (2) The branchiae are blade-like, not fringed, and are
exposed at the sides of the body: example, Cloëon (Fig. 276). (3)
The respiratory tubes are placed on the under surface of plates
whose upper surface is not respiratory: example, Oligoneuria
garumnica (Fig. 279). (4) The anterior gill is modified to form a plate
that covers the others: example, Tricorythus (Fig. 282, B). (5) The
gills are concealed in a respiratory chamber: example, Prosopistoma
(Fig. 280). The last of these nymphs is more completely adapted for
an aquatic life than any other Insect at present known; it was for long
supposed to be a Crustacean, but it has now been shown to be the
early stage of a may-fly, the sub-imago having been reared from the
nymph. The carapace by which the larger part of the body is covered
is formed by the union of the pro- and meso-thorax with the sheaths
of the anterior wings, which have an unusually extensive
development; under the carapace there is a respiratory chamber, the
floor and sides of which are formed by the posterior wing-sheaths,
and by a large plate composed of the united nota of the metathorax
and the first six abdominal segments. In this chamber there are
placed five pairs of tracheal gills; entrance of water to the chamber is
effected by two laterally-placed orifices, and exit by a single dorsal
aperture. These nymphs use the body as a sucker, and so adhere
strongly to stones under water. When detached they swim rapidly by
means of their caudal setae; the form of these latter organs is
different from that of other Ephemerid nymphs. This point and other
details of the anatomy of this creature have been described in detail
by Vayssière.[355] These nymphs have a very highly developed
tracheal system; they live in rapid watercourses attached to stones
at a depth of three to six inches or more under the water. Species of
Prosopistoma occur in Europe, Madagascar, and West Africa.
Fig. 280.—Prosopistoma punctifrons, nymph. France. (After Vayssière.)

o, Orifice of exit from respiratory chamber.
According to Eaton,[356] in the nymphs of some Ephemeridae the

rectum serves, to a certain extent, as a respiratory agent; he
considers that water is admitted to it and expelled after the manner
we have described in Odonata, p. 421.
Fig. 281.—A, Last three abdominal segments and bases of the three
caudal processes of Cloëon dipterum: r, dorsal vessel; kl, ostia
thereof; k, special terminal chamber of the dorsal vessel with its
entrance a; b, blood-vessel of the left caudal process; B, twenty-
sixth joint of the left caudal process from below; b, a portion of the
blood-vessel; o, orifice in the latter. (After Zimmermann.)
The internal anatomy of the nymphs of Ephemeridae shows some

points of extreme interest. The long caudal setae are respiratory
organs of a kind that is almost if not quite without parallel in the other
divisions of Insecta. The dorsal vessel for the circulation of the blood
is elongate, and its chambers are arranged one to each segment of
the body. It drives the blood forwards in the usual manner, but the
posterior chamber possesses three blood-vessels, one of which is
prolonged into each caudal seta. This terminal chamber is so
arranged as to drive the blood backwards into the vessels of the
setae; on the under surface of the vessels there are oval orifices by
which the blood escapes into the cavity of the seta so as to be
submitted to the action of the surrounding medium for some of the
purposes of respiration. This structure has been described by
Zimmermann,[357] who agrees with Creutzberg[358] that the organ by
which the blood is propelled into the setae is a terminal chamber of
the dorsal vessel; Verlooren,[359] who first observed this accessory
system of circulation, thought the contractile chamber was quite
separate from the heart. The nature of the connexion between this
terminal chamber that drives the blood backwards and the other
chambers that propel the fluid forwards appears still to want
elucidation.
Fig. 282.—A, Nymph of Ephemerella ignita with gills of left side

removed; g, gills: B, nymph of Tricorythus sp. with gill cover of
right side removed; g.c, gill cover; g, g′, gills. (After Vayssière.)
The nymphs of the Ephemeridae being creatures adapted for

existence in water, the details of their transformation into creatures
having an entirely aerial existence cannot but be of much interest. In
the nymphs the tracheal system is well developed, but differs from
that of air-breathing Insects in the total absence of any spiracles.
Palmén has investigated this subject,[360] and finds that the main
longitudinal tracheal trunks of the body of the nymph are not
connected with the skin of the body by tracheae, but are attached
thereto by ten pairs of slender strings extending between the
chitinous integument and the tracheal trunks. When the skin is shed
these strings—or rather a chitinous axis in each one—are drawn out
of the body, and bring with them the chitinous linings of the tracheae.
Thus notwithstanding the absence of spiracles, the body wall is at
each moult pierced by openings that extend to the tracheae. After
the ordinary moults these orifices close immediately, but at the
change to the winged state they remain open and form the spiracles.
At the same time the tracheal gills are completely shed, and the
creature is thus transformed from a water-breather to an Insect
breathing air as usual. In addition to this change there are others of
great importance, such as the development of the great eyes and the
complete atrophy of the mouth-parts. The precise manner of these
changes is not known; they occur, however, within the nymph skin.
The sudden emergence of the winged Insect from the nymph is one
of the most remarkable facts in the life-history of the may-fly; it has
been observed by Sir John Lubbock,[361] who describes it as almost
instantaneous. The nymph floats on the water, the skin of the back
opens, and the winged Insect flies out, upwards and away; "from the
moment when the skin first cracks not ten seconds are over before
the Insect has flown away." The creature that thus escapes has not,
however, quite completed its transformation. It is still enveloped in a
skin that compresses and embarrasses it; this it therefore rapidly
gets rid of, and thus becomes the imago, or final instar of the life-
cycle. The instar in which the creature exists winged and active,
though covered with a skin, is called the sub-imago. The parts of the
body in the sub-imago are as a whole smaller than they are in the
imago, and the colour is more dingy; the appendages—wings, legs,
and caudal setae—are generally considerably shorter than they are
in the imago, but attain their full length during the process of
extraction. The creatures being, according to Riley, very impatient
and eager to take to the wing, the completion of the shedding of the
skin of the sub-imago is sometimes performed while the Insect is
flying in the air.
Fig. 283.—Lingua of Heptagenia longicauda, × 16. m, Central; l, lateral

pieces. (After Vayssière.)
The food of young Ephemeridae is apparently of a varied and mixed

nature. Eaton says[362] that though sometimes the stronger larvae
devour the weaker, yet the diet is even in these cases partly
vegetable. The alimentary canal frequently contains much mud; very
small organisms, such as diatoms and confervae, are thought to
form a large part of the bill of fare of Ephemerid nymphs. Although
the mouth is atrophied in the imago, yet it is highly developed in the
nymphs. This is especially notable in the case of the lingua or
hypopharynx (Fig. 283); indeed Vayssière[363] seems to incline to the
opinion that this part of the mouth may be looked on in these Insects
as a pair of appendages of a head-segment (see p. 96 ante), like the
labium or maxillae.
The life-history has not been fully ascertained in the case of any
species of may-fly; it is known, however, that the development of the
nymph sometimes occupies a considerable period, and it is thought
that in the case of some species this extends to as much as three
years. It is rare to find the post-embryonic development of an Insect
occupying so long a period, so that we are justified in saying that
brief as may be the life of the may-fly itself, the period of preparation
for it is longer than usual. Réaumur says, speaking of the winged fly,
that its life is so short that some species never see the sun. Their
emergence from the nymph-skin taking place at sunset, the duties of
the generation have been, so far as these individuals are concerned,
completed before the morning, and they die before sunrise. He
thinks, indeed, that individuals living thus long are to be looked on as
Methuselahs among their fellows, most of whom, he says, live only
an hour or half an hour.[364] It is by no means clear to which species
these remarks of Réaumur refer; they are doubtless correct in
certain cases, but in others the life of the adult is not so very short,
and in some species may, in all probability, extend over three or four
days; indeed, if the weather undergo an unfavourable change so as
to keep them motionless, the life of the flies may be prolonged for a
fortnight.
The life of the imago of the may-fly is as remarkable as it is brief; in

order to comprehend it we must refer to certain peculiarities of the
anatomy with which the vital phenomena are connected. The more
important of these are the large eyes of the males, the structure of
the alimentary canal, and that of the reproductive organs. We have
already remarked that the parts of the mouth in the imago are
atrophied, yet the canal itself not only exists but is even of greater
capacity than usual; it appears to have much the same general
arrangement of parts as it had in the nymph. Its coats are, however,
of great tenuity, and according to Palmén[365] the divisions of the
canal are separated by changes in the direction of certain portions
anterior to, and of others posterior to, its central and greater part—
the stomach—in such a manner that the portions with diverted
positions act as valves. The stomach, in fact, forms in the interior of
the body a delicate capacious sac; when movement tends to
increase the capacity of the body cavity then air enters into the
stomachic sac by the mouth orifice, but when muscular contractions
result in pressure on the sac they close the orifices of its extremities
by the valve-like structures we have mentioned above; the result is,
that as complex movements of the body are made the stomach
becomes more and more distended by air. It was known even to the
old naturalists that the dancing may-fly is a sort of balloon, but they
were not acquainted with the exact mode of inflation. Palmén says
that in addition to the valve-like arrangements we have described,
the entry to the canal is controlled by a circular muscle, with which
are connected radiating muscles attached to the walls of the head.
Palmén's views are adopted, and to a certain extent confirmed, by
Fritze,[366] who has examined the alimentary canal of the may-fly,
and considers that though the normal parts of the canal exist, the
function is changed in the imago, in which the canal serves as a sort
of balloon, and aids the function of the reproductive organs. The
change in the canal takes place in an anticipatory manner during the
nymph and sub-imago stages.
The sexual organs of Ephemeridae are remarkable for their

simplicity; they are destitute of the accessory glands and diverticula
that, in some form or other, are present in most other Insects. Still
more remarkable is the fact that the ducts by which they
communicate with the exterior continue as a pair to the extremity of
the body, and do not, as in other Insects, unite into a common duct.
Thus in the female there is neither bursa copulatrix, receptaculum
seminis, nor uterine portion of oviduct, and there is no trace of an
ovipositor; the terminations of the ducts are placed at the hind
margin of the seventh ventral plate, just in front of which they are
connected by a fold of the integument. The ovary consists of a very
large number of small egg-tubes seated on one side of a sac, which
forms their calyx, and one of whose extremities is continued
backwards as one of the pair of oviducts. The male has neither
vesiculae seminales, accessory glands, nor ductus ejaculatorius.
The testes are elongate sacs, whose extremities are prolonged
backwards forming the vasa deferentia; these open separately at the
extremity of the body, each on a separate intromittent projection of
more or less complex character, the two organs being, however,
connected by means of the ninth ventral plate, of which they are,
according to Palmén, appendages. We should remark that this
authority considers Heptagenia to form, to some extent, an exception
as regards the structures of the female; while Polymitarcys is in the
male sex strongly aberrant, as the two vasa deferentia, instead of
being approximately straight, are bent inwards at right angles near
their extremities so as to meet, and form in the middle a common
cavity, which then again becomes double to pass into the pair of
intromittent organs.
According to the views of Exner and others, the compound eyes of
Insects are chiefly organs for the perception of movement; if this
view be correct, movements such as those made during the dances
of may-flies may, by the number of the separate eyes, by their
curved surfaces and innumerable facets, be multiplied and
correlated in a manner of which our own sense of sight allows us to
form no conception. We can see on a summer's evening how
beautifully and gracefully a crowd of may-flies dance, and we may
well believe that to the marvellous ocular organs of the flies
themselves (Fig. 274) these movements form a veritable ballet. We
have pointed out that by this dancing the peculiarly formed
alimentary canal becomes distended, and may now add that Palmén
and Fritze believe that the unique structure of the reproductive
organs is also correlated with the other anatomical peculiarities, the
contents of the sexual glands being driven along the simple and
direct ducts by the expansion of the balloon-like stomach. During
these dances the momentary conjugation of the sexes occurs, and
immediately thereafter the female, according to Eaton, resorts to the
waters appropriate for the deposition of her eggs. As regards this,
Eaton says:[367] "Some short-lived species discharge the contents of
their ovaries completely en masse, and the pair of fusiform or
subcylindrical egg-clusters laid upon the water rapidly disintegrate,
so as to let the eggs sink broadcast upon the river-bed. The less
perishable species extrude their eggs gradually, part at a time, and
deposit them in one or other of the following manners: either the
mother alights upon the water at intervals to wash off the eggs that
have issued from the mouths of the oviducts during her flight, or else
she creeps down into the water to lay her eggs upon the under-side
of stones, disposing them in rounded patches, in a single layer
evenly spread, and in mutual contiguity." The eggs are very
numerous, and it is thought may sometimes remain in the water as
much as six or seven months before they hatch.
The number of individuals produced by some kinds of may-flies is

remarkable. Swarms consisting of millions of individuals are
occasionally witnessed. D'Albertis observed Palingenia papuana in
countless myriads on the Fly River in New Guinea: "For miles the
surface of the river, from side to side, was white with them as they
hung over it on gauzy wings; at certain moments, obeying some
mysterious signal, they would rise in the air, and then sink down
anew like a fall of snow." He further states that the two sexes were in
very disproportionate numbers, and estimates that there was but a
single female to every five or six thousand males.
Ephemeridae in the perfect state are a favourite food of fishes, and it

is said that on some waters it is useless for the fly-fisher to try any
other lure when these flies are swarming. Most of the "duns" and
"spinners" of the angler are Ephemeridae; so are several of the
"drakes," our large E. danica and E. vulgata being known as the
green drake and the gray drake. Ronalds says[368] that the term
"dun" refers to the pseud-imago condition, "spinner" to the perfect
Insect. E. danica and E. vulgata are perhaps not distinguished by
fishers; Eaton says that the former is abundant in rapid, cool
streams, while E. vulgata prefers warmer and more tranquil rivers.
These sensitive creatures are unable to resist the attractions of

artificial lights. Réaumur noticed this fact many years ago, and since
the introduction of the electric light, notes may frequently be seen in
journals recording that myriads of these Insects have been lured by it
to destruction. Their dances may frequently be observed to take
place in peculiar states of light and shade, in twilight, or where the
sinking sun has its light rendered broken by bushes or trees;
possibly the broken lights are enhanced in effect by the ocular
structures of the Insects. It has recently been ascertained that a
species of Teleganodes is itself luminous. Mr. Lewis,[369] who
observed this Insect in Ceylon, states that in life the whole of the
abdomen was luminous, not brightly so, but sufficient to serve as a
guide for capturing the Insect on a dark night. It has also been
recorded that the male of Caenis dimidiata gives a faint blue light at
night.
Nearly 300 species of Ephemeridae are known, but this may be only
a fragment of what actually exist, very little being known of may-flies

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Business Law: Text and Cases Kenneth

Roger LeRoy Miller

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Unit One The Legal Environment of Business 1

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Unit Five Negotiable Instruments 461

Unit Six Creditors’ Rights and Bankruptcy 537

Unit Seven Agency and Employment 603

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Unit Nine Government Regulation 821

Unit Ten Property and Its Protection 915

Unit One Chapter 4

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1.1 Sources of American Law 5 25.1 Requirements for Negotiability 474

Supplements/Digital What Will You Find?

Instructor’s Companion Website for remembering the individual steps: Inquiry,

Acknowledgments for Previous Editions

Robert B. Bennett, Jr. Kristi K. Brown

Rita Cain Maria Elena Ellison James M. Haine

Donald Cantwell Robert J. Enders JoAnn W. Hammer

Tamra Kempf Woodrow J. Maxwell Dwight D. Murphey

Norberto Ruiz Robert D. Sprague William H. Walker

The number of species of Odonata or Libellulidae that have been

A good work on the British Odonata is still a desideratum.[344] In

The nymphs are capable, under certain circumstances, of

Fig. 271.—Under side of Agrionid nymph, with short mask, living in

Fig. 272.—Palaeophlebia superstes. A, The Insect with wings of one

Numerous fossil dragon-flies are known; the group is well

AMPHIBIOUS NEUROPTERA CONTINUED—EPHEMERIDAE, MAY-FLIES

Fam. VII. Ephemeridae—May-flies.

Delicate Insects with atrophied mouth and small, short antennae;

Fig. 273.—Ephemera danica, male, Britain.

The may-flies are well known—in literature—as the types of a brief

The mouth of the imago is atrophied, the trophi scarcely existing as

Fig. 274.—Front of head of Cloëon, male. a, Pillared eye; b, sessile

The prothorax is small, the pronotum being, however, quite distinct.

Fig. 275.—Wings of Ephemera danica. (After Eaton.)

The earlier stages of the life of Ephemeridae are, it is believed, in the

Fig. 277.—Larvule of Cloëon dimidiatum. (After Lubbock.)

The metamorphosis of Cloëon has been described by Sir John

The nymphs differ greatly in the structure and arrangement of their

The anatomy of the nymphs has been treated by Vayssière,[354] who

Fig. 280.—Prosopistoma punctifrons, nymph. France. (After Vayssière.)

According to Eaton,[356] in the nymphs of some Ephemeridae the

The internal anatomy of the nymphs of Ephemeridae shows some

Fig. 282.—A, Nymph of Ephemerella ignita with gills of left side

The nymphs of the Ephemeridae being creatures adapted for

Fig. 283.—Lingua of Heptagenia longicauda, × 16. m, Central; l, lateral

The food of young Ephemeridae is apparently of a varied and mixed

The life of the imago of the may-fly is as remarkable as it is brief; in

The sexual organs of Ephemeridae are remarkable for their

The number of individuals produced by some kinds of may-flies is

Ephemeridae in the perfect state are a favourite food of fishes, and it

These sensitive creatures are unable to resist the attractions of

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