CH-12-15 Product and Service Liability Law – The Legal Environment of Business: A Critical Thinking Approach : Book Guide

This Document Contains Chapters 12 to 15 Chapter 12 Product and Service Liability Law Introduction Chapter Twelve addresses these questions: • What theories of recovery do plaintiffs assert in product liability cases? • What is market share liability, and how does this theory help plaintiffs? • What is service liability, and who should care about the evolution of this kind of liability? • What are the global dimensions of product liability law? Chapter Twelve is significant because it helps the student function better as a consumer, and as a businessperson. The chapter helps students understand dangers in products and how to assert their rights if they are injured by a product or service. Also, as managers, students need to know how to ensure their products and services will not end up as liability concerns for the companies that employ them. Achieving Teaching Excellence How Is the Course Going So Far? By the time instructors and their students start working on Chapter Twelve, they will be so far enough into the term that it would be a good idea to figure out how things are going, and what changes they might want to make to achieve Teaching Excellence. Instructors will want to evaluate their work, see how students are progressing, and see what students think of what’s happening in class so far. Instructors could start by taking stock of how they think things are going. Most instructors are good at determining how one course is going compared to one they taught last term, or last year. The instructors need to note the aspects of the course that are working well along with the reasons for the same. Apart from that the changes that need to be made must be noted. Instructors shouldn’t promise themselves that they will do better next term. They should make appropriate changes as soon as possible. Here are some questions instructors might want to ask themselves: • How much of class time am I talking compared to the students? • What kinds of questions do I ask the most? Do these questions promote higher-order or lower-order thinking skills? (Ask one of your colleagues to observe your class and write down the questions you ask.) • What kinds of questions are my students asking me? • Are students interacting with their peers in productive ways? • Am I encouraging students to engage in critical thinking in class? • Do my assignments promote critical thinking? • Are my students learning the legal content in the course? Next, the instructor should try to assess how well students are doing in terms of learning critical thinking skills and course content. Instructors should review students’ papers, exams, or whatever assignments that they are given. If instructors are not sure how their students are doing in either of these areas, they might want to go back and look at the assignments given to the students. Perhaps the assignments are not giving instructors a good chance to see what their students are learning. This Instructor’s Manual gives ideas about assignments that promote critical thinking and mastery of course content. Instructors are probably already giving good assignments if they are following the guidance of the textbook authors and the ideas in this Instructor’s Manual. If instructors are not, it is not too late to change what they aspire to do in the course. Finally, instructors need to know how students think the course is going. Instructors can ask them in more than one way, depending upon why they want to know. If instructors are concerned about the evaluations students will give them at the end of the semester, they should ask students the same questions the school’s course evaluations will ask them at the end of the semester. Then instructors can see which areas of their teaching performance call for change. Probably, many instructors teach at schools where the teaching evaluations do not give them all the information they need to assess their performance in ways that are meaningful to them. The instructors need to make sure that they add questions to their school’s course evaluations that will give instructors the feedback they need to achieve Teaching Excellence. A better way to figure out what students think of an instructor’s performance is to ask them open-ended questions. The instructors could give the students an almost completely blank sheet of paper. At the top, they could include three columns. One could say START, another could say STOP, and the last could say CONTINUE. The students could be asked to fill out this form. Instructors could ask students: In this course, the professor should START _____, STOP _____, and CONTINUE _____. Sometimes instructors get responses they never expected, and responses that do not fit neatly into the questions that schools ask instructors to ask students. After instructors assess how they think they are doing, how their students are doing in terms of learning both critical thinking and course content, and how students think the course is going, they should develop an action plan for necessary changes. Instructors should keep in mind that they are trying to get their students to appreciate them in the long run, not necessarily the short run. Instructors might be unable to make students happy this term. M. Neil Browne and Stuart M. Keeley gave a good reminder. In their article that offered advice to new teachers they wrote: “[R]espect from students is preferable to their immediate approval. Ideally, of course, it is desirable to engender both short-run applause and long-run gratitude from students.” References • M. Neil Browne & Stuart M. Keeley, “Achieving Excellence: Advice to New Teachers,” 33 COLLEGE TEACHING 78 (1985). Chapter Overview, Topic Outline, and Discussion Questions Chapter Overview If students enjoyed the material Chapter Eleven presented, they will probably enjoy Chapter Twelve even more. This chapter presents interesting cases and legal theories that are important and complex. Students will find parts of this chapter especially challenging. The concepts of privity, the implied warranty of merchantability, and the tests for showing design defects in strict liability cases (consumer expectations test and feasible alternatives test) are especially challenging. After the topic outline, discussion questions will encourage students to work with the more difficult concepts Chapter Twelve presents. Topic Outline I. Theories of Recovery in Product Liability Cases A. Negligence The Privity Limitation Negligent Failure to Warn Negligent Design Negligence per Se Defenses to a Negligence-Based Product Liability Action Donna S. Riegel v. Medtronic, Inc. B. Strict Liability in Contract for Breach of Warranty Implied Warranty of Merchantability Williams v. Braum Ice Cream Stores, Inc. Implied Warranty of Fitness for a Particular Purpose Express Warranties Defenses to Breach-of-Warranty Actions C. Strict Liability in Tort Welge v. Planters Lifesavers Co. Beard v. Johnson & Johnson, Inc. Impact of the Restatement (Third) of Torts Defenses to a Strict Product Liability Action D. Liability to Bystanders II. Market Share Liability III. Service Liability A. Accountants’ Liability IV. Global Dimensions of Product Liability Law V. Summary Discussion Questions for Chapter Twelve 1. Explain relationships among negligence, breach of warranty, and strict product liability. The most significant relationship among negligence, breach of warranty, and strict product liability is that they are the three theories plaintiffs assert in product liability cases. The first and third (negligence and strict product liability) are tort theories, whereas the second (breach of warranty) is a contract theory. 2. Explain why someone might say this statement is true: Eradication of the privity requirement has benefited plaintiffs. This statement is true because privity had limited who could sue in product liability cases. Originally, courts said that a plaintiff who was not the purchaser of a defective product could not establish a duty of care. This limitation was based on the concept of privity. Privity means that one is a party to a contract. The eradication of privity meant people who were not purchasers of a defective product and were injured by that product could sue in a product liability action. 3. Explain relationships between negligent failure to warn and negligent design. Both negligent failure to warn and negligent design are theories a plaintiff can assert in a product liability action. Failure to warn cases arose earlier in history than negligent design cases. Also, manufacturers are concerned about both kinds of cases because both allege something is wrong with all the products, not just that one was made poorly. If a warning is inadequate, it is probably inadequate on all the products. If a design is faulty, it is faulty on every product. Both theories assert significant problems with the behavior of those who developed and marketed a particular product. 4. Explain why someone might think this statement is true: Manufacturers benefit from the many defenses they can assert in negligence cases. This statement is true because if defendant manufacturers can assert just one defense successfully, they might not have to pay the plaintiff any damages. Manufacturers can assert the defenses of contributory, modified, or pure comparative negligence, depending upon which defense a particular state has adopted. They can also assert the defenses of assumption of the risk, misuse of the product, the statute of limitations, the statute of repose, and the state of the art defense. 5. Explain relationships between the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. The implied warranty of merchantability goes with every product sold, unless expressly and clearly excluded. It is a more general warranty than the implied warranty of fitness, which goes with a product in very limited circumstances. Both are defined according to the Uniform Commercial Code. The implied warranty of merchantability guarantees that goods are fit for the ordinary purpose for which the goods are used. The implied warranty fitness for a particular purpose arises when a seller knows the purchaser wants to purchase a good for a particular use. The seller tells the consumer that the good can be used for that purpose, and the buyer reasonably relies on the seller’s expertise, and purchases the product. Have students give an example of each kind of warranty. 6. Explain relationships between implied and express warranties. One relationship between the two is that both are defined by the UCC. The implied warranty of merchantability goes with almost every product, whereas the implied warranty of fitness for a particular purpose and the express warranty may or may not go with a product. An express warranty is created in one of three ways—by describing the goods, by making a promise or affirmation of fact about the goods, or by providing a model or sample of the good. If the goods fail to the meet the description, fail to do what the seller claimed they would do, or fail to be the same as the model or sample, the seller has breached an express warranty. 7. How does the strict liability theory explained in Chapter Eleven relate to the strict liability theory in this chapter? Both definitions rely on the same theory. The difference is that strict product liability is defined by the Restatement of Torts to show how the theory that underlies strict liability should be applied in cases that focus on products. In Chapter Eleven, the strict product liability theory concentrated on dangerous situations, and Chapter Twelve’s definition focuses on dangerous products. Both definitions are reminders of the purpose of strict liability is to insure that the costs of injuries resulting from defective products or dangerous activities are borne by the manufacturer or person who engages in the dangerous activity, rather than the innocent persons who are powerless to protect themselves. 8. How are the defenses available to manufacturers in strict liability cases different from the defenses available to manufacturers in negligence cases? More defenses are available to manufacturers in negligence cases than strict liability cases. Also, the defenses in strict liability cases are not allowed to focus on anyone’s behavior. Instead, they must focus on the product itself. Some defenses allowed in negligence cases are not allowed in strict liability cases. Examples are the defenses of contributory negligence and the state of the art defense. 9. How is the strict liability theory good for plaintiffs? This theory allows plaintiffs to recover even if the manufacturer was not at fault. It also ignores the behavior of the plaintiff. Instead, this theory focuses on the product itself and whether that product was defective. The evolution of strict liability theory made it easier for plaintiffs to win product liability cases. Plaintiffs often lost in negligence cases because they were contributorily negligent. 10. Why might someone say this statement is true: In strict liability cases, the part of the test that focuses on the “defect” is the most difficult part of the case for plaintiffs to prove. A defect in manufacture or marketing generally involves a specific product’s not meeting the manufacturer’s specifications. Proof of such a defect is generally provided by experts who testify as to the type of flaw that could have caused the accident that led to the plaintiff’s injury, or evidence of the circumstances surrounding the accident that would lead the jury to infer that the accident must have been caused by a defect in the product. Often it is difficult to meet the plaintiff’s burden of proof, which is that it is more likely than not that the defect caused the plaintiff’s injury. 11. The text lists reasons the evolution of the concept of strict product liability is positive. Have your students identify two major reasons the evolution is negative. One reason is that strict liability has increased the liability of manufacturers, and they have passed this cost onto the consumers. A particular plaintiff might be successful, but consumers incur higher costs in general. Another negative aspect of strict liability is that this theory discourages innovation and technological advances. Increased expectations about safety and manufacturers’ fears of lawsuits make companies too afraid to develop and market certain kinds of products. 12. Explain relationships between market share liability and service liability. Both are relatively new areas of law. Market share liability splits liability among manufacturers of a fungible product based on market share at the time the product was produced. Service liability actions occur when someone or someone’s property is harmed as a result of an inadequately performed service. Courts in the states are considering both kinds of liability and developing new rules and definitions. One major difference is that market share liability considers who should have to pay a judgment, whereas service liability is broader and looks at liability in general. Answers to Critical Thinking about the Law Questions, Case Summaries, Answers to Review Questions, Review Problems, and Case Problems Suggested Answers to Critical Thinking about the Law Questions 1. There are two primary differences between the cases. First, in Katherine’s case, Katherine interacted with the product. She bought the product and removed the cap, whereas the other woman did not buy the product. This fact will give Katherine more theories of recovery than the earlier woman. Specifically, Katherine will be able to sue for breach of an implied warranty of merchantability. Second, Katherine’s injuries were less severe. Katherine recovered, but the other woman lost her eyesight. Katherine will recover damages, but her injuries were different, which will mean her settlement amount will not be as high as the earlier woman’s. 2. The idea of security is shaping the judge’s thought. The definition of security should be revised and made consistent with thoughts of safety. Consumers should be confident that when they open a product it will not explode. It will help consumers achieve the psychological condition of self-confidence. That is possible when we hold manufacturers responsible even when they have included a warning. 3. It would be helpful to have the date because the exact cause of the problem can be explored. Knowing the date might help one see whether the manufacturer has a design defect (are all cans defective no matter when they were manufactured?) or are only some defective (which means something went wrong with a particular batch). Also, one would want to know whether tampering with the product was possible. If so, it is possible the stores or some criminal are to blame, rather than the manufacturer. At this point instructors can explain the Tylenol cases, which showed an innocent manufacturer responding to a problem of someone else tampering with their product. Case Summary—Donna S. Riegel v. Medtronic, Inc. This case illustrates a defense to a negligence-based product liability case. Charles and Donna Riegel sued Medtronic, Inc. for making a faulty catheter. Medtronic argued that the production of the catheter complied with the Food and Drug Administration’s guidelines and so the company was protected from a product liability suit. The Supreme Court agreed with the district courts and the Second Circuit and found in favor of Medtronic. Suggested Answers to Critical Thinking about the Law Questions 1. No, Justice Scalia sees the general tort duties and the requirements imposed by the FDA review process as demanding the same duties. For the Riegels to argue that their claim was preempted by the MDA, there would have had to be a requirement in place by the MDA that was “different from, or in addition to” a federal law. 2. The Riegels claimed that the duties underlying their negligence claim was not preempted even if “requirements” were imposed because general common-law duties are not maintained as requirements. Scalia and the rest of the Supreme Court, however, interpreted the MDA differently. The Court found that no state can establish any requirement related to safety or effectiveness that is different than a federal requirement. Case Summary—Williams v. Braum Ice Cream Stores, Inc. In this case, the court set forth the two tests used in various jurisdictions to decide whether a breach of warranty of merchantability exists. The court explained both the foreign-natural test and reasonable expectations test, then decided to adopt the reasonable expectations test. The case arose after the plaintiff broke a tooth on a cherry pit that was in cherry-pecan ice cream. Suggested Answers to Critical Thinking about the Law Questions 1. Under the foreign-natural test, a plaintiff may recover only if the object is foreign to the food served. The rationale behind this test is that it is difficult to separate ingredients in the course of food preparation, and this fact is common knowledge. The reasonable expectations test focuses on what is reasonably fit, and what we expect people to anticipate. The fundamental difference is what is expected of consumers. 2. The reasonable expectations test is more ambiguous. It will be hard to define precisely whether consumers act in a reasonable manner. It would be much easier to figure out whether a substance in food is foreign to the food (such as a pebble) or natural (such as a cherry pit in cherry-pecan ice cream). Case Summary—Welge v. Planters Lifesavers Co. This case is in the book to show how a court will analyze a situation in which a glass jar shatters, and no one is quite sure why. The jar in question was a jar of peanuts. The court considers the possibilities that the plaintiff (whose hand was injured when the jar shattered) misused the product, or that someone other than the manufacturer was responsible for the defect. The court even introduces the idea of res ipsa loquitur. Ultimately, the court rules that the plaintiff can pursue a product liability action even though he failed to exclude possible causes of the accident other than a defect introduced during the manufacturing process. Case Summary—Beard v. Johnson & Johnson, Inc. This case is about product liability. An ETS-Flex45 Articulating Endoscopic Linear Cutter, or an “endocutter” marketed by Ethicon Endo-Surgery, Inc. was used during Sandra Selepec’s gastric bypass surgery. Selepec experienced pain after the surgery, and her doctors discovered that some of the staples from her bypass had failed. The company argued that risk-utility should not be limited by only one minor use of a product. The Court held that trial courts are not restricted to considering a single use of a multi-use product in design defect, threshold, risk-utility balancing. It also declined to disturb the Superior Court’s legal determination as to the appropriate risk-utility calculus. The order of the Superior Court was affirmed. Suggested Answers to Critical Thinking about the Law Questions 1. Abstract conclusions are difficult to be drawn and they tend to disturb the balance of risk-utility analysis. The Court held that its decision could not be restricted to a single use of the product alone. Additionally, the Court stated that framing the argument should be taken up on a case-by-case basis. 2. Risk-utility analysis that was conducted by Azzarello did set up rational limits. However, while dealing with technology, it would be difficult to ascertain every risk that a particular instrument can cause. Hence, the claim that there is a defect was present would be a difficult matter to pursue. Answers to Review Questions 12-1. Originally, courts said a plaintiff could not establish a duty of care and could not recover unless he or she had purchased the product. This limitation was based on the concept of privity. The requirement of privity was abolished in 1916, which meant people who had not purchased products but were injured by them could sue in product liability cases. 12-2. Plaintiffs have to prove duty, breach of duty, cause (both actual and proximate), and damages in negligence cases. Common negligence actions that lead to product liability cases are: • Negligent failure to warn • Negligent provision of an inadequate warning • Negligent manufacture • Negligent testing or failure to test • Negligent advertising. 12-3. Defenses plaintiffs can assert in negligence cases are: • Contributory, modified comparative, or pure comparative negligence • Assumption of the risk • Misuse of the product • Statutes of limitations • Statutes of repose • State-of-the-art defense 12-4. The three kinds of warranties are the express warranty, implied warranty of merchantability, and implied warranty of fitness for a particular purpose. This question gives students an opportunity to review Table 12-3. 12-5. The foreign-natural test is different from the consumer expectations test because it accepts the difficulty of separating ingredients in the course of food preparation. It reduces the likelihood of liability in food cases where the damaging aspect of the food is natural to the food, such as a bone in a fish dish. The consumer expectations test instead asks what consumers should reasonably expect. That is what is keyed to whether food is reasonably fit. If we should not reasonably expect fish bones in a fish dish, we would say the food preparer had breached a warranty of merchantability. 12-6. Defenses available in breach of warranty cases include: • That the purchaser failed to give the seller notice within a reasonable time after he or she knew or should have known of the breach of warranty • The existence of a disclaimer • The statute of limitations Answers to Review Problems 12-7. The primary factor will be whether Clark is in a state that adopted the foreign-natural test or the consumer expectations test. If his state adopted the foreign-natural test, Clark would be much less likely to win than if the state adopted the consumer expectations test. The chicken bone would be “natural,” yet most consumers would not expect a chicken bone in an enchilada. 12-8. Yes, the decedents’ estates do have a product liability action. The manufacturer needed to put a warning on the gas heater, in addition to the warning in the manual. 12-9. Contributory negligence is a valid defense when the plaintiff failed to act reasonably. This defense would be relevant if the plaintiff failed to act reasonably in using the extinguisher. Certainly, the manufacturer should expect that carelessness causes fires. That’s the reason behind installing fire extinguishers. The manufacturer cannot turn around and use the plaintiff’s carelessness in causing the fire as a defense. 12-10. Mattie can sue under strict liability breach of warranty and recover damages. A court would find her guarantee unconscionable. The UCC now contains a provision stating that a limitation of consequential damages for injury to a person in the case of consumer goods is prima facie unconscionable. 12-11. Bob will be allowed to bring a strict product liability action against the manufacturer of the engine. Bystanders are allowed to sue in this kind of case. The focus of the case will not be on fault. Instead, the question will be whether the product was defective and, if so, whether this defect could make the product unreasonably dangerous. Bob will also need to show cause and damages. 12-12. This situation involves service liability. Have the students look back to the First Florida Bank case. The answer depends on which test the state has adopted in service liability cases. The First Florida Bank case outlines the four possible tests. Under some of the tests, the bank cannot bring a cause of action. Under others, the bank could bring a cause of action. Answers to Case Problems 12-13. The Court affirmed the decision. The warning was adequate. Just because he did not read it did not make it any less legal. Also, the bacteria were not anything added by the restaurant; it is naturally occurring. Therefore there was no negligence in the farming or preparing of the oysters. 12-14. Punishing a defendant for damages to individuals who are not in court is unfair to both the defendant and other victims. The Fourteenth Amendment due process clause protects defendants from having to pay punitive damages for individuals who are not involved in the litigation. Individuals who are not involved have the right to sue the defendant and receive compensation individually. The Supreme Court found that the punitive damages were excessive and should only be granted for the harm done to Williams. 12-15. The court of appeals affirmed, ruling that the risk that milk could cause temporary gas and stomach discomfort to lactose-intolerant individuals who did not yet know of their condition could not support a claim based upon failure to warn. 12-16. The product-liability actions brought against Genentech were dismissed. Marsh claimed that immunity was not applicable since it was preempted by the federal law. However, the court held that the company had immunity since it was under the purview of the Michigan Products Liability Act. 12-17. The claim was not preempted because action by the court did not constitute state action. Even though they would be forced to change the label, it was not at the behest of the state, rather it was because the label was found to be insufficient by a court of law, not a state governing body. The Court specifically rule that negligence claims could not be preempted because they did not deal with relabeling, but rather the fact that the product was not tested enough or the company did not have enough information to market it the way they did. 12-18. The defect caused by the manufacturing would not be preempted because it could be proven that it was the cause of the injury. The rest of the claims fell under the umbrella of the federal law, but manufactured defect would not be covered because it referred to the specific device, not the more general concepts regarding all the devices. If one problem with one device caused the injury, then that would not be preempted. Thinking Critically about Relevant Legal Issues 1. The issue here is that businesses are not equipped to handle problems that arise from goods made in other countries. Instead of holding the distributors liable, the government should step in and take a hard-line approach to foreign imports. In conclusion, these imports need to be inspected and deemed safe by the United States, not the country in which they were made. 2. The author uses statistics about how much we import from other countries. He talks about the legal issues, briefly, behind the liability laws and makes an argument why governments should be more concerned with the products coming into our country. 3. An implementation strategy is missing. The author makes a very valid and intelligent point about government accountability but he fails to finish; namely he does inform the reader exactly what should be done. He should have outlined exactly what he thought the government could and should do about the situation. 4. One could argue that if the companies want to maximize profits by sending all the work overseas where it is done in much less regulated facilities, then it should be their job to inspect their products. U.S.-made goods do not have the problem of low standards. Because CEOs insist on making hundreds of millions of dollars, companies must be willing to shoulder the blame when products made outside the United States in their name are defective. Chapter 13 Law of Property—Real and Personal Introduction Chapter Thirteen addresses these questions: • What is real property? • What are the various interests in real property, and what is the significance of each? • How can one voluntarily transfer real property? • How is real property transferred involuntarily? • What is personal property? • What are the global dimensions of property law? Chapter Thirteen is significant because it explains the concept of property, and the ways government rules and judicial decisions allow owners to exclude others. Achieving Teaching Excellence Encouraging Students to Ask Better Questions The past few chapters of this Instructor’s Manual have encouraged instructors to ask higher-order thinking questions, encourage class discussion, and get students to interact with one another. This chapter reminds instructors to encourage students to ask specific kinds of questions. Just as instructors should ask students certain kinds of questions if they want to achieve teaching excellence, they should also encourage their students to ask interesting, important questions. Here are some questions instructors might want to ask: • What is an uninteresting question? Have you heard any of these? • The question that lacks precision: “Could you go over Chapter Nine again?” • The question that asks you, the instructor, to engage in lower-order thinking skills: “What was the definition of real property?” • The question we all dislike: “Will that material be on the test?” Most instructors want students to ask questions that are consistent with their goals for them. Instructors want them to engage in higher-order thinking, and they should insist that not only their comments, but also their questions, move them toward higher-order thinking. To get started in encouraging students to ask better questions, instructors should notice for a few days the kinds of questions students are asking. Instructors should write down the questions, or ask someone else to observe a class and write down the questions. Second, instructors should classify the questions according to Bloom’s taxonomy of educational objectives. Then, instructors should develop a plan for improving the quality of questions students ask. Instructors can get some good ideas on this topic from an article by Susan Beers. Beers wrote an article in which she described how she got her students in a psychology class to raise interesting questions. Beers suggested activities that encouraged her students toward this goal. Her goals were: “to encourage students to raise questions, to help students become aware of different levels of questioning, and to encourage students to see writing as an integral part of the inquiry process.” Beers explained her exercise. During each week of the term, she asked students to write three questions that related to class discussion, readings, or independent thinking. Copies of the questions were made available to each student. Beers returned the questions with a handout that listed Bloom’s taxonomy and key words that relate to each category of the taxonomy. For instance, she used these terms: “knowledge—state, list; comprehension—explain, identify; application—apply, demonstrate; analysis—compare, differentiate; synthesis—create, hypothesize; evaluation—judge, revise.” Next, each student was assigned two questions to classify according to the taxonomy. Beers discussed in class the utility of the taxonomy and the function of different kinds of questions. Beers noted that students seemed to appreciate that higher-order thinking questions were more interesting. She encouraged students to write higher-order thinking questions. Students categorized questions four times during the term. Beers stated that students wrote more questions that called for evaluation as the term progressed. By the end of the term, Beers saw several positive outcomes from her exercise. The exercise “made for a livelier class.” Some students “categorized the class as a whole using Bloom’s taxonomy.” She also noted that some students evaluated other courses they were taking at the time according to Bloom’s taxonomy. Finally, the exercise “helped at least some students to think about the nature of knowledge and learning more explicitly than they had previously.” Beers concluded her description by presenting this quote by M.T. Moore: “The productive question is more important and often a greater achievement than the solution.” Why not try Beers’ exercise when instructors and students work on Chapter Thirteen? Beers’ exercise has been simplified in the description, and instructors should be able to do the exercise with just one chapter to see how it works for them and their students. If it works, do it again later in subsequent chapters. Remember that an instructor’s goal is to encourage students to ask questions that show higher-order thinking skills. References • Susan E. Beers, “Questioning and Peer Collaboration as Techniques for Thinking and Writing about Personality,” 13 TEACHING OF PSYCHOLOGY 75 (1986). • M.T. Moore, “The Relationship between the Originality of Essays and Variables in the Problem-Discovery Process,” 19 RESEARCH IN THE TEACHING OF ENGLISH 84 (1985). Chapter Overview, Topic Outline, and Discussion Questions Chapter Overview When people hear the word property, they generally think of physical objects—land, houses, cars. Property, however, is a bundle of rights and interests in relation to other persons with reference to a tangible or intangible object. The essence of the concept of property is that the state provides the mechanism to allow the owner to exclude other people. The cases in this chapter are timely and interesting. Also, students will be interested in the topics in this chapter. The discussion questions that follow the topic outline focus on the skill of synthesis. They encourage students to integrate, or explain relationships between the many concepts Chapter Thirteen explains. Topic Outline I. Real Property A. Definition of Real Property Fixtures B. Extent of Ownership II. Interests in Real Property A. Fee Simple Absolute B. Conditional Estate C. Life Estate D. Future Interest E. Leasehold Estates F. Easements G. License H. Co-Ownership I. Condominiums and Cooperatives Condominiums Burton Stevens v. Elk Run Homeowners’ Association, Inc. Cooperatives III. Voluntary Transfer of Real Property A. Execution General Warranty Deed Quitclaim Deed B. Delivery C. Acceptance D. Recording IV. Involuntary Transfer of Real Property A. Adverse Possession B. Condemnation Susette Kelo, et al., Petitioners. v. City of New London, Connecticut, et. al. V. Restrictions on Land Use A. Restrictive Covenants B. Zoning Emine Bayram V. City of Binghamton and City of Binghamton Zoning Board of Appeals C. Other Statutory Restrictions on Land Use VI. Personal Property A. Voluntary Transfer of Property B. Involuntary Transfers of Personal Property C. Bailments VII. Global Dimensions of Property Law VIII. Summary Discussion Questions for Chapter Thirteen 1. Explain relationships between real and personal property. Real property is land and everything permanently attached to it. All property that is not real property is personal property; personal property may be either tangible or intangible. One relationship between the two is that business owners possess both real and personal property. An example of real property would be the building. An example of personal property would be the manager’s desk. 2. Explain relationships between a fee simple absolute and life estate. The fee simple absolute and the life estates are two different interests in real property. The fee simple absolute gives a person all rights to own and possess that land against all others, without conditions. The life estate gives a person the right to own and possess property until one dies. Thus, the fee simple absolute gives a person more rights than the life estate. 4. Explain relationships between easements and licenses. Easements and licenses are both interests in real property, but the interests are different. Easements are irrevocable rights to use some portion of another’s land for a specific purpose. The party holding the easement does not own the land, but has the right to use it. A license is a temporary, revocable right to be on someone else’s property. Easements give the holder greater rights than licenses in that easements are not as easily or quickly revocable. It is also true that the two are different enough that a businessperson might need an easement but not a license, or a license but not an easement. 5. Explain relationships between a quitclaim deed and adverse possession. A quitclaim deed is one way to voluntarily transfer property, whereas adverse possession is one way to involuntary transfer property. With a quitclaim deed, the grantor simply transfers to the grantee the interest the grantor owns in the property being conveyed, with no additional covenants. Adverse possession is a doctrine that provides that when a person openly treats realty as his or her own, with neither protest nor permission from the real owner, for a statutorily established period of time, ownership is automatically vested in that person. 6. Explain relationships between restrictive covenants and zoning. Restrictive covenants and zoning are both restrictions on land use. Restrictive covenants are promises people voluntarily enter into that restrict the ways they will use the land. For instance, a neighborhood community might include restrictive covenants in deeds that place limits on the kind of door a person might have—what color, what style. This type of restrictive covenant encourages uniformity in the neighborhood and helps maintain property values. Zoning is different because it is determined by government regulators. Zoning is the restriction of the use of property to allow for the orderly growth and development of a community and to protect the health, safety, and welfare of its citizens. Zoning restrictions state how land might be used—residential, commercial, industrial, or agricultural. 7. Explain relationships between gifts and bailments. One way people voluntarily transfer property is through a gift. Gifts are distinguished from purchases in that there is no consideration for a gift. A bailment is another way people voluntarily transfer property, but the transfer is only of possession, and it is only temporary. A bailment of personal property involves a bailor, who transfers property to a bailee to be used by the bailee in an agreed-on manner for an agreed-on time. Answers to Critical Thinking about the Law Questions, Case Summaries, Answers to Review Questions, Review Problems, and Case Problems Suggested Answers to Critical Thinking about the Law Questions 1. The ethical norm that is most likely to cause increased protection of property is security. Security means “to be safe from those wishing to interfere with your property rights.” 2. The ethical norm that would lead to redistribution of property rights is justice. Justice is defined as, “to treat all humans identically, regardless or race, class, gender, age, and so on.” Under that definition of justice, people should have a relatively equal distribution of property rights. 3. Instead of stating, “this property is mine,” nations or individuals in different nations could explain what rights they have over property. What are they allowed to do with the property they are referring to? Can they use it as a security? Do they have the right to sell? Or can they donate it? And what restrictions do they have on their rights to the property? Simply stating, “This property is mine.” is not sufficient because the listener does not know to what degree the property is owned. Case Summary—Burton Stevens v. Elk Run Homeowners’ Association, Inc. This case deals with the say the owners of a condominium have over their tenants. Stevens put a portable hot tub on the patio of his condo. The Association told him to remove it and he refused. The district court ruled for the Association, so Stevens appealed. On appeal, the Court ruled that the tub had to be removed because it was observable and therefore subject to regulation by the Association. Suggested Answers to Critical Thinking about the Law Questions 1. The Court here read that section to be in reference to permanent alterations to the property. In Stevens’s case, he did not permanently alter his unit because the hot tub was removable. Because of that, he did not violate that section of his agreement. 2. If it were out of sight, the Association would have had a harder time proving those sections. If the tub was out of sight, it would not have been an obstruction and then not regulated by the sections. The problem was that it could be considered an eyesore, and therefore a regulate-able obstruction. Case Summary—Susette Kelo et al., Petitioners, v. City of New London, Connecticut, et al. This case deals with condemnation. The city wanted to build a new waterfront area to revitalize the city and create new jobs. This involved taking some pieces of private property. Those who refused to sell were condemned by the doctrine of eminent domain. The owners appealed. The Court found that the city could take the property as long as fair market price was given to the owners and the land was to be used solely for the public good, that is, parks and shops. Case Summary—Emine Bayram v. City Of Binghamton and City of Binghamton Zoning Board of Appeals This case deals with zoning. A single-family residence was leased to seven Binghamton University students by Bayram, for two years. The City of Binghamton received a complaint that the residence was being rented out as a frat house. A Notice of Violation was issued to Bayram advising him the seven students didn’t constitute a factual or functional family. Following a review by the Zoning board and a public hearing the Board decided to evict the tenants. The New York Supreme Court affirmed the judgment in favor of the City. Answers to Review Questions 13-1. The reason why each of the following is or is not real property is explained below: a. A fence is real property because it is attached to the land, and its removal would cause damage to the property. b. A tree is real property because it is attached to the land, and its removal would cause damage to the property. c. A house trailer is real property, for the same reasons as above. d. A built-in oven is real property. It is a fixture. (Note the exception for trade fixtures.) e. A refrigerator is usually considered a fixture, although it is not usually built in like an oven. Custom is different in different locations where one must leave the refrigerator upon the sale of a house. 13-2. The primary estates in land are the easement, leasehold estate, life estate, conditional estate, and fee simple estate. Have students refer to Exhibit 13-2. 13-3. The circumstances under which each of the following types of ownership would be most desirable are as follows: a. Joint tenancy—a person who wants equal shares, does not mind that creditors can attach their interest, and wants the property to be divided among other joint tenants when he or she dies b. Tenancy in common—a person who wants equal or unequal shares, does not mind that creditors can attach their interest, and wants the property to be transferred to his or her heirs when he or she dies c. Tenancy by the entirety—a person who wants equal shares, does not want creditors to be able to attach their interests, and wants the property to go to his or her surviving spouse when he or she dies 13-4. To transfer property, the owner must follow the proper procedures. These are execution, delivery, acceptance, and recording. Unless something to the contrary is stated, it is presumed that a conveyance of ownership is the conveyance of a fee simple absolute. 13-5. A general warranty deed is preferred over a quitclaim deed. A general warranty deed transfers ownership of property and contains certain promises by the grantor, such as the covenants of seisin, the covenant of the right to convey, etc. A quitclaim deed transfers property, but without the promises by the grantor. With such a deed, the grantor simply transfers to the grantee the interest that the grantor owns in the property being conveyed. The grantor makes no additional covenants. 13-6. Condemnation and adverse possession are both involuntary transfers of real property. Adverse possession provides that when a person openly treats realty as his or her own, without protest or permission from the real owner, for a statutorily established period of time, ownership is automatically vested in that person. Condemnation is a process by which the government acquires the ownership of private property for a public use over the protest of the owner of the property. They are different in that condemnation involves a whole parcel of land, whereas adverse possession usually involves a smaller portion, and in condemnation, the owner asserts his or her interests. Adverse possession assumes a passive landowner who fails to protest another person’s encroachment. Answers to Review Problems 13-7. The court would most likely grant the injunction because Carlos only owns the land as long as he is alive. After his death, the land is reverted back to the original owner. Therefore, the land is real property and is subject to the restrictions listed in covenants or placed in a set of CC&Rs. If the future owner did not have a written agreement about what could and could not be done to the property, though, the court may not grant the injunction. 13-8. No, as long as the set of CC&Rs does not contradict a federal or state law, they are binding on the owners. In this case, there is no law demanding the use of artificial grass so the Hortons were not within their legal rights to add artificial grass. The best argument the Hortons could make is that the CC&R’s restriction on artificial grass contradicts state actions to save water and should, therefore, be changed. 13-9. It would be difficult to win this case as the defense would argue that rezoning was carried out for the greater public good. However, the plaintiff would incur a loss as the economic value of the property would be lost. Therefore, the plaintiff would be entitled to receive just compensation. 13-10. No, building a sports arena would not qualify as condemnation because the city can only declare eminent domain to use the land for a public good. In County of Wayne v. Hathcock et al., the Michigan Supreme Court ruled that using eminent domain for economic redevelopment is unlawful and a sports arena parking lot would most likely be considered economic redevelopment. 13-11. Judy should win, unless there is evidence that she abandoned the Pepsi. If Judy discarded or abandoned the Pepsi, Cindy would become its owner when she possessed it. From reading the facts, there is no evidence that Judy discarded or abandoned the Pepsi, so Cindy did not become its owner. There is also no evidence that Judy lost or mislaid the Pepsi. 13-12. Bailment benefits both the bailor and bailee, so the bailee, the New Colonial Hotel, is responsible for any damage caused by the bailee’s ordinary or gross negligence. Here, the New Colonial Hotel will be responsible. It was negligent to leave the car in an unsafe lot. Answers to Case Problems 13-13. The case was remanded because there were issues of fact that the Appellate Court addressed. Nothing regulated Taub above the level of trespasser just because his activities were consistent with the public’s easement. He was not a landlord or tenant, so he had no right to go above the easement. 13-14. The appeals court affirmed the judgment of the trial court by ruling in favor of the individual homeowners. The association’s board was ordered to enforce the trimming of all trees, including palm trees that exceeded the roof of the house and obstructed the view from other lots. 13-15. The rent control ordinance does constitute a taking since the city does have the authority to take up ordinances related to mobilehome rent. These matters are based on legislative policy and discretion. For this reason the city can exercise its discretion and the Courts have dismissed several attempts that have been made by landlords to avoid such procedures. 13-16. In this case, the court recognized the emotional distress and the loss of companionship that was caused by the pet’s death. However, the Court cannot recognize the sentimental loss of the plaintiff. For this reason the recovery of noneconomic damages cannot be taken into account under the legislative arena. 13-17. The appellant court reversed the trial court’s ruling to award the plaintiff money for his motorcycle. It found that the “Garage Agreement” did not create a bailment. Without a legal binding agreement, the court found that the defendant did not owe the plaintiff anything. Thinking Critically about Relevant Legal Issues 1. It would be useful to know what the eminent domain is being used for, how much the community would benefit from a new structure built using eminent domain, which individuals or communities would benefit, and how many land owners would have their land taken away. Knowing the answers to these questions would help shed light on whether the use of eminent domain is beneficial or detrimental to society and would help alleviate the tension between democracy and eminent domain. 2. One would need to know what properties and how many properties are being seized through eminent domain. One would also need to know what public good or benefit to society the new building would bring, how many people it would benefit and for how long. 3. If the issue is worded to focus only on the benefits that are brought to society and businesses, it is likely the public with agree with the government’s use of eminent domain. However, if the issue is worded to focus on the loss incurred by the individuals whose property was taken, the public would be much less likely to agree with the government’s use of eminent domain. 4. One could argue that the issue involves taking property from individuals and that it needs to be clear that a majority of the public agrees with the use of eminent domain in this case. The point of eminent domain is to help society and if less than half of society were benefiting, eminent domain would not be democratic. It is not democratic to only benefit a powerful group who can influence the government; a majority of the people need to be in favor of the new structure. Chapter 14 Intellectual Property Introduction Chapter Fourteen addresses these questions: • What is intellectual property? • How are trademarks protected? • How are trade secrets protected? • What do patents protect? • What do copyrights protect? • What are the global dimensions of intellectual property law? Chapter Fourteen is significant because it explains the concept of intellectual property, a relatively new and ever growing type of property. The chapter details what can be protected as intellectual property, how intellectual property can be protected, and the global protections that are given to intellectual property. Achieving Teaching Excellence Encouraging Students to Resist Social Pressures to Not Ask Questions The past few chapters of this Instructor’s Manual have encouraged instructors to ask higher-order thinking questions, encourage class discussion, and get students to interact with one another. This chapter reminds instructors to encourage students to understand that they will need to endure a great deal of resistance from other people who do not want them to ask productive questions on a regular basis. Many people in a position of authority prefer others to just listen and obey. When learners start asking questions on a regular basis, they must be very sensitive to the audience for their questions. They must keep in mind who the questions are being addressed to and how people who listen to them would respond. In the current polarized climate, the temptation is great. Just look at the tactics employed during the American election season—the tactics the Daily Show’s Jon Stewart mocked when he said, “I disagree with you, but I am pretty sure you’re not Hitler.” In the spirit of this Jon Stewart quote, learners can choose to create an environment in which reasonable people can productively and respectfully disagree—an environment that welcomes discussion and question-asking. Yet, however careful a person is when asking productive questions, the person asking the questions needs to realize in advance that the idea of searching for clarity and evidence is often not socially smooth. First, it’s easier to shoot down a hard question than to consider and respond to it. Take a look at the tone and word choice in this review of the 2009 box office success Transformers: Revenge of the Fallen. Popular film critic Roger Ebert suggested, “If you want to save yourself the ticket price, go into the kitchen, cue up a male choir singing the music of hell, and get a kid to start banging pots and pans together. Then close your eyes and use your imagination.” Just try to convince students that they should calm down and reconsider. Imitating the approach of Ebert cuts people off from the thoughts of those they are trying to communicate with. They shut down conversation. In addition, this method directly conflicts with the values of a critical thinker, namely curiosity, humility, and respect for good reasoning. Arguing your position with the ferocity and conviction displayed by Ebert closes one off to that important critical thinking question: “Might I be wrong?” Students are moving toward excellence as a learner when they accept that asking questions will sometimes be socially awkward, but that the potential rewards far outweigh any discomfort that might result. Chapter Overview, Topic Outline, and Discussion Questions Chapter Overview Intellectual property consists of the fruits of one’s mind. The laws of intellectual property protect property that is primarily the result of mental creativity rather than physical effort. This category includes trademarks, trade secrets, patents, and copyrights. The material in this chapter will be interesting to the students because it is becoming more important to businesses with each passing year. The case in this chapter are timely and involve well know corporations and their technologies. Following Chapter Fourteen’s Topic Outline, the discussion questions center on comparing the different types of intellectual properties and the different ways one can protect his or her intellectual property and even draws on concepts taught in Chapter Thirteen. Comparing these ideas will provide the students with a better understanding of the concepts in Chapter Fourteen and how they relate to Chapter Thirteen because the students must use integration rather than just memorization. Topic Outline I. Introduction to Intellectual Property II. Trademarks Toys “R” Us, Inc., v. Canarsie Kiddie Shop, Inc. A. Trade Dress B. Federal Trademark Dilution Act of 1995 Victor Moseley and Kathy Moseley et al., dba Victor’s Little Secret v. V Secret Catalogue, Inc. et al. III. Trade Secrets IV. Patents Bilski v. Kappos V. Copyrights A. Fair Use Doctrine Zomba Enterprises, Inc.; Zomba Songs, Inc., Plaintiffs-Appellees v. Panorama Records, Inc., Dedendant-Appellant B. Copyrights in the Digital Age Software and the Copyright Act of 1976 The No Electronic Theft Act of 1997 The Digital Millennium Copyright Act File-Sharing Networks and Technologies RealNetworks, Inc. v. DVD Control Copy Association, Inc., et al. VI. Global Dimensions of Property Law VII. Summary Discussion Questions for Chapter Fourteen 1. Explain relationships between real and intellectual property. Real property is land and anything permanently attached to it. Intellectual property includes things created primarily by mental rather than physical processes. One relationship between the two is that real property rules regarding interests in real property are more developed than rules regarding interests in intellectual property. The law is well developed regarding real property. Courts are still developing laws that are related to intellectual property. The cases in the intellectual property section of the chapter show the kinds of issues the courts are currently considering. Ask the students to give examples. 2. Explain relationships between trademarks and trade secrets. Trademarks and trade secrets are two kinds of intellectual property. A trademark is a distinctive mark, word, design, picture, or arrangement used by a seller in conjunction with a product and tending to cause the consumer to identify the product with the producer. A trade secret is a process, product, method of operation or compilation of information that gives a businessperson an advantage over his or her competitors. 3. Explain relationships between patents and copyrights. Patents and Copyrights are both used to protect intellectual property. A patent protects a product, process, invention, machine, or plant produced by asexual reproduction, while a copyright protects the expression of creative ideas, such as books, motions pictures, works of art, and computer programs. 4 Explain what the Fair Use Doctrine is and why it causes controversy. The Fair Use Doctrine is a legal doctrine that provides that a portion of a copyrighted work may be reproduced for purposes of “criticism, comment, news reporting, teaching, scholarships, and research.” This doctrine has caused controversy because the purposes for reproducing a copyrighted work can be interpreted in different ways. There are different ways to define words such as “criticism,” “comment,” and “research.” 5. Explain how digital copyright laws have developed over time. Legislators faced a number of problems with the development of computers, software and the Internet. First, legislators had to determine how someone could “copy” from a computer and they determined that copying occurred once the material was downloaded onto a computer’s memory. Then, a law was enacted to protect software with copyrights. In the 1990s, laws were passed to protect copyrighted material from being spread on the Internet and to protect Internet service providers from certain lawsuits. 6. Explain how intellectual property rights are protected globally. Treaties and conventions, such as the Trade Related Aspects of International Property Rights (TRIPS), are the best security against intellectual property theft. Global negotiations continue to advance the world protection of intellectual property rights, though. New treaties have been created and old treaties, like TRIPS, have been updated to keep up with our ever-advancing technology. Answers to Critical Thinking about the Law Questions, Case Summaries, Answers to Review Questions, Review Problems, and Case Problems Suggested Answers to Critical Thinking about the Law Questions 1. It is more difficult to define what intellectual property is because a lot of it is not tangible. Real property consists of material someone could touch and see while intellectual property includes ideas and names. It is more difficult to prove the ownership of an idea than a piece of land. 2. The idea of expecting people to share their mental output comes from valuing collective responsibility over individual responsibility. If someone possesses an ability that other people lack, he or she should be willing to share it with the group. The ability does not really belong to the individual so it is not fair of him or her to keep it for him or herself. 3. A person would be more willing to support the intellectual property rights of an individual if they knew he or she had worked hard to create the idea or work. It would be difficult for them to give rights to someone who just came up with an idea in a matter of moments. Case Summary—Toys ‘R’ Us, Inc. v. Canarsie Kiddie Shop, Inc. This case is a trademark infringement case. In this case, plaintiff Toys “R” Us, Inc., sold children’s clothes in stores across the country from the beginning of 1960. The firm obtained a registered trademark and service mark for Toys “R” Us in 1961 and aggressively advertised and promoted its products using these marks. In the late 1970s, Defendant Canarsie Kiddie Shop, Inc., opened two children’s clothing stores within two miles of a Toys “R” Us shop and contemplated opening a third. Toys ‘R’ Us persuaded the district court to agree with them that a store Kids ‘r’ Us had engaged in trademark infringement. The court made this decision after considering nine classic factors. Suggested Answers to Critical Thinking about the Law Questions 1. The “classic factors” come from past cases that considered trademark infringement. The analogy is a correlation to past cases. 2. The reference of past cases is a crucial piece of information that is missing in this case. It is because without these understanding the background of these cases it would be difficult to see their similarities and differences. Additionally, it would be difficult to understand how the classical factors affected the court’s decision. Case Summary—Victor Moseley and Kathy Moseley et al., dba Victor’s Little Secret v. V Secret Catalogue, Inc et al. This case is in the book to show analysis relevant in trademark dilution cases. In this case, a novelty store, “Victor’s Little Secret” did not infringe upon the Victoria’s Secret trademark. The court found no evidence of confusion between the parties’ marks. The Court did, however, find that the trial court needed to gather more evidence regarding trademark dilution, and remanded the case. The Supreme Court indicated that circumstantial evidence could prove a statutory violation. Case Summary—Bilski v. Kappos This case deals with patents. The petitioner had sent in an application to file a patent for their invention. However, the application was rejected on the basis that it was an abstract idea that had been expressed mathematically. Additionally, they stated that it did not pass the “machine-or-transformation test” that determined whether a patient was eligible for a patent or not. The U.S. Supreme Court had agreed to hear an appeal. Case Summary—Zomba Enterprises, Inc.; Zomba Songs, Inc., Plaintiffs-Appellees v. Panorama Records, Inc., Defendant-Appelant This case deals with copyrights. Panorama put out karaoke CDs containing the recent hits. Zomba owned many of the rights to those songs. They agreed to allow Panorama to continue as long as they paid the royalties. The companies entered into an agreement meant to stop Panorama from releasing the material. They did anyway, so Zomba took them to court. The district court awarded summary judgment to Zomba and Panorama appealed. On appeal, the Court ruled that Panorama was in the wrong because they willfully violated the agreement by knowingly selling copyrighted material. Case Summary—RealNetworks, Inc. v. DVD Control Copy Association, Inc., et al. This case is in the book to demonstrate how copyright law constantly evolves as new technologies emerge. RealNetworks created a product called RealDVD to copy DVDs as “backups.” These copied DVDs, however, were created without permission from the DVD Control Copy Association of America and could have other uses besides just being a “backup.” The company sued the DVD Association in pursuit of a declaration that its DVD copying software was legal but the court disagreed. The court ruled that RealNetworks was infringing on the studios’ rights because it was accessing copyright-protected content without permission. Answers to Review Questions 14-1. Trademark infringement laws protect all trademarks that have been registered with the U.S. Patent Office. However, the potential for consumers to be confused with the two different products is considered in trademark infringement cases. If a consumer seems unlikely to confuse the two products, the trademark will not be protected. Trademark dilution laws, on the other hand, prohibit the use of “distinctive” or “famous” trademarks on all goods, not just related goods. With these laws, famous trademarks are protected regardless of whether a consumer would confuse them with the other product. 14-2. The different types of marks that are protected under the Lanham Act are as follows: • Product trademarks—marks affixed to a good, its packaging or its labeling. • Service marks—marks used in conjunction with a service. • Collective marks—marks identifying the producers as belonging to a larger group, such as a trade union. • Certification marks—marks licensed by a group that has established certain criteria for use of the mark. 14-3. Someone would choose patent protection over trade-secret protection if he or she wanted to have exclusive rights to produce, sell and use a product, process, invention, machine or asexually reproduced plant for the next twenty years. The criteria for a patent are that the object should be novel, useful and nonobvious to discover. On the other hand, someone would choose trade-secret protection over patent protection if he or she had a process, product, method of operation, or compilation of information that gave him or her an advantage over his or her competitors. Trade secrets are protected from unlawful appropriation by competitors but if the competitors discover the secret lawfully it is no longer considered a secret and is no longer protected. 14-4. The four factors that are relevant to whether the Fair Use Doctrine can be used as a defense are as follows: • The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes • The nature of the copyrighted work • The amount and substantiality of the portion used in relation to the copyrighted work as a whole • The effect of the use upon the potential market for or value of the copyrighted work 14-5. Both tying arrangements and cross-licensing are common illegal uses of patents. A tying arrangement occurs when the patent holder issues a license to use the patented object only if the licensee agrees also to buy some nonpatented product from the holder. Cross-licensing, on the other hand, occurs when two patent holders license each other to use their patents only on the condition that neither licenses anyone else to use his or her patent with the other’s consent. 14-6. A trade dress refers to the overall appearance and image of a product but it is entitled to the same protection as a trademark. A trademark, on the other hand, is a distinctive mark, word, design, picture or arrangement used by a seller in conjunction with a product that tends to cause the consumer to identify the product with the producer. Answers to Review Problems 14-7. If Simon has also been selling donuts in Ohio, he may be infringing on Matt’s rights by using a similar trademark because the trademark would be protected under state common law. If Simon has been selling donuts outside of Ohio, the case would be interstate and Simon would be correct. Matt would have had to register his trademark with the U.S. Patent Office under the Lanham Act. Because Matt did not register his trademark, his signature packaging has no protection. 14-8. Yes, having Markham Manufacturing buy a key ingredient after they have already licensed the patent from Grover is illegal. Issuing a license only if the licensee agrees to also buy some nonpatented product from the holder is known as a tying arrangement and is an illegal use of a patent. 14-9. The plaintiffs won’t be able to win the case. This is because even though the screenplay is copyrighted, the settings are quite different. Even though both screenplays share a basic outline, it is not a substantial claim to prove infringement. 14-10. The injunction will be granted. This case is similar to the Toys “R” Us case. The “Mc” mark is strong. Customers know “Mc” means cheap. Use of the mark by Sleep McCheap is unfair to McDonald’s. 14-11. The Christopher’s will say they discovered the secret by lawful means. They would be allowed to discover the secret by going on public tours and observing. The Christopher’s will lose. They were not on a public tour when they took aerial photographs. They were trespassers. 14-12. The professor will say the “fair use” defense applies because he was using the material for educational purposes. However, the professor will lose. He is not allowed to deprive the journal from the profits it deserves for publishing the journal. Answers to Case Problems 14-13. The court ruled in favor of Seinfeld. It found that the two cookbooks were decidedly different and could not be easily confused. The similar idea to sneak healthy foods into children’s meals was not protected by a copyright so Lapine had no rights to the idea. Therefore, Seinfeld was not guilty of plagiarism or copyright infringement. 14-14. Following the trial that award $2 million to Capital Records, the appellant court found that the sum was an excessive award for copyright infringement and changed the award to $54,000 ($2,250 per song). The range for copyright awards is $750 to $150,000 per infringement and the judge found that $80,000 per song was excessive. Capital Records did not have to prove their damages but the judge believed that statutory damages must still bear some relation to actual damages. Thomas-Rasset refused a $25,000 settlement offer following the court’s decision to award Capital Records $54,000. She refused because Capital Records wanted her to ask the judge to vacate his decision to lessen the award. Capital Records appealed the $54,000 award ruling and a third court awarded Capital Records $1.5 million ($62,000 per song). 14-15. The remand was granted because the Court found that the distributors of the software were guilty of contributory liability because they knew that the software would be used to infringe copyrights. They had directions on how to use it and did nothing to stop the infringement from happening. They did not warn the users that the software was illegal. The Court argued that they knew exactly what would happen and did nothing to stop it and in fact facilitated it. 14-16. To be successful, Dippin’ Dots would have to prove three elements: • The trade dress is primarily nonfunctional • The trade dress is inherently distinctive or has acquired a secondary meaning • The alleged infringement creates a likelihood of confusion All three elements are necessary to be successful on a claim of trade dress infringement. The district court held that Dippin’ Dots trade dress is primarily functional, and because they failed to prove this one element, their claim of trade dress infringement could not be successful. The district court granted summary judgment in favor of the defendant, Frosty Bites, and Dippin’ Dots appealed. The appellate court affirmed the district court’s findings. The appellate court found that the color of Dippin’ Dots is functional because it signifies the flavor of ice cream, using the industry standard color-to-flavor relationships. Furthermore, size was also found to be functional in this case, because a larger dot would not produce the same creamy taste. Evidence provided by Dippin’ Dots proves that larger dots would be of an inferior quality, making it functional to have small, spherical dots. Because any flash-frozen ice cream product would have the same basic features as Dippin’ Dots, the specific features are deemed to be functional; ergo the appellate court affirmed the district court’s decision, finding in favor of Frosty Bites. 14-17 The plaintiff’s case was dismissed by the court based on reasonable grounds. The Court stated that there was no substantial similarity between the two movies. For this reason, it is likely that the appeals court would support the lower court’s judgment, 14-18. The Court found in favor of Veoh because Veoh is protected under the Digital Millennium Copyright Act’s “safe harbor” provisions. These provisions shield Internet providers from liability of infringing material that was stored by users. Veoh was not actively infringing on copyrighted material, they were only allowing their users to store information. Thinking Critically about Relevant Legal Issues 1. The issue of the essay is that generic HIV medications have been copied and no compensation has been given to the original manufacturers. They worked hard to develop the drug and their intellectual property rights should be upheld. The conclusion is that the makers of illegal generic drugs need to be stopped. 2. The author believes in fair compensation. The author cares about credit for those who put in the effort, money, and time to develop a drug to greatly help other people. Those involved should be rewarded. 3. A student could ask, “Are intellectual property rights very important in today’s world?” The answer would be, “Yes they are important, especially in pharmaceuticals because they create an incentive to produce better and newer drugs. Without the incentive of compensation and recognition, many scientists would put time into other pursuits.” 4. One would argue that the company in India is producing the drug to help save many lives. At times, pharmaceutical companies are selfish and tend to hold on to drugs until they know that they will be compensated for them. This company is speeding up the process and after the dust has cleared, they can give the original producers their dues. But if the company believed that the pharmaceutical company is dragging its feet, then it has an ethical obligation to step in and help the situation. Chapter Fifteen Agency Law Introduction Chapter Fifteen addresses these questions: • What is an agency relationship and what are the types of agency relationships? • How is an agency relationship created? • What are the duties of agents and principals? • When are principals and agents liable to third parties? • How are principal-agency relationships terminated? • What are the global dimensions of agency law? Chapter Fifteen is significant because both principals and agents need to know their rights and responsibilities. The expansion of the post-industrial economy required the use of agents. This chapter explains the importance of the principal-agent relationship, and presents information that helps those engaged in business avoid precarious liability situations. Achieving Teaching Excellence Assignments to Promote Critical Thinking For instructors who want to create assignments that promote critical thinking in the legal environment of business classroom, this section lists several alternatives. Incorporating assignments that promote critical thinking will help students recognize the need to engage in critical thinking in their other college courses, and in their everyday lives. By creating additional assignments that promote critical thinking, instructors will continue on their quest to achieve Teaching Excellence. Here is a list of five critical thinking assignments that instructors can adapt to meet their needs at different times in the semester: • Send students to the library to find two arguments that support a student’s opinion about a specific legal issue. Have them write an essay in which they explain why (from a critical thinking perspective) one argument is better than the other. • Send students to the library to find two arguments that oppose a student’s opinion abut a specific legal issue. Have students find arguments that are strong from a critical thinking perspective. Ask students to write a short, good essay that presents an argument that conflicts with their own value preferences. • Ask students to integrate material from the text with material from another identified source, prior learning experiences, social issues, or personal choices. • Ask students to think like someone other than a lawyer. Choose a case in the book, and ask students to write a memo that responds to the case from the perspective of the CEO of the corporation, the personnel manager, a consumer advocacy or other public interest group. This exercise will help them see alternative perspectives. • Ask students to generate questions for a particular class session that will keep the conversation going. Remind them that questions that promote higher-order thinking are more likely to keep the conversation going. References • M. Neil Browne & Stuart M. Keeley, “Getting Started as a Teacher of Critical Thinking.” Workshop presented July 30, 1995, at the 15th International Conference on Critical Thinking & Educational Reform, Sonoma, California. • Stuart M. Keeley & M. Neil Browne, “Beyond the Term Paper: Assignments That Stimulate Critical Thinking,” JOURNAL OF PROFESSIONAL STUDIES (Winter, 1988). Chapter Overview, Topic Outline, and Discussion Questions Chapter Overview Agency law has become more prominent in the complex postindustrial society. In an earlier period, when business owners (principals) did most or all of their business on a one-to-one basis with their customers, agents and third parties played a very small role in the business environment. As business entities became larger and conducted far-flung transactions within the United States and worldwide, businesspeople felt a need to hire domestic and foreign agents to represent their interests to potential customers. Chapter Fifteen has a lot of interesting information. All the information in the chapter is significant. The chapter defines the agency relationship, explains how these relationships are formed, delineates the rights and duties of agents and principals toward each other, outlines the law of contracts and torts as they impact agency relationships, and explores the international dimensions of agency law. Each section is important, so the discussion questions that follow the outline focus on material from across the chapter. Topic Outline I. Definition and Types of Agency Relationships A. Definition of Agency B. Types of Agency Relationships Principal–Agent Employer–Independent Contractor Alberty-Vélez v. Corporación de Puerto Rico II. Creation of an Agency Relationship A. Expressed Agency or Agency by Agreement B. Agency by Implied Authority Penthouse International v. Barnes C. Agency through Ratification by Principal D. Agency by Estoppel or Apparent Authority Motorsport Marketing, Inc. v. Wiedmaier, Inc. III. Duties of Agents and Principals A. Principal’s Duties to Agent Duty of Compensation Duty of Reimbursement and Indemnification Duty of Cooperation Duty to Provide Safe Working Conditions B. Agent’s Duties to Principal Duty of Loyalty Cousins v. Realty Ventures, Inc. Duty of Obedience Duty of Accounting Duty of Performance Gossels v. Fleet National Bank IV. Principals’ and Agent’s Liability to Third Parties A. Contractual Liability McBride v. Taxman Corp. B. E-Commerce: Intelligent Agents C. Liability of Disclosed, Partially Disclosed Principals, and Undisclosed Principals D. Liability of Undisclosed Principal E. Tort Liability F. Tort Liability and Negligence Pennsylvania State Police v. U.S. G. Criminal Liability V. Termination of the Principal-Agency Relationship A. Termination by Agreement B. Termination by Operation of Law Gaddy v. Douglass VI. Global Dimensions of Agency Law A. Japan B. European Union C. U.S. Agents Abroad VII. Summary Discussion Questions for Chapter Fifteen 1. Explain relationships between respondeat superior and the agency relationship. An agency is defined as a fiduciary relationship between two persons in which both mutually agree that one person (agent) will act on the behalf of another (principal) and be subject to the latter’s control and consent. The doctrine of respondeat superior says that the master is responsible for the acts of servants while they are acting within the scope of their employment. In modern times, we call this an employer–employee relationship. This relationship is one kind of agency relationship. 2. Explain why someone might think this statement is true: Employers would prefer to hire independent contractors than employees. The statement is true if one believes that a primary motive of employers is to lower their expenses. When employers hire independent contractors instead of employees, they escape employment and insurance taxes, as well as medical benefits. Employers who want to retain significant control over the work of their employees will not want independent contractors, even though that relationship would save them money. 3. Explain relationships between an exclusive agency contract and a power of attorney. An exclusive agency contract is a type of agreement whereby the principal agrees that it will not employ any other agent for a period of time or until a particular job is completed. A power of attorney is a legal document used to establish an agency relationship. Both are kinds of express agency relationships, also called agencies by agreement. 4. Explain relationships between agency by ratification by principal and agency by apparent authority. An agency by ratification is formed when an unauthorized act of an agent is accepted by a principal. An agency by apparent authority of estoppel is formed when a third person is led to believe that a certain agent is acting on behalf of a principal. The principal is estopped from denying the agency relationship. One relationship between the two is that neither is an express or implied relationship. A difference is that the role of a third person is crucial in agencies by apparent authority or estoppel. That third person’s belief is critical in establishing the relationship. Third persons are irrelevant in agencies by ratification. 5. Agents have legal obligations toward the principals. Which of these duties is the hardest for agents to comply today? It is becoming increasingly difficult for agents to comply with the duty of loyalty to principals. When employees are discarded easily, it is hard to expect them to act with utmost loyalty to principals who are not necessarily loyal to them. 6. Explain why someone might think this statement is true: The doctrine of respondeat superior has important implications for employers. This doctrine is important to employers because it holds employers liable for the intentional or negligent torts of employees if such acts are committed within the scope of their employment. Have students give examples of acts that would and would not be committed within the scope of employment. 7. Evaluate this statement: Employers are regularly held responsible for their employees’ crimes. Usually, employers are not responsible for their employees’ crimes because it is difficult to show the intent of the principal that such crimes require. Usually, employers are not responsible for crimes such as rape and murder. They can be held liable, however, if they direct or participate in the crime, or if they direct a violation of a law. 8. How does the North American Free Trade Agreement (NAFTA) relate to agency law? With the signing of NAFTA, foreign agents are much more likely to be hired by firms in the United States. As tariff barriers are generally lowered around the world over a period of years, agents will be needed to export, distribute, and sell goods. The law will develop to define any unique requirements for these kinds of agency relationships. Answers to Critical Thinking about the Law Questions, Case Summaries, Answers to Review Questions, Review Problems, and Case Problems Suggested Answers to Critical Thinking about the Law Questions 1. Probably, the most important ethical norm to a business is efficiency, which means to minimize costs or to get the most from a particular input. Agents are expected to be efficient. 2. A judge would care about the relationship between the parties trying to figure out whether an agency relationship exists. What is the person called? How is the person presented to other people? What was said to or about the person’s authority? What traditions has that particular employer followed in the past? 3. When an agent has already performed a task, he or she wants to receive the product of his or her labor. The agent expects to be paid for a task already performed. Case Summary—Alberty-Vélez v. Corporación de Puerto Rico This case deals with a contract and discrimination. Alberty worked for a Puerto Rican TV station owned by the Corporación de Puerto Rico. She hosted a show that profiled cities and towns and was contracted on a per show basis. She was paid, but did not receive any benefits. When she became pregnant, the station stopped contracting her. She sued the company, alleging discrimination based on her pregnancy. The trial court found for the defense, so she appeals. On appeal, the Court ruled in favor of the defense because they determined that Alberty was an independent contractor and therefore was not protected under employee rights. Suggested Answers to Critical Thinking about the Law Questions 1. The factors are: • The source of the instrumentalities and tools • The location of the work • The duration of the relationship between the parties • Whether the hiring party has the right to assign additional projects to the hired party • Whether the hiring party is in the business • The provision of employee benefits • The tax treatment of the hired party Alberty highlighted the fact that WIPR controlled the manner of her work. With a different judge, she might have been successful. 2. Alberty would have been more likely to succeed if WIPR had: • Provided instrumentalities/tools • Assigned additional projects to her • Provided employee benefits • Treated her like an “employee” for tax purposes Case Summary—Penthouse International v. Barnes In this case, the court explained the extent to which implied authority will be granted to an agent. The case involved Penthouse’s relationship with Dunas, an independent contractor. This independent contractor had made an agreement with Barnes, who posed nude for him, that if her pictures were published, her real name wouldn’t be used. Penthouse wanted to publish Barnes’ photo and use her real name, so the question became whether they were bound by Dunas’ agreement not to publish Barnes’ real name. The court ruled in favor of Barnes and against Penthouse by explaining why they believed Dunas had implied authority to make the agreement with Barnes not to use her real name. Suggested Answers to Critical Thinking about the Law Questions 1. The court agreed with the district court that Dunas was an agent, and that he acted within the scope of his authority by modifying the contract. 2. The strongest part of the reasoning is that Dunas was indeed an agent. The most questionable part of the reasoning is whether Dunas exceeded his authority when he modified the contract. Case Summary—Cousins v. Realty Ventures, Inc. This case is about a breach of fiduciary responsibility. Cousins contracted Hodgins of Realty Venture to help him find property. Cousins asked Hodgins to submit an offer to buy an office building. The sale fell through. Later, Hodgins resubmitted the deal after learning that the office building was part of a group of buildings called 4141 Veterans Blvd. Hodgins and his brother set up a company and purchased both the office building and 4141 Veterans. He then offered to sell the building to Cousin’s company for $175,000. Cousins sued and won $1,750,000. The defendant appealed. The Court found for the plaintiff because Hodgins breached his fiduciary responsibility when he failed to notify Cousins about the package sale. Case Summary—Gossels v. Fleet National Bank In the Gossels case, the court decided whether Fleet National Bank (agent) misrepresented themselves to an investor, Gossels (principal). Gossels invested euros from Germany in the Boston branch of Fleet National Bank. The Fleet bank teller, however, did not inform Gossels that Fleet paid internal checks at a “retail exchange rate” and then misinformed Gossels not to endorse the check. About a month later, Gossels learned that his investment had depreciated several thousand dollars in value, although it could have increased in value if he had invested in a German bank. Gossels sued Fleet and the court found for Gossels on the ground of negligent misrepresentation. Both parties appealed. The appellant court ruled in favor of Gossels. As Gossels’s agent, Fleet was obligated to disclose all the facts material to the transaction. Having failed to do so, the court found that Fleet was liable for negligent misrepresentation for a breach of fiduciary duty. Case Summary—McBride v. Taxman Corp. This case deals with contractual liability. Walgreen’s entered into a contract with Taxman to operate a store in a shopping center in which Taxman was the property manager. Part of the contract stipulated swift removal of snow and ice. Taxman contracted out that job to Artic. McBride, a Walgreen’s employee, slipped and hurt herself on the ice outside the store. She sued Taxman, alleging negligence. Summary judgment came out in favor of Taxman, so McBride appealed. On appeal, the Court ruled in favor of Taxman because the company legally contracted out snow removal and therefore was not negligent. Case Summary—Pennsylvania State Police v. U.S. This case deals with harassment. Nancy Drew Suders was hired by the Pennsylvania State Police (PSP) as a police communications operator in March 1998. Her supervisors subjected her to continued harassment while she was employed there. Later, in June 1998, Sunders told the PSP Equal Employment Opportunity Officer, Virginia Smith-Elliot, that she could require some help. Smith-Elliot gave Suders her phone number but never followed up on the conversation. Then, in August Suders informed Sam-Elliot that she was being harassed. Smith-Elliot told her how to file a complaint but did not tell her how to obtain the necessary form. Suders felt that Sam-Elliot was unhelpful and insensitive and didn’t file a complaint with the PSP. Additionally, there were several other instances where Sunders was harassed. Suders sued PSP for sexual harassment and constructively discharging her in violation of Title VII of the Civil Rights Act. The district court granted PSP’s motion for summary judgment. Case Summary—Gaddy v. Douglass This case deals with the principle-agent relationship. Gaddy was the doctor of a woman known as Ms. M, who passed away. Douglass is a relative. When Ms. M’s medical condition worsened, Gaddy became her attorney of record and took care of her finances and care. As her dementia and Alzheimer’s worsened, Gaddy made sure that she was well cared for and that her house was in order. The relatives finally came, and took Ms. M to see an attorney. They did not tell the attorney that Ms. M was not of sound mind. There, she signed a document revoking Gaddy’s rights as attorney. Gaddy sued and was awarded attorney-ship because Ms. M was not of sound mind to handle her own affairs and Gaddy was most intimate with her needs. Suggested Answers to Critical Thinking about the Law Questions 1. Gaddy showed that he had Ms. M’s wishes in mind because he used her assets wisely and only for her care. He did not use any money for himself and he made sure to keep her house in good shape and when she needed, he took her to a doctor to get evaluated. He made sure to act as if the needs were his own. 2. Basically, if Gaddy had not been protecting her rights, then he would not have been awarded power of attorney. Also, if fraud was evident in the form of Gaddy using her funds for himself, or if he was completely ignoring her, then he would have been denied attorney-ship. A. Answers to Review Questions 15-1. The doctrine of respondeat superior said that the master was responsible for the acts of servants while they were acting within the scope of their employment. Today, it holds employers responsible for the acts of their employees who are acting within the scope of their employment. 15-2. Apparent authority differs from actual authority in that the principle communicates directly with a third person to create apparent authority. To create actual authority, the principal communicates directly with the agent. 15-3. The agent’s duties to the principal are as follows: • Loyalty—the agent should act on behalf of one principal only to avoid conflicts of interest, communicate all material information to the principal, and refrain from acting in a manner that is adverse to the principal’s interest. • Obedience—the agent has the duty to follow all reasonable and lawful instructions of the principal. • Accounting—whenever the principal requests an accounting of money or property, it is the duty of the agent to hand over the requested material. • Performance—courts have indicated that agents must use reasonable care and skill in performing their work. 15-4. Factors that distinguish agents and independent contractors are: • The degree of control the employer has over the agent • Whether the hired persons had a distinct occupation or profession • Whether they supplied their own tools and equipment • Whether they were employed for only a specific time period • Whether they were paid hourly or on completion of a job • What degree of skill is required 15-5. Principals are normally responsible for the acts of their agents if those acts come within the scope of the agents’ employment. Therefore, a principal’s liability for an agent’s contracts depends on whether the principal is disclosed or undisclosed to the third party at the time of the execution of the agreement. An agent with actual authority binds the principal to contracts. In the case where the third party is not aware of the identity of the principal and has no knowledge of an agency relationship, the agent may be liable to the third party if the principal does not pay. 15-6. A principal should notify a third party of the termination of an agency relationship so the principal does not end up responsible for the agent’s behavior or acts if the agent continues to hold himself or herself out as an agent. Answers to Review Problems 15-7. Both Wilson and A & B were unaware of the actual value of the land till the time they were about to make the deal. However, A & B can argue that an implied agreement had been made and the discovery of the higher valuation of land cannot be a reason to revoke this agreement. It would have been a case of fraud if A & B had known about this beforehand but this is not the case, 15-8. As an agent Ankir is bound to follow through certain duties toward the principal. Ankir violated all the four legal duties that agents have toward the principal—loyalty, obedience, accounting, and performance. Jamision can sue Ankir for breach of fiduciary duty. 15-9. The owner does not have to write down the agency relationship. However, the Statute of Frauds requires a written contract for the sale of a house. 15-10. Owner does not have to pay Penelope a commission because she did not sell the house. The clause about the right to cancel if financing falls through is standard. Real estate brokers get buyers and sellers together. Perhaps Penelope had a contract with the owner saying that she just has to bring the buyer and seller together. That’s it. This kind of arrangement would be rare. Owners want buyers who actually buy the property. 15-11. The Sylvester’s should sue Beck for fraud. Fraud is difficult to prove, but what Beck did seems underhanded. Arguably, however, the Sylvester’s were unreasonable to rely on Beck’s assertions. Allow the class to be the jury on this issue of fact. 15-12. Peter cannot cancel the contract. Arguably, the broker acted unethically by engaging in self-dealing. However, the broker sold at the current market price, so Peter did not suffer any real damage. Answers to Case Problems 15-13. In this case, even though Dennegar claimed that he was not aware of the existence of the credit card, he was liable for the debt incurred. This is because the evidence supported this claim that the defendant had applied to for the credit card and that he had ceded the authority to manage his finances. For this reason, the Court found him liable on the stated charges. 15-14. Frances being the plaintiff and Chen’s fiancée could create a conflict of interest. The testimony was admitted by the judge and this question was directed to a jury. The jury found that Chen had committed fraud and awarded damages to Frances. However, the appellate Court held that it is not the duty of the agent not to treat the principal as an adverse party, unless otherwise agreed by the two parties. Any violation on the agent’s part would be a breach in the agency relationship. 15-15 An agent for Trinity Mortgage set up the homeowners with a loan for construction with the promise that their payments would be relatively low. However, when the plaintiffs called the company, they were informed that the agent no longer worked there. Trinity should have informed the plaintiffs that the agent was no longer part of the firm. They did not and therefore violated their responsibility to the lender and were liable. 15-16. The court enforced the settlement agreement. A settlement agreement entered by an attorney without his client’s consent is enforceable against the client. The court noted that an attorney is a “powerful agent, who has apparent authority to dismiss case, to allow judgment against client, and to do all things ordinarily done with respect to litigation for which attorney was hired.” Thinking Critically about Relevant Legal Issues 1. The author concludes that agency relationships should be treated like contracts. He believes that without the contract aspect, they are too hard to define. He uses many analogies; some that are incomplete. For example the analogy about different languages is ambiguous because contracts get done all the time in other languages because both parties realize that the terms must be simplified so that there will be no misunderstanding. 2. One would need to know the amount of agency relationships and those that are the most common. However, it seems that this subject is more subjective and harder to get concrete information on. 3. The opposition would obviously argue that agency relationships are completely different from contracts and should be treated as such. Because of their nature, they are harder to define, but that does not mean they are less valid. Agency relationships, many times, deal with things that contracts could not cover, so implied relationships and estoppels are sometimes the only way. Solution Manual for The Legal Environment of Business: A Critical Thinking Approach Nancy K. Kubasek, Bartley A. Brennan, M. Neil Browne 9780133546422, 9780134074030