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1 For business and Personal Use18e JOHN E. ADAMSON LawAustralia Brazil Japan Korea Mexico Singapore Spain United Kingdom United StatesPrinted in the United States of America1 2 3 4 5 6 7 11 10 09 08 Law for business and Personal Use, 18th EditionJohn E. AdamsonVice President of Editorial, business : Jack W. CalhounVice President/Editor-in-Chief: Karen SchmoheExecutive Editor: Eve LewisSenior Developmental Editor: Enid NagelMarketing Manager: Valerie LauerMarketing Coordinator: Kelley GilreathContent Project Manager: Jennifer A. ZieglerProduction Manager: Patricia Matthews BoiesSenior Technology Project Editor: Sally NiemanWebsite Project Manager: Edward StubenrauchManufacturing Coordinator: Kevin KluckEditorial Assistant: Virginia WilsonProduction Service: ICC Macmillan Art Director: Tippy McIntoshInternal Designer: Trish Knapke, Ke DesignCover Designer: Trish Knapke, Ke DesignCover Image: Kelly Redinger/Design Pics/Corbis 2009, 2006 South-Western, a part of Cengage LearningALL RIGHTS RESERVED.

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3 Windows is a registered trademark of the Microsoft Corporation used herein under license. Macintosh and Power Macintosh are registered trademarks of Apple Computer, Inc. used herein under Career Clusters icons are being used with permission of the:States Career Clusters Initiative, 2007, 2008 Cengage Learning. All Rights : 978-0-538-44588-7 ISBN-10: 0-538-44588-2 South-Western Cengage Learning5191 Natorp BoulevardMason, OH 45040 USAC engage Learning products are represented in Canada by Nelson Education, your course and learning solutions, visit Albright-BarnhartDigital AcademyCareer Tech DepartmentBolton High SchoolAlexandria, LouisianaJudith Kay BinnsTeacher, business DepartmentBryant High SchoolBryant, ArkansasDawna CarterBusiness Education TeacherPuxico R-8 SchoolPuxico, MissouriLeo DunnInstructor, business and TechnologyGreater Lowell Technical High SchoolTyngsboro, MassachusettsNancy EversonChair, business EducationSun Prairie High SchoolSun Prairie.

4 WisconsinChristine FerreiraBusiness TeacherAlgonquin Regional High SchoolNorthboro, MassachusettsRichard T. GordonLead Teacher, business & Applied Tech DepartmentBloomington High SchoolBloomington, IllinoisLinda HughesBusiness EducatorRapides High SchoolLecompte, LouisianaKristine LabbusBusiness Education InstructorNeenah High SchoolNeenah, WisconsinJallane LinkBusiness Office Technology InstructorCanadian Valley Technology CenterChickasha, OklahomaCatherine McDonaldSenior Teacher, BusinessRidgefield High SchoolRidgefield, ConnecticutVicki NossBusiness TeacherBeloit Memorial High SchoolBeloit, WisconsinJeanne RobinsonTeacher, business DepartmentSouth Technical High SchoolSunset Hills, MarylandThomasine MontoyaTeacher/CoordinatorCibola High SchoolAlbuquerque.

5 New MexicoTammy SavageBusiness Department ChairSpain Park High SchoolHoover, AlabamaJanice B. SheltonBusiness TeacherMills E. Godwin High SchoolRichmond, VirginiaLynn M. TaillonBusiness EducatorCheshire High SchoolCheshire, ConnecticutCaroline Janovec TassoneBusiness TeacherWaynesboro Area High SchoolWaynesboro, PennsylvaniaTamara M. TuckerTeacher, business DepartmentColumbia High SchoolColumbia, South CarolinaGrant Pierce WilliamsBusiness Instructor/FBLA AdviserHarrison High SchoolHarrison, ArkansasKevin W. WillsonBusiness Education ChairYork Suburban Senior High School York, PennsylvaniaAbout the AuthorJohn E. Adamson is Emeritus Professor of business and Law in the Department of Finance and General business at Southwest Missouri State University.

6 Adamson received a from the Military Academy at West Point, New York; an from Georgetown University; and an and from the University of Virginia at Charlottesville. A decorated, disabled veteran and past mayor and school board member of Miller, Missouri, Adamson is author of numerous business law Trial ConsultantMelissa A. MarcinAttorney at LawMilford, Ohio Reviewers iiiReviewersiv ContentsChapter 1 Laws and Their Ethical Foundation 41-1 Laws and Legal Systems 51-2 Types of Laws 101-3 Ethical Bases for Laws 16 Chapter 1 Assessment 20 Sports & Entertainment Law 23 Chapter 2 Constitutional Rights 242-1 Foundations of the Constitution 252-2 Division and Balance of Governmental Powers 312-3 The Internet and Constitutional Rights 36 Chapter 2 Assessment 44 Sports & Entertainment Law 47 Chapter 3 Court Systems 483-1 Forms of Dispute Resolution 493-2 The Federal Court System 523-3 State Court Systems 55 Chapter 3 Assessment 60 Case For

7 Legal Thinking 63 Chapter 4 Criminal Law and Procedure 644-1 Criminal Law 654-2 Criminal Procedure 71 Chapter 4 Assessment 76 Sports & Entertainment Law 79 Chapter 5 Civil Law and Procedure 805-1 Private Injuries vs. Public Offenses 815-2 Intentional Torts, Negligence, and Strict Liability 855-3 Civil Procedure 93 Chapter 5 Assessment 98 Sports & Entertainment Law 101 ContentsContentsFeatures in Unit 1A Question of Ethics 17, 29, 57, 65, 87 Cyberlaw 8, 86 Economic Impact 66 Global Issues 6, 32, 71 Hot Debate 4, 24, 48, 64, 80In This Case 11, 16, 42, 54, 70, 73, 83, 85, 93 Law Brief 9, 29, 58, 74, 94 Legal Research 10, 38, 50, 69, 91 Net Bookmark 19, 32, 53, 72, 95 Online Research 97 What s Your Verdict?

8 5, 6, 10, 12, 13, 16, 25, 28, 31, 33, 36, 39, 49, 52, 55, 57, 65, 67, 68, 71, 72, 74, 81, 82, 83, 85, 89, 91, 93, 94, 96 Unit 1 Law, Justice, and You 2 Planning a Career in Law: Trial Lawyer 3 Entrepreneurs and the Law: Law, Justice, and You 102 Community Action: Get Out the Vote 103 Winning Edge: FBLA Emerging business Issues 103 Mock Trial Prep: Concepts of Advocacy 104 Contents vUnit 2 Contract Law 106 Planning a Career in Law: Franchisee 107 Entrepreneurs and the Law: Contract Law 222 Community Action: Positive Peer Pressure 223 Winning Edge: FBLA Multimedia Presentation 223 Mock Trial Prep: Case Scenario 224 Features in Unit 2A Question of Ethics 112, 133, 148, 159, 183, 193, 216 Cyberlaw 134, 161 Economic Impact 115, 171 Global Issues 116, 132, 143, 157, 180, 207 Hot Debate 108, 126, 140, 156, 170, 190, 206In This Case 109, 115, 119, 127, 130, 142, 147, 159, 163, 173, 177, 181, 182, 193, 199, 208 Law Brief 120, 132, 150, 158, 173, 193, 215 Legal Research 110, 134, 150, 164, 178, 200, 210 Net Bookmark 111, 133, 145, 158, 175, 198, 209 Online Research 217 What s Your Verdict?

9 109, 110, 114, 116, 118, 127, 128, 130, 131, 133, 141, 145, 147, 149, 157, 160, 162, 163, 164, 171, 174, 177, 179, 181, 191, 192, 197, 199, 207, 208, 210, 213, 214 Chapter 6 Offer and Acceptance 1086-1 Creation of Offers 1096-2 Termination of Offers 1146-3 Acceptances 118 Chapter 6 Assessment 122 Sports & Entertainment Law 125 Chapter 7 Genuineness of Assent 1267-1 Duress and Undue Influence 1277-2 Mistake, Misrepresentation, and Fraud 130 Chapter 7 Assessment 136 Case For Legal Thinking 139 Chapter 8 Consideration 1408-1 Types of Consideration 1418-2 Questionable Consideration 1458-3 When Consideration Is Not Required 149 Chapter 8 Assessment 152 Sports & Entertainment Law 155 Chapter 9 Legal Capacity to Contract 1569-1 Contractual Capacity of Individuals and Organizations 1579-2 Limits on the Rights of Those Without Capacity 162 Chapter 9 Assessment 166 Sports & Entertainment Law 169 Chapter 10 Legal Purpose and Proper Form 17010-1 Illegal Agreements 17110-2 The Statute of Frauds 177

10 Chapter 10 Assessment 186 Sports & Entertainment Law 189 Chapter 11 Contractual Obligations and their Enforcement 19011-1 Transfer and Discharge of Obligations 19111-2 Remedies for Breach of Contract 197 Chapter 11 Assessment 202 Sports & Entertainment Law 205 Chapter 12 Contractual Aspects of Marriage and Divorce 20612-1 Marriage and the Law of Contracts 20712-2 Divorce and the Law of Contracts 213 Chapter 12 Assessment 218 Case For Legal Thinking 221vi ContentsChapter 13 Sales Contracts 22813-1 Sales 22913-2 Special Rules for Sales Contracts 234 Chapter 13 Assessment 238 Case For Legal Thinking 241 Chapter 14 Ownership and Risk of Loss in Sales 24214-1 Transfer of Ownership 24314-2 Risk of Loss and Insurable Interest in Sales 247 Chapter 14 Assessment 254 Case For Legal Thinking 257 Chapter 15 Consumer Protection 25815-1 Protection through Governmental Action 25915-2 Protection through Action by the Consumer 266 Chapter 15 Assessment 274 Case For Legal Thinking 277 Unit 3 The Law of Sales 226 Planning a Career in Law: Border Patrol Agent 227 Entrepreneurs and the Law: The Law of Sales 278 Community Action.