Bonus A – Working Within the Legal Environment
learning goal 5
List and describe the conditions necessary to make a legally enforceable contract,
and describe the possible consequences if such a contract is violated .
V. CONTRACT LAW
A. TERMINOLOGY
2. There is a VOLUNTARY ACCEPTANCE of the
offer
3. Both parties give CONSIDERATION
a. CONSIDERATION is something of value; it
is one of the requirements of a legal con-
tract.
Bonus A – Working Within the Legal Environment
lecture link A-4
NEGOTIABLE INSTRUMENT
FORGERY AND THE UNIFORM
COMMERCIAL CODE
Frank Abagnale seems an unlikely person to work with the
FBI’s Financial Crimes Unit, but he does. Thirty years ago he
created and passed millions of dollars of bad checks. (See the
complete lecture link on page A.60 of this manual.)
PPT A-22
Contract Law
(See complete PowerPoint slide notes on page A.50.)
PPT A-23
Contract Requirements
(See complete PowerPoint slide notes on page A.50.)
Bonus A – Working Within the Legal Environment
A-23
2. CONSEQUENCES of a breached contract are:
a. SPECIFIC PERFORMANCE: The person
violating contract may be required to live up
to the agreement if no monetary award is
adequate.
learning goal 6
NESS PRACTICES
A. The legislature passes laws to enforce a competi-
tive atmosphere among businesses.
Bonus A – Working Within the Legal Environment
A-24
PPT A-24
Breached Contracts
(See complete PowerPoint slide notes on page A.50.)
progress
assessment
(Text page A-10)
PPT A-25
Progress Assessment
(See complete PowerPoint slide notes on page A.51.)
Bonus A – Working Within the Legal Environment
1. The Justice Department’s antitrust division
serves as watchdog.
a. Congress passed the SHERMAN ANTI-
TRUST ACT in 1890.
b. The act was designed to prevent large or-
ganizations from stifling the smaller compet-
itors.
Bonus A – Working Within the Legal Environment
A-26
(See complete PowerPoint slide notes on page A.51.)
Bonus A – Working Within the Legal Environment
b. The FEDERAL TRADE COMMISSION
ACT OF 1914 prohibits unfair methods of
competition in commerce and created the
Federal Trade Commission.
i. This legislation set up the five–member
FEDERAL TRADE COMMISSION (FTC)
to enforce compliance with this act.
ii. The FTC regulates activities ranging
from misleading advertising to price dis-
closure for funeral homes.
iii. The WHEELER-LEA AMENDMENT in
1938 gave the FTC additional jurisdic-
tion over false or misleading advertising.
c. The ROBINSON-PATMAN ACT OF 1936
Bonus A – Working Within the Legal Environment
A-28
(See complete PowerPoint slide notes on page A.52.)
(See complete PowerPoint slide notes on page A.52.)
Bonus A – Working Within the Legal Environment
less these differences can be justified
by lower selling costs.
iii. This act applies to business–to-business
transactions and does not apply to con-
sumers in business transactions.
4. MICROSOFT’S COMPETITIVE PRACTICES
buyers in relation to sellers.
Bonus A – Working Within the Legal Environment
A-30
(See complete PowerPoint slide notes on page A.52.)
(See complete PowerPoint slide notes on page A.53.)
This text figure lists several major consumer protection laws
and their purpose.
A-31
4. The DODD-FRANK ACT created the Consumer
Financial Protection Bureau that provides gov-
ernment oversight involving consumers.
B. Figure A.4 lists major consumer protection laws.
learning goal 7
Explain the role of tax laws in generating income for the government and as a method
of discouraging or encouraging certain behaviors among taxpayers.
VIII. TAX LAWS
Bonus A – Working Within the Legal Environment
PPT A-31
Taxes
(See complete PowerPoint slide notes on page A.53.)
PPT A-32
Sin Taxes
(See complete PowerPoint slide notes on page A.54.)
PPT A-33
Do the Rich Pay Taxes?
(See complete PowerPoint slide notes on page A.54.)
TEXT FIGURE A.5
Types of Taxes
(Text page A-14)
This text figure highlights the primary types of taxes levied
on individuals and businesses.
1. States claim to lose billions in sales tax as a re-
sult of e-commerce.
2. The European Union already levies certain In-
ternet taxes.
learning goal 8
Distinguish among the various types of bankruptcy as outlined by the Bank-
ruptcy Code.
IX. BANKRUPTCY LAWS
the equity in a house.
Bonus A – Working Within the Legal Environment
A-34
lecture link A-5
GOOGLE’S TAX TACTICS
Tax havens are used by multinationals, including Google.
(See complete lecture link on page A.62 of this manual.)
PPT A-34
Bankruptcy Laws
(See complete PowerPoint slide notes on page A.55.)
lecture link A-6
BAD TIMING FOR BANKRUPTCY
LAW CHANGES
The 2005 Bankruptcy Act took effect in October 2005, bad
timing for residents of the Gulf Coast recently hit by Hurri-
cane Katrina. (See the complete lecture link on page A.63 of
this manual.)
Bonus A – Working Within the Legal Environment
D. Bankruptcy can be either VOLUNTARY or INVOL-
UNTARY.
(used by businesses and individuals)
3. CHAPTER 13: Repayment (used by individuals)
1. Up to $21,625 of equity in a home and $3,225
equity in a car are protected.
2. Cash from the sale is divided among creditors
3. First, creditors with SECURED CLAIMS are
paid, and then the unsecured claims are paid.
Bonus A – Working Within the Legal Environment
PPT A-35
Chapter 7 Bankruptcy
(See complete PowerPoint slide notes on page A.56.)
PPT A-36
How Assets Are Divided in
Bankruptcy
TEXT FIGURE A.6
How Assets Are Divided in
Bankruptcy
(Text page A-16)
(See complete PowerPoint slide notes on page A.56.)
4. Chapter 7 is the most popular form of bankrupt–
cy.
5. Text Figure A.6 lists the order that UNSE-
CURED CLAIMS are paid.
G. CHAPTER 11
1. CHAPTER 13 proceedings are less complicated
than Chapter 7 proceedings.
2. The debtor files a proposed plan for paying off
debts to the court.
learning goal 9
Explain the role of deregulation as a tool to encourage competition.
X. DEREGULATION VERSUS REGULATION
Bonus A – Working Within the Legal Environment
A-38
PPT A-37
Going, Going, Gone
(See complete PowerPoint slide notes on page A.56.)
PPT A-38
Deregulating Commerce
(See complete PowerPoint slide notes on page A.56.)
Bonus A – Working Within the Legal Environment
A-39
B. Deregulation has had a huge impact on the airline
and telecommunication industries.
plans.
Bonus A – Working Within the Legal Environment
PPT A-39
Hamburger Regulations
TEXT FIGURE A.7
Hamburger Regulations
(Text page A-18)
(See complete PowerPoint slide notes on page A.57.)