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14 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
§ 1101. Short title of title
This title shall be known and may be cited as the “Uniform Commercial Code.”
California Commercial Code
The text of another of the state statutes whose citations are explained in the textbook follows—Section
1101 of the California Commercial Code (Cal. Com. Code § 1101).
WEST’S ANNOTATED CALIFORNIA CODES
COMMERCIAL CODE
DIVISION 1. GENERAL PROVISIONS
CHAPTER 1. SHORT TITLE, CONSTRUCTION, APPLICATION AND SUBJECT MATTER OF THE CODE
§ 1101. Short Title
ADDITIONAL BACKGROUND—
Code of Federal Regulations
Created by Congress in 1937, the Code of Federal Regulations is a set of softcover volumes that con-
tain the regulations of federal agencies currently in effect. Items are selected from those published in the
§ 230.504 Exemption for Limited Offerings and Sales of Securities Not Exceeding $1,000,000.
16 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
(a) Exemption.
Offers and sales of securities that satisfy the conditions in paragraph (b) of this Section by an issuer that is
(b) Conditions to be met—
(b)(1) General Conditions. To qualify for exemption under this § 230.504, offers and sales must satisfy the
terms and conditions of §§ 230.501 and 230.502, except that the provisions of § 230.502(c) and (d) shall not
apply to offers and sales of securities under this § 230.504 that are made:
(b)(1)(i) Exclusively in one or more states each of which provides for the registration of the securities and
(b)(1)(ii) In one or more states which have no provision for the registration of the securities and the delivery of
a disclosure document before sale, if the securities have been registered in at least one state which provides
(b)(2) Specific condition—
(b)(2)(i) Limitation on aggregate offering price. The aggregate offering price for an offering of securities under
this § 230.504, as defined in § 230.501(c), shall not exceed $1,000,000, less the aggregate offering price for
Note 1.—The calculation of the aggregate offering price is illustrated as follows:
230.504.
Example 2. If an issuer sold $900,000 pursuant to state registration on June 1, 1987 under this § 230.504 and
Note 2.—If a transaction under this § 230.504 fails to meet the limitation on the aggregate offering price, it
does not affect the availability of this § 230.504 for the other transactions considered in applying such
CHAPTER 1: LAW AND LEGAL REASONING 17
18 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
Note 3.—In addition to the aggregation principles, issuers should be aware of the applicability of the in-
tegration principles set forth in § 230.502(a).
[53 FR 7869, March 10, 1988; 54 FR 11372, March 20, 1989]
AUTHORITY: Secs. 6, 7, 8, 10, 19(a), 48 Stat. 78, 79, 81, 85; secs. 205, 209, 48 Stat. 906, 908; sec. 301,
54 Stat. 857; sec. 8, 68 Stat. 685; Sec. 308(a)(2), 90 Stat. 57; Secs. 3(b), 12, 13, 14, 15(d), 23(a), 48 Stat.
882, 892, 894, 895, 901; secs. 203(a), 1, 3, 8, 49 Stat. 704, 1375, 1377, 1379; sec. 202, 68 Stat. 686; secs.
Source: Sections 230.490 to 230.494 contained in Regulation C, 12 FR 4076, June 24, 1947, unless other-
wise noted.
ADDITIONAL BACKGROUND—
United States Code Annotated
Published by West Publishing Company, the United States Code Annotated contains the complete text
of laws enacted by Congress that are included in the United States Code (discussed above), together with
case notes (known as annotations) of judicial decisions that interpret and apply specific sections of the
TITLE 15. COMMERCE AND TRADE
CHAPTER 1—MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE
§ 1. Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce
among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any
contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a
CHAPTER 1: LAW AND LEGAL REASONING 19
both said punishments, in the discretion of the court.
(July 2, 1890, c. 647, § 1, 26 Stat. 209; Aug. 17, 1937, c. 690, Title VIII, 50 Stat. 693; July 7, 1955, c. 281, 69
Stat. 282.)
(As amended Dec. 21, 1974, Pub.L. 93-528, § 3, 88 Stat. 1708; Dec. 12, 1975, Pub.L. 94-145, § 2, 89 Stat.
801.)
HISTORICAL AND STATUTORY NOTES
Effective Date of 1975 Amendment. Section 4 of Pub.L. 94-145 provided that: “The amendments made by
sections 2 and 3 of this Act [to this section and section 45(a) of this title] shall take effect upon the expiration
of the ninety-day period which begins on the date of enactment of this Act [Dec. 12, 1975].”
Short Title of 1980 Amendment. Pub.L. 96-493, § 1, Dec. 2, 1980, 94 Stat. 2568, provided: “That this Act
[enacting section 26a of this title] may be cited as the ‘Gasohol Competition Act of 1980’.”
Short Title of 1975 Amendment. Section 1 of Pub.L. 94-145 provided: “That this Act [which amended this
section and section 45(a) of this title and enacted provisions set out as a note under this section] may be cited
as the ‘Consumer Goods Pricing Act of 1975’.”
Short Title of 1974 Amendment. Section 1 of Pub.L. 93-528 provided: “That this Act [amending this section,
and sections 2, 3, 16, 28, and 29 of this title, and section 401 of Title 47, Telegraphs, Telephones, and
Radiotelegraphs, and enacting provisions set out as notes under sections 1 and 29 of this title] may be cited
as the ‘Antitrust Procedures and Penalties Act’.”
REFERENCES
CROSS REFERENCES
Antitrust laws inapplicable to labor organizations, see § 17 of this title.
20 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
Carriers relieved from operation of antitrust laws, see § 5(11) of Title 49, Transportation.
Combinations in restraint of import trade, see § 8 of this title.
Conspiracy to commit offense or to defraud United States, see § 371 of Title 18, Crimes and Criminal
Procedure.
Discrimination in price, services or facilities, see § 13 of this title.
FEDERAL PRACTICE AND PROCEDURE
1990 Pocket Part Federal Practice and Procedure
Adding new parties, see Wright & Miller: Civil § 1504.
Adequacy of representation of members in class actions instituted under sections 1 to 7 of this title, see
Wright, Miller & Kane: Civil 2d § 1765.
Answers to interrogatories with respect to justification for unlawful activity, see Wright & Miller: Civil § 2167.
Applicability of rule relating to summary judgment, see Wright, Miller & Kane: Civil 2d § 2730.
Applicability of standards developed by federal courts under sections 1 to 7 of this title to certain intrastate
transactions, see Wright, Miller, Cooper & Gressman: Jurisdiction § 4031.
Authority of district court to award injunctive relief in actions to restrain antitrust violations, see Wright & Miller:
Civil § 2942.
* * * *
CODE OF FEDERAL REGULATIONS
CHAPTER 1: LAW AND LEGAL REASONING 21
1973 Main Volume Code of Federal Regulations
LAW REVIEW COMMENTARIES
Abolishing the act of state doctrine. Michael J. Bazyler, 134 U.Pa.L.Rev. 325 (1986).
ANNOTATIONS
1. Common law
Congress did not intend text of sections 1 to 7 of this title to delineate their full meaning or their application in
concrete situations, but, rather, Congress expected courts to give shape to their broad mandate by drawing
on common-law tradition. National Society of Professional Engineers v. U.S., U.S.Dist.Col.1978, 98 S.Ct.
1355, 435 U.S. 679, 55 L.Ed.2d 637.
This section has a broader application to price fixing agreements than the common law prohibitions or
sanctions. U.S. v. Socony-Vacuum Oil Co., Wis.1940, 60 S.Ct. 811, 310 U.S. 150, 84 L.Ed. 1129, rehearing
denied 60 S.Ct. 1091, 310 U.S. 658, 84 L.Ed. 1421.
Effect of §§ 1 to 7 of this title was to make contracts in restraint of trade, void at common law, unlawful in
positive sense and created civil action for damages in favor of injured party. Denison Mattress Factory v.
Spring-Air Co., C.A.Tex.1962, 308 F.2d 403.
Combinations in restraint of trade or tending to create or maintain monopoly gave rise to actions at common
law. Rogers v. Douglas Tobacco Bd. of Trade, Inc., C.A.Ga.1957, 244 F.2d 471.
Federal statutory law on monopolies did not supplant common law but incorporated it. Mans v. Sunray DX Oil
Co., D.C.Okl.1971, 352 F.Supp. 1095.
22 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
CASE SYNOPSIS—
A Sample Case:
Rosa and Raymond Parks Institute for Self Development v. Target Corp.
In December 1955, on a bus in Montgomery, Alabama, Rosa Parks refused to give up her seat to a white
man in violation of the city’s segregation law. This act, which sparked the modern civil rights movement, is
featured on mementoes offered for sale by Target Corp. The Rosa and Raymond Parks Institute for Self
Development owns Parks’s name and likeness. The Institute filed a suit in a federal district court against
Target, alleging misappropriation in violation of the Institute’s right of publicity. The court dismissed the
complaint. The Institute appealed.
..................................................................................................................................................
Notes and Questions
What is “the public interest”? How does that meaning apply to the Rosa case? Public interest has
two meanings that could fit into the theoretical underpinnings of the Rosa case. The first definition is common
benefit, or the general benefit of the public. A law, for example, may be for, or contrary to, the public interest,
in this meaning.
TEACHING SUGGESTIONS
1. Emphasize that the law is not simple—there are no simple solutions to complex problems. Legal prin-
ciples are presented in this course as “black letter law”—that is, in the form of basic principles generally ac-
cepted by the courts or expressed in statutes. In fact, the law is not so concrete and static. One of the pur-
CHAPTER 1: LAW AND LEGAL REASONING 23
poses of this course is to acquaint students with legal problems and issues that occur in society in general
and in business in particular. The limits of time and space do not allow all of the principles to be presented
2. Point out that the law assumes everyone knows it, or, as it’s often phrased, “Ignorance of the law is no
3. As Oliver Wendell Holmes noted, “The life of the law has not been logic”—that is, the law does not re-
spond to an internal logic. It responds to social change. Emphasize that laws (and legal systems) are man-
made, that they can, and do, change over time as society changes. To what specific social forces does
law respond? Are the changes always improvements?
4. One method of introducing the subject matter of each class is to give students a hypothetical at the be-
ginning of the class. The hypothetical should illustrate the competing interests involved in some part of the
5. You might want to remind your students that the facts in a case should be accepted as given. For
example, under some circumstances, an oral contract may be enforceable. If there is a statement in a case
Cyberlaw Link
Ask your students, at this early stage in their study of business law, what they feel are the chief legal
issues in developing a Web site or doing business online. What are the legal risks involved in transacting
business over the Internet? As their knowledge of the law increases over the next few weeks, this question
can be reconsidered.
DISCUSSION QUESTIONS
1. If justice is defined as the fair, impartial consideration of opposing interests, are law and justice the
24 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
2. Which of the schools of legal thought matches the U.S. system? None of the approaches mentioned in
3. What is the common law? Students may most usefully understand common law to be case law—that is, the
5. What is the Uniform Commercial Code? A uniform law drafted by the National Conference of
6. Discuss the differences within the classification of law as civil law and criminal law. Civil law concerns
7. Discuss the differences between remedies at law and in equity. Remedies at law were once limited to
payments of money or property (including land) as damages. Remedies in equity were available only when there was
8. Identify and describe remedies available in equity. Three are discussed briefly in the text Specific per-
9. What is the primary function of law? The primary function of law is to simultaneously maintain stability and
10. What is stare decisis? Why is it important? Stare decisis is a doctrine that prescribes following earlier
CHAPTER 1: LAW AND LEGAL REASONING 25
ACTIVITY AND RESEARCH ASSIGNMENTS
1. Have students research the laws of other common law jurisdictions (England, India, Canada), other legal
systems (civil law systems, contemporary China, Moslem nations), and ancient civilizations (the Hebrews, the
Babylonians, the Romans), and compare the laws to those of the United States. In looking at other legal systems,
have students consider how international law might develop, given the differences in legal systems, laws, traditions,
and customs.
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 4: In Brown v. Board of Education of Topeka, the United States Supreme Court unanimously
held that the separate but equal concept had no place in education. The case involved four consolidated cases
focusing on the permissibility of local governments conducting school systems that segregated students by race. In
each case blacks sought admission to public schools on a nonsegregated basis, and in each case the lower court
Footnote 5: In Plessy v. Ferguson, the United States Supreme Court adopted the doctrine of separate
but equal. A Louisiana state statute required that all railway companies provide separate but equal accommodations
for black and white passengers, imposing criminal sanctions for violations. Plessy, who alleged his ancestry was
seven-eighths Caucasian and one-eighth African, attempted to use the coach for whites. The Court said that the U.S.
Constitution’s Thirteenth and Fourteenth Amendments (the Civil War Amendments) “could not have been intended to
