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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.”

1979, Nov. 1, P.L. 255, No. 86, § 1, effective Jan. 1, 1980.

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

This code shall be known and may be cited as Uniform Commercial Code.

(Stats.1963, c. 819, § 1101.)

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:

Example 1. If an issuer sells $500,000 worth of its securities pursuant to state registration on January 1, 1988

230.504.

towards the $1,000,000 limit within the preceding twelve months.

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

selected references.

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’.”

Legislative History. For legislative history and purpose of Act July 7, 1955, see 1955 U.S. Code Cong. and

For legislative history and purpose of Pub.L. 93-528, see 1974 U.S. Code Cong. and Adm. News, p. 6535.

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.

Fishing industry, restraints of trade in, see § 522 of this title.

Misdemeanor defined, see § 1 of Title 18, Crimes and Criminal Procedure.

Monopolies prohibited, see § 2 of this title.

Trusts in territories or District of Columbia prohibited, see § 3 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.

Capacity of unincorporated association to sue and be sued, see Wright & Miller: Civil § 1564.

Discretion of court in taxing costs, see Wright, Miller & Kane: Civil 2d § 2668.

Elements of offense to be alleged directly and with certainty, see Wright: Criminal 2d § 126.

Joinder of claims, see Wright & Miller: Civil § 1587.

* * * *

CODE OF FEDERAL REGULATIONS

CHAPTER 1: LAW AND LEGAL REASONING 21

1973 Main Volume Code of Federal Regulations

Advisory opinions and rulings of particular trade practices, see 16 CFR 15.1 et seq.

Common sales agency, see 16 CFR 15.46.

Compliance with state milk marketing orders, see 16 CFR 15.154.

Guides and trade practice rules for particular industries, see 16 CFR subd. B, parts 17 to 254.

LAW REVIEW COMMENTARIES

Abolishing the act of state doctrine. Michael J. Bazyler, 134 U.Pa.L.Rev. 325 (1986).

Affecting commerce test: The aftermath of McLain. Richard A. Mann, 24

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.

L.Ed.2d 1249, on remand 291 F.Supp. 564, 567.

This section is but an exposition of common law doctrines in restraint of trade and is to be interpreted in the

light of common law. U.S. v. Greater Kansas City Chapter Nat. Elec. Contractors Ass’n, D.C.Mo.1949, 82

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

this may be enough to seek professional legal assistance. In this course, students should also be able to

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

Also, knowing the law allows business people to make better business decisions.

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