To fully understand the law with respect to business (including tax law), you need to be able to read
and understand court decisions. To make this task easier, you can use a method of
case analysis that is called briefing. There is a fairly standard procedure that you can
follow when you “brief” any court case. You must first read the case opinion carefully.
When you feel you understand the case, you can prepare a brief of it.
Although the format of a case brief may vary, typically it will present the essentials
of the case under headings such as those listed below. This is basically the format followed
by the authors when briefing the cases that have been included in this text.
Citation. Give the full citation for the case, including the name of the case, the
date it was decided, and the court that decided it.
Facts. Briefly indicate (a) the reasons for the lawsuit; (b) the identity and arguments
of the plaintiff(s) and defendant(s), respectively; and (c) the lower court’s
Issue. Concisely phrase, in the form of a question, the essential issue before the
court. (If more than one issue is involved, you may have two—or even more—
Decision. Indicate here—with a “yes” or “no,” if possible—the court’s answer
to the question (or questions) in the Issue section above.
Reason. Summarize as briefly as possible the reasons given by the court for its
decision (or decisions) and the case or statutory law relied on by the court in
arriving at its decision.
How to Analyze Case Problems
In addition to learning how to brief cases, students of business law also find it helpful
to know how to analyze case problems. Part of the study of business law usually
involves analyzing case problems, such as those included in this text at the end of
For each case problem in this book, we provide the relevant background and
facts of the lawsuit and the issue before the court. When you are assigned one of
these problems, your job will be to determine how the court should decide the issue
and why. In other words, you will need to engage in legal analysis and reasoning.
Here we offer some suggestions on how to make this task less daunting. We begin
by presenting a sample problem:
While Janet Lawson, a famous pianist, was shopping in Quality Market, she slipped and
fell on a wet floor in one of the aisles. The floor had recently been mopped by one of the
store’s employees, but there were no signs warning customers that the floor in that area was
wet. As a result of the fall, Lawson injured her right arm and was unable to perform piano
concerts for the next six months. Had she been able to perform the scheduled concerts,
should would have earned approximately $60,000 over that period of time. Lawson sued
Quality Market for this amount, plus another $10,000 in medical expenses. She claimed
that the store’s failure to warn customers of the wet floor constituted negligence and therefore
the market was liable for her injuries. Will the court agree with Lawson? Discuss.
UNDERSTAND THE FACTS
This may sound obvious, but before you can analyze or apply the relevant law to a
specific set of facts, you must clearly understand those facts. In other words, you
should read through the case problem carefully and more than once, if necessary, to
make sure you understand the identity of the plaintiff(s) and defendant(s) in the case
and the progression of events that led to the lawsuit.
In the sample case just given, the identity of the parties is fairly obvious. Janet
Lawson is the one bringing the suit; therefore, she is the plaintiff. Quality Market,
against whom she is bringing the suit, is the defendant. Some of the case problems
you may work on have multiple plaintiffs or defendants. Often, it is helpful to use
abbreviations for the parties. To indicate a reference to a plaintiff, for example, the
pi symbol—π—is often used, and a defendant is denoted by a delta—Δ—a triangle.
The events leading to the lawsuit are also fairly straightforward. Lawson slipped
and fell on a wet floor, and she contends that Quality Market should be liable for
her injuries because it was negligent in not posting a sign warning customers of the
When you are working on case problems, realize that the facts should be accepted
as they are given. For example, in our sample problem, it should be accepted that
the floor was wet and that there was no sign. In other words, avoid making conjectures,
such as “Maybe the floor wasn’t too wet,” or “Maybe an employee was getting
a sign to put up,” or “Maybe someone stole the sign.” Questioning the facts as
they are presented only adds confusion to your analysis.
LEGAL ANALYSIS AND REASONING
Once you understand the facts given in the case problem, you can begin to analyze
the case. The IRAC method is a helpful tool to use in the legal analysis and reasoning
process. IRAC is an acronym for Issue, Rule, Application, Conclusion. Applying
this method to our sample problem would involve the following steps:
First, you need to decide what legal issue is involved in the case. In our sample
case, the basic issue is whether Quality Market’s failure to warn customers of the
wet floor constituted negligence. As discussed in Chapter 4, negligence is a tort—
a civil wrong. In a tort lawsuit, the plaintiff seeks to be compensated for
another’s wrongful act. A defendant will be deemed negligent if he or she
breached a duty of care owed to the plaintiff and the breach of that duty caused
the plaintiff to suffer harm.
Once you have identified the issue, the next step is to determine what rule of law
applies to the issue. To make this determination, you will want to review carefully
the text of the chapter in which the problem appears to find the relevant rule of
law. Our sample case involves the tort of negligence, covered in Chapter 4. The
applicable rule of law is the tort law principle that business owners owe a duty to
exercise reasonable care to protect their customers (“business invitees”).
Reasonable care, in this context, includes either removing—or warning customers
of—foreseeable risks about which the owner knew or should have known.
Business owners need not warn customers of “open and obvious” risks, however.
If a business owner breaches this duty of care (fails to exercise the appropriate
degree of care toward customers), and the breach of duty causes a customer to be
injured, the business owner will be liable to the customer for the customer’s
The next—and usually the most difficult—step in analyzing case problems is the
application of the relevant rule of law to the specific facts of the case you are
studying. In our sample problem, applying the tort law principle just discussed
presents few difficulties. An employee of the store had mopped the floor in the
aisle where Lawson slipped and fell, but no sign was present indicating that the
floor was wet. That a customer might fall on a wet floor is clearly a foreseeable
risk. Therefore, the failure to warn customers about the wet floor was a breach
of the duty of care owed by the business owner to the store’s customers.
Once you have completed step 3 in the IRAC method, you should be ready to
draw your conclusion. In our sample case, Quality Market is liable to Lawson
for her injuries, because the market’s breach of its duty of care caused Lawson’s
The fact patterns in the case problems presented in this text are not always as
simple as those presented in our sample problem. Often, for example, there may be
more than one plaintiff or defendant. There also may be more than one issue
involved in a case and more than one applicable rule of law. Furthermore, in some
case problems the facts may indicate that the general rule of law should not apply.
For example, suppose a store employee advised Lawson not to walk on the floor in
the aisle because it was wet, but Lawson decided to walk on it anyway. This fact
could alter the outcome of the case because the store could then raise the defense of
assumption of risk (see Chapter 4). Nonetheless, a careful review of the chapter
should always provide you with the knowledge you need to analyze the problem
thoroughly and arrive at accurate conclusions.