Business Law Chapter One Our Laws

Our Laws and Legal System Section 1.1 Our Laws and Legal System

Terms Laws-enforceable rules of conduct in a society Code-grouping laws into an organized form May see similarity between civilizations Hammurabi (King of Babylon) code resembles U.S. code

Stages in the growth of law Individuals are free to take revenge Leader (sovereign) has enough power for wronged to accept money or goods for wrong Leader gives power to system of courts (too much to handle). Central authority acts to prevent and punish wrongs (by enforcing laws)

Common vs. Positive Law Common Law-Law based on the current standards or customs of the people Positive law-Law set down by a ruler to prevent disputes from occurring (statute).

Two great systems of law English common law-U.S except Louisiana Roman civil law

The development of English common law Feudal barons acted as judges in their territories. Decisions based on local customs Result-laws varied by region. Hard to follow and no central government control The King’s Courts (1150). King Henry II appointed nobles as judges. “Ride circuit” to hold court Bad weather-in London to hear cases that might have been decided unwisely on circuit. Called King’s (or Queen’s) Bench

Cont. Barons-heard some minor cases but King’s Court took jurisdiction (the power to decide a case). Judges created panels of citizens to decide court cases in harmony with customs (avoid unrest). Like today’s juries.

Advantages of English Common Law Uniformity Able to adapt to changes in society

Equity: An Alternative to Common Law Common law followed precedents (using prior cases to decide similar cases) to provide stability Adhere to proper form. Errors can result in case getting thrown out. Also limited to remedy of money damages…must wait until harm occurs. Equity law allows an for a decree to be ordered or an injunction prevent damages.

Cont. Injunction- an order that prevents something from being done Originally, equity law involved having the King refer the matter to a chancellor, known for his equity (fairness) to hear matter. There was no jury. Today, common law and equity courts are generally merged.

Common Law Equity Uniform Precedents Proper form Jury Wait until harm occur Chancellor heard cases No jury injunction

Section 1-2 Types of Laws

Sources of Law All levels of government…federal, state, and local. Include constitutions, statues, administrative regulations, and case law

Constitutions Constitution-document that sets forth the framework of a government and its relationship to the people it governs. Constitutional law is made when constitutions are adopted or amended or when courts interpret constitutions. The Supreme Court of the U.S. is the final interpreter of the U.S. Constitution and each state is the final interpreter of their state constitution.

Cont. Constitutions allocated powers: Between the people and the government Between state and federal government Among branches of government

Allocation between people and government U.S. Constitution First 10 Amendment (Bill of Rights)

Allocation of power between federal and state government Example: federal government governs international and interstate commerce (between states) and states govern intrastate commerce (within states)

Allocation of power among the branches of government System of checks and balances to ensure that no branch (executive, legislative, or judicial) becomes too powerful.

Research a recent (2014 or 2015) case decided by the U. S Research a recent (2014 or 2015) case decided by the U.S. Supreme court. What were the details of the case and how was it decided? Why was it heard by the USSC? What courts, if any, previously heard the case and what was the decision. Cite your source(s).

Statutes Laws enacted by legislatures (elected officials) Ordinance-legislation at local level (only effective within local boundary)

Cases Case law-process of new rules or opinions being determined by the appeals process. (Judicial branch) May be at state or federal level Stare decisis-”let the decision stand”. Lower courts must follow case law. *Does not generally bind supreme courts.

Administrative Regulations Administrative agencies-government bodies created by legislatures to carry out particular laws. Controlled (usually) by the executive branch May have power to create rules and regulations May have judicial power and can hold hearings, determine fact, and apply law

When laws conflict…. Supremacy rules Federal laws over state State laws over local Constitutional law over statutory Statutory over administrative

Cases cont. Constitutions and Validity Federal constitution is “the supreme law of the land”. No law may contradict. Same for state constitution at the state level Unconstitutional (determined by supreme court)

Cases Cont. Statutes and Validity Statutes and ordinances must be constitutional. Cannot exceed the scope of powers delegated. Commerce is regulated by federal government States set penalties for murder

Cases cont. Administrative Regulations and Validity Can be reviewed by courts to determine constitutionality. Must be within the scope of power delegated to it.

Cases Cont. Case Law and Validity Legislative body can abolish or rewrite a statue or ordinance (nullifying court’s interpretation) Constitution can be changed

Criminal vs. Civil Law Civil law-wrongs against individuals Right to sue (seek legal remedies) Criminal law-activities that violate the right to live in peace Crime-offense against society Conviction can result in fine, imprisonment, or execution May be both!

Procedural vs. Substantive Law Procedural law- set forth how rights and responsibilities can be legally exercised and enforced. Deals with methods of enforcing legal rights and duties (how to arrest) Civil and criminal Substantive law-defines rights and duties. Defines offenses (murder, breach of contract, etc)

Business Law Concentrates on civil law, especially contracts. Torts-private wrongs against people or organizations UCC(Uniform Commercial Code)-set of business laws that govern business Has helped to make state laws more alike. (Although this is not required)

Ethical Bases for Laws Section 1-3

Ethics-a collection of standards of conduct and moral judgment forming the basis for a reasoned, impartial decision as to what is right or Ethical system-organized and consistent compilation of such standards set down by an established authority. (Torah, Bible, Koran) Impartial-applying the same ethical standards to everyone (balance our self-interest with others).

Business Ethics Ethical principles used in making business decisions In conflict with profit maximization!

Assignment Find an example of what you consider unethical behavior exhibited by a business (or a business leader). Explain the situation. What did they do that was unethical? Did this also violate law? Which law? What should they have done? What was the consequence of the behavior (fine, citation, law suit. etc). Include the source. Be prepared to discuss!

Basic Forms of Ethical Reasoning Two forms Consequences-If the consequence is good, the act is good Ethical rules-acts are either right or wrong Most of the time, the two conclusions are the same

Consequences-based Ethical Reasoning Looks for alternative ways Forecasts the consequences for each alternative Evaluates consequences. Which will generate the greatest good Selecting the standard for judging consequences as right or wrong. Called “The Good”. The primary goal toward which human life should be directed. (love, justice, truth, pleasure) Counting the persons affected (by greatest good for greatest number of people)

Rule-based Ethical Reasoning Actions themselves are judged as right or wrong Standards for judging based on one of two sources— Recognized authority-law or religious text. Doesn’t matter how many would benefit. Human reasoning-universalizing-what would it be like if everyone did it?

Both conclude that humans have dignity and worth and have moral rights (rightful claims on other people that flow from each person’s status as a human being).

Our laws reflect ethics based on consequences Majority rule for electing officials and passing laws (officials represent the opinion of the people that elected them) Because of this, it uses features of consequence based ethics when passing laws (laws and consequences are good for the majority)

Our laws reflect ethic based on rules To protect the minority, Bill of Rights affords civil rights to everyone.

The law must be followed because… More are injured than benefit when laws are broken (consequence based) Breaking the law is wrong (ethical rule) Universalizing (ethical rule)

Because people will still break laws…. Fidelity bond-an insurance policy that pays money in case of theft by employees Scofflaws-persons who do not respect the law. Consider benefit vs. chance of being caught. Integrity-capacity to be right in the face of temptation or pressure to do otherwise.

https://www.youtube.com/watch?v=osDT5HR1wRw

Civil disobedience Open, peaceful, violation of a law to protest its alleged injustice. Ethical when: Law conflicts with ethical reasoning No effective political method to change law Nonviolent Does not advance person’s immediate self-interest Public and accepting of punishment