Chapter 1 Legal Foundations and Global Environment PowerPoint Slides to accompany THE LEGAL ENVIRONMENT OF BUSINESS AND ONLINE COMMERCE 5E, by Henry R. Cheeseman Chapter 1 Legal Foundations and Global Environment Prentice Hall © 2007 1

What Is Law? Law consists of rules that regulate the conduct of individuals, businesses, and other organizations within society. It is intended to protect persons and their property from unwanted interference from others. Prentice Hall © 2007

Functions of Law Keeping the peace Shaping moral standards Promoting social justice Maintaining the status quo Prentice Hall © 2007

Functions of Law Facilitating orderly change Facilitating planning Providing a basis for compromise Maximizing individual freedom Prentice Hall © 2007

Qualities of the Law Fairness The American legal system is one of the most comprehensive, fair, and democratic systems of law ever developed and enforced. Prentice Hall © 2007

Qualities of the Law Flexibility The American legal system is generally responsive to cultural, technological, economic, and social changes. Prentice Hall © 2007

What Is Jurisprudence? Jurisprudence is the philosophy or science of law. Prentice Hall © 2007

Schools of Jurisprudential Thought Natural school—Believes law is based on what is “correct” Historical school—Believes law is an aggregate of social traditions and customs Analytical school—Believes law is shaped by logic Prentice Hall © 2007

Schools of Jurisprudential Thought Sociological school—Believes law is a means of achieving and advancing certain sociological goals Command school—Believes law is a set of rules developed and enforced by the ruling party Prentice Hall © 2007

Schools of Jurisprudential Thought Critical legal studies school—Believes legal rules are unnecessary and that legal disputes should be solved using rules of fairness Law and economics school—Believes promoting market efficiency should be the central concern of legal decision making Prentice Hall © 2007

History of American Law English common law Developed by judges who issued their opinions when deciding a case. The principles became precedent for later judges deciding similar cases. 49 states base their legal systems on common law. Prentice Hall © 2007

History of American Law Law court A court that developed and administered a uniform set of laws decreed by the kings and queens after William the Conqueror. Legal procedure was emphasized over merits. Court of Chancery (Equity Court) Court that granted relief based on fairness Equitable remedies were shaped to fit individual situations. Merchant court Courts that were established to administer the “law of merchants” Prentice Hall © 2007

Sources of U. S. Law Constitutions Treaties Codified law Executive orders Regulations and administrative orders Judicial decisions Prentice Hall © 2007

Constitutions The U.S. Constitution established the structure of the federal government. Legislative branch Executive branch Judicial branch The U.S. Constitution and treaties take precedence over all other conflicting laws. Prentice Hall © 2007

Treaties A treaty is a compact made between two or more nations. Prentice Hall © 2007

Codified Law Statutes Ordinances Written law enacted by the legislative branches of federal and state governments Ordinances Laws enacted by local government bodies such as cities and municipalities, counties, school districts, and water districts Prentice Hall © 2007

Executive Orders An executive order is an order issued by a member of the executive branch of government. Prentice Hall © 2007

Administrative Agency Rules and Regulations The legislative and executive branches of federal and state governments establish administrative agencies to enforce and interpret statutes enacted by Congress and state legislatures. Many agencies regulate business. Prentice Hall © 2007

Judicial Decisions A judicial decision is a decision about an individual case issued by a federal or state court. Prentice Hall © 2007

Doctrine of Stare Decisis Based on the common law tradition, past court decisions become precedent for deciding future cases. Precedent is a rule of law established in a court decision. Lower courts must follow the precedent established by higher courts. Stare decisis—Latin for “to stand by the decision”—means adherence to precedent. Prentice Hall © 2007

Priority of Law in the U.S. The US Constitution and treaties take precedence over all other laws. Federal statutes take precedence over federal regulations. Valid federal law takes precedence over any conflicting state or local law. Prentice Hall © 2007

Priority of Law in the U.S. State constitutions rank as the highest state law. State statutes take precedence over state regulations. Valid state law takes precedence over local laws. Prentice Hall © 2007