1. Welcome to…. OBE-118 Legal Environment of Business!!! Professor John A. McKinsey Fall 2004, Section 10, Tuesday Evenings

2. 2 Office Hours (TAHOE-2054) –Tuesday 5:00 to 5:45 PM – Thursday 9:00 to 9:45 AM – or by appointment E-Mail –mckinsey@csus.edu –Put “OBE118” in the subject header for faster response Telephone –CSUS Office (916) 278-7030 Finding Your Professor

3. 3 –Legal Environment Beatty, Samuelson, 2 nd Edition –Some handouts –Class Website www.csus.edu/indiv/m/mckinsey –At the website you will find edited versions of the lectures for you to download/ review/print/etc. Text and Resources

4. 4 John McKinsey -Full-time lawyer in Sacramento law firm. I specialize in the regulation of business. - CSUS graduate - Former nuclear power plant operator - Why do I teach?

5. 5 Course Summary- Learning Goals –Substantive law –Legal Reasoning –Relationship of law to business –Process of law –Critical thinking –Writing –Speaking

6. 6 Course Summary- Assessment Exams 75% Quizz-es 25% Participation ??? (up to a full letter grade) (See page 4 of syllabus)

7. 7 Exams Multiple choice questions Sometimes short analysis questions Exams increase in weight as semester goes on (90, 100, 110 points) You will need a Scantron form 882 for exams Tests can include anything assigned for reading or discussed in class

8. 8 Quizzes All quizzes are short and worth 10 points Twelve scheduled quizzes Bring a Scantron quizstrip to every class Best ten quiz scores count for total possible 100 points

9. 9 Reading Assignments - See syllabus for course coverage - I do not tend to fall behind This Week: -Chap 1: 3, 5-17 -Chap 2: 27-28 Next Week: -Chapter 4

10. 10 Succeeding in this Class Read and attempt to understand concepts before each class (Before class) Use slides to make note taking in class more effective (During class) After class (within 48 hours) review reading and lecture notes and make outline, etc that puts it all together (After class) Test yourself via groups or on your own and use results to conduct further studying (Between lecture and exam) Review before exam (Before exam)

11. 11 What is “The Law”? - Rules of permissible conduct, limits on allowable conduct - Not the same as a moral limit or rule, but is supposed to be reflective of morals and ethics - But we all know there are many things that you can do, but should not do. The Law Ethics

12. 12 Role of Law in Business The ways in which the law affects business are as numerous as the number of laws themselves Enron, Worldcom, Tyco (Business structure) The McDonald’s coffee spill (Torts) Grace Inc. and “A Civil Action” (Environmental) Limit of VOC content in underarm deodorant (Product regulation) Employees not paid overtime (Employment law) Customer refuses to pay (Contracts)

13. 13 Types of Legal Situations Transactional Situational Negotiation of contracts, purchases etc. (these tend to occur in more informal settings) Reactionary events such as claims made by someone else against you or you against them. (these tend to occur in more formal settings such as law suits, criminal accusations, etc.)

14. 14 Types of Law- Nature Substantive Law vs Procedural Law Defines rights and duties Explains how to make the law work Ex: “You may not drive greater than the posted speed limit” Ex: “To challenge a traffic citation you must pay the established bail amount by the deadline and indicate that you require a hearing”

15. 15 English Common Law U.S. Constitution State #1 Constitution State #2 Constitution Individual or Business Federal Courts CongressExecutive Branch State Courts State Leg State Exec State Courts State Leg State Exec Agencies

16. 16 Types of Law- Source Constitutions Statutes Cases or Court Orders Regulations Ordinances / Codes

17. 17 Types of Law- Type Criminal Civil Administrative (Quasi Civil)

18. 18 Defining the Law Some law is “black letter” Most law is very ambiguous and hard to pin down –Court interpretations of statutes – “precedent” –Ethical interpretations –Tradition and practice of police, courts and agencies –Case law or “common law”

19. 19 Cases Cases flesh out and define black letter law as well as create law of their own When reading a case, what things should you look for that tell you the importance and relevance of the case?

20. 20 Jurisprudence, or “What is Law?” Legal Positivism Natural Law Legal Realism “Law is what the sovereign says it is.” Decisions stand, regardless of morality. “An unjust law is no law at all and need not be obeyed.” Laws must have a good moral basis. “Enforcement of the law is more important than the law itself.” Enforcers determine if the law is applied in a fair and consistent way.

21. 21 Applying the Law Begin with black letter law Evaluate the moral situation Apply the moral pressure against the strength of the law 1) The less clear the black letter law, the more likely moral standard determines outcome. 2) The stronger the moral conviction the more likely moral standard determines outcome.

22. 22 What Standard??? Questions Can a judge use his or her own standard? Must a judge go against his or her own belief? Does it matter if the judge is elected? Does it matter if the judge proclaimed the particular belief? What limits legislature? What limits the majority?

23. 23 Overview of this Course Introduction, Defining Law Types of LawForums Where Law is Applied TortsContracts Product Liability Secured Transactions Employment Law Bankruptcy Property Business Organizations Some substantive areas we get to sample

24. 24 Next Week: Types of law Read this week’s and next week’s assignment Go to my website and start using the lecture slides available there. Compare this week’s reading to my lecture and make some type of complete outline/ overview/ etc of this introductory topic. Be prepared for a quiz on Chapter 4 (scantron quizstrip).