1. McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 1-2

3. 1-3 Learning Objectives  Discuss what Law is and what it is designed to do  Analyze the interplay between law, equity, morals, and justice  Recite four jurisprudential theories and decide which best reflects our law  Provide several sources of our law  Explain what common law is and where it came from  Distinguish between precedent and stare decisis

4. 1-4 Learning Objectives  Explain the different classifications of law  Understand the various areas of law  Explain the role and importance of ethics in business  Discern how diversity may come into play in business and legal issues

5. 1-5 Relationship of Law and Ethics

6. 1-6 Legal Considerations  What type of business is suitable?  Sole Proprietorship  LLC  Partnership  Corporation  State and Federal regulations  Local ordinances  Contracts

7. 1-7 Ethical Considerations  Business decisions involve ethical considerations  Affect company investors and employees  ENRON  Affect clients  Does a financial business consultant allow a client to invest into a financial product that looks good on paper but may prove too risky for the client’s needs?

8. 1-8 Diversity Considerations  Diversity issues in the context of American law, policy, and history  Businesses operate in a non- homogeneous society Socioeconomic Multiple races Ethnicities National Origins Genders Ages Abilities

9. 1-9 Definition of Law  Law  System of limitations upon our actions imposed by the government to ensure order, safety, predictability, and control in society.  Law and Justice – not always aligned.  Law plays central role in personal and business relationships

10. 1-10 Jurisprudence  Jurisprudence  Study of law, legal systems, and legal philosophy  Judicial philosophers have developed different approaches to explain law and its role in society:  Natural Law  Legal Positivism  Legal Realism  Sociological Theory

11. 1-11 Sources of Law  A Federal form of government:  Tripartite System  Tripartite System composed of three branches created by the U.S. Constitution:  Legislative, enacts laws, Article I  Executive, enforces laws, Article II  Judicial, interprets laws, determines constitutionality of laws, Article III  Separation of Powers:  Provides checks and balances among the branches

12. 1-12  Common Law  System of laws originated and developed in England by court decisions based on customs rather than codified laws.  Became the basis of our American legal system today  Stare Decisis Latin term: Look to the decision Courts decide new cases based on established case law precedent  Common Law  System of laws originated and developed in England by court decisions based on customs rather than codified laws.  Became the basis of our American legal system today  Stare Decisis Latin term: Look to the decision Courts decide new cases based on established case law precedent Sources of Law

13. 1-13 CLASSIFICATIONS OF LAW Civil LawCriminal Law SubstantiveProcedural Public LawPrivate Law LegalEquitable

14. 1-14 Areas of Law  Civil Law Areas  TORTS  PROPERTY  CONTRACTS  Civil Law Areas  TORTS  PROPERTY  CONTRACTS

15. 1-15 Common Law Torts Business Torts AssaultDisparagement BatteryFalse Advertising False ImprisonmentInfringement: Patent, Copyright, Trademark Intentional Infliction of Emotional Distress (IIED) Interference with contractual relations Negligent Infliction of Emotional Distress (NIED) Negligent Entrustment Fraud Defamation Invasion of Privacy Negligence  Torts are civil wrongs  Common Law and Codified Tort Law

16. 1-16 Contract Law  Contracts are voluntary binding agreements people or businesses enter into in order to obtain something to which they are not otherwise entitled.  If parties fail to perform the contract terms, a contract breach occurs, for which money or other remedies may be granted by a court.  Goal is to put the non-breaching party in the position he or she would have been before the breach.

17. 1-17  Property law governs the acquisition of title to real or personal property for various purposes creating property interests of title and possession: – Sale – Will – Gift – Bailment Property Law

18. 1-18  Utilitarian Approach  The ends justify the means and the choice is made to do what is the “greatest good” for the most people.  Universalism - Categorical Imperative  Everyone should act as they would want someone else to act in the situation Ethical Approaches