1. 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

2. 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

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

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

5. 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

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

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

8. 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

9. 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

10. 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

11. 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

12. 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

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

14. 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

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

16. 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

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

18. 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

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

20. 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

21. 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

22. 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