Business Law

Ch. 1: Laws and Their Ethical Foundations

What is Law?

• Laws are enforceable rules of conduct in a society that reflects the culture and circumstances that create them

Codes

• Codes are laws grouped into an organized form

Stages In the Growth of Law

1. Individuals are free to take revenge for wrongs done to them.

• Injuries inflicted on one human being by another are matters for personal revenge

• Those that are wronged feel that justice can be done only through personally punishing the wrongdoers

• Example would be Gang Wars

Stages In the Growth of Law

2. A leader acquires enough power to be able to force revenge-minded individuals to accept an award of goods or money instead

Stages In the Growth of Law

3. The leader gives this power to a system of courts

4. The leader or central authority acts to prevent and punish wrongs that provide individuals to seek revenge.

Common Law vs. Positive Law

• Laws reflect the wisdom or lack of wisdom of their creators.

• Laws should be predictable and flexible

• Do you want a lack system or controlling?

• Best system evolves slowly toward a form that is most appropriate to the current standards of the people.

Common Law vs. Positive Law

• Common Law – laws based on the current standards or customs of the people.– Formed from the rules used by judges to

settle people’s disputes.

• Positive Law – Laws dictated from above

Origin of the U.S. Legal System

• Roman Civil Law– Laws adopted are written, well organized,

comprehensive set of statutes in code form.– Laws can only be changed by the central

government.– Louisiana is the only state with a civil law

system

Origin of the U.S. Legal System

• English Common Law– In England, disputes were decided by local

customs and enforced by the barons’ power.• Laws were different from region to region.• Made it difficult to follow

English Common Law

• King Henry appointed a number of judges.– Judges were given the power of order

wrongdoers to pay with money or goods – Judges would travel during the good-weather

months and hold court.– This was called King’s Bench– Baron’s Courts still heard minor cases.– Kings court had jurisdiction – The power to

decide cases, over the important cases

English Common Law

• Judges were instructed to choose citizens from each region to interpret the regions customs for the courts– The panel of citizens is called a jury

• Jury consist of 12 people

Advantages of English Common Law

• Achieves uniformity while maintaining an ability to adapt to changes in society.

Alternative to Common Law

• Common law courts carefully follow precedent– Precedent means that courts use prior cases

as a guide for deciding similar new cases – Help provide stability in the law.– Disadvantage was that courts could only grant

remedy for damages• Had to wait until harm actually ahppened.

Chancellor

• Matter were handed to a chancellor instead of going to the courts– No jury– My issue an injunction (stop something from

being done)

Source of Laws

• Laws in the U. S. are created at all three levels of the government (Federal, State, Local)

Forms of Laws

• Constitutions

• Statutes

• Case Law

• Administrative Law

Forms of Laws

• Constitutions– Document that set forth framework of a

government and its relationship to the people it governs.

– When constitutions are adopted or amended, or when courts interprets constitutions – Constitutional Law is created.

Forms of Laws

• Constitutions– Highest source of law– “Supreme Law of the Land”– Federal, State, or Local laws is not valid if it

conflicts with the federal Constitution.– State Constitution is the Supreme Law over all

state laws.

Forms of Laws

• Constitutions– Defines and allocates certain powers in our

society.– Allocates powers

• Between the people and their government• Between state government and the federal

government• Among the branches of the government

Allocating Powers between People and their Government

• Constitution is the main document for allocating powers between people and their government– Done in the Bill of Rights (first 10

ammendments)

Allocating Powers between Federal and State Government

• Many governmental powers over business are divided between state governments and the federal governments.– The federal government regulates foreign and

interstate commerce.• Interstate Commerce occurs between two or more

states.• Intrastate Commerce occurs within one state. Left

to the state

Allocating Powers among the Branches of the Government

• Branches: Executive, Legislative, and Judicial Branches.– Checks and Balance

• Ensures that no branch of the government becomes too powerful.

Statutes

• State legislators enacting state laws– Statutes

• Local government set their own local laws– Ordinances– Only effective within boundries

Case Law

• Set by judicial branch

• Is made after a trial has ended and one of the parties has appealed the result to a high court.– Appeal will be based on legal issues arising

from rulings made by the lower court.– Appellate Court publishes its opinion that

states new or more appropriate rules to be used in deciding the case and others like it.

Beginning of Class

• Turn to page 9 in your text book– Take 10 minutes to answers the Assestment

Case Law

• Case Law arises from the doctrine of “Stare Decisis”– Means “let the decision stand”– Requires lower courts to decide similar cases

the same way.

Administrative Law

• Federal, State and Local legislatures create administrative agencies– Administrative agencies are government

bodies that carry out particular laws.• Examples

– Social Security Administration– DMV– County Zoning Commission

Administrative Law

• Agencies created by legislature but controlled by executive branch– Legislatures grant agencies Legislative

powers and limited judicial powers• Create there own laws called Rules and

Regulations• With judicial powers – they would hold hearing,

make decisions, and apply the law.

Turn to Page 13

• What’s your Verdict

Types of Laws

• Civil Law– Private legal rights of an individual are

violated– Individuals seek legal remedies for wrongs

done to them– Another name is Tort

Civil Law

• Two parties– Plaintiff – one suing– Defendant

• Liable – Defendant loses

• Punishment– Compensation

Types of Laws

• Criminal Law– Is an offense against society rather than

individuals– Government investigates an alleged

wrongdoing.

Criminal Law

• Two Parties– Prosecutor – Defendant

• Conviction– Fine– Imprisonment– Execution

Procedural Law

• Sets forth how rights and responsibilities can be legally exercised and enforced through the legal system.

Procedural Law

• Two types– Criminal Procedure

• Defines the process for enforcing the law when someone is charged with a crime

– Civil Procedure• When civil law have been violated

Substantive Law

• Defines rights and duties

• Concerned with rules of conduct

• Defines offenses

Business Law

• Rules that apply to business situations and transactions.– Mostly concerned with Civil Law

Uniform Business Laws

• UCC – Uniform Commercial Code– Governs such areas as sale of goods, certain

aspect of banking and leases of goods.• Important because of the large use of interstate

commerce and commercial transactions

Assessment

• Turn to page 15 and answer the question

Ethics

• Practice of deciding what is right or wrong in a reasoned, impartial manner– Must affect you or others in a significant way– Should be impartial

Ethics in Business

• Ethics is not considered for one reason

Profit maximization

Forms of Ethical Reasoning

1. Consequences– Rightness and Wrongness is based on the

results of the action– First looks for alternative ways to alter the

current situation– Then attempts to forecast the consequence

that will arise from each alternative– Evaluates this possible consequences to

select the alternative that will generate the greatest good

Forms of Ethical Reasoning

2. Moral– Based on ethical rules– Acts are either right or wrong– Good consequences do not justify wrong or

bad acts– The standard of judging is based on

• Recognized Authority (Religious)• Human Reasoning

Civil Disobedience

• Open and peaceful violation of a law to protest its alleged injustice or unfairness.– Goal is to make the legal system more just– Participants are willing to be arrested in order

to test the validity of the law in court

Assessment

• Turn to page 19

Handouts

• Complete Lesson 1-1 Reteach

• Complete Lesson 1-2 Quiz

• Complete Lesson 1-3 Reteach

• Complete Lesson 1-3 Quiz

Chapter 1 Assessment

• Complete Your-Legal Vocabulary on page 20

• Complete Review Legal Concepts questions 20, 21 and 24

• Complete Write Your Legal Concepts #30

• Complete Think Critically About Evidence #34

• Complete Analyze Cases #36