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Chapter 1 – Business and Its Legal Environment

Introduction

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The following slides are not intended to be a complete treatment of Chapter 1

Additional resources from the textbook authors are found at the textbook companion website

Today’s Readings

What is the Law?

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In a singular sense, law consists of mandatory rules promulgated by the government that regulate societal conduct

In a plural sense, law establishes how society is governed, allowing society to function

Section 1

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Schools of Jurisprudential Thought

Jurisprudence

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The science or philosophy of law is jurisprudence

Jurisprudence deals with the question “What should be the law?" as opposed to the question “What is the law?”

Schools of Jurisprudential Thought

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There are multiple schools of jurisprudence, many not presented in the textbook

The textbook examines the following schools (see Concept Summary 1.1, p.4): Natural Law Positivist Historical Legal Realism

The Natural Law School

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Natural law denotes a system of moral principles that are inherent in human nature

The moral principles are usually identified through belief in God and a religious system, or through the application of human reason

For example, consider the Declaration of Independence

Declaration of Independence

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IN CONGRESS, JULY 4, 1776The unanimous Declaration of the thirteen united States of America

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

Martin Luther King

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The natural law school influenced the civil rights movement of the 1960s – as reflected by Martin Luther King's writings

The following letter excerpt was written after Reverend King lead peaceful civil disobedience against racial segregation in Birmingham, Alabama in 1963

Martin Luther King'sLetter from Birmingham Jail

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April 13, 1963MY DEAR FELLOW CLERGYMEN: While confined here in the Birmingham city

jail, I came across your recent statement calling my present activities "unwise and untimely." . . . I want to try to answer your statements in what I hope will be patient and reasonable terms

Martin Luther King'sLetter from Birmingham Jail

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You express a great deal of anxiety over our willingness to break laws. This is certainly a legitimate concern. Since we so diligently urge people to obey the Supreme Court's decision of 1954 outlawing segregation in the public schools, at first glance it may seem rather paradoxical for us consciously to break laws. One may ask: "How can you advocate breaking some laws and obeying others?". . . .

Martin Luther King'sLetter from Birmingham Jail

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The answer lies in the fact that there are two types of laws: just and unjust. Now, what is the difference between the two? . . . A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law

Martin Luther King'sLetter from Birmingham Jail

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We should never forget that everything Adolf Hitler did in Germany was "legal" and everything the Hungarian freedom fighters did in Hungary was "illegal" . . .

Positive Law

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Analyze King’s last quote under positive law and legal realism, pages 3-4 in the textbook

Jurisprudence Question

Under the schools of jurisprudential thought, how would you analyze the following section from the California Constitution (a section under current court review)?

Cal. Const., Art. I § 7.5 (2010)§ 7.5.  - Marriage validity limited to man

and womanOnly marriage between a man and a woman is

valid or recognized in California.

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Your Understanding of Jurisprudence

Section 2

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Business Activities and the Legal Environment

Law & Business

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The reach of law into the business realm is extensive

One transaction may be affected by multiple laws

See exhibit 1-1, page 5

Sections 3, 4, & 5

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Sources of American LawThe Common Law Tradition

The Common Law Today

Sources of American Law

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At the federal level, the primary sources of law include the Constitution, federal statutes and regulations, and executive orders

At the state level, the same sources of law exist – a constitution, statutes, etc.

State courts also create law through the common law process, a power the federal government lacks

1st Tier - Law Sources – in Rank Order1st Tier - Law Sources – in Rank Order

2nd Tier - The Common Law Process2nd Tier - The Common Law Process

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1. US Constitution2. Federal Statutory

Law3. State Constitution4. State Statutory Law5. Local Law Above sources are

created by lawmakers and interpreted by courts – Stare Decisis is important regarding precedents

Stare Decisis, orOverruling

Precedent, orCreating First

PrecedentCommon law is

created by and found only in state court opinions

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The Legal Process - An Overview

Understanding

Common Law

Our common law (or case law) originated in the laws of William the Conqueror (1027-1087, A.D.)

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Common Law

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Today, common law refers to court created rules in areas where constitutional and statutory rules are silent

Common law is only created by state courts, not federal courts, and each state is sovereign and supreme in its common law

Courts of LawCourts of Law Courts of EquityCourts of Equity

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Relief granted - usually money damages

Jury trial allowedTime to sue

governed by statutes of limitation

Relief granted - usually court orders (e.g., injunctions, orders of specific performance, etc.)

Jury trial not allowedTime to sue

governed by the doctrine of laches

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Distinctions Courts of Law - Courts of Equity

Stare Decisis

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Stare Decisis, where past court decisions become precedent for future cases, is the cornerstone of our American judicial system

Stare decisis is Latin for “let the decision stand”

Lower courts must follow the precedent established by higher courts, but higher courts have the power to overturn their own precedents

Section 6

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Classifications of Law

Classifications of Law

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The law may be classified in a variety of categories

Examples include substantive versus procedural, public versus private, and civil versus criminal

Regarding high profile defendants and criminal law, see the blog Sentencing Law and Policy

Civil LawCivil Law Criminal LawCriminal Law

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 Area of concern: Rights and duties between individuals

Wrongful act: Harm to a person or to a person's property  

Party who brings suit: Person who suffered harm

Standard of proof: Preponderance of the evidence

Remedy: Damages (money) and/or an equitable remedy

Area of concern: Offenses against society as a whole

Wrongful act: Behavior that violates a criminal statute

Party who brings suit: The state

Standard of proof: Beyond a reasonable doubt

Remedy: Punishment (fine and/or imprisonment)

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Civil versus Criminal Law

Cyberlaw

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Cyberlaw is a new field of law comprised of legal principles applicable to business conducted via the Internet

The Internet is not owned by a government; many of the standards of behavior are found in voluntary codes

Section 7

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How to Find Primary Sources of Law

Locating the Law

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Court decisions are published in chronological order, using a case citation for identification

Statutes are collected and published by subject matter, using a statutory citation

Legal Research Using Computers

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Westlaw and Lexis-Nexis are the two leading fee-based computerized legal search systems

Lexis-Nexis is available free for ASU students through the ASU library Web site

A variety of smaller legal databases are available free on the WWW

Section 8

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How to Read and Understand Case Law

Elements of a Case Brief

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Case name and citationFacts – a summary of the essential factsIssue – the legal question raised by the caseDecision - the answer to the case questionReason(s) – the court’s reasoning for its

ruling

Using the above format, explain Berger v. City of Seattle