Chapter 2 - Intro To Law & The Legal Environment Of Business Flashcards
What is Law?
Consists of rules that regulate the conduct of individuals, businesses, and other organizations within society.
Is intended to protect persons and their property from unwanted interference from others. The law forbids person from engaging in certain undesirable activities.
Definition of Law:
A body of rules of action or conduct prescribed by the controlling authority, and having binding legal force.
That by which must be obeyed and followed by citizens subject to sanctions or legal consequences.
Functions of Law:
- Keeping the peace
- Shaping moral standards
- Promoting social justice
- Maintaining the status quo
- Facilitating orderly change
- Facilitating planning
- Providing a basis for compromise
- Maximizing individual freedom
Facilitating Planning
Well-designed commercial laws allow businesses to plan their activities, allocate their resources, and assess their risks
Maximizing Individual Freedom
The rights of freedom of speech, religion, and association granted the the First Amendment to the U.S. Constitution
Fairness of the Law:
The American legal system is one of the most comprehensive, fair and democratic systems of law ever developed and enforced.
Flexibility of the Law:
The American legal system is generally responsive to cultural, technological, economic, and social changes
Jurisprudence
The philosophy or science of law
Schools of Jurisprudential Thoughtq
- Natural Law School
- Historical School
- Analytical School
- Sociological School
- Command School
- Critical Legal School
- Law and Economics School
Natural School
Postulates that law is based on what is “correct”
Law should be based on morality and ethics
Contend source of law is absolute due to nature, God, or reason
Believe some higher law or set of universal rules bind all people
No form of human law can supersede natural law because of the idea that there are rational objective limits to the power of legislative rulers.
Legal Positivism
Believes that law is separate from moral values
Every enacted law should be a good and enforceable law
Believes that law is a set of rules developed, communicated, and enforced by the ruling party
American Legal Realism:
Maintains that law should focus on the actors in the judicial system, like judges, instead of social conditions and values
Critics argue this is dangerous because brings unpredictability to law
Sociological School:
Asserts that law is a means of achieving and advancing certain sociological goals and promote social welfare
One of the most important schools
Law must change to meet changing social conditions and values to promote social welfare
Critics say this makes laws unpredictable and harm the community because standards change over time = negative effects
Feminist School:
Believes that law today promotes gender inequality and should be changed to accommodate women’s views
Believes that language, logic, and structure of the law are male-created and reinforce male values and significant rights are denied to women
Critical Legal Studies School:
Maintains that legal rules are unnecessary and that legal disputes should be solved by applying arbitrary rules based on fairness
The basic view of this school is that the law is politics and it is not neutral or value free - created by elitists
Law and Economics School:
Believes that promoting market efficiency should be the central concern of legal decision making
History of American Law
The English system of law was generally adopted
It became the foundation from which American judges developed our common law
English Common Law
Developed by judges who issued their opinions when deciding a case
The principles announced in these cases became precedent for later judges deciding similar cases
A uniform system of courts emphasizing form over substance
Court of Chancery
Equity Court
Sought when law courts could not grant appropriate remedy
Remedies were shaped to fit each situation
Merchant Court
Law Merchant rules based on common trade practices and trade
Civil Law System
Romano-Germanic civil law based on the 12 Tables and Corpus Juris Civilis
Napoleanic Code
German Civil Code
Sources of Law in the US
- Constitutions
- Codified Law
- Treaties
- Executive Orders
- Agency Rules & Regulations
- Judicial Decisions
Constitution
Establishes the structure of the federal gov and enumerates its powers. Created 3 branches: 1. Legislative 2. Executive 3. Judicial
Treaties
The president, with the advice and consent of the Senate, may enter into treaties with foreign governments.
A treaty is a compact (agreement) made between two or more nations
Codified Law:
Statutes and Ordinances
Statutes
Written law enacted by the legislative branches of federal and state governments.
The US Congress enacts federal statutes
State legislature enact state statutes
Ordinances:
Laws enacted by local government bodies such as cities and municipalities, counties, school districts, and water districts
Executive Orders:
An executive order is an order issued by a member of the executive branch of gov
Issued by the president and state governors
Power derived from express delegation from legislative branch
Regulations and Orders of Administrative Agencies
Administrative agencies are created by the legislative and executive branches of gov
They may adopt rules and regulations and may enforce and interpret statutes
Many agencies regulate business
Judicial decisions:
Courts decide controversies
Judicial decisions usually state the rationale used by the court in reaching that decision
Doctrine of Stare Decisis
Based on the common law tradition, past court decisions become precedent for deciding future cases
Both federal and state courts follow the precedents established by the US Supreme Court decisions
Courts in one jurisdiction are not bound by precedent of another jurisdiction, but may look at it for guidance
Precedent
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
Supremacy Clause
US Constitution Article VI
Article 6 defines what is the Supreme Law of the Land and who is bound by it
Priority of the Law
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
State constitutions rank as the highest state law
State statutes take precedence over state regulations
Valid state law takes precedence over local laws.
Types of Law:
- Substantive Law
2. Procedural Law
Substantive Law:
The law that creates and regulates legal rights, I.e. Contract Law, Property Law, ect.
Procedural Law:
The law that defines the rules of enforcing Substantive Law rights in a Court of Law
The law that defines the manner by which to obtain a remedy in a Court of Law
Plantiff
The party who originally brought the lawsuit
Defendant
The party against who the lawsuit who has been brought
Petitioner or Appellant
The party who has appealed the decision of the trial court or lower court
Respondent or Appellee
The party who must answer the petitioner’s appeal
Step 1 in How a Bill Becomes a Law
Legislative Bill proposal is introduced by a member body(s) of Congress
Step 2 in How a Bill Becomes a Law
Bill is referred to appropriate sub-committee overseeing the subject matter
Step 3 in How a Bill Becomes a Law:
Sub-committee holds hearings to listen to testimony from parties to establish a hearing record
Step 4 in How a Bill Becomes a Law:
When the hearing is complete, bill is drafted in precise form and referred to sub-committee for a vote
Step 5 in How a Bill Becomes a Law:
If sub-committee’s Vote is affirmative, the sub-committee forwards the bill to full committee, which accepts, rejects or puts the bill on hold. If bill is accepted, it will report the bill to the appropriate body of Congress
Step 6 in How a Bill Becomes a Law:
If similar bills are passed by the House and Senate, they are forwarded to Senate-House Conference Committee for reconcile of any differences. Upon compromise and reconciliation, a single bill is drafted and reported to full House and Senate for vote
Step 7 in How a Bill Becomes a Law:
If both the House and Senate vote to pass the bill, it will be forwarded to the President for signature. Pres. can sign, reject or do nothing. If signed, it becomes a law = statute, then printed and codified. If vetoed, a vote of 2/3 of both House and Senate members can overturn veto. If no actions within 10 days upon receipt of the bill from Congress, the bill will automatically become a law without signature of Pres. Exception = if Congress adjourns before 10 day period lapses = “pocket-veto”
