BUS 206 Project 1 PDF

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BUS 206 Powerpoint Module 1...

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According to Kubasek et al., business law “consists of the enforceable rules of conduct that govern commercial relationships” (2019, p. 2). The law sets the bar for the responsibility each business has in order to protect themselves and consumers. Without these integral laws, companies would be able to sell consumers’ personal data, breach contracts, and perform unethically without repercussions. Without these rules and responsibilities, we would not have a thriving market economy.

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The foundation of the United States Legal system is the U.S. Constitution, which is known as “The Supreme Law of the Land”. No state or federal laws may violate the U.S. Constitution. In order to ensure a properly balanced system, the Separation of Powers breaks the United States Government down into three different branches: Legislative, Executive, and Judicial. (LibGuides: Circuit Riders: Sources of Law, n.d.) • The Legislative Branch is responsible for enacting laws called statutes and ordinances. The legislative branch consists of the House of Representatives and the Senate, which together create what we know as Congress. • The Executive Branch is responsible for enforcing and implementing the laws created by the legislature through rules and regulations. The executive branch consists of the President, Vice President, and the Cabinet. • The Judicial Branch is responsible for interpreting these laws by issuing verdicts in cases. The judicial branch consists of the Supreme Court and other Federal Courts. While these three branches of government have very different responsibilities, none of them can exist without the others. Each of the branches of government can change

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acts of the others. For example, the President within the Executive Branch can veto laws created by Congress in the Legislative Branch. Congress can remove the President from office under extreme circumstances, and the Supreme Court can overturn laws. This creates what we know as Checks and Balances. (Branches of the U.S. Government | USAGov, n.d.)

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The United States Constitution is the framework for all laws created. The U.S. Constitution and state constitutions “establish the fundamental principles and rules by which the United States and individual states are governed” (Kubasek et al., 2019, p. 5). Constitutional law is the limit of power these governments have, according to the constitutions. The U.S. Constitution overrules any federal, state, and local laws that conflict with it. While the U.S. Constitution and state Constitutions generally address individuals, there are a few main points that affect businesses: • The Commerce Clause gives congress the authority to place regulations on international and state-to-state trade. Trade regulations can have huge impacts on businesses that import supplies and products from overseas and even from other states. • Freedom of Speech applies to businesses as well as individuals. For example, under campaign finance reform, businesses were not allowed to donate to any political campaigns. Many argued this infringed on a business’ right to freedom of speech, and the Supreme Court later overturned this decision. • Free Association allows businesses to support and associate themselves with certain beliefs or groups. However, this does not apply within the hiring process as

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businesses must withhold an equal employment opportunity to everyone. (Business Constitutional Rights: Everything You Need to Know, n.d.)

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Statutory law refers to the rules and regulations put forth by legislature. Statutes passed by Congress are written into the United States Code while statutes passed by state legislatures are written into the particular state’s code. Because many businesses conduct business over state lines, it can be difficult for businesses to ensure they are conducting business in the correct manner. Because of this, the National Conference of Commissioners on Uniform State Laws (NCC) was created to prevent any problems. The NCC recommends states to enact certain laws to create uniformity. However, it is completely up to the state legislature to act on the suggestions. This aided in the creation of the Uniform Commercial Code (UCC), which is a body of law that greatly affects businesses. It includes regulations on things like bank deposits and collections and warranties, as well as laws relating to sales and commerce. This body of law is responsible for governing the warranties offered by large automobile manufacturers, for example. (Kubasek et al., 2019, p. 5)

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Case law is the collection of legal interpretations made by judges, also known as common law. When issuing judicial decisions, courts usually include interpretations of statutes and regulations that were their reasoning for arriving at their decision. This reasoning often includes past decisions on similar cases, also known as precedent. Case law is especially important for businesses to keep tabs on. One example of how businesses can be affected by case law is McDonald’s. A woman was severely burnt by hot coffee, leading her to sue the franchise. McDonald’s was found to be negligent for not providing a warning label on the cups. It would be important for any business selling hot beverages or food to use this case as an example to place warning labels, as to avoid a similar situation which would likely put their company in the same position as McDonald’s based on the precedent.

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The Commerce Clause refers to Article 1, Section 8, Clause 3 of the U.S. Constitution, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes. (Commerce Clause, n.d.) An example of government regulation when it comes to businesses is the federal laws upheld by the Department of Labor (DoL). This includes the Fair Labor Standards Act, which mandates the federal minimum wage and the overtime pay rate. The Occupational Safety and Health Act (OSHA) mandates that businesses must provide safe and healthy work environments for employees. (Summary of the Major Laws of the Department of Labor | U.S. Department of Labor, n.d.)

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The federal court system is made up of three main levels: Trial Courts, Intermediate Appellate Courts, and the Supreme Court, also known as the Court of Last Resort. The Trial Courts consist of district courts. The U.S. has 94 districts, and each district has at least one court of general jurisdiction. These courts have the power to hear a wide variety of cases and can grant nearly any type of remedy. The Intermediate Courts of Appeal consist of the circuit courts. The United States has 12 circuits, including a circuit for D.C. The circuit courts hear appeals from the district courts. The Court of Last Resort consists of nine justices that are appointed by the president and confirmed by the senate. The Supreme Court hears appeal cases from the court of last resort in a state system, however it does not hear cases based on state laws. (Kubasek et al., 2019, pp. 51–52) An example of a business case that could be heard in a federal court would be a business that is being sued for federal tax evasion for failing to file and pay federal

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income taxes.

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Most cases at the state level begin in a Trial Court of General Jurisdiction. These courts are similar to the trial courts at the federal level, and have the ability to hear a wide variety of cases. Most states have a trial court in each county, and they have specialized divisions such as domestic relations, probate, etc. They are commonly called County Courts About 50% of states have Intermediate Courts of Appeal. These courts hear appeals from the trial courts at the state level. They are commonly called Superior Courts. Courts of Last Resort hear appeals from state intermediate courts. Appeals in states that do not have intermediate courts go directly to the court of last resort. These courts are often called Supreme Courts or Courts of Appeals. (Kubasek et al., 2019, p. 54) An example of a business case that would be held in a state court is a business taking a party to small claims court for failure to pay for products or services rendered.

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CIVIL LAW is the law of civil or private rights. It typically involves cases like bankruptcy, tenant rights, breach of contract, defamantion of character, custody disputes, property damage, etc. and typically involve person vs person, business vs business or person vs business. The punishment is usually a financial penalty, and these cases are normally resolved outside of court. CRIMINAL LAW is the laws of crime and their punishments. It typically involves cases like homicide, assault, obstruction of justice, possession of a controlled substance, etc. and typically involve person vs the state or person vs the United States. The punishment is usually jail time and/or monetary fine, depending on the severity of the crime committed. (Erstad, 2018)

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Alternative Dispute Resolution, or ADR, is used to avoid litigation. It is typically cheaper than litigation, and includes methods such as arbitration, negotiation, mediation, and others. ADR is usually used to resolve contract disputes, insurance, labor, the environment, securities, technology, and international trade. Many companies has created internal dispute resolution methods, such as UPS. This allows companies to generally resolve issues faster and cheaper than going to litigation, and also allows them to avoid the uncertainty that often comes with a jury trial. Congress enacted the Alternative Dispute Resolution Act of 1998, which requires federal district courts to have an ADR program as well as a set of rules for the program. Congress also passed the Alternative Dispute Resolution Act, which mandates federal agencies to have their own internal ADR programs. The most frequently used methods of ADR: NEGOTIATION allows each party to bargain informally, with or without lawyers. A neutral third party is not involved.

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MEDIATION involves a neutral third party agreed to by both parties who aids in communication and suggests resolutions. ARBITRATION is the resolution of a dispute by a third party outside of the judicial system. Arbitrators must follow the Arbitator’s Code of Ethics. (Kubasek et al., 2019, pp. 73–83)

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Every business owner should have a basic understanding of the U.S. legal system. It can aid in making better business decisions, gives the framework for operations and policies, and can help avoid costly legal issues that may arise in the future.

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