Business Law Ch 1-3 - Lecture notes Professor and Book Lectures Chapters 1, 2, and 3 PDF

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Professor and Book Lectures Chapters 1, 2, and 3...

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Business Law Chapters 1, 2, & 3 Chapter 1 ● LAW is a set of enforceable guidelines that help maintain order in a society. ○ A civilized society is one that no longer settle private disputes through private violence. ● Legal Philosophies (Definitions of Law) ○ JURISPRUDENCE - philosophy of law i.

NATURAL LAW (Right or Wrong, Moral Law) 1. Can create controversy (abortion)

ii.

LEGAL POSITIVISM (Ruling Authority) 1. Government, theory of no “unjust” laws 2. To a positivist, there is no unjust law if enacted by the recognized political authority. (The law’s the law)

iii.

LEGAL REALISM (Decision Maker’s Discretion) 1. Concerned with the results of the law (will legal abortion encourage more unprotected sex?)

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2  2. The legal realist recognizes that lawmakers are influenced by many factors, and that these influences affect the decision being made. 3. The legal realist prefers laws leaving room for decision makers’ discretion as they implement the law ● CONSTITUTION - basic principles and laws of a nation/state/social group determining the powers and duties of the government and guarantees certain rights to people in it ● STATUTE - law passed by legislative body ● ORDINANCE - legislation enacted by municipal (city/town/governing body) authority ● RULE - regulation issued by federal/state/local administrative authority (or court) and governing procedure or conduct in a specific field ● Eight Sources of Law (in the U.S.) ○ U.S. CONSTITUTION i.

Supreme law of land since 1787

ii.

All federal and state laws must be consistent with this

iii.

The first three articles establish basic structure for federal government: 1. ARTICLE I creates the Congress (legislative) 2. ARTICLE II establishes presidency and its duties (executive) 3. ARTICLE III creates different governmental duties (juridical)

iv.

SEPARATION OF POWERS - system of checks and balances. 1. Established by the Founding Fathers over fears of too much power in a person or group

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3  2. Marbury v. Madison (1803) established judicial review for the legislative powers ○ FEDERAL STATUTES AND TREATIES (Statutory law) i.

THE COMMERCE CLAUSE 1. Constitution has power to regulate Commerce with foreign and other states 2. ENUMERATED POWERS - powers vested to Congress in A1S8 3. “Necessary and Proper Clause” - implied powers of Congress in A1S8 4. Regulation of foreign and interstate commerce 5. McCulloch v. Maryland (1819) implemented Constitution's express powers to create a functional national government. State actions cannot override the powers of the Federal government. 6. CONTROLLED SUBSTANCES ACT of 1970 7. Gonzales v. Raich (2005) - ban on recreational marijuana use did not exceed Congress’s powers 8. Gibbons v. Ogden (1824) established that states cannot pass laws impeding powers of Congress to regulate interstate commerce 9. Heart of Atlanta Motel v. United States (1964) ruled that restrictions on accommodations for intrastate commerce impeded Congress’s powers to regulate commerce interstate

ii.

THE CONTRACT CLAUSE 1. Prohibits states from enacting any laws prohibiting contract rights (only in state legislation)

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4  iii.

UNIFORM LAW COMMISSION (ULC) 1. aka National Conference of Commissioners on Uniform State Law

iv.

UNIFORM COMMERCIAL CODE (UCC) 1. All 50 states have adopted variations of this 2. Addresses topics of law involved in commercial transactions 3. CA has a “Commercial Code”

v.

TREATIES 1. Grants U.S. President to enter into international treaties (which are considered supreme law of the land) 2. EXECUTORY - requiring further legislative action to become rule of law 3. SELF-EXECUTING - no further action to become rule of law 4. FOREIGN CORRUPT PRACTICES ACT (FCPA) - anti-bribery law, amended in 1988 a. Payments to minor government officials are legal when payments are made to expediate or facilitate performance of routine government actions

○ 50 U.S. STATE CONSTITUTIONS i.

The states have the power to enact law based upon the 10th Amendment (“Reservation Amendment”). Supreme law of the state.

ii.

Cannot interfere with the U.S. Constitution

○ INDIVIDUAL STATE STATUTES

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i.

In California, there are 29 different codes. (Originally 4)

ii.

CODIFIED - when a law has been placed into an existing code

5  iii.

Sections within the CA Codes can be referred to as “Section”

○ EXECUTIVE ORDERS i.

Law issued by the executive branch. U.S. President, state governor, or head of local government may issue orders directing certain action be taken to enforce those laws. 1. For executive orders to be legal, there must be an existing statutory or constitutional basis for exercising this power.

○ LOCAL AREA ORDINANCES i.

Local law that cities and countries make that citizens must comply with. (Dog leash laws, land use zoning, etc)

○ ADMINISTRATIVE/REGULATORY LAW i.

Market failures: lack of adequate information concerning products in the marketplace, tendency of markets to favor natural monopolies, failure to provide certain goods, created a need for more corrective action by the government

ii.

Executive branch must enforce and administer legislative laws

iii.

ADMINISTRATIVE AGENCY - specialized oversight of various society functions

iv.

“Enabling Acts” are legislative acts creating administrative agencies taking over some of the government’s authorities (creation of FDA)

v.

Administrative agency, if needed, can give both notice and opportunity to an appropriate party before making rule or regulation

○ DECISIONS MADE BY FEDERAL AND STATE COURTS i.

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Primary source of U.S. common law

6  ii.

COMMON LAW - general body of law based on court decisions and custom and usage in community rather than codified law. (Originated in England)

iii.

EQUITY - a particular set of remedies and associated procedures. These equitable doctrines and procedures are distinguished from “legal” ones. Equitable relief is generally available only when a legal remedy is insufficient or inadequate in some way (no jury trials)

iv.

JUDICIAL DECISIONS (case law) - produced when a judge decides a case and announces reasoning behind ruling

v.

Four forces shaping law: 1. Philosophy 2. History a. Previous court decisions “precedent” for future cases (STARE DECISIS - providing a degree of certainty and stability to society, making law predictable) 3. Custom 4. Welfare of society

vi.

Common law is judge-made and considered unwritten law, while codified/statutory law is considered written law.

○ SUBSTANTIVE - laws concerning the general public i.

Example: speed limits

○ PROCEDURAL - how we work or enforce the laws i.

Example: to sue a city, a “claim” must be filled out first

○ PUBLIC LAW - deals with government organization and operation ○ PRIVATE LAW - deals with interactions between individuals i.

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Example: contract laws

7  ○ CIVIL LAW i.

Two parties’ interactions (and when the govt can be a party)

ii.

PLAINTIFF - party suing

iii.

DEFENDANT - party being sued

○ CRIMINAL LAW i.

Victim will have to sue defendant, and only get money (cannot request punishment for the defendant)

○ Law vs Equity ○ Courts of Equity i.

This type of court has the power to order someone to do something

● Attorneys ○ Legal advice ○ Act as client’s representative i.

Ethically, attorneys should only take cases they are familiar with

○ Two ways for compensation i.

Hourly fee (or “flat fee” for contracts, incorporating business or creating an estate plan) 1. “Retainer fee” - upfront payment

ii.

Contingency 1. Attorney gets a percentage of client’s winnings a. This has advantages and disadvantages

● Briefing a case - analyzing the opinion written by a court ● IRAC: Issue, Rule of law, Analysis of law, Conclusion  

8   

Chapter 2 ● Adversarial System ○ parties have disputes and present case to a neutral third party. ● Court must first have jurisdiction / authority to decide case ● Trial court - first level of court ● District courts - federal trial courts (power to hear any dispute) ● Superior courts - trial courts in California ● Appellate: reviews for any errors in law ● Intermediate appellate courts / district courts of appeal ○ Federal: Circuit Courts of Appeal ● Independent appellate review (“de novo” - “anew”) ● Supreme Court ○ U.S.: nine justices ○ Only time for appeal is if asking federal questions ● Federal Court System ● 12 Circuits in U.S. Court of Appeals ○ 11 federal courts ○ Next level after supreme court ● District Courts - federal trial courts ● All U.S. Courts must follow Supreme Court ruling ● Federal courts have exclusive jurisdiction ○ Bankruptcy, patents, lawsuits against U.S. ● CA State Court System ○ Superior Court ■ General jurisdiction division (felonies and $25K+ civil suits) ■ Limited jurisdiction division ■ Appellate court for items filed in small claims court and administrative agency decisions for things started in an administrative bureau ○ Small claims court 

9  ■ Not real judges, but attorneys volunteering time ■ No attorneys for parties ■ No right to jury ■ Businesses/groups can only file up to $5K ■ Single person can file for up to $10K ■ No appeal for plaintiff ○ Courts of Appeal ■ Next level of appeal (if not supreme court) ■ All trial courts must follow reported opinions of these type of courts ○ California Supreme Court ■ Discretion to hear and decide cases appealed to it ○ State & Federal Courts ■ Subject matter jurisdiction ■ “In personam” jurisdiction ● Defendant must be connected to state somehow (vacation, etc) ■ Long-Arm Statutes ■ “In rem” (property) jurisdiction ● You can sue a in-state bank account instead of a person, etc ■ Venue ● Proper in defendant's location and/or where accident occurred ● Court Procedures ○ Compliant - first document filed in lawsuit, submitted by plaintiff ■ Calls for a cause of action (legal basis for lawsuit) ■ Filing fee needs to be paid ○ Court issues summons - notice of lawsuit ■ Must be served to defendant by hand ○ Response: Demurrer or Answer ■ Demurrer - motion to dismiss ■ Answer - admission or denial of allegation ● If defendant fails to answer, plaintiff can win and take money ○ “Motion” - party asks the court for something ○ “Discovery” phase - each side gets info from the other ■ Interrogatories 

10  ● Parties ask the other questions ■ Depositions ● Out-of-court interviews of possible witnesses ■ production/inspection of documents and misc ● Party asks the other for copies or things of all the files ○ “Requests for Admission” ■ Statements sent to the other party that they can agree with , deny, or object to ○ “Motion for Summary Judgement” ■ Party thinks they can win and thus no trial is needed ● Trial ○ “Redirect” / “re-cross” - other side questioning witness again ○ “Case” - calling witness and introducing evidence ○ Nonsuit motion / motion for a directed verdict ■ defendant asks judge to throw out case

Chapter 3 ● Dispute Resolution ○ Finding a way to resolve controversy without the court involved ● Alternative Dispute Resolution (ADR) ○ Non-governmental person is hired by both parties to put the controversy to rest (both parties must agree to resolve) ■ Mediation ● Third party employed by both parties to resolve dispute ■ Artribution ● Third party judging WILL resolve dispute ● Both sides must agree not to go to court ● Binding or non-binding ● Could be wrongly ruling in favor of one party based on past relationship ● Negotiation ○ “Distributive negotiation” ■ win/lose resolution ○ “Integrative negotiation” 

11  ■ win/win resolution

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