Business Law Study Guide exam 1 PDF

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VOCAB!: https://quizlet.com/427662389/blw-302-unit-1-flash-cards/?i=99i16&x=1jqY Ch 1 specifically - https://quizlet.com/_6z6hx6?x=1jqt&i=1l6f9r Key: Terms with definitions: Blue Highlight In-Class Examples: Yellow Highlight ` Our examples/scenarios: Green Highlight

CHAPTER 1 HIGHLIGHTS Business Activities and the Legal Environment Law and government regulations affect almost all business activities. To make good business decisions require a basic knowledge of the laws and regulations. Liability–Legally responsible (liable) for something, such as a debt or obligation. Business persons must develop critical thinking and legal reasoning skills so that they can evaluate how various laws might apply to a given situation and determine the best course of action.

Different Laws May Affect a Single Business Decision Various areas of the law may influence business decision making. ● Contracts– ● Torts–Civil wrongs (e.g. assault and battery) ● Intellectual Property–copyrights ● Employment Law– ● Principal/Agency Relationships–(e.g. Am I able to bind you to the contract?)

Ethics and Business Decision Making Consider not just whether a decision is legal, but also whether it is ethical. Ethics generally is defined as the principles governing what constitutes right or wrong behavior.

Sources of American Law Primary sources of law, or sources that establish the law, include the following (written laws): 1.The U.S. Constitution and State constitutions. 2.Statutory law (federal/state/local) 3.Regulations created by administrative agencies, such as the Federal Trade Commission 4.Case law and common law doctrine Secondary sources of law are books and articles that summarize and clarify the primary sources of law. 1. Legal Encyclopedias (AmJur)

2. Treatises 3. Law Review Journals 4. Restatements (compilations of laws)

Constitutional Law US Constitution is the supreme law of the land. A law in violation of the Constitution, if challenged, will be declared unconstitutional and will not be enforced, no matter what its source. Each state in the union has its own constitution. ● Unless it conflicts with the U.S. Constitution or a federal law, a state constitution is supreme within the state’s borders.

Statutory Law Statutory law –The body of law enacted by legislative bodies. Federal and state statutes ● A federal statute is passed by Congress and applies to all states. ● A state statute is passed by a state legislature and applies only within the state’s borders. ● (No Federal nor State statutes may violate the U.S Constitution) Ordinances–A law passed by a local governing unit, such as a city or a county. ● land use (zoning ordinances) ● building and safety codes, and ● other matters affecting the local community. Uniform law– A model law created by the National Conference of Commissioners on Uniform State Laws and/or the American Law Institute for the states to consider adopting. ● Each state has the option of adopting or rejecting all or part of a uniform law. ● If the state adopts the law, it becomes statutory law in that state. The Uniform Commercial Code● The Uniform Commercial Code (UCC) facilitates commerce among the states by providing a uniform, yet flexible, set of rules governing commercial transactions.

Administrative Law Administrative Law- Created by administrative agencies in order to carry out their duties and responsibilities. Administrative Agency- Federal or state gov. Agency created by legislature to perform a specific function and regulate certain areas (ex. EPA [Environmental Protection Agency], FCC etc) ● Impacts Businesses in many ways: Capital structure/financing, hiring/firing procedures, relations w/ employees, way businesses manufacture & mkt products Federal Agencies ● Executive Agency- An administrative agency within the executive branch of government.(ex. The U.S. FDA is an agency within the U.S. Department of Health and

Human Services) ○ Executive agencies are subject to the authority of the President, who has the power to appoint and remove their officers. ● Independent regulatory agency –An administrative agency that is not considered part of the government’s executive branch and is not subject to the authority of the president. (ex. Federal Trade Commission, Securities and Exchange Commission) State and Local Agencies There are administrative agencies at the state and local levels ● Just as Federal Statutes take precedence over conflicting state statutes, Federal agency regulations take precedence over conflicting state regulations. ● Ex: State Pollution- Control Agency

Case Law and Common Law Doctrines Case law – “ Also known as Judge-made law” The rules of law announced in court decisions. Case law interprets: ● Statutes ● Regulations ● Constitutional provisions ● Other case law

The Common Law Tradition ● ● ●

Common Law: A body of general rules that applied throughout the entire english realm. American law is based on the English legal system. Judges in the United States still apply common law principles when deciding cases.

Early English Courts Courts of Law and Remedies at Law ● Court of law – A court in which the only remedies that can be granted are things of value, such as money damages. ● Remedies at law – A remedy available in a court of law (The legal means to enforce a right or wrong) ● Damages–A monetary award sought as a remedy for a breach of contract or a tortious act. Courts of Equity No adequate remedy in a court of law, petitioned the king for relief. Most decided by an adviser to the king, (chancellor) who had the power to grant new and unique remedies. ● Eventually, formal chancellor courts, or courts of equity, were established. ● Court of equity –decides controversies according to the rules, principles, and precedents of equity. Remedies in Equity 1. Injunction: order to cease engaging in a specific activity or to undo some wrong or injury. 2. Specific performance: ordering to perform an agreement as promised

3. 4. 5. 6.

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Rescission: cancellation of a contractual obligation Restitution: EX: Gives some money back Reformation: EX: Rewrite contracts General rule: No equitable remedies unless the remedy at law (monetary damages) is inadequate.( If the remedy at law [Money] is sufficient then courts are not going to give equitable remedy) Breaches: “Fails to Fulfill” to an agreement.

Equitable Maxims Equitable maxims –General propositions or principles of law that have to do with fairness (equity).• 1. Whoever seeks equity must do equity. (Anyone who wishes to be treated fairly must treat others fairly.) 2. Where there is equal equity, the law must prevail. (The law will determine the outcome of a controversy in which the merits of both sides are equal.) 3. One seeking the aid of an equity court must come to the court with clean hands. (The plaintiff must have acted fairly and honestly.) 4. Equity will not suffer a wrong to be without a remedy. (Equitable relief will be awarded when there is a right to relief and there is no adequate remedy at law.) 5. Equity regards substance rather than form. (Equity is more concerned with fairness and justice than with legal technicalities.) 6. Equity aids the vigilant, not those who rest on their rights. (Equity will not help those who neglect their rights for an unreasonable period of time.)

Procedural Differences between an Action at Law and an Action in Equity Procedure

Action at Law

Action in Equity

Initiation of lawsuit

By filing a complaint

By filing a petition

Decision

By jury or judge

By judge (no jury)

Result

Judgment

Decree

Remedy

Monetary damages or property

Injunction, specific performance, or rescission

Legal and Equitable Remedies Today Medieval England two distinct court systems: 1. Courts of law 2. Courts of equity

U.S. combines courts of law and equity. ● May request both legal and equitable remedies in the same action. ● Trial court judge may grant appropriate relief.

The Doctrine of Stare Decisis Stare decisis –“Let the Decision Stand” ● A common law doctrine under which judges are obligated to follow the precedents established in prior decisions. ● Judges are obligated to follow the precedents established within their jurisdictions. ○ Jurisdiction: geographic area in which a court or courts have the power to apply the law. ● Legal Stability ○ Helps the courts to be more efficient ○ Makes the law more stable and predictable Stare decisis: 1. A court should not overturn its own precedents unless there is a compelling reason to do so. 2. Decisions made by a higher court are binding on lower courts. Precedent–A court decision that furnishes an example or authority for deciding subsequent cases involving identical or similar facts. Controlling Precedents ● Precedents that must be followed within a jurisdiction are called controlling precedents. ○ Binding authority –Any source of law that a court must follow when deciding a case. ○ Binding authorities include constitutions, statutes, and regulations that govern the issue being decided, as well as court decisions that are controlling precedents within the jurisdiction. When There Is No Precedent Cases of first impression: courts often look at persuasive authorities. Persuasive authority– Any legal authority or source of law that a court may look to for guidance but need not follow when making its decision. 1. Precedents from other jurisdictions 2. Legal principles and policies underlying previous court decisions or existing statutes 3. Issues of fairness, social values and customs, and public policy (governmental policy based on widely held societal values) 4. Unpublished opinions (those not intended for publication in a printed legal reporter)

Persuasive Authority ● ● ● ●

CLASS EXAMPLE: Assume a brand new NV law says Notice of Lien claim must be sent by certified mail to owner of property. Lien holder instead of mailing has it personally served. Motion to Dismiss –because they did not follow statute which required certified mailing. No existing NV case law interpreting the new statute.

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Similar to CA statute which reads “lien holder must provide notice of lien” This can be accomplished by certified mail or such other suitable method. ○ CA courts determine the purpose to assure land owners have notice of lien. Personal service assures that since purpose is met, it is a suitable method. Counter argument; NV statute differs by stating must be sent by certified mail.

Stare Decisis and Legal Reasoning ●

Legal reasoning –The process of reasoning by which a judge harmonizes his or her opinion with the judicial decisions in previous cases. ● IRAC (Issue, Rule, Application, and Conclusion) method. ● To apply the IRAC method, the following questions are asked: 1. Issue—What are the key facts and issues? 2. Rule—What rule of law applies to the case? 3. Application—How does the rule of law apply to the particular facts and circumstances of this case? ■ Case on point –A previous case involving factual circumstances and issues that are similar to those in the case before the court. 4. Conclusion—What conclusion should be drawn? There Is No One “Right” Answer ● Many people believe that there is no one “right” answer to every legal question. ● The outcome of a particular lawsuit before a court cannot be predicted with certainty. ● Good arguments can usually be made to support either side of a legal controversy. ● Each judge has her or his own personal beliefs and philosophy which, at least to some extent, shape the legal reasoning process.

Common Law Today: ● Court interprets statutes: ○ Judge doesn’t make laws but interprets and applies them (statutes are not written by judges) ○ Because judges have some flexibility in interpreting and applying the law, different courts often arrive at different conclusions in cases that involve nearly identical issues, facts, and applicable laws. ● Restatements of Law clarify and illustrate the common law ○ American Law Institute (ALI): published compilations of common law called “Restatements of the Law” which summarizes common law. They are used when judges make decisions.

Schools of Legal Thought: Jurisprudence: The science or philosophy of law ● 4 of them: They tell how a judge interprets a case ● 1) Natural Law school: A higher, universal law exists that applies to all human beings ● 2) Positivist school: A written law of given society at a particular time

● 3) Historical school: “evolutionary process of law” ● 4) Legal realism: based on the idea that law is just one of many institutions in society and that it is shaped by social forces and needs

Natural Law School: ● Natural Law: the legal system should reflect universal (“higher”) moral and ethical principles that are inherent in human nature

● According to that theory: ○ Higher law applies to ALL human beings ○ If law =/= reflect natural law principles (ex: murder wrong), then law loses legitimacy and need not be obeyed ● Natural rights stem from this

Positivist School ● Positive Law or National Law: written law of a given society at a particular time (applies to only the citizens of a nation/society)

● Legal positivism: A school of legal thought centered on the assumption that there is NO LAW higher than the laws created by the national government ○ Laws must be followed, even if unjust, to prevent anarchy ● This judge will probably be more inclined to defer to existing law than judge who adheres to natural law

Historical School ● Historical School: looks to the past to determine what the principles of contemporary law should be (learn from the past) ○ Emphasizes the evolutionary process of law by concentrating on origin and history of legal system (evolution of law) ■ Legal doctrines that have withstood the passage of time are considered best suited for shaping present law ■ Law derives its legitimacy from the historical development show to be workable ○ Follows are more likely to strictly follow decisions made in past case

Legal Realism ● Legal Realism: holds that the law is only one of the factors to be considered when deciding cases that social and economic circumstances should also be taken in account ○ Legal realists believe that the law can never be applied with total uniformity ■ Judges have diff. Personality, values, intellects, therefore diff judge will bring diff reasoning to the same case ○ Strong influenced the growth of sociological school ● Sociological school: school of legal thought that views the law as a tool for promoting

justice in society (more likely to overturn precedents)

Important Terminology: ● Substantive law: law that defines, describes, regulates, and creates legal rights and ● ● ● ● ●

obligations Procedural Law: law that establishes the methods of enforcing the rights established by substantive law (aka how it will happen) Federal Law and State Law Private Law: relationships between private entities (ex: HOA rules) ○ Like the rules for trash and recycling in a neighborhood Public Law: relationship between persons and their governments National Law and International Law

Civil Law and Criminal Law ● Civil Law: Enforcement of all private or public rights ○ Rights and duties that exist between persons and between persons and their governments, as well as the relief available when a person’s rights are violated ○ You probably won’t go to jail for breaking a contract ● Criminal Law: branch of law that defines and punishes wrongful actions committed against the public ○ Criminal acts are defined and prohibited by local,state, or federal government statues ○ Criminal defendants are prosecuted by public officials (aka: only State/Government prosecutes, not private parties) ■ District attorney (D.A.) on behalf of the state ■ Not by their victims or other private parties

Cyber Law ● Cyberlaw: informal term used to refer to all laws governing electronic communications and transactions, particularly those conducted via the Internet

How to Find Primary Sources of Law ●

Citation: a reference to a publication in which a legal authority (statute/court decision) can be found ○ In addition to being published in sets of books, most federal and state laws and case decisions are available online

Finding Statutory and Administrative Law ●

United States Code: All federal laws passed by Congress are arranged by broad subject in the United States Code (U.S.C.)

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Example: 17 U.S.C § 107 (2012) Limitations on exclusive rights: Fair use

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Volume

the type of code

section

last year amended

State Codes: State codes passed by state legislatures are collected in state publications ○ Example: ○ N.R.S 18.010 Award of Attorney Fees State(aka type of code) volume section ■ N.R.S = Nevada Revised Statutes Administrative Rules ○ Rules and Regulations adopted by federal administrative agencies ○ Initially published in the Federal Register (a daily publication of U.S. government) and then incorporated into Code of Federal Regulations (C.F.R) ○

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Example: 20 CFR §402.45 Availability of records. (FOIA - employee benefits) Volume where published section

Finding Case Law ●

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There are two types of courts in the U.S: ○ Federal courts ○ State courts Both systems consist of several levels ○ Trial Courts (Bottom Tier Court) ○ Appealed to a higher court: (intermediate court of appeals or appellate court) ○ State Supreme court or United States Supreme Court (Highest Court) State Court Decisions ○ Decisions from state trial courts are typically filed in the office of the clerk of the court, where the decisions are available for public inspection ○ Written decisions of the appellate, or reviewing, courts are published and distributed in print and online ■ Called reports or reporters, which are numbered consecutively and published by each state Federal Court Decisions: ○ Federal District court: Federal Supplement ■ F.Supp. (...