Chapter 1 Notes - Dynamic Business Law PDF

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An Introduction to the Fundamentals of Dynamic Business Law Notes...

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CHAPTER 1: An Introduction to the Fundamentals of Dynamic Business Law

INTRODUCTION Almost every single action, inaction, and transaction in the business world has or could have legal ramifications. Chapter 1 lays the foundation for the textbook and the course. The textbook emphasizes ways in which business law intersects with the six functional areas of business. Throughout the textbook, you will be encouraged to “connect to the core,” and remember the ways in which law intersects with other areas of study, including corporate management, production and transportation, marketing, research and development, accounting and finance, and human resource management.

LEARNING OBJECTIVES After reading this chapter, you will be able to answer the following questions: , What is business law? , How does business law relate to business education? , What are the purposes of law? , What are alternative ways to classify law? , What are the sources of law? , What are the various schools of jurisprudence?

SATISFYING THE LEARNING OBJECTIVES

What is business law? Business law consists of the enforceable rules of conduct that govern the actions of buyers and sellers in market exchanges.

How does business law relate to business education? Business law applies to the six functional areas of business: Management Production and transportation Marketing Research and development Accounting and finance Human resource management

What are the purposes of law? Providing order Serving as an alternative to fighting Facilitating a sense that change is possible Encouraging social justice Guaranteeing personal freedoms Serving as a moral guide

What are alternative ways to classify law? One way to classify law: Private law involves disputes between private individuals or groups. Public law involves disputes between private individuals or groups and their government. A second way to classify law: Civil law is the body of laws that govern the rights and responsibilities either between persons or between persons and their government. Criminal law is the body of laws that involve the rights and responsibilities an individual has with respect to the public as a whole. Critical Thinking: When might one action or situation lead to both a criminal and civil lawsuit? (Hint: O.J. Simpson trials - Simpson was found not guilty in the murder of his ex-wife, but was later found civilly liable for her death)

What are the sources of law? Constitutions Constitutional law refers to the general limits and powers of governments as stated in their written constitutions.

Statutes or legislative actions Statutes or legislative actions refer to the assortment of rules and regulations put forth by legislatures. Cases Case law (or common law) is the collection of legal interpretations made by judges. Precedent is a tool used by judges to make rulings on cases on the basis of key similarities to previous cases. Stare decisis is a principle stating that rulings made in higher courts are binding precedent for lower courts. Administrative law Administrative law is the collection of rules and decisions made by administrative agencies to fill in particular details missing from constitutions and statutes. Treaties A treaty is a binding agreement between two states or international organizations. Executive orders An executive order is a directive that comes from the president or state governor to officials in the executive branch to perform their functions in a particular manner. The Code of Federal Regulations (CFR) contains all executive orders created by the President. For example, the internment of people of Japanese descent during WWII was the result of an executive order by President Roosevelt.

What are the various schools of jurisprudence (legal interpretation)? Natural law – certain ethical laws and principles are morally right and “above” the laws devised by humans. Legal Positivism – assumes the legitimate political authority deserves our obedience when it issues a rule. Identification with the Vulnerable – emphasis on fairness and looking out for those with the least power. Historical School/Tradition – emphasis on the use of traditions and stare decisis. Legal Realism – judges consider context such as social and economic conditions.

Cost-benefit Analysis – emphasis is on assigning monetary values to costs and benefits of the law in order to make calculations to maximize the ratio of benefits to costs.

LET’S DIG DEEPER

Why do business people need to have a basic understanding of the law? Make better business decisions Avoid lawyers and the courts – just like preventative medicine: an ounce of prevention is worth a pound of cure Learn how to deal with problems as they arise Put you in control, not the lawyers

How does case law and precedent work? Precedent (also known as binding authority) requires lower courts to follow the decisions of higher courts when the facts and law are determined to be "on all fours," and requires a lower court to follow the decisions of a superior court. Courts can overturn their own prior decisions, but cannot overturn a decision of a higher court. However, a lower or inferior court can disagree that a precedent exists by distinguishing facts or the law from a prior case (precedent). Sometimes there is no precedent. When that happens, courts will look to persuasive authority that may consist of: (1) decisions from other jurisdictions, (2) non-binding or unprinted opinions, (3) non-legal sources such as scientific journals or published opinions of experts, or (4) public policy as interpreted by the court. Legal reasoning as applied by the courts involve: (1) identifying key facts and issues, (2) identifying applicable rules of law, (3) applying those rules of law to the facts of the case, and (4) drawing a conclusion. Think about cases you’ve no doubt heard of or studied in your high school civics or history classes. For example, Roe v. Wade (women have a constitutional right to abortion in the first two trimesters), Plessy v. Ferguson (state “separate but equal” segregation laws were constitutional), Brown v. Board of Education (segregation of schools is unconstitutional), and Miranda v. Arizona (prisoners must be advised of their constitutional rights before being questioned by police). These are all cases that were decided by the U.S. Supreme Court and the federal government and state and local governments must all abide by the rules of law set out in those cases. But notice how the U.S. Supreme Court upheld segregation laws in the 1896 case of Plessy v. Ferguson, but then struck down segregation in the 1954 case of Brown v. Board of Education. The Supreme Court has the power to reverse its

prior decisions, such as it effectively did in Brown v. Board of Education. Our values as a country change over time, and the laws often change to reflect the times. This is why so much attention is given to who gets to appoint Supreme Court justices and who is ultimately appointed to serve on the U.S. Supreme Court. Although our Constitution provides us with a system of checks and balances, many believe that the Supreme Court may hold the most power of all of our government branches with their ability to interpret the Constitution and strike down laws passed by the other two branches of government....