Chapter 1
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Chapter 1. An Introduction to Dynamic Business Law. Business Activities and the Legal Environment. Law regulates many different areas of business. Study of business law also involves a knowledge of ethics in decision-making. Many different laws may affect a single business transaction.

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Chapter 1

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Chapter 1

Chapter 1

An Introduction to Dynamic Business Law


Business activities and the legal environment

Business Activities and the Legal Environment

  • Law regulates many different areas of business.

  • Study of business law also involves a knowledge of ethics in decision-making.

  • Many different laws may affect a single business transaction.


Law vs ethics

Law vs. Ethics

  • “Law” – rules which must be followed by everyone in society.

  • “Ethics” – your own rules, such as personal beliefs, religious doctrine, moral code, cultural traditions, etc.; may involve giving up a legal right.

  • Ethics will give rise to law, but law does not necessarily give rise to ethical behavior.

  • Example of ethics becoming law – religious doctrine re killing another person now found in homicide laws.

  • Example of following law without being ethical – MLB team’s name change from Anaheim Angels to Los Angeles Angels of Anaheim; contract requires that “Anaheim” must be in team’s name, but is new name what was contemplated by the city or the Angels when contract signed back in 1996?


Sources of american law

Sources of American Law

  • Constitutions – federal plus every state; everyone in U.S. subject to federal constitution plus one state constitution at all times; creates government powers/structure and guarantees individual rights.

  • Statutes – federal, state and local; also called ordinances, regulations and codes.

  • Common or case law – decisions by judges, who interpret constitutions, statutes and/or prior cases (“precedent”) to make decision of current dispute; stare decisis ordinarily requires judges to follow past decisions, which creates predictability and stability in legal and business matters.

  • Administrative law – decisions and rules of federal, state and local administrative entities (e.g., IRS, DMV); important since many laws require a hearing by an administrative agency before being able to file a case in court (note that courts often give great deference to administrative agency’s decision).


The common law tradition

The Common Law Tradition

  • American law is based largely on English Common Law originating in medieval England.

  • The common law was based largely on traditions, social customs, rules and cases developed over hundreds of years after the Norman conquest in 1066.


Early english courts

Early English Courts

  • At common law, there were two separate court systems with two different types of remedies:

    • COURTS OF LAW (monetary relief).

    • COURTS OF EQUITY (non-monetary relief), based on “notions of justice and fair dealing.”


Courts of law

Courts of Law

  • Also called “king’s courts” where judges were appointed by the king.

  • Remedies limited to those provided at law, i.e., land, chattel, money.

  • Judges resolved disputes by application of rules of law to the facts of the case before the court.


Courts of equity

Courts of Equity

  • Equitable relief was sometimes available in instances where a strict application of the law to the facts of the case compelled a result that was legal but unjust.


Legal and equitable remedies today

Legal and Equitable Remedies Today

  • Today federal and state courts of general jurisdiction have consolidated remedies at law and remedies at equity.

  • Generally, the same court can fashion a remedy that includes both damages and equitable or injunctive relief.


The doctrine of stare decisis

The Doctrine of Stare Decisis

  • Stare decisis is a Latin phrase meaning “to stand on decided cases.”

    • Makes the law stable and predictable.

    • Increases judicial efficiency by relieving courts of having to reinvent legal principles for each case brought before them.

  • Stare decisis is “judge made law” based on precedent.


Case precedents and case reporters

Case Precedents and Case Reporters

  • Precedents are judicial decisions that give rise to legal principles that can be applied in future cases based upon similar facts.

  • Precedents and other forms of law, such as statutes, constitutions, and regulations are referred to as binding authorities and must be followed.

  • Today, cases are published or ‘reported’ in books called reporters


Departure from precedent

Departure from Precedent

  • In cases of “first impression” where there is no precedent, the court may refer to positive law, public policy, and widely held social values in order to craft the best new precedent.


Stare decisis and legal reasoning

Stare Decisis and Legal Reasoning

  • Method used by judges to reach a decision.

  • Many courts and attorneys frame decisions and briefs using the IRAC format: Issue, Rule, Application (Analysis) and Conclusion.

    • What are the key facts and issues?

    • What rules or laws apply?

    • How do the rules of law apply to these facts?


Categories of law

Categories of Law

  • Substantive and procedural – substantive law defines legal rights/limitations; procedural law provides the methods for seeking or defending legal rights/limitations.

  • Public and private – public law involves matters of public interest; private law pertains to the parties to a dispute only.

  • Civil and criminal – civil law relates to duties between individuals, businesses and/or government; criminal law relates to wrongs against society and is investigated, prosecuted and administered by government.

  • Law and equity – actions at law involve money; actions in equity involve non-monetary relief (e.g., injunction, specific performance); jury trial available in actions at law only.


Civil vs criminal law

Civil vs. Criminal Law

  • Civil law defines the rights between individuals or individuals and governments.

  • Criminal law defines an individual’s obligations to society as a whole.


Civil lawsuit terminology

Civil Lawsuit - Terminology

  • Parties in the trial court – plaintiff or petitioner, defendant or respondent, cross-complainant, cross-defendant; party can be more than one.

  • Parties in the appellate court - federal (appellant, appellee, cross-appellant, cross-appellee, petitioner, respondent); California (appellant, respondent, cross-appellant, cross-respondent, petitioner, respondent); party can be more than one.

  • Pleadings filed by parties in the trial court – complaint by plaintiff; answer or other responsive pleading by defendant or cross-defendant; cross-complaint by cross-complainant; petition by petitioner; response by respondent; motion by any party.

  • Briefs filed by parties in the appellate court – opening brief(s); respondent’s or cross-respondent’s brief; reply brief(s); petition for review (California Supreme Court) or petition for writ of certiorari (United States Supreme Court); petition for writ of mandate.


Finding primary sources of law

Finding Primary Sources of Law

  • Finding Statutory Law.

    • United States Code (USC).

    • State Statutes (California).

  • Finding Administrative Law.

    • Code of Federal Regulations (CFR).

  • Finding Case Law.

    • Supreme Court Cases at Findlaw.com.

    • Federal Court Cases at Findlaw.com.

    • State Court Cases at Findlaw.com.


How to read understand case law

How to Read & Understand Case Law

  • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:

    D.A.B.E., Inc. v. City of Toledo, 393 F.3d 692 (6th Cir. 2005).

Title: First Party is Plaintiff, second party is Defendant. The parties are either italicized or underlined.


How to read understand case law1

How to Read & Understand Case Law

  • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:

    D.A.B.E., Inc. v. City of Toledo,393 F.3d 692 (6th Cir. 2005).

Citation: Case is found in Federal Supplement 3rd, Volume 393, page 692.


How to read understand case law2

How to Read & Understand Case Law

  • Legal cases are identified by a “legal citation” (or a “cite”) as the example below:

    D.A.B.E., Inc. v. City of Toledo, 393 F.3d 692 (6th Cir. 2005).

Case was decided by the Sixth Circuit Court of Appeals, 2005.


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