BUSINESS LAW TODAY Standard 8th Ed.Roger LeRoy Miller - Institute for University Studies, Arlington, TexasGaylord A. Jentz - University of Texas at Austin, Emeritus The Legal Environment of Business Chapter1
Learning Objectives • What are the theories of jurisprudence? • What is the Uniform Commercial Code? • What is the common law tradition? • What is a precedent? When might a court depart from precedent? • What is the difference between remedies at law and remedies in equity? • What are some of the important differences between civil law and criminal law?
Natural Law Tradition • The Natural Law Tradition • Oldest and most significant view of law. • Government and legal system should reflect universal moral and ethical principles. • These principles are inherent in human nature. • They can be discovered through right reason. • Basis for natural rights.
Legal Positivism • Legal Positivism (or Positive Law) • Applies only to citizens of that nation or society. • No higher law than the nation’s highest governing body or court. • Laws must be obeyed regardless of whether they are just or unjust. • No view of “natural” rights. • Morality of a law is irrelevant.
Historical School • The Historical School • Emphasizes the evolutionary process of law. • Concentrates on the origin and history of legal system. • Looks to the past to determine laws for present. • Law derives legitimacy from precedent.
Legal Realism • Legal Realism • View of law started in 1920’s. • Law must be viewed within the social context. • Judges should take economic and social realities into account. • Sociological jurisprudence tends to be activistic, e.g., civil rights decisions. • Do not feel bound by past decisions.
Business Activities and the Legal Environment • Knowledge of “black letter” law is not enough. • Many different laws affect a single business transaction. • Ethics and business decision making. • Ethics: what constitutes right or wrong behavior.
Sources of American Law • Constitutional Law. • Found in text and cases arising from federal and state constitutions. • U.S. Constitution is the supreme law of the land. • Statutory Law. • Laws enacted by federal and state legislatures. • Local ordinances. • Uniform Laws (e.g.,Uniform Commercial Code).
Sources of American Law • Administrative Law. • Rulemaking--Rules, orders and decisions of administrative agencies, federal, state and local. • Administrative agencies can be independent regulatory agency such as the Food and Drug Administration. • Adjudication--agencies make rules, then investigate and enforce the rules in administrative hearings.
The Common Law Tradition • Early English Courts of Law. • King’s courts started after Norman conquest of 1066. • Established the common law—body of general legal principles applied throughout the English empire. • King’s courts used precedent to build the common law.
Stare Decisis • Stare Decisis • Practice of deciding new cases based on precedent. • A higher court’s decision based on certain facts and law, is a binding authority on lower courts. • Helps courts stay efficient.
Equitable Remedies • Remedy: means to enforce a right or compensate for injury to that right. • Remedy at Law: in king’s courts, remedies were restricted to damages in either money or property. • Equitable Remedy: based on justice and fair dealing a chancery court does what is right: specific performance, injunction, rescission. • Plaintiffs (injured party initiating the lawsuit), Defendants (allegedly caused injury).
Classifications of Law • Substantive vs. Procedural Law • Substantive: laws that define and regulate rights and duties. • Procedural: laws that establish methods for enforcing and protecting rights. • Civil Law and Criminal Law • Civil: private rights and duties between persons and government. • Criminal: public wrongs against society.
Classifications of Law • National and International Law • National: laws of a particular nation. • Civil vs. Common Law: Civil law countries based on Roman code (e.g., Latin America). • International: body of written and unwritten laws observed by nations when dealing with each other.
Appendix • Finding Statutory Law. • United States Code (USC). • State Statutes. • Finding Administrative Law. • Code of Federal Regulations (CFR). • Finding Case Law (Case Citations).
Appendix • Reading & Understanding Case Law • Legal cases are identified by a “legal citation” (or a “cite”) as the example below: Nunez v. Carabba’s Italian Grill, Inc., 448 Mass. 170, 859 N.E.2d 801 (2007). Title: One party is Plaintiff, Appellant or Petitioner, other party is Defendant, Appellee or Respondent. The parties are either italicized or underlined.
Appendix • Reading & Understanding Case Law • Legal cases are identified by a “legal citation” (or a “cite”) as the example below: Nunez v. Carabba’s Italian Grill, Inc., 448 Mass. 170, 859 N.E.2d 801 (2007). This is a State Supreme Court Case found in volume 448, page 170 of the Massachussets Reports, OR volume 859, page 801 of the NorthEastern Reporter 2nd.