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Foundations of American Law

1. Foundations of American Law. The Nature of Law The Resolution of Private Disputes Business and The Constitution Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking. McGraw-Hill/Irwin Business Law, 13/e.

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Foundations of American Law

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  1. 1 Foundations of American Law The Nature of Law The Resolution of Private Disputes Business and The Constitution Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

  2. Business & The Constitution 3 C H E A P T R "The very idea of the power and the right of the People to establish government presupposes the duty of every Individual to obey the established Government." -- George Washington (Farewell Address, September 19, 1796)

  3. Learning Objectives • Basics of the Constitution and federalism • Relationship between federal and state powers • Important legal principles: supremacy, preemption • Constitutional guarantees and limitations 3 - 4

  4. Overview of the Constitution • Establishes a tripartite government to ensure a separation of powers • A system of checks and balances exists in which no one branch may control another 3 - 5

  5. The Power to Regulate • Federal government has exclusive power to administer certain national concerns, such as war and currency • Some powers are shared with the states • States possess exclusive power to enact laws to protect general welfare, health, and safety 3 - 6

  6. Supremacy & Preemption • The Constitution and statutes enacted by Congress, including treaties, are the supreme law of the land • Congress may enact laws on certain issues and preempt state regulation of that issue 3 - 7

  7. Testing Constitutionality • Courts apply a means-ends test to review allegedly unconstitutional statute • Rational basis test (minimal scrutiny) • if law has rational basis, it will stand • Intermediate scrutiny • law must substantially relate to important governmental objectives to stand • Strict scrutiny • Law presumed invalid if, on its face, it is based on race, ethnicity, and religion 3 - 8

  8. The Commerce Power • Commerce clause (Article I, Section 8, Clause 3) applies to interstate commerce • Supreme Court has applied the power to intrastate commerce when the activity affects interstate commerce • See Gonzales v. Raich 3 - 9

  9. The First Amendment • First Amendment guarantees freedoms of religion, speech, press, assembly, and petition to individuals (and corporations) • Restriction on commercial speech is valid if it (1) seeks to implement a substantial government interest, (2) directly advances interest, and (3) is least restrictive method of achieving interest (see Kasky v. Nike) 3 - 10

  10. Constitutional Limitations • Fifth Amendmentprohibits federal government from depriving “any person of life, liberty, or property without due process of law” (due process clause) • Protection from unreasonable procedures or unreasonable laws • Applied to states through Fourteenth Amendment 3 - 11

  11. Constitutional Limitations • Equal protection clause of Fourteenth Amendmentprohibits a government from treating one person differently than another without reasonable grounds for differential • Basic test: rational basis (minimal) • “Suspect” classifications (race, gender, ethnicity) require higher level of scrutiny 3 - 12

  12. Constitutional Limitations • Phrase “depriving a person … of property” known as the takings clause • Requires government to pay compensation to property owner for taking property for public purpose through eminent domain 3 - 13

  13. Test Your Knowledge • True=A, False = B • The Constitution establishes a tripartite government • The federal government has exclusive power over matters of war and taxation • States possess exclusive power to enact laws to protect welfare, health, and safety • The Fifth Amendment prohibits depriving any person of life, liberty or happiness • Federal supremacy means that the U.S. Constitution is the supreme law of the land 3 - 14

  14. Test Your Knowledge • True=A, False = B • The Federal government may not interfere with interstate commerce • The federal government may not restrict individual or commercial speech • Constitutional limitations on governmental power includes the Fifth Amendment • The “takings clause” means that the federal government cannot take away an individual’s freedom 3 - 15

  15. Test Your Knowledge • Multiple Choice • Courts apply a means-ends test to review an allegedly unconstitutional statute. Which level of scrutiny applies to a statute that gives benefits to people based on their religion? • (a) Minimal scrutiny • (b) Intermediate scrutiny • (c) Strict scrutiny 3 - 16

  16. Test Your Knowledge • Multiple Choice • Substantive due process refers to a prohibition against: • (a) Unreasonable procedures • (b) Unreasonable laws • (c) Unreasonable (unfair) results • (d) Both A & B • (e) All of the above 3 - 17

  17. Thought Question • What constitutional issues are important to you? 3 - 18

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