Business and its Legal Environment

1. Business and its Legal Environment Theories and Sources of Law

2. Law: Rules enacted and enforced by the government. Rule of Law: Laws are applied generally and equally to everyone.

3. Definition of Law Aristotle Rules of conduct “Pledge that citizens of a state will do justice to one another.” Greek Philosopher (384-322 BC)

4. Definition of Law Plato A form of social control. Greek Philosopher (427-347 BCE)

5. Definition of Law Blackstone The command of the sovereign. “a rule of civil conduct prescribed by the supreme power in a state, commanding what is right, and prohibiting what is wrong.” Sir William Blackstone (1723–1780) English Jurist

6. Definition of Law Holmes A set of rules that allows one to predict how a court will resolve a particular dispute. Oliver Wendel Holmes Supreme Court Justice. 1841- 1935.

7. At a minimum, law consists of enforceable rules governing relationships among persons and between persons and society. • There are several different “schools” of law: • Natural Law. • Positivist view. • Historical view. • Legal Realism view.

8. Schools of Legal Philosophy Natural Law School : A system of moral and ethical principles that are inherent in human nature and can be discovered by humans through the use of their natural intelligence. Unchanging value judgments: That can be determined by human reason. That supersede any form of human law. Criticism: Whose moral precepts are to be included in the moral law?

9. Declaration of Independence • When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

10. Schools of Legal Philosophy Positivist School: The laws created by a particular society at a particular point in time Law is the expression of the will of the sovereign. Law and morals are separate. Correct legal decisions can be reached solely by the use of logic and precedent. Criticism: Refusal to consider social and ethical factors leads to negative results for society. • Law, and therefore rights and ethics, are not universal. The morality of a law, or whether the law is “bad or good”, is irrelevant.

11. SOURCES OF LAW • CONSTITUTIONS • LEGISLATURES • COURTS • EXECUTIVE ORDERS • ADMINISTRATIVE AGENCIES

12. Legislature as a Source of Law • Bill introduced by one or more legislators in house (or senate). • Referred to the appropriate committee and subcommittee. • Hearings held by subcommittee. • Bill is marked up (drafted in precise form), referred to subcommittee for vote. • If affirmative vote, forwarded to committee. • If accepted, reported back to house (or senate). • If passed by one house, sent to other house. If passed there, sent to conference committee to iron out differences. • When identical bill passed by both houses, sent to President for his signature. • If President signs (or allows 10 days to go by without taking action) bill becomes law. • If President vetoes, back to Congress to see if they can override with 2/3 majorityof both houses.

13. Judicial Branch as a Source of Case Law • Interpretation of statutes necessary when deciding cases. • Use of legislative history. • Cases as precedents.(Stare Decisis) • Lower courts must follow previous cases. • Even higher courts usually follow their previous decisions. • (However,will sometimes overrule precedent) • They usually accept previous interpretations of statutes. • They usually follow previous decisions of courts when there is no relevant statute. 2-8

14. Stare Decisis (Precedent)Justice Musmanno: Bosely v. Andrews (1958) Stare Decisis is the viaduct over which the law travels in transporting the precious cargo of justice. Prudence and a sense of safety dictate that the piers of that viaduct should be examined and tested from time to time to make certain that they are sound strong and capable of supporting the weight above. A precedent…should appeal to logic and a genuine sense of justice. A precedent cannot, and should not, control, if its strength depends alone on the fact that it is old, but may crumble at the slightest probing touch of instinctive reason and natural justice.

15. Stare Decisis (Precedent)(Justice Wanamaker: Adams Express v. Beckwith) “A decided case is worth as much as it weights in reason and righteousness, and no more”

16. Executive Branch as a Source of Law • The President • Treaty making. • Executive orders. • The President giving orders to the officials who work for him in federal agencies. 2-9

17. Administrative Agencies • Administrative Agencies • Congress delegates rule-making authority to agencies. • Examples of administrative agencies: • Securities and Exchange Commission • Federal Trade Commission • Equal Employment Opportunity Commission • Occupational Safety and Health Administration

18. EQUITY COURT • Available when money damages are not adequate. • Equitable remedies • Specific performance • Injunction • rescission