Foundations of American Law

2. 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.

3. The Nature of Law 1 C H E A P T R “The sacred rights of mankind . . . are written, as with a sun beam in the whole volume of human nature, . . . and can never be erased or obscured by mortal power.” Alexander Hamilton, 1775

4. Learning Objectives • Types and sources of law • Important legal doctrines • Classification of law • Jurisprudence and legal reasoning • Statutory interpretation • Limitations on judicial power 1 - 4

5. Types or Sources of Law • Federal, state, and tribal level: • U.S. Constitution: establishes governmental structure, specific rights and duties • Statute: enacted by legislative body to regulate conduct • Common Law: case law (judge-made) • Administrative Law: agency rules to implement enforcement of statutes 1 - 5

6. Types or Sources of Law • Issued at chief executive level: • Executive Order: under limited powers • Treaty: with other nations, by the U.S. president on behalf of the nation, and ratified by the U.S. Senate 1 - 6

7. Important Doctrines • Stare Decisis (let the decision stand) • Doctrine of precedent applied in common law • Equity • Applied by the judiciary to achieve justice when legal rules would produce unfair results • Federal supremacy: • Rule of priority for conflicts between laws that holds U.S. Constitution the supreme law of land (Art. VI, Sec. 2, U.S. Constitution) 1 - 7

8. Classification of Law • Criminal law establishes duties to society • Government charges and prosecutes defendant, who is found guilty or innocent • Civil law establishes duties between private parties • Plaintiff sues defendant for monetary damages or equitable relief 1 - 8

9. Classification of Law • Substantive law establishes rights and duties of people in society • Procedural law establishes how to enforce those rights and duties • Public law refers to the relationship between governments and private parties • Private law refers to the regulation of conduct between private parties 1 - 9

10. Jurisprudence • Jurisprudence refers to the philosophy of law as well as the collection of laws • Legal positivism: law is the command of a recognized political authority • Natural law: universal moral rules bind all people whether written or unwritten • SeeU.S. v. Lynch 1 - 10

11. Jurisprudence • Legal realism defines law as the behavior of the judiciary as they rule on matters within the legal system • Sociological jurisprudence unites theories that examine law within its social context 1 - 11

12. Legal Reasoning • Basically deductive, with the legal rule as the major premise and facts as the minor premise • Court may stand on precedent or distinguish prior case from current case • If precedent inapplicable, new rule developed • SeeHagan v. Coca-Cola Bottling Co. 1 - 12

13. Statutory Interpretation • Plain meaning rule: court applies statute according to usual meaning of the words • See Hyatt v. Anoka Police Department • A court examines legislative historyand purpose when plain meaning rule is inadequate • SeeGeneral Dynamics Land Systems, Inc. v. Cline • Courts may interpret a statute in light of a general public purpose or public policy 1 - 13

14. Limitations on Judicial Power • Courts limited to deciding existing cases or controversies • Parties must have standing (direct interest in the outcome) to sue Do plants and animals have legal standing? 1 - 14

15. Global Business Environment • Courts may faced with treaty interpretation • The U.S. Supreme Court interpreted The Warsaw Convention in Olympic Airways v. Husain • How would you have interpreted the treaty language? “The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of the operations of embarking or disembarking.” Warsaw Convention, Art. 17 1 - 15

16. Test Your Knowledge • True=A, False = B • The Constitution, statutes, and case law are sources of law in the United States • Agency regulations, presidential orders, and treaties are sources of law in the United States • Stare decisis refers to the doctrine of equity • The Supremacy Clause states that the U.S. Constitution is the supreme law of the land 1 - 16

17. Test Your Knowledge • True=A, False = B • Civil law establishes the duties an individual has to keeping a civil society • Substantive law establishes how to enforce the rights and duties of people in society • Jurisprudence refers to the philosophy of law as well as the collection of laws • Legal reasoning is basically inductive 1 - 17

18. Test Your Knowledge • Multiple Choice • The plain meaning rule means that the court applies a statute • (a) according to the unique or special meaning of words • (b) according to usual meaning of the words • (c) according to public policy and legislative purpose 1 - 18

19. Test Your Knowledge • Multiple Choice • Courts are: • (a) Limited to hearing existing cases or controversies • (b) Limited to hearing cases in which the plaintiff has standing (a direct interest in the outcome) • (c) Unlimited in types of cases they may hear • (d) All of the above • (e) Both A & B 1 - 19

20. Thought Question • What do you think the authors of the U.S. Constitution would think about current legal issues in our society? 1 - 20