BUSINESS LAW I

HUMAN BEINGS DO NOT EVER

MAKE LAWS; IT IS THE
ACCIDENTS AND
CATASTROPHES OF ALL KINDS
HAPPENING IN EVERY
CONCEIVABLE WAY THAT
MAKE LAW FOR US
Plato (423 – 348 BC)- Laws IV, 709
What is Law?

■ Law is a body of rules of action or conduct prescribed by controlling authority, and

having binding legal force. That which must be obeyed and followed by citizens
subject to sanctions or legal consequences is a law.
■ Also, Law is a system that regulates and ensures that individuals or a community
adhere to the will of the state.
What is Law?

■ Every society makes and enforces laws that govern the conduct of the individuals,
businesses, and other organizations that function within it.
■ It is intended to protect persons and their property against unwanted interference
from others. In other words, the law forbids persons from engaging in certain
undesirable activities.
Customs

■ Customs are widely accepted expectations of

behavior that are particular to a specific place,
time, or society.
Customs
To show that a customary practice has become customary
law, two elements must be established
One Behavioral One Psychological
■ The first—called usus in ■ The second element is
Latin—requires consistent and observing the custom must
recurring action (or lack of regard it as binding. That is,
action if the custom is one of they must recognize the
noninvolvement). custom as being a practice
that they must obligatorily
follow.
Jurisprudence

■ The philosophy or science of the law is referred to as jurisprudence.

■ Understanding the philosophy behind the existence of law is important for
understanding:
– 1) the justification for legislation, and
– 2) the judicial reasoning applied when interpreting laws.
 What is the “rule of law”?

■ Laws exist to serve or represent the interests of the greatest number of people.
Enforcement of the law is done to both maintain order within the community and to create
a system in which individuals can be productive.
■ An important aspect of the rule of law is that it applies uniformly to all individuals. That is,
the law is not applied selectively to some individuals and not others. If laws are applied
generally to all individuals, there is little reason or motivation for the use of law to oppress
or gain advantage over others. A functioning rule of law system is essential for economic
productivity.
■ Again, the just and uniform application of law across the population creates trust and
confidence . Individuals can rest assured that their rights will be protected through the
elimination of any unfair advantages or disadvantages to individuals under the law.
Functions of the Law

■ The primary functions served by the law are the following:

1. Keeping the peace. Example Some laws make certain activities crimes.
2. Shaping moral standards. Example Some laws discourage drug and alcohol abuse.
3. Promoting social justice. Example Some laws prohibit discrimination in employment.
4. Maintaining the status quo. Example Some laws prevent the forceful overthrow of the
government.
Functions of the Law

5. Facilitating orderly change. Example Laws are enacted only after considerable study,
debate, and public input.
6. Facilitating planning. Example Well-designed commercial laws allow businesses to
plan their activities, allocate their productive resources, and assess the risks they take.
7. Providing a basis for compromise. Example Laws allow for the settlement of cases
prior to trial. Approximately 95 percent of all lawsuits are settled in this manner.
8. Maximizing individual freedom. Example The rights of freedom of speech, religion,
and association are granted by the First Amendment to the U.S. Constitution.
Types of Legal Systems

■ Legal systems vary from country to country, and sometimes within a single country.
Although they develop in different ways, legal systems also have some similarities
based on historically accepted justice ideals.
■ Many countries employ more than one of these systems at the same time to create
a hybrid system. In some places, the current security situation can also impact the
way that legal systems work. It is helpful to understand some of the similarities and
differences as you move through your case.
Types of Legal Systems

Common Law Legal Systems

Civil Law System

Religious Law Legal Systems

Common Law Legal Systems

■ Law developed by judges who issued their opinions when deciding cases. The U.S.
and the U.K. are examples of common law systems.
■ The principles announced in these cases became precedent for later judges
deciding similar cases.
■ The laws governing a case are based on both; legal precedent, created by judges,
and statutory laws, created by legislatures.
■ A jury may determine the facts , and a judge will decide the law to be applied.
Civil Law System of France and
Germany
■ This legal system, which is commonly called the civil law, dates to 450 BCE, when
Rome adopted the Twelve Tables, a code of laws applicable to the Romans.
■ Later, two national codes—the French Civil Code of 1804 (the Napoleonic Code) and
the German Civil Code of 1896— became models for countries that adopted civil
codes.
■ In contrast to the Anglo-American law, in which laws are created by the judicial
system as well as by congressional legislation, the civil code and parliamentary
statutes are the sole sources of the law in most civil law countries. Thus, the
adjudication of a case is simply the application of the code or the statutes to a
particular set of facts. In some civil law countries, court decisions do not have the
force of law. Many countries in Europe still follow the civil law system.
Religious Law Legal Systems
(Canon Law, Islamic Law, and Talmudic
Law)
■ In traditional religious legal systems, criminal law is based mainly on religious texts
and interpretations of those texts.
■ Religious legal systems include Canon law (e.g., Roman Catholic, Anglican), Islamic
law, and Talmudic (Jewish) law.
■ Even in countries that have common or civil law systems, religious courts may
exclusively hear some matters (examples: marriage, divorce and inheritance) for the
followers of individual faiths if the country has different religious groups.
■ Some countries incorporate some aspects of religious law into civil or common law
systems.