1.

Law for Business, 17e

by Ashcroft and Ashcroft

Chapter 1:
Introduction to Law

Law for Business, 17e, by Ashcroft and Ashcroft, © 2011 Cengage Learning
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Learning Objectives

• Define law.
• Explain why we have laws.
• List four sources of law.
• Distinguish law and ethics.
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What is Law?

Blackstone’s definition is
famous: “Law is a rule of civil
conduct, commanding what
is right and prohibiting what
is wrong.”
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Introduction

• Business law is concerned with

what is right or wrong regarding
business transactions.
• The law is also concerned with
establishing a framework in which
society can operate as smoothly as
possible to avoid disputes.
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Roots of Our
Legal System
• English, French, and Spanish
influences.
• Mostly from English because the 13
original colonies were English.
• We get our common law and equity
concepts from English law.
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Types of Law

• Common law - customs that gradually

became law. Colonists brought this
concept of law to America from England.
• Equity law - system based on fairness in
which money damages sometimes are
not sufficient. This gave rise to the
following:
• Restraining orders
• Injunctions
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Sources of Law

Federal, State, Local

Constitutions
Bill of Rights

Federal, State, Local

Statutes
Codes
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Sources of Law

• Judicial decisions
• Precedents
• Stare decisis
• Administrative agency orders
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Bases for Ethical

Judgment
• Personal values coming from:
• Religious beliefs
• Individual experiences
• Cultural background
• Scientific knowledge
• Because all people had differing
backgrounds, judgments as to what
is right and wrong vary.
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Ethical Principles

Seriousness of consequences
–Laws do not reflect everything we
believe about right or wrong; less serious
matters are not addressed.
Consensus of majority
–Laws can’t possibly reflect every
individual’s concept of right or wrong.
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Ethical Principles

Change in ethical standards

–Behavior evolves as society evolves.
Legally enforceable
–Organizations have codes of professional
responsibility, and violations provide the
basis for penalties.
Voluntary
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Do you have
any questions?