Chapter 1 Sources of business law and the global legal environment

Chapter Outline
The Nature Of Law The Common Law Traditions Sources Of Law Classifications Of Law The Constitution As It Affects Business

The Nature Of Law

There have been and will continue to be different definitions of law .  The Greek philosopher Aristotle saw law as a : pledge that citizen of a state will do justice to one another .  Aristotle s mentor, Plato, believed that law was a form of social control .

The Nature Of Law (cont d)

o The Roman orator and politician Cicero contended that law was the agreement of reason and nature, the distinction between the just and the unjust. o The British jurists Sir William Blackstone described law as : a rule of civil prescribed by the supreme power in a state, commanding what is right, and prohibiting what is wrong .

The Nature Of Law (cont d)

Although these defections vary on their particulars, they all are based on the following general observations : law consists of enforceable rules governing relationships among individuals and between individuals and their society .

The Common Law Traditions

Stare Decisis
The Practice of deciding new cases by referring to former decision, or precedents, eventually became a cornerstone of the English and American judicial systems.

The Common Law Traditions

(cont d)

The Importance of Precedents in Judicial Decision Making  The doctrine of stare decisis means that once a court has set forth a principle of law as applicable to a certain set of facts, that court and courts of lower rank must adhere to that principle and apply it in the future cases involving similar facts patterns .

Sources Of Law
* Primary sources of Law , or sources that establish the law, include the following :

Constitutional Law Statutory Law and Legislation Case Law and Common Law Doctrines

Sources Of Law

Sources Of Law (cont d) Constitutional Law

 The federal government and the state have separate written constitutions that set forth the general organizations, powers, and limits of their respective governments.

 Constitutional Law : is the law as expressed in these constitutions .

Sources Of Law (cont d) Statutory Law and Legislation

o Status enacted by legislative bodies at any level of government make up another source of law, which is generally referred to as statutory law .

Sources Of Law (cont d)

Case Law and Common Law Doctrines The body of law that was first developed in England and that is still used today in the united states consists of the rules of law announced in the court decisions.
These rules of law include interpretations of constitutional provisions, of statues enacted by legislatures, and of regulations created by administrative agencies .

Sources Of Law (cont d)

Case Law and Common Law Doctrines
The common laws --- the doctrines and principles embodied in case law --- governs all areas not covered by statuary law ( or agency regulations issued to implement various statues ) . *EXAMPLE#6 In disputes concerning contracts for the sale of goods, the Uniform Commercial Code (statuary law) applies when one of its provisions supersedes the common law of contracts .

Classifications Of Law
The huge body of the law may be broken down according to several classification systems . For example, one classification systems divides the law into : Substantive Law Procedural Law

All laws that define, describe, regulate and create legal rights and obligations

All laws that establish the methods of enforcing the rights established by substantive law

Classifications Of Law (cont d)

Other classification systems divide law into federal law and state law

Private Law

Public Law Addressing the relationship between the persons and their government

Dealing with relationships between persons

Classifications Of Law (cont d)

 One divides the law into criminal and civil law; the other divides the law into national and international law .

Civil Law And Criminal Law

Spells out the rights and duties that exist between persons and their governments, and the relief available when a person s rights are violated

Civil Law

Classifications Of Law (cont d)

Civil Law And Criminal Law

Typically, in a civil case, a private party uses another private party ( although the government can also sue a party for a civil law violation ) to make that other party comply with a duty or pay for the damage caused by failure to comply with a duty .

Classifications Of Law (cont d)

Civil Law And Criminal Law

*EXAMPLE#7 if a seller fails to perform a contract with a buyer, the buyer may bring a lawsuit against the seller. The purpose of the lawsuit is either to compel the seller to perform as promised or, more commonly, to obtain money damages for the sellers failure to perform .

Classifications Of Law (cont d)

Civil Law And Criminal Law

Criminal Law

Has to do with the wrongs committed against society for which society demand redress .

Classifications Of Law (cont d)

Civil Law And Criminal Law

Criminal defendants are thus prosecuted by public officials, such as a district attorney(D.A.) on behalf of the state, not by their victims or other private parties . Whereas in a civil case the object is to obtain remedies to the injured party, in a criminal case the object is to punish the wrongdoers in an attempt to deter others from similar actions .

Classifications Of Law (cont d)

Civil Law And Criminal Law

 Penalties for violations of criminal statutes consists of fines and/or imprisonment---and, in some cases, death .

Classifications Of Law (cont d)

National Law
The law of particular nation is national law . National law, of course, varies from country to country, because each nation s law reflects the interests, customs, activities, and values that are unique to its particular culture .

Classifications Of Law (cont d)

International Law
 In contrast to the national law, international law applies to more than one nation.  International law can be defined as a body of written and unwritten laws observed by independent nations and governing the acts of individuals as well as governments .

Classifications Of Law (cont d)

National And International Laws o The key difference between national and international law is that the national law can be enforced by government authorities. If a nations violates an international law, however, the most that other countries or international organizations can do is to resort to coercive actions against the violating nation .

Classifications Of Law (cont d)

National And International Laws

Treaties
A treaty is an agreement between two or more nations that creates rights and duties binding on the parties to the treaty, just as a private contract creates rights and duties binding on the parties to the contract .

Classifications Of Law (cont d)

National And International Laws

Treaties
 To give effect of a treaty, just a private contact creates rights and duties binding on the parties to the contract .  To give effect of a treaty, the supreme power of each nation that is a party to the treaty must ratify.

Classifications Of Law (cont d)

National And International Laws

 International Organizations
International organizations and conferences also play an important role in the international legal arena . International organizations and conferences adopt resolutions, declarations, and other types of standards that often require a particular behavior of nations.

Classifications Of Law (cont d)

National And International Laws

 International Organizations
The general Assembly of the United Nations, for example, has adopted numerous resolutions and declarations that embody principles of international law and has sponsored conferences that have lead to the information of international agreements .

The Constitution As It Affects Business

 Each of the sources of law just discussed helps to frame the legal environment of business .  Because laws that govern business have their origin in the lawmaking authority granted by the U.S. Constitution.