Chapter 2 - Intro To Law & The Legal Environment Of Business

Question 1

What is Law?

Answer 1

Consists of rules that regulate the conduct of individuals, businesses, and other organizations within society.

Is intended to protect persons and their property from unwanted interference from others. The law forbids person from engaging in certain undesirable activities.

Question 2

Definition of Law:

Answer 2

A body of rules of action or conduct prescribed by the controlling authority, and having binding legal force.

That by which must be obeyed and followed by citizens subject to sanctions or legal consequences.

Question 3

Functions of Law:

Answer 3

1. Keeping the peace
2. Shaping moral standards
3. Promoting social justice
4. Maintaining the status quo
5. Facilitating orderly change
6. Facilitating planning
7. Providing a basis for compromise
8. Maximizing individual freedom

Question 4

Facilitating Planning

Answer 4

Well-designed commercial laws allow businesses to plan their activities, allocate their resources, and assess their risks

Question 5

Maximizing Individual Freedom

Answer 5

The rights of freedom of speech, religion, and association granted the the First Amendment to the U.S. Constitution

Question 6

Fairness of the Law:

Answer 6

The American legal system is one of the most comprehensive, fair and democratic systems of law ever developed and enforced.

Question 7

Flexibility of the Law:

Answer 7

The American legal system is generally responsive to cultural, technological, economic, and social changes

Question 8

Jurisprudence

Answer 8

The philosophy or science of law

Question 9

Schools of Jurisprudential Thoughtq

Answer 9

1. Natural Law School
2. Historical School
3. Analytical School
4. Sociological School
5. Command School
6. Critical Legal School
7. Law and Economics School

Question 10

Natural School

Answer 10

Postulates that law is based on what is “correct”
Law should be based on morality and ethics
Contend source of law is absolute due to nature, God, or reason
Believe some higher law or set of universal rules bind all people
No form of human law can supersede natural law because of the idea that there are rational objective limits to the power of legislative rulers.

Question 11

Legal Positivism

Answer 11

Believes that law is separate from moral values
Every enacted law should be a good and enforceable law
Believes that law is a set of rules developed, communicated, and enforced by the ruling party

Question 12

American Legal Realism:

Answer 12

Maintains that law should focus on the actors in the judicial system, like judges, instead of social conditions and values
Critics argue this is dangerous because brings unpredictability to law

Question 13

Sociological School:

Answer 13

Asserts that law is a means of achieving and advancing certain sociological goals and promote social welfare
One of the most important schools
Law must change to meet changing social conditions and values to promote social welfare
Critics say this makes laws unpredictable and harm the community because standards change over time = negative effects

Question 14

Feminist School:

Answer 14

Believes that law today promotes gender inequality and should be changed to accommodate women’s views
Believes that language, logic, and structure of the law are male-created and reinforce male values and significant rights are denied to women

Question 15

Critical Legal Studies School:

Answer 15

Maintains that legal rules are unnecessary and that legal disputes should be solved by applying arbitrary rules based on fairness
The basic view of this school is that the law is politics and it is not neutral or value free - created by elitists

Question 16

Law and Economics School:

Answer 16

Believes that promoting market efficiency should be the central concern of legal decision making

Question 17

History of American Law

Answer 17

The English system of law was generally adopted

It became the foundation from which American judges developed our common law

Question 18

English Common Law

Answer 18

Developed by judges who issued their opinions when deciding a case
The principles announced in these cases became precedent for later judges deciding similar cases
A uniform system of courts emphasizing form over substance

Question 19

Court of Chancery

Answer 19

Equity Court
Sought when law courts could not grant appropriate remedy
Remedies were shaped to fit each situation

Question 20

Merchant Court

Answer 20

Law Merchant rules based on common trade practices and trade

Question 21

Civil Law System

Answer 21

Romano-Germanic civil law based on the 12 Tables and Corpus Juris Civilis
Napoleanic Code
German Civil Code

Question 22

Sources of Law in the US

Answer 22

1. Constitutions
2. Codified Law
3. Treaties
4. Executive Orders
5. Agency Rules & Regulations
6. Judicial Decisions

Question 23

Constitution

Answer 23

Establishes the structure of the federal gov and enumerates its powers.
Created 3 branches:
1. Legislative
2. Executive
3. Judicial

Question 24

Treaties

Answer 24

The president, with the advice and consent of the Senate, may enter into treaties with foreign governments.
A treaty is a compact (agreement) made between two or more nations

Question 25

Codified Law:

Answer 25

Statutes and Ordinances

Question 26

Statutes

Answer 26

Written law enacted by the legislative branches of federal and state governments. The US Congress enacts federal statutes State legislature enact state statutes

Question 27

Ordinances:

Answer 27

Laws enacted by local government bodies such as cities and municipalities, counties, school districts, and water districts

Question 28

Executive Orders:

Answer 28

An executive order is an order issued by a member of the executive branch of gov Issued by the president and state governors Power derived from express delegation from legislative branch

Question 29

Regulations and Orders of Administrative Agencies

Answer 29

Administrative agencies are created by the legislative and executive branches of gov They may adopt rules and regulations and may enforce and interpret statutes Many agencies regulate business

Question 30

Judicial decisions:

Answer 30

Courts decide controversies | Judicial decisions usually state the rationale used by the court in reaching that decision

Question 31

Doctrine of Stare Decisis

Answer 31

Based on the common law tradition, past court decisions become precedent for deciding future cases Both federal and state courts follow the precedents established by the US Supreme Court decisions Courts in one jurisdiction are not bound by precedent of another jurisdiction, but may look at it for guidance

Question 32

Precedent

Answer 32

Rule of law established in a court decision. Lower courts must follow the precedent established by higher courts

Question 33

Stare Decisis

Answer 33

Latin for "to stand by the decision" - means adherence to precedent

Question 34

Supremacy Clause

Answer 34

US Constitution Article VI | Article 6 defines what is the Supreme Law of the Land and who is bound by it

Question 35

Priority of the Law

Answer 35

US Constitution and treaties take precedence over all other laws Federal statutes take precedence over federal regulations Valid federal law takes precedence over any conflicting state or local law State constitutions rank as the highest state law State statutes take precedence over state regulations Valid state law takes precedence over local laws.

Question 36

Types of Law:

Answer 36

1. Substantive Law | 2. Procedural Law

Question 37

Substantive Law:

Answer 37

The law that creates and regulates legal rights, I.e. Contract Law, Property Law, ect.

Question 38

Procedural Law:

Answer 38

The law that defines the rules of enforcing Substantive Law rights in a Court of Law The law that defines the manner by which to obtain a remedy in a Court of Law

Question 39

Plantiff

Answer 39

The party who originally brought the lawsuit

Question 40

Defendant

Answer 40

The party against who the lawsuit who has been brought

Question 41

Petitioner or Appellant

Answer 41

The party who has appealed the decision of the trial court or lower court

Question 42

Respondent or Appellee

Answer 42

The party who must answer the petitioner's appeal

Question 43

Step 1 in How a Bill Becomes a Law

Answer 43

Legislative Bill proposal is introduced by a member body(s) of Congress

Question 44

Step 2 in How a Bill Becomes a Law

Answer 44

Bill is referred to appropriate sub-committee overseeing the subject matter

Question 45

Step 3 in How a Bill Becomes a Law:

Answer 45

Sub-committee holds hearings to listen to testimony from parties to establish a hearing record

Question 46

Step 4 in How a Bill Becomes a Law:

Answer 46

When the hearing is complete, bill is drafted in precise form and referred to sub-committee for a vote

Question 47

Step 5 in How a Bill Becomes a Law:

Answer 47

If sub-committee's Vote is affirmative, the sub-committee forwards the bill to full committee, which accepts, rejects or puts the bill on hold. If bill is accepted, it will report the bill to the appropriate body of Congress

Question 48

Step 6 in How a Bill Becomes a Law:

Answer 48

If similar bills are passed by the House and Senate, they are forwarded to Senate-House Conference Committee for reconcile of any differences. Upon compromise and reconciliation, a single bill is drafted and reported to full House and Senate for vote

Question 49

Step 7 in How a Bill Becomes a Law:

Answer 49

If both the House and Senate vote to pass the bill, it will be forwarded to the President for signature. Pres. can sign, reject or do nothing. If signed, it becomes a law = statute, then printed and codified. If vetoed, a vote of 2/3 of both House and Senate members can overturn veto. If no actions within 10 days upon receipt of the bill from Congress, the bill will automatically become a law without signature of Pres. Exception = if Congress adjourns before 10 day period lapses = "pocket-veto"