Chapter 1 The Legal Environment

1. Chapter 1The Legal Environment

2. Learning Objectives • What is the Uniform Commercial Code? • What is the common law tradition? • What is a precedent? When might a court depart from precedent? • What is the difference between remedies at law and remedies in equity? • What are some of the important differences between criminal law and civil law?

3. The Nature of Law • The Natural Law Tradition • Oldest and most significant view of law. • Government and legal system should reflect universal moral and ethical principles. • These principles are inherent in human nature. • They can be discovered through right reason. • Basis for natural rights.

4. Nature of Law • Legal Positivism (or Positive Law) • Applies only to citizens of that nation or society. • No higher law than the nation’s highest governing body or court. • Laws must be obeyed regardless of whether they are just or unjust. • No view of “natural” rights. • Morality of a law is irrelevant.

5. Nature of Law • The Historical School • Emphasizes the evolutionary process of law. • Concentrates on the origin and history of legal system. • Looks to the past to determine laws for present. • Law derives legitimacy from precedent.

6. Nature of Law • Legal Realism • View of law started in 1920’s. • Law must be viewed within the social context. • Judges should take economic and social realities into account. • Sociological jurisprudence tends to be activistic, e.g., civil rights decisions. • Do not feel bound by past decisions.

7. Business Activities and the Legal Environment • Knowledge of “black letter” law is not enough. • Many different laws affect a single business transaction. • Ethics and business decision making. • Ethics: what constitutes right or wrong behavior.

8. Sources of American Law • Constitutional Law • Found in text and cases arising from federal and state constitutions. • U.S. Constitution is the supreme law of the land. • Statutory Law • Laws enacted by federal and state legislatures. • Local ordinances. • Uniform Laws (e.g.,Uniform Commercial Code).

9. Sources of American Law • Administrative Law • Rulemaking--Rules, orders and decisions of administrative agencies, federal, state and local. • Administrative agencies can be independent regulatory agency such as the Food and Drug Administration. • Adjudication--agencies make rules, then investigate and enforce the rules in administrative hearings.

10. The Common Law Tradition • Early English Courts of Law • King’s courts started after Norman conquest of 1066. • Established the common law—body of general legal principles applied throughout the English empire. • King’s courts used precedent to build the common law.

11. The Common Law Tradition • Stare Decisis • Practice of deciding new cases based on precedent. • A higher court’s decision based on certain facts and law, is a binding authority on lower courts. • Helps courts stay efficient.

12. The Common Law Tradition • Remedies: Law vs. Equity • Remedy: means to enforce a right or compensate for injury to that right. • Remedy at Law: in king’s courts, remedies were restricted to damages in either money or property. • Equitable Remedy: based on justice and fair dealing a chancery court does what is right. • Today, legal and equitable remedies are found in the same court.

13. Sources of American Law • Case Law and Common Law Doctrines • Much of the common law is still used today. • Common law governs all areas not specifically covered by statutory or constitutional law. • Restatements of the Law: modern compilations of common law principles found, e.g., in contracts, torts, property and agency.

14. Classifications of Law • Substantive vs. Procedural Law • Substantive: laws that define and regulate rights and duties. • Procedural: laws that establish methods for enforcing and protecting rights. • Civil Law and Criminal Law • Civil: private rights and duties between persons and government. • Criminal: public wrongs against society.

15. Classifications of Law • National and International Law • National: laws of a particular nation. • Civil vs. Common Law: Civil law countries based on Roman code (e.g., Latin America). • International: body of written and unwritten laws observed by nations when dealing with each other. • Cyberlaw:governs internet transactions.

16. Appendix • Finding Statutory Law. • United States Code (USC). • State Statutes. • Finding Administrative Law. • Code of Federal Regulations (CFR). • Finding Case Law (Case Citations). • Supreme Court Cases at Findlaw.com. • Federal Court Cases at Findlaw.com. • State Court Cases at Findlaw.com.

17. Appendix • Reading & Understanding Case Law • Legal cases are identified by a “legal citation” (or a “cite”) as the example below: EMG Recordings, Inc. v. Sinnot, 300 F. Supp.2d 993 (E.D. Ca. 2004). Title: First Party is Plaintiff, second party is Defendant. The parties are either italicized or underlined.

18. Appendix • Reading & Understanding Case Law • Legal cases are identified by a “legal citation” (or a “cite”) as the example below: EMG Recordings, Inc. v. Sinnot,300 F. Supp.2d 993 (E.D. Ca. 2004). This is a federal court case from the Eastern District of California, found in Volume 300, Page 993 of the Federal Supplement 2d. This case was decided in 2004.