Legal Issues and Regulations
 Regulations that Promote Competition
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As an entrepreneur, there are laws that affect almost every aspect of your business.
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Even the competition that business face is regulated by the government
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To make sure that competition is fair, the government has enacted various laws to help
protect businesses.
 Law and Regulations
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Antitrust Legislation – begin in 1890 created to make monopolies in certain industries illegal.
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_____________ – makes it illegal for competitors to get together and set prices on the
products or services they sell.
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______________ – law states that it is illegal for a business to require customer to buy
exclusively from it or to purchase one good in order to be able to purchase another
good.
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_______________ – This law protects small businesses from unfair pricing practices
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________________ – This law bans unfair or deceptive actions or practices by
businesses that may cause an unfair competitive advantage.
 Government Agencies that Protect Competition
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The Antitrust Division of the Justice Department and the Federal Trade Commission
are two government agencies that work to make sure competition remains fair.
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_________________ – takes legal action against any businesses it believes has tried to
monopolize an industry.
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________________ – FTC deals with issues that touch the economic life of every
American
 Intellectual Property
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Patents – is the grant of property right to an inventor to exclude others from making,
using, or selling his or her invention.
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____________________– is a form of intellectual property law that protects original
works of authorship, including literary, dramatic, musical and artistic works.
Chpt 2.5b Legal Issues and Regulations- Notes
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_________________ – is a name symbol, or special mark used to identify a business or
brand of products.
 Laws that Protect the Consumer
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Licenses – state and local governments require some businesses to have licenses –
beauty salons, restaurants, and health and fitness centers etc.
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_______________ – local governments often establish zoning regulations that control
what types of buildings can be built in what areas. Like business and residential.
 Consumer Protection Laws
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The Federal Food, Drug and Cosmetic Act of 1938 – bans the sale of impure improperly
labeled, falsely guaranteed and unhealthful foods, drugs and cosmetics.
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The Consumer Product Safety Act of 1972 – sets the safety standards for products other
than food and drugs. Can cause a product recall.
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_______________________ – requires all banks to calculate credit costs in the same
way. When consumer gets a loan the lender must provide 2 types of info about the
loan’s cost—the finance charge and the annual percentage rate.
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____________________ – is part of the Truth and Lending Act and helps consumers
correct credit card billing errors. Also gives the consumer a method for resolving
problems relating to product quality.
 When to Get Legal Advice
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An entrepreneur you will need to decide when you should seek advice and when you
can handle the situations on your own
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Hire an attorney – can help you with legal issues.
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__________________ - when entering legally binding agreements between 2
or more persons or parties
Chpt 2.5b Legal Issues and Regulations- Notes