Business Law I
Chapter 1
LAWS AND THEIR ETHICAL FOUNDATION—Part A
I.
WHAT IS LAW?
A.
_______________________ – enforceable rules of conduct in society reflecting culture and
circumstances which create them.
B.
Grouped into codes (think of current day Ohio Revised Code--ORC)
1.
Oldest sets of codified law include
a)
Code of _________________________, King of Babylon (very detailed law
included sections on criminal law, property law, business law, family
law, personal injury law, labor law, etc.)
b)
C.
Ecclesiastical law of ____________________ (10 Commandments)
Stages of growth in law that most societies go through
1.
Individuals take revenge for themselves (_________________________)
2.
Leader (_________________________) gains power and forces revenge-minded
individuals to accept money or goods to settle dispute.
3.
Leader gives power to _______________________ _______________________ as appeals
to the leader grow too numerous
4.
Leader or central authority acts to _________________________ and/or
____________________ wrongs, preventing ____________________ -____________________
D.
Common law versus positive law
1.
Laws need to be _________________________ and _________________________
a)
Provides _________________________
b)
Changing with wants and needs of the people help to prevent
_________________________
2.
__________________ ____________ – based on current standards or ________________ of
the people and formed from rules used by judges to ________________ disputes
3.
____________________ ____________________ – laws set down by central authority to
____________________ disputes and wrongs from even occurring
II.
WHAT IS THE ORIGIN OF THE U.S. LEGAL SYSTEM?
A.
Two great systems of law in the world
1.
____________________ ____________________ ____________________ – developed using
Napoleonic Code (derived from Germanic customs and Roman law)
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Chapter 1
a)
Is _________________________ law, usually only changed by central
government, not judges
b)
Followed only by _________________________; is a well-organized,
comprehensive set of statutes in code form
c)
Leaders have essentially aligned their laws with the other 49; would
see no obvious differences today
2.
___________________ ___________________ ____________ – brought to this country by
English colonists
a)
Originally feudal barons in England acted as _________________________
within their own territories.
b)
As a result, laws ________________________ from region to region, making
it difficult for the people to ________________________ – and hard for
central government to main ________________________
c)
Around 1150 ____________________ ____________________ _____ created The
King’s Courts to improve situations
(1)
Appointed trusted _________________________ as judges
(2)
Rode the “_________________________” in good weather
(3)
Met in _________________________ during bad weather
(4)
Court was known as King’s or Queen’s _______________________
(5)
Baron’s courts kept power to decide minor cases, but King’s
Bench always took ___________________________ (power to decide a
case) over important cases
d)
________________ – King Henry recognized need to have decisions made
in harmony with customs, so citizens were _______________ to interpret
those customs (jury is unique to English common law system)
e)
B.
Advantages include ________________________ and ________________________
Equity: An Alternative to Common Law
1.
Common law courts follow ___________________________ (using prior case
decisions as a guide)
2.
Disadvantages of following precedents in common law
a)
Rigid compliance with _________________________
b)
Could only award _________________________ (money) after harm was
done—no _________________________ measures
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3.
Creation of the____________________ _______ ____________________ (fairness)
attempted to resolve these problems
a)
b)
____________________ (usually a high clergyman) presided; would order
(1)
_____________ _____________ (compelled compliance/completion)
(2)
________________________ (prohibited something from being done)
U.S. today has merged law and equity court, so most American courts
can award damages, issue orders, or both
III.
WHAT ARE THE SOURCES OF LAW?
A.
Laws are created at all three levels of government: federal, state and local
B.
Four sources of law
1.
_________________________ law
a)
Made when constitutions (_________________________ describing
government’s framework and relationship to its people) are
adopted, amended, or interpreted
b)
Highest sources of law, with ____________________ ____________________
being the supreme law of the land
c)
_________________________ of powers
(1)
Between ______________________ and their government – primary
example: ______ ___________ _____ _________ (first 10 amendments)
(2)
Between ____________________ and ___________________ governments
(a)
_________________________ commerce – business taking
place between multiple states
(b)
_________________________ commerce – business taking
place within one state
(3)
Among __________________________ of government
(a)
Executive, legislative, judicial
(b)
Ensures no branch of government becomes too
powerful
2.
_________________________ Law
a)
Elected representatives act on behalf of their ___________________________
enacting statutes
b)
Local legislation known as an ______________________ is passed to protect
citizens within their jurisdiction by cities, towns, and counties.
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3.
_________________________ Law
a)
Created by the ________________________ branch
b)
Made after trial has ended, an appeal has been made, and the
appellate court publishes its opinion
c)
Background and solidity of rulings comes from ____________________ ____
____________________ ____________________ – Latin for “let the decision
stand;” also referred to as the ____________________ ___ ____________________
d)
Carefully established and seldom _________________________; but rule
does not bind supreme courts
4.
_________________________ Law
a)
Created at all levels of government
b)
By ____________________ ____________________ (governmental bodies
established and authorized with executive/legislative/judicial
powers) to oversee specific areas
IV.
c)
Because of ____________________, agency orders are seldom overturned
d)
Their laws are usually called ___________________, and ____________________,
WHAT HAPPENS WHEN LAWS CONFLICT?
A.
__________________________ rules hold that
1.
Federal law prevails over _________________________ law, and state law prevails
over _________________________ law
2.
Constitutional law prevails over __________________________ law and
_________________________ law
3.
B.
Higher court’s decision prevails over a _________________________ court’s
Constitutions and Validity
1.
Constitutions are the highest sources of law, with the U.S. Constitution the
“supreme law of the land”
2.
Any type of law that conflicts with the higher authority is declared
_________________________
C.
3.
Some issues remain under _______ control; therefore the highest state “wins”
4.
Constitutions can still be _________________________
Statutes and Validity
1.
Must be constitutional to be valid
2.
Has the government _________________________ its power?
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D.
E.
V.
Chapter 1
Administrative Regulations and Validity
1.
Are they outside the ____________________ ___ ____________________ of the agency?
2.
Courts can _________________________ a rule or regulation if so
Case Law and Validity
1.
_________________________ are not the final authority
2.
Legislative body can _______________________ or _______________________ a statute
3.
Administrative agency can _________________________ their regulations
WHAT ARE THE MAIN TYPES OF LAWS?
A.
Criminal and Civil Laws
1.
____________________ law – deals with offenses against ____________________ (AKA
____________________ law)
B.
2.
____________________ law – deals with offenses against ____________________
3.
Single offenses can be governed by both
Procedural and Substantive Laws
1.
____________________ law – deals with methods of enforcing legal rights and
duties (the _________________________ of arrest/trial/conviction/punishment)
2.
a)
Criminal procedural law
b)
Civil procedural law
____________________ law – defines rights and duties (includes justification for
actions, alibis, etc.)
C.
Business Law – rules that apply to business/commercial situations and transactions
1.
Largely concerned with tort law (private wrongs)
2.
Uniform business laws
a)
Became more important with growth of ___________________ commerce
b)
Committees of experts drafted for approval model laws covering
areas such as sale of goods, certain banking issues, leasing of goods,
credit transactions and business forms
c)
____________________ ____________________ ____________________ (UCC) – widely
adopted set of uniform business laws