PowerPoint Slides to Accompany
BUSINESS LAW
E-Commerce and Digital Law
International Law and Ethics
5th Edition
by Henry R. Cheeseman
Chapter 1
Legal, Business, and ECommerce Environment
Slides developed by
Les Wiletzky
Wiletzky and Associates, Puyallup, WA
Copyright © 2004 by Prentice-Hall. All rights reserved.
What is law?
The law consists of rules that regulate
the conduct of individuals, businesses,
and other organizations within society.
It is intended to protect persons and
their property from unwanted
interference from others. The law forbids
persons from engaging in certain
undesirable activities.
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Definition of Law
 That
which must be obeyed and followed by
citizens subject to sanctions or legal
consequences.
 A body of rules of action or conduct
prescribed by controlling authority, and
having binding legal force.
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Functions of Law

Keeping the peace


Shaping moral standards


Including making certain activities crimes
e.g., enacting laws that discourage drug and
alcohol abuse
Promoting social justice

e.g., enacting statutes that prohibit discrimination
in employment
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Functions of Law (continued)

Maintaining the status quo


Facilitating orderly change


e.g., passing laws preventing the forceful
overthrow of the government
e.g., passing statutes only after considerable
study, debate, and public input
Providing a basis for compromise

e.g., approximately 90 percent of all lawsuits are
settled prior to trial
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Functions of Law (continued)

Facilitating planning


e.g., well-designed commercial laws allow
businesses to plan their activities, allocate their
resources, and assess their risks
Maximizing individual freedom

e.g., the rights of freedom of speech, religion,
and association granted by the First Amendment
to the U.S. Constitution
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Qualities of the Law
Fairness
Flexibility
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1-7
Qualities of the Law (continued)
 Fairness

of the Law
The American legal system is one of the most
comprehensive, fair, and democratic systems
of law ever developed and enforced.
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1-8
Qualities of the Law (continued)
 Flexibility

of the Law
U.S. law evolves and changes along with the
norms of society, technology, and the growth
and expansion of commerce in the United
States and the world.
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Jurisprudence:
The philosophy or
science of the law.
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Schools of Jurisprudential Thought
Natural Law
School
Historical
School
Analytical
School
Sociological
School
Law and
Economics
School
Critical Legal
Studies School
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Command
School
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Schools of Jurisprudential Thought
(continued)

Natural Law School
Postulates that law is based on what is
“correct”.
 Law should be based on morality and ethics.


Historical School


Believes that law is an aggregate of social
traditions and customs.
Analytical School

Maintains that law is shaped by logic.
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Schools of Jurisprudential Thought
(continued)

Sociological School


Asserts that law is a means of achieving and
advancing certain sociological goals.
Command School

Believes that law is a set of rules developed,
communicated, and enforced by the ruling
party.
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Schools of Jurisprudential Thought
(continued)

Critical Legal Studies School


Maintains that legal rules are unnecessary and
that legal disputes should be solved by
applying arbitrary rules based on fairness.
Law and Economics School

Believes that promoting market efficiency
should be the central concern of legal decision
making.
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History of American Law

When the American colonies were first
settled, the English system of law was
generally adopted as the system of
jurisprudence.

This was the foundation from which
American judges developed a common law
in America.
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English Common Law

Law 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.
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English Common Law (continued)
 The
English common law can be divided
into cases decided by the:
Law courts
 Equity courts (Court of Chancery)
 Merchant courts

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The Civil Law System

The Civil Code and parliamentary statutes
that expand and interpret it are the sole
sources of law in most civil law countries.

The adjudication of a case is simply the
application of the code or the statutes to a
particular set of facts.
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In some civil law
countries, court
decisions do not
have the force of
law.
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Adoption of English Common Law in
America
 All
the states except Louisiana base their
legal systems on the English common law.
 Louisiana

bases its law on the civil law.
Influence of its French heritage
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Adoption of English Common Law in
America (continued)

In the U.S., the law, equity, and merchant
courts have been merged.

Most U.S. courts permit the aggrieved party
to seek both law and equitable orders and
remedies.
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1 - 21
Sources of Law in the United States
Constitutions
Codified Law
Treaties
Executive
Orders
Judicial
Decisions
Agency Rules
& Regulations
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Sources of Law in the United States
(continued)
 Constitutions

The U.S. Constitution establishes the federal
government and enumerates its powers.

Powers not given to the federal government are
reserved to the states.

State constitutions establish state governments
and enumerate their powers.
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Sources of Law in the United States
(continued)
 Codified
law: Statutes and ordinances

Statutes are enacted by Congress and state
legislatures.

Ordinances are enacted by municipalities and
local government agencies.

They establish courses of conduct that must be
followed by covered parties.
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Sources of Law in the United States
(continued)
 Treaties

The president, with the advice and consent of
the Senate, may enter into treaties with foreign
governments.
 Executive
orders
Issued by the president and governors of
states.
 They regulate the conduct of covered parties.

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Sources of Law in the United States
(continued)
 Administrative
agency rules and
regulations
Administrative agencies are created by the
legislative and executive branches of
government.
 They may adopt rules and regulations that
regulate the conduct of covered parties.

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Sources of Law in the United States
(continued)
 Judicial
decisions
Courts decide controversies.
 In doing so, a court issues decisions that state
the holding of the case and the rationale used
by the court in reaching that decision.

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The Doctrine of Stare Decisis
 Based
on the common law tradition, past
court decisions become precedent for
deciding future cases.
 Lower
courts must follow the precedent
established by higher courts.
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The Doctrine of Stare Decisis (continued)
 Thus,
all federal and state courts in the U.S.
must follow the precedents established by
U.S. Supreme Court decisions.
 Adherence
to precedent is called stare
decisis.
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Priority of Law in the United States
 The
U.S. Constitution and treaties take
precedence over all other laws.
 Federal
statutes take precedence over
federal regulations.
 Valid
federal law takes precedence over
conflicting state or local law.
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Priority of Law in the United States
(continued)
 State
constitutions rank as the highest state
law.
 State
statutes take precedence over state
regulations.
 Valid
state law takes precedence over local
laws.
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Critical Legal Thinking
 The
process of:
specifying the issue presented by a case,
 identifying the key facts in the case and
applicable law, and then
 applying the law to the facts to come to a
conclusion that answers the issue presented.

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Key Terms
 Plaintiff
The party who
originally brought
the lawsuit.
 Defendant
The party against
who the lawsuit has
been brought.
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Key Terms (continued)
 Petitioner
or
Appellant
The party who has
appealed the
decision of the trial
court or lower court.
 Respondent
or
Appellee
The party who must
answer the
petitioner’s appeal.
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