CHAPTER 1
Laws and Their
Ethical Foundation
1-1
1-2
1-3
Laws and Legal Systems
Types of Laws
Ethical Bases for Laws
LAW for Business and Personal Use
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May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1-1
Laws and Legal Systems
 GOALS
 Explain the stages in the growth of law
 Describe the differences between common law
and positive law
 Identify the origin of the U.S. legal system
LAW for Business and Personal Use
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© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 2
WHAT IS LAW?
 Stages in the growth of law
1. Individuals are free to take revenge for wrongs
done to them.
2. A leader convinces revenge-minded individuals
to take money or goods instead.
3. Leader gives this power to a system of courts.
4. Leader acts to prevent and punish wrongs that
provoke revenge.
LAW for Business and Personal Use
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© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 3
WHAT IS LAW?
 Common law versus positive law
 Common Law: Law based on the current
standards or customs of the people.
 Positive Law: Law based on the dictates of
central authority.
LAW for Business and Personal Use
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© 2012 Cengage Learning. All Rights Reserved.
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SLIDE 4
CHECKPOINT

 How does common law differ from positive
law?
 Answer: Common Law is based on current
standards or customs among the people,
whereas positive law is dictated from above by a
central authority
LAW for Business and Personal Use
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© 2012 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
SLIDE 5
WHAT IS THE ORIGIN OF THE U.S.
LEGAL SYSTEM?
 English common law
 King’s Bench
 Jury
 An example
 Advantages of English common law
 Uniform while being able to adapt to changes in
society
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© 2012 Cengage Learning. All Rights Reserved.
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SLIDE 6
WHAT IS THE ORIGIN OF THE U.S.
LEGAL SYSTEM?
 Equity: An alternative to common law
 Equity: Basic fairness
 Equity courts: citizens had no right to issue
injunctions or compel something to happen.
These court were given power by the king to
allow access to equitable remedies for citizens.
LAW for Business and Personal Use
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SLIDE 7
CHECKPOINT

 On which early legal system is the U.S. legal
system based?
 English Common Law
LAW for Business and Personal Use
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SLIDE 8
1-2
Types of Laws
 GOALS
 Identify the four sources of law
 Discuss how conflicts between laws are resolved
 Compare and contrast criminal and civil law, and
substantive and procedural law
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© 2012 Cengage Learning. All Rights Reserved.
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SLIDE 9
WHAT ARE THE SOURCES
OF LAW?
 Constitutions: Document sets framework of
the government and its relationship to the
people.
 Constitutional law: when courts interpret the
constitution.
 Constitutions allocate powers:
1. Between people and their government
2. Between state governments and federal governments
3. Among branches of government
LAW for Business and Personal Use
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© 2012 Cengage Learning. All Rights Reserved.
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SLIDE 10
WHAT ARE THE SOURCES
OF LAW?
 Statutes: Law enacted by state of federal
legislatures
 Congress was formed from the constitution
 Congress is composed of elected officials that enact laws
called statutes.
 Ordinances: Legislation enacted by a town, city, or
county board or commission
 States give towns or cities the power to legislate matters.
 When the town or city creates a new piece of legislation it is
referred to as an ordinance
 Only effective within the boundary of the local government
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SLIDE 11
WHAT ARE THE SOURCES
OF LAW?
 Case law: Made when an appellate court endorses a
rule to be used in deciding court cases
 Occurs when a case is appealed to a higher court
 The higher courts ruling becomes the new set of rules by
which all other cases are decided.
 Stare Decisis: Doctrine that requires lower courts to follow
existing case in deciding similar cases.
 Administrative law
 Administrative agencies: governmental body formed to
carry out particular laws
 Agencies are given power to apply law in specific cases.
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© 2012 Cengage Learning. All Rights Reserved.
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SLIDE 12
CHECKPOINT

 What are the five sources of law?





Constitutions
Statutes
Ordinances
Case Law
Administrative Law
LAW for Business and Personal Use
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SLIDE 13
WHAT HAPPENS WHEN LAWS
CONFLICT?
 Constitutions and validity
 Laws can be rules unconstitutional by courts
 Supreme Court has the final say
 Statutes and validity
 Statutes can be looked at to see if the law
exceeds the scope of powers of the authoritative
body.
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SLIDE 14
CHECKPOINT

 Which source of law in the United States is
the highest authority?
 U.S. Constitution
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SLIDE 15
WHAT ARE THE MAIN
TYPES OF LAWS?
 Civil and criminal laws
 Civil Law: group of laws that allows individuals to
seek legal remedies for wrongs done to them.
 Example: You forget to pay rent, the landlord has the
right to sue you.
 Criminal Law: group of laws that defines and sets
punishments for offenses against society.
 Example: Joe, a Doctor, intentionally harms his patients.
Joe can be convicted in a trial for wrongdoing.
 You can be convicted of both a civil and criminal
law
LAW for Business and Personal Use
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SLIDE 16
WHAT ARE THE MAIN
TYPES OF LAWS?
 Procedural and substantive laws
 Procedural Law: group of laws that define the methods for
enforcing legal rights and duties
 Substantive Law: Defines rights and duties
 Example: defines offenses such as murder
 Business law
 Laws that govern business situations and transactions
 Usually concerned with contracts, property, and business
related areas.
 Uniform Commercial Code (UCC): Widely adopted uniform
business law.
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SLIDE 17
TYPES OF LAW
Constitutional law
Based on constitutions
Statutory law
Enacted by legislative bodies
Administrative law Rules and regulations made by administrative agencies
Civil law
Addresses wrongs done to individuals
Criminal law
Addresses wrongs done to society
Procedural law
Deals with methods of enforcing legal rights and duties
Substantive law
Defines legal rights and duties
Business law
Rules that apply to business situations and
transactions
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Chapter 1
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SLIDE 18
1-3
Ethical Bases for Laws
 GOALS
 Define ethics
 Compare and contrast consequences-based
ethics with rule-based ethics
 Discuss ways in which ethics are reflected in laws
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SLIDE 19
ETHICS AND THE LAW
 Ethics: A collection of standards of conduct
and moral judgment forming the basis of a
reasoned, impartial decision of what is right
and wrong.
 Ethical Decisions are based on reason not
emotion
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SLIDE 20
ETHICS AND THE LAW
 Basic forms of ethical reasoning
 Consequences-based ethical reasoning: Moral
worth of a proposed action is based on the
consequences and alternatives to it.
 Rule-based ethical reasoning: Acts are judged
based on the fundamental ethical rules set.
 Wrong actions are never condoned even if they bring
about a good result.
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SLIDE 21
ETHICS AND THE LAW
 Ethics reflected in laws
 Representatives vote on laws that they feel will
be acceptable to the majority of the people they
represent.
 Civil Disobedience: open, peaceful, violation of a
law to protest its alleged, or supposed, injustice.
 Example: Dr. Martin Luther King Jr. engaged in civil
disobedience to protest the racial injustice.
 He only believed that civil disobedience should be used
for very limited circumstances.
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SLIDE 22
CHECKPOINT

 In the U.S. system of democracy, how are
ethics reflected in laws?
 US democracy is based on the rules created by
our constitution. Ethical content is based on the
values of the people who elect legislators to make
these rules.
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SLIDE 23
PREVENT
LEGAL
DIFFICULTIES
 As a citizen . . .
 When moving to a new location, find out how the
laws in that county or city may affect you.
 Before beginning a new business, consult an
attorney to learn about city, county, state, and
federal laws and how they may affect you.
 Study business law so you can become an
informed citizen who is knowledgeable about
legal matters.
Continued on the next slide
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SLIDE 24
PREVENT
LEGAL
DIFFICULTIES
 Recognize that fulfilling your duties as a citizen is
the greatest guarantee of your maintaining your
individual rights and liberties. These duties
include:
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
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The duty to obey the law.
The duty to respect the rights of others.
The duty to inform yourself on political issues.
The duty to vote in elections.
The duty to serve on juries if called.
The duty to serve and defend your country.
The duty to assist agencies of law enforcement.
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SLIDE 25