PowerPoint Slides to accompany
THE LEGAL ENVIRONMENT OF BUSINESS
AND ONLINE COMMERCE 5E,
by Henry R. Cheeseman
Chapter 1
Legal Foundations and Global
Environment
Prentice Hall © 2007
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What Is Law?
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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.
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Functions of Law
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Keeping the peace
Shaping moral standards
Promoting social justice
Maintaining the status quo
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Functions of Law
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Facilitating orderly change
Facilitating planning
Providing a basis for compromise
Maximizing individual freedom
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Qualities of the Law
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Fairness
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The American legal system is one of
the most comprehensive, fair, and
democratic systems of law ever
developed and enforced.
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Qualities of the Law
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Flexibility
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The American legal system is
generally responsive to cultural,
technological, economic, and social
changes.
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What Is Jurisprudence?
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Jurisprudence is
the philosophy or
science of law.
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Schools of Jurisprudential Thought
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Natural school—Believes law is based
on what is “correct”
Historical school—Believes law is an
aggregate of social traditions and
customs
Analytical school—Believes law is
shaped by logic
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Schools of Jurisprudential Thought
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Sociological school—Believes law is a
means of achieving and advancing
certain sociological goals
Command school—Believes law is a set
of rules developed and enforced by the
ruling party
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Schools of Jurisprudential Thought
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Critical legal studies school—Believes legal
rules are unnecessary and that legal
disputes should be solved using rules of
fairness
Law and economics school—Believes
promoting market efficiency should be the
central concern of legal decision making
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History of American Law
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English common law
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Developed by judges
who issued their
opinions when deciding
a case. The principles
became precedent for
later judges deciding
similar cases.
49 states base their
legal systems on
common law.
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History of American Law
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Law court
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Court of Chancery (Equity Court)
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A court that developed and administered a uniform set
of laws decreed by the kings and queens after William
the Conqueror. Legal procedure was emphasized over
merits.
Court that granted relief based on fairness
Equitable remedies were shaped to fit individual
situations.
Merchant court
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Courts that were established to administer the “law of
merchants”
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Sources of U. S. Law
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Constitutions
Treaties
Codified law
Executive orders
Regulations and administrative
orders
Judicial decisions
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Constitutions
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The U.S. Constitution
established the structure of
the federal government.
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Legislative branch
Executive branch
Judicial branch
The U.S. Constitution and
treaties take precedence
over all other conflicting
laws.
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Treaties
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A treaty is a
compact made
between two or
more nations.
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Codified Law
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Statutes
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Written law enacted by the legislative
branches of federal and state governments
Ordinances
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Laws enacted by local government bodies
such as cities and municipalities, counties,
school districts, and water districts
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Executive Orders
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An executive
order is an order
issued by a
member of the
executive branch
of government.
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Administrative Agency Rules
and Regulations
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The legislative and executive branches of
federal and state governments establish
administrative agencies to enforce and
interpret statutes enacted by Congress
and state legislatures.
Many agencies regulate business.
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Judicial Decisions
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A judicial decision
is a decision
about an
individual case
issued by a
federal or state
court.
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Doctrine of Stare Decisis
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Based on the common law tradition, past
court decisions become precedent for
deciding future cases.
Precedent is a rule of law established in a
court decision. Lower courts must follow the
precedent established by higher courts.
Stare decisis—Latin for “to stand by the
decision”—means adherence to precedent.
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Priority of Law in the U.S.
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The US Constitution and treaties take
precedence over all other laws.
Federal statutes take precedence over
federal regulations.
Valid federal law takes precedence over any
conflicting state or local law.
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Priority of Law in the U.S.
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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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