Bonus
Chapter A
McGraw-Hill/Irwin
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Working
Within The
Legal
Environment
LE-1
1-1
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
The Judiciary
Branch of government chosen to
oversee the legal system through
the court system
LE-2
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
Organized at federal,
state, and local levels
LE-3
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
 Trial Courts
Appellate Courts
 Supreme Courts
LE-4
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
Trial Courts
Hear cases involving
criminal and civil law
LE-5
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
Criminal Law
Defines crimes, establishes
punishment, and regulates
prosecution
LE-6
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
Civil Law
Involves legal proceedings
that do not involve criminal
acts
LE-7
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
Appellate Courts
In federal and state systems,
hear appeals of trial court
decisions
LE-8
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
U. S. Court System
Supreme Courts
In federal and state systems,
may hear appeals of appellate
court decisions
LE-9
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McGraw-Hill/Irwin
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Business,
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Sources of U.S. Law
LE-10
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Sources of U.S. Law
State
Local
Federal
Court
Decisions
Common Law
Statutory Law
EPA
FTC
SEC
OSHA
PUC
Administrative
Law
FCC
EEOC
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FDA
LE-11
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Statutory Law
• Written laws
• Includes:
• State and federal constitutions,
legislative enactments, treaties of
federal government, and ordinances.
LE-12
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Common Law
• Unwritten law
• Comes from decisions handed down
by judges
• Precedents
• Decisions made in earlier cases that guide the
handling of new cases
• Lower courts must abide by higher court
precedents
LE-13
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Administrative Law
• Administrative agencies –
• Created by Congress or state legislatures with
delegated power to pass rules and regulations
within their mandated area of authority
• Administrative Law Judge
LE-14
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Administrative Agencies
EPA
FTC
SEC
OSHA
PUC
Administrative
Law
FCC
EEOC
FDA
LE-15
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McGraw-Hill/Irwin
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Business Law
LE-16
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Business Law
Rules, statutes, codes, and
regulations established to
provide legal framework
within which business may
be conducted and are
enforceable by court action
LE-17
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Tort Law
LE-19
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Tort Law
• Tort -- A wrongful act that causes
injury to another person’s body,
property or reputation.
• An intentional tort is a willful
act that results in injury.
• Negligence -- An unintentional
tort that causes harm or injury that
was not intended.
LE-20
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Product Liability
LE-21
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Product Liability
• Product Liability -- Holds
businesses liable for harm
that results from the
production, design, or
inadequate warnings of
products they market.
LE-22
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Strict Product Liability
Strict Product Liability -Liability without regard to
fault; a company can be
held liable for a defective
product even if they didn’t
know of the defect.
LE-23
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Intellectual Property
LE-24
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Intellectual Property
• Patents
• Copyrights
• Trademarks
LE-25
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Intellectual Property
• Patent – Exclusive rights to
Invention – 20 years
• USPTO
LE-26
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Patent Facts
• Patent applicants should
seek the advice of a lawyer.
• Foreign companies are
eligible to file for U.S.
patents.
• Patent owners have the right
to sell or license the use of
their patent to others.
LE-27
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Intellectual Property, cont.
• Copyright - Rights to Literary Work
and Art Work (including sound, visual,
and performing arts) – lifetime of
author + 70 yrs
• LOC
• Trademark - Protects Name,
Symbol, Design, or a combination of,
and identifies goods or services of a
seller – belong to owner forever
• USPTO
McGraw-Hill/Irwin
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LE-28
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Sales Law
LE-29
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WHAT’S the
UNIFORM COMMERCIAL CODE?
• Uniform Commercial Code
(UCC)
A comprehensive commercial law
that covers sales laws and other
commercial laws.
LE-30
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
WHAT’S the
UNIFORM COMMERCIAL CODE?
•
Adopted by every state
• 11 Articles:
• covers sales, commercial paper, bank
deposits and collections, letters of
credit, bulk transfers, warehouse
receipts, bills of lading, and other
documents of title; investment
securities; and secured transactions
LE-31
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Sales Law
• Warranties (Article 2)
• Negotiable
Instruments (Article 3)
LE-32
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Warranties
(Article 2)
LE-33
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Express Warranties
Specific representations
by seller that buyers rely
on regarding goods they
purchase
LE-34
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Implied Warranties
Legally imposed on the
seller, who implies that a
product will conform to
the standards of trade.
LE-35
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Negotiable Instruments
(Article 3)
LE-36
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Negotiable Instruments
Forms of commercial paper, e.g.,
checks, that are transferable
among businesses and
individuals and represent
promise to pay specified amount
LE-37
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
Negotiable Instruments
Four conditions for using
negotiable instruments:
1. They must be written and signed
by the maker or drawer.
2. Be made payable on demand or at
a certain time.
3. Be made payable to the bearer.
4. Contain an unconditional promise
to pay a specified amount.
LE-38
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Contract Law
LE-39
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Contract Law
Set of laws that specify what
constitutes a legally enforceable
agreement
LE-40
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Contract Law
 Legally Binding
Contract
 Legally enforceable
agreement between
two or more parties
 An offer is made.
 There is a voluntary
acceptance of the offer.
 Both parties give
consideration.
 Both parties are
competent.
 The contract must
involve a legal act.
 The contract is in proper
form.
LE-41
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Contract Law
Breach of Contract -- When
one party fails to follow the
terms of a contract.
LE-42
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Contract Law
If a contract is breached the
following may be ordered:
• Specific performance
• Payment of damages
• Discharge of obligation
LE-43
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Business Law/Legislation
LE-44
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© 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Sherman Antitrust Act (1890)
The Act Forbids:
1. Contracts, combinations, or
conspiracies in restraint of trade
2. Actual monopolies or attempts to
monopolize any part of trade or
commerce
LE-45
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HISTORY of HIGH PROFILE
ANTITRUST CASES
Case
Year
Outcome
U.S. v. Standard Oil
1911
Standard Oil broken into 34 companies
U.S. v. American
Tobacco
1911
American Tobacco split into 16
companies
U.S. v. E. I. du Pont de
Nemours
1961
DuPont ordered to divest its 23%
ownership in General Motors
U.S. v. AT&T
1982
Settled after Ma Bell spun off into
regional companies
U.S. v. Microsoft
2000
Microsoft ordered to halt prior
anticompetitive practices
LE-46
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Clayton Act (1914)
• Tying Contracts
• Interlocking Directorates
LE-47
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FTC Act (1914)
• The Federal Trade Commission Act of 1914
created the FTC and prohibits unfair methods of
competition in commerce.
• The Wheeler Lea Amendment of 1938 gave the
FTC additional control over false and misleading
ads.
• The Robinson-Patman Act of 1936 prohibits
price discrimination and applies to buyers and
sellers.
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Robinson-Patman Act (1936)
• Prohibits price discrimination
• Applies to buyers and sellers
• B2B transactions, not consumer
LE-49
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Consumerism
• Social movement seeking to increase and
strengthen rights and powers of buyers in
relation to sellers
• The Consumer Product Safety
Commission provides information
concerning consumerism and consumer
protection.
LE-50
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Tax Laws
LE-51
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Taxes
• Governments collect money
• Encourage businesses to hire or purchase
via tax credits
• Discourage citizen
bad practice
LE-52
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Types of Taxes
• Income Taxes
• Property Taxes
• Sales Taxes
• Excise Taxes
LE-53
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SIN TAXES
State Tax Rates per Pack of Cigarettes
State(s)
Rate per Pack
New York
$4.35
Massachusetts
$3.51
Rhode Island
$3.50
Connecticut
$3.40
Hawaii
$3.20
Washington
$3.025
Minnesota
$2.83
McGraw-Hill/Irwin
McGraw-Hill/Irwin
A-54
Source: Tobacco Free Kids, www.tobaccofreekids.org, accessed
November
© 2005
The 2014.
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Bankruptcy
LE-55
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Bankruptcy
The legal process by which a person,
business, or government entity, unable to
meet financial obligations, is relieved of
those debts by a court.
LE-56
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Bankruptcy Options
• Chapter 7 – Straight Bankruptcy (Liquidation)
• Voluntary and Involuntary
• Businesses and Individuals
LE-57
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How Assets are
Divided in Bankruptcy
LE-58
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Bankruptcy Options
• Chapter 7 – Straight Bankruptcy (Liquidation)
• Voluntary and Involuntary
• Businesses and Individuals
• Chapter 11 – Reorganization
• Businesses
• Chapter 13 – Repayment Plan
• Individuals
LE-59
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GOING, GOING, GONE
Big Bankruptcies of 2008-2014
• Circuit City
• KB Toys
• Linens N Things
• Borders
• City of Detroit
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A-60
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Deregulating
Commerce
LE-61
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Deregulation
• The government withdraws certain laws
and regulations that seem to hinder
competition
• Deregulation efforts were active in:
- The airline industry
- Telecommunication
- Some public utilities
LE-62
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