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Learning Objectives
1. What is the common law tradition?
2. What is the difference between
remedies at law and remedies at
equity?
3. What constitutional clause gives the
federal government the power to
regulate commercial activities among
the various states? 
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Learning Objectives
4. What is the Bill of Rights? What
freedoms does the First Amendment
guarantee?
5. Where in the U.S. Constitution can
the due process clause be found?
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Introduction
 At a minimum law consists of:
– Enforceable rules governing relationships,
– Among and between individuals and
– Their society. 
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Introduction
 Different views of law have one thing
in common:
– Duties, rights, and privileges that are
consistent with the values and traditions of
that culture.
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Business Activities and
The Legal Environment
 Knowledge of “black letter” law is not
enough.
 Many different laws affect a single
business transaction.
 Ethics and business decision making:
what constitutes right or wrong
behavior?
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Business Activities and
The Legal Environment
 Many Different Activities Can Affect a Single Business
Transaction.
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Sources of American Law
 Constitutional Law.
– Found in text and cases arising from
federal and state constitutions.
– U.S. Constitution is the supreme law of
the land.
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Sources of American Law
 Statutory Law.
– Laws enacted by federal and state
legislatures.
– Local ordinances.
– Uniform Laws.
– Uniform Commercial Code (UCC).
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Sources of American Law
 Administrative Law.
– Rulemaking--Rules, orders and decisions of
administrative agencies, federal, state and
local.
– Adjudication--agencies make rules, then
investigate and enforce the rules in
administrative hearings.
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Sources of American Law
 Case Law and Common Law Doctrines.
– Much of the common law is still used today.
– Common law governs all areas not specifically
covered by statutory or constitutional law.
– Restatements of the Law: modern compilations
of common law principles found, e.g., in
contracts, torts, property and agency.
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The Common Law Tradition
 Early English Courts.
– King’s courts started after Norman
conquest of 1066.
– Established the common law—body of
general legal principles applied
throughout the English empire.
– King’s courts used precedent to build the
common law.
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The Common Law Tradition
 Stare Decisis.
– Importance of Precedents: Practice of
deciding new cases based on precedent.
• A higher court’s decision based on certain facts
and law, is a binding authority on lower courts.
– Stare Decisis and Legal Stability.
– Departures from Precedent.
– When there is No Precedent.
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The Common Law Tradition
 Equitable Remedies and Courts of
Equity.
– Remedy: means to enforce a right or
compensate for injury to that right.
– Remedy at Law: in king’s courts, remedies
were restricted to damages in either
money or property. 
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The Common Law Tradition
 Equitable Remedies and Courts of
Equity.
– Remedies in Equity: based on justice and
fair dealing a chancery court does what is
right.
– Merging of Law and Equity. Today, legal
and equitable remedies are found in the
same court.
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Classifications of Law
 Substantive vs. Procedural Law.
– Substantive: laws that define and regulate
rights and duties.
– Procedural: laws that establish methods
for enforcing and protecting rights.
 Civil Law and Criminal Law.
– Civil: private rights and duties between
persons and government.
– Criminal: public wrongs against society.
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Classifications of Law
 National and International Law.
– National: laws of a particular nation.
– Civil vs. Common Law: Civil law countries
based on Roman code (e.g., Latin America).
– International: body of written and
unwritten laws observed by nations when
dealing with each other.
 Cyberlaw: internet transactions.
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The Constitutional
As It Affects Business
 The Commerce Clause.
– U.S. Constitution gives Congress the
power to: “regulate Commerce with
foreign Nations, and among the several
States, and with the Indian tribes” (Art. 1
§ 8).
– Greatest impact on business than any
other Constitutional provision.
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The Constitutional
As It Affects Business
 The Commerce Clause.
– The Commerce Clause and the Expansion
of National Powers.
• The national government had the exclusive
power to regulate interstate commerce.
Gibbons v. Ogden (1824).
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The Constitutional
As It Affects Business
 The Commerce Clause.
– Commerce Today: Commerce Clause
applies to e-commerce internet
transactions.
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The Constitutional
As It Affects Business
 The Commerce Clause.
– Regulatory Powers of the States: often
referred to as “police” powers. State laws
enacted pursuant to a police power are
given a strong presumption of
constitutionality.
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The Constitutional
As It Affects Business
 The Commerce Clause.
– The “Dormant” Commerce Clause.
• State police powers or regulations that
substantially interfere with interstate commerce
will be struck down.
• CASE 1.1 FAMILY WINEMAKERS OF
CALIFORNIA V. JENKINS (2010). Did the
State of Massachusetts discriminate against outof-state wineries?
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– 1791: Ten written guarantees of protection of
individual liberties from government
interference. Originally, Bill of Rights only
applied to the federal government.
– Recently, the Bill of Rights was “incorporated”
and applied to the States as well.
– Some protections apply to businesses.
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Speech.
• Symbolic Speech: Free speech also includes
“symbolic” speech, including gestures,
movements, articles of clothing.
• Reasonable Restrictions.
• Corporate Political Speech. Corporations and
unions now have broader rights to support
candidates. See Citizens United v. FEC (2010). 
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Speech.
• Commercial Speech (advertising) is given
substantial protection. Government restrictions
must seek to implement substantial government
interest, directly advance that interest, and must
go no further than necessary to accomplish. 
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Speech.
• Commercial Speech.
– CASE 1.2 BAD FROG BREWERY, INC. V. NEW
YORK STATE LIQUOR AUTHORITY (2003). Did
the State unconstitutionally restrict
commercial speech when it prohibited a
certain gesture (illustration) on beer labels?
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Speech.
• Unprotected Speech. U.S. Supreme Court
has held that certain speech is NOT
protected:
–Defamatory speech.
–Threatening speech that violates criminal
laws. 
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Speech.
• Unprotected Speech. U.S. Supreme Court
has held that certain speech is NOT
protected:
–Fighting Words.
–Obscene Speech is patently offensive,
violates community standards and has no
literary, artistic, political or scientific merit.
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Speech.
• Online Obscenity. Some of Congress’ attempts to
protect children from online pornography have
been ruled unconstitutional restrictions on free
speech.
– Communications Decency Act (1996).
– COPA (1998-challenged, in court).
– Children’s Internet Protection Act-CIPA-(2000) requires
filters for computers in public libraries and public
schools. Court held it is constitutional.
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Religion.
• First amendment guarantees that “Congress shall
make no law respecting an establishment of
religion, or prohibiting the free exercise
thereof…” 
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– First Amendment—Freedom of Religion.
• Establishment Clause: no state-sponsored religion
or preference for one religion over another.
–CASE 1.3 TRUNK V. CITY OF SAN DIEGO (2011).
What was the Supreme Court’s rationale for
ordering the cross removed? 
• Free Exercise clause: person can believe what he
wants, but actions may be unconstitutional.
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– Fifth and Fourteenth Amendments.
• Due Process: both guarantee that “no person
shall be deprived of life, liberty, or property
without due process of law.”
–Procedural: any government decision to take
life, liberty or property must be fair. Requires:
Notice and Fair Hearing. 
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The Constitutional
As It Affects Business
 Business and the Bill of Rights.
– Fifth and Fourteenth Amendments.
• Due Process.
–Substantive: focuses on the content or the
legislation (the right itself).
»Fundamental Right: requires compelling
state interest.
»Non-Fundamental: rational relationship to
state interest.
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Appendix
 Finding Statutory and Administrative
Law.
– United States Code (USC).
– State Statutes.
– Code of Federal Regulations (CFR).
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Appendix
 Finding Case Law (Case Citations).
– Supreme Court Cases at Findlaw.com.
– Federal Court Cases at Findlaw.com.
– State Court Cases at Findlaw.com.
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Appendix: Finding
and Analyzing the Law
Legal cases are identified by a “legal
citation” (or a “cite”) as the sample
below:
Fehr v. Algard, ___ N.J. Super ___, A.3d
(2011).
Title: First Party is Plaintiff, second
party is Defendant. The parties are
either italicized or underlined.
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Appendix: Finding
and Analyzing the Law
Legal cases are identified by a “legal
citation” (or a “cite”) as the sample
below:
Fehr v. Algard, ___ N.J. Super ___, A.3d
(2011).
The case is from the Superior Court of
New Jersey and is not numbered as of
the date of this printing.
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Appendix: Finding
and Analyzing the Law
Legal cases are identified by a “legal
citation” (or a “cite”) as the sample
below:
Fehr v. Algard, ___ N.J. Super ___, A.3d
(2011).
The case was decided in 2011.
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permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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