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WELCOME TO APPLIED BUSINESS LAW

ABUS 241

POWERPOINT NARRATED BY MELISSA BROWN ASSOCIATE PROFESSOR APPLIED BUSINESS & ACCOUNTING

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CHAPTER 1

INTRODUCTION TO LAW

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The principles discussed in this chapter are practical. Neither these lectures, the book, or the course is a theoretical exercise. The law will affect you, regardless of your career, whether you want it to or not. The more you understand the law the more you can use it productively.

QUOTES OF THE DAY

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True human goodness, in all its purity and freedom, can come to the fore only when

its recipient has no power. Milan Kundera, Czech author

What is good? All that heightens the feeling of power, the will to power,

power itself in man. Freidrich Nietzsche, German Philosopher

PresenterPresentation NotesQuotes of the DayHere are two opposing thoughts on goodness: True human goodness, in all its purity and freedom, can come to the fore only when its recipient has no power. Milan Kundera, Czech author (b. 1929). What is good? All that heightens the feeling of power, the will to power, power itself in man. Friedrich Nietzsche, German philosopher (1844 1900).

LAW IS POWERFUL Affects all people, from CEOs to children

Affects most of life, from work to leisure

Law is important Virtually all known civilizations throughout history have had some kind of law. But which is more important -- written law or the people who enforce it?

Law is fascinating Complex, but never just theoretical Televised trials often draw a large audience

PresenterPresentation NotesMost likely, you fall into one of four categories: (1) someone who does not intend law as a career but approach the material with an open mind; (2) someone for whom the course kindles a strong interest in law, and may for the first time consider law as a career; (3) someone who entered the course with a strong interest in law and plans to attend law school ; and (4) someone who is in the course only because your program requires it. But regardless of what category you fall into, my job is to help you see that the law is powerful, important and fascianting and Ill do my best on this.

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Origins of Our Law - Many Sources

Inherited much from British law.

Founding Fathers created a multi-level government which guaranteed citizens rights.

Accumulation of precedent in legal cases makes up the common law.

Statutes are passed by legislative body.

Substantive rules state parties rights.

Procedural rules determine how courts should settle disputes.

COMPLEXITY

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Powerful Competing Interests

Property ownership

Ethics

Raw power

Business practices

Personal responsibility

Social mores

PresenterPresentation NotesIt is often frustrating to students, citizens, and even lawyers that law is so complex. AngloAmerican legal history consists, in part, of a clash of powerful, competing interests: property ownership, ethics, raw power, business practices, personal responsibility, social mores, and the need for predictability, to list a few. To understand the interplay of these forces is to understand why law is complicated.

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Sources of Our Law Today United States Constitution -- Law of the Land Establishes Congress, the Presidency and Courts Gives to states powers not given to Federal Govt Guarantees basic rights to all citizens

State Constitutions Create state executive, legislative & judicial

systems

Statutes laws passed by federal & state governments

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Sources of Our Law Today (contd)

Common Law -- established by precedent, or earlier cases decided by courts

Equity courts may issue rulings such as injunctions to provide an equitable remedy

Administrative Law -- created by agencies

Other treaties and executive orders

PresenterPresentation NotesCommon Law was created through precedent, which simply means earlier cases decided by courts.Courts may issue rulings such as injunctions to provide an equitable remedy.Administrative Law is created by agencies, while the president can intitiate treaties and executive orders.

CASE PRECEDENTS

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Precedents are judicial decisions that give rise to legal principles that can be applied in future cases based upon similar facts.

Precedents and other forms of positive law, such as statutes, constitutions, and regulations are referred to as binding authorities and must be followed.

PresenterPresentation NotesCase Precedents The common law system involves the application, in current cases, of principles applied in earlier cases with similar facts. Judges rely on precedent to decide on cases. If a case involves the same or similar facts as a past case, a judge can refer to this when making a ruling. Prior judicial decisions carry a great deal of weight.

Binding Authority refers to any primary source of law a court must follow when deciding a dispute. This includes all constitutional provisions, statutes, treaties, regulations, or ordinances that govern the issue being decided, as well as prior court decisions that constitute controlling precedent in the courts jurisdiction.

IS AN 1875 CASE PRECEDENT STILL BINDING?

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Supreme Court precedents, no matter how old, remain controlling until they are overruled.

PresenterPresentation NotesIn a suit against the U.S. government for breach of contract, Boris Korczak sought compensation for services that he had allegedly performed for the Central Intelligence Agency (CIA) from 1973 to 1980. Korczak claimed that the government had failed to pay him an annuity and other compensation required by a secret oral agreement he had made with the CIA. The federal trial court dismissed Korczaks claim, and Korczak appealed the decision to the U.S. Court of Appeals for the Federal Circuit.At issue on appeal was whether a Supreme Court case decided in 1875, Totten v. United States, remained the controlling precedent in this area. In Totten, the plaintiff alleged that he had formed a secret contract with President Lincoln to collect information on the Confederate army during the Civil War. When the plaintiff sued the government for compensation for his services, the Supreme Court held that the agreement was unenforceable. According to the Court, to enforce such agreements could result in the disclosure of information that might compromise or embarrass our government or cause other serious detriment to the public. In Korczaks case, the federal appellate court held that the Totten case precedent was still good law, and therefore Korczak, like the plaintiff in Totten, could not recover compensation for his services. Said the court, Totten, despite its age, is the last pronouncement on this issue by the Supreme Court. ... We are duty bound to follow the law given us by the Supreme Court unless and until it is changed. The Bottom LineSupreme Court precedents, no matter how old, remain controlling until they are overruled by a subsequent decision of the Supreme Court, by a constitutional amendment, or by congressional legislation. 92 U.S. 105 (1875).b. Korczak v. United States, 124 F.3d 227 (Fed.Cir. 1997).

PRECEDENTS

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Why do they hold such importance?

Why are they only changed when it is considered essential?

PresenterPresentation NotesPrecedentLaw attempts to balance the need for predictability with the need for change. You may want to consider the values served by precedent and stare decisis in your own life and the circumstances under which a court should be free to modify or ignore precedent. For example, you may depend upon contract law to prevent a landlord from raising your rent, upon landlordtenant law to ensure a habitable apartment, upon consumer protection law to protect you from unfair retail practices, and upon employment law to protect you from discrimination and sexual harassment in the workplace. If the common law changed with every lawsuit, no one could conduct business with certainty.

LEGAL HIERARCHY IN AMERICAN LAW

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United States Constitution Federal statutory law State constitution State statutory law Local ordinance Administrative rules and rulings Common law

PresenterPresentation NotesLaws emanating from the various primary sources of American law are enforced according to the following hierarchy:(1)The United States Constitution takes precedence over(2)federal statutory law, which takes precedence over(3)a state constitution, which takes precedence over(4)state statutory law, which takes precedence over(5)a local ordinance, which takes precedence over(6)administrative rules and rulings, which take precedence over(7)common law.

LOCAL GOVERNMENTS OFTEN HAVE LITTLE POWER

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Is this a good or bad thing?

Pros and cons - some things to consider.

PresenterPresentation NotesIn most industrial nations, no local governments wield as much power as the states do in this country. Is state government wise? What are some pros and cons of state power?Answer:Some pros:The country is huge, and state government keeps political power physically nearer the people.Different geography, industry, population, and mores mean diverse concerns and opinions in different areas, and a local government can be more sensitive to these local pressures.As technology and social issues change, the law should be able to evolve more rapidly on a local level than on a national level.Some cons:State borders have little meaning in an age when physical distances can be crossed quickly by airplane or instantly by telecommunications.A corporation doing business in all states may have to meet 51 different sets of federal and state regulations.It is a waste of time for society to investigate the same issuesay, liability for toxic waste51 times, and to pass 51 different responses to the same concern.

CLASSIFICATIONS OF LAW

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Criminal Law Civil Law

Dangerous behavior outlawed by society Government prosecutes accused Guilt is determined Punishment or fine is imposed

Regulates rights and duties of parties Victim, not govern-ment brings suit Guilt not determined Compensation is ordered

vs.

PresenterPresentation NotesCivil vs. Criminal LawCivil law defines and enforces the duties or obligations of persons to one another.Criminal law, by contrast, defines and enforces the obligations of persons to society as a whole.

Most non-lawyers experience criminal law in the media, but most lawyers practice civil law. Civil law does not involve guilt or punishment, two legal concepts with which youre probably the most familiar. Correct terminology is importanta court does not find a civil defendant guilty of negligence or breach of contract, it finds him or her liable for negligence or breach of contract. Cyberlaw: A growing body of law that deals specifically with issues raised by cyberspace transactions.

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Classifications of Law (contd) Substantive Law Procedural Law

Defines the rights of the people

Establishes processes for settling disputes

Public Law Private Law

Sets the duties of government to its citizens

Regulates duties between individuals

vs.

vs.

PresenterPresentation NotesEvery type of law will be either:Civil or Criminal (and either),Substantive or Procedural (and either), Public or Private. Substantive rules of law state the rights of the parties. Substantive law consists of all laws that define, describe, regulate, and create legal rights and obligations.Procedural law consists of all laws that establish and regulate the manner of enforcing or vindicating the rights established by substantive law. Procedural rules govern the conduct of legal proceedings. The text focuses primarily on substantive law.

Cyberlaw is traditional law applied in the online forums

LAW AND MORALITY

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Drunk driving is both immoral and illegal.

Actions may be legal, but immoral to some people. Owning slaves in Colonial America was legal, but this violates most peoples moral standards today.

LAW

MORALITY Actions may be moral, but not required by law.

Helping a hurt person is required by moral standards, but is not mandated by the law.

Actions may be required by both moral standards and the law.

PresenterPresentation NotesActions may be legal, but immoral to some people.For example, many corporations dump as much toxic sudge into waterways as they are legally permitted, even though these limits can be very harmful to the environment and wildlfe.

Actions may be moral, but not required by law.There are also many who go out of their way to ensure their industry is polluting as little as possible, even if this is at the expense of making a heftier profit.

Actions may be required by both moral standards and the law. Every state has certain environmental standards that businesses must comply with in an effort to minimize environmental damage.

JURISPRUDENCE, OR WHAT IS LAW?

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Legal Positivism

Natural Law

Legal Realism

Law is what the sovereign says it is. Decisions stand, regardless of morality.

An unjust law is no law at all and need not be obeyed.

Laws must have a good moral basis.

Enforcement of the law is more important than the law itself. Enforcers determine if the law is applied in a fair and consistent way.

THE NATURAL LAW SCHOOL

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Assumes that law, rights and ethics are based on universal moral principals inherent in nature discoverable through the human reason.

The oldest view of jurisprudence dating back to Aristotle.

The Declaration of Independence assumes the Laws of Nature.

PresenterPresentation NotesNatural Law: A system of universal moral and ethical principles that are inherent in human nature and that people can discover by using their natural intelligence (e.g., murder is wrong; parents are responsible for the acts of their minor children).Natural Law Theory presupposes that positive law derives its legitimacy from natural law and holds that, to the extent that natural law and positive law differ, natural law must prevail.

NATURAL LAW REV. MARTIN LUTHER KING, JR.

Letter from the Birmingham Jail, April 16, 1963 [T]here are two types of laws: just and unjust laws. . . . A just law is a man-made code that squares with the moral law . . . . An unjust law is a code that is out of harmony with the moral law. . . . An unjust law is a human law that is not rooted in eternal and natural law.

JURISPRUDENCE

The foundation of our national policy will be laid in the pure and immutable principles of private morality. There is no truth more thoroughly established, than that there exists in the economy and course of nature, an indissoluble union between virtue and happiness.

PresenterPresentation NotesAt the First Inaugural Address in 1789, George Washington said , The foundation of our national policy will be laid in the pure and immutable principles of private morality. There is no truth more thoroughly established, than that there exists in the economy and course of nature, an indissoluble union between virtue and happiness.Some claim that the American legal system has taken us too far from Washingtons ideal world, arguing that we place too many moral issues in the hands of judges and juries, that we allow government regulators to control too many matters. They argue that only by limiting the roles of government and the courts can we permit true morality to flourish. These critics would like to see most if not all federal regulatory agencies disbanded, permitting private morality once more to rule.Others strongly disagree, claiming that governmental regulation forces recalcitrant individuals and companies to follow the common morality, something they would not do unless faced with potential legal penalties. Would we be comfortable shopping if meat were not inspected? Should new drugs simply be tested on unwitting consumers, rather than subjected to FDA review? Are race and sex discrimination so inconsequential that we can permit them to go unregulated? Should companies be free to dump toxic waste wherever they want? The answers, claim many, are too obvious to need stating.

QUIGLEY v. FIRST CHURCH OF CHRIST, SCIENTIST 65 Cal. App. 4th 1027, 76 Cal. Rptr. 2d 792, 1998 Cal. App. LEXIS 677

California Court of Appeal, 1998

CASE ANALYSIS

Facts: Gayle Quigley and James Wantland had divorced. They had joint custody of their 12-year-old son, Andrew, who lived with his father. James was a member of the Christian Science church, a religion that regards disease as an error of the mind and discourages the use of traditional medicine. Members of the faith

Issue: Did the defendants have a duty to summon medical help for Andrew?

Excerpts from Judge Bedsworths Decision: [The judge began by mentioning an earlier California case, in which the states highest court ruled that one person generally has no duty to protect another from harm, unless there is a special relationship between the two, such as custody or control...

PLAINTIFF: the party who is suing

DEFENDANT: the party being sued

LEGAL CITATION: where to find the case in a law library

Where and when the case was decided.

FACTS: background information on the case

ISSUE: the question being decided

EXERPTS: the decision -- also called the holding -- and the courts rationale

PresenterPresentation NotesHeres a sample analysis to help you identify legal terminology and where to find the information you need when you read future cases.

WE DEPEND UPON THE LAW TO GIVE US A STABLE NATION AND ECONOMY, A FAIR SOCIETY, A SAFE PLACE TO LIVE AND WORK. BUT WHILE LAW IS A VITAL TOOL FOR CRAFTING THE SOCIETY WE WANT, THERE ARE NO EASY ANSWERS ABOUT HOW TO CREATE IT. ...LEGAL RULES CONTROL US, YET WE CREATE THEM.

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THE END

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PresenterPresentation NotesCongratulations! You made it through the first chapter.

Slide Number 1Slide Number 2Quotes of the DayLaw is powerfulSlide Number 5ComplexitySlide Number 7Slide Number 8Case PrecedentsIs an 1875 Case Precedent Still Binding?PrecedentsLegal Hierarchy in American LawLocal governments often have little powerClassifications of LawSlide Number 15Law and MoralityJurisprudence, or What is Law?The Natural Law SchoolNatural Law Rev. Martin Luther King, Jr. JurisprudenceCase AnalysisWe depend upon the law to give us a stable nation and economy, a fair society, a safe place to live and work. But while law is a vital tool for crafting the society we want, there are no easy answers about how to create it. ...Legal rules control us, yet we create them.The End