The Legal Environment of Business BUSA 2106 Carol D Terry J D PTI Legal Studies GSU Sr Counsel and Chief Compliance Officer General Electric Company PGS Miller Cross 2010 1 Now on to the real show Objectives Define and classify law Identify sources of law Explain Stare Decisis Understand basic legal terminology Demonstrate critical legal thinking by using IRAC and case briefs Miller Cross 2013 2 Let s be practical Do Legal Principles impact your life How does law play a role in the business environment Miller Cross 2013 3 Business Applications of Law Miller Cross 2013 4 What Functions Does the Law Serve Keeping the peace Shaping moral standards Promoting social justice Maintaining the status quo Miller Cross 2013 Facilitating orderly change Facilitating planning Providing a basis for compromise Maximizing individual freedom 5 Classifications of Law Substantive vs Procedural Federal vs State Criminal vs Civil Law vs Equity Common Law vs Statutory Law National vs International Law Miller Cross 2013 6 Comparing Civil and Criminal Law Who is the plaintiff What is the purpose of a lawsuit What remedies sanctions are available What is the burden of proof How might this affect the outcome of the case What is the outcome called Miller Cross 2013 7 Comparing Law and Equity Historically Law courts granted compensatory damages money land or items of value Equity courts granted equitable remedies specific performance injunctive relief and rescission Miller Cross 2013 Today Law and equity have merged but Distinction between legal and equitable remedies remain No jury trial in action at equity unless granted by statute 8 Some Equitable Maxims Equity will not suffer a wrong to be without a remedy Equity aids the vigilant not those who rest on their rights One seeking the aid of an equity court must come into court with clean hands Miller Cross 2013 Fairness and Justice 9 Comparing National and International Law National Law Law of a particular nation e g US law May be based on common law civil law codified law or sharia religious law of Islam International Law Law that governs relations among nations Includes national laws and customs treaties and laws of international organizations Miller Cross 2013 10 Primary Sources of US Law Constitution Supreme Law of the Land Legislative Law Treaties Statutes and Ordinances Executive Law Executive Orders Administrative Agencies Regulations and Orders Judicial Law The Common Law Miller Cross 2013 11 Sources of US Law U S Constitution Supreme Law of the Land Administrative Agencies Legislature Ex FDA SEC EEOC CONGRESS Statutes Ratify Treaties Miller Cross 2013 Executive PRESIDENT Rules Regs Agency Orders Judiciary SUPREME COURT Executive Orders Negotiate Treaties Common Law 12 How do Courts Make Law The Common Law and the Doctrine of Stare Decisis What is a case precedent Why are they important to managers Do you think judges should make law Why or why not Miller Cross 2013 13 Using Precedent When Brad proposed to Amy he hid a Tiffany s box with an engagement ring for her in her car Before they were married Brad was killed in a tragic car accident Brad s parents as executors of his estate sued Amy in NY to recover the engagement ring Why might they do so Miller Cross 2013 14 What Does Each Party Claim Estate s argument Brad gave Amy the ring in consideration of marriage which is a theory Because the marriage never happened she must return the consideration Amy s argument Brad gave me the ring as a and are complete when made Miller Cross 2013 15 A Case of First Impression The case ultimately went to the highest court in NY the Court of Appeals The court researched NY law looking for a binding precedent to govern the case It didn t find any a case of first impression But it found a similar case in PA where the PA court concluded that the ring should be treated as a gift Persuaded by the PA court s reasoning the NY court borrowed the PA precedent Miller Cross 2013 16 Distinguishing Precedents Does our precedent apply to these situations Carla broke off her engagement with Dan after she learned that he was cheating on her After a 3 year engagement Earl and Frances decided not to get married Miller Cross 2013 17 Reversing Precedent Can a lower court reverse the decision of a higher court When might a court reverse a prior decision Can you think of any famous examples Miller Cross 2013 18 Stare Decisis Let the Decision Stand Disadvantages Advantages Predictability Certainty Stability Miller Cross 2013 Volume of Cases Time Intensive Expensive Precedent may be Rejected Multitude of Systems 19 Critical Legal Thinking Terminology Case at trial Porter v Dawson Who is the PLAINTIFF Who is the DEFENDANT Who has the burden of proof Why Miller Cross 2013 20 More Legal Terminology On appeal Assume that Porter won at trial Dawson appealed alleging that the trial court erred in defining or applying the law not simply that the trial court s decision was incorrect On appeal the case may remain Porter v Dawson or be renamed Dawson v Porter Who is the APPELLANT Who is the RESPONDENT Miller Cross 2013 21 What are the Appellate Court s Options In reviewing the trial court s judgment the appellate court may AFFIRM the judgment REVERSE the judgment AFFIRM in part and REVERSE in part REVERSE and REMAND the case back to the lower court for further proceedings consistent with the appellate court s ruling on the legal issues Miller Cross 2013 22 Types of Judicial Opinions Unanimous Majority Plurality no value as precedent Concurring Dissent Per curiam of the court Miller Cross 2013 23 Analyzing a Case The Case Brief Method Facts Who are the key parties and what happened Issue What legal question needs to be answered Decision Holding What does the court decide Rationale Reasons How does the court explain its ruling Miller Cross 2013 24 Analyzing a Case or Problem The IRAC Method The IRAC Method Issue s Rule legal doctrine or precedent Application of law to the facts Conclusion Also use IRAC to solve business law problems and hypotheticals Miller Cross 2013 25 IRAC Example Facts Scenario 1 A and B presidents of two carpet companies agree that each will sell carpet at 22 95 a square yard beginning on 9 1 Miller Cross 2013 Scenario 2 C and D are both retailers C decides to sell a power drill for 25 Independently D decides to sell the same drill for 25 26 IRAC Issue and Rule What is the legal issue raised by these scenarios What is the appropriate legal rule Section 1 of the Sherman Act