BUSFIN 3500 Midterm Review Chapter 1 The Legal and Constitutional Environment of Business Sources of American Law Primary sources of law are sources that establish the law These include 1 The US Constitution and state constitutions 2 Statutes passed by Congress or state legislators 3 Regulations created by administrative agencies 4 Case law Secondary sources of law are books and articles that summarize the primary sources of law These are laws derived from the US Constitution as well as state constitutions The US Constitution is the supreme law of the land and is the basis for all laws in the US The Tenth Amendment gives the states all powers not given to the federal government by the US Constitution Constitutional Law Statutory Law Laws created by the legislative bodies in the US For example federal statutory law is created by Congress and applies to all states in the United States A state statute on the other hand is created by a state legislature and applies only within that state s borders Uniform laws are laws created by an agency that the states may consider to adopt in order to facilitate interstate commerce States can adopt all or part of these laws Administrative Law oversee a particular task Laws created by an administrative agency These agencies are created at all levels of government to Federal agencies can be divided into two types executive and independent regulatory Executive agencies exist within the cabinet departments of the executive branch This means that these departments are all subject to the authority of the president Independent regulatory agencies are not subject to the authority of the president and are numerous at the federal level These agencies are created by enabling legislation passed by Congress and are meant to oversee the execution of statutory law State and local agencies are often created as a parallel of a federal agency Federal regulations by an agency take precedent over state regulations Case Law The Common Law Tradition The rules and principles announced in court decisions makeup this category of the law Common law is the principle of one set of laws that apply to an entire region in this case the United States Common law creates predictability and stability by having judgments be based on precedent the prior ruling of a court that had similar facts in the case Following precedent eventually came to be called stare decisis Stare decisis is made up of two parts following the decisions made by higher courts and not overturning a precedent unless absolutely necessary Using Precedent Courts are obligated to use the principle of stare decisis when making a judgment This is due to the binding authority that primary sources of the law have on a court The constitutions statutes regulations and precedents that apply to the case must all be considered Courts can depart from precedent when it is deemed necessary An example of this would be the Brown decision that overturned Plessy and the doctrine of separate but equal When a case has no precedent it is referred to as a case of first impression Often cases from other jurisdictions are used to inform the court on what decision to make These precedents have persuasive authority as they are not binding on the court A remedy is a means by which a party may be compensated for the violation of a right or may Remedies enforce a right Classifications of the Law designed to enforce those rights Substantive laws are laws that describe the rights given to a person while procedural laws are the laws Civil law spells out the rights guaranteed to a person Thus civil cases are generally between two private parties or a private party and the government Criminal law pertains to wrongs committed against society and as such generally has the person who committed the wrongs being sued by a public official such as a DA National law is the laws that pertain to a specific country The two main types of legal systems in the world are common law and code law The latter refers to the practice of precedent not having a binding authority on courts International law are laws that apply to more than one country How the Constitution Affect Business The Commerce Clause The commerce clause gives Congress the power to regulate interstate commerce The definition of interstate commerce has expanded through the years starting with Gibbons v Ogden Today any action that threatens to affect interstate commerce can be regulated by Congress An example of this is Wickard v Filburn where wheat production intended for personal use only was deemed as affecting interstate commerce and able to be regulated by Congress States have what are referred to as police powers These are the ability to regulate activities within a state in order to promote the general welfare of those within the state The dormant commerce clause refers to the inability of the states to regulate interstate commerce These means that when a state s actions affect interstate commerce the courts weigh the benefit of the state s regulation against the burden placed on interstate commerce The First Amendment Freedom of Speech Restrictions on the freedom of speech are generally only allowed by the courts when the restriction is content neutral and reasonable Content neutral means that the restriction must be aimed at combating a societal problem rather than suppressing speech Corporate political speech is protected by the First Amendment A restriction on commercial speech is generally only allowed when 1 the restriction seeks to implement a governmental interest 2 3 the restriction directly advances that interest and the restriction must not further than necessary Unprotected speech is determined by following the Miller test This speech must 1 an average person finds that it violates community standards 2 3 4 the work appeals to a prurient interest in sex the work shows blatantly offensive sexual conduct and the work lacks serious redeeming merit Unfortunately community standards vary and the Miller test has had inconsistent applications As a result the issue of obscenity has yet to be fully settled The First Amendment Freedom of Religion The establishment clause prohibits the sponsorship of a national religion The free exercise clause prohibits a party from interfering with a person s religious beliefs The Fourth Amendment Searches and Seizures In order to search or seize private property an officer must have a warrant To obtain this warrant probable cause must be shown to a