Business Law Chapter 1 Review Introduction to Law The law determines who may conduct business how it is to be conducted and what sanctions are to be imposed if its requirements are not met Law Influences Creation of a corporation Liability of owners for business debts Responsibilities of an employer toward employees Use of property owned by business to produce product Income taxes a business must pay Liability of owners for business debts Impact of business when one owner dies Definitions of Law civilization to exist Rules and regulations established by government and applied to people in order for o In attempting to define law it is helpful to look at its purposes or functions A basic purpose of law in a civilized society is to maintain order This is the prime function of that body of law known as criminal law Resolve disputes that arise between individuals and to impose responsibility if one person has a valid legal claim against another o As in a suit for breach of contract Law is simply what the courts determine it to be as an expression of the public s will in resolving these issues and disputes The rules and principle applied by the courts to decide controversies o 1 Legislative Law o 2 Judicial Pronouncements These are laws including the federal constitution and state constitutions that have been passed by legislative bodies These are legal statements made by courts They can be interpretations of statues or they can be based on common law principles that were created by the courts decades or centuries ago o 3 Procedural law Most often this type is the product of legislative branch aimed at determining how lawsuits are handled in the courts These laws include such matters as the rules of evidence and related issues The first two elements provide the rules of substantive law that the courts apply to decide controversies The third provides the machinery whereby these rules of substantive law are given effect and applied to resolve controversies Another view of law is that it is a method of social control An instrument of social political and economic change Classification of Legal subjects Substantive Law resolve disputes Procedural Law o Laws that regulate and control the rights and duties of persons and are used to o Laws that establish the process by which litigation is conducted Substantive law is the part of the law that defines rights procedural law establishes the procedures by which rights are enforced and protected Public Law includes those bodies of law that affect the public generally o Constitutional Law o Administrative Law o Criminal Law Concerns itself with the rights powers and duties of federal state governments under the U S Constitution and the constitutions of the various states Concerned with the multitude of administrative agencies such as the Federal Trade Commission and the National Labor Relations Board Consists of statues that forbid certain conduct as being detrimental to the welfare of the state or the people generally and provides punishment for their violation Private Law That body of law that pertains to the relationships between individuals in an organized society o Contracts Sales Commercial paper Agency Business organizations o Torts o Property The primary source of litigation in this country and is also a part of the total body of law in areas such as agency and sales A tort is a wrong committed by one person against another or against another s property The basic ingredient in our economic system Wills trusts estates in land personal property bailments and many more Sources of Law Court Decisions Our law comes from 4 basic sources o Constitutions o Legislation o Judicial Decisions o Rules regulations and decisions of administrative agencies Common Law Civil Law o That body of law deriving from judicial decisions o A system of law based on legislation or codes as in the European system of codified law o Ex Louisiana if the sign does not say you can turn right on red then you cannot turn right Comes from French and Spanish heritage Basic Constitutional Principles All state laws must conform to or be in harmony with the federal constitution as well as with the constitution of the appropriate state Two Basic principles of the constitution o Doctrine of separation of powers The doctrine that the legislative executive and judicial branches of government function independently of one another and that each branch serves as a check on the others There is separation between the federal government and the state Vertical aspect government Horizontal Aspect Separation of powers between the three branches o Doctrine of Judicial Review The power of courts to declare laws and executive actions unconstitutional Created in Marbury vs Madison 1803 Courts have the power to review the actions of the legislative and executive branches to determine if they are being constitutional Legislation Statute Ordinance Code conduct Interpreting Legislation Theory o A law passed by congress or the legislative body of a state o Generally speaking the legislative act of a municipality A city council is a legislative body and it passes ordinances that are the laws of the city o A collection or compilation of the statues passed by a legislative body on a particular subject o U S Code the statues of the United States that attempt to regulate general o Legislation expresses the will or intent of the legislature on a particular subject Defects 1 It is not possible to express the legislative intent in words that will mean the same thing to everyone Statutes by their very nature are written in general language which frequently is ambiguous 2 The search for legislative intent often is complicated by the realization that the legislative body in fact had no intent on the issue in question and the law is incomplete o Sometimes the question about legislation concerns now what the legislature intended bu what it would have intended had it considered the problems Technique of Interpretation o Legislative history used to determine the purpose of the legislation Committee hearings debates and any statement made by the executive requesting the legislation Rules of Statutory interpretation o 1 Criminal statues and taxing laws should be strictly or narrowly construed As a result doubts as to the applicability of criminal and taxing laws will be resolved in favor of the accused or the taxpayer o 2 Remedial statutes those crating a judicial remedy on behalf of one person at the expense of
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