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1Prentice Hall © 2007
PowerPoint Slides to accompanyTHE LEGAL ENVIRONMENT OF BUSINESS
AND ONLINE COMMERCE 5E, by Henry R. Cheeseman
Chapter 1Legal Foundations and Global
Environment
Prentice Hall © 2007 2
What Is Law? Law consists of rules
that regulate the conduct of individuals, businesses, and other organizations within society. It is intended to protect persons and their property from unwanted interference from others.
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Functions of Law
Keeping the peace Shaping moral standards Promoting social justice Maintaining the status quo
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Functions of Law
Facilitating orderly change Facilitating planning Providing a basis for
compromise Maximizing individual freedom
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Qualities of the Law
Fairness The American legal system is
one of the most comprehensive, fair, and democratic systems of law ever developed and enforced.
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Qualities of the Law
Flexibility The American legal system is
generally responsive to cultural, technological, economic, and social changes.
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What Is Jurisprudence?
Jurisprudence is the philosophy or science of law.
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Schools of Jurisprudential Thought
Natural school—Believes law is based on what is “correct”
Historical school—Believes law is an aggregate of social traditions and customs
Analytical school—Believes law is shaped by logic
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Schools of Jurisprudential Thought
Sociological school—Believes law is a means of achieving and advancing certain sociological goals
Command school—Believes law is a set of rules developed and enforced by the ruling party
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Schools of Jurisprudential Thought
Critical legal studies school—Believes legal rules are unnecessary and that legal disputes should be solved using rules of fairness
Law and economics school—Believes promoting market efficiency should be the central concern of legal decision making
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History of American Law English common law
Developed by judges who issued their opinions when deciding a case. The principles became precedent for later judges deciding similar cases.
49 states base their legal systems on common law.
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History of American Law Law court
A court that developed and administered a uniform set of laws decreed by the kings and queens after William the Conqueror. Legal procedure was emphasized over merits.
Court of Chancery (Equity Court) Court that granted relief based on fairness Equitable remedies were shaped to fit
individual situations. Merchant court
Courts that were established to administer the “law of merchants”
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Sources of U. S. Law
Constitutions Treaties Codified law Executive orders Regulations and administrative
orders Judicial decisions
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Constitutions The U.S. Constitution
established the structure of the federal government.
Legislative branch Executive branch Judicial branch
The U.S. Constitution and treaties take precedence over all other conflicting laws.
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Treaties
A treaty is a compact made between two or more nations.
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Codified Law Statutes
Written law enacted by the legislative branches of federal and state governments
Ordinances Laws enacted by local government
bodies such as cities and municipalities, counties, school districts, and water districts
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Executive Orders An executive
order is an order issued by a member of the executive branch of government.
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Administrative Agency Rulesand Regulations
The legislative and executive branches of federal and state governments establish administrative agencies to enforce and interpret statutes enacted by Congress and state legislatures.
Many agencies regulate business.
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Judicial Decisions
A judicial decision is a decision about an individual case issued by a federal or state court.
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Doctrine of Stare Decisis Based on the common law tradition, past
court decisions become precedent for deciding future cases.
Precedent is a rule of law established in a court decision. Lower courts must follow the precedent established by higher courts.
Stare decisis—Latin for “to stand by the decision”—means adherence to precedent.
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Priority of Law in the U.S. The US Constitution and treaties take
precedence over all other laws. Federal statutes take precedence over
federal regulations. Valid federal law takes precedence
over any conflicting state or local law.
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Priority of Law in the U.S. State constitutions rank as the
highest state law. State statutes take precedence
over state regulations. Valid state law takes
precedence over local laws.