Essentials of Essentials of Business LawBusiness Law

Prepared by Prepared by

Abdesalm BadreAbdesalm Badre

CHAPTER ICHAPTER I

INTRODUCTIONINTRODUCTION

QuestionQuestion

What’s the first thing that comes to What’s the first thing that comes to your mind when you hear the word your mind when you hear the word “LAW”?“LAW”?

PLAINTIFFPLAINTIFF

The person who brings a lawsuit The person who brings a lawsuit against another person.against another person.

The party who begins a lawsuit by The party who begins a lawsuit by filing a complaint in the appropriate filing a complaint in the appropriate court.court.

DEFENDANTDEFENDANT

The person against whom a lawsuit is The person against whom a lawsuit is brought, or who is charged with a brought, or who is charged with a violation of the law. violation of the law.

The party against whom a lawsuit is The party against whom a lawsuit is brought and from whom recovery is brought and from whom recovery is sought. sought.

It is important to understand certain It is important to understand certain legal principles because they affect legal principles because they affect both your business and your personal both your business and your personal life.life.

Accountants for example need to know Accountants for example need to know that if they do their work carelessly that if they do their work carelessly and cause someone to sustain a loss, and cause someone to sustain a loss, they could be sued. they could be sued.

Just as important, a person who is Just as important, a person who is planning to rent an apartment or buy a planning to rent an apartment or buy a home needs to know his/her legal home needs to know his/her legal rights as they relate to property.rights as they relate to property.

Applications of LawApplications of Law

The effects of law are felt throughout The effects of law are felt throughout society. Indeed, some aspects of the society. Indeed, some aspects of the law apply to all persons, institutions, law apply to all persons, institutions, and organizations.and organizations.

Personal Applications of LawPersonal Applications of Law Business Applications of LawBusiness Applications of Law Government Applications of LawGovernment Applications of Law

Personal Applications of LawPersonal Applications of Law Imagine, for one moment, how the law affects Imagine, for one moment, how the law affects

just one day in your life. The alarm clock that just one day in your life. The alarm clock that awakens you in the morning, is set to a time that awakens you in the morning, is set to a time that is regulated by a law establishing standard time is regulated by a law establishing standard time zones.zones.

The clothing you wear is labeled in compliance The clothing you wear is labeled in compliance with governmental regulations.with governmental regulations.

Your right to drive a car is regulated by state Your right to drive a car is regulated by state laws, and speed limits and other traffic laws are laws, and speed limits and other traffic laws are often the responsibility of state or local officials.often the responsibility of state or local officials.

You know that no one else may occupy your You know that no one else may occupy your home while you are away at school or work, or on home while you are away at school or work, or on a vacation.a vacation.

Business Applications of LawBusiness Applications of Law Every business must comply with many laws that Every business must comply with many laws that

are primarily aimed at regulating business are primarily aimed at regulating business activity.activity.

A firm that wishes to set up business in a A firm that wishes to set up business in a particular community may find that there are particular community may find that there are laws that prohibit such activities.laws that prohibit such activities.

For example, local zoning laws might prohibit the For example, local zoning laws might prohibit the operation of a noisy factory in a residential area.operation of a noisy factory in a residential area.

Laws prohibit or regulate the operation of certain Laws prohibit or regulate the operation of certain businesses that might pollute the environment.businesses that might pollute the environment.

Other laws require that businesses provide safe Other laws require that businesses provide safe working conditions for employees or demand that working conditions for employees or demand that only qualified persons perform certain jobs.only qualified persons perform certain jobs.

Government Applications of LawGovernment Applications of Law

Legislatures at all levels of Legislatures at all levels of government pass many laws that government pass many laws that apply only to businesses and apply only to businesses and individuals, but some apply individuals, but some apply specifically to governments.specifically to governments.

For example, the government may For example, the government may pass a law that provides funding for pass a law that provides funding for building highways or for low-income building highways or for low-income housing.housing.

ORIGINS OF LAWORIGINS OF LAW

The ever-changing body of law that The ever-changing body of law that affects all persons in our country has affects all persons in our country has arisen from a number of sources:arisen from a number of sources:

Constitutional lawConstitutional law Common lawCommon law Statutory lawStatutory law

Constitutional LawConstitutional Law

In USA, the principles and ideals that In USA, the principles and ideals that protect individual liberty and freedom are protect individual liberty and freedom are incorporated in the Constitution of the incorporated in the Constitution of the United States (the federal constitution). This United States (the federal constitution). This historic document gives the federal historic document gives the federal government certain reasonable powers and, government certain reasonable powers and, at the same time, clearly limits the use of at the same time, clearly limits the use of those powers.those powers.

In addition, each state has a constitution of In addition, each state has a constitution of its own (the state constitution) that provide its own (the state constitution) that provide safeguards for the rights of individuals safeguards for the rights of individuals within that particular state.within that particular state.

Common LawCommon Law

After the Revolutionary War, one of the After the Revolutionary War, one of the most difficult tasks faced by the newly most difficult tasks faced by the newly independent nation was to establish a independent nation was to establish a system of law.system of law.

Because the original states were formerly Because the original states were formerly English colonies, it is not surprising that the English colonies, it is not surprising that the new states adopted the system of laws that new states adopted the system of laws that had been used in England for hundreds of had been used in England for hundreds of years.years.

They applied ‘They applied ‘stare decisisstare decisis’ that is to rely ’ that is to rely on previous legal decisions when similar on previous legal decisions when similar disputes arose.disputes arose.

Statutory LawStatutory Law

The laws passed by Congress are The laws passed by Congress are called called statutesstatutes, and the field of the , and the field of the law that deals with these statutes is law that deals with these statutes is known as known as statutory lawstatutory law..

A law that is passed by a local A law that is passed by a local government such as a city council is government such as a city council is called an called an ordinanceordinance. .

CLASSIFICATION OF LAWS 1/2CLASSIFICATION OF LAWS 1/2

The various laws, regardless of origins, The various laws, regardless of origins, can be grouped into several can be grouped into several classifications, each of which represents classifications, each of which represents a legal specialty:a legal specialty:

Constitutional lawConstitutional law Civil lawCivil law Criminal lawCriminal law Administrative lawAdministrative law International lawInternational law

CLASSIFICATION OF LAWS 2/2CLASSIFICATION OF LAWS 2/2

Constitutional law:Constitutional law: is the study of the federal is the study of the federal Constitution, its interpretation by the federal Constitution, its interpretation by the federal courts, and its relationship to existing laws.courts, and its relationship to existing laws.

Civil law:Civil law: is the study of the rights and is the study of the rights and obligations of individuals. It includes the law for obligations of individuals. It includes the law for property and the law of contracts.property and the law of contracts.

Criminal law:Criminal law: is concerned with acts against is concerned with acts against society and the regulation of criminal activity.society and the regulation of criminal activity.

Administrative law:Administrative law: is concerned with the is concerned with the conduct of governmental administrative agencies conduct of governmental administrative agencies and their regulations. Examples include tax laws, and their regulations. Examples include tax laws, and laws dealing with transportation and trade.and laws dealing with transportation and trade.

International law:International law: is concerned with the conduct is concerned with the conduct of nations in their relations with other nations.of nations in their relations with other nations.

MORAL LAWMORAL LAW

Since earliest times, people have Since earliest times, people have recognized that they are to a certain recognized that they are to a certain extent responsible for one another and extent responsible for one another and have obligations to one another beyond have obligations to one another beyond those required by the law.those required by the law.

A person sees someone drowning has a A person sees someone drowning has a moral obligation to try to save him/her, moral obligation to try to save him/her, and a person who hears someone and a person who hears someone screaming for help in the night has a screaming for help in the night has a moral duty to at least call the police.moral duty to at least call the police.

End of Chapter oneEnd of Chapter one

HOMEWORK due next Thursday…HOMEWORK due next Thursday…

Interview the owners or managers Interview the owners or managers of small businesses to determine of small businesses to determine the levels of laws to which the the levels of laws to which the firm is subject.firm is subject.

Further, ask the interviewee to Further, ask the interviewee to provide examples.provide examples.