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Chapter 1

Sources ofbusiness law and

the global legalenvironment

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Chapter Outline

The Nature Of Law

The Common Law Traditions

Sources Of Law

Classifications Of Law

The Constitution As It Affects Business

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The Nature Of Law

There have been and will continue to be

different definitions of law .

The Greek philosopher Aristotle

saw law as a : pledge that citizen of a

state will do justice to one another .

Aristotles mentor, Plato, believed that

law was a form ofsocial control .

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The Nature Of Law (contd)

o The Roman oratorandpolitician

Cicero contended that law was the

agreement of reason and nature, the

distinction between the just and theunjust.

o The Britishjurists Sir William

Blackstone described law as : a rule

of civil prescribed by the supreme

power in a state, commanding what

is right, and prohibiting what is

wrong .

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The Nature Of Law (contd)

Although these defections vary on

their particulars, they all are based on

the following general observations :

law consists of enforceable rules

governing relationships among

individuals and between individuals

and their society .

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The Common Law Traditions

Stare Decisis

The Practice of deciding new cases

by referring to former decision, or

precedents, eventually became a

cornerstone of the English and

American judicial systems.

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The Common Law Traditions(contd)

The Importance of Precedents in Judicial

Decision Making

The doctrine ofstare decisis means

that once a court has set forth a

principle of law as applicable to a

certain set of facts, that court and

courts of lower rank must adhere to

that principle and apply it in the future

cases involving similar facts patterns .

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Sources Of Law

* Primary sources of Law , or sources that

establish the law, include the following :

Sources Of Law

Constitutional

Law

Statutory Law

and Legislation

Case Law andCommon Law

Doctrines

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Sources Of Law (contd)

ConstitutionalLaw

The federal government and the state

have separate written constitutions that set

forth the general organizations, powers, and

limits of their respective governments.

Constitutional Law : is the law as

expressed in these constitutions .

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Sources Of Law (contd)

Statutory Law andLegislation

o Status enacted by legislative

bodies at any level of government

make up another source of law,

which is generally referred to as

statutory law .

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Sources Of Law (contd)

Case Law and CommonLaw Doctrines

The body of law that was first

developed in England and that is still

used today in the united states consists

of the rules of law announced in the

court decisions.These rules of law include interpretations of

constitutional provisions, of statues enacted by

legislatures, and of regulations created by

administrative agencies .

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Sources Of Law (contd)

Case Law and CommonLaw Doctrines

The common laws --- the doctrines andprinciples embodied in case law --- governs all

areas not covered by statuary law ( or agency

regulations issued to implement various

statues ) .

*EXAMPLE#6*EXAMPLE#6In disputes concerning contracts

for the sale of goods, the Uniform Commercial

Code (statuary law) applies when one of its

provisions supersedes the common law of

contracts .

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Classifications Of Law

The huge body of the law may be broken down

according to several classification systems .

For example, one classification systems

divides the law into :

Substantive Law

All laws that define,describe, regulateand create legal

rights andobligations

Procedural Law

All laws that establishthe methods of

enforcing the rightsestablished by

substantive law

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Classifications Of Law(contd)

Other classification systems divide law into

federal law and state law

Private Law

Dealing withrelationshipsbetween persons

Public Law

Addressing the

relationshipbetween thepersons and their

government

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Classifications Of Law(contd)

One divides the law into criminal and civil

law; the other divides the law into national

and international law .

Civil Law And Criminal Law

Civil Law

Spells out the rights and

duties that exist betweenpersons and their

governments, and the reliefavailable when a persons

rights are violated

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Classifications Of Law(contd)

Civil Law And Criminal Law

Typically, in a civil case, a private party

uses another private party ( although the

government can also sue a party for a

civil law violation ) to make that other

party comply with a duty or pay for the

damage caused by failure to comply with

a duty .

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Classifications Of Law(contd)

Civil Law And Criminal Law

*EXAMPLE#7*EXAMPLE#7if a seller fails toif a seller fails toperform a contract with a buyer, theperform a contract with a buyer, the

buyer may bring a lawsuit againstbuyer may bring a lawsuit against

the seller. The purpose of the lawsuitthe seller. The purpose of the lawsuit

is either to compel the seller tois either to compel the seller toperform as promised or, moreperform as promised or, more

commonly, to obtain moneycommonly, to obtain money

damages for the sellers failure todamages for the sellers failure to

perform .perform .

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Classifications Of Law(contd)

Civil Law And Criminal Law

CriminalLaw

Has to do with the wrongscommitted against societyfor which society demand

redress .

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Classifications Of Law(contd)

Civil Law And Criminal Law

Criminal defendants are thus prosecuted

by public officials, such as a districtattorney(D.A.) on behalf of the state, not by

their victims or other private parties .

Whereas in a civil case the object is to

obtain remedies to the injured party, in a

criminal case the object is to punish the

wrongdoers in an attempt to deter others

from similar actions .

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Classifications Of Law(contd)

Civil Law And Criminal Law

Penalties for violations of criminal

statutes consists of fines and/or

imprisonment---and, in some cases,

death .

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Classifications Of Law(contd)

National Law

The law of particular nation is nationallaw .

National law, of course, varies from

country to country, because each nations

law reflects the interests, customs,activities, and values that are unique to its

particular culture .

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Classifications Of Law(contd)

In contrast to the national law,international lawapplies to more than

one nation.

International lawcan be defined asa body of written and unwritten laws

observed by independent nations and

governing the acts of individuals as

well as governments .

International Law

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Classifications Of Law(contd)

National And

International Laws

o The key difference between national

and international law is that thenational law can be enforced by

government authorities. If a nations

violates an international law, however,

the most that other countries or

international organizations can do is to

resort to coercive actions against the

violating nation .

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Classifications Of Law(contd)

National And

International Laws

Treaties

A treaty is an agreement between two

or more nations that creates rights and

duties binding on the parties to the

treaty, just as a private contract createsrights and duties binding on the parties

to the contract .

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Classifications Of Law(contd)

National And

International Laws

Treaties

To give effect of a treaty, just a private

contact creates rights and duties binding on

the parties to the contract .

To give effect of a treaty, the supreme

power of each nation that is a party to the

treaty must ratify.

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Classifications Of Law(contd)

National And

International Laws

International Organizations International organizations and conferences

also play an important role in the

international legal arena .

International organizations and conferences

adopt resolutions, declarations, and other

types of standards that often require a

particular behavior of nations.

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Classifications Of Law(contd)

National And

International Laws

International Organizations

The general Assembly of the United

Nations, for example, has adopted

numerous resolutions and declarations

that embody principles of international

law and has sponsored conferences that

have lead to the information of

international agreements .

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The Constitution As It

Affects Business

Each of the sources of law just

discussed helps to frame the legal

environment of business .

Because laws that govern business

have their origin in the lawmaking

authority granted by the U.S.Constitution.