Business and its Legal Environment

Theories and Sources of Law

Law: Rules enacted and enforced by the

government.

Rule of Law: Laws are applied generally

and equally to everyone.

Definition of Law Aristotle

Rules of conduct

“Pledge that citizens of a state will do justice to one another.”

Greek Philosopher

(384-322 BC)

Definition of Law Plato

A form of social

control.

Greek Philosopher(427-347 BCE)

Definition of Law Blackstone

The command of the

sovereign.

“a rule of civil conduct

prescribed by the supreme

power in a state,

commanding what is right,

and prohibiting what is

wrong.”

Sir William Blackstone (1723–1780)

English Jurist

Definition of Law Holmes

A set of rules that

allows one to

predict how a court

will resolve a

particular dispute.

Oliver Wendel Holmes

Supreme Court Justice.

1841- 1935.

At a minimum, law consists of enforceable rules governing relationships among persons and between persons and society.

There are several different “schools” of law: Natural Law. Positivist view. Historical view. Legal Realism view.

Schools of Legal Philosophy

Natural Law School :

A system of moral and ethical principles that are inherent in human nature and can be discovered by humans through the use of their natural intelligence.

Unchanging value judgments:

That can be determined by human reason.

That supersede any form of human law.

Criticism: Whose moral precepts are to be included in the moral law?

Declaration of Independence

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

Schools of Legal Philosophy

Positivist School: The laws created by a particular society at a particular point in timeLaw is the expression of the will of the sovereign.Law and morals are separate.Correct legal decisions can be reached solely by the

use of logic and precedent.Criticism: Refusal to consider social and ethical

factors leads to negative results for society. Law, and therefore rights and ethics, are not

universal. The morality of a law, or whether the law is “bad or good”, is irrelevant.

SOURCES OF LAW

CONSTITUTIONS LEGISLATURES COURTS EXECUTIVE ORDERS ADMINISTRATIVE AGENCIES

Legislature as a Source of Law

Bill introduced by one or more legislators in house (or senate). Referred to the appropriate committee and subcommittee. Hearings held by subcommittee. Bill is marked up (drafted in precise form), referred to subcommittee for

vote. If affirmative vote, forwarded to committee. If accepted, reported back to house (or senate). If passed by one house, sent to other house. If passed there, sent to

conference committee to iron out differences. When identical bill passed by both houses, sent to President for his

signature. If President signs (or allows 10 days to go by without taking action) bill

becomes law. If President vetoes, back to Congress to see if they can override with 2/3

majority of both houses.

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Judicial Branch as a Source of Case Law Interpretation of statutes necessary when deciding

cases. Use of legislative history.

Cases as precedents.(Stare Decisis) Lower courts must follow previous cases. Even higher courts usually follow their previous

decisions. (However,will sometimes overrule precedent)

They usually accept previous interpretations of statutes.

They usually follow previous decisions of courts when there is no relevant statute.

Stare Decisis (Precedent)Justice Musmanno: Bosely v. Andrews (1958)

Stare Decisis is the viaduct over which the law travels in

transporting the precious cargo of justice. Prudence and a sense of

safety dictate that the piers of that viaduct should be examined and

tested from time to time to make certain that they are sound strong

and capable of supporting the weight above.

A precedent…should appeal to logic and a genuine sense of

justice.

A precedent cannot, and should not, control, if its strength depends

alone on the fact that it is old, but may crumble at the slightest

probing touch of instinctive reason and natural justice.

Stare Decisis (Precedent) (Justice Wanamaker: Adams Express v. Beckwith)

“A decided case is worth as much as it weights

in reason and righteousness, and no more”

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Executive Branch as a Source of Law

The President Treaty making. Executive orders.

The President giving orders to the officials who work for him in federal agencies.

Administrative Agencies Congress delegates rule-making authority to agencies. Examples of administrative agencies:

Securities and Exchange Commission Federal Trade Commission Equal Employment Opportunity Commission Occupational Safety and Health Administration

Administrative Agencies

EQUITY COURT

Available when money damages are not adequate.

Equitable remedies Specific performance Injunction rescission