Part OneThe Legal System !

and !The Legal Environment !

of Business

Chapter 1: Introduction to Law• Law is the system of rules of conduct issued by a sovereign

state commanding what is right and prohibiting what is wrong.

• We have laws to provide a stable framework to keep society operating as smoothly and justly as possible.

• Four sources of law are judicial decisions, constitutions, statutes, and administrative agency orders.

• Crimes are offenses against society as a whole. Torts are private or civil wrongs or injuries for which the injured person may bring an action for damages. Ethics is the study of the morality of conduct, its motives and duties.

Chapter 2: Courts and Court Procedure

• The function of the courts is to declare and apply judicial precedents and to interpret the laws passed by the legislative branch of government.

• In our society, courts are bound by decisions of higher appellate courts. Trial courts are therefore bound by their appellate courts and all courts, both federal and state, are bound by decisions of the U.S. Supreme Court.

• The first step in filing a lawsuit is for the plaintiff to file a complaint or petition with the clerk of the court.

• In a jury trial, the jury is selected and sworn in. The plaintiff and then the defendant make an opening statement. The plaintiff calls witnesses and they testify. The defendant then calls witnesses to testify. After all witnesses have testified and all the evidence has been presented, closing statements are made, the jury is instructed by the judge, and then the jury deliberates its verdict.

Chapter 3: Business Torts and Crimes• The basis for intentional tort liability includes (a) an act by the defendant, (b) an

intention to cause the consequences of the act, and (c) causation. The basis for negligent tort liability includes (a) a duty of the defendant, (b) breach of the duty, (c) the breach was the actual and proximate cause of an injury, and (d) injury.

• The generally recognized business torts include product liability, interference with a contract or economic advantage, and confusion about a product. Interference with a contract or economic advantage occurs when a person who is not a party to a business relationship improperly induces one of the parties to break the relationship. Confusion about a product could occur by making false statements about another’s product or by representing goods or services as being the goods or services of another.

• Business crimes are crimes committed against a business or in which the perpetrator uses a business to commit the crime.

• Computer crimes are crimes committed with the aid of a computer or crimes involving computers. The three types of computer crimes that affect business are: trespass/unauthorized use of or access to a computer; fraud/larceny and embezzlement; and criminal copyright infringement/willful copyright infringement for business advantage or financial gain.

Chapter 4: Government Regulation of Business

• Law is the system of rules of conduct issued by a sovereign state commanding what is right and prohibiting what is wrong.

• We have laws to provide a stable framework to keep society operating as smoothly and justly as possible.

• Four sources of law are judicial decisions, constitutions, statutes, and administrative agency orders.

• Crimes are offenses against society as a whole. Torts are private or civil wrongs or injuries for which the injured person may bring an action for damages. Ethics is the study of the morality of conduct, its motives and duties.