OBE 118 – Legal Environment of Business

INTRODUCTIONDr. Donald L. Carper

Law is powerful

• Affects all people, from CEO’s to children• Affects most of life, from work to leisure

Law is important But which is more important -- written law or

the people who enforce it?

Law is fascinating Complex, but never just theoretical

To examine law is to examine social life

One person alone does not require law

Any investigation about law could begin or include

Definitions of law Philosophy of law History of law Functions of law and Sources of law

All of these topics are interrelated

Whatever definition of law chosen there exists a set of rules or “general standards of conduct, established and enforced by government officials.”

Law consists of

Norms (standards of behavior)

Regularly enforced by coercion

By persons authorized by society

As stipulated by courts of law

Classifications & Categories of LAW helpful to understanding law

Classifications & Categories of Law helpful to understanding Law

PUBLIC LAW PRIVATE LAW

CRIMINAL LAW CIVIL LAW

SUBSTANTIVE LAW PROCEDURAL LAW

COMMON LAW STATUTORY LAW

LAW EQUITY

Private v. Public Law

• Public law: Body of law directly concerned with public rights and obligations.

• Private law: Body of law regulating the rights and duties existing between private persons. The rights and duties are created by the affected parties.

Civil v. Criminal Law

• Civil law: Body of law directly concerning the rights and duties between parties.

• Criminal law: Body of law dealing with crimes and their punishment

CONTRAST BETWEEN CIVIL AND CRIMINAL LAW

Civil Criminal

Nature Rights and duties of individuals to each other

Wrongs against society as a whole

Person Initiating Action

Plaintiff or person injured

Either federal, state, or local prosecutor

Burden of Proof in Trial

Preponderance of the evidence

Beyond a reasonable doubt

Result sought Money damages or equitable remedy

Death, fine or imprisonment

Substantive v. Procedural Law

• Substantive law: General principles and detailed rules defining legal rights and duties.

• Procedural law: General principles and detailed rules that define the methods of administering the substantive law

SUBSTANTIVE LAW: General principles and detailed rules defining legal rights and duties.

Example of a substantive law

Definition of minor: “a person below the age of legal competence. For most purposes, in most states, minority ends at age 18. For some purposes, such as the purchase and consumption of alcoholic beverages, it may end later, up to the age 21.”

Procedural Law Examples

•Rules of evidence such as the hearsay rule •Method of filing a lawsuit such as the requirement of a complaint and service of summons•To be able to seize assets of a judgment debtor the law requires a creditor to file an affidavit as to the debtor’s ownership of any assets to be seized

EXAMPLES

Substantive law Procedural law

Agency Administrative procedure

Contracts Appellate procedure

Criminal law Criminal procedure

Partnerships Evidence

Torts Civil procedure

EXAMPLES

Substantive law Procedural law

Agency Administrative procedure

Contracts Appellate procedure

Criminal law Criminal procedure

Partnerships Evidence

Torts Civil procedure

Case: Oculist's Case (1329), p. 8

• This seal was found in the bed of the Moselle River in France. The Romans were the first people to have specialized eye doctors, called oculists, who were devoted to treating eye diseases such as cataracts

Case: Oculist's Case (1329), p. 8

• The defendant, attempting to heal the plaintiff, left him blind in one eye. The plaintiff has sued in trespass

• What was the defendants response?

• Was it procedural or substantive?

• How did the court rule?

Case: Oculist's Case (1329), p. 8

• Consider the underlying facts and the probable legal treatment today.

Common Law v. Statutory Law

• Common law: Laws from the courts as opposed to a legislature or court of equity Common law is also called unwritten law.

• Statutory law: Laws enacted by Congress state legislatures or local government. Statutory law is also called written law.

COMMON V. STATUTORY LAW

Common and also called case law

From the courts

After the fact

Narrow

Based on actual situations and conflict

Law maker is neutral

Law from court cases may be changed in the future by courts or by the legislature

COMMON V. STATUTORY LAW

STATUTORY LAW

From the legislature and executive branch

Prospective

Can be broad or narrow

Can be initiated at any time by legislator

Lawmaker can be an advocate

Interpreted by the courts

May only be changed by courts only if unconstitutional

COMMON LAW STATUTORY LAW

Creation Judicial branch through decisions in cases appearing before the courts

Legislative branch through a formal law-making process

Form Rules found in official fact patterns & decisions of prior cases

Codified text

Scope Narrow-limited to actual cases

Broad-subject only to constitutional limitations

Effects of Social Forces

Indirect-judges somewhat insulated from political pressure

Direct-Through the political process

STATUTES, CODES, AND ORDINANCES

STATUTE Single Legislative enactment. A completed and signed bill.

CODE Statute indexed by subject matter or a comprehensive statute

ORDINANCE City or County Statute

Equity

• Equity: A civil trial held without a jury when relief sought by the plaintiff is equitable in nature, such as an injunction, or a divorce or dissolution of a marriage.

• Other than equity: Often referred to as the common law.

Equity Other than Equity

Subject Matter Family law, matter juvenile, probate trusts, foreclosure, when remedy it law is inadequate

Everything but equity

Fact Finding No jury-chancellor of trial makes findings and a issues degree

Jury-leading to judgment

Remedies Specific performance, injunction, recission, restitution, reformation

Money damages or replevin

Enforcement Contempt of court Can attach defendant’s property

SOURCES OF LAW

• Constitutional law

• Treaties• Administrative

law• Statutory law• Case law

• Federal law

• State law

Constitutional

• The U.S. Constitution is the Supreme Law of The United States.

• State constitutions are supreme within their own borders to the extent that they do not violate or are inconsistent with the U.S. Constitution or other federal law.

SOURCE DESCRIPTION

TREATIES Agreements With Foreign Nations made by the President and ratified by a 2/3 vote of the Senate.

An Exclusive Federal Function.

SOURCE DESCRIPTION

STATUTORY LAW Created by Federal, State, and Local Legislatures or Governing Bodies.

Neither Federal Nor State Statutes are Valid if in-consistent with the U.S. Constitution.

State Statutory Law is invalid if inconsistent with its Constitution.

Uniform Statutes Create uniform State Law in those adopting States.

Administrative Law DESCRIPTION

Law Concerned with the power and actions of Administrative agencies at all levels of government.

Enabling Legislation from the U.S. Congress create federal administrative agencies. Also created at State and local levels of government.

Agency functions include:Rule-making

InvestigationEnforcement, &Adjudication.

COMMON LAW DESCRIPTION

Use of past judicial decisions and reasoningthrough the applicationof the doctrine of staredecisis-the rule of precedent-in deciding cases.

Originated in England.

Applies to situations not otherwise covered by statutory law.

COMMON LAW DESCRIPTION

Use of past judicial decisions and reasoningthrough the applicationof the doctrine of staredecisis-the rule of precedent-in deciding cases.

Originated in England.

Applies to situations not otherwise covered by statutory law.