CHAPTER 1 INTRODUCTION TO LAW DAVIDSON KNOWLES FORSYTHE

CHAPTER 1 INTRODUCTION TO LAW DAVIDSON, KNOWLES & FORSYTHE Business Law: Cases and Principles in the Legal Environment (8 th Ed. )

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. THE RELATIONSHIP BETWEEN LAW, ORDER, AND JUSTICE l Law: enforceable rules created for social control. – Criminal law: body of law dealing with public wrongs. – Negligence: failure to do something a reasonable person would do. – Substantive law: portion of law that creates and defines legal rights. – Procedural law: methods of enforcing rights. – Injunction: court order prohibiting a person from doing a certain thing. © 2004 West Legal Studies in Business A Division of Thomson Learning 2

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. THE RELATIONSHIP BETWEEN LAW, ORDER, AND JUSTICE l Order: absence of chaos resulting when laws are obeyed. l Justice: process legal system uses to achieve fairness. – Commutative justice: treating everyone the same. – Distributive justice: treating people as individuals. © 2004 West Legal Studies in Business A Division of Thomson Learning 3

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. LAW AS AN ARTIFICIAL LANGUAGE l Terms may have different connotations when used in our legal system: – Legal terms are often not synonymous with everyday words; – Legal terms often have more than one meaning; – Legal terms often have no relation to everyday language. © 2004 West Legal Studies in Business A Division of Thomson Learning 4

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. ORIGINS OF THE LAW OF BUSINESS l Historically, began as a private system in England to influence commerce. l Originated in the English Law Merchant. l Administered by Merchant Courts established in various merchant guilds. l Merchant Courts were integrated into English Common Law. © 2004 West Legal Studies in Business A Division of Thomson Learning 5

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. ORIGINS OF THE LAW OF BUSINESS l Today, the Law of Business focuses on maintaining a competitive environment; l Regulates specific marketing and business activities; l Includes contract and sales law, commercial paper, negotiability, secured transactions, agency, employment, and property law, as well as, laws regulating business organizations. © 2004 West Legal Studies in Business A Division of Thomson Learning 6

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. WHY STUDY THE LAW OF BUSINESS? l Preventive Law: law designed to prevent harm or wrongdoing before it occurs. – How to avoid legal problems. – How to resolve problems quickly as they arise. l Proactive: identifying potential problems and participating in resolving them. – Helps develop valuable decision-making skills. – Can’t be expected to know everything. – If it’s in writing, it’s binding; otherwise it isn’t. © 2004 West Legal Studies in Business A Division of Thomson Learning 7

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. THE NEEDS OF A LEGAL SYSTEM l To be Reasonable; l To be Definite; l To be Flexible; l To be Practical; l To be Published; l To be Final. © 2004 West Legal Studies in Business A Division of Thomson Learning 8

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. PURPOSES OF A LEGAL SYSTEM l l l l Achieve Justice; Provide Police Power; Maintain Peace and Status Quo; Provide Answers; Provide Protection; Enforce Intent; Provide Rehabilitation; Facilitate Commerce. © 2004 West Legal Studies in Business A Division of Thomson Learning 9

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. JURISPRUDENCE l Natural Law: source of law is Nature, God, or Reason. – There are certain legal values or value judgements. – These values are absolute. – These values can be determined by human reason. – Once values are determined they supersede any form of human law. © 2004 West Legal Studies in Business A Division of Thomson Learning 10

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. JURISPRUDENCE l Legal Positivism: the source of law is the legislature. l Sociological: the source of law is contemporary opinion and customs. l Historical: law evolves over time based on custom and social traditions. © 2004 West Legal Studies in Business A Division of Thomson Learning 11

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. JURISPRUDENCE l Law and Economics: classical economic theory should be applied to all areas of the law l Feminist Legal: believes that the law does not treat women equally. l Critical Legal Studies: law is a combination of legal and non-legal beliefs. © 2004 West Legal Studies in Business A Division of Thomson Learning 12

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. CHANGE IN THE LEGAL SYSTEM l Distinguish these three questions: – What is the law about this topic? – How do people and businesses behave? – What should the law be on this topic? l Answers will vary based on geographical area, views about jurisprudence, and values. © 2004 West Legal Studies in Business A Division of Thomson Learning 13

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. SOURCES OF LAW IN THE U. S. LEGAL SYSTEM l l l l Constitutions; Treaties; Statutes; Ordinances; Administrative Regulations; Common Law and Law Merchant; Case Law; Equity. © 2004 West Legal Studies in Business A Division of Thomson Learning 14

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. HOW IS THE LAW CLASSIFIED? l Federal vs. State Law. l Common vs. Statutory Law. l Civil vs. Criminal Law. l Substantive vs. Procedural Law. l Public vs. Private Law. © 2004 West Legal Studies in Business A Division of Thomson Learning 15

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. LEGAL SYSTEMS IN OTHER COUNTRIES l Judges rely primarily on codes and secondarily on statutes passed by the legislative bodies. l Legal systems based on religious teachings and writings. © 2004 West Legal Studies in Business A Division of Thomson Learning 16

BUSINESS LAW: Cases & Principles Davidson • Knowles • Forsythe 8 th Ed. THE ATTORNEY-CLIENT RELATIONSHIP l Hiring an Attorney. – Attorney has an obligation to client to keep client confidence. – Ask questions before hiring an attorney. l Resolving Problems with Legal Counsel. – Communicate effectively with your attorney. © 2004 West Legal Studies in Business A Division of Thomson Learning 17