LGST study guide unit 1
LGST study guide unit 1 LGST 3010
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This 14 page Study Guide was uploaded by Sophie Levy on Sunday September 18, 2016. The Study Guide belongs to LGST 3010 at Tulane University taught by Sanda Groome in Fall 2016. Since its upload, it has received 32 views. For similar materials see Legal/Ethical/Regul Busn in Business at Tulane University.
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Date Created: 09/18/16
CH. 1 Law: a body of rules of action or conduct prescribed by controlling authority and having legal binding force - May be in a written code prescribed by an elected legislative body, but may also take the form of judicial decisions and actions of government agencies - Creates duties, obligations, and rights that reflect accepted views of a given society - Provides a mechanism to resolve disputes rising from those duties and rights and allows parties to enforce promises in a court of law - Ex: o Contract law: certain rules regarding agreements o Employment law: certain laws that regulate certain rights of employees Jurisprudence: the science and philosophy of law - Defines several schools of law that are used to describe various approaches to the appropriate function of law and how legal doctrines should be developed and applied - Natural law: proponents argue that a system of moral values, inherent to humankind, form the basis for all law and those certain principals are of a higher authority than national laws - Positivists: believe in a specific set of agreed-upon laws that are enforced uniformly and strictly until the law is changed via the government o Reject the natural law notion of a higher authority that surpasses national law - Legal realism: began after WWI; based on the concept that law is a social institution that should be used to promote fairness by taking into account social and economical realities o Ex: when the Supreme Court interpreted the Constitution to give equality for all Americans during the Civil Rights era Purposes of Law - Provide for some system of order that defines crimes and levies punishment for the violation of crimes - Other uses: o Lawmakers embraced legal mechanisms (like antidiscrimination laws) to help promote equality and justice o Law is a system for resolving disputes by providing a basis for deciding the legal interests and rights of the parties o Law serves as a catalyst for commerce by promoting good faith dealing among merchants and consumers and giving some degree of reliability Language of the Law - A basic understanding of legal terminology is useful to maximize the value of interaction between business owners and attorneys - Jargon or legalese: refers to legal terms - Terminology is primarily a combination of Latin, modern English, and French - Black’s Law Dictionary: the authoritative source for legal terms; first published in 1891 Legal Decisions in a Business Environment - First step: developing legal insight by understanding the fundamentals of legal theory and how they may impact a business - Second step: learning to apply legal theories in practice and recognizing that having legal awareness may present opportunities for proactive business planning, empowering business owners and managers to limit liability, adding value to the business, etc. - Relying exclusively on attorneys is expensive and involves the risk that a decision will be made without taking everything about the business into account o When managers work cooperatively with their attorney, it results in better strategic business decisions - Retainer fee: an advanced payment by a client that ensures the availability of an attorney to handle general legal matters Role of Counsel - Counsel: attorneys; particularly in the business context o In-house counsel: “general counsel”; for larger companies, counsel may be a part of the executive or midlevel management team May also supervise more attorneys, the “associate counsel” General counsel is responsible for selecting and supervising lawyers form outside paw firms when a particular field of expertise is needed Ex: a trial lawyer, aka a litigator o Majority of companies rely on attorneys aka business lawyers or corporate lawyers employed by law firms Primary sources of law: Modern law is a combination of constitutional law, statutory law, common law, and administrative (regulatory) law - Much of American law is derived from English legal doctrines o In the West and Southwest, there are Spanish influences o In Louisiana, there are French influences - Case of First Impression: a case with issues that have never been litigated before in the court hearing it - Constitutional law: the foundation for all other law in the US and is the supreme law of the land; functions with other sources of the law in three broad areas: 1. Establishing a structure for federal and state governments, setting rules for amending the constitution, and granting specific enumerate powers to the different branches of government a. Enumerated powers: specific powers granted to the federal government, named by Article I, section 8 of the Constitution 2. Establishing the concept of federalism, allowing the federal and state governments shared powers 3. Establishing individual civil rights and providing procedural protections for US citizens from wrongful government actions o Different from other types in terms of permanence and preemption Permanence: a constitution is thought to reflect the basic principles of a particular study and should be amended only in extraordinary cases Preemption: constitutional law is supreme o Exists at both federal and state level - Statutory law o Statutes: written laws passed by the federal or state legislature and either approved or rejected by the executive branch o federal level: Bill: when Congress has drafted a federal statue, but has not passed it yet The President is the executive o State level: State legislature might be called the General Assembly The governor is the executive o Local level Ordinances: written laws; generally, regulate issues such as zoning o Plain meaning rule: applied by courts when interpreting statues o Statutory scheme: the structure of the statute and the format of its mandates in a law o Legislative history: records kept by legislature, including the debates, committee and conference reports, that courts look to when interpreting statutes; provide indication of the intent of the statute o Find the publication of statutory law in the United States Code (U.S.C.) Citation: a specific format used by the legal community to express where a statutory law can be found State statutes are referred to as codes or consolidated statutes Primary Sources of Law cntd. - Common Law: law made by the courts o Ex: with the rise of the internet, courts had to fill in the gaps to apply existing law to the internet until legislature could create statutes o US, the UK, Canada, and Australia use it o Japan and France use civil law: system that requires courts to adhere to a strict interpretation o Doctrine of stare decisis: principle that similar cases with similar facts and issues should have the same judicial outcome Gives confidence that law will remain reasonably constant o Precedent: notion of applying law of previous cases to current Created when an appellate court renders a decision, known as the holding of the case, absent a controlling statutes; then, all lower courts are bound to follow the appellate court’s decision (as long as no new statute has been enacted) Appellate courts: courts that review the decisions of trial courts and have the authority to overturn decisions if they are inconsistent with the current state of the law Precedent on one state court will have no impact on another’s - Administrative Law: the source of law that authorizes the exercise of authority by executive branch agencies and independent government agencies o Federal administrative law is largely authorized by statutes and the Constitution o Administrative agencies: carry out and articulate rules for applying the laws o State legislatures are also empowered to create administrative agencies to address state matters Secondary Sources of Law: used when interpreting statutory law or applying judicially created law - To increase uniformity and fairness across all 50 states; can be rejected - The most important are 1. Restatements of Law: a collection of uniform legal principles focused in a particular area of traditional state law a. developed by law professors, judges, and lawyers in the American Law Institute (ALI) b. Restatements are continuously revised 2. Model State Statues: various sets of statutes drafted by legal experts as a model for state legislatures to adopt in their individual jurisdictions a. Uniform Model Laws: primary focus of model laws is commerce b. Ex: The Uniform Commercial Code is a set of model statutes Criminal Law vs. Civil Law - Civil Law: designed to compensate parties for losses as a result of another’s conduct o Damages: losses - Criminal Law: a protection of society, and the violation of criminal laws results in penalties to the violator such as fines or imprisonment Substantive Law vs. Procedural Law - Substantive Law: provides individuals with rights and creates certain duties o Ex: state common law providing an individual who has suffered losses due to negligence of another the right to obtain restitution - Procedural Law: provides a structure and sets out rules for pursuing substantive rights o Ex: a state statute that prescribes the procedure for using legal means to collect restitution Law vs. Equity - Remedies: Judicial actions, which can be monetary or equitable, taken by the courts and intended to compensate an injured party in a civil lawsuit o Remedy at Equity: when a remedy at law is inadequate o Remedies at Law: Generally, takes the form of money damages o Sometimes, takes the form of equitable relief instead of/in addition to money damages; includes: An injunction/restraining order A specific performance: ordering a party to carry out her obligations as specified in a contract o Needed when there is a Breach of contract: failure to live up to the agreement - Equitable Maxims: used in the context of common law rules that guide courts in deciding cases and controversies before them o Intended to be broad statements of rules that are based on notions of fairness and justice in applying the laws o “Equity aids the vigilant”: The law favors those who exercise vigilance in pursuing their claims and disfavors those who rest on their legal rights by failing to act to protect their rights in a reasonable period of time. o “Substance over form”: When applying the law, courts look to the intent of parties involved and adhere to a standard of good faith and fair play instead of applying the letter of the law in a way that would violate fundamental principles of fairness and consistency. o “Clean Hands Doctrine”: Courts are guided in their decisions not only by the letter of the law, but also on the basis that one seeking the aid of a court must come to the court with clean hands that are unstained by bad faith, misrepresentations, or deceit. Public vs. Private Law - Public laws: derived from some government entity o Ex: statues and administrative regulations - Private Laws: binding between two parties even though no specific statute or regulation provides the rights of the parties o Ex: contract for services CH. 2 Constitution - Federal system: national government coexists with state governments - The Constitution acts to limit the federal government’s powers to regulate individuals and businesses; has three general functions 1. Establishes a structure for the federal government and rules for amending the Constitution 2. Grants specific powers for the different branches of government 3. Provides procedural protections for U.S. citizens from wrongful government actions Structure - Composed of a preamble, seven articles, and 27 amendments - First three articles: establishes enumerated powers to the three branches o Separation of powers: checks and balances: enumerated powers: ensure that no one branch becomes overly dominant over the two o Article I: Legislative: House of Representatives and Senate Power to regulate commerce (commerce clause) Power to tax citizens and businesses Power to regulate bankruptcy, patents, and copyrights General implied power to make all laws necessary for carrying out its enumerated powers (Necessary and Proper Clause) Congress may place conditions on the sue of federal money in order to achieve some public policy agreement o Article II: Executive: President, his staff, and his cabinet Carry out laws made by Congress Act as the commander in chief of the armed forces Enter into treaties and carry out foreign policy Appoint/dismiss federal officers and judges Executive orders: force of law and are typically issued by the president as a method to carry out executive functions of the government o Article III: Judicial: federal court and state court Decides cases and controversies that fall within its authority Constitution establishes boundaries of jurisdiction (legal authority for a court to decide a specific case) Judicial review: a central concept in federal constitution law; the notion that federal courts have the right to invalidate state or federal laws that are inconsistent with the U.S. constitution in some way - Amendments: important for the Constitution’s’ function as a protection of the citizenry from unlawful or repressive acts of government o Bill of Rights: first 10 amendments; preserves the rights of the individual U.S. citizens; establishes and protects citizens’ rights o There have been 27 amendments to the constitution Applying the Constitution - Three standards of review for applying constitutional law - The actions are classified in one of these: 1. Rational basis: Government actions in this are subject to the least amount of scrutiny; a. the government needs to show that the action advanced a legitimate government objective and the action was minimally related to the government’s objective b. actions in this category do not involve any fundamental constitutional rights c. mostly economic and tax-related laws 2. Intermediate-level scrutiny a. Courts will uphold government actions as constitutional so long as the government can prove that its action advanced an important government objective and that the action is substantially related to the government’s objective b. Used in cases involving government action related to regulating time, place, and manner of a political demonstration that is protected under the First Amendment 3. Strict scrutiny a. When the government action is related to a fundamental right or is based on a “suspect” classification like race, national origin, or alienage b. Courts uphold the law only if it’s a compelling government’s objective, the means chosen by the government to advance that objective is necessary, and no less restrictive alternatives exist c. When courts classify this category, it is likely that the governments action is going to be ruled unconstitutional Supremacy Clause: that valid federal laws are always supreme to any conflicting state law; in Article VI - Preemption: the power granted by the supremacy clause to override a state law Commerce Powers - Commerce Clause: Congress’s broadest power, whereby Congress is given the power to regulate commerce among the several states - Interstate vs. Intrastate commercial activity: Congress can regulate 1. Channels of interstate commerce such as railways and highways 2. Instrumentalities of interstate commerce such as vehicles used in shipping 3. The articles moving in interstate commerce - Congress can regulate activity as long as it has a substantial economic effect on interstate commerce - Civil Rights legislation: In 1964, Congress used its commerce power to ban discrimination in places of public accommodation such as hotels and restaurants - Noncommercial activity: when Congress passes a statute that is seemingly unrelated to commerce, the Court has used increased levels of scrutiny to be sure that the activity that Congress seeks to regulate has a sufficient connection to some legitimate economic interest Constitutional Restrictions on State Regulation of Commerce - States are free to regulate commerce so long as 1. It does not impose a discriminatory law on out-of-state business 2. The state law is a legitimate effort to regulate health, safety, and welfare Constitutional protections - Due process: guaranteed by the Fourteenth Amendment - First amendment: freedom of speech, press, religion, expression o Commercial speech: is advertising through print, television, radio, and web-based sources - Fourth amendment: freedom from government-conducted searches without cause or warrant - Fifth and Sixth amendments: rights against self-incrimination and to a speedy jury trial by our peers - Eighth amendment: freedom from cruel and unusual punishments - Fourteenth amendment: due process clause o Equal Protection Clause: prohibits the government from denying citizens equal protection of the laws CH. 3 Judiciary: a set of federal and state courts - Two roles 1. Adjudicate disputes: courts are responsible for interpreting and apply the rules of law and principles of equity to settle legal cases and controversies 2. Judicial review: courts review decisions of lower courts and the actions of other branches of the government to be sure that these decisions and actions are consistent with existing law and that they comply with constitutional requirements - State courts: deals primarily with cases arising form state statutory, state common, or state constitutional law - Federal courts: concerned with national laws, federal constitutional issues, and other cases that are outside the purview of state courts - Court must have Jurisdiction: legal authority over the dispute and parties in the case State courts - Two types: state trial courts and state appellate courts - State trial courts: when one party alleges a violation of some legal right or standard, there will be a lawsuit o Plaintiff: aggrieved party; brings the lawsuit o Defendant: the alleged violator o Inferior trial courts: some courts provide local access to a court for the purpose of resolving relatively simple disputes on an expedited basis; these courts provide an automatic appeal for the losing party, usually to the state trial court Trial de novo: a form of appeal in which the appeals court conducts the new trial as if the original trial had never occurred - State appellate courts o After a trial is over, the losing party must decide whether to file an appeal to the appellate court to get the decision reviewed If the appellate court denies the appeal, then the trial court ruling is binding on the parties in that case o Appellate courts assess the lower court’s decision by: 1. Reviewing lower court transcripts and rulings 2. Reading briefs 3. Sometimes allowing the attorneys to engage in oral argument o Appellate courts do NOT consider new evidence o Remand: to send a case back to the lower court from which it came for further action consistent with the opinion and instructions of the higher court in cases where there is a substantial error o Appellate courts set precedent that is binding on all lower courts Federal Court - U.S. district courts: principal trial courts o Deals with federal law and state law with parties from different states - U.S. courts of appeal: federal appellate courts/circuit courts of appeal - U.S. supreme court: the ultimate arbiter of federal law; reviews decisions of state courts that involve some issue of federal law o U.S. constitution does not specify size of Supreme Court, but it has remained at 9 members since 1869 o Writ of Certiorari: a discretionary order issued by the Supreme Court and federal appellate courts granting a request to argue an appeal; a party filing for an appeal must file a petition Jurisdiction with Venue - Jurisdiction: a court’s authority to decide a particular case based on 1. Who the parties are 2. The subject matter of the dispute - Venue: a determination of the most appropriate court location for litigating a dispute - Cost benefit analysis involving jurisdictional restrictions may affect the managerial decision-making process when a company or individual contemplates filing a lawsuit; litigating disputes in out-of-state courts increases the cost of litigation - Original jurisdiction: courts that are authorized to initially hear a case - Concurrent jurisdiction: when more than one court has jurisdiction over the same case - Property jurisdiction: exercising jurisdiction in a lawsuit based on property located within their jurisdictional boundaries o In rem jurisdiction: allows a court the author to determine title to an object or real estate o Quasi in rem jurisdiction: when a court uses its in rem jurisdiction to compel a litigant to appear in court by attaching property that belongs to the litigant - A court must have both 1. Subject matter jurisdiction: court’s authority over the parties involved in the dispute a. Generally, the issue must involve a federal question: some issue arising form the constitution b. Or, the case must have parties from two different states, diversity of citizenship 2. And personal jurisdiction: a court’s authority over the parties in a legal dispute a. Out of state, the court’s jurisdiction must be authorized by a state long-arm statute: grants the court specific authorization over the defendant due to the defendant’s conduct or other circumstances; if: 1. Transacts business within the state’s borders 2. Commits a negligent act in that state that results in a loss to another party 3. Owns property in the state - Minimum contacts; a defendant’s activities within or affecting the state in which a lawsuit is brought that are considered legally sufficient to support jurisdiction in that state’s court - Zippo standard: the legal framework used by trial courts in determining personal jurisdiction when one party is asserting minimum contacts based on a certain level of Internet activity by the defendant Venues - Country of origin principle: general agreement between the US, Canada, and the EU governments to apply the law of the country in which the defendant’s servers are located Ch. 4 Civil litigation: the term used to describe a dispute resolution process in which the parties and their counsel argue their views of a civil controversy in a court of law STAGES OF LITIGATION - Pre-lawsuit: when an issue arises, one party will typically make an informal demand of the other party in which the principals lay out the basics of the dispute and demand action; may discuss a settlement or other cost-effective ways of settling o Standing: that the party asserting the claim: suffered an injury in fact suffered harm that is direct, concrete and individualized articulates what legal redress exists to compensate for the injury o Statutes of limitations: plaintiff must file the lawsuit within this time limit or the case could be barred forever o Jurisdiction - Pleadings stage o Complaint and summons Complaint: filed by the plaintiff with the local clerk of courts Summons: a formal notification to the defendant that she has been named in the lawsuit and informs her that an answer must be filed within a certain period of time o Answer: if the defendant does not answer on time, she will default judgment and automatically lose the case o Counterclaim: filed by a defendant when she believes that the plaintiff has caused her damages arising out of the very same set of facts as articulated in the complaint o Cross-claim: filed by a defendant to bring in a third party to the litigation who may be partially or fully liable for the damages - Motions: a document filed by one party that requests court action in a matter pertaining to the litigation - Discovery Stage: the parties attempt to collect more evidence for trial o Inculpatory evidence: tends to prove a criminal offense or civil wrong o Exculpatory evidence: evidence that tends to prove innocence or non-liability o Subpoena: a court order compelling a person to testify and/or produce evidence in her possession o Methods Depositions: oral questions asked of either a party or a witness in the case Interrogatories: written questions submitted to the opposing party that must be answered in writing within a time limitation determined by statute Requests for production: usually very wide in scope so that a request would cover all documents, memorandums, reports, EVERYTHING etc. Request for admissions: furthers the objective of determining what facts are in dispute and which facts both parties accept as true - Pretrial conference: conference generally held between the attorneys for the parties and the judge in the case, and no court reporter is present o the purpose is to encourage a settlement and to resolve any outstanding motions, confirm that 1) discovery is proceeding smoothly, and 2) dispose of any procedural issues that arose during the pleadings or discovery stages - Trial o Jury selection and opening Jury selection: process of asking potential jurors questions to reveal any prejudices that may affect their judgment of the facts Opening statements: attorneys present their theories of the case and what they hope to prove to the jury o Testimony and submission of evidence Direct examination: the plaintiff’s attorney asks questions of the witnesses on the plaintiff’s list After, there may be a cross-examination: the defendant’s attorney may ask questions of that witness as well o Closing arguments and charging the jury Closing argument: each attorney sums up the case and tries to convince the jury that their version of the case is more compelling Charging of the jury: when the judge gives the jury instructions on how to work through the process of coming to a factual decision in the case The judge informs the jury that the standard of proof in a civil case is a Preponderance of the evidence o Deliberation and verdict Deliberations: engaged in by the jurors in a private room Verdict: the decision made by the jurors Hung jury: when the jurors cannot agree on a verdict; the litigants must start the process all over again with a new jury o Post-trial motions and appeal o Collecting the judgment Alternative Dispute Resolution (ADR): process by which disputes involving individuals or businesses are resolved outside of the federal or state court system through the help or third parties - Some potential advantages include: o Cost o Preserving the business relationship o Time o Expertise o Privacy - Informal ADR: involves parties negotiating face-to-face or through intermediaries to arrive at a mutually agreeable solution without the use of a formal process; can be a: o Settlement agreement: one party agrees to a payment in exchange for the other party’s promise not to sue o or an agreement to cancel a contract or to revise an existing contract to better reflect the parties’ obligations and needs - Formal ADR: o Most common include arbitration, mediation, expert evaluation, and some hybrid of these methods o Invoked either via contract or by mutual agreement o Breach of Warranty: legal violation that occurs when a product fails to perform as promised by the seller - Arbitration: an individual, the arbitrator, conducts a hearing between the parties in the dispute o Similar to a court setting but less formal o Arbitrator is mutually agreed upon and functions like a judge o Parties usually choose to have an attorney o Binding arbitration: the arbitrator’s decision is final unless both parties agree to have the case reopened o Legally mandated arbitration: most states have a requirement that certain civil lawsuits go through an arbitration hearing before the case proceeds to trial Nonbinding arbitration: the losing party has the right of automatic appeal to the trial court o Federal Arbitration Act (FAA): statute in which Congress endorsed the use of arbitration as the preferred dispute resolution method in matters governed by the federal law Makes clear that arbitration is preferred over litigation as a method of dispute resolution so long as the parties agreed to an arbitration clause - Mediation: informal and cost-efficient form of dispute resolution o Mediator is appointed in much the same manner as an arbitrator; often, but not required to be, an attorney who is specially trained in negotiations and has a set hourly rate - Expert evaluation: done by an independent expert who recommends a settlement o Expert evaluator reviews documents and evidence provided by each party that give a full description of the events and circumstances leading to the claim and the resulting loss - Other forms: o Med-arb: both parties submit to mediation for a set period of time; if it fails, the process then moves to binding arbitration o Summary jury trials: primarily in federal courts; a short trial with time limits and no live expert testimony; no record A sitting or retired judge conducts it and issues a nonbinding advisory opinion o Minitrial: a condensed version of the case is present to the top management from both sides; a neutral party, often an expert, conducts the trial Ch. 5 Ethics: addresses how one should act, in a given situation, as defined by society; having a conscious system in use for deciding moral dilemmas, and how society dictates one ought to act Business ethics: a consciousness of what is right or wrong in t he workplace and a commitment to taking responsibly for an ethical course of action in business operations - Helps ensure that leaders maintain a strong moral compass even in times of crisis Stakeholders: an expansive term that includes a business entity’s owners, investors, employees, customers, suppliers, and the wider community - Primary stakeholders: those who will feel a direct impact based on the decision - Secondary stakeholders: those who do not have any direct connection to the business but may suffer some adverse consequence in an indirect way Morals: generally accepted standards of right and wrong in a given society - Principles-Based approach: ethical decisions that are made according to a set of established principles or standards such as religious tenets or codes - Consequences-based approach: this approach emphasizes that the ethical course of action is the one that provides the most good (happiness) for the greatest number of people and has the least harmful consequences for the majority of the community o Utilitarian: under this model, an action is ethically sound if it produces positive results for the most people o Owners and managers who employ this approach seek to provide the greatest balance of good over harm for all who are affected Values management: business ethics in the workplace context emphasizes prioritizing moral values for the organization and ensuring behaviors are aligned with those values - Moral minimum theory: encourages businesses to “do no harm” or “do the least possible harm” as long as the business remains profitable - Maximizing profits theory: strives to make as much money as possible, as long as no laws are broken - Values management should have strategic parity with other management priorities Corporate Social Responsibility (CSR) - The fundamental notion is that conscience resides not just in individuals but also in a corporation - CSR involves corporate citizenship - There are three schools of thought: 1. The Narrow View: Invisible Hand: a deliberate amorality in corporate decision making is encouraged in the name of a new morality: the common good is best served when each of us and our economic institutions pursue not the common good or moral purpose, but rather a competitive advantage a. what is good for business is good for America because the market’s efficiencies provide an invisible hand that guides morality and responsibility 2. The Moderate View: Government’s Hand: the government provides the exclusive view of corporate responsibility a. Corporations have the responsibility to pursue objections that are rational, legal, and purely economic b. The regulatory hand of the law and the political process provide the basis for ethical decision making 3. The Broad View: Management’s Hand: some business ethicists argue that corporations are allowed to exist only because they can serve some public good a. it is not necessary to justify the need for a greater corporate role in social responsibility b. set of societal expectation with the idea that corporations conduct their business on such terms c. radical
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