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LGS 200 Exam 1 Notes

by: taflournoy

LGS 200 Exam 1 Notes Lgs 200


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These are class notes for Exam 1 which includes chapters 1-3
Introduction to Business Law
Philip N Lisenby
Study Guide
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This 10 page Study Guide was uploaded by taflournoy on Tuesday October 11, 2016. The Study Guide belongs to Lgs 200 at University of Alabama - Tuscaloosa taught by Philip N Lisenby in Fall 2016. Since its upload, it has received 2 views. For similar materials see Introduction to Business Law in Legal Studies at University of Alabama - Tuscaloosa.


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Date Created: 10/11/16
LGS 200- T est 1 Review 12/02/2015 12:54:00  Chapter 1  Nature of Law:  Law- enforceable rules governing relationships among individuals and between individuals and their society; unwritten principles or written laws/court decisions o They establish rights, duties, and privileges that are consistent with the values and beliefs of their society or its ruling group  Jurisprudence- part of the study of law that involves learning about different schools of legal thought and discovering how each school’s approach to law can affect judicial decision making.  Natural Law- denotes a system of moral and ethical principles that are inherent in human nature and thus can be discovered through the use of people’s own native intelligence; applies universally to all humankind o One of the oldest and mist significant schools of “jurisprudence” o “natural rights” stems from the natural law tradition   Positive Law- national law; the written law of a given society at a particular point in time; applies to the citizens of that nation or society  Legal Positivism- the belief that there can be no higher law than a nation’s positive law o According to “positivist school” there is no such thing as “natural rights” o Law is law and must be obeyed until changed—through legitimate law making process  Historical School- emphasizes the evolutionary process of law by concentrating on the origin and history of the legal system o Uses past to discover what principles of contemporary law should be; those that have worked in the past best suited  Legal Realism- based in the idea that law is just one of many institutions in society and that is shaped by social forces/needs o “legal realists”—journalists and scholars in the 1920-1930s that rebelled against the historical approach to law; they believe that the law can never be applied with total uniformity  Sociological School- strongly influenced by legal realism; a type of “jurisprudence” that views laws as a tool for promoting justice in society o Ex. Supreme Court played role in Civil Rights Movement  Business Activities/Legal Environment:  Ethics- the study of what constitutes right or wrong behavior; business decision makers need to consider not just whether a decision is legal, but also ethical o Relationship between law and ethics  Sources of American Law:  Primary sources of Law- sources that establish the law such as The U.S. Constitution, statues or laws passed by Congress/State Legislature, regulations created by administrative agencies, and “case laws”—court decisions  Secondary sources of Law- books and articles that summarize and clarify primary sources; such as legal encyclopedias, legal journals, “compilations”—Restatements of the Law which organizes/summarizes case law on particular topics, and treatises o Used for guidance interpreting primary sources  Constitutional Law- law expressed in constitutions of the federal and state governments that sets forth the general organization, powers, and limits of their respective governments  Statutory Law- laws enacted by legislative bodies at any level of government make up this body of law; such as statues passed by Congress or by state legislature o “statue”—laws, rules, or orders; included in the federal code of laws or the relevant state code of law; whenever mentioned a “citation”—reference to publication where legal authority can be found o opposed to laws enacted by the constitution, administrative law, or case law  Ordinances- statues passed by municipal/county governing units to govern matters not covered by federal/state law; has to do with city/county land use, building/safety codes, matters affecting local government unit o Included in “statutory law”  Uniform law- “model statutes”; formed/drafted by the National Conference of Commissioners on Uniform State Laws (NCCUSL) in 1892 o Before differences among state laws caused problems for conducting business/trade among states; with this each state had the option of adopting/rejecting a uniform law o “Uniform Negotiable Instruments Law”—earliest uniform law completed in 1896 and adopted by all by 1920s  The Uniform Commercial Code (UCC)- most ambitious uniform act; issued in 1952, it facilitates commerce among states by providing a uniform set of rules governing commercial transactions; assures businesspersons that their contracts will be enforced  Administrative law- important source of American law; rules, orders, and decisions of administrative agencies o “administrative agency”—a federal, state, or local government agency established to perform a specific function; they affect every aspect of a business’s operations, capital structure, relations with employees/unions, etc.  Federal Agencies- o “executive agencies”—subject to the authority of the president; within cabinet departments of executive branch; ex. Food and Drug Administrative Act within the U.S. Department of Health and Human Services o “independent regulatory agencies”—officers served for fixed terms, cannot be removed without cause, president’s power less pronounced; ex. Federal Trade Commission, Securities and Exchange Commission, and Federal Communications Commission  State/Local Agencies- o State agency created to parallel a federal agency; ex. state pollution control agency under Environmental Protection Agency  Agency Creation- o “enabling legislation”—a statue enacted by congress that authorizes the creation of an administrative agency and specifies the name, composition, purpose, and powers of the agency being created o “Federal Trade Commission” created by the Federal Trade Commission Act in 1914; prohibits unfair and deceptive trade practice  Adjudicate- to render a judicial decision/resolve judicially, a trial-like proceeding in which an administrative law judge hears and decides issues that arise when an administrative agency charges a person or firm with violating a law or regulation enforced by the agency o “administrative law judge”—one who presides over an administrative agency hearing and has the power to administer oaths, take testimony, rule on questions of evidence, and make determinations of fact in “agency adjudication”; when no appeal his decision is final  Administrative process- the procedure used by administrative agencies in the administration of law which includes the legislative branch of government (rulemaking), the executive branch (investigation and enforcement), and the judicial branch (adjudication)  Rulemaking- creating/modifying rules, or regulations, pursuant to its enabling legislation; one of the major functions of an administrative agency o Involves notifying the public of a proposed rule or change and receiving and considering the public’s comments  Case Law- the doctrines and principles announced in cases; governs all areas not covered by statutory law or administrative law, and its part of common law tradition o The rules of law announced in court decisions; included the aggregate of reported cases that interpret judicial precedents, statues, regulations, and constitutional provisions  The Common Law Tradition:  Common Law- evolved from the king’s courts establishment of a uniform set of rules for the country as a whole; the body of general rules/law developed from custom or judicial decisions in English and U.S. Courts, not attributable to a legislature o Developed the common law rules from principles underlying judge’s decisions in actual legal controversies  Precedent- a court decision that furnishes an example or authority for deciding subsequent cases involving identical or similar facts; each interpretation became part of the law on that subject and it served as this o “Year Books”  Stare Decisis- a common law doctrine under which judges are obligated to followe the precedents established in prior decisions; the practice of deciding new cases with reference to former decisions (precedents); stands for “to stand on decided cases” o Two aspects: decisions made by a higher court are binding on lower courts and a court should not overturn its own precedents unless there is a strong reason to do so o Allows for courts to be more efficient in decision making; makes law more stable and predictable  Binding authority- any source of law that a court must follow when deciding a case; controlling precedents in a jurisdiction referred to as binding authorities—includes constitutions, statutes, and regulations that govern the issues being decided  Persuasive authority- court looking for guidance in a case for other precedents from other jurisdictions that are not binding on the court, as well as secondary sources of law; used in “cases of first impression”—cases where there are no precedents within its jurisdiction on which to base a decision  Remedy- the relief given to an innocent party to enforce a right or compensate for the violation of a right o “equity”—refers to a branch of the law, founded in justice and fair dealing, that seeks to supply a fair and adequate remedy when no remedy is available at law  Plaintiff- one who initiates law suite  Equitable Principles and Maxims- general propositions or principles of law that have to do with fairness (equity); provides guidance in deciding whether plaintiffs should be granted equitable relief  Statutes of Limitations- a federal/state statute setting the maximum time period during which a certain action can be brought or certain rights enforced  Classification of Law:  Substantive law- a law that defines, describes, regulates, and creates legal rights and obligations  Procedural law- a law that establishes the methods of enforcing the rights established by substantive law  Cyberlaw- body of law that governs transactions conducted via internet  Civil law- branch of law dealing with the definition and enforcement of all private/public rights, as opposed to criminal matters  12/02/2015 12:54:00  Chapter 2   Business Ethics:  Ethics- defined as the study of what constitutes right or wrong behavior  Business ethics- focuses on how moral and ethical principles are applied in the business context  Reasons for ethical problems- o the desire to increase sells which increases profits  Ethical Reasoning- a reasoning process in which an individual links his or her moral convictions or ethical standards to the particular situation at hand  Duty-based Ethics- are often derived from revealed truths, such as religious precepts; also derived through philosophical reasoning  Categorical imperative- a concept developed by the philosopher Immanuel Kant as an ethical guideline for behavior; in deciding whether what is right or wrong, or desirable or undesirable, a person should evaluate the action in terms of what would happen if everybody else in the same situation acted the same way  Principle of Rights- “rights theory”; the principle that human beings have certain fundamental rights (life, freedom, pursuit of happiness) o “rights theory”—the belief that a key factor in determining whether a business decision is ethical is how that decision affects the right of various groups  Utilitarianism- an approach to ethical reasoning that evaluates behavior in light of the consequences of that behavior for those who will be affected by it, rather than on the basis of any absolute ethical or moral values o A “good” decision is the one that results in the greatest good for the greatest number of people affected by the decision o Modified by John Stuart o Applying the utilitarian theory requires: a determination of which individuals will be affected by the action in question, a cost benefit analysis, and a choice among alternative actions that will produce maximum societal utility  Cost-Benefit Analysis- a decision-making technique that involves weighing the costs of a given action against the benefits of that action  Corporate Social Responsibility- the idea that corporations can and should act ethically and be accountable to society for their actions  How the Law Influences Business Ethics:  Moral Minimum- the minimum degree of ethical behavior expected of a business firm, which is usually defined as compliance with the law  Backdating- the practice of marking a document with a date that precedes the actual date; persons who backdate stock options are picking a date when the stock was trading at a lower price than the date of the options grant o Backdating is legal if:  No documents have been falsified  The shareholders of the corporation have been notified that stock options were backdated  The corporation correctly reported the backdated options as earnings in its financial statements  The backdating is properly reflected in taxes 12/02/2015 12:54:00  Chapter 3   The Judiciary’s Role in American Government:  Judicial Review- the process by which a court decides on the constitutionality of legislative enactments and actions of the executive branch  Jurisdiction- the authority of a court to hear and decide a specific case  Long Arm Statute- a state statute that permits a state to obtain personal jurisdiction over nonresident defendants; a defendant must have certain “minimum contacts” with that state for the statute to apply  Probate court- a state court of limited jurisdiction that conducts proceedings relating to the settlement of a deceased person’s estate  Bankruptcy Court- a federal court of limited jurisdiction that handles only bankruptcy proceedings, which are governed by federal bankruptcy law  Federal Question- a question that pertains to the U.S. Constitution, acts of congress, or treaties; a federal question provides a basis for federal jurisdiction  Diversity of Citizenship- a basis for federal district court jurisdiction over a lawsuit between 1) citizens of different states 2) a foreign country and citizens of different states 3) citizens of a state and citizens or subjects of a foreign country  Concurrent jurisdiction- jurisdiction that exists when two different courts have the power to hear a case; ex. some cases can be heard in a federal or a state court  Exclusive jurisdiction- jurisdiction that exists when a case can be heard only in a particular court or type of court  Docket- the list of cases entered on a court’s calendar and thus scheduled to be heard by the court  Venue- the geographic district in which a legal action is tried and from which the jury is selected  Standing to sue- the requirement that an individual must have a sufficient stake in a controversy before he or she can bring a lawsuit; the plaintiff must demonstrate that he or she has been either injured or threatened with injury  Questions of fact- in a lawsuit, an issue that involves only disputed facts, and not what the law is on a given point; DECIDED BY A JURY  Questions of Law- an issue involving the application or interpretation of a law; only a JUDGE CAN RULE  Appeals to the Supreme Court: o Writ of Certiorari- a writ from a higher court asking the lower court for the record of a case o Rule of Four- a rule of the united states supreme court under which the Court will not issue a writ of certiorari unless at least four justices approve of the decision to issue the writ  Following a State Court Case  Litigation- the process of resolving a dispute through the court system


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