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by: Linsey Moen


Marketplace > Arizona State University > LES 305 > LES 305 WEEK 1 NOTES PT 1 CHAPTER 1
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These are the reading notes for the chapter 1 of week 1 From the 8e of Legal Environment of Business by Henry R. Cheeseman
Business Law & Ethics For Majors
Adriana Sanford
Class Notes
business, Law, les305
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This 7 page Class Notes was uploaded by Linsey Moen on Sunday September 11, 2016. The Class Notes belongs to LES 305 at Arizona State University taught by Adriana Sanford in Fall 2016. Since its upload, it has received 11 views.


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Date Created: 09/11/16
LES 305 READING NOTES: Chapter 1: Legal Heritage and the Digital Age I. Introduction to Legal Heritage and the Digital Age a. Every society makes and enforces laws that govern the conduct of the individuals, businesses, and other organizations that function within it. b. Law in the United States is based primarily on English common law. i. Other legal systems, such as Spanish and French civil law also influence it. c. The sources of law in this country are the U.S. Constitution, state constitutions, federal and state statues, ordinances, administrative agency rules and regulations, executive orders, and judicial decisions by federal and state courts. d. Businesses organized in the US are subject to its laws. i. Also subjected to the laws of other countries in which they operate e. Businesses organized in other countries must obey US law when operating within our borders f. Businesspeople owe a duty to act ethically in the conduct of their affairs i. Businesses owe a responsibility not to harm society II. What is Law? a. The law consists of rules that regulate the conduct of individuals, businesses and other organizations in society. i. Intended to protect persons and their property against unwanted interference from others b. The law forbids persons from engaging in certain undesirable activities III. Definition of Law a. A body of rules of action or conduct prescribed by controlling authority and having binding legal force. That which must be obeyed followed by citizens subject to sanctions or legal consequences IV. Functions of the Law a. Primary functions served by the law: i. Keeping the peace 1. Some laws make certain activities crime ii. Shaping moral standards 1. Some laws discourage drug and alcohol abuse iii. Promoting social justice 1. Some laws prohibit discrimination in employment iv. Maintain the status quo 1. Some laws prevent the forceful overthrow of the government v. Facilitate orderly change 1. Laws are enacted only after considerable study, debate, and public input vi. Facilitate Planning 1. Well-designed commercial laws allow businesses to plan their activities, allocate their productive resources, and assess the risks they take vii. Provide a basis for compromise 1. Laws allow for the settlement of cases prior to trail. Approx. 95% of all lawsuits are settled in this manner viii. Maximize individual freedom 1. The rights of freedom of speech, religion and association are granted by the first amendment V. Fairness of the Law a. US Legal system is one of the most comprehensive, fair, and democratic systems of law ever developed and enforced. b. Some misuses of the law allow guilty parties to go unpunished VI. Flexibility of the Law a. US law evolves and changes along with the norms of society, technology and the growth and expansion of commerce in the US and the world. b. US law is largely vague and variable because of the variety and complexity of cases that are dealt with VII. Brown V. BOE 1954 a. Landmark supreme court case in the US b. 13 amendment abolished slavery in 1865 c. 14 amendment est. equal proportions clause: provides that no state shall deny to any person within its jurisdiction the equal protection of laws i. The original intent of this law was to guarantee equality to freed African Americans but equality was denied to the for years 1. Included discrimination in: housing, transportation, educations, jobs, service at restaurants and other activities d. Plessy V. Fergusson 1896 i. Court ruled that “separate but equal” state law did not violate the equal protection clause of the 14 amendment for railway passengers ii. “separate but equal” was then applied to public education e. Brown V. BOE challenged 4 separate schools in Kansas, South Carolina, Virginia and Delaware i. Supreme court decided to revisit “separate but equal” doctrine f. Unanimous decision, opinion written by Chief Justice Earl Warren, reversed prior th precedent and held that separate but equal doctrine violated the 14 amendment g. After the case was decided it took court orders and US army enforcement to integrate public schools VIII. Schools of Jurisprudential Thought a. Jurisprudence – the philosophy or science of law IX. Natural Law School a. Suggests that the law is based on what is “correct”. b. Natural law philosophers emphasize a moral theory of law – law should be based on morality and ethics c. Is discovered by humans through the use of reason and choosing between good and evil d. Ex: US constitution, the magna carta and the UN Charter reflect the moral theory of law X. POM Wonderful LLC V. Coca-Cola Company a. This case involves the moral theory of law and ethics b. POM wonderful is a grower and distributer of juice and juice blends c. POM sued Coca-Cola because of false advertisement on their beverages making it seem like their product contains more fruits than it actually did d. POM sued Coke under section 43 of the Federal Lanham Act which allows one competitor to sue the other to recover damages for unfair competition arising from false and misleading product descriptions. e. Coke tried to avoid the lawsuit by asserting that the Federal Food, Drug, and Cosmetic Act (FDCA), a federal statute that protects the safety of food products, did not require any different labeling f. US District court and US court of appeals held in favor of Coke, POM appealed to US Supreme court g. Ruling: US Supreme court held that POM may proceed with its Lanham Act unfair competition lawsuit against coke and remanded the case for further proceedings XI. Historical School a. Believes that the law is an aggregate of social traditions and customs that have developed over the centuries. It believes that changes in the norm of society will gradually be reflected in the law. b. The law is an evolutionary process c. Ex: historical legal scholars look to past legal decisions (precedent) to solve contemporary problems XII. Analytical School a. Maintains that the law is shaped by logic. b. Analytical philosophers believe that results are reached by applying principles of logic to the specific facts of a case. c. The emphasis is on the logic of the result rather than on how the result is reached. d. Ex: if the US Constitution freed the slaves or granted females the right to vote, it wouldn’t have been ratified in the states in 1788. XIII. Sociological School a. Asserts that the law is a means of achieving and advancing certain sociological goals. b. Followers of this philosophy, known as realists, believe that the purpose of law is to shape social behavior i. They are unlikely to adhere to past law as precedent c. Ex: Laws that make discrimination in employment illegal and laws that impose penalties for drunk driving XIV. Command School a. Believe that the law is a set of rules develop, communicated, and enforced by the ruling party rather than a reflection of the society’s morality, history, logic, or sociology b. This school maintains that law changes when the ruling class changes c. Ex: during certain military conflicts, WWII and Vietnam, the federal government enacted draft laws that require men of a certain age to serve in the military if they meet certain physical and other requirements XV. Critical Legal Studies School a. Legal rules are unnecessary and are used as an obstacle by the powerful to maintain the status quo. b. Critical legal theorists argue that legal disputes should be solved by applying arbitrary rules that are based on broad notions of what is “fair” in each circumstance. c. Under this theory subjective decision making by judges would be permitted. d. Ex: Rape laws often make it difficult for woman to prove legally that they have been raped because the laws have mostly been drafted from a male’s perspective. Therefore these laws should be ignored and the judge should be free to decide whether or not the rape occurred. XVI. Law and Economics School – AKA The Chicago School a. Believes that promoting market efficiency should be the central goal of legal decision making b. Named after university of Chicago where it was first developed c. Ex: Proponents of this theory suggest that the federal government’s policy on subsidizing housing provide incentives so that too many homes are built. If these laws didn’t exist then the free market would determine the exact number of homes being built. XVII. History of American Law a. When the American colonies were first settled the English system of law was generally adopted as the system of jurisprudence. i. This was the foundation from which American judges developed common law in America XVIII. English Common Law a. Developed by judges who issued their opinions when deciding cases. These principles became precedent for later judges deciding similar cases b. English common law can be divided into cases decided by law courts, equity courts and merchant courts XIX. Law Courts a. Prior to Norman Conquest of England in 1066 each locality in England was subject to local laws as established by the lord in control of the area. There was no countrywide system of law b. After 1066 Williams the Conqueror and his successors to the throne of England began to replace the various local laws with one uniform system of law. c. To accomplish this the king or queen appointed loyal followers as judges in all local areas. These judges were charged with administering the law in a uniform manner, in courts they were called law courts. i. Only relief available at the time was a monetary award for damages. XX. Chancery (Equity Courts) a. Because of some unfair results and limited remedies available in law courts, a second set of courts – the court of chancery – was established b. Under the authority of the Lord Chancellor c. Persons who believed that the decision of a law court was unfair or believed that the law court couldn’t grant an appropriate remedy could seek relief in this court d. Inquired into the merits of the case instead of emphasizing the legal procedure e. The Chancellors remedies were called “Equitable remedies” because they were shaped to fit each situation i. Took precedence over the legal decisions and remedies of the law courts XXI. Merchant Courts a. As trade developed merchants who traveled developed certain rules to solve their disputes b. These rules known as the “law of merchants” or the law merchant were based on common trade practices and usage c. Eventually a separate set of courts was est. to administer these rules. This court was called the merchant court d. In the early 1900s the merchant court was absorbed into the regular law court system of England XXII. Adoption of English Common Law in the US a. All the states except Louisiana base their legal system primarily on the English common law b. In the US the law, equity, and merchant courts have merged i. Thus most US courts permit the aggrieved party to seek both legal and equitable orders and remedies c. Currently the law of the US is a combination of law created by the judicial system and by congressional legislation XXIII. Sources of Law in the US XXIV. Constitution a. Constitution of the US is the supreme law of the land i. Any law whether federal, state or local that conflicts with the constitution is unconstitutional and therefore unenforceable b. Referred to as a living document because it is so adaptable c. Legislative branch (congress) – has the power to make (enact) the law d. Executive branch (president) – has the power to enforce the law e. Judicial branch (courts) – has the power to interpret and determine the validity of the law f. Powers not given to the federal government by the constitution are reserved for the states g. State constitutions are often patterned after the US constitution although many are more detailed i. Est. the legislative, executive, and judicial branches of state government and est. the powers of each branch ii. Provisions are valid unless they conflict with the US constitution or any valid federal law XXV. Treaties a. According to the constitution the president with the consent of 2/3 of the senate may enter into a treaty with foreign governments b. A compact made between two or more nations c. Treaties become the supreme law of the land d. Treaties will become an even more important source of law that will affect business in the future due to the increasing international economic relations among nations XXVI. Federal Statues a. Statues are written laws that establish certain courses of conduct that covered parties must adhere to b. US Congress is empowered by the Commerce Clause and other provisions of the US constitution to enact federal statues to regulate foreign and interstate commerce c. Federal statues are organized by topic into code books, often referred to as codified law i. Federal statues can be found in these hardcopy books and online XXVII. State Statues a. State legislators enact state statues. These statues are placed in code books. i. Can be assessed in these hardcopy code books or online XXVIII.Ordinances a. State legislatures often delegate lawmaking authority to local government bodies, including cities and municipalities, counties, school districts, and water districts which is known as an ordinance b. Governmental units are empowered to adopt ordinances c. Also codified XXIX. Executive Orders a. An order issued by a member of the executive branch b. Executive branch of government, includes president and state governors, is empowered to issue executive orders c. This power is derived from express delegation from the legislative branch and its implied from the US constitution and state constitutions XXX. Regulations and Orders of Administrative Agencies a. Legislative and executive branches of federal and state governments are empowered to establish administrative agencies to enforce and interpret statues enacted by congress and state legislatures i. Many of the agencies regulate business ii. Congress or the state legislatures usually empower these agencies to adopt administrative rules and regulations to interpret the statues that the agency is authorized to enforce b. Administrative agencies usually have the power to hear and decide disputes i. Their decisions are often called orders ii. because of their power, administrative agencies are often informally referred to as the “fourth branch of the government” XXXI. Judicial Decisions a. Issued when federal and state courts are deciding individual lawsuits b. A judge explains the legal reasoning used to decide the case c. These opinions include interpretations of statues, ordinances and administrative regulations and the announcement of legal principles used to decide the case d. Many court decision are reported in books that are available in law libraries XXXII. Doctrine of Stare Decisis a. Based on common law tradition past court decisions become precedent for deciding future cases b. Lower courts must follow the precedent established by higher courts c. The courts of one jurisdiction are not bound by the precedent est. by the courts of another jurisdiction although they may look to each other for guidance d. Adherence to precedent is called the doctrine of stare decisis (to stand by the decision) i. This doctrine promotes uniformity of law within a jurisdiction, makes the court system more efficient and makes the law more predictable for individuals and businesses ii. Without it there would be no stability in our system of jurisprudence e. A court may later change or reverse its legal reasoning if a new case is presented to it and change is warranted XXXIII.Priority of Law in the US a. The US Constitution and treaties take precedence over all other laws in the United States. b. Federal statues takes precedence over any conflicting state or local law c. State constitutions rank as the highest state law. d. State statues take precedence over local laws. XXXIV.Digital Law a. New laws have been that apply specifically to the new advances in technology. b. Courts have applied existing laws to the new digital environment by requiring interpretations and applications. XXXV. Critical Legal Thinking a. The US Supreme court and its 9 justices often reach 5-4 decisions b. Each justice applied critical thinking in reaching his or her decision c. Critical legal thinking – is significant because there is no straight answer in law. XXXVI. Define Critical Legal Thinking a. A method of thinking that consists of investigating, analyzing, evaluating, and interpreting information to solve a legal issue or case. b. Requires intellectually disciplined thinking XXXVII. Socratic Method a. A process that consists of a series of questions and answers and a give-and-take inquiry and debate between a professor and students b. Stimulates class discussions XXXVIII. IRAC method a. A method used to examine a law case. It is an acronym that stands for issue, rule, application and conclusion b. First facts must be investigated and understood c. Then the legal issues that is to be answered must be identified and stated d. Then the law that is to be applied to the case must be identified, read and understood. e. Once the facts, law and legal issue have been stated , critical thinking must be used in applying the law to the facts of the case f. I = what is the legal issue in the case? g. R = what is the rule (law) of the case? h. A = what is the court’s analysis and rationale? i. C = what was the conclusion or outcome of the case? XXXIX. Shelby County, Texas V. Holder a. 15 amendment was added to the constitution in 1870 following the civil war i. Provides the right of citizens of the US to vote and cannot be denied based off of race, color or precious conditions of servitude and gives power to congress to enact laws to enforce the amendment b. During the first century after the 15 amendment, congressional enforcement of the amendment was a complete failure. c. Many states enacted literacy and knowledge tests, enforced good moral character requirements, created the need for vouchers from registered voters and intimated voters to prevent minorities from qualifying to vote or just voting in general i. based on these impairments, voting by minority citizens specifically African Americans d. In 1965, congress enacted the Voting Rights Act i. Section 2 forbids any standard, practice, or procedure that denies or abridges the right of any citizen to vote on account of race or color ii. Section 4(b) provides a coverage formula that identified six states, Alabama, Georgia, Louisiana, Mississippi, South Carolina, and Virginia, that maintained illegal voting requirements that reduced minority voter turnout. iii. Section 5 stipulates that the covered states could not make any changes to voting districts or voting procedures without clearance from the federal government 1. Portions of other states, including Texas, were added to the list iv. The Voting Rights Act was originally enacted for 5 years, had been reauthorized by congress for more than forty years. v. In 2006 congress reauthorized the voting rights act for 25 years 1. Shortly after, a Texas voting district challenged the constitutionality of the special coverage provision e. Decision i. The US Supreme court held that the coverage provision of the voting rights act that requires clearance by the federal government for covered states to make changes to voting districts and other voting requirements is unconstitutional


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