ACCT 2700 Chapter 1 Notes
ACCT 2700 Chapter 1 Notes ACCT 2700
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This 3 page Class Notes was uploaded by jcsumlin on Wednesday March 9, 2016. The Class Notes belongs to ACCT 2700 at Auburn University taught by Robert Hollis Cochran in Spring 2016. Since its upload, it has received 12 views. For similar materials see Business Law in Accounting at Auburn University.
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Date Created: 03/09/16
Chapter 1 Notes Wednesday, March 9, 2016 2:02 PM Law: Law is a body of rules of conduct prescribed by controlling authority, and having binding legal force. That which must be obeyed and followed by citizens subject to sanctions or legal consequences is a law. Sources of the law • The U.S. Constitution and the constitutions of the various states. • Statutory law—including laws passed by Congress, state legislatures, or local governing bodies. • Regulations created by administrative agencies, such as the Food and Drug Administration. • Case law and common law doctrines. Secondary sources of law are books and articles that summarize and clarify the primary source of the law Functions of the Law • Keeping the peace • Promoting social justice • Facilitating orderly change • Encouraging compromise • Shaping moral standards • Maintaining the status quo • Facilitating planning • Maximizing individual freedom Laws and regulations affect virtually all business activities Sources of American Law Constitutional law is the law as expressed in these constitutions Laws enacted by legislative bodies at any level of government, such as statutes passed by Congress or by state legislatures, make up the body of law known as statutory law. • Statutory law also includes local ordinances— statutes (laws, rules, or orders) passed by municipal or county governing units to govern matters not covered by federal or state law • Uniform Laws (NCCSL) • Uniform Commercial Code Administrative agency is a federal, state, or local government agency established to perform a specific function Case Law and common law doctrines • American law is largely based on English common law • Early English Courts: at common law, there were two separate court systems: ○ Courts of Law: Monetary relief Also called "king's courts" b/c judges were appointed by the kings □ Remedies limited to those provided at law (i.e. land, chattel, money.) Judges resolved disputes by application of rules of law to the facts of the case before the court. ○ Courts of Equity: non-monetary relief, based on the notion that justice and fair dealing A branch that is founded on what is fair and just Administered by the chancellors appointed by the king Remedies included: specific performance, injunctions, rescissions Many different laws may affect a single business transaction Business decisions are affected by: Torts, Agency Law, Product Liability, Intellectual Property Rights, Negotiable Instruments, Creditors’ Rights, Sales Law, Contracts, Procedural Law, Courts, Environmental Law, Business Organizations, Local Laws, State Laws, National Laws and many other potential legal factors. Law of Merchants • Were mainly left to their own devices • By 1600 the Law Merchant had slowly become part of the Common Law and it was administered by both Legal and Equitable courts • By 1896 the U.S. ad 1954 in the U.K. all law systems were mreged into a single system • Some minor exceptions; Tennessee and Delaware have Chancery Courts but they only handle limited matters Stare Decisis (“stand on decided cases”) is judge-made law. Case Precedents & Reporters • Each decision and interpretation becomes a legal precedent • Courts are obliged to follow precedents within their jurisdictions. • Courts should not overturn their own precedents without compelling reasons. Stare Decisis and Legal Stability. • Stare decisis helps courts be more efficient and makes the law more predictable, but • Stare decisis historically makes changing the law SLOW. Schools of Jurisprudential Thought • Jurisprudence is the Philosophy of Law • Schools: ○ Natural Oldest view, dating back to Aristotle Laws of Nature ○ Historical Wisdom of the ages We should not change the law until we understand why the law became the common law Emphasizes the evolutionary process of law ○ Sociological The law is just another tool with which to correct social injustice Society should tailor the law to what is needed now instead of being wed to history ○ Law and Economics Economics underlie virtually all law Many laws are created or changes with no understanding of the economics involved involved The economic impact should be studied and understood before a decision is made to change a law. Often mischaracterized as “Free Markets Should Determine the Law.” ○ Command Whoever holds power makes the law and everyone else must obey. Alive and well throughout the world today. Every type of law will be either: • Civil or Criminal. • Substantive or Procedural. • Public or Private. Skip Cyber Law and §6 and §7. .
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