BLS 112 Chapter 1: Chapter 1

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Binghamton University
Business Law and Society
BLS 112
S U N Y Ulster

Chapter 1: Introduction to Law and Legal Reasoning I. Business Activities and the Legal Environment - Laws and regulations affect all business activities - Business assumes an ethical dimension - Many different laws may affect a single business transaction - Ethics: principles governing what constitutes right vs. wrong behavior II. Sources of American Law - Primary Sources of Law (establish the law) o Constitutional Law: law expressed in U.S & State Constitutions ▪ Constitution = supreme law, basis of all U.S. law ▪ 10 thAmendment: reserves to states all powers not granted to federal government o Statutory Law: laws passed by Congress, State Legislatures, & local governing bodies ▪ Local ordinances: statutes (laws, rules, or orders) passed by municipal or county governing units to govern matters not covered by federal or state laws • Usually deal with matters affecting local community ▪ Uniform Laws: created by National Conference of Commissioners on Uniform State Laws (NCCUSL) • Difficult for businessmen to conduct trade/commerce between states with different laws • Each state has option of accepting/rejecting whole or part of uniform law ▪ Uniform Commercial Code: facilitates commerce among states by providing uniform, yet flexible, set of rules governing commercial transactions • Created by NCCUSL & American Law Institute o Administrative Law: rules, orders, & decisions of administrative agencies ▪ Administrative Agency: federal, state, or local government agency established to perform specific function • Executive Agency: at national level; under cabinet department o Ex. Food & Drug Administration • Independent Regulatory Agencies: at federal level o Ex. SEC, FCC, FTC • State & Local Agencies: created to parallel federal agency o Ex. Environmental Protection Agency o Case Law & Common Law Doctrines ▪ Case Law: judge-made law; doctrines & principles announced in cases; interpretations - Secondary Sources of Law (summarize/clarify primary sources) o Ex. legal encyclopedias, treatises, articles, compilations o Courts refer to for guidance in interpreting/applying III. Common Law Tradition - American law is based on English Common Law: based on traditions, social customs, rules, and cases [2 separate court systems] o Courts of Law & Remedies at Law ▪ Provide monetary relief ▪ Remedies: legal means to enforce a right or redress a wrong • 3 remedies → (1) Land, (2) Items of Value, (3) Money ▪ Judges resolved disputes by applying rules of law to the facts of a case before the court o Courts of Equity ▪ Non-monetary relief ▪ Equity: branch of law based on “notions of justice & fair dealing” ▪ Administered by chancellors appointed by king ▪ Equitable Remedies: • Specific Performance: perform agreement as promised • Injunctions: order to cease engaging in activity • Rescission: cancellation of contractual obligation ▪ Courts will not grant equitable remedies unless remedy at law (monetary damages) is inadequate ▪ Equitable Maximums: propositions or general statements of equitable rules 1. Anyone who wishes to be treated fairly must treat others fairly 2. Law determines outcome of a controversy where the merits of both sides are equal 3. The plaintiff must have acted fairly & honestly 4. Equitable relief will be awarded when there is a right to relief & no adequate remedy at law 5. Equity is more concerned with fairness & justice than with legal technicalities 6. Equity will not help those who neglect their rights for unreasonable period of time [aka laches → used as a defense] o Defense = argument raised by the defendant (party being sued) indicating why the plaintiff (suing party) should not obtain the remedy sought - Legal & Equitable Remedies Today o Federal & State courts consolidated remedies at law and equity ▪ Same court order includes both damages & equitable or injunctive relief - The Doctrine of Stare Decisis o Case Precedents & Reporters ▪ Precedent: decision that furnishes an example or authority for deciding subsequent (similar) cases ▪ Reporters: volumes where cases are published o Stare Decisis: (“stand on decided cases”) judge-made law Jurisdiction = geographic area in which court can
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