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Chapter 1 Introduction to Law
Its Legal, Ethical, and Global Environment
Marianne M. Jennings
BUSINESS9th Ed.
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Definition of LawDefinition of Law• Aristotle
– Law is reason unaffected by desire
• Holmes – Law embodies the story of a nation’s
development through many centuries
• Blackstone– That rule of action which is prescribed by
some superior and which the inferior is bound to obey
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Definition of LawDefinition of Law• Black’s Law Dictionary
– A body of rules of action or conduct prescribed by the controlling authority, and having legal binding force
• Rules Enacted By a Government Authority That Govern Individuals and Relationships in Society
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Classifications of LawClassifications of Law• Public Law
– Enacted by some authorized government body. Example: Federal securities laws
• Private Law– Enacted by private individuals
• Example: the terms of a lease agreement• Example: employment agreement
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Classifications of LawClassifications of Law• Criminal versus Civil Laws
– Criminal laws are wrongs against society– Civil laws are wrongs against individuals
• Substantive versus Procedural Laws– Substantive: Gives rights and
responsibilities– Procedural: Means or procedures for
enforcing substantive rights
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Classifications of LawClassifications of Law• Common Law
– Began in England in 1066 and continues today– Non-statutory law– Exists in court decisions– Following case precedent, or stare decisis, “let
the decision stand”
• Statutory Law– Passed by governmental body– Also known as Codified Law
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Classifications of LawClassifications of Law
• Law versus Equity– In common law England, remedies were
separated into legal and equitable remedies• Legal = money• Equitable = injunctions, specific performance
– Remedies were separated so that courts of chancery could give remedies when courts of law could not
– Today all courts are authorized to award legal or equitable remedies
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Purposes of LawPurposes of Law
• Keeping Order
• Influencing Conduct
• Honoring Expectations
• Promoting Equality
• Law as the Great Compromiser
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Characteristics of LawCharacteristics of Law
• Flexibility– Examples: The Internet has required
the courts to revisit when a contract acceptance occurs
• Consistency– Example: Allows businesses to rely
on law for planning
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• Pervasiveness– Example: Laws covering
formation, operation and dissolution of corporations do not unduly interfere with management flexibility
Characteristics of LawCharacteristics of Law
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CasesCases• Case 1.1 Sony Corp. v. Universal
City Studios (1984)– “Time-Shifting”: Contributory
Infringement or Fair Use?
• Case 1.2 Metro-Goldwyn-Mayer Studios v. Grokster, Ltd. (2005)– Downloading: Copyright Infringement
or Peer-to-Peer Sharing?
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Theory of Law: Theory of Law: JurisprudenceJurisprudence
• Incorporation of Theories or Values Into Definition of Law
• Holmes: “The life of the law … has been experience”
• Pound: Law is the result of those in power
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Five Minutes of Legal Five Minutes of Legal PhilosophyPhilosophy
1. One: Positive law; law is what is given as law
2. Two: Law is what benefits the people
3. Three: Law is justice or treating everyone according to the same standard
4. Four: That which is unjust cannot be law
5. Five: Natural law; principles that exist regardless of laws
1-13
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Sources of LawSources of Law
1-14
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• Constitutional Law– Exists at federal and state level
• Establishes government structure• Establishes individual rights
• Statutory Law at Federal Level– Enactments of Congress
• United States Code. Citation = (e.g., 15 U.S.C. § 77)
Sources of LawSources of Law
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• Statutory Law at the Federal Level– Administrative agency regulations
• Code of Federal Regulations. Cite or citation = C.F.R. (e.g., 12 C.F.R. § 226)
– Executive orders • Presidential orders
Sources of LawSources of Law
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• State Laws– Enactments of state legislatures
• State Codes• Cite = Nevada Revised Statutes—N.R.S.
– State administrative agency regulations
• Local Laws– Ordinances
• County or city statutes
Sources of LawSources of Law
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• Private Laws– Contracts– Leases– Employer regulations
• Court Decisions– Language in statute unclear– Court provides interpretation or
clarification of law
Sources of LawSources of Law
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• Sources– Custom (Country-by-Country)– Treaties
• Bilateral—between two nations• Multilateral—among three or more nations• Geneva Convention—prisoners of war• Vienna Convention—diplomatic relations• Warsaw Convention—air travel
International LawInternational Law
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• Private Law or Party Autonomy
• International Organizations (U.N.)
• Act of State Doctrine– Expropriation
– Confiscation or nationalization: Taking of private property by a government
International LawInternational Law
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• Trade Laws and Policies– Tariffs– Treaties, e.g., GATT, NAFTA
• Uniform International Laws– Contracts for the International Sale
of Goods (CISG)– Similar To Article 2 of the Uniform
Commercial Code (UCC)
International LawInternational Law
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• The European Union (EU)– Group of countries in continental Europe– Aiming for barrier-free trade; uniform
laws; ease in transaction negotiations and execution
– Uniformity in currency, job safety, immigration, customs, licensing, and taxation
International LawInternational Law