Business Law – Chapter 1

Constitutional Law, Statutory Law, Administrative Law, and Case Law/Common Law Doctrines.

Books and articles that summarize and clarify the primary sources of law. Legal encyclopedias, treatises, articles in law reviews, and compilations of law such as "The Restatements of the Law."

"The Supreme Law of the Land" according to Article VI (6) of the US Constitution. The federal and state constitutions set forth the general organization, powers, and limits of their respective governments.

The amendment to the Constitution which reserves for the states all powers not granted to the federal government.

The laws enacted by legislative bodies at ANY level of government. Statutes passed by Congress or by state legislatures. Passed statutes are included in the federal/state code of laws. Statutory law also includes ORDINANCES and optional UNIFORM LAWS.

Statutory law passed by municipal or county governing units that is not covered by state or federal law. Commonly have to do with city land use, safety codes, and matters effecting the local community. Must not violate federal or state constitution.

Model laws that states can consider adopting. If the legislature adopts, it becomes a part of state statutory law. May adopt all OR part of a uniform law.

The earliest uniform law. Adopted by every state.

Created by NCCUSL and the American Law Institute. All 50 states including the District of Columbia and the Virgin Islands have adopted the UCC. Promotes commerce and ensures businesspersons that their contracts will be enforced.

Rules, orders, and decisions of administrative agencies. An administrative agency is a federal, state, or local government agency established to perform a specific function.

Dominant element in the regulatory environment of businesses. Dictates capital structure, hiring and firing, employee and union relations, and environmental regulations.

At the national level, the cabinet departments of the executive branch include numerous executive agencies such as the USDA and the FDA. Executive agencies are subject to the authority of the president who has the power to appoint or remove officers.

Includes the FTC, SEC, and the FCC. The presidents power is limited because their officers serve fixed terms and cannot be removed without just cause.

Typically created to parallel a federal agency.

Rules of law announced in court decisions. Includes interpretations of constitutional provisions, statutes enacted by legislatures, and of regulations created by administrative agencies. "Judge made law." Governs all areas not covered by statutory law and is a part of our common law tradition.

Much of American law is based on the English legal system.

He began the process of unifying England under his rule. To do this, he established the kings courts.

"The Kings Courts"

To establish a uniform set of customs for the country as a whole (ie common law).

The early English courts could only grant limited kinds of remedies (the legal means to enforce a right or wrong).

The King's courts would award as compensation one or more remedies at law: land, items of value, or money. These courts became known as Courts of Law.

The modern version of a remedy at law.

Only economic compensation could be provided by the Courts of Law. If other compensation was needed, the courts could do nothing.

When individuals could not be granted an adequate remedy at law, they petitioned the King for relief. Most decisions were decided by the advisor to the King - the chancellor.

Formal chancery courts that were established to grant remedies in equity aka equitable remedies.

A branch of law. Founded on what might be described as notions of justice and fair dealing. Seeks to find a remedy when no economic remedy is available.

specific performance, injunction, recission

Ordering a party to perform an agreement as promised.

Ordering a party to cease engagement in a particular activity or to undo some wrong or injury.

Cancellation of a contractual obligation.

As a general rule, courts of today will not issue a remedy in equity unless the remedy at law (monetary damages) is not sufficient.

In fashioning appropriate remedies, judges often were guided by equitable maxims - or general statements of equitable rules.

Whoever seeks equity must do equity.

Where there is equal equity, the law must prevail.

One seeking the aid of equity courts must come to the court with clean hands.

Equity will not suffer a wrong to be without a remedy.

Equity regards substance rather than form.

"Equitable Doctrine of Laches" - Equity aids the vigilant, not those who rest on their rights.

Laches = lax/negligant. Can be used as a defense. Encourages people to bring lawsuits while the evidence is still fresh. Statutes of limitations determines what amount of time is reasonable.

Determines what a reasonable amount of time is to fulfille the equitable doctrine of laches. Once the statute of limitations expires, no lawsuit can be brought regardless of how strong the original case.

The person being sued. (Respondent in a court of equity)

The person bringing the lawsuit.

A party can only demand a jury in an action at law but not for an action in equity.

A unique feature of common law.

Judges try to be consistent, base decisions on earlier cases. New decisions will create new laws (legal precedent) that can be used for deciding subsequent cases.

Where the majority of court decisions could be found in the 14th century. In te 16th century, yearbooks were replaced by other forms of publications.

Today, cases and case decisions are published in volumes called reporters.

"To stand on decided cases" - Practice of deciding cases with reference to former decisions.

Obligates judges to follow the precedents established within their jurisdictions. Their court and lower ranked courts must adhere to that same principle.

1. Decisions made by a higher court bind lower courts. 2. A court should not overturn its own precedents unless there is a compelling reason to do so.

Any source of law a court must follow (controlling precedents).

US Supreme Court decisions remain binding until they are overruled by the Supreme Court, a constitutional amendment, or congressional legislation.

Might depart from precedent if technological or social changes render it inapplicable. Often receives a great deal of publicity - ie desegregation of schools. A lower court can avoid applying precedent if it can distinguish the two cases based on facts.

Cases where no precedent exists. Courts often look to "persuasive authorities" which are precedents from other jurisdictions and "public policy" which is govt policy based on widely held social values.

Reasoning process used by judges in deciding what law applies to a given dispute. Using legal reasoning, judges harmonize decisions with those made before.

I = Issue / R = Rule / A = Application / C = Conclusion.

What is the Issue? What rules of law apply to the case - could be stated by courts previously. / How do the rules of law apply to the particular facts and circumstances of the case? Uses cases in point. / What Conclusion should be drawn?

To help decide how the rules apply to the facts. Deductive Reasoning, Linear Reasoning, Reasoning by Analogy

"Syllogistic Reasoning". Involves a major premise, a minor premise, and a conclusion.

Proceeds from one point to another - ie "knotted rope."

To compare the facts in the case to the facts of previous cases so that the same rule of law can be applied.

ONLY applies to areas not covered by statutory or administrative law. Still, judges need to interpret these statutes, so common law practices still apply.

Clarifies and illustrates common law - drafted and published by the ALI (American Law Institute). Exists in the areas of torts (actions), contracts, agency, trusts, etc. DO NOT HAVE THE FORCE OF LAW. Secondary Source.

How judges apply the law to specific cases including disputes related to the business world.

Natural Law, Positivist, Historical, and Legal Realism

States that a higher universal law exists that applies to all human beings. If a written law is unjust, it should be ignored. Dates back to Aristotle who distinguished between natural law and national laws.

Positive/National law applies only to the citizens of that nation or society. Legal Positivism states that no higher law exists outside of a nations positive law. No such thing as natural rights. Whether a law is good or bad is irrelevant. Positivist leaning judge might be more inclined to defer to an existing law.

Emphasis on the evolutionary process of law by concentrating on the origin and history of the legal system. Looks to the past to see what legal action was taken before and stood the test of time. More likely to follow decisions made in past cases.

Rebelled against the historical approach to law. Based on the idea that law is just one of the many institutions governing society. Belief that laws can never be applied with total uniformity. Influenced by "sociological school". LAW IS A TOOL FOR PROMOTING SOCIAL JUSTICE. ie Civil Rights.

Substantive Law and Procedural Law/ Civil Law and Criminal Law, etc.

Substantive law defines describes and regulates legal rights and obligations. Procedural law explains the procedure in which these substantive laws may be enforced.

Civil law spells out the rights and duties that exist between persons and their governments and the relief available when a person's rights are violated. Private Party vs a Private party is typical, can also be the govt vs a private party. Criminal Law is concerned with the wrongs committed against the PUBLIC. Criminals are prosecuted by public officials, not individuals.

Identify the publication in which a legal authority - such as a statute or a court decision - can be found.

When Congress passes a law, it can be found here.

Laws are referred to in this way. This is how they appear in federal and state codes. They are compiled by subject.

Arranges all existing federal laws by broad subject and each of the 50 subjects is given both a title and a title number. This is further subdivided into section numbers. 15 U.S.C. Sec 1 = Title 15, Section 1 of the US Code.

Commercially publishes U.S.C.A which is the U.S.C. with annotations included. Similar citation is used.

May be categorized by name or by number.

This is where Administrative rules are published. A daily publication of the US government. These rules are later incorporated into the Code of Federal Regulations.

Trial Courts ---> court of appeals/appellate courts--->State Supreme Courts or US Supreme Court.

Where appellate courts decisions are published. They may also be published in regional reporters which are a part of the national reporter system. Lists citations in this order: Vol No., Name, Page No.

WestLaw - and online legal database that publishes unpublished opinions.

Party appealing the case

Party against whom the appeal is taken

Written opinions explain most decisions reached and reasons for decision. May be unanimous, majority, concurring, or dissenting opinions.