Chapter 1 Law & Legal Reasoning

Areas of Law That May Affect Business Decision Making

• Contracts

• Sales & E-Commerce

• Negotiable Instruments

• Creditors Rights

• Intellectual Property

• Professional Liability

• Product Liability

• Torts

• Agency

• Business Organizations

• Environmental Laws

• Courts and Court Procedures

Laws and regulations affect almost all business activities such as:

• Hiring

• Firing

• Workplace safety

• Manufacturing & marketing products

• Business financing

• & more

Sources of American Law

• Primary source of law

• Secondary source of law

Primary Source of Law

A document that establishes the law on a particular issue, such as constitution, a statute

4 kinds of primary sources of law:

1) Constitutional

2) Statutory

3) Administrative

4) Common law (also known as case law)

T/F: Wikipedia is a primary source of law

FALSE

Secondary source of law

A publication that summarizes or interprets the law, such as a legal encyclopedia, a legal treatise, or an article in a law review

Constitutional law

The body of law derived from the US Constitution & the constitutions of the various states

US Constitution is the supreme law of the land

• Each state has its own constitution, which is supreme within the state’s borders, unless it conflicts with the US Constitution

Can the states give you additional freedoms that the US Constitution cannot?

Yes, for ex California put in their constitution that they would respect gay marriage before it was ever discussed

Can the states take away any freedoms given to you by the federal Constitution?

No, because the federal gov/constitution is the supreme law of the land

Preemption

Principle established under Supremacy Law. Conflicting law will be struck down and federal law will be supreme

Statutory Law:

The body of law enacted by legislative bodies (as opposed to constitutional law, administrative law, or case law)

Statutory Laws happen at the ________, __________, and _________ level

state, federal, and local

Statutory Law

• Local Ordinances

• Applicability of Statutes

• Uniform Laws

• The Uniform Commercial Code (UCC)

Ex of laws @ state level:

• Concealed carry

• Drinking age (withholds highway money)

• Marriage age

• Driving Laws

Local laws are not called laws, they’re called ______

ordinances

Uniform Commercial Code

System of laws across the federal landscape that make commerce easier for business.

Administrative Law

• Administrative Law is made through Administrative Agencies

• Federal Agencies

• State & Local Agencies

Administrative Law

• How Administrative Law Works in the Real World:

• Agency Creation

• Rulemaking: rules, orders & decisions of administrative agencies

• Enforcement and Investigation

• Adjudication

Federal Agencies are allowed to make rules in their particular area and they are allowed to enforce them.

Adjudication

Administrative Law happens at 3 levels:

federal, state, and local. they all do the same thing, they are created or a purpose, they have rule making, and adjudication where they enforce the rules they make

Case Law:

The rules of law announced in court decisions. Case law interprets statutes, regulations, constitutional provisions, and governs all areas not covered by statutory or administrative law

Case law can also be called:

court decisions, or common law

Common Law:

• Early English Courts:

General rules that began in 1066

Common Law:

• Stare Decisis

• Established common law

• Controlling precedents

• Stare Decisis and Legal Stability

• Departures from precedent

  • Brown v Board of Education of Topeka

• When there is no precedent

Stare Decisis and Legal Reasoning:

1. Issue- What are the key facts & issues?

2. Rule- What rule of law applies to the case?

3. Application- How does the rule of law apply to the particular facts and circumstances of this case?

4. Conclusion- What conclusion should be drawn?

Remedies in Equity:

Based on justice and fair dealing, a chancery court does what is right:

• specific performance

• injunction

• recission

Equitable Remedies and Courts of Equity

• Remedy

• Remedies at Law

Remedy:

the relief given to an innocent party to enforce a right or compensate for the violation of a right. essentially what will fix your problem?

Remedies at law: $$

In king’s courts, remedies were restricted to damages in either money or property

Plaintiff

One who initiates a lawsuit

Defendant

One against whom a lawsuit is brought or the accused person

The Merging of Law & Equity

A court will normally only gran an equitable remedy only when the remedy at law (property or monetary damages) is inadequate

Equitable Maxims

Do right to get right. Don’t be suing me if my dog bites you if you’re poking at him. Provide guidance in deciding whether plaintiffs should be granted equitable relief

Classifications of Law

• Substantive vs Procedural Law

Substantive Law:

Law that defines, describes, and regulates, and creates legal rights and obligations. Ex: the right to free speech

Procedural Law:

Law that establishes the methods of enforcing the rights established by substantive law. Ex: if police want to search your house there’s steps they need to follow

Civil Law: basically, deals with money

• People’s obligation to one another

• 1 individual vs another

• The branch of law dealing with the definition and enforcement of all private or public

Criminal Law: deals with the government

• Obligations to society

• The branch of law that defines and punishes the wrongful actions committed against the public

  • Criminal defendants are prosecuted by public officials on behalf of the state

    • Objective is to punish the wrongdoer and deter others from similar actions

National Law:

Law that pertains to a particular nation inside its (as opposed to international law)

International law:

The law that governs relations among nations

A Federal Form of Government

Classy Cycles, Inc vs Panama City Beach (2019)

Relations Among the States

• Privileges & Immunities clause

• Full Faith & Credit Clause

Privileges & Immunities Clause

Prevents a state from passing laws that would create an undo burden on another state or its citizens

• basic activities include transferring property, seeking employment, and accessing the court system

Full Faith & Credit Clause

Applies to civil matters.

• Each state is going to recognize contracts and agreements across state lines

(one of the main arguments for gay marriage)

Separation of Powers

3 branches of gov:

• Executive - enforces law

• Legislative - makes law

• Judicial - interprets law

States adopted this system as well

Commerce Clause (Art. 1 S. 8)

• US Constitution gives Congress the power to: “regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes”

• Single biggest most important clause of the constitution as it applies to businesses.

Landmark in the Law

Gibbons v. Ogden (1824)

Set the standard as to when Congress could regulate trade. it defined it.

• The national gov had the exclusive power to regulate interstate commerce

• Set the standard for when gov could regulate commerce

  • If an activity “substantially affects interstate commerce” Congress can regulate it.

    • Handled by a case-by-case basis

The Commerce Clause Today

• in theory the gov can stretch it and say the commerce clause applies to everything. the gov has pulled back a couple of times though,

  • Only occasionally has the Supreme Court curbed the federal government’s regulatory authority under the commerce clause

    • Spotlight Case: Gonzales v Raich (2005): old ladies and marijuana

    • Ex: Guns in Washington DC

Heart of Atlanta Motel v United States (1964)

Owner of hotel wouldn’t rent to people of color at all. in 1964 congress passed civil rights act saying you could not discriminate on race, color, religion, national origin. His defense was that he was local and didn’t affect interstate commerce.

Court held that his behavior “substantially affected interstate commerce” so the Federal gov could regulate his activites. The Civil Right Act applied to him. The majority of the people staying in his hotel were participating in conventions and he was on a major hwy.

If the case of Heart of Atlanta Motel v United States was a purely local mom and pop and you don’t substantially affect interstate commerce can you discriminate?

Yes

Can you discriminate if you have a private club?

Yes, if it is purely local

The Supremacy Clause (Article VI (6) )

Constitution, laws, and treaties of the US are the “supreme law of the land”

• Preemption

Preemption

A doctrine under which certain federal laws preempt, or take precedence over, conflicting state or local laws

Gucci America, Inc. v. Wang Huoqing (2011) — Key Takeaways

• Chinese defendant (Huoqing) sold counterfeit Gucci online.

• Gucci sued for trademark infringement in California federal court.

• Legal question: Could the U.S. court have personal jurisdiction over Huoqing just because his website targeted U.S. customers?

• Court said yes — Huoqing’s interactive website (allowing sales to U.S. customers) was enough for personal jurisdiction.

• Shows how courts handle personal jurisdiction with foreign defendants in the internet age.