Business Law: Exam 1

Business Law

Areas of law that affect businesses and business decisions.

Nature of Law

Rules that tell people and businesses what behavior is allowed or required and that can be enforced by courts.

Purpose of Law

To keep order, settle disputes, promote fairness, and allow society to change in an organized way.

Public Law

Law involving the government and its relationship with people or businesses.

Private Law / Civil Law

Law involving disputes between private people or businesses.

Constitution

The highest basic source of law in the United States.

Statutory Law

Laws passed by legislatures such as Congress or state legislatures.

Case Law / Common Law

Law that develops through court decisions and judges' interpretations.

Administrative Law

Rules and regulations made by government agencies.

Treaty

An agreement between the United States and another country or international entity.

Executive Order

A directive issued by the president to the executive branch.

Historical School of Law

Approach that looks at tradition and past court decisions when interpreting law.

Originalism

Interpreting legal language based on its original meaning when it was written.

Legal Realism

Approach that considers current social, economic, and real-world conditions when interpreting law.

Cost-Benefit Analysis

Comparing the expected benefits of a decision with its expected costs.

Identification with the Vulnerable

Approach to law that focuses on protecting people or groups who are vulnerable.

Ethics

Principles used to determine what is right and wrong.

Business Ethics

Applying ethical principles to business decisions.

Law vs. Ethics

What you MUST do; what you SHOULD do.

Social Responsibility

The idea that businesses have responsibilities to society and people affected by their decisions.

Stakeholder

Any person or group affected by a business decision.

Shareholder

A person who owns stock in a company.

Stakeholder vs. Shareholder

A shareholder owns part of the company; a stakeholder is anyone affected by the company.

WH Framework

A framework for ethical decision-making that asks WHO the stakeholders are and HOW the decision should be made.

WHO in the WH Framework

Identify all stakeholders affected by the decision.

HOW in the WH Framework

Use ethical values and guidelines to decide what action should be taken.

Values

Principles or beliefs that guide decisions, such as honesty, fairness, respect, and responsibility.

Golden Rule

Treat other people the way you would want to be treated.

Disclosure Rule

Ask whether you would be comfortable if your decision became public.

Professional Ethic

Ask whether respected professionals would consider the decision acceptable.

Utilitarianism

Choose the action that creates the greatest overall good for the greatest number of people.

Amoral Business

A business approach that makes decisions without considering whether they are ethical.

Moral Unity

The idea that the same basic moral standards should apply in business and personal life.

Jurisdiction

A court's legal authority to hear and decide a case.

Original Jurisdiction

The authority of a court to hear a case for the first time.

Appellate Jurisdiction

The authority of a court to review the decision of a lower court.

Personal Jurisdiction

A court's authority over the people or businesses involved in a case.

Subject-Matter Jurisdiction

A court's authority over the type of legal issue involved in a case.

Venue

The proper geographic location where a lawsuit should be heard.

Jurisdiction vs. Venue

Court has power; the proper place.

Standing

The requirement that a person bringing a lawsuit has a real legal injury or interest in the dispute.

Case or Controversy

There must be a real legal dispute for a court to decide.

Ripeness

The dispute must be developed enough and ready for the court to decide.

Statute of Limitations

The deadline for filing a lawsuit.

Civil Litigation

The process of resolving a private legal dispute through the court system.

Pretrial

The stage before trial that may include pleadings, discovery, and motions.

Discovery

The process where parties obtain information and evidence from each other before trial.

Appeal

A request for a higher court to review a lower court's decision.

Alternative Dispute Resolution (ADR)

Ways of resolving disputes without going through a full traditional court trial.

Negotiation

The parties communicate directly and try to reach an agreement themselves.

Mediation

A neutral third person helps the parties reach their own agreement.

Arbitration

A neutral third person hears the dispute and makes a decision.

Mediator

A neutral person who helps the parties reach an agreement but does not normally decide the outcome.

Arbitrator

A neutral person who hears both sides and makes the decision.

Mediation vs. Arbitration

Mediator helps the parties decide; arbitrator decides for the parties.

Federalism

The division of government power between the federal government and state governments.

Legislative Branch

Congress; the branch of government that makes laws.

Executive Branch

The president; the branch that carries out and enforces laws.

Judicial Branch

The federal court system; the branch that interprets laws.

Checks and Balances

A system in which each branch of government has powers that limit the other branches.

Supremacy Clause

The rule that valid federal law is supreme over conflicting state or local law.

Commerce Clause

The constitutional power allowing Congress to regulate commerce with foreign countries and among the states.

Taxing and Spending Power

The federal government's constitutional power to collect taxes and spend government money.

Bill of Rights

The first ten amendments to the U.S. Constitution.

First Amendment

Protects freedom of religion, speech, press, peaceful assembly, and petition.

Speech Not Protected by the First Amendment

Defamation, obscenity, and fighting words are examples listed in the class slides.

Defamation

A false statement that harms another person's reputation.

Obscenity

Speech or material that meets the legal test for obscene content and is not protected by the First Amendment.

Miller Test

The three-part Supreme Court test used to determine whether material is legally obscene.

Establishment Clause

The government cannot make a law establishing or promoting religion.

Free Exercise Clause

The government cannot prohibit the free exercise of religion.

Second Amendment

Protects the right to bear arms.

Third Amendment

Generally prevents the government from housing soldiers in private homes without permission.

Fourth Amendment

Protects against unreasonable searches and seizures.

Probable Cause

A reasonable basis to believe that evidence of a crime will be found.

Fifth Amendment

Protects against self-incrimination and double jeopardy and includes due process and takings protections.

Self-Incrimination

The protection against being forced to testify against yourself.

Double Jeopardy

Protection against being tried twice for the same crime in the same tribunal.

Due Process

The government cannot deprive a person of life, liberty, or property without due process of law.

Procedural Due Process

Requires the government to use fair procedures.

Substantive Due Process

Focuses on whether the law itself is fundamentally fair.

Procedural vs. Substantive Due Process

Procedural = HOW the government acts; substantive = WHAT the law does.

Takings Clause

If the government takes private property for public use, it must provide just compensation.

Just Compensation

Fair payment, generally fair market value, for private property taken by the government.

Sixth Amendment

Provides criminal defendants rights such as a speedy public trial, impartial jury, witnesses, and an attorney.

Seventh Amendment

Provides a right to a jury trial in certain civil cases.

Eighth Amendment

Prohibits excessive bail, excessive fines, and cruel and unusual punishment.

Ninth Amendment

The listing of certain rights in the Constitution does not mean people have no other rights.

Tenth Amendment

Powers not given to the federal government are reserved to the states.

Fourteenth Amendment

Prevents states from denying people equal protection of the laws.

Strict Scrutiny

The highest level of judicial scrutiny; in the class slides it applies to race, national origin, citizenship, or fundamental rights.

Strict Scrutiny Standard

The government must show a compelling state interest.

Intermediate Scrutiny

In the class slides, generally applies to classifications based on gender or legitimacy of children.

Intermediate Scrutiny Standard

The classification must be substantially related to an important government objective.

Rational Basis Test

Used for most other classifications.

Rational Basis Standard

The classification must advance a legitimate government interest.