Chapter 1 - Legal Environment of Business Vocabulary

Vocabulary flashcards covering core terms and definitions from Chapter 1 - Legal Environment of Business.

Law

Rules that tell people and businesses what they may do, must do, and must not do.

Primary law

The actual law that people and courts must follow.

Secondary law

Books and articles that explain or comment on primary law.

Constitutional law

Law found in the U.S. Constitution and state constitutions.

U.S. Constitution

The highest law in the United States.

Unconstitutional

Not allowed because it conflicts with the Constitution.

State constitution

The highest law within a state, as long as it does not conflict with the U.S. Constitution or federal law.

Statutory law

Law created and passed by a legislative body.

Statute

A written law passed by a legislature.

Federal statute

A law passed by Congress that applies throughout the United States.

State statute

A law passed by a state legislature that applies inside that state.

Ordinance

A local law passed by a city or county government.

Zoning ordinance

A local law that controls how land may be used.

Uniform law

A model law written for states to consider adopting so their rules can be more alike.

Uniform Commercial Code (UCC)

A widely adopted set of rules that makes business transactions more consistent across states.

Commercial transaction

An exchange connected to business, such as buying, selling, or paying.

Administrative law

Rules, orders, and decisions created by government agencies so they can perform their jobs.

Administrative agency

A government organization created to perform a specific job and often to make and enforce rules.

Regulation

A rule made by a government agency.

Regulatory environment

All the government rules and oversight that affect how a business operates.

Executive agency

An administrative agency within the executive branch. At the federal level, it is subject to the president's authority.

Independent regulatory agency

A federal administrative agency outside the executive departments that has more independence from the president.

Federal Trade Commission (FTC)

An independent federal agency that protects consumers and promotes fair competition.

Securities and Exchange Commission (SEC)

An independent federal agency that regulates securities markets and helps protect investors.

Environmental Protection Agency (EPA)

A federal agency that protects human health and the environment.

Case law

Rules and legal principles announced in court decisions.

Common law

Law developed through customs and judges' decisions instead of being passed by a legislature.

Judicial decision

A judge's or court's ruling in a case.

Legal precedent (precedent)

An earlier court decision used as an example or authority when deciding a later case with similar facts.

Stare decisis

The common-law rule that courts should follow precedents from earlier cases.

Jurisdiction

The geographic area, type of case, or people over which a court has legal power.

Controlling precedent

A precedent that a court is required to follow.

Binding authority

A source of law that a court must follow.

Case of first impression

A case involving a legal issue that the court has not decided before and for which no controlling precedent exists.

Persuasive authority

A legal source a court may use for guidance but is not required to follow.

Public policy

Government principles or goals based on what society generally believes is good or important.

Unpublished opinion

A court decision not chosen for publication in a printed legal reporter.

Legal reporter

A published collection of court opinions.

Legal reasoning

The thinking process a judge uses to choose the law, apply it to the facts, and connect the decision to earlier cases.

IRAC method

A four-step method for analyzing a legal problem: Issue, Rule, Application, and Conclusion.

Issue

The legal question the court must answer.

Rule

The law or legal principle that applies to the issue.

Application

The step where the rule is connected to the specific facts of the case.

Conclusion

The final answer reached after applying the rule to the facts.

Case on point

An earlier case with facts and legal issues that are very similar to the current case.

Legal stability

The idea that the law stays consistent enough for people to understand and predict it.

Legal encyclopedia

A reference work that gives broad explanations of legal topics.

Treatise

A detailed book written by a legal expert about one area of law.

Law review

A scholarly legal journal that publishes articles about laws and legal issues.

Restatement of the Law

A respected summary of common-law rules prepared by legal experts. It guides courts but is not itself binding law unless adopted.

Substantive law

Law that creates and defines people's legal rights, duties, and obligations.

Procedural law

Law that explains the steps used to enforce substantive rights.

Federal law

Law created by the U.S. national government.

State law

Law created by a state government and generally applied within that state.

Private law

Law dealing with relationships between private people or organizations.

Public law

Law dealing with the relationship between people or organizations and the government.

National law

The law that operates within one country.

International law

Rules and agreements that govern relationships across countries or between nations.

Civil law

The branch of law that defines and enforces private or public rights in noncriminal disputes.

Civil case

A noncriminal lawsuit in which a person, business, or sometimes the government asks a court for a remedy.

Private party

A person or organization acting as a nongovernment participant.

Relief (legal remedy)

What a court gives or orders to fix a legal wrong.

Criminal law

The branch of law that defines and punishes wrongful acts committed against the public.

Criminal defendant

A person or organization formally accused of committing a crime.

Prosecution

The government's legal case against someone accused of a crime.

District attorney (D.A.)

A public lawyer who prosecutes criminal cases for the government.