Comprehensive Legal Systems and Business Ethics in U.S. Law

Common Law

Developed from custom/judicial decisions. Judges must follow precedents.

Precedent

Court decision used for deciding similar cases.

Constitutional Law

U.S. Constitution is supreme. State constitutions exist. Laws violating it are unenforceable.

Statutory Law

Laws created by legislatures; must comply with constitutions.

Administrative Law

Governs administrative agencies' powers/actions.

Civil Law

Acts against a person; remedy is compensation.

Criminal Law

Acts against society; remedy is punishment.

Based on English law; used in U.S., Canada, Australia, India, New Zealand

Common Law

International Law

Written/unwritten laws governing individuals and governments globally.

Stare Decisis

Judges are obligated to follow the precedents established within their jurisdictions.

Remedies

The relief given to innocent parties to enforce a right or to prevent a wrong.

Supreme Law of the Land

The U.S. Constitution.

International Law Sources

The laws of individual nations, customs, and treaties.

Statutory Law Includes

Laws enacted by Congress, state legislatures, as well as ordinances passed by cities and counties.

Civil Case

In a civil case, one party tries to make another party comply with a duty.

Civil Law System

primary source of law is a statutory code.

Business Ethics

Study of right vs. wrong behavior in business.

Enron Case

Misleading accounting, self-dealing, unethical corporate culture.

Sarbanes-Oxley Act (2002)

Strict auditing/accounting rules.

Foreign Corrupt Practices Act

Prohibits bribery of foreign officials.

Duty-Based Ethics

Based on religious/philosophical beliefs; involves compassion.

Outcome-Based Ethics (Utilitarianism)

Evaluates actions by consequences; greatest good for greatest number.

Ethics

The study of what constitutes right or wrong behavior.

Sarbanes-Oxley Act

The act that requires certain companies to set up confidential systems for reporting illegal/unethical practices.

Legal compliance as a moral minimum

Simply obeying the law.

Two fundamental approaches to ethical reasoning in business

Duty-based and outcome-based.

Duty-based ethics often derive from

Revealed truths.

Utilitarianism

A type of outcome-based ethics.

Assessment of negative/positive effects of alternative actions

Cost-benefit analysis.

Effective corporate compliance programs

Monitored by separate committee.

Jurisdiction

Territorial boundaries within which a court can decide cases concerning a defendant.

Court Structure - NY State vs Federal

Comparison of court levels in NY State and Federal courts.

Civil Court Procedure: Summons & Complaint

Notice of lawsuit; filed with court.

Service of Summons & Complaint

Delivered to defendant by third party.

Answer

Defendant admits/denies allegations or counterclaims.

Discovery

Gathering evidence via depositions (sworn testimony) & interrogatories (written Q&A).

Trial

Parties present case to court.

Appeal

Either party may appeal; briefs filed; court renders opinion.

Motion to Dismiss

Defendant asks court to throw out a frivolous claim.

Motion for Summary Judgment

One side can win without trial if no facts are disputed.

Appellate Courts

The typical state court system is made up of trial courts and appellate courts.

Federal Court Jurisdiction

A federal court can exercise jurisdiction if a case involves a federal law.

Standing to Sue

Before a person can bring a lawsuit, the party must have standing to sue.

Complaint

A lawsuit begins when a lawyer files a complaint.

Default Judgment

A judgment entered by a court against a defendant who fails to file an answer is called a default judgment.

Appellant

The party who appeals a trial court's judgment is known as the appellant.

Negotiation

The simplest form of alternative dispute resolution (ADR) is negotiation.

Mediation

A traditional type of ADR where a third party works with both sides to facilitate a resolution is called mediation.

Arbitration

A formal method of ADR where disputes are settled by a neutral third party who renders a legally binding decision is called arbitration.

Federal Form of Government

Power divided between central government & states.

Commerce Clause

Congress regulates interstate commerce.

Bill of Rights

First 10 amendments; examples include freedom of speech & religion.

Equal Protection Clause

States cannot deny equal protection; laws are scrutinized by classification.

Strict Scrutiny

Race: Strict scrutiny; compelling reason required.

Intermediate Scrutiny

Sex: Intermediate scrutiny; important reason required.

Legitimate Government Interest

Other: Legitimate government interest.

Checks and Balances

The system of checks and balances allows each branch to limit the actions of the others.

Example of Checks and Balances

Legislative branch enacts laws; executive branch can veto.

Commerce Clause Authorization

Commerce Clause authorizes Congress.

Federal Government Regulation

Federal government regulates enterprises in U.S. involved in interstate commerce.

Interstate commerce

in U.S. involved in interstate commerce

Supremacy clause

State law conflicting with federal law is invalid under

Bill of Rights protections

some protections apply

Commercial speech under First Amendment

less protection than noncommercial

Tort

a civil wrong not arising from contract; damages are sought

Intentional Torts

Assault: Creates fear of harmful/offensive contact.

Battery

Actual harmful/offensive contact.

Unintentional Torts (Negligence)

Duty of Reasonable Care

Breach of Duty

Failure to meet the standard of care

Causation

Link between breach and injury

Damage

Actual harm suffered by the plaintiff

Duty of Professionals

Must act consistent with knowledge/skill (e.g., accountants, physicians)

Strict Liability

Defendant liable regardless of care if engaging in inherently dangerous activities

Basic purpose of tort law

provide remedies for acts causing injury

Difference between tort and criminal law

tort = individual brings suit for compensation

Intentional tort

must intend to commit act that caused harm

False imprisonment

confined/restrained intentionally without justification

Defamation

injures reputation

Negligence

Not an intentional tort against property

Four elements of negligence

duty, breach, causation, damage

Strict liability applies to

inherently dangerous activities