P A R T P A R T Foundations of American Law The Nature of Law The Resolution of Private Disputes Business and The Constitution Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking 1 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

The Nature of Law PA E TR HC 1 “The sacred rights of mankind... are written, as with a sun beam in the whole volume of human nature,... and can never be erased or obscured by mortal power.” Alexander Hamilton, 1775

Learning Objectives  Types and sources of law  Important legal doctrines  Classification of law  Jurisprudence and legal reasoning  Statutory interpretation  Limitations on judicial power 1 - 4

Types or Sources of Law  Federal, state, and tribal level:  U.S. Constitution : establishes governmental structure, specific rights and duties U.S. Constitution  Statute : enacted by legislative body to regulate conduct  Common Law : case law (judge-made)  Administrative Law : agency rules to implement enforcement of statutes 1 - 5

Types or Sources of Law  Issued at chief executive level:  Executive Order : under limited powers  Treaty : with other nations, by the U.S. president on behalf of the nation, and ratified by the U.S. Senate 1 - 6

Important Doctrines  Stare Decisis ( let the decision stand )  Doctrine of precedent applied in common law  Equity  Applied by the judiciary to achieve justice when legal rules would produce unfair results  Federal supremacy :  Rule of priority for conflicts between laws that holds U.S. Constitution the supreme law of land (Art. VI, Sec. 2, U.S. Constitution) 1 - 7

Classification of Law  Criminal law establishes duties to society  Government charges and prosecutes defendant, who is found guilty or innocent  Civil law establishes duties between private parties  Plaintiff sues defendant for monetary damages or equitable relief 1 - 8

Classification of Law  Substantive law establishes rights and duties of people in society  Procedural law establishes how to enforce those rights and duties  Public law refers to the relationship between governments and private parties  Private law refers to the regulation of conduct between private parties 1 - 9

Jurisprudence  Jurisprudence refers to the philosophy of law as well as the collection of laws  Legal positivism : law is the command of a recognized political authority  Natural law : universal moral rules bind all people whether written or unwritten  See U.S. v. Lynch

Jurisprudence  Legal realism defines law as the behavior of the judiciary as they rule on matters within the legal system  Sociological jurisprudence unites theories that examine law within its social context

Legal Reasoning  Basically deductive, with the legal rule as the major premise and facts as the minor premise  Court may stand on precedent or distinguish prior case from current case  If precedent inapplicable, new rule developed  See Hagan v. Coca-Cola Bottling Co

Statutory Interpretation  Plain meaning rule : court applies statute according to usual meaning of the words  See Hyatt v. Anoka Police Department  A court examines legislative history and purpose when plain meaning rule is inadequate  See General Dynamics Land Systems, Inc. v. Cline  Courts may interpret a statute in light of a general public purpose or public policy

Limitations on Judicial Power  Courts limited to deciding existing cases or controversies  Parties must have standing (direct interest in the outcome) to sue Do plants and animals have legal standing?

Global Business Environment  Courts may faced with treaty interpretation  The U.S. Supreme Court interpreted The Warsaw Convention in Olympic Airways v. Husain Olympic Airways v. Husain  How would you have interpreted the treaty language? “The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of the operations of embarking or disembarking.” Warsaw Convention, Art. 17

Test Your Knowledge  True=A, False = B  The Constitution, statutes, and case law are sources of law in the United States  Agency regulations, presidential orders, and treaties are sources of law in the United States  Stare decisis refers to the doctrine of equity  The Supremacy Clause states that the U.S. Constitution is the supreme law of the land

Test Your Knowledge  True=A, False = B  Civil law establishes the duties an individual has to keeping a civil society  Substantive law establishes how to enforce the rights and duties of people in society  Jurisprudence refers to the philosophy of law as well as the collection of laws  Legal reasoning is basically inductive

Test Your Knowledge  Multiple Choice  The plain meaning rule means that the court applies a statute  (a) according to the unique or special meaning of words  (b) according to usual meaning of the words  (c) according to public policy and legislative purpose

Test Your Knowledge  Multiple Choice  Courts are:  (a) Limited to hearing existing cases or controversies  (b) Limited to hearing cases in which the plaintiff has standing (a direct interest in the outcome)  (c) Unlimited in types of cases they may hear  (d) All of the above  (e) Both A & B

Thought Question  What do you think the authors of the U.S. Constitution would think about current legal issues in our society?