1. An Introduction to Dynamic Business Law
Chapter 1
Chapter 1: An Introduction to Dynamic Business Law
An Introduction to Dynamic Business Law
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2. Overview LO1-1: What is business law?
LO1-2: How does business law relate to business education?
LO1-3: What are the purposes of law?
LO1-4: What are alternative ways to classify the law?
LO1-5: What are the sources of the law?
LO1-6: What are the various schools of jurisprudence?

3. Chapter 1 Discussion
As indicated in Exhibit 1-2 of the textbook, there are many purposes fulfilled by the law, including:
Providing order such that one can depend on a promise or an expectation of obligations.
Serving as an alternative to fighting.
Facilitating a sense that change is possible, but only after a rational consideration of options.
Encouraging social justice.
Guaranteeing personal freedoms.
Serving as a moral guide by indicating minimal expectations of citizens and organizations.
Based on your personal ideology, rank the foregoing purposes of law from most to least important, and discuss your rankings with fellow students. To what extent are your rankings determined by your political affiliation? In your reasoned opinion, is it possible to achieve all of the purposes of law simultaneously, or are certain purposes mutually exclusive (for example, providing order versus guaranteeing personal freedoms)?
Chapter 1 Discussion: As indicated in Exhibit 1-2 of the textbook, there are many purposes fulfilled by the law, including: 1. Providing order such that one can depend on a promise or an expectation of obligations; 2. Serving as an alternative to fighting; 3. Facilitating a sense that change is possible, but only after a rational consideration of options; 4. Encouraging social justice; 5. Guaranteeing personal freedoms; and 6. Serving as a moral guide by indicating minimal expectations of citizens and organizations.
Based on your personal ideology, rank the foregoing purposes of law from most to least important, and discuss your rankings with fellow students. To what extent are your rankings determined by your political affiliation? In your reasoned opinion, is it possible to achieve all of the purposes of law simultaneously, or are certain purposes mutually exclusive (for example, providing order versus guaranteeing personal freedoms)?
[Instructor: See Law and Its Purposes in Chapter 1]

4. Chapter 1 Hypothetical Case 1
John Harrison is the owner of Harrison Enterprises, Inc., a small metal fabrication shop located in Poughkeepsie, New York. Andrew Jameson, an employee of Harrison Enterprises, has approached John with a request. Jameson is the proud parent of a newborn son, and he would like to take the next two weeks off from work in order to bond with his new child. Harrison knows that Jameson does not have any accrued vacation time (shortly before his son was born, Jameson had taken a final two-person family trip to Florida with his wife, Sara). He also knows that Harrison Enterprises is not legally required to comply with the Family and Medical Leave Act (FMLA), since the company only has seventeen employees (FMLA mandates that businesses employing more than fifty people provide their workers with up to twelve weeks' unpaid leave every year for a host of specified reasons, including the birth of a child).
Harrison wonders whether his company has an ethical obligation to comply with the spirit of the Family and Medical Leave Act, even though it does not have a technical, legal obligation of compliance. Advise Harrison as to whether his company has such an ethical obligation. Should Harrison allow Jameson to take his requested two weeks of leave from work?
Chapter 1 Hypothetical Case 1: John Harrison is the owner of Harrison Enterprises, Inc., a small metal fabrication shop located in Poughkeepsie, New York. Andrew Jameson, an employee of Harrison Enterprises, has approached John with a request. Jameson is the proud parent of a newborn son, and he would like to take the next two weeks off from work in order to bond with his new child. Harrison knows that Jameson does not have any accrued vacation time (shortly before his son was born, Jameson had taken a final two-person family trip to Florida with his wife, Sara). He also knows that Harrison Enterprises is not legally required to comply with the Family and Medical Leave Act (FMLA), since the company only has seventeen employees (FMLA mandates that businesses employing more than fifty people provide their workers with up to twelve weeks’ unpaid leave every year for a host of specified reasons, including the birth of a child).
Harrison wonders whether his company has an ethical obligation to comply with the spirit of the Family and Medical Leave Act, even though it does not have a technical, legal obligation of compliance. Advise Harrison as to whether his company has such an ethical obligation. Should Harrison allow Jameson to take his requested two weeks of leave from work?
[Instructor: See Sources of Business Law in Chapter 1]

5. Chapter 1 Hypothetical Case 2
A group of attorneys, judges, and law professionals has collaborated to write a uniform criminal code. The code would create uniformity in criminal law across the United States, defining what constitutes a misdemeanor, what constitutes a felony, how crimes are defined, and what the punishment for particular crimes will be. The code also proposes that the death penalty be abolished, and that the maximum punishment for murder be life imprisonment.
Would you favor the adoption and implementation of such a code? What advantages would result from a uniform criminal code? What disadvantages would result? What is the likelihood that all states would favor its adoption and implementation, as opposed to the traditional practice of each state defining criminal law within its own jurisdiction?    Reference: An Introduction to the Model Penal Code
Chapter 1 Hypothetical Case 2: A group of attorneys, judges, and law professionals has collaborated to write a uniform criminal code. The code would create uniformity in criminal law across the United States, defining what constitutes a misdemeanor, what constitutes a felony, how crimes are defined, and what the punishment for particular crimes will be. The code also proposes that the death penalty be abolished, and that the maximum punishment for murder be life imprisonment. Would you favor the adoption and implementation of such a code? What advantages would result from a uniform criminal code? What disadvantages would result? What is the likelihood that all states would favor its adoption and implementation, as opposed to the traditional practice of each state defining criminal law within its own jurisdiction?
[Instructor: See Classification of the Law in Chapter 1]

6. What Is Business Law?
Definition: The enforceable rules of conduct that govern the actions of buyers and sellers in market exchanges
Business law consists of enforceable rules of conduct that govern commercial relationships. These rules and responsibilities provide the stability required in a thriving market economy.

7. Functional Areas of Business Affected by Business Law
Corporate management
Production and transportation
Marketing
Research and development
Accounting and finance
Human resource management
The functional areas of business affected by business law include corporate management, production and transportation, marketing, research and development, accounting and finance, and human resource management.

8. Purposes of the Law Providing order
Serving as an alternative to altercation
Facilitating a sense that change is possible
Encouraging social justice
Guaranteeing personal freedoms
Serving as a moral guide
There are several purposes served in having law. Law provides order, serves as an alternative to altercation, facilitates a sense that change is possible, encourages social justice, guarantees personal freedoms, and serves as a moral guide.

9. Classification of Law: Private and Public
Private Law: Regulates disputes between private individuals or groups
Public Law: Regulates disputes between private individuals or groups and their government
Law can be classified as either public or private. Private law regulates disputes between private individuals or groups, while public law regulates disputes between private individuals or groups and their government.

10. Classification of Law: Civil and Criminal
Civil Law: The body of laws that govern the rights and responsibilities involved in relationships between persons and between persons and their government
Criminal Law: A classification of law involving the rights and responsibilities an individual has with respect to the public as a whole
Law can be further classified as either civil or criminal. Civil law lays out the rights and responsibilities in relationships between persons and between persons and their government, while criminal law regulates situations in which someone commits a wrongful act against the public as a whole.

11. Sources of Business Law
Constitutions
Statutes
Cases (common law)
Administrative law
Treaties
Executive orders
Federal and state sources of business law include constitutional law, statutes, judicial decisions, administrative law, treaties, and executive orders.
Constitutional law refers to the general limits and powers of a government as interpreted from its written constitution.
Statutory law is the assortment of rules and regulations put forth by legislatures.
Case law is the collection of legal interpretations made by judges. They are considered to be law unless otherwise revoked by a statutory law. Also known as common law.
Administrative law is the collection of rules and decisions made by administrative agencies to fill in particular details missing from constitutions and statutes.
A treaty is a binding agreement between two nations or international organizations.
An executive order is a directive that can be issued by the president and state governors requiring officials in the executive branch to perform their functions in a particular manner.

12. Major Federal Administrative Agencies (Independent)
Commodity Futures Trading Commission
Consumer Product Safety Commission
Equal Employment Opportunity Commission
Federal Trade Commission
Federal Communications Commission
National Labor Relations Board
National Transportation Safety Board
Nuclear Regulatory Commission
Securities and Exchange Commission
The federal, state, and local governments have dozens of administrative agencies whose task is to perform a particular government function. Federal administrative agencies can be classified as either independent or executive. Major independent federal administrative agencies include the Commodity Futures Trading Commission, the Consumer Product Safety Commission, the Equal Employment Opportunity Commission, the Federal Trade Commission, the Federal Communications Commission, the National Labor Relations Board, the National Transportation Safety Board, the Nuclear Regulatory Commission, and the Securities and Exchange Commission.

13. Major Federal Administrative Agencies (Executive)
Federal Deposit Insurance Corporation
Occupational Safety and Health Administration
General Services Administration
National Aeronautics and Space Administration
Small Business Administration
U.S. Agency for International Development
National Science Foundation
Veterans Administration
Office of Personnel Management
Major executive federal administrative agencies include the Federal Deposit Insurance Corporation, the Occupational Safety and Health Administration, the General Services Administration, the National Aeronautics and Space Administration, the Small Business Administration, the U.S. Agency for International Development, the National Science Foundation, the Veterans Administration, and the Office of Personnel Management.

14. Schools of Jurisprudence
Natural law
Legal positivism
Identification with the vulnerable
Historical school: Tradition
Legal realism
Cost-benefit analysis
When legislators or courts make law, they do so guided by certain habits of mind and specific beliefs about human nature. Such beliefs may be commonly held and thus create various schools of thought. Schools of jurisprudence include natural law, legal positivism, identification with the vulnerable, the historical school tradition, legal realism, and cost-benefit analysis.
Natural law is the school of jurisprudence that recognizes the existence of higher law, or law that is morally superior to human laws.
Legal positivism is the school of jurisprudence which holds that because society requires authority, a legal and authoritarian hierarchy should exist. When a law is made, therefore, obedience is expected because authority created it.
Identification with the vulnerable is the school of jurisprudence of pursuing change on the grounds that some higher law or body of moral principles connects all of us in the human community.
One of the guidelines most often used for shaping the law is tradition, or custom. Stare decisis is rooted in this historical school. When we follow tradition, instead of reinventing the wheel, we link our behavior to the behavior of those who faced similar problems in earlier time periods.
Legal realism is the school of jurisprudence which dictates that context must be considered as well as law. Context includes factors such as economic conditions and social conditions.
Cost-benefit analysis is an economic school of jurisprudence in which all costs and benefits of a law are given monetary values. Those laws with the highest rations of benefits to costs are then preferable to those with lower ratios.

15. Chapter 1 Hypothetical Case 3
In 2013, Wal-Mart Stores, Inc. pleaded guilty to charges of dumping hazardous waste at sites in California and Missouri. The company was fined $82 million for actions in violation of the Clean Water Act and the Federal Insecticide, Fungicide and Rodenticide Act. In addition, the company agreed to create an environmental management system throughout its network of retail stores. The resolution was a settlement of suits filed by the U.S. Environmental Protection Agency (EPA) and the Department of Justice.
Some believe that the powers of the independent federal administrative agencies, such as the EPA, should be limited, noting that regulatory agencies today straddle the lines between the legislative, executive, and judicial areas of government. Do you agree that these agencies are too powerful? Or are they not doing enough? What would be the advantages of limiting regulatory agencies' powers? What would be the disadvantages? What are the avenues available to lawmakers—and the people who vote for them—to limit or expand their powers?   References: Wal-Mart Is Fined $82 Million Over Mishandling of Hazardous Wastes
Who Will Regulate the Regulators? Administrative Agencies, the Separation of Powers, and Chevron Deference
Chapter 1 Hypothetical Case 3: In 2013, Wal-Mart Stores, Inc. pleaded guilty to charges of dumping hazardous waste at sites in California and Missouri. The company was fined $82 million for actions in violation of the Clean Water Act and the Federal Insecticide, Fungicide and Rodenticide Act. In addition, the company agreed to create an environmental management system throughout its network of retail stores. The resolution was a settlement of suits filed by the U.S. Environmental Protection Agency (EPA) and the Department of Justice.   Some believe that the powers of the independent federal administrative agencies, such as the EPA, should be limited, noting that regulatory agencies today straddle the lines between the legislative, executive, and judicial areas of government. Do you agree that these agencies are too powerful? Or are they not doing enough? What would be the advantages of limiting regulatory agencies' powers? What would be the disadvantages? What are the avenues available to lawmakers—and the people who vote for them—to limit or expand their powers?
[Instructor: See Sources of Business Law in Chapter 1]