1-2 Chapter Overview How legal issues impact business planning and strategy. The foundations, definitions, and scope of various primary and secondary sources of law. Classifications of law.
1-3 “THEORY to PRACTICE” The Melvin Text 2-Step System Step 1: developing insight by understanding legal fundamentals Step 2: learning to apply legal theories in practice
1-4 Primary Sources of Law Constitutional law Statutory law Common law Administrative law
1-5 Constitutional Law Establishes important legal principles Not designed to specifically resolve every legal issue or case May require “interpretation” by courts Exists at state and federal levels
1-6 Statutory Law Created by a legislative body Approved or disapproved by the executive branch (i.e., governor or president) Also known as “codes”
1-7 Administrative Law Source of law that regulates the exercise of authority by government agencies Also known as “regulations”
1-8 Common Law Made by appellate courts Based on the fundamentals of previous cases that had similar facts Also known as “case” law
1-9 Case Precedent Once an appellate court has decided a particular case, the decision becomes a case precedent. Precedent is usually only binding within the jurisdiction of the court setting the precedent.
1-10 Stare Decisis The doctrine of stare decisis, one of the most important concepts in American law, is the principle that similar cases with similar facts and issues should have the same judicial outcome.
1-11 Advantages of Stare Decisis Allows individuals and business to have some degree of confidence that the law will remain reasonably consistent. Requires all lower courts, such as a trial court, to follow the case precedent so that any similar case would be decided according to the precedent.
1-12 Secondary Sources of Law Secondary sources have no independent authority, nor are they legally binding. Include the Restatements of the Law and sets of model statutes Example: Uniform Commercial Code
1-13 learning outcome checklist 1 - 1 Understand the broad definition and origins of law. 1-2 List and explain the purposes of law. 1-3 Explain the importance and benefits of legal awareness for business owners and managers in creating strategy and adding value to a company.
1-14 learning outcome checklist 1-4 Articulate the role of counsel in legal decision making in a business context. 1-5 Recognize, explain, and give examples of sources of American law. 1-6 Differentiate between the concepts of law and equity.
1-15 learning outcome checklist 1-7 Understand the legal doctrine of stare decisis. 1-8 Identify and apply important equitable maxims. 1-9 Classify the law into several broad categories.