Chapter 1

Law

A body of enforceable rules governing relationships among individuals and between individuals and their society.

Equity

A branch of law founded on notions of justice and fair dealing—that seeks to supply a remedy when no adequate remedy at law is available.

Stare Decisis

A common law doctrine under which judges are obligated to follow the precedents established in prior decisions.

Precedent

A court decision that furnishes an example or authority for deciding subsequent cases involving identical or similar facts.

Courts of Law

A court in which the only remedies that could be granted were things of value, such as money damages. In the early English king's courts, courts of law were distinct from courts of equity.

Concurring Opinion

A court opinion by one or more judges or justices who agree with the majority but want to make or emphasize a point that was not made or emphasized in the majority's opinion.

Plurality Opinion

A court opinion that is joined by the largest number of the judges or justices hearing the case, but fewer than half of the total number.

Dissenting Opinion

A court opinion that presents the views of one or more judges or justices who disagree with the majority's decision.

Majority Opinion

A court opinion that represents the views of the majority (more than half) of the judges or justices deciding the case.

Courts of Equity

A court that decides controversies and administers justice according to the rules, principles, and precedents of equity.

Administrative Agency

A federal or state government agency created by the legislature to perform a specific function, such as to make and enforce rules pertaining to the environment.

Statutes of Limitations

A federal or state statute setting the maximum time period during which a certain action can be brought or certain rights enforced.

Jurisdiction

A geographic area in which a court or courts have the power to apply the law.

Ordinances

A law passed by a local governing unit, such as a city or a county.

Uniform Laws

A model law created by the National Conference of Commissioners on Uniform State Laws and/or the American Law Institute for the states to consider adopting. If the state adopts the law, it becomes statutory law in that state. Each state has the option of adopting or rejecting all or part of a uniform law.

Damages

A monetary award sought as a remedy for a breach of contract or a tortious act.

Plaintiff

A party that initiates a lawsuit.

Cases on Point

A previous case involving factual circumstances and issues that are similar to those in the case before the court.

Reporters

A publication in which court cases are published, or reported.

Citation

A reference to a publication in which a legal authority—such as a statute or a court decision—or other source can be found.

Remedies in Equity

A remedy allowed by courts in situations where remedies at law are not appropriate. Remedies in equity include injunction, specific performance, rescission and restitution, and reformation

Remedies at Law

A remedy available in a court of law. Money damages are awarded as a remedy at law.

Legal Positivism

A school of legal thought centered on the assumption that there is no law higher than the laws created by a national government. Laws must be obeyed, even if they are unjust, to prevent anarchy.

Legal Realism

A school of legal thought that holds that the law is only one factor to be considered when deciding cases and that social and economic circumstances should also be taken into account.

Historical School

A school of legal thought that looks to the past to determine what the principles of contemporary law should be.

Sociological School

A school of legal thought that views the law as a tool for promoting justice in society.

Opinions

A statement by a court expressing the reasons for its decision in a case.

operations, capital structure, financing, hiring, firing, employees, unions, manufactures, markets, protect

Administrative Law Rules issued by various administrative agencies now affect almost every aspect of a business's __________________. Regulations govern a business's ________________________ and _____________________, its __________________ and _________________ procedures, its relations with __________________ and _______________, and the way it ____________________ and _______________ its products. Regulations enacted to ___________________ the environment also often play a significant role in business operations.

Independent Regulatory Agencies

An administrative agency that is not considered part of the government's executive branch and is not subject to the authority of the president. Independent agency officials cannot be removed without cause.

Executive Agencies

An administrative agency within the executive branch of government. At the federal level, executive agencies are those within the cabinet departments.

Cyberlaw

An informal term used to refer to all laws governing electronic communications and transactions, particularly those conducted via the Internet.

Persuasive Authorities

Any legal authority or source of law that a court may look to for guidance but need not follow when making its decision.

Binding Authority

Any source of law that a court must follow when deciding a case.

Secondary sources of law

Books and articles that summarize and clarify the primary sources of law

business activities, hiring, firing, safety, manufacturing, marketing, financing beneficial critical thinking, legal reasoning ethical, ethical dimension

Business Activities and The Legal Environment Laws and government regulations affect almost all __________________________ -_________________ and ________________ decisions, workplace ___________________, the ______________________ and ______________________ of products, and business _______________________. To make good business decisions, a basic knowledge of the laws and regulations governing these activities is ______________________ Businesspersons must develop ______________________ and _______________________ skills so that they can evaluate how various laws might apply to a given situation and determine the best ________________________. Businesspersons are also expected to make ________________ decisions. Thus, the study of business law necessarily involves an ____________________.

per curiam opinion

By the whole court; a court opinion written by the court as a whole instead of being authored by a judge or justice.

provisions, legislatures, regulations case law, statutory, administrative, tradition

Case Law and Common Law Doctrines These rules include interpretations of constitutional _______________________, of statutes enacted by _____________________, and of __________________ created by administrative agencies. Today, this body of judge-made law is referred to as ____________________. Case law governs all areas not covered by ___________________ law or ____________________ law and is part of our common law _____________________.

consistent, earlier cases, similar way, new law, precedent

Case Precedents and Case Reporters When possible, judges attempted to be ___________________ and to base their decisions on the principles suggested by ___________________________. They sought to decide similar cases in a _______________________, and they considered new cases with care because they knew that their decisions would make ________________________. Each interpretation became part of the law on the subject and thus served as a legal ___________________.

separate supreme law, basis, unconstitutional, enforced, Appendix B granted, constitution, supreme

Constitutional Law The federal government and the states have ______________________ written constitutions that set forth the general organization, powers, and limits of their respective governments. According to Article VI of the U.S. Constitution, the Constitution is the ____________________________ of the land.As such, it is the _______________ of all law in the United States. A law in violation of the Constitution, if challenged, will be declared ______________________ and will not be ________________, no matter what its source. Because of its importance in the American legal system, we present the complete text of the U.S. Constitution in ____________________. The Tenth Amendment to the U.S. Constitution reserves to the states all powers not _________________ to the federal government. Each state in the union has its own _________________________. Unless it conflicts with the U.S. Constitution or a federal law, a state constitution is _____________________ within the state's borders.

binding authority constitutions, statutes, regulations, court decision, Supreme Court, legislation, amendment

Controlling Precedent Controlling precedents are a type of _________________________. Binding authorities include ______________________, _______________, and _____________________ that govern the issue being decided, as well as _______________________ that are controlling precedents within the jurisdiction. United States Supreme Court case decisions, no matter how old, remain controlling until they are overruled by a subsequent decision of the ______________________ or changed by further ___________________ or a constitutional _________________.

relief, chancellor, new, unique, courts of equity

Courts of Equity When individuals could not obtain an adequate remedy in a court of law, they petitioned the king for ______________. Most of these petitions were decided by an adviser to the king, called a __________________, who had the power to grant ____________ and ________________ remedies. Eventually, formal chancery courts, or _________________________, were established. Equity is a branch of _________

remedies, land, items of value, money courts of law, remedies at law uniform, remedy, right

Courts of Law and Remedies of Law The early English king's courts could grant only very limited kinds of _________________. If one person wronged another in some way, the king's courts could award as compensation one or more of the following: ________________, _____________ of ___________________, or ___________________. The courts that awarded this compensation became known as _______________________, and the three remedies were called _______________________. This system made the procedure for settling disputes more ________________. When a complaining party wanted a remedy other than economic compensation, however, the courts of law could do nothing, so "no ______________, no right."

customs, common law all nations

Early English Courts Before the Norman Conquest, disputes had been settled according to the local legal customs and traditions in various regions of the country. The king's courts sought to establish a uniform set of __________________ for the country as a whole. What evolved in these courts was the beginning of the ______________________. Eventually, the common law tradition became part of the heritage of ________________________ that were once British colonies, including the United States.

equitable maximums, equity, remedy, equal equity, substance, clean hands, viligant

Equitable Maximums In fashioning appropriate remedies, judges often were (and continue to be) guided by so-called ___________________. Important equitable maximums: Whoever seeks equity must do _______________________ Equity will not suffer a wrong without a _______________________ Where there is ___________________, the law must prevail Equity regards ____________________ rather than form One seeking the aid of an equity must come to the court with ________________________________ Equity aids the ________________________ not those who rest on their rights

sufficient, ethical

Ethics and Business Decision Making Merely knowing the areas of law that may affect a business decision is not ____________________ in today's business world. Today, business decision makers need to consider not just whether a decision is legal, but also whether it is __________________.

executive agencies, president, appoint, remove independent regulatory agencies, less, fixed, just cause

Federal Agencies At the national level, the cabinet departments of the executive branch include numerous __________________________. Executive agencies are subject to the authority of the _____________________, who has the power to __________________ and ______________________ their officers. There are also major ___________________________________________ at the federal level. The president's power is __________ pronounced in regard to independent agencies, whose officers serve for ____________ terms and cannot be removed without _____________________.

Equitable Maximums

General propositions or principles of law that have to do with fairness (equity).

Petitioner

In equity practice, a party that initiates a lawsuit.

Respondant

In equity practice, the party who answers a complaint or other proceeding.

special attention, laches, defense fresh, circumstances, statutes of limitations, action, strong

Laches The last maxim listed in the exhibit—"Equity aids the vigilant, not those who rest on their rights"—merits ___________________________. It has become known as the equitable doctrine of _______________and it can be used as a _________________. The doctrine of laches arose to encourage people to bring lawsuits while the evidence was _____________. What constitutes a reasonable time, of course, varies according to the __________________________ of the case. Time periods for different types of cases are now usually fixed by _________________________________. After the time allowed under a statute of limitations has expired, no _________________ (lawsuit) can be brought, no matter how _________________ the case was originally.

Substantive Law

Law that defines, describes, regulates, and creates legal rights and obligations.

Procedural Law

Law that establishes the methods of enforcing the rights established by substantive law.

Constitutional Law

Law that is based on the U.S. Constitution and the constitutions of the various states.

law, equity, judges, remedies, combining, action, either, both relevant, differ, available, separate, law, equity

Legal and Equitable Remedies Today The establishment of courts of equity in medieval England resulted in two distinct court systems: courts of _________ and courts of _______________. The courts had different sets of __________________ and granted different types of __________________. During the nineteenth century, however, most states in the United States adopted rules of procedure that resulted in the __________________ of courts of law and equity. A party now may request both legal and equitable remedies in the same ________________, and the trial court judge may grant ___________ or ____________ forms of relief. The distinction between legal and equitable remedies remains _______________ to students of business law, however, because these remedies ____________. To seek the proper remedy for a wrong, you must know what remedies are ______________. Additionally, certain vestiges of the procedures used when there were _________________ courts of law and equity still exist. For instance, a party has the right to demand a jury trial in an action at _______, but not in an action in _______________.

environmental, contracts, property, torts, liability, sales, internet

Many Different Laws May Affect a Single Business Decision The various areas of the law that may influence business decision making: ______________________ law and sustainability, __________________, intellectual __________________, ______________,Product ___________________, ______________, and _________________________ law.

Defendant

One against whom a lawsuit is brought, or the accused person in a criminal proceeding.

Controlling Precedents

Precedents that must be followed within a jurisdiction

Defense

Reasons that a defendant offers in an action or suit as to why the plaintiff should not obtain what he or she is seeking.

remedies in equity, performance, injunction, r inadequate

Remedies in Equity The remedies granted by the equity courts became known as _____________________, or equitable remedies. These remedies include specific _____________________, _________________, and ___________________. As a general rule, today's courts, like the early English courts, will not grant equitable remedies unless the remedy at law—monetary damages—is ____________________.

numerous, primary, secondary, Constitution, various states, statutory, regulations, case, common

Source of American Law American law has __________________ sources. Often, these sources of law are classified as either __________________ or _______________________. 1. The U.S. ___________________ and the constitutions of the ____________________________. 2. ____________________ law—including laws passed by Congress, state legislatures, or local governing bodies. 3. _____________________ created by administrative agencies, such as the Federal Trade Commission. 4. ________ law and ________________ law doctrines.

Primary sources of law

Sources that establish the law

efficient, guides, stable, predictable

Stare Decisis and Legal Stability The doctrine of stare decisis helps the courts to be more __________________ because, if other courts have analyzed a similar case, their legal reasoning and opinions can serve as _______________. Stare decisis also makes the law more _______________ and _______________________.

To stand on decided cases jurisdictions similar facts, lower rank, compelling reason, lower courts

Stare Decisis and the Common Law Tradition The practice formed a doctrine known as stare decisis, a Latin phrase meaning "__________________________." Under the doctrine of stare decisis, judges are obligated to follow the precedents established within their ____________________________. Once a court has set forth a principle of law as being applicable to a certain set of facts, that court must apply the principle in future cases involving ________________. Courts of ________________________ (within the same jurisdiction) must do likewise. Thus, stare decisis has two aspects: 1. A court should not overturn its own precedents unless there is a _________________________ to do so. 2. Decisions made by a higher court are binding on ______________________________.

state, local, parallel, state regulations

State and Local Agencies There are administrative agencies at the ___________ and _____________ levels as well. Commonly, a state agency is created as a _________________ to a federal agency. Just as federal statutes take precedence over conflicting state statutes, federal agency regulations take precedence over conflicting _____________________________.

legislative bodies, federal code, state code ordinances, city, county, building, safety federal statute, borders, vary, U.S constitution, relevant state

Statutory Laws Laws enacted by ________________________ at any level of government, such as statutes passed by Congress or by state legislatures, make up the body of law known as statutory law. When a legislature passes a statute, that statute ultimately is included in the _____________________ of laws or the relevant _______________________ of laws. Statutory law also includes local ________________________________—regulations passed by municipal or county governing units to deal with matters not covered by federal or state law. Ordinances commonly have to do with ___________ or _______________ land use (zoning ordinances), _____________________ and _________________ codes, and other matters affecting the local community. A ______________________, of course, applies to all states. A state statute, in contrast, applies only within the state's __________________. State laws thus may ____________ from state to state. No federal statute may violate the _________________________, and no state statute or local ordinance may violate the U.S. Constitution or the _______________________ constitution.

English legal, common law principles

The Common Law Tradition Because of our colonial heritage, much of American law is based on the _____________________ system. Knowledge of this tradition is crucial to understanding our legal system today because judges in the United States still apply ______________________________ when deciding cases.

judge-made, legal controversies

The Doctrine of Stare Decisis One of the unique features of the common law is that it is __________________ law. The body of principles and doctrines that form the common law emerged over time as judges decided ___________________________.

Uniform Commercial Code, uniform, flexible, commercial transactions, frequently, Appendix C, adoption

The Uniform Commercial Code One of the most important uniform acts is the __________________________________. The UCC facilitates commerce among the states by providing a _______________, yet _______________, set of rules governing __________________________. Because of its importance in the area of commercial law, we cite the UCC ____________________ in this text. We also present the full UCC in _____________________. From time to time, the NCCUSL revises the articles contained in the UCC and submits the revised versions to the states for ______________________.

Administrative Law

The body of law created by administrative agencies in order to carry out their duties and responsibilities.

Common Law

The body of law developed from custom or judicial decisions in English and U.S. courts, not attributable to a legislature.

Statutory Law

The body of law enacted by legislative bodies (as opposed to constitutional law, administrative law, or case law).

Civil Law

The branch of law dealing with the definition and enforcement of all private or public rights, as opposed to criminal matters.

Criminal Law

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

Laches

The equitable doctrine that bars a party's right to legal action if the party has neglected for an unreasonable length of time to act on his or her rights.

Natural Law

The oldest school of legal thought, based on the belief that the legal system should reflect universal ("higher") moral and ethical principles that are inherent in human nature.

Appelle

The party against whom an appeal is taken—that is, the party who opposes setting aside or reversing the judgment.

Appellant

The party who takes an appeal from one court to another.

Ethics

The principles governing what constitutes right or wrong behavior.

Legal Reasoning

The process of reasoning by which a judge harmonizes his or her opinion with the judicial decisions in previous cases.

Remedies

The relief given to an innocent party to enforce a right or compensate for the violation of a right.

Case Law

The rules of law announced in court decisions. Case law interprets statutes, regulations, constitutional provisions, and other case law.

Jurisprudence

The science or philosophy of law.

Liability

The state of being legally responsible (liable) for something, such as a debt or obligation.

Alleges

To state, recite, assert, or charge.

adopting, rejecting, adopts, all, part, rewrite, uniform

Uniform Laws Each state has the option of ________________ or _________________ a uniform law. Only if a state legislature ________________ a uniform law does that law become part of the statutory law of that state. Note that a state legislature may adopt ________ or _____________ of a uniform law as it is written, or the legislature may _______________ the law however the legislature wishes. Hence, even though many states may have adopted a uniform law, those states' laws may not be entirely "__________________."

Injunction

an order to a party to cease engaging in a specific activity or to undo some wrong or injury.

Specific Performance

ordering a party to perform an agreement as promised.

Rescission

the cancellation of a contractual obligation.