Business Law Chapter 1

Definition of Law

Consist of rules that regulate the conduct of individuals, businesses, and other organizations in society. Laws are intended to protect persons and their property against unwanted interference from others Law forbids persons from engaging in certain undesirable activities.

Shaping Moral Standards

Ex: Some laws discourage drug and alcohol abuse

Keeps the Peace

Ex: Some laws make certain activities crimes

Promoting Social Justice

Ex: some laws prohibit social justice

Functions of Law

Keeps the peace Shape moral standards Promote social justice Maintain the status quo Facilitate orderly change Facilitate Planning Provide a basis compromise Maximize individual freedom

Sources of Law

U.S. Constitution State Constitution Federal and State Statues Ordinances Administrative Agency Rules & Regulations Executive Order Judicial Decisions by Federal and State Courts -businesses must follow rules in the United States as well as any other country they do business in.

Fairness of the law

U.S. Legal system is one of the most comprehensive, fair, and democratic systems of law every developed and enforced.

basis for compromise

laws allow for the settlement of cases prior to trial. approximately 90% of lawsuits are settled in this manner.

Facilitating orderly change

laws are enacted only after considerable study, debate, and public input

Maintaining the status quo

some laws prevent the forceful overthrow of the government.

maximizing individual freedom

the rights of freedom of speech, religion, and association are granted by the first amendment to the U.S Constitution.

facilitating planning

well designed commercial laws commercial laws allows businesses to plan their activities, allocate their productive resources, and assess the risks they take.