Skip to content
Textbook Guides

Solution Manual for Business Law and the Legal Environment, Version 2.0

Solution Manual for Business Law and the Legal Environment, Version 2.0 provides key summaries, making it easier to absorb textbook material.

Preview 16 of 1176 pages

See the first 16 pages exactly as they appear in the document.

  1. Page 1
    Read page 1 as text

    BUSINESS LAW 1 Chapter 1 Introduction to Law and Legal Systems 1. What Is Law? • Distinguish different philosophies of law — schools of legal thought — and explain their relevance. • Identify the various aims that a functioning legal system can serve. • Explain how politics and law are related. • Identify the sources of law and which laws have priority over other laws. • Understand some basic differences between the US legal system and other legal systems. Section Outline • According to Black’s Law Dictionary: o Law is a body of rules of action or conduct that are prescribed by a controlling authority , and have binding legal force. o Law has to be obeyed and followed by citizens subject to sanctions or legal consequence. • In a nation law serves to: o Keep the peace o Maintain the status quo o Preserve individual rights o Protect minorities against majorities o Promote social justice o Provide for orderly social change

  2. Page 2
  3. Page 3
    Read page 3 as text

    BUSINESS LAW 2 • In the United States, legislators, judges, administrative agencies, governors, and presidents make law, with substantial input from corporations, lobbyists, and a diverse group of nongovernment organizations (NGOs). o In the 50 states, judges are often appointed by governors or elected by people. o In the federal system, judges are appointed by the president and confirmed by the Senate. o In most nation - states, knowing who has the power to make and enforce the laws is a matter of knowing who has political power. o In many places, the people or groups that have military power can also command political power to make and enforce the laws. Key Takeaway Law is the result of political action, and the political landscape is vastly different from nation to nation. Unstable or authoritarian governments often fail to serve the principle functions of law. Exercises Section 1 – What Is Law? 1. Consider North Korea. What political rights do you have that the average North Korean citizen has not enjoyed ? Answer : Student answers may differ. Answers should contain a general comparison between the political situations in North Korea with its hereditary, authoritarian rule, and th e U . S . (Republic/Democracy) and how these situations affect the political rights of the citizens of both the countries. 2. What is a nongovernment organization, and what does it have to do with government? Do you contribute to (or are you active in) a nongovernment organization? What kind of rights do they espouse, what kind of laws do they support, and what kind of laws do they oppose?

  4. Page 4
    Read page 4 as text

    BUSINESS LAW 3 Answer : Non - governmental organization, or NGO, is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations (UN), a nd is normally used to refer to organisations that do not form part of the government and are not conventional for - profit business. In the cases in which NGOs are funded totally or partially by governments, the NGO maintains its non - governmental status by excluding government representatives from membership in the organization. The term is usually applied only to organizations that pursue some wider social aim that has political aspects, but that are not overtly political organizations such as political parties. The rest of the answer will vary for each student. Teaching Suggestions 1. The i nstructor may start the session by asking the students what they understand by the term ‘ law ’ and what they think the functions of . law are. 2. The i nstructor may ask the students to explain who makes the laws in the United States. Suggested Activities 1. The i nstructor may ask the students to discuss the consequences that will arise if the legal system of a country fails to perform its functions efficiently. 2. Schools of Legal Thought • Distinguish different philosophies of law — schools of legal thought — and explain their relevance. • Explain why natural law relates to the rights that the founders of the US political legal system found important. • Describe legal positivism and explain how it differs from natural law. • Differentiate critical legal studies and ecofeminist legal perspectives from both natural law and legal positivist perspectives .

  5. Page 5
    Read page 5 as text

    BUSINESS LAW 4 Section Outline • Philosophy of law is called jurisprudence. o The two main schools of jurisprudence are legal positivism and natural law . • The school of legal positivism considers law as the command of a sovereign — such as a king, a president, or a dictator — who has power within a defined area or territory. o John Austin was a supporter of legal positivism. o Positivism is a philosophical movement that claims that science provides the only knowledge precise enough to be worthwhile. o Examining in a precise way what the rule itself says is sometimes known as the “positivist” school of legal thought. o The “legal realist” school of thought relies on social context and the actual behavior of the principal actors who enforce the law. o The disadvantage of the positive - law school of legal thought is that because it recognizes the lawmaker’s command as legitimate, questions about the law’s morality or immorality loses their import ance. o The natural - law school of legal thought refuses to recognize the legitimacy of laws that do not conform to natural, universal, or divine law. o According to the natural - law school , if a lawmaker issues a command that is in violation of natural law, a citizen is morally justified in demonstrating civil disobedience. • The natural - law school of thought emphasizes that law should be based on a universal moral order. o Natural law was “ discovered ” by humans through the use of reason and by choosing between that which is good and that which is evil. o The Cambridge Dictionary of P hilosophy defines natural law as an objective norm or set of objective norms governing human behavior, similar to the positive laws of a human ruler, but binding on all people alike and usually understood as inv olving a superhuman legislator.

  6. Page 6
    Read page 6 as text

    BUSINESS LAW 5 o Both the US Constitution and the United Nations (UN) Charter have an affinity for the natural - law outlook, as it emphasizes certain objective norms and rig hts of individuals and nations. o The US Declaration of Independence embodies a natural - law philosophy. • The historical school of law believes that societies should base their legal decisions today on the examples of the past. Precedent would be more important than moral arguments. • The legal realist school that flourished in the 1920s and 1930s believed that because life and society are constantly changing, certain laws and doctrines have to be altered or modernized in order to remain current. • The critical legal school of thought believed that the social order and the law was dominated by those with power, wealth, and influence. • The ecofeminist school of legal thought emphasizes — and would modify — the long standing domination of men over both women and the rest of the natural world. Key Takeaway Each of the various schools of legal thought has a particular view of what a legal system is or what it should be. The natural - law theorists emphasize the rights and duties of both government and the governed. Positive law takes as a given that law is simply the command of a sovereign, the political power that those governed will obey. Recent writings in the various legal schools of thought emphasize long - standing patterns of domination of the wealthy over others (the CLS school) and of men over women (ecofeminist legal theory). Exercises Section 2 – Schools of Legal Thought 1. Vandana Shiva draws a picture of a stream in a forest. She says that in our society the stream is seen as unproductive if it is simply there, fulfilling the need for water of women’s families and communities, until engineers come along and tinker with it, perhaps damming it and using it for generating hydropower. The same is true of a forest,

  7. Page 7
    Read page 7 as text

    BUSINESS LAW 6 unless it is replaced with a monoculture plantation of a commercial species. A forest may very well be productive — protecting groundwater; creating oxygen; providing fruit, fuel, and craft materials for nearby inhabitants; and creating a habitat for animals that are also a valuable resource. She criticizes the view that if there is no monetary amount that can contribute to gross domestic product (GDP), neither the forest nor the river can be seen as a productive resource. Which school of legal thought does her criticism reflect? Answer: Natural law 2. Anatole France said, “The law, in its majesty, forbids rich and poor alike from sleeping under bridges.” Which school of legal thought is represented by this quote? Answer: Legal positivism 3. Adolf Eichmann was a loyal member of the National Socialist Party in the Third Reich and worked hard under Hitler’s government during World War II to round up Jewish people for incarceration — and eventual extermination — at labor camps like Auschwitz and Buchenwald. After an Israeli “extraction team” took him from Argentina to Israel, he was put on trial for “crimes against humanity.” His defense was that he was “just following orders.” Explain why Eichmann was not an adherent of the natural - law school of legal thought. Answer : The natural - law school of thought emphasizes that law should be based on a universal moral order. But, Adolf Eichmann’s defense that he was “just following orders” shows that he was a follower of legal positivism. Legal positivism is a jurisprudence that focuses on the law as it is — the command of the sovereign. Teaching Suggestions 1. The i nstructor could ask students to define the term sovereign. Suggested Activities 1. The i nstructor could ask the students to read the extract of “The Unanimous Declaration of the Thirteen United States of America” contained in the c hapter and discuss how it reflects the beliefs of the natural - law philosophy.

  8. Page 8
    Read page 8 as text

    BUSINESS LAW 7 2. The i nstructor could ask students to read Martin Luther King Jr.’s “Letter from Birmingham Jail” and then discuss c ivil disobedience in context with natural law. 3. Basic Concepts and Categories of US Positive Law • In a general way, differentiate contract law from tort law. • Consider the role of law in supporting ethical norms in our society. • Understand the differing roles of state law and federal law in the US legal system. • Know the difference between criminal cases and civil cases. Section Outline • Law does not correct every wrong that occurs in society but aims to curb the worst kinds of wrongs that violate the “moral minimums” that a community demands of its members. • The “moral minimums” include not only violations of criminal law but also torts and broken promises. • The use of precedent in common - law cases came into being, and the doctrine of stare decisis became accepted in English courts. • Precedent is a rule of law established for the first time by a court for a particular type of case and thereafter referred to deciding similar cases. • Stare decisis means in, Latin, “let the decision stand.” • Most judicial decisions that don’t apply l egislative acts will involve one of three areas of law — property, contract, or tort . • Property law deals with the rights and duties of those who can legally own land , how that ownership can be legally confirmed and protected, how property can be bought and sold, what the rights of tenants are, and what the various kinds of “estates” in land are . • Contract law deals with what kinds of promises courts should enforce.

  9. Page 9
    Read page 9 as text

    BUSINESS LAW 8 • Tort law deals with the types of cases that involve some kind of harm and or injury between the plaintiff and the defendant when no contract exists. • Typically , if the supreme court in a particular state has already ruled on a certain kind of case, lower courts in that state will always follow the rule set forth by their highest court. • The power of state law has historically included governing the following kinds of issues and claims: o contracts, including sales, commercial paper, letters of credit, and secured transactions o torts o property, including real property, bailments of personal property, trademarks, copyrights, and the estates of decedents o corporations o partnerships o domestic matters, including marriage, divorce, custody, adoption, and visitation o securities law o environmental law o agency o banking o insurance • Over the past eighty years, however federal law has become increasingly important in many of these areas, including banking, securities, and environmental law. • A criminal case involves a governmental decision — whether state or federal — to prosecute someone (named as a defendant ) for violating society’s laws. • The law establishes a moral minimum and does so especially in the area of criminal laws; if you break a criminal law, you can lose your freedom or your life . • In a civil action , you would not be sent to prison; in the worst case, you can lose property

  10. Page 10
    Read page 10 as text

    BUSINESS LAW 9 • The main differences between civil cases and criminal cases can be summed up in the following table: Civil Cases Criminal Cases Parties Plaintiff brings the case; Defendant must answer or lose by default Prosecutor brings the case; Defendant may remain silent Proof Preponderance of evidence Beyond a reasonable doubt Reason To settle disputes peacefully, usually between private parties To maintain order in society Remedies Money damages (legal remedy) Injunctions (equitable remedy) Specific performance (equity) Fines, jails, forfeitures • R ules and regulations in law are substantive or procedural . • Substantive laws refer to rules of conduct or behavior that is called for or some action that is prohibited. They tell us how to act with one another and with the government. • Procedural laws are the rules of courts and administrative agencies. They tell us how to proceed if there is a substantive - law problem. • In the United States, all state procedural laws must be fair according to the due process clause of the Fifth and Fourteenth Amendment. Key Takeaway In most legal systems, like that in the United States, there is a fairly firm distinction between criminal law (for actions that are offenses against the entire society) and civil law (usually for disputes between individuals and corporations). Basic ethical norms for promise - keeping and not harming others are reflected in the civil law of contracts and torts. In the United States, both the states and the federal government have roles to play, and sometimes these roles will overlap, as in environmental standards set by both states and the federal government.

  11. Page 11
    Read page 11 as text

    BUSINESS LAW 10 Exercises Section 3 – Basic Concepts and Categories of US Positive Law 1. Jenna gets a ticket for careless driving after the police come to investigate a car accident she had with you on Hanover Boulevard. Your car is badly damaged through no fault of your own. Is Jenna likely to face criminal charges, civil charges, or both? Answer : Jenna is likely to face civil charges in addition to the traffic ticket for careless driving (a misdemeanor or infraction in criminal law). 2. Jenna’s ticket says that she has thirty days in which to respond to the charges against her. The thirty days conforms to a state law that sets this time limit. Is the thirty - day limit procedural law or substantive law? Answer: The thirty - day limit is procedural law. Teaching Suggestions 1. The i nstructor could try and find out if the students know the basic difference between criminal cases and torts by asking them relevant questions. 2. The i nstructor could explain the concept of precedent and stare decisis in detail. Suggested Activities 1. The instructor can ask the students to identify which of the following is a substantive law and which is a procedural law: a. laws which define the various degrees of murder b. laws which protect the right to a speedy trial for people accused of murder 4. Sources of Law and Their Priority • Describe the different sources of law in the US legal system and the principal institutions that create those laws. • Explain in what way a statute is like a treaty, and vice versa.

  12. Page 12
    Read page 12 as text

    BUSINESS LAW 11 • Explain why the Constitution is “prior” and has priority over the legislative acts of a majority, whether in the US Congress or in a state legislature. • Describe the origins of the common - law system and what common law means. Section Outline • In the United States, the main sources of law are: o c onstitutions — both state and federal o s tatutes and agency regulations o j udicial decisions • Chief executives (the president and various governors) can issue executive orders that have the effect of law. • In international legal systems, sources of law include treaties, agreements between states or countries, and judicial decisions from national court systems where parties from two or more nations are in a dispute . • Constitutions are the foundation for a state or nation’s other laws, providing the country’s legislative, executive, and judicial framework. The y are the founding documents of any nation - state’s legal system. o In case of amendments, two - thirds of the House and Senate must pass amendments, and three - fourths of the states must approve them. o The nation’s states also have constitutions that along with providing for legislative, executive, and judicial functions, also prescribe various rights of citizens. • In Washington, DC, the federal legislature is known as Congress and has both a House of Representatives and a Senate . o The House is composed of representatives elected every two years from v arious districts in each state. o These districts are established by Congress according to population as determined every ten years by the census, a proces s required by the Constitution. o Each s tate has at least one district.

  13. Page 13
    Read page 13 as text

    BUSINESS LAW 12 o In the Senate, there are two senators from each state, regard less of the state’s population. o The House of Representatives, on the other hand, is directly proportioned by population, though no state can have less than one representative. o Each Congressional legislative body has commi ttees for various purposes. o In these committees, proposed bills are discussed, hearings are sometimes held, and bills are either reported out (brought to the floor for a vote) or killed in committee. o If a bill is reported out, it may be passed by majority vote. o A conference committee will then be held to try to match the t wo versions. o If the two versions differ widely enough, reconciliation of the two differing versions into one acceptable to both chambers (House and Senate) is more difficult. o If the House and Senate can agree on identical language, the reconciled bill will be sent to the p resident for signature or veto. o The Constitution prescribes that the president will have v eto power over any legislation. But the two bodies can override a presidential veto with a two - thirds vote in each chamber. o In the case of treaties, the Constitution specifies that on ly the Senate must ratify them. When the Senate ratifies a treaty, it becomes part of federal law, with the same weight and effect as a statute passed by the entire Congress. • Although the Constitution does not expressly provide for administrative agencies, the US Supreme Court has upheld delegation of power to create federal agencies. o The Congress must delegate its authority with some guidelines for the agency and cannot altogether avoid its constitutional responsibilities. o Agencies propose rules in the Federal Register, published each working day of the year. o Rules that are formally adopted are published in the Code of Federal Regulations. • Statutes are passed by legislatures and provide general rules for society.

  14. Page 14
    Read page 14 as text

    BUSINESS LAW 13 o States have legislatures (sometimes called assemblies), which are usually made up of both a senate and a house of representatives. o State legislatures agree on the provisions of a bill, which is then sent to the governor for signature. o G overnors often have a veto power. o The process of creating and amending, or changing, laws is filled with political negotiation and compromise. • Common law consists of decisions by courts that do not involve interpretation of statutes, regulations, treaties, or the Constitution. • United States law comes primarily from the tradition of English common law. • The US Constitution takes precedence over all statutes and judicial decisions that are inconsistent. • Statutes generally have priority, or take precedence, over case law. • A treaty or convention is considered of equal standing to a statute. • No matter how wrong someone’s actions may seem to you, the only wrongs you can right in a court are those that can be tied to one or more causes of action. • Not every wrong you may suffer in life will be a cause to bring a court action. • Your cause of action is based on existing laws, including decided cases. Key Takeaway There are different sources of law in the US legal system. The US Constitution is foundational; US statutory and common law cannot be inconsistent with its provisions. Congress creates statutory law (with the signature of the president), and courts will interpret constitutional law and statutory law. Where there is neither constitutional law nor statutory law, the courts function in the realm of common law. The same is true of law within the fifty states, each of which also has a constitution, or foundational law. Both the federal government and the states have created administrative agencies. An agency only has the power that the legislature gives it. Within the scope of that power, an agency will often create regulations (see Chapter 5), which have the same force and effect as statutes. Treaties are never negotiated and concluded by states, as the federal government has exclusive authority over relations with other nation - states. A treaty, once

  15. Page 15
    Read page 15 as text

    BUSINESS LAW 14 ratified by the Senate, has the same force and effect as a statute passed by Congress and signed into law by the president. Constitutions, statutes, regulations, treaties, and court decisions can provide a legal basis in the positive law. You may believe you have been wronged, but for you to have a right that is enforceable in court, you must have something in the positive law that you can point to that will support a cause of action against your chosen defendant. Exercises Section 4 – Sources of Law and Their Priority 1. Give one example of where common law was overridden by the passage of a federal statute. Answer : Under common law, employers could hire young children for difficult work, offer any wage they wanted, and not pay overtime work at a higher rate. But the federal Fair Labor Standards Act (1938) forbid the use of oppressive child labor and established a minimum pay wage and overtime pay rules. 2. How does common law change or evolve without any action on the part of a legislature? Answer : Unless the legislature acts to over - ride common law, judges themselves may alter or abandon some aspects of common law. For example, if a judicial doctrine in North Carolina dating back to the 1800s were to say that a breach of a promise to marry creates a cause of action in civil courts in that state, a 20 th century (or later) appellate case in that state could decide that such a cause of action would no longer be recognized in the state’s courts. The legislature could (but likely would not) create a statute that re - affirmed the right of a jilted betrothed to sue for damages in civil court. 3. Lindsey Paradise is not selected for her sorority of choice at the University of Kansas. She has spent all her time rushing that particular sorority, which chooses some of her friends but not her. She is disappointed and angry and wants to sue the sorority. What are her prospects of recovery in the legal system? Explain. Answer : Lindsey Paradise probably cannot recover. It is highly unlikely that Kansas has

  16. Page 16
    Read page 16 as text

    BUSINESS LAW 15 judicial or statutory law that confers a cause of action for this kind of disappointment. If a sorority member effectively blocked her from joining by defaming her (see Torts, Chapter 7) , she might have a cause of action for defamation. But if she just wasn’t considered to have the right look, or was considered a bit socially awkward, there would be no right to recover. An individual , no matter how wronged she may feel, can only that wrong in a court by using an established cause of action in the positive law. Teaching Suggestions 1. Before starting this section, the i nstructor may ask a few students to explain what they know about the US C onstitution. 2. The i nstructor can ask the students to share what they know about the composition of the House of Representatives and the Senate. Suggested Activities 1. The i nstructor can ask the students to visit the site http://uscode.house.gov He can then ask them to discuss what they got to know about the Office of the Law Revision Counsel and the United States Code and the codification legislation. 2. The i nstructor could ask the students to visit the site http://www.access.gpo.gov/nara/cfr/cfr - table - search.html He can then ask them to write an assignment on the definitions that they come across in the Administrative Committee of the Federal Register mentioned under the title, General Provisions 2011. 5. Legal and Political Systems of the World Learning Objective • Describe how the common - law system differs from the civil - law system. Section Outline • The common - law tradition is unique to England, the United States, and former

1160 more pages in the full document

Unlock it once and it stays in your library, ready to chat with or turn into flashcards.

Unlock the full document

More Business Law study materials

See all

Study this document with CramX

Once it is in your library, every tool can work from it.