` CHAPTER 1: THE LEGAL AND CONSTITUTIONAL ENVIRONMENT

` CHAPTER 1: THE LEGAL AND CONSTITUTIONAL ENVIRONMENT

` CHAPTER 1: THE LEGAL AND CONSTITUTIONAL ENVIRONMENT 1 Learning Objectives 1. What is the common law tradition? 2. What is the difference between remedies at law and remedies at equity? 3. What constitutional clause gives the federal government the power to

regulate commercial activities among the various states? 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2 Learning Objectives 4. What is the Bill of Rights? What freedoms does the First Amendment guarantee? 5. Where in the U.S. Constitution can the due process clause be found? 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as

permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3 Introduction At a minimum law consists of: Enforceable rules governing relationships, Among and between individuals and Their society. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 4

Introduction Different views of law have one thing in common: Duties, rights, and privileges that are consistent with the values and traditions of that culture. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 5 Business Activities and The Legal Environment

Knowledge of black letter law is not enough. Many different laws affect a single business transaction. Ethics and business decision making: what constitutes right or wrong behavior? 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6 Business Activities and The Legal Environment Many Different Activities Can Affect a Single Business

Transaction. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 7 Sources of American Law Constitutional Law. Found in text and cases arising from federal and state constitutions. U.S. Constitution is the supreme law of the land.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 8 Sources of American Law Statutory Law. Laws enacted by federal and state legislatures. Local ordinances. Uniform Laws. Uniform Commercial Code (UCC). 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as

permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 9 Sources of American Law Administrative Law. Rulemaking--Rules, orders and decisions of administrative agencies, federal, state and local. Adjudication--agencies make rules, then investigate and enforce the rules in administrative hearings. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as

permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 10 Sources of American Law Case Law and Common Law Doctrines. Much of the common law is still used today. Common law governs all areas not specifically covered by statutory or constitutional law. Restatements of the Law: modern compilations of common law principles found, e.g., in contracts, torts, property and agency. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

11 The Common Law Tradition Early English Courts. Kings courts started after Norman conquest of 1066. Established the common lawbody of general legal principles applied throughout the English empire. Kings courts used precedent to build the common law. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12 The Common Law Tradition Stare Decisis. Importance of Precedents: Practice of deciding new cases based on precedent. A higher courts decision based on certain facts and law, is a binding authority on lower courts. Stare Decisis and Legal Stability. Departures from Precedent. When there is No Precedent. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as

permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 13 The Common Law Tradition Equitable Remedies and Courts of Equity. Remedy: means to enforce a right or compensate for injury to that right. Remedy at Law: in kings courts, remedies were restricted to damages in either money or property. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as

permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14 The Common Law Tradition Equitable Remedies and Courts of Equity. Remedies in Equity: based on justice and fair dealing a chancery court does what is right. Merging of Law and Equity. Today, legal and equitable remedies are found in the same court.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 15 Classifications of Law Substantive vs. Procedural Law. Substantive: laws that define and regulate rights and duties. Procedural: laws that establish methods for enforcing and protecting rights. Civil Law and Criminal Law. Civil: private rights and duties between persons and government.

Criminal: public wrongs against society. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 16 Classifications of Law National and International Law. National: laws of a particular nation. Civil vs. Common Law: Civil law countries based on Roman code (e.g., Latin America). International: body of written and unwritten laws observed by nations when dealing with

each other. Cyberlaw: internet transactions. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 The Constitutional As It Affects Business The Commerce Clause. U.S. Constitution gives Congress the power to: regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes (Art. 1 8).

Greatest impact on business than any other Constitutional provision. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 18 The Constitutional As It Affects Business The Commerce Clause. The Commerce Clause and the Expansion of National Powers. The national government had the exclusive power to regulate interstate commerce. Gibbons v. Ogden

(1824). 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 19 The Constitutional As It Affects Business The Commerce Clause. Commerce Today: Commerce Clause applies to ecommerce internet transactions. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

20 The Constitutional As It Affects Business The Commerce Clause. Regulatory Powers of the States: often referred to as police powers. State laws enacted pursuant to a police power are given a strong presumption of constitutionality. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 21

The Constitutional As It Affects Business The Commerce Clause. The Dormant Commerce Clause. State police powers or regulations that substantially interfere with interstate commerce will be struck down. CASE 1.1 FAMILY WINEMAKERS OF CALIFORNIA V. JENKINS (2010). Did the State of Massachusetts discriminate against out-ofstate wineries? 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 22

The Constitutional As It Affects Business Business and the Bill of Rights. 1791: Ten written guarantees of protection of individual liberties from government interference. Originally, Bill of Rights only applied to the federal government. Recently, the Bill of Rights was incorporated and applied to the States as well. Some protections apply to businesses. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

23 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Speech. Symbolic Speech: Free speech also includes symbolic speech, including gestures, movements, articles of clothing. Reasonable Restrictions. Corporate Political Speech. Corporations and unions now have broader rights to support candidates. See Citizens United v. FEC (2010). 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as

permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 24 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Speech. Commercial Speech (advertising) is given substantial protection. Government restrictions must seek to implement substantial government interest, directly advance that interest, and must go no further than necessary to accomplish.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 25 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Speech. Commercial Speech. CASE 1.2 BAD FROG BREWERY, INC. V.

NEW YORK STATE LIQUOR AUTHORITY (2003). Did the State unconstitutionally restrict commercial speech when it prohibited a certain gesture (illustration) on beer labels? 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 26 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Speech.

Unprotected Speech. U.S. Supreme Court has held that certain speech is NOT protected: Defamatory speech. Threatening speech that violates criminal laws. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 27 The Constitutional As It Affects Business

Business and the Bill of Rights. First AmendmentFreedom of Speech. Unprotected Speech. U.S. Supreme Court has held that certain speech is NOT protected: Fighting Words. Obscene Speech is patently offensive, violates community standards and has no literary, artistic, political or scientific merit. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

28 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Speech. Online Obscenity. Some of Congress attempts to protect children from online pornography have been ruled unconstitutional restrictions on free speech. Communications Decency Act (1996). COPA (1998-challenged, in court). Childrens Internet Protection Act-CIPA-(2000) requires filters for computers in public libraries and public schools. Court held it is constitutional.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 29 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Religion. First amendment guarantees that Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

30 The Constitutional As It Affects Business Business and the Bill of Rights. First AmendmentFreedom of Religion. Establishment Clause: no state-sponsored religion or preference for one religion over another. CASE 1.3 TRUNK V. CITY OF SAN DIEGO (2011). What was the Supreme Courts rationale for ordering the cross removed? Free Exercise clause: person can believe what he wants, but actions may be unconstitutional.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 31 The Constitutional As It Affects Business Business and the Bill of Rights. Fifth and Fourteenth Amendments. Due Process: both guarantee that no person shall be deprived of life, liberty, or property without due process of law.

Procedural: any government decision to take life, liberty or property must be fair. Requires: Notice and Fair Hearing. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 32 The Constitutional As It Affects Business Business and the Bill of Rights. Fifth and Fourteenth Amendments.

Due Process. Substantive: focuses on the content or the legislation (the right itself). Fundamental Right: requires compelling state interest. Non-Fundamental: rational relationship to state interest. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 33 Appendix Finding Statutory and Administrative Law.

United States Code (USC). State Statutes. Code of Federal Regulations (CFR). 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 34 Appendix Finding Case Law (Case Citations). Supreme Court Cases at Findlaw.com. Federal Court Cases at Findlaw.com. State Court Cases at Findlaw.com.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 35 Appendix: Finding and Analyzing the Law Legal cases are identified by a legal citation (or a cite) as the sample below: Fehr v. Algard, ___ N.J. Super ___, A.3d (2011). Title: First Party is Plaintiff, second party is Defendant. The parties are

either italicized or underlined. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 36 Appendix: Finding and Analyzing the Law Legal cases are identified by a legal citation (or a cite) as the sample below: Fehr v. Algard, ___ N.J. Super ___, A.3d (2011). The case is from the Superior Court of New Jersey and is not numbered as of

the date of this printing. 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 37 Appendix: Finding and Analyzing the Law Legal cases are identified by a legal citation (or a cite) as the sample below: Fehr v. Algard, ___ N.J. Super ___, A.3d (2011). The case was decided in 2011.

2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 38

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