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Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 1
Chapter 1
Chapter 1
Laws and Their
Ethical Foundation
1-1 Laws and Legal Systems
1-2 Types of Laws
1-3 Ethical Bases for Laws
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 2
Chapter 1
1-1 Laws and Legal Systems
GOALS
Explain the stages in the growth of law
Describe the differences between common
law and positive law
Identify the origin of the U.S. legal system
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 3
Chapter 1
WHAT IS LAW?
The first law code set down 4,000 years ago
is similar to that found in our current law
codes.
Why?
Enforceable rules of conduct in a society that
reflects the culture and circumstances that
create them.
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Stages in the Growth of Law
Individuals are free to take revenge for
wrongs done to them.
A leader acquires enough power to be able
to force revenge-minded individuals to
accept an award of goods or money instead.
The leader gives this power to a system of
courts.
The leader or central authority acts to
prevent and punish wrongs that provoke
individuals to seek revenge.
Slide 4
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Common Law vs. Positive Law
Common Law is based on the current
standards or customs of the people.
Usually formed from the rules used by judges to
settle people’s disputes
Positive Law are laws set down by a
sovereign or other central authority to
prevent disputes and wrongs from occurring
in the first place.
Slide 5
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 6
Chapter 1
How does common law differ from
positive law?
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 7
Chapter 1
WHAT IS THE ORIGIN OF THE U.S.
LEGAL SYSTEM?
Read “What’s Your Verdict?” Pg. 6
Is LaBonne Correct?
Two great systems of Law
English Common Law
Roman Civil Law
Roman Civil Law
Adopted, written, well organized, comprehensive
set of statues in code form. Only changed by
central government, not by judges.
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
English Common Law
Slide 8
Chapter 1
Brought by colonist from England to the US
King’s Bench
Jury
An example p. 7
Advantages of English common law
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Equity: An Alternative to Common
Law
Common Law courts follow precedent
Courts use prior cases as a guide for deciding
similar cases
Following precedent helps to provide stability in
the law
Slide 9
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Disadvantages of Early Common
Law
Rigid adherence to proper form
Courts could only grant damages
Inability to stop wrong before it caused damage
Nobles could go directly to the King (unequitable)
Slide 10
Chapter 1
King sensed a need for access to equitable remedies for
all citizens, so he created a system of equity courts.
In the US today, law courts and equity courts are
merged, except Delaware, Mississippi, and
Tennessee
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 11
Chapter 1
On which early legal system is the U.S.
legal system based?
Read “Cyber Law” on pg. 8 and
discuss
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Assignment
Begin vocabulary word list for chapter 1 (Key
Terms on pg. 5)
Complete and turn in 1-1 Assessment (hand-
written)
Different Country’s Legal Systems:
See handout
Slide 12
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 13
Chapter 1
1-2 Types of Laws
GOALS
Identify the four sources of law
Discuss how conflicts between laws are
resolved
Compare and contrast criminal and civil law,
and substantive and procedural law
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
What’s Your Verdict
Read “What’s Your Verdict” on p. 10
What part of the US Constitution contains
most of these guarantees?
Bill of Rights
Slide 14
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Laws are created at all three levels of
government:
Federal
State
Local
Slide 15
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 16
Chapter 1
WHAT ARE THE SOURCES
OF LAW?
Constitutions
Statutes
Case law
Administrative law
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Constitution
A document that sets forth the framework of
a government and it’s relationship to the
people it governs.
Supreme law of the land
Creates governmental framework and
relationship to the people
US Constitution and state constitutions apply
concurrently
US Constitution superior to any and all state
constitutions
Slide 17
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
US Constitution, Article VI
Constitutions are the highest sources of law,
and the federal Constitution is “the supreme
law of the land”
Any federal, state, or local law is not valid if it
conflicts with the federal Constitution.
Constitutions are concerned primarily with
defining and allocating certain powers in our
society
Slide 18
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Constitutions allocate powers:
Between people and their governments
Bill of Rights (First 10 amendments)
Between Federal and State Governments
Power to regulate both foreign and interstate
commerce
Among the branches of Government
Executive, Legislative and Judicial
Ensures that no branch becomes too powerful
Slide 19
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Statutes
State and federal legislatures are composed
of elected representatives of the people
Acting for their citizens, these legislatures enact
laws called statutes
Local governments also can create legislation on
matters. These pieces of legislation created by a
town or city are referred to as ordinances.
Slide 20
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Case Law
The judicial branches of governments create
case law.
Usually made after a trial has ended and one
of the parties has appealed the result to a
higher court.
The rules or opinions published by the
appellate court are then used in deciding
other cases like it.
Slide 21
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Administrative Law
Rules and regulations made by appropriately
empowered agencies (Administrative
Agencies)
Legislative branch delegates it power to
agencies
Rules have power of law
Slide 22
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 23
Chapter 1
What are the four sources of law?
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 24
Chapter 1
WHAT HAPPENS WHEN LAWS
CONFLICT?
Read p. 12 “What happens when laws
conflict”
Legal Rules are used the determine which
statement of the law is superior
Constitutions and validity
Statutes and validity
Administrative regulations and validity
Case law and validity
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Constitutions and Validity
Constitutions are the highest sources of the
law, and the federal Constitution is “the
supreme law of the land”.
If a local, state or federal statute conflicts with the
constitution, it is not valid (unconstitutional)
These can be appealed to the highest court.
The people have the power to amend
constitutions if they disagree with the courts
interpretation.
Slide 25
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Statutes and Validity
Must be constitutional to be valid
Slide 26
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Administrative Regulations and
Validity
Can also be reviewed by courts
Can be invalidated by courts
Slide 27
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Case Law and Validity
A legislative body has the power to nullify a
courts interpretation of a statute or ordinance
by rewriting the statute
Slide 28
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 29
Chapter 1
Which source of law in the United States is
the highest authority?
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 30
Chapter 1
WHAT ARE THE MAIN
TYPES OF LAWS?
Read “What’s Your Verdict” p. 13
Civil and criminal laws
Is this Civil, Criminal or both?
Procedural and substantive laws
Business law
Mainly civil law
Uniform business laws
Uniform Commercial Code (UCC)
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 31
Chapter 1
Compare and contrast criminal and civil law
and substantive and procedural law.
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 32
Chapter 1
TYPES OF LAW
Constitutional law Based on constitutions
Statutory law Enacted by legislative bodies
Administrative law Rule-makings by administrative agencies
Civil law Addresses wrongs done to individuals
Criminal law Addresses wrongs done to society
Procedural law Deals with methods of enforcing legal rights
and duties
Substantive law Defines legal rights and duties
Business law Rules that apply to business transactions
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Assignment
Complete Assessment 1-2 on p. 15
Questions 1-11
Slide 33
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 34
Chapter 1
1-3 Ethical Bases for Laws
GOALS
Define ethics
Compare and contrast consequences-based
ethics with rule-based ethics
Discuss ways in which ethics are reflected in
laws
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 35
Chapter 1
ETHICS AND THE LAW
What does Ethics mean?
(Focus)
Three elements of ethics
1. Decisions about right and wrong
2. Decision is reasoned (consistent and established)
3. Decision is impartial (fair)
An ethical decision is one that is reasoned out typically
by referring to an established authority that provides
consistency. (law is such an authority).
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Ethics (Continued)
Ethic decisions should be impartial
Impartiality is the idea that the same ethical
standards are applied to everyone.
Business Ethics are the ethical principals
used in making business decisions
Often not considered in business decisions
(video)
Slide 36
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Forms of Ethical Reasoning
Read “In This Case” p. 16
Basic forms of ethical reasoning
Consequences-based ethical reasoning
Right or wrong is based on the results of the action
Rule-based ethical reasoning
Acts are either right or wrong (judging comes from an
authority [law] or human reasoning)
Slide 37
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
What kinds of ethical decisions do
you have to make?
Give some examples
Apply consequence based reasoning and
rule based reasoning to each situation.
Compare the results
Is one superior to the other? Why?
Slide 38
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Ethics reflected in laws
Discuss “A Question of Ethics” p. 17
Representatives must vote for laws that are
acceptable to the majority of the people
(that’s how they get re-elected).
Laws are judged to be right or good when
they affect the majority of people positively
(Consequence Based Ethics)
“Provides the greatest good for the greatest
number”
Slide 39
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Ethics reflected in laws (continued)
Constitution also protects the well-being of
minority groups.
Done through the first 10 Amendments (Bill
of Rights) and other civil rights laws.
This reflects ethics based on rules.
Both consequence and rule based ethics
conclude that we are obligated to obey the
law.
Slide 40
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Breaking Laws
Even if unethical, it can be tempting
Some don’t even obey minor laws
Some assess the risk of being caught against the
benefits
Shows a lack personal integrity
Slide 41
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Civil Disobedience
Some care passionately about ethical
behavior, human rights, and justice
They participate in an open, peaceful,
violation of a law
Protest it’s injustice
Read “What’s Your Verdict” p. 16
Slide 42
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Dr King’s belief on Civil
Disobedience
He believed it’s ethical when:
The law is in conflict with ethical reasoning
No effective political methods are available to
change the law
It is nonviolent
Does not advance a persons immediate self-
interest
It’s public and one willingly accepts the
punishment for violating the law.
Slide 43
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 44
Chapter 1
In the U.S. system of democracy, how
are ethics reflected in laws?
Reflected in the Constitution which is drawn
from the values of the people who elect the
majority of the legislatures making the rules
for our country.
Law for Business and Personal Use
© South-Western, a part of Cengage Learning
Assignment
Ch 1-3 Assessment p. 19
Questions 1-9
Slide 45
Chapter 1
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 46
Chapter 1
PREVENT LEGAL DIFFICULTIES
As a citizen . . .
When moving to a new location, find out how the
laws in that county or city may affect you.
Before beginning a new business, consult an
attorney to learn about city, county, state, and
federal laws and how they may affect you.
Study business law so you can become an informed
citizen who is knowledgeable about legal matters.
Continued on the next slide
Law for Business and Personal Use
© South-Western, a part of Cengage Learning Slide 47
Chapter 1
PREVENT LEGAL DIFFICULTIES
Recognize that fulfilling your duties as a citizen is
the greatest guarantee of your maintaining your
individual rights and liberties. These duties include:
The duty to obey the law.
The duty to respect the rights of others.
The duty to inform yourself on political issues.
The duty to vote in elections.
The duty to serve on juries if called.
The duty to serve and defend your country.
The duty to assist agencies of law enforcement.
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