Business and Its Legal Environment Ch. 1 What are the different legal philosophies? How does law affect business decision-making? What are the classifications of the law? What are the sources of our law? What is stare decisis? Ethics and Professional Responsibility Ch. 3 What is business ethics? Why is business ethics important? What categories of ethical dilemmas and rationalizations can suggest a problem? What tests/considerations should individual employees use in resolving an ethical dilemma? How does a business create an ethical atmosphere? What is corporate social responsibility and what other theories are there on the role of business in society and how it should achieve its goals? What approaches exist for ethical reasoning? The Courts and: ADR Ch. 2 How are the federal courts organized? What is the process of judicial review - reversible error and stare decisis. Know the options of the appellate court and how its decisions are made. How does a case go to court and who are the personnel involved? How do courts decide whether to hear a case? Understand subject matter and personal jurisdiction. What are the various methods of alternative dispute resolution? What are the advantages and disadvantages of ADR and litigation? What are the four main steps and the various stages of litigation? What strategies should companies use particularly during discovery and jury selection? Constitutional Law Ch. 4 What are the constitutional limitations on business regulations? Know that the Commerce Clause limits the federal government to regulating interstate and international trade. How does the Supremacy Clause define the relationship between state and federal regulation of trade? What individual freedoms under the Bill of Rights give rights to businesses and how are these rights used? - First Amendment - Due process (substantive and procedural) - Equal protection Torts and Product Liability Ch 6. What is an intentional tort? What are the main intentional torts that are likely to arise in a business relationship? (defamation, invasion of privacy, interference with contract, intentional infliction of emotional distress, false imprisonment) What are the main elements of these torts and what should managers know to avoid committing the torts? What are the different theories under which a product liability claim can be brought? Negligence: What are the elements of a negligence claim? Duty Breach of duty Causation and proximate cause (when is one used rather than the other and what is the difference?) Injury Product advertising as a basis for product liability - Express Warranties. What does a plaintiff have to prove? What implied warranties are given in product sales? When is each given and how can it be used to bring a claim? What does a plaintiff have to show to demonstrate strict tort liability? Who is liable? What are the defenses to negligence and strict liability claims? Contributory/comparative negligence, product misuse or alteration and assumption of risk Issues such as manufacturing defects, design and failure to warn claims. Defenses Administrative Regulations Ch 5 Why is there government regulation? What is the Constitutional foundation for regulation? What are the constraints on regulatory agencies? What is enabling legislation? How do agencies operate - executive, legislative and judicial duties/functions? True/False and Multiple-Choice example questions Business law questions Name: School: Legal philosophy Legal philosophy is a branch of philosophy that deals with the law and the principles that guide courts to make the decisions they do. (Pound 1910 p. 12) The law affects business decision making by many ways. The bottom line goal of every business is to have a maximum profit and every law by the government will reduce the profit in one way or the other. Example the regulations imposed by the government on businesses can be divided in three categories. Taxes: all businesses must be taxed based on the amount of profit they earn. The number of employees employed in a certain business, either part time or full time is another factor that determines the amount of tax the business will pay. Employee relations: it's a mandatory for employers to follow government regulation regarding the hiring and treating of employees. Many of these regulations are directly or indirectly related to the rights granted under the United States constitution and its amendments. International trade: the government imposes tariffs or taxes on international trade. The government also gives specific guidelines on the product or the raw material that may be traded and with who it may be traded with. Classification of the law The law can be classified as either criminal law or civil law Criminal law: This type of law creates protection of the society as a whole and also helps maintain law and order. It also provides punishment for the people who break law. The criminal sets up the illegal behaviors that are forbidden by the society. Civil law: this type of law settles dispute among individuals, companies and corporations. The civil law solves civil cases that are brought by an individual or a company. Sources of our law The constitution: A constitutions is a source of law since it defines how the government is to be organized and its responsibilities. Statute: this is a federal law enacted by members elected in the legislature. Administrative law: this is a type of law that is created by administrative agencies. Stare decisis. This is a doctrine that rules on which a court rested a previous decision are authoritative in all feature cases in which the facts are similar. Ethics and Professional Responsibility Business ethics can be defined as the study of proper business policies and practices On issues that are potentially controversial. Business ethics is important because, it guides whoever makes decisions by influencing the person by the culture of the company. Here employees must decide what they think is the right course of action. Categories of ethical dilemmas and rationalizations that can suggest a problem Informed consent: Informed consent is a major ethical issue especially in the conducting research. Do not harm: This is another ethical dilemma that means that one should be of help. Respect for confidentiality Respect for privacy How to resolve ethical dilemma Determine whether there is an ethical issue or a dilemma. Identify the key values and principles involved. The limitations that are typically attached to the competing values are determined. Rank the values in a professional judgment so as to know what to solve first. Develop an action plan. The action plan should be consistent to the ethical priorities. Implement your plan utilizing the best practice skills How a business creates an ethical atmosphere There should be clear expectations: the culture of the organization should include guidelines on how the employees should interact with each other, interact with the clients, as well as the behavior that is and is not acceptable in the work place. Positive reinforcement: an organization should a wealth of its research in motivating the employees. Corporate social responsibility refers to business practices involving initiatives that promote the society. Theories that are there on the role of business include; Consequentialist theories, Nonconsequentialist theories and Agent-centered theories. The Courts and: ADR Ch. 2 Federal courts are organized from the highest ranked to the lowest. That is: the Supreme Court - Court of appeals - Bankruptcy appellate panels - District courts - Bankruptcy courts - Article I courts. Judicial review is the process whereby a case that had already been decided is reviewed back. A reversible error is an error that can be corrected after the judicial review. (Blum& Steinhardt 1981 p. 589) Personnel involved in a court The personnel involved in the court are: Judge, district attorney, plaintiff, defendant, lawyer, bailiff, court reporter, minute clerk, witness. Methods of alternative dispute resolution The first method of alternative dispute resolution is Mediation. The second method of alternative dispute resolution is Conciliation. The third method of alternative dispute resolution is Arbitration. Advantages and disadvantages of ADR Advantages A jury is not involved since they are very unpredictable. In case of arbitration there is more flexibility on the parties involved. One is able to select his or her own mediator. Disadvantages With the exemption of arbitration there is no guaranteed resolution The arbitration decisions are final. Main stages of litigation Stage I: Preliminary Case Assessment & Development Stage II: Pleadings Stage III: Discovery Stage IV: Summary Judgment Limitations on business regulations The constitution at times set some rules and regulations that make it hard for a company to follow. The constitution specifies the amount the lowest person should be paid, this makes this companies incur heavy pay wages. The states mostly regulate international trade while the federal regulates internal cooperation. The freedom under the bill of rights is used for equal protection. An international tort is a category of torts that gives description of a civil wrong resulting from an international act. The main international acts that are likely to arise are: defamation, interference with contract and false imprisonment. The main elements that the managers should know to avoid these torts are: They should know that they have a duty to defend, they have liability insurance. they should have a compensatory function. Different theories under which a product liability claim can be brought The theories of liability are the bleach of express warranty, bleach of implied warranty, strict product liability, and implied warranty of fitness for a specific purpose. Elements of negligence are claims based on strict product liability. One may be able to argue that the defendants acted negligently in supplying or manufacturing the defective product. A plaintiff has to proof the following things: The manufacturer owed a duty to the plaintiff, the manufacturer broke the duty it owed the plaintiff, and the injury on the plaintiff was actually caused by the manufacturer breach of his duty, and the plaintiff sustained actual damage due to the manufacturer's negligent conduct. A plaintiff has to demonstrate the fact that the manufacturer caused the injuries. The manufacturing company is liable. (Prosser 1947 p.32) The defense to negligence can only be successful when the manufacturer produces evidence that he or she did not owe a duty to the plaintiff, carried out a lot of care, and did not cause the plaintiff's damages. Administrative Regulations Ch 5 Government regulation is there because it's a government response to rectify situations of market failure. (Rhodes 1996 p.640) Regulations change frequently as jurisdiction overlaps. The body of regulations grows at various and bounds at various level of government. The federal government is responsible for regulations. The constitutional foundations for regulation are: contributions to organization and also grants Professional judgment is another constraint on regulatory agencies. Enabling legislation is a legislation that gives appropriate officials the power to put into practice a law. References Rhodes, R. A. W. (1996). The new governance: governing without government. Political studies, 44(4), 652-667. Prosser, W. L. (1947). Contributory Negligence as Defense to Violation of Statute Minn. L. Rev.32, 105 Blum, J. M., & Steinhardt, R. G. (1981) Federal Jurisdiction over International Human Rights Claims: The Alien Tort Claims Act after Filartiga v. Pena-Irala. Harv. Int'l LJ, 22, 53 Pound, R. (1910). Law in books and law in action Am. L. Rev., 44, 12