BLAW 502 Business Law

Law as the Foundation of Business

Chapter One Outline
I.

Origins of Our Law

Our laws can not be found in one book or on one single web page or even in one
entire library. It is a work in progress a contemporary piece of art that
essentially reflects contemporary life. Law itself has many different definitions. We
discussed two in class:
Law is a body of enforceable rules governing relationships among individuals and
between individuals and society.
Law is a set of rules that allowed one to predict how a court would resolve a
particular dispute. (Oliver Wendell Holmes)
Laws include rights and duties; a legal right is the legal capacity to require
another person to perform or refrain from performing an act. These rights
originate from all the sources of laws discussed below. A legal duty is an
obligation of law imposed on a person to perform or refrain from performing a
certain act.
A. The U.S. legal system is a common law system. Our laws come from court
cases, statutes, administrative rules/orders/ treaties and executive orders.
B. At the heart of the US legal system is the doctrine of stare decisis. This legal
principle requires judges to look at prior legal decisions (legally referred to as
precedents) in order to decide the actual case that is currently before them. In
other words, judges look back in order to decide current law.
C. Within a democracy, the rule of law (the concept that rules adopted by legislative
bodies, administrative bodies and courts) form the basis for the proliferation of a
global market place.
D. Property law also plays an integral part of business law since it allows private
property owners to exclude others from using their property.

II.

Sources of American Law

A. Four major sources of U.S. Law
1. Constitutional Law (Federal and State)
2. Statutory Law (Federal and State Statutes)
3. Administrative Rules/Law
4. Case Law (Court Decisions/Judge made Law)
B. Two other sources include:
1. Treaties
2. Executive Orders

III.

Jurisprudence
A. Natural law- This theory of law originated with Aristotle and focuses on teaching
law as universal moral principles.
B. Positive law- This area of law focuses on the concept that law is made
(promulgated) by the state and its enforcement is backed up through the
executive branch of government that is empowered to enforce the law and punish
those who disobey the law.
C. Historical school- This area of law teaches that contemporary law is a result of
cultural traditions that have withstood the test of time. This area of law
recognizes that different cultures/nations adopt different laws.
D. Sociological jurisprudence- Teaches that law should change and meet the needs of
society and its development.
E. Legal realism- Advocates one should interpret and apply the law in a way that is
consistent with the way the law was promulgated.

IV. Classification of Law

A.
B.
C.
E.

Common vs. Civil

Public vs. Private law
Civil vs. Criminal
Substantive vs. Procedural

V. Legal Sanctions
A. Criminal sanctions
B. Civil sanctions