According to the textbook “The Legal and Regulatory Environment of Business 17th – Marisa Anne Pagnatt”Answer the 5 questions, each question requires 250-400 words.
Briefly explain the two types of product defects that give rise to strict products liability.List and explain the five elements required to form a valid contract.Steve has been asked to join a partnership. What must Steve consider when choosing to become a general or limited partner?Explain the characteristics that an invention should have in order to be patentable.Jessica, a marketing manager of a firm, has a stellar employment record with the firm. When her name came up for promotion, the committee responsible for promotions felt that clients would not respond well to a female head, so they gave her a salary hike instead. Can Jessica sue the firm in this case? Explain.
ch_1.ppt

ch_2.ppt

ch_3.ppt

ch_4.ppt

ch_5.ppt

Unformatted Attachment Preview

Law and Regulations are Fundamental
Foundations for Business
➢ Companies in the U.S. must:
➢ Be aware of the legal and regulatory landscape
➢ Take steps to ensure full compliance with the
law to avoid civil and criminal liability
➢ Lawyers play a positive role in corporate
boards
1-5
Law
➢ Rules established by the state and backed
up by enforcement
➢ Formal social force
➢ Adequate enforcement institutions are
necessary to maintain order in society
1-6
Rule of Law
➢ Laws are generally and equally applicable
➢ Applies to all members of society
➢ Rule-of-law nations adopt laws supporting
the private market
➢ Judges play a vital role in maintaining the
rule of law
1-7
Property (Ownership)
➢ Legal right that allows a person to exclude
others from his/her resources
➢ Types of ownership fences
➢ Public property
➢ Private property
➢ Common property
➢ Exclusionary right of property provides a
basis for the private market and modern
business
1-11
Property in its Broadest Sense
➢ Central concept of Western legal systems
➢ Includes ownership of individual
constitutional and human rights
1-12
Figure 1.1 – Wheel of Property
1-13
Jurisprudence
Natural Law
Jurisprudence
Philosophies that
explain origin of
law, and its
justification.
Positive Law
Historical School
Sociological
Legal Realism
1-7
Classification of Law
Common law and civil law
Public and private law
Civil law and criminal law
Substantive law and
procedural law
1-15
Common Law and Civil Law
➢ Common law
➢ Emphasizes the role of judges in determining
the meaning of laws
➢ Civil law
➢ Relies on legislation than judicial decisions for
law
1-16
Public and Private Law
➢ Public law: Includes matters that involve
the regulation of society
➢ Constitutional law
➢ Administrative law
➢ Criminal law
➢ Private law: Covers legal problems and
issues that concern private resource
relationships
➢ Property law
➢ Contract law
➢ Tort law
1-17
Civil Law and Criminal Law
➢ Civil cases
➢ Include suits for breach of contract or tort cases
➢ Involve request for damages or appropriate
relief
➢ Criminal cases
➢ A government representative attempts to prove
the wrong committed against society
➢ Result in punishment
1-18
Substantive Law and Procedural
Law
➢ Substantive law
➢ Defines the legal relationship of people with
other people or with the state
➢ Procedural law
➢ Method and means by which substantive law is
made and administered
1-12
Sources of Law
Federal law
State law
Judicial
decisions or
case law
1-20
Federal Law
Constitution
Legislation
Administrative
law or regulation
1-21
State Law
State constitution
Statutes or acts
Regulatory law of state
administrative agencies
Ordinances
1-22
Judicial Decisions or Case Law
➢ Interpret the constitutional, legislative, and
regulatory laws
➢ Opinions: Decisions made by judges on
legal issues
➢ Become precedents for future cases involving
similar facts and legal issues
➢ Citation: Enables to locate the case in a library
or computer databases
1-23
Judicial Decisions or Case Law
Advantages
➢ Stare decisis
➢ Judges follow precedents
whenever possible
➢ Ensures certainty and
predictability in the law
➢ Specifies the boundaries
of property-based legal
system
Disadvantages
➢ Volume of cases
➢ Conflicting precedents
➢ Distinction between the
holding and dicta
➢ Increases the difficulty of
determining the precedent
➢ Rejection of precedent
➢ Conflicts of law
1-24
Hierarchy of Sources of Law
➢ U.S. Constitution and Amendments
➢ Statutes of Congress
➢ Federal administration regulation
➢ State constitutions
➢ State statutes
➢ State administrative regulation
➢ Local ordinances
➢ Case law
1-25
Legal Sanctions
➢ Methods used by law enforcement officials
and courts to encourage or force
compliance with the obedience to the law
➢ Remedy: Right of an individual to take
another person’s resources as that person
failed to meet the requirements of the law
1-26
Sanctions for Criminal Conduct
Crime
Punishments
•Public wrong
against society
•Death
•Imprisonment
•Fine
•Removal
•Disqualification
1-27
Sanctions for Breach of Contract
Remedies
•Damages (Money)
•Compensatory
Breach of
contract
•Failure to perform
contractual promise
•Consequential
•Specific performance
1-28
Tortious Conduct
Tort
•Civil wrong (other
than breach of
contract)
•Intentional
•Negligence
•Strict liability
Remedies
•Compensatory
damages (Money)
•Punitive damages
(Exemplary damages)
1-22
Sanctions for Violating Statutes and
Regulations
➢ Similar to those imposed for criminal
conduct, breach of contract, or tortious
conduct
➢ Statutes impose a fine for a violation and
authorized damages to injured parties
➢ Help define boundaries and protect people
from the boundary infringements of others
1-30
Corporations
➢ Businesses chartered by the state to do
business as legal persons
➢ Owned by shareholders
➢ Board of directors run the business
➢ Managers are in charge of day-to-day
business operations
1-32
Specific Sense of Corporate
Governance
➢ Corporate governance: Legal relationship
between corporate agents and the
shareholders of the corporation
➢ Value of corporations will be destroyed
when managers abuse their control of
resources for personal benefits
1-33
General Sense of Corporate
Governance
➢ Corporate governance applies to legal
relationships that businesses have with
customers and society
1-34
➢.
©2016 by McGraw-Hill Education.
Contemporary Business Ethics
➢ Companies hire a ethics officers to:
➢ Develop ethics policies
➢ Listen to complaints of ethics violations
➢ Investigate ethics abuses
➢ Sarbanes-Oxley Act (SOX) of 2002
➢ Established higher standards for corporate
responsibility and governance
2-4
Contemporary
Business Ethics
Ethics
…and Society
•Changing values
•Economic
interdependence
•News media and
the Internet
…and Government
•Government may
take action
•Companies can
self-regulate
2-2
Ethics and Morality
➢ Morality: Values that guide one’s behavior
➢ Sharing moral values promotes social
cooperation and control
➢ Businesses need to instil shared moral values
in employees
➢ Ethics: Formal system for deciding what is
right and wrong and to justify moral
decisions
➢ The good: Moral goals and objectives one
chooses to pursue
2-7
Ethics and Law
➢ Society’s ethical values may become law
through:
➢ Legislation
➢ Court decisions
➢ Many ethical values are not enforced by
the state
➢ Motivation to follow laws and ethics differ
➢ Ethical systems involve a broader-based
commitment to behavior than the law
2-8
Systems of Ethics
Formalism
Consequentialism
Affirms absolute
morality
•Duty based view
•Categorical imperative
•Social contract
Concerned with moral
consequences of
actions
•Utilitarianism
•Protestant ethic
2-9
Figure 2.1 – A Common Result
2-10
Sources of Values for Business
Ethics
Legal
regulation
Professional
codes of
ethics
Organizational
codes of
ethics
Individual
values
2-13
Legal Regulation – Ethical Rules
Drawn from the Law
Respect liberty and rights of others
Act in good faith
Exercise due care
Honor confidentiality
Avoid conflicts of interest
2-14
Professional Codes of Ethics
➢ Certain professions have long traditions of
codes of ethical conduct
➢ More recent professions have developed and
adopted their codes
➢ Ethical codes of organizations are a form of
self-regulation
2-15
Organizational Codes of Ethics
➢ Businesses have adopted ethical codes at
the individual organization level
➢ Take varied approaches to suit their
organizations
➢ Effective implementation and enforcement
of codes is more important than its creation
2-16
Individual Values:
Self-Examination
1. Have I thought if my action
is right or wrong? 2. Will I be proud to
tell of my action?
Questions to
ask yourself to
help explore
ethical values
before making
decisions
3. Am I willing for
everyone to act
like me?
4. Will my decision
cause harm?
5. Will my actions violate
the law?
2-11
Achieving Ethical Business Corporation
➢ Obstacles
➢ Emphasis on profit conflicts with ethical
responsibility
➢ Effect of the group
➢ Individuals feel less responsible
➢ Control of resources by non-owners
➢ Managerial agents can manipulate resources in their
own interest
2-18
Steps to Promote Business Ethics in
Corporate Life
➢ Involve top management
➢ Top management should act as a role model
➢ Must believe in the expressed values
➢ Openness in communication
➢ Promotes trust
➢ Required due to the complexity of information
➢ Consideration of stakeholders
➢ Stakeholder theory: Directors and managers
must take into account its stakeholders whose
interests the corporation impacts
2-19
Rewards
➢ Popular observations about business
ethics
➢ Profits and ethics are not contradictory
➢ Ethical organizational life is a business asset
➢ Ethics are of concern to the business
community
➢ Requires constant re-evaluation
➢ Business ethics reflect business leadership
2-20
Can a Business Have a Conscience?
➢ Personhood rights of a corporation have
been recognized in the law
➢ Laws that force individuals’ to violate a
religious value are problematic
2-23
➢.
©2016 by McGraw-Hill Education.
Judges and Justices
➢ Individuals who operate courts
➢ Judges – Trial court persons
➢ Determines the rules of law for case
➢ Justices – Reviewing court persons
➢ Decide an appeal and provide reasons for their
decisions
3-5
Jurors
➢ Fact-finding body
➢ Trial by jury is guaranteed by the Bill of
Rights
➢ Petit jury: Trial jury that returns a verdict in
criminal and civil situations
➢ Consist of 12 persons
➢ Smaller juries are acceptable
➢ Decision must be unanimous
➢ Reason is not provided
3-6
Lawyers
➢ Serve as representative advocates in court
system
➢ Present evidence, points of law, and
arguments
➢ Help juries and judges in making decisions
➢ Primary duty is to the administration of
justice
3-7
Lawyers
➢ Serve as counselor, advocate, and public
servant
➢ Rules of evidence provide confidential
communications to a lawyer
➢ Attorney-client privilege
➢ Forbids a lawyer to reveal confidential facts and
testify against a client
3-8
Organization of the Court System
Supreme Courts
Appellate Courts
Subject Matter
Jurisdiction –
Power over
Particular
Issues
Trial Courts
3-9
Subject Matter Jurisdiction
➢ Power over the issues involved in the case
➢ Jurisdiction can be limited to a subject
matter or area in which the parties live
➢ Probate courts – Deal with wills and estates
of deceased persons
➢ Traffic courts – Deal with traffic violations
3-11
State Courts
➢ Sources that create and govern state court
systems
➢ State constitutions
➢ State legislature
➢ Other legislation
➢ Trial courts: Initial level for filing lawsuits
➢ Referred as superior or circuit or district court
➢ Responsible for determining the facts and law
in the case
3-12
State Courts
➢ Appellate courts: Review the results of
lower courts
➢ Some states have one appellate court
➢ Certain states have two levels of review
➢ Courts of appeal: Intermediate courts
➢ Supreme court: Highest court
➢ Writ of certiorari: Procedure for requesting a
second review
3-13
Figure 3.1 – State Court System
3-14
Federal Courts
• Article III Of Constitution
• Reviews:
• Questions of
Federal Law
• U.S. As Party
• State Disagreements
• Suits Between
Citizens Of
Different States
Federal
Jurisdiction
3-10
Federal Question Cases
Federal
Questions
U.S.
Constitution
Issues
Federal
Statute
Issues
No $ Limit
3-11
Diversity Of Citizenship
Diversity
Plaintiffs/
Defendants –
Citizens of
Different States
Each
Claim
Must Be
$75,000+
Guard
Against
State Court
Bias
3-12
Figure 3.2 – Federal Court System
3-18
District Courts
➢ Trial courts of the federal judicial system
➢ One court in every state and the District of
Columbia
➢ Federal Rules of Civil Procedure:
Provide the details concerning procedures
to be followed in federal court litigation
3-19
Appellate Courts
➢ 12 Courts of Appeal
➢ Special Court of Appeals hears appeals
from
➢ Special courts
➢ Administrative decisions
➢ Other courts have been created to handle
special subject matter
➢ Court of Appeals for Armed Forces
3-20
Decisions by the U.S. Supreme Court
➢ Review by the U.S. Supreme Court
requires a petition for a writ of certiorari
➢ Supreme Court resolves cases involving
major constitutional issues or interpretation
of federal law
➢ Final judgments of the highest state court
are reviewed only by the Supreme Court of
the U.S.
3-22
Power of Judicial Review
➢ Judicial review: Ultimate power to
invalidate actions by the president or the
Congress
➢ Judicial restraint: Power should not be
used except in unusual cases
➢ Judicial activism: Power should be used
when the needs of society justify its use
3-23
Judicial Restraint
➢ Philosophy is referred as strict
constructionism or judicial abstention
➢ Followers favor a very limited role for the
courts in system of government
➢ Belief that change in society should result
from the political process
➢ Supporters take a pragmatic approach to
litigation
3-24
Judicial Activism
➢ Supporters favor a more expansive role for
the courts in system of government
➢ Activists are value oriented and policy
directed
➢ Courts are more result conscious and
place less reliance on precedent
3-25
Case 3.1: Supreme Court’s Influence
on Law
➢ Case
➢ National Federation of Independent Business v.
Sebelius
➢ 567 U.S. __, 132 S. Ct. 2566 (2012)
➢ U.S. Supreme Court
➢ Issue
➢ Plaintiffs challenged the constitutionality of
individual mandate and Medicaid expansion of
the Affordable Care Act
3-27
Nature of the Judicial Process
Case To Be Decided
Use
Existing
Statutes &
Precedent
Create Law
Where
None Exists
Refuse
To Apply
Case Law or
Find Unconstitutional
Will Ruling Provide Justice and
Sound Precedent?
3-21
➢.
©2016 by McGraw-Hill Education.
Litigation
➢ Process helps the business community
resolve actual disputes
➢ Effective business leaders should develop
an understanding of the process
➢ Any lawsuit is an immense drain of time,
money, and energy on everyone involved
4-5
Parties
➢ Plaintiff: Party who files a civil action
➢ Defendant: Party sued by the plaintiff or
person against whom a criminal charge is
filed by state
➢ Third-party defendant: Parties brought in
by the defendant to complete the
determination of a controversy
4-6
Standing to Sue
➢ Plaintiff establishing that he or she is
entitled to have the court decide the
dispute
➢ To establish a standing, plaintiff must
allege:
➢ Litigation involves a case or controversy
➢ Personal stake in the resolution of the
controversy
4-7
Case 4.1 – Standing to Sue
➢ Case
➢ Mayer v. Belichick
➢ 605 F.3d 223 (3rd Cir.)
➢ United States District Court for District of New
Jersey
➢ Issue
➢ Videotaping the New York Jets coaches and
players on the field with the purpose of illegally
recording, capturing and stealing the New York
Jets signals and visual coaching instructions by
the Patriots
4-8
Personal Jurisdiction
➢ Having authority over the parties to the
case on the part of the court
➢ Personal jurisdiction over the defendant
obtained by:
➢ Summons
➢ Service of process
➢ Long-arm statutes: Provision for the
service of process beyond the boundaries
of the state
4-9
Personal Jurisdiction
➢ Long-arm statute allows a court to obtain
jurisdiction over defendant outside its
borders
➢ Extradition: Voluntary turning in of
prisoner from one state to another by the
presiding governors
4-10
Class-Action Suits
➢ One or more plaintiffs file suit on their own
behalf and on behalf of all other persons
who may have a similar claim
➢ Involve matters in which no one member of
the class has sufficient financial interest to
warrant litigation
4-12
Figure 4.1 – Pretrial Procedure
4-13
Figure 4.1 – Pretrial Procedure
4-14
Pleadings
➢ Legal documents that are filed with a court
to begin the litigation process
➢ Complaint: Pleading filed by plaintiff with
the court clerk
➢ Answer: Response in the form of written
pleading by defendant
4-15
Pleadings
➢ Default: Order entered by court when
defendant does not respond in any way
➢ After receiving an answer plaintiff files a
reply that:
➢ Admits or denies each allegation of the
defendant’s counterclaims
4-16
Discovery
➢ Ensure that the results of lawsuits are
based on the merits of the controversy and
not on the ability or skill of counsel
➢ Narrows the issues disputed by the parties
➢ Encourages the settlement of the lawsuit
and possibly avoiding actual trial
4-17
Methods to Discovery
➢ Interrogatories: Series of written
questions presented to the opposing
parties
➢ Request for production of documents:
Either party asking the other to produce
specific documents
➢ Depositions: Lawyer orally asks questions
of the possible witness
➢ Request for an admission
4-18
Scope of Discovery
➢ Discovery procedures are intended to be
used freely by parties without court’s
supervision
➢ Judges provide a liberal interpretation of
the degree of discoverable information
4-19
Abuse of Discovery
➢ Discovery imposes a tremendous burden
on the judicial system
➢ Aggression during discovery on the part of
any party can damage the litigation
process
➢ Defendant should be open and responsive
to reasonable requests of the plaintiff
4-20
Motions
➢ Statute of limitations: Move defendant to
dismiss a suit when a matter of law prevent
the plaintiff from winning the suit
➢ Judgment on the pleadings: Motions
which asks the judge to decide the case
based only on the complaint and its answer
➢ Summary judgment: Motion asking the
judge to base a decision on the pleadings
and on other evidence
➢ Affidavits: Evidence in the form of sworn
statements
4-22
Figure 4.2 – Typical Pretrial Motions
4-23
Figure 4.3 – Trial Steps
4-24
Figure 4.3 – Trial Steps
4-25
Food for Thought…
“I consider trial by jury as the
only anchor yet devised by
man, by which a government
can be held to the principles of
its constitution”
–Thomas Jefferson
4-26
Jury Selection
➢ Prior to calling of the case, court clerk will
have summoned prospective jurors
➢ Voir dire: Speaking the truth
➢ Selected jurors are called into jury box to
conduct the examination
➢ Peremptory challenge: No cause or
reason needs to be given to excuse a
prospective juror
4-27
Case 4.2 – Commonality
➢ Case
➢ Wal-Mart stores, Inc. v. Dukes
➢ 564 U.S. __ (2011)
➢ Issue
➢ Local managers exercise their discretion over
pay and promotions disproportionately in favor
of men, having an unlawful disparate impact on
female employees; and Wal-Mart refused to
cabin its managers’ authority
4-28
Food for Thought…
➢ Supreme Court outlawed racial
discrimination in peremptory challenges
➢ Batson v. Kentucky, 476 U.S. 79 (1986)
➢ Gender discrimination is banned in the jury
selection process
➢ J.E.B. v. Alabama Ex Rel. T.B., 511 U.S. 127
(1994)
➢ Courts are divided on the issue of banning
discrimination based on religion in
peremptory challenges
4-29
Other Steps During a Trial
➢ Attorneys make opening statements
➢ Plaintiff introduces evidence to establish
truth of allegations made in the complaint
➢ Directed verdict: Motion by defendant
➢ Lawyers summarize the evidence
➢ Jury instructions: Judge informing the
jury with the law applicable to the case
4-30
Burden of Proof
➢ Criminal cases
➢ Beyond a reasonable doubt …
Purchase answer to see full
attachment