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Business Law I Essentials.pdf
Chapter Outline 1.1 Basic American Legal Principles 1.2 Sources and Types of Law 1.3 Important Business Laws and Regulations Introduction Learning Outcome • Describe the foundation and sources that establish American law. 1.1 Basic American Legal Principles The American legal system has its roots in the British legal s...
Business Law I Essentials.pdf
Figure 1.2 The American legal system is designed to establish a set of standards for acceptable behavior. (Credit: joergelman/ pixabay/ License: CC0) Promoting Consistency The American legal system follows the British Common Law system, which is designed to leverage past judicial reasoning, while also promoting fairnes...
Business Law I Essentials.pdf
Resolving Disputes Conflicts are to be expected given people’s varying needs, desires, objectives, values systems, and perspectives. The American legal system provides a formal means for resolving conflicts through the courts. In addition to the federal court and individual state systems, there are also several informa...
Business Law I Essentials.pdf
Figure 1.3 The U.S. Constitution is known as the supreme law of the land. (Credit: lynn0101/ pixabay/ License: CC0) American Common Law As discussed in the previous section, the United States follows the common law legal tradition of English law. Judges in the Common Law system help shape the law through their rulings ...
Business Law I Essentials.pdf
states. Finally, a number of powerful federal and state laws coexist in areas such as antitrust, trademark, employment law, and others. Statutes When a bill becomes a federal law, it is assigned a law number and prepared for publication by the Office of the Federal Register (OFR) of the National Archives and Records Ad...
Business Law I Essentials.pdf
Business law consists of many legal disciplines, including contracts, tax law, corporate law, intellectual property, real estate, sales, immigration law, employment law, bankruptcy, and others. Figure 1.4 Contract law is just one type of law that businesses need to be concerned about. (Credit: edar/ pixabay/ License: C...
Business Law I Essentials.pdf
companies avoid legal liability and exposure. Typically, an ethics code and/or a code of conduct details a company’s requirements and guidelines, while also serving as a key corporate governance tool. In addition to business ethics, companies must also consider their social responsibility and the laws related to it, su...
Business Law I Essentials.pdf
or contract is that there must be an offer and acceptance of the terms of that offer. Sales contracts normally involve the sale of goods and include price terms, quantity and cost, how the terms of the contract will be performed, and method of delivery. Employment and Labor Law Employment and labor law is a very broad ...
Business Law I Essentials.pdf
Assessment Questions 1. What country is the United States legal system derived from? a. Germany. b. United Kingdom. c. United States of America. d. Canada. 2. What is the function of law in the United States? a. Establish standards. b. Promote consistency. c. Promote, provide, and maintain order. d. All of the above. 3...
Business Law I Essentials.pdf
10. Regulations are: a. Laws passed by Congress. b. Rules made by local governments. c. Derived from decisions made by judges. d. Rules adopted by administrative agencies. 11. What is an Unfair Trade Practice and which Administrative Agency regulates it? 12. Some of the rights in the Constitution’s Bill of Rights exten...
Business Law I Essentials.pdf
Introductory Business Law. Modern States. Retrieved from: https://modernstates.org/course/introductory- business-law/. Chapter 1 American Law, Legal Reasoning, and the Legal System 13
Business Law I Essentials.pdf
14 Chapter 1 American Law, Legal Reasoning, and the Legal System This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
Business Law I Essentials.pdf
Chapter Outline 2.1 Negotiation 2.2 Mediation 2.3 Arbitration Introduction Learning Outcome • Explain the theory, practice, and law of disputes and resolution. 2.1 Negotiation We frequently engage in negotiations as we go about our daily activities, often without being consciously aware that we are doing so. Negotiatio...
Business Law I Essentials.pdf
Negotiation Types and Objectives Per the above definition, negotiation becomes necessary when two parties hold “non-identical” preferences. This statement seems fairly obvious, since 100% agreement would indicate that there is not any need for negotiation. From this basic starting point, there are several ways of think...
Business Law I Essentials.pdf
Negotiation Style Everyone has a different way of approaching negotiation, depending on the circumstance and the person’s personality. However, the Thomas-Kilmann Conflict Mode Instrument (TKI) is a questionnaire that provides a systematic framework for categorizing five broad negotiation styles. It is closely associat...
Business Law I Essentials.pdf
Figure 2.3 Concern for self vs. others leads to the differences in negotiating styles. (Modification of art by BNED/Rubin Credit: CC BY NC SA) Negotiation Styles in Practice Apple’s response to its treatment of warranties in China, i.e., giving one-year warranties instead of two-year warranties as required by law, serv...
Business Law I Essentials.pdf
decided to be subject to binding arbitration relinquish their constitutional right to settle their dispute in court. It is the FAA that allows parties to confirm their awards, as will be discussed in the following chapters. When considering negotiation laws, it is important to keep in mind that each state has laws with...
Business Law I Essentials.pdf
judge may come up with a solution to which neither party is in favor. In contrast, mediation gives the disputing parties opportunities to find common ground on their own terms, before relinquishing control to outside forces. Role of the Mediator Successful mediators work to immediately establish personal rapport with t...
Business Law I Essentials.pdf
whether the action itself is right or wrong, regardless of its consequences. Imagine a situation in which a professional accountant holds a consequentialist ethical viewpoint and believes that there are certain scenarios in which the disclosure of only part of the truth is a commendable course of action. For example, i...
Business Law I Essentials.pdf
Future Directions in Mediation As technology continues to change the ways we interact with one another, it is likely that we will see advances in mediation techniques. For example, there are companies that offer online mediation services, known as e- mediation. E-mediation can be useful in situations where the parties ...
Business Law I Essentials.pdf
lawyers and judges. Types of Arbitration Agreements Parties can enter into either voluntary or involuntary arbitration. In voluntary arbitration, the disputing parties have decided, of their own accord, to seek arbitration as a way to potentially settle their dispute. Depending on the state’s laws and the nature of the...
Business Law I Essentials.pdf
Ethics of Commercial Arbitration Clauses As previously discussed, going to court to solve a dispute is a costly endeavor, and for large companies, it is possible to incur millions of dollars in legal expenses. While arbitration is meant to be a form of dispute resolution that helps disagreeing parties find a low-cost, ...
Business Law I Essentials.pdf
Figure 2.6 Various types of arbitration can be employed depending on what the parties think is best for their situation. (Credit: Tim Eiden/ pexels/ License: CC0) To overcome this shortcoming, the building owner could write a lease agreement that stipulates that the parties use binding baseball arbitration and use subj...
Business Law I Essentials.pdf
• Writ of Execution. Cornell Law School defines a writ of execution as “A court order that directs law enforcement personnel to take action in an attempt to satisfy a judgment won by the plaintiff.” • Garnishment. A garnishment refers to a court order that seizes the money, typically wages, to satisfy a debt. A myriad ...
Business Law I Essentials.pdf
4. How does the process of negotiation work? 5. Explain the Thomas-Kilmann Conflict Mode Instrument. 6. A person trained in conflict resolution is considered: a. An arbitrator. b. A mediator. c. A negotiator. d. A judge. 7. Mediation focuses on: a. Solutions. b. Testimony. c. Expert witnesses. d. Discoveries. 8. Name t...
Business Law I Essentials.pdf
Endnotes He, L. (April 2013). Tim Cook’s apology letter to Apple customer in China. Forbes. Retrieved from: https://www.forbes.com/sites/laurahe/2013/04/03/tim-cooks-apology-letter-to-customers-in- china/#510458b51ea3. Kilmann, R. H., & Thomas, K. W. (1977). Developing a forced-choice measure of conflict-handling behav...
Business Law I Essentials.pdf
Farber, H. S. (1981). Splitting-the-difference in interest arbitration. ILR Review, 35(1), 70–77. Use ‘Baseball Arbitration’ to settle rent disputes at renewal time. Commercial Lease Law Insider. Retrieved from: https://www.stroock.com/siteFiles/Pub391.pdf. What We Do (n.d.). American Arbitration Association. Retrieved...
Business Law I Essentials.pdf
30 Chapter 2 Disputes and Dispute Settlement This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
Business Law I Essentials.pdf
Chapter Outline 3.1 Business Ethics 3.2 Social Responsibility Introduction Learning Outcome • Analyze the role of ethics and social responsibility in business. 3.1 Business Ethics Businesses must establish a clear set of values that promote ethical practices and social responsibility. In today’s business climate, compa...
Business Law I Essentials.pdf
Figure 3.2 A group of employees who uphold strong corporate values can be an asset to the company they work for. (Credit: rawpixel/ pexels/ License: CC0) Business ethics are considered to be the blueprint for building a successful organization. If an organization is built on socially responsible values, it will be stro...
Business Law I Essentials.pdf
Executive compensation rates during employee layoffs. Let’s say a company is struggling during an economic downturn and must lay off a portion of its workforce. Does the CEO of the company take his or her annual raise or take a pay cut when others are losing their jobs? One could say that to take a raise is unethical b...
Business Law I Essentials.pdf
until the 21st century that greater attention was paid to how companies operate and how the operation impacts employees and the communities in which they serve. According to the Ethics and Compliance Initiative, which is comprised of organizations that are committed to creating best practices in ethics, each decade has...
Business Law I Essentials.pdf
to the local food pantry to support the community, etc. Regulatory ethics. These are designed to maintain certain standards of performance based on the industry. One example is a commitment to maintaining data privacy at all times, as it pertains to customer records. This element defines how employees are to handle sen...
Business Law I Essentials.pdf
Figure 3.3 Employees often like to participate in volunteer activities through their employer. (Credit: rawpixel/ pixabay/ License: CC0) What Is Corporate Responsibility? Corporate responsibility refers to the idea that a business is given the opportunity and privilege to make the world a better place. This process can...
Business Law I Essentials.pdf
Corporate Responsibility of the Businessman, published in 1953. This book introduced the concept of companies giving back as a form of investment in the future. This idea came from a generation that had survived some of the hardest times in our world and wanted to make it a better place for generations to come. By the ...
Business Law I Essentials.pdf
Consumer influence. A major benefit of engaging in corporate social responsibility efforts is that consumers regularly check in with their favorite brands to see what they are doing, and they are influenced to make purchases so they can be part of this community. With the process of posting messages on social networks,...
Business Law I Essentials.pdf
intervention. Another example could be a social cause, such as creating housing for single parents in poverty-stricken neighborhoods in a specific city. The impact can be felt in terms of the additional housing that is created (built or rehabbed from existing homes), and the value that this effort brings to the neighbo...
Business Law I Essentials.pdf
8. The benefits of Corporate Responsibility for a business include: a. Talent attraction. b. Consumer influence. c. Improved perception by investors. d. All of the above. 9. The three dimensions of the triple bottom line include all of the following except: a. Profits. b. People. c. Planet. d. Promotion. 10. Distinguis...
Business Law I Essentials.pdf
ttps://www.nationalservice.gov/vcla. Fallon, Nicole. “Why You Shouldn’t Jump on the CSR Bandwagon.” Business News Daily. Retrieved from: https://www.businessnewsdaily.com/6475-csr-brand-authenticity.html. Lilly Family School of Philanthropy. “Giving USA 2015 Highlights.” Retrieved from: https://doublethedonation.com/fo...
Business Law I Essentials.pdf
42 Chapter 3 Business Ethics and Social Responsibility This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
Business Law I Essentials.pdf
Chapter Outline 4.1 Commerce Clause 4.2 Constitutional Protections Introduction Learning Outcome • Explain the impact of the U.S. Constitution on business. 4.1 Commerce Clause Figure 4.2 The United States Constitution is the supreme law of the land. (Credit: 1778011/ pixabay/ License: CC0) Figure 4.1 (Credit: geralt/ p...
Business Law I Essentials.pdf
The Constitution and the Law Federal and state constitutions are a major source of business law. The United States Constitution is the supreme law of the United States. In addition to the individual constitutions established in each state, the U.S. Constitution sets out the fundamental rules and principles by which the...
Business Law I Essentials.pdf
limiting state power. So long as a federal regulation impacts interstate commerce, that regulation can be described as constitutional, according to the commerce clause. However, since the Constitution was first written, there have often been occasions when the judiciary system has needed to step in to interpret the mea...
Business Law I Essentials.pdf
line with the commerce clause. An exception is the 1995 case, United States v. Lopez. The case centered around the legality of the Gun-Free School Zone Act, which was a federal law that outlawed the possession of guns within 1,000 feet of a school. In a landmark case, the Court ruled that the Act was outside the scope ...
Business Law I Essentials.pdf
Regulation of the channels of interstate commerce Channels of interstate commerce describe the passages of transportation between the states. Thus, the commerce clause authorizes Congress to regulate activities pertaining to the nation’s airways, waterways, and roadways, and even where the activity itself takes place e...
Business Law I Essentials.pdf
Amendment Provision First Ensures that U.S. citizens have the right to freedom of speech, press, religion, and peaceable assembly. Provides citizens with the right to appeal to government to redress grievances. Second Establishes that the government cannot infringe upon citizens’ right to bear arms. Establishes the imp...
Business Law I Essentials.pdf
Boston v. Bellotti, it has been established that corporate political speech is protected in the same way as citizens’ free speech. 2. Unprotected Speech. The 1942 case Chaplinsky v. New Hampshire determined that certain types of speech—that which could “inflict injury or incite an immediate breach of the peace”—is not ...
Business Law I Essentials.pdf
the official believes items will be removed prior to obtaining a warrant). The Fourth Amendment protects individual organizations and places of business, as well as residences. However, under the terms of the pervasive-regulation exception, administrative agencies can conduct warrantless searches of businesses attached...
Business Law I Essentials.pdf
Figure 4.4 The various protections afforded the citizenry in the Bill of Rights are also extended to corporations and commercial activities. (Credit: Anthony Garand/ unsplash/ License: Unsplash License) Assessment Questions 1. Explain Police Power and the Dormant Commerce Clause. 2. The Patient Protection and Affordabl...
Business Law I Essentials.pdf
6. Describe the 2 types of Due Process. 7. The _____ of the constitution offers the most extensive protection for businesses. a. Supremacy Clause. b. Equal Protection Clause. c. Due Process Clause. d. Freedom of Speech Clause. 8. The 14th Amendment is a part of the Bill of Rights. a. True. b. False. 9. Which of the fol...
Business Law I Essentials.pdf
Chapter Outline 5.1 Common Business Crimes 5.2 Civil vs. Criminal Liability Introduction Learning Outcome • Analyze sources of criminal exposure in business. 5.1 Common Business Crimes People rarely think about their conduct at work as being potentially illegal, or that jail time could result from poor workplace decisi...
Business Law I Essentials.pdf
their businesses and keep commerce flowing more efficiently. While federal courts initially interpreted the commerce power narrowly, over time, the federal courts have decided that the commerce clause gives the federal government broad powers to regulate commerce, not only on an interstate (between the states) level, b...
Business Law I Essentials.pdf
Types of Business Crimes Business crimes or white collar crimes are not limited to pump-and-dump schemes; they come in many different forms. Business crimes come in many different forms. As previously stated, these crimes often involve deceit, fraud, or misinformation. The types of high-profile crimes include Ponzi sch...
Business Law I Essentials.pdf
The company admitted to altering required water test samples so they met the limits set by their permit before releasing the waste into the city’s sewer system. The company also admitted to transporting waste that contained benzene, barium, chromium, cadmium, lead, PCE, and trichloroethene for disposal in South Carolin...
Business Law I Essentials.pdf
brokerages, tobacco companies, banks, and other large commercial enterprises.” (Schodolski, 2018). Racketeering is no longer limited to organized crime. Health insurance companies and other legitimate businesses are being accused of pressure tactics similar to those used in organized crime racketeering. These claims in...
Business Law I Essentials.pdf
understand the civil and criminal systems, it is important to understand the aspects of both civil and criminal laws. The scope, consequences, and treatments of each vary. Constitutional Rights It is important to understand the Constitution, which is the basis of all law. States are allowed to create and categorize cri...
Business Law I Essentials.pdf
Components of Crime There are usually two components to criminal conduct that must be proven by the prosecutor. The prosecutor prosecutes the case against the accused: mens rea (the criminal, or guilty, or “wrongful” mind) and actus reus (the criminal, or guilty, or “wrongful” act). Each statute creating a crime is sup...
Business Law I Essentials.pdf
Figure 5.5 Civil and criminal cases involve the court system. (Credit: Brett Sayles/ pexels/ License: CC0) Initiation and Roles Criminal and civil cases are initiated differently, and the titles of the individuals involved differ slightly. Criminal cases are only initiated by the federal or state government in response...
Business Law I Essentials.pdf
In the Liebeck v. McDonald’s case, a woman sued McDonald’s for serving hot coffee. The woman spilled hot coffee on her lap while trying to add cream and sugar. The woman sued McDonald’s for negligence in a civil suit. The issue centered on whether or not the coffee’s specific temperature was unreasonably hot. McDonald’...
Business Law I Essentials.pdf
7. The burden of proof is a criminal case is: a. Reasonable suspicion. b. Beyond a reasonable doubt. c. Preponderance of evidence. d. Clear and convincing evidence. 8. Which of the following is a goal of an arraignment? a. The defendant is informed of the charge and enters a plea. b. Requires the defendant to bear the ...
Business Law I Essentials.pdf
Chapter Outline 6.1 Intentional Torts and Negligence 6.2 Product and Strict Liability Introduction Learning Outcome • Explain torts system application to business. 6.1 Intentional Torts and Negligence Civil suits arise from damages suffered by one or more persons or entities at the hands of another person or entity. Th...
Business Law I Essentials.pdf
Figure 6.2 Civil suits are decided in court by judges and juries. (Credit: Coffee/ pixabay/ License: CC0) Torts Civil suits involve different causes of action, and they are included in one general classification: torts. The word “tort” means “wrong” in French. Thus, torts are wrongs committed against others who suffer ...
Business Law I Essentials.pdf
Functions During a Tort Litigation The Judge Decides Issues of Law The Jury Decides Questions of Fact The elements of the defense Legal consequences of what happened Application of legal rules The damages suffered by the plaintiff Table 6.1 Harm Two types of torts are intentional torts and negligence. Intentional torts...
Business Law I Essentials.pdf
• Invasion of privacy involves unwanted production of negative public information. Different standards apply to invasion of privacy based on the status of the individual as a public figure. Negligence Negligence is another type of tort that has two meanings. It is the name of a cause of action in a tort, and it is a fo...
Business Law I Essentials.pdf
• A duty by the defendant to either act or refrain from acting • A breach of that duty, based on a failure to conform to the standard of care by the defendant • A causal connection between the defendant’s action or inaction, and the injury to the plaintiff • Measurable harm that can be remedied in monetary damages Fore...
Business Law I Essentials.pdf
Figure 6.4 If horses get out of a fenced-in area, the owner would be liable for any damage they cause while loose. (Credit: Slack/ pexels/ License: CC0) For a court to assign strict liability based on abnormally dangerous activities, the activity must meet certain criteria. The court must establish that at least four o...
Business Law I Essentials.pdf
Figure 6.5 Train tracks are a common area for trespassing. (Credit: Muscat_Coach/ pixabay/ License: CC0) In some cases, however, the property owner could be held liable (Kionka, 2013): • When the area in question is a common place for trespassing • When the owner knows a trespasser is present • When the trespasser need...
Business Law I Essentials.pdf
• The behavior of the plaintiff did not significantly contribute to the harm caused. The doctrine of res ipsa loquitor does not establish proof of negligence, but it does allow the jury to infer what is not explicitly available pertaining to negligent acts or omissions on the part of the defendant (Baime, 2018). Neglig...
Business Law I Essentials.pdf
Defenses There are defenses to product liability claims. In some cases, the plaintiff’s own behaviors contribute to his or her injuries, based on his or her own negligence. This situation is known as contributory negligence. Contributory negligence, when determined by the court, prevents any recovery of damages by the ...
Business Law I Essentials.pdf
Conclusion In some cases, a plaintiff suffers harm, but fault is not easily determined, or fault is not the issue. A defendant can exercise reasonable care while the nature of the activity lends itself to risk of harm. Products could have obvious or hidden defects that cause harm to another. When defects occur, the pla...
Business Law I Essentials.pdf
9. The elements of res ipsa loquitor that a plaintiff must establish in a product liability lawsuit include all of the following except: a. The defendant breached his or her duty of care. b. The defendant had control over the product in question while it was being manufactured. c. Under normal circumstances, the produc...
Business Law I Essentials.pdf
74 Chapter 6 The Tort System This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
Business Law I Essentials.pdf
Chapter Outline 7.1 Consideration and Promissory Estoppel 7.2 Capacity and Legality 7.3 Breach of Contract and Remedies Introduction Learning Outcome • Analyze the principles of contract law and how they apply to businesses. 7.1 Consideration and Promissory Estoppel A contract is defined as an agreement between two or ...
Business Law I Essentials.pdf
Figure 7.2 Before a contract can become legal and enforceable, several elements must first be in place. (Credit: rawpixel/ pixabay/ License: CC0) The key to a contract is that there must be an offer, and acceptance of the terms of that offer. An offer is a proposal made to demonstrate an intent to enter a contract. Acc...
Business Law I Essentials.pdf
party gets consideration from the agreement. Consideration can be money, property, a promise, or some right. For instance, when a music company sells studio equipment, the promised equipment is the consideration for the buyer. The seller’s consideration is the money the buyer promises to pay for the equipment. Promisso...
Business Law I Essentials.pdf
The doctrines of consideration and promissory estoppel are essential to an understanding of how contracts are formed and enforced in the United States. 7.2 Capacity and Legality For a contract to be legally binding, the parties entering into the contract must have the capacity to do so. As a legal matter, there are cer...
Business Law I Essentials.pdf
Voluntary Intoxication – Drugs and Alcohol Courts generally do not find lack of capacity to contract for people who are voluntarily intoxicated. The rationale for this decision is found in the reasoning that individuals should not be allowed to side-step their contractual obligations by virtue of their self-induced sta...
Business Law I Essentials.pdf
Some examples of contracts that would be considered illegal are contracts for the sale or distribution of illegal drugs, contracts for illegal activities such as loansharking, and employment contracts for the hiring of undocumented workers. An understanding of the several theories outlined herein for establishing (or c...
Business Law I Essentials.pdf
considered minor. For example, the breaching party may be late on delivering goods or services promised under a contract that does not specify a firm delivery date and that doesn’t state that time is of the essence. In this case, a reasonably short delay would likely only be considered a minor breach of the contract. C...
Business Law I Essentials.pdf
constitute forced labor, i.e. slavery, which is in violation of the U.S. Constitution. Inevitably, when valid contracts are created, the potential for breach exists. An understanding of what happens when a contract’s terms are breached is fundamental to an understanding of contract law. Assessment Questions 1. What is ...
Business Law I Essentials.pdf
11. Define a material breach. 12. Typical remedies available for a breach of contract include: a. Money damages. b. Rescission. c. Specific Performance. d. All of the above. 13. Distinguish between rescission and reformation. 14. Courts of equity will not grant specific performance of contracts: a. For a personal servi...
Business Law I Essentials.pdf
84 Chapter 7 Contract Law This OpenStax book is available for free at http://cnx.org/content/col30149/1.5
Business Law I Essentials.pdf
Chapter Outline 8.1 The Nature and Origins of Sales Contracts 8.2 Warranties and Sales Contracts Introduction Learning Outcome • Recognize nuances of contracts pertaining to sales. 8.1 The Nature and Origins of Sales Contracts Features of Sales Contracts Commercial enterprises that engage in buying and selling practice...
Business Law I Essentials.pdf
4. Commutative: the good sold is considered to be the equivalent of the price, and vice versa 5. Nominate: this type of contract has a special designation (i.e., sale) 6. Principal: the validity does not depend upon the existence of other contracts Sources of Law for Sales Contracts Only in very limited circumstances (...
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