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Business Law Test 1


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What is law?
*Principles applied by courts
*Enforcable rules that govern relationships among individuals and between individuals and the government or society
Social control
Exists to control and influence our behavior
A goal of law is to be administered in a way that is fair and right
The philosophy of law. The theory of how and why law should develop.
Natural law
*The idea or principle that humans have certain fundamental rights
*One of the oldest schools of thought
*Declaration of Independence
*Law is law and exists because legislature says so
*Natural rights exists because of law
*Look to the past; Use doctrines as a basis to shape present law
Legal realism & the Sociological School
*Belief that law is shaped by social forces and needs
*Law should be a tool to promote justice
*Judges should take individuals into account
Economic school
*Cost/benefit analysis
*Is it economical to sue?
Ethics and the Legal Environment
*The study of what constitues right and wrong behavior
*Actions can be legal, profitable but not ethical
What does "legal" mean?
There is no law regulating the behavior
*A charter that expresses both the power of govn't and the limitations of govn't
*U.S. Constitution
Statutory law
Laws that are enacted by legislative bodies, such as Congress
Administrative law
*State and federal agencies that have the power to regulate certain areas of the law
Case law
The rule of law announced in case devisions by judges (common law)
Common law
*Developed by England; used by the US
*Judges apply rules and principles from earlier cases
*Interprets a statute
Civil law system
*Primary source of law is statutory code
*Law is rule driven
*Napleonic Code
Civil law
*Regulates the relationship between individuals
*A private wrong - the party that was wronged is seeking a remedy
Criminal law
*Relationships between individuals and society
*The harm is to the public based on the conduct of the defendant
Substantive law
The laws that define, describe, regulate and create rights and duties
Procedural law
*The rules for enforcing rights
"Rules of the game" for individuals substantive rights
Stare decisis
*"Let the decision stand"
*Fundamental principles of our common law system
*Gives law a predictability
What is a "case of first impressions"?
When a situation is brought to court for the first time
What are 3 exceptions of following precedents?
1. Unjust (Brown vs Brown of Education)
2. Poorly reasoned
3. Changing times
Legal sanctions
Law provides a remedy to either enforce a right or compensate for violation of a right
Compensatory damages
Money awarded to plantiff designed to compensate the victim (equal to damages)
Punitive damages
Awarded to a plantiff and designed to punish defendant
Equitable relief
Doing what is fair or what is right
Court will return the parties to the position they were in before contract was entered
An order of the court that directs a party to do something
Specific performance
Court orders the party to perform under the contract
Judicial philosophies
Restraintists- One who believes that the legislature should make the law and that the courts role is to interpret the law

Activists - Said to "make law"
Teleological theory
The morality of an act must be judged by its consequences

A good action is one that has a good outcome
Deontological theory
An approach to ethical behavior that focuses on the means used to achieve an end
Normative theory
One which tells you how you ought to act
Descriptive theory
One that describes how we did act, but not how to act
Psychological Egoism
Descriptive theory that we act according to our own interest

We give to charity to feel good about ourselves
Ethical egoism
A normative theory that we should always act to promote our self interest
Cultural relativism
A descriptive theory that holds that the morality of an action is relative to its cultural setting

Bribing government officials is acceptable in some countries
A teleological theory that an action is morally right if it produces the greatest good for the most people
Categorical imperative
Deontological theory that we should always act as if our actions could become universal law

Improper to lie about a loan because then everyone would do it
Aristotles' Virtue and Perfectionism
We should seek true happiness, which comes about by practicing courage, temperance... become good by doing good

Generosity is the middle between wastefulness and stinginess

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