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PART ONE
THE LEGAL SYSTEM AND THE
LEGAL ENVIRONMENT OF BUSINESS
Teaching Suggestions
1. Have the students visit an actual civil courtroom trial. Talk to the lawyers for the plaintiff and
the defendant and to the judge, if possible, about the courtroom procedures.
2. Put on a mock trial. Appoint a judge, plaintiff, defendant, attorneys for the plaintiff and the
defendant, bailiff, clerk, and jury panel. Then go through a mock trial starting from the filing
of the petition by the plaintiff.
Group Projects
1. Divide the class into groups and assign each group to research a federal or state agency.
Have each group report to the class on what the agency does, how and why it was set up,
and what businesses are affected by the agency.
CHAPTER 1
INTRODUCTION TO LAW
Answers to Learning Objectives
(Page 2)
1. Law is the system of rules of conduct issued by a sovereign state commanding what is right
and prohibiting what is wrong.
Chapter 1 Introduction to Law
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Lesson Outline
1. Law is a rule of civil conduct, commanding what is right and prohibiting what is wrong.
2. Business law is concerned primarily with those rules of conduct prescribed by government
for the performance of business transactions.
which courts have rendered in specific cases. These decisions become precedents.
6. Our laws are derived from judicial decisions, constitutions, statutes, and administrative
agency regulations.
7. Constitutional law defines the relationships of the parts of the government to each other and
the relationship of the government to its citizens. The U.S. Constitution is the supreme law of
the land and the U.S. Supreme Court is the final arbiter. The Commerce Clause is the basis
for most laws regulation business. The Bill of Rights is an addition to the U.S. Constitution
designed to protect individual liberty. States also have constitutions, and they must not
contradict the U.S. Constitution.
11. Criminal law is that branch of law that has to do with crimes and the punishment of wrong
doers. Crimes are classified as:
a. Felonies, or offenses of a serious nature
b. Misdemeanors, or offenses of less serious nature
c. Infractions (or violations), or minor offenses.
12. Tort law concerns private or civil wrongs or injuries, other than breaches of contracts.
13. Ethics is the study of the morality of conduct, its motives, and duties.
Note: Many variations occur from state to state in the laws on every subject. The text gives the
general principles that are the same and reports on laws that most states have in common. In some
cases it reports principles only a few states adhere to if they appear to be a trend.
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Comments on Cases
(p. 3) This is a clear example of our current law being based on common law. The Florida
statute stated, “The common law of England in relation to crimes, except so far as the
same relates to the modes and degrees of punishment, shall be of full force in this state
where there is no existing provision by statute on the subject.” State v. Egan, 287 So2d 1
(Fla.)
(p. 7) The sentence imposed for an offense is the key to determining whether it is a felony or a
misdemeanor. Although petty theft may normally be a misdemeanor, in this case the
sentence resulted in its classification as a felony. Since Terry then had three felony
convictions he was subject to the three strikes law. People v. Terry, 54 Cal.Rptr.2d 769
(Cal.)
Answers to Questions
(Page 10)
1. The normal penalty for a breach of a civil wrong is the payment of a sum of money called
damages.
2. Business law is that class of laws that are concerned primarily with rules of conduct
prescribed by government for the performance of business transactions.
3. Law seeks to establish rules so we will be able to resolve disputes and set rules of conduct for
many transactions so we will know how to avoid disputes. This is to establish a stable
framework to keep society operating smoothly.
Chapter 1 Introduction to Law
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9. The sentence imposed determines whether an offence is a felony or a misdemeanor. In some
states there are offenses less serious than misdemeanors and they are called violations or
infractions.