THE LEGAL ENVIRONMENTChad Penny, Kimberly Schaub. Courtney Spall, Kaya Comrie
COMMON LAWBody of law that comes from decisions handed down by Judiciarypart of our government through court systemAlso known as unwritten lawUses what is called Precedents, which are decisions decided inprevious casesCreated by decisions made in trial courts, appellate courts, andspecial courtsLower courts must abide by precedents made by higher courts
STATUTORY LAWActual written law that is made up of Federal and Stateconstitutions, legislative enactments, treaties of the FederalGovernment and OrdinancesAlthough written where anyone can read, it’s usually determinedby courts systems.Law created by legislatures
ADMINISTRATIVE AGENCIESFederal or State institutions and other government organizationscreated by Congress or state legislators with delegated power to createrules and regulations within their given area of authorityLegislative bodies can create administrative agencies, as well asterminate themAgencies can pass rules and regulations within it’s area of authority,conduct investigations in rule violations, as well as hold hearingsImportant agencies include the Securities and Exchange Commission(SEC), Federal Reserve Board, as well as the Equal EmploymentOpportunity Commission
ANTITRUST LEGISLATIONWas created in 1890 by Congress.Sherman Antitrust Act was passed to alleviate any chance of largecompanies becoming so big that smaller companies would becrushedForbids: Contracts, combinations, or conspiracies in restraint oftrade, as well as the creation of MonopoliesOther laws enacted: Clayton Act of 1914. Federal TradeCommission Act of 1914, Robinson-Patman Act of 1936
TORT LAWAny wrong doing against another person, property, or reputationOften non-criminal in nature I.E. Tobacco lawsuitsExamples of Torts:NegligenceProduct LiabilityStrict Product Liability
DEREGULATIONGovernment withdrawal of certain laws and regulations that seemto hinder competitionExample: Airline IndustryBanking Industry downfall of DeregulationGovernment takeover of Fannie May and Freddy Mac/Bailout ofAIG
COPYRIGHTSProtects a creators rights to materials such as books, articles,photos, paintings and cartoons.Filed in Library of Congress and lasts lifetime + seventy yearsCan be passed to heirJK Rowling lawsuit
TRADEMARKSLegally protected name, symbol, or design that identifies thegoods or services of one seller and distinguishes them from thoseof competitors.Belongs to owner forever as long as it’s properly registered andrenewed every ten yearsProtected against infringementSome well known trademarks include: AFLAC duck, MickeyMouse, McDonald’s arches, Nike swoosh
BANKRUPTCYThe legal process by which a person, business, or govt entityunable to meet financial obligations is relieved of theseobligations by a court that divides any assets among creditors,allowing creditors to get at least part of their money and freeingthe debtor to begin anew.The US Constitution gives congress the power to establishbankruptcy laws, and legislation has existed since the 1890s.
BANKRUPTCY CON’TDifferent types of bankruptcy:Chapter 7: Straight bankruptcy in which all assets are dividedamong creditors after exemptionsChapter 11: Allows a firm to reorganize and continue operationafter paying only a limited portion of it’s debts. EX: AAChapter 13: Allows individuals to pay their creditors over anextended period of time
CONTRACT LAWContract: Legally enforceable agreement between two or morepartiesContract Law: Specifies what constitutes a legally enforceableagreementConsideration: Something of value someone is willing to give upin order to enter into contract with someone else
CONTRACT LAW CON’TWhat makes a contract binding?1. Oral or written offer is made2. Mutual acceptance/agreement of offer and cannot be forced upon3. Both parties give consideration/collaboration. Both parties must hold up their end of contract4. Both parties sober and conscience of details of contract5. Must be legal and not contain any stolen goods6. Contract is in proper form
BREACH OF CONTRACTHappens when one party fails to uphold their end of contractDamages: Agreed settlement awarded by the court to personaffected by breach of contractIf breech happens, the following can occur:1. Specific Performance2. Payment of Damages3. Discharge of Obligation
LAWS TO PROTECT CONSUMERSConsumerism: A social movement that seeks to increase andstrengthen the rights and powers of buyers in relation to thesellersFair Packaging and Labeling Act of 1966: Makes deceptivepackaging or labeling of a package illegalChild Protection Act of 1966: Removes unsafe toys and allowsthe FDA to pull dangerous products from the market
TAX LAWSTaxes: How all forms of government raises moneyGovernments have used taxes primarily as a source of fundingfor their operations and programsSin Tax: Used to raise prices on certain itemsTax Credits: An amount firms can deduct from their tax bills
TAX LAWS CON’TIncome Tax: Income received by businesses and individualsProperty Taxes: Paid on real and personal propertySales Taxes: Paid on merchandise sold at retail levelExcise Tax: Paid on Select handful of items
PATENTSA document that gives inventors exclusive rights to theirinventions for twenty yearsApproval two to four yearsUSPTOSelling and license use of patentsInternational companies
UCCUniform Commercial CodeLaws that cover any and all sales transactionsAdopted by all fifty statesHas eleven articles which contain laws covering sales
WARRANTIESArticle two of the UCCFour Types:Warranty- guarantees that the product sold will be acceptablefor the purpose for which the buyer intends to use it.Express warranties- are specific representations by the sellerthat buyers rely on regarding the goods they purchase
WARRANTIES CON’TImplied warranties- are legally imposed on the seller, who impliesthat a product will conform to the customary standards of thetrade or industry in which it competes.Full/limited warranty-full warranty requires a seller to replace orrepair a whereas a limited warranty typically limits the defects ormechanical problems the seller cover.
NEGOTIABLE INSTRUMENTSNegotiable instruments- forms of commercial paper (such as checks)that are transferable among business and individuals; they represent apromise to pay a specified amount.Article 3 of the UCC requires negotiable instruments to follow fourconditions-they must be written and signed by the maker or drawer-they must be made payable on demand or at a certain time-they must be payable to the bearer or to specific order-they must contain an unconditional promise to pay a specified amountof money.