Business Law Exam I

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Functions of the Law

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1. Keep the peace
2. Shape moral standards
3. Promote social justice
4. Maintain the status quo
5. Facilitate orderly change
6. Facilitate planning
7. Proved a basis for compromise
8. Maximize individual freedom

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Jurisprudence

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The philosophy or science of law

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Natural Law School

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Postulates that law is based on what is "correct." It emphasizes a moral theory of law--that is, law should be based on morality of ethics.

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Historical School

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Believes that law is an aggregate of social traditions and customs.

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Analytical School

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Maintains that law is shaped by logic

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Command School

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Believes that the law is a set of rules developed, communicated, and enforced by the ruling party

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Common law

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Law developed by judges who issued their opinions when deciding a case. The principles announced in these cases became precedent for later judges deciding similar cases.

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Executive Branch

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Power to enforce the law--president

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Treaty

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a compact made between two or more nations

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Statute

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Written law enacted by the legislative branch of the federal and state governments that establishes certain courses of conduct that must be adhered to by covered parties

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Ordinace

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Law enacted by local government bodies such as cities and municipalities, countries, school districts, and water districts

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Precedent

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a rule of law established in a court decision. Lower courts must follow the precedent established by a higher court.

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Stare Decisis

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"to stand by the decision." Adherence to precedent

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Administrative Agencies

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agencies (such as the Securities and Exchange Commission and the Federal Trade Commission) that the legislative and executive branches of federal and state governments are empowered to establish

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administrative agency

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a governmental body (e.g., a board, a commission) created by the federal, state, or local government in order to implement and administer particular legislation

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administrative law judge (ALJ)

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a government official who hears and decides administrative cases. Ordinarily, the ALJ's findings of fact and recommendations are presumed correct by higher administrative bodies and courts

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administrative process

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procedures governing an agency's exercise of administrative power, as well as a private party's right to advance rule-making proposals, present quasi-judicial claims or defenses, and otherwise take part in administrative proceedings

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administrative regulation

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rules adopted by administrative agencies to implement and administer statutes. They have the force of law, absent successful challenge in the courts.

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affirmative disclosure

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administrative requirement, such as by the Federal Trade Commission, that an advertiser include certain information in its advertisement so that the ad is not deceptive as a remedy for past deceptive ads or as a disclaimer that the product will not benefit all members of the public and specifying which members will not be helped

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alternative dispute resolution (ADR)

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methods of dispute resolution, such as arbitration and mediation, that are different from the traditional judicial process (litigation)

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answer

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the defendant's response to the complaint-- the answer usually admits or denies each of the various allegations in the complaint, and may include affirmative defenses

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arbitrary and capricious standard

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if an administrative agency has a choice between several courses of action, a reviewing court will ordinarily presume that the chosen course is valid unless the person challenging it shows that it lacks any rational basis

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arbitration

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an out-of-court procedure in which a dispute is presented to one or more persons (arbitrators), whose decision is binding on the parties

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arbitration clause

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the section in a contract that provides for arbitration if a dispute develops between the contracting parties. Such a clause either makes arbitration mandatory or permits either party to choose arbitration in lieu of a lawsuit

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Bill of Rights

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the first ten amendments to the U.S. Constitution, all ratified in 1791

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writ of certiorari

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an appellate court's order that a lower court transmit to it for review the records of a case. The writ is requested by the appellant, and a grant or denial of the request is within the discretion of the higher court, as it is for the U.S. Supreme Court. (If the writ is denied, the appeal is denied.) The U.S Supreme Court usually only grants the writ for cases involving novel federal issues or conflicting decisions among the federal circuit courts of appeal.

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commerce clause

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the authority granted to Congress by Article I, Section 8, of the U.S. Constitution to regulate foreign and interstate commerce

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commercial speech

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expressions, such as advertising, made by business-- while protected under the constitution's First Amendment, this type of speech can be restricted as to time, place, and manner in ways that political speech can not

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complaint

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the initial pleading in a lawsuit, sometimes called a "declaration," "petition," or "bill of complaint"-- it includes a statement of facts, the legal basis of the suit (cause of action), and a request for one or more remedies

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concurrent jurisdiction

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the simultaneous authority of two or more different courts (e.g., federal and state) to hear and decide a case

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constitution

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a nation's or state's supreme law set of laws, outlining the basic organization, powers, and responsibilities of the government and guaranteeing certain specified rights to the people

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Constitution of the United States

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The supreme law of the U.S.

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Critical Legal Studies

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Maintains that legal rules are unnecessary and that legal disputes should be solved by applying arbitrary rules based on fairness

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delegated authority

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in administrative law, powers delegated by the legislature to administrative agencies

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division of powers

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the arrangement in which constitutions (e.g., the U.S. Constitution) give to each branch of government a different, major area of responsibility

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due process

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protection granted by the U.S. Constitution, Fifth and Fourteenth Amendments, against the government's depriving a person of "life, liberty, or property" without according that person fundamental procedural rights. ( In some cases of "substantive due process," the deprivation is not permitted, no matter what procedure is followed.)

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Equal protection

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a provision in the U.S Constitution, Fourteenth Amendment, that no person may be denied “the equal protection of the laws”-- generally requires that any differences in treatment be reasonable and related to a permissible, governmental purpose (the “rational basis” test) but for cases involving “suspect” classifications (e.g., by race or religion) or fundamental rights (e.g., voting, marriage) differential treatment must be as narrow as possible and also necessary to achieve a compelling governmental interest ( the “strict scrutiny” test)

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Establishment Clause

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provision in the U.S. Constitution’s First Amendment that prohibits the government from either establishing a state religion or promoting one religion over another

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Exclusionary rule

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constitutional law doctrine that evidence obtained from an unreasonable search and seizure can generally be barred from introduction at a trial or an administrative proceeding

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Exclusive jurisdiction

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the authority of only one type of court (e.g., state or federal) to decide a case

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Federalism

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a form of government in which power is divided between a national government and state (provincial) governments

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Forum section clause

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a provision in the contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract

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Free exercise clause

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a provision in the U.S. Constitution’s First Amendment that bars the government from interfering with the exercise of religion

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Freedom of speech

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the right to engage in oral, written, and symbolic speech protected by the U.S. Constitution’s First Amendment

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Implied powers

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laws and actions taken by the federal government that are necessary and proper to carry out enumerated powers

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in rem jurisdiction

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the authority of a court to take action directly against the defendant’s property-- jurisdiction is thus based on the location of the property (i.e., the court is in the same state or county as is the property)

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intermediate scrutiny test

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test that is applied to classifications based on protected classes other than race (ie sex or age)

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justify the differential treatment of people

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1. an important governmental objective and 2. a substantial relationship between the means and the end

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Judicial Branch

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Power to interpret and determine the validity of the law--courts

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Law

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That which must be obeyed and followed by citizens subject to sanctions or legal consequences-- a body of rules of action or conduct prescribed by controlling authority and having binding legal force.

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Law and Economics

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Believes that promoting market efficiency should be the central concern of legal decision making

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Legislative Branch

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Power to make (enact) the law--congress

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limited jurisdiction

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power of a court to hear only certain kinds of cases

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litigation

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the process of filing, maintaining, and defending a lawsuit

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long-arm statute

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a state law extending personal jurisdiction over out-of-state persons, including corporations, that do business in the state, own real property there, or have taken other relevant actions (e.g., committed an alleged tort, entered a contract) in a state

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minimum contacts

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as long as the person has sufficient minimum contacts with a state, such that it is fair to require him/her to appear in a court of that state, the state has personal jurisdiction over that person

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partially protected speech

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speech that cannot be regulated by the government but can be restricted as to time and place and must be fully truthful

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in personum/personal jurisdiction

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the authority of a court to bind the parties in a case

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police powers

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1. the general power granted state and city government to protect its citizen’s health, safety, morals, and general welfare 2. state power to promote or protect public health, safety, morals, and general welfare

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preemption

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federal law expressly or implicitly covers a subject so completely that the states are barred from making their own laws on this subject

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procedural due process

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the requirement that governmental action depriving a person of life, liberty, or property be via fair procedure

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quasi in rem jurisdiction

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the authority of a court based on the location of the defendant’s property, but with the case brought against the defendant personally

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separation of powers

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allocation of powers among the legislative, executive, and judicial branches of government

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Sociological School

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Asserts that the law is a means of achieving and advancing certain sociological goals

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strict scrutiny test

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requirement that, for legislation to successfully withstand court challenges, it must, among other things, be proven necessary to promote a compelling governmental interest

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subject-matter jurisdiction

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the authority of a court to decide the issues in a particular case

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summons

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a document served on the defendant, along with the complaint, and notifying the defendant that he/she must file an answer or other response to the complaint within a certain time period (e.g., 30 days) or else be subject to a default judgment

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sunset law

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a statute requiring periodic review of an administrative agency (or other governmental function) and whether it should continue-- the legislature must act to “renew” the agency by a certain date or it ceases to exist

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tort

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a private wrong against a person or his/her property. Aside from certain limited circumstances, all torts arise from either an intentional, wrongful action or a negligent action.

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unprotected speech

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speech not protected by the U.S. Constitution’s First Amendment, including fighting words, speech that incites violence or revolution, defamatory speech, and obscenity

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venue

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the geographic district (e.g., a county) in which an action is tried and from which jurors are chosen

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voir dire

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a jury selection process in which the judge and/or the attorneys for both sides question prospective jurors-- the information provided may be used to determine whether persons can be kept off the panel “for cause” (e.g., bias) and whether a peremptory challenge (rejecting a potential juror without offering a reason) should be exercised

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“federal questions” jurisdiction

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a type of subject-matter jurisdiction-- the authority of federal courts to hear and decide cases involving the U.S. Constitution, federal statutes, or treaties

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“supremacy” clause

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a provision in the U.S. Constitution, Article VI, Section 2, stating that the federal Constitution, laws made in pursuit of the Constitution, and treaties are “the supreme law of the land”