Business Law Questions

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timer Asked: Oct 21st, 2018
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Question Description

Answer the following questions, each question requires 200-350 words.

Reference textbook: The Legal and Regulatory Environment of Business 17th - Marisa Anne Pagnatt

  1. What issues can form a basis for a federal question case?
  2. Briefly describe the two standards to which the burden of proof is subject to in civil cases.
  3. Briefly explain the features of freedom of speech.
  4. What are the three major questions that the Federal Trade Commission asks to check if there is deception or antitrust violation involved?
  5. Materiality is one of the several defenses that is recognized by the Securities Act of 1933 and may be used to avoid civil liability. Explain materiality.

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Law and Regulations are Fundamental Foundations for Business ➢ Companies in the U.S. must: ➢ Be aware of the legal and regulatory landscape ➢ Take steps to ensure full compliance with the law to avoid civil and criminal liability ➢ Lawyers play a positive role in corporate boards 1-5 Law ➢ Rules established by the state and backed up by enforcement ➢ Formal social force ➢ Adequate enforcement institutions are necessary to maintain order in society 1-6 Rule of Law ➢ Laws are generally and equally applicable ➢ Applies to all members of society ➢ Rule-of-law nations adopt laws supporting the private market ➢ Judges play a vital role in maintaining the rule of law 1-7 Property (Ownership) ➢ Legal right that allows a person to exclude others from his/her resources ➢ Types of ownership fences ➢ Public property ➢ Private property ➢ Common property ➢ Exclusionary right of property provides a basis for the private market and modern business 1-11 Property in its Broadest Sense ➢ Central concept of Western legal systems ➢ Includes ownership of individual constitutional and human rights 1-12 Figure 1.1 - Wheel of Property 1-13 Jurisprudence Natural Law Jurisprudence Philosophies that explain origin of law, and its justification. Positive Law Historical School Sociological Legal Realism 1-7 Classification of Law Common law and civil law Public and private law Civil law and criminal law Substantive law and procedural law 1-15 Common Law and Civil Law ➢ Common law ➢ Emphasizes the role of judges in determining the meaning of laws ➢ Civil law ➢ Relies on legislation than judicial decisions for law 1-16 Public and Private Law ➢ Public law: Includes matters that involve the regulation of society ➢ Constitutional law ➢ Administrative law ➢ Criminal law ➢ Private law: Covers legal problems and issues that concern private resource relationships ➢ Property law ➢ Contract law ➢ Tort law 1-17 Civil Law and Criminal Law ➢ Civil cases ➢ Include suits for breach of contract or tort cases ➢ Involve request for damages or appropriate relief ➢ Criminal cases ➢ A government representative attempts to prove the wrong committed against society ➢ Result in punishment 1-18 Substantive Law and Procedural Law ➢ Substantive law ➢ Defines the legal relationship of people with other people or with the state ➢ Procedural law ➢ Method and means by which substantive law is made and administered 1-12 Sources of Law Federal law State law Judicial decisions or case law 1-20 Federal Law Constitution Legislation Administrative law or regulation 1-21 State Law State constitution Statutes or acts Regulatory law of state administrative agencies Ordinances 1-22 Judicial Decisions or Case Law ➢ Interpret the constitutional, legislative, and regulatory laws ➢ Opinions: Decisions made by judges on legal issues ➢ Become precedents for future cases involving similar facts and legal issues ➢ Citation: Enables to locate the case in a library or computer databases 1-23 Judicial Decisions or Case Law Advantages ➢ Stare decisis ➢ Judges follow precedents whenever possible ➢ Ensures certainty and predictability in the law ➢ Specifies the boundaries of property-based legal system Disadvantages ➢ Volume of cases ➢ Conflicting precedents ➢ Distinction between the holding and dicta ➢ Increases the difficulty of determining the precedent ➢ Rejection of precedent ➢ Conflicts of law 1-24 Hierarchy of Sources of Law ➢ U.S. Constitution and Amendments ➢ Statutes of Congress ➢ Federal administration regulation ➢ State constitutions ➢ State statutes ➢ State administrative regulation ➢ Local ordinances ➢ Case law 1-25 Legal Sanctions ➢ Methods used by law enforcement officials and courts to encourage or force compliance with the obedience to the law ➢ Remedy: Right of an individual to take another person’s resources as that person failed to meet the requirements of the law 1-26 Sanctions for Criminal Conduct Crime Punishments •Public wrong against society •Death •Imprisonment •Fine •Removal •Disqualification 1-27 Sanctions for Breach of Contract Remedies •Damages (Money) •Compensatory Breach of contract •Failure to perform contractual promise •Consequential •Specific performance 1-28 Tortious Conduct Tort •Civil wrong (other than breach of contract) •Intentional •Negligence •Strict liability Remedies •Compensatory damages (Money) •Punitive damages (Exemplary damages) 1-22 Sanctions for Violating Statutes and Regulations ➢ Similar to those imposed for criminal conduct, breach of contract, or tortious conduct ➢ Statutes impose a fine for a violation and authorized damages to injured parties ➢ Help define boundaries and protect people from the boundary infringements of others 1-30 Corporations ➢ Businesses chartered by the state to do business as legal persons ➢ Owned by shareholders ➢ Board of directors run the business ➢ Managers are in charge of day-to-day business operations 1-32 Specific Sense of Corporate Governance ➢ Corporate governance: Legal relationship between corporate agents and the shareholders of the corporation ➢ Value of corporations will be destroyed when managers abuse their control of resources for personal benefits 1-33 General Sense of Corporate Governance ➢ Corporate governance applies to legal relationships that businesses have with customers and society 1-34 ➢. ©2016 by McGraw-Hill Education. Contemporary Business Ethics ➢ Companies hire a ethics officers to: ➢ Develop ethics policies ➢ Listen to complaints of ethics violations ➢ Investigate ethics abuses ➢ Sarbanes-Oxley Act (SOX) of 2002 ➢ Established higher standards for corporate responsibility and governance 2-4 Contemporary Business Ethics Ethics …and Society •Changing values •Economic interdependence •News media and the Internet …and Government •Government may take action •Companies can self-regulate 2-2 Ethics and Morality ➢ Morality: Values that guide one’s behavior ➢ Sharing moral values promotes social cooperation and control ➢ Businesses need to instil shared moral values in employees ➢ Ethics: Formal system for deciding what is right and wrong and to justify moral decisions ➢ The good: Moral goals and objectives one chooses to pursue 2-7 Ethics and Law ➢ Society’s ethical values may become law through: ➢ Legislation ➢ Court decisions ➢ Many ethical values are not enforced by the state ➢ Motivation to follow laws and ethics differ ➢ Ethical systems involve a broader-based commitment to behavior than the law 2-8 Systems of Ethics Formalism Consequentialism Affirms absolute morality •Duty based view •Categorical imperative •Social contract Concerned with moral consequences of actions •Utilitarianism •Protestant ethic 2-9 Figure 2.1 - A Common Result 2-10 Sources of Values for Business Ethics Legal regulation Professional codes of ethics Organizational codes of ethics Individual values 2-13 Legal Regulation - Ethical Rules Drawn from the Law Respect liberty and rights of others Act in good faith Exercise due care Honor confidentiality Avoid conflicts of interest 2-14 Professional Codes of Ethics ➢ Certain professions have long traditions of codes of ethical conduct ➢ More recent professions have developed and adopted their codes ➢ Ethical codes of organizations are a form of self-regulation 2-15 Organizational Codes of Ethics ➢ Businesses have adopted ethical codes at the individual organization level ➢ Take varied approaches to suit their organizations ➢ Effective implementation and enforcement of codes is more important than its creation 2-16 Individual Values: Self-Examination 1. Have I thought if my action is right or wrong? 2. Will I be proud to tell of my action? Questions to ask yourself to help explore ethical values before making decisions 3. Am I willing for everyone to act like me? 4. Will my decision cause harm? 5. Will my actions violate the law? 2-11 Achieving Ethical Business Corporation ➢ Obstacles ➢ Emphasis on profit conflicts with ethical responsibility ➢ Effect of the group ➢ Individuals feel less responsible ➢ Control of resources by non-owners ➢ Managerial agents can manipulate resources in their own interest 2-18 Steps to Promote Business Ethics in Corporate Life ➢ Involve top management ➢ Top management should act as a role model ➢ Must believe in the expressed values ➢ Openness in communication ➢ Promotes trust ➢ Required due to the complexity of information ➢ Consideration of stakeholders ➢ Stakeholder theory: Directors and managers must take into account its stakeholders whose interests the corporation impacts 2-19 Rewards ➢ Popular observations about business ethics ➢ Profits and ethics are not contradictory ➢ Ethical organizational life is a business asset ➢ Ethics are of concern to the business community ➢ Requires constant re-evaluation ➢ Business ethics reflect business leadership 2-20 Can a Business Have a Conscience? ➢ Personhood rights of a corporation have been recognized in the law ➢ Laws that force individuals’ to violate a religious value are problematic 2-23 ➢. ©2016 by McGraw-Hill Education. Judges and Justices ➢ Individuals who operate courts ➢ Judges - Trial court persons ➢ Determines the rules of law for case ➢ Justices - Reviewing court persons ➢ Decide an appeal and provide reasons for their decisions 3-5 Jurors ➢ Fact-finding body ➢ Trial by jury is guaranteed by the Bill of Rights ➢ Petit jury: Trial jury that returns a verdict in criminal and civil situations ➢ Consist of 12 persons ➢ Smaller juries are acceptable ➢ Decision must be unanimous ➢ Reason is not provided 3-6 Lawyers ➢ Serve as representative advocates in court system ➢ Present evidence, points of law, and arguments ➢ Help juries and judges in making decisions ➢ Primary duty is to the administration of justice 3-7 Lawyers ➢ Serve as counselor, advocate, and public servant ➢ Rules of evidence provide confidential communications to a lawyer ➢ Attorney-client privilege ➢ Forbids a lawyer to reveal confidential facts and testify against a client 3-8 Organization of the Court System Supreme Courts Appellate Courts Subject Matter Jurisdiction – Power over Particular Issues Trial Courts 3-9 Subject Matter Jurisdiction ➢ Power over the issues involved in the case ➢ Jurisdiction can be limited to a subject matter or area in which the parties live ➢ Probate courts - Deal with wills and estates of deceased persons ➢ Traffic courts - Deal with traffic violations 3-11 State Courts ➢ Sources that create and govern state court systems ➢ State constitutions ➢ State legislature ➢ Other legislation ➢ Trial courts: Initial level for filing lawsuits ➢ Referred as superior or circuit or district court ➢ Responsible for determining the facts and law in the case 3-12 State Courts ➢ Appellate courts: Review the results of lower courts ➢ Some states have one appellate court ➢ Certain states have two levels of review ➢ Courts of appeal: Intermediate courts ➢ Supreme court: Highest court ➢ Writ of certiorari: Procedure for requesting a second review 3-13 Figure 3.1 - State Court System 3-14 Federal Courts • Article III Of Constitution • Reviews: • Questions of Federal Law • U.S. As Party • State Disagreements • Suits Between Citizens Of Different States Federal Jurisdiction 3-10 Federal Question Cases Federal Questions U.S. Constitution Issues Federal Statute Issues No $ Limit 3-11 Diversity Of Citizenship Diversity Plaintiffs/ Defendants – Citizens of Different States Each Claim Must Be $75,000+ Guard Against State Court Bias 3-12 Figure 3.2 - Federal Court System 3-18 District Courts ➢ Trial courts of the federal judicial system ➢ One court in every state and the District of Columbia ➢ Federal Rules of Civil Procedure: Provide the details concerning procedures to be followed in federal court litigation 3-19 Appellate Courts ➢ 12 Courts of Appeal ➢ Special Court of Appeals hears appeals from ➢ Special courts ➢ Administrative decisions ➢ Other courts have been created to handle special subject matter ➢ Court of Appeals for Armed Forces 3-20 Decisions by the U.S. Supreme Court ➢ Review by the U.S. Supreme Court requires a petition for a writ of certiorari ➢ Supreme Court resolves cases involving major constitutional issues or interpretation of federal law ➢ Final judgments of the highest state court are reviewed only by the Supreme Court of the U.S. 3-22 Power of Judicial Review ➢ Judicial review: Ultimate power to invalidate actions by the president or the Congress ➢ Judicial restraint: Power should not be used except in unusual cases ➢ Judicial activism: Power should be used when the needs of society justify its use 3-23 Judicial Restraint ➢ Philosophy is referred as strict constructionism or judicial abstention ➢ Followers favor a very limited role for the courts in system of government ➢ Belief that change in society should result from the political process ➢ Supporters take a pragmatic approach to litigation 3-24 Judicial Activism ➢ Supporters favor a more expansive role for the courts in system of government ➢ Activists are value oriented and policy directed ➢ Courts are more result conscious and place less reliance on precedent 3-25 Case 3.1: Supreme Court’s Influence on Law ➢ Case ➢ National Federation of Independent Business v. Sebelius ➢ 567 U.S. __, 132 S. Ct. 2566 (2012) ➢ U.S. Supreme Court ➢ Issue ➢ Plaintiffs challenged the constitutionality of individual mandate and Medicaid expansion of the Affordable Care Act 3-27 Nature of the Judicial Process Case To Be Decided Use Existing Statutes & Precedent Create Law Where None Exists Refuse To Apply Case Law or Find Unconstitutional Will Ruling Provide Justice and Sound Precedent? 3-21 ➢. ©2016 by McGraw-Hill Education. Litigation ➢ Process helps the business community resolve actual disputes ➢ Effective business leaders should develop an understanding of the process ➢ Any lawsuit is an immense drain of time, money, and energy on everyone involved 4-5 Parties ➢ Plaintiff: Party who files a civil action ➢ Defendant: Party sued by the plaintiff or person against whom a criminal charge is filed by state ➢ Third-party defendant: Parties brought in by the defendant to complete the determination of a controversy 4-6 Standing to Sue ➢ Plaintiff establishing that he or she is entitled to have the court decide the dispute ➢ To establish a standing, plaintiff must allege: ➢ Litigation involves a case or controversy ➢ Personal stake in the resolution of the controversy 4-7 Case 4.1 - Standing to Sue ➢ Case ➢ Mayer v. Belichick ➢ 605 F.3d 223 (3rd Cir.) ➢ United States District Court for District of New Jersey ➢ Issue ➢ Videotaping the New York Jets coaches and players on the field with the purpose of illegally recording, capturing and stealing the New York Jets signals and visual coaching instructions by the Patriots 4-8 Personal Jurisdiction ➢ Having authority over the parties to the case on the part of the court ➢ Personal jurisdiction over the defendant obtained by: ➢ Summons ➢ Service of process ➢ Long-arm statutes: Provision for the service of process beyond the boundaries of the state 4-9 Personal Jurisdiction ➢ Long-arm statute allows a court to obtain jurisdiction over defendant outside its borders ➢ Extradition: Voluntary turning in of prisoner from one state to another by the presiding governors 4-10 Class-Action Suits ➢ One or more plaintiffs file suit on their own behalf and on behalf of all other persons who may have a similar claim ➢ Involve matters in which no one member of the class has sufficient financial interest to warrant litigation 4-12 Figure 4.1 - Pretrial Procedure 4-13 Figure 4.1 - Pretrial Procedure 4-14 Pleadings ➢ Legal documents that are filed with a court to begin the litigation process ➢ Complaint: Pleading filed by plaintiff with the court clerk ➢ Answer: Response in the form of written pleading by defendant 4-15 Pleadings ➢ Default: Order entered by court when defendant does not respond in any way ➢ After receiving an answer plaintiff files a reply that: ➢ Admits or denies each allegation of the defendant’s counterclaims 4-16 Discovery ➢ Ensure that the results of lawsuits are based on the merits of the controversy and not on the ability or skill of counsel ➢ Narrows the issues disputed by the parties ➢ Encourages the settlement of the lawsuit and possibly avoiding actual trial 4-17 Methods to Discovery ➢ Interrogatories: Series of written questions presented to the opposing parties ➢ Request for production of documents: Either party asking the other to produce specific documents ➢ Depositions: Lawyer orally asks questions of the possible witness ➢ Request for an admission 4-18 Scope of Discovery ➢ Discovery procedures are intended to be used freely by parties without court’s supervision ➢ Judges provide a liberal interpretation of the degree of discoverable information 4-19 Abuse of Discovery ➢ Discovery imposes a tremendous burden on the judicial system ➢ Aggression during discovery on the part of any party can damage the litigation process ➢ Defendant should be open and responsive to reasonable requests of the plaintiff 4-20 Motions ➢ Statute of limitations: Move defendant to dismiss a suit when a matter of law prevent the plaintiff from winning the suit ➢ Judgment on the pleadings: Motions which asks the judge to decide the case based only on the complaint and its answer ➢ Summary judgment: Motion asking the judge to base a decision on the pleadings and on other evidence ➢ Affidavits: Evidence in the form of sworn statements 4-22 Figure 4.2 - Typical Pretrial Motions 4-23 Figure 4.3 - Trial Steps 4-24 Figure 4.3 - Trial Steps 4-25 Food for Thought… “I consider trial by jury as the only anchor yet devised by man, by which a government can be held to the principles of its constitution” –Thomas Jefferson 4-26 Jury Selection ➢ Prior to calling of the case, court clerk will have summoned prospective jurors ➢ Voir dire: Speaking the truth ➢ Selected jurors are called into jury box to conduct the examination ➢ Peremptory challenge: No cause or reason needs to be given to excuse a prospective juror 4-27 Case 4.2 - Commonality ➢ Case ➢ Wal-Mart stores, Inc. v. Dukes ➢ 564 U.S. __ (2011) ➢ Issue ➢ Local managers exercise their discretion over pay and promotions disproportionately in favor of men, having an unlawful disparate impact on female employees; and Wal-Mart refused to cabin its managers’ authority 4-28 Food for Thought… ➢ Supreme Court outlawed racial discrimination in peremptory challenges ➢ Batson v. Kentucky, 476 U.S. 79 (1986) ➢ Gender discrimination is banned in the jury selection process ➢ J.E.B. v. Alabama Ex Rel. T.B., 511 U.S. 127 (1994) ➢ Courts are divided on the issue of banning discrimination based on religion in peremptory challenges 4-29 Other Steps During a Trial ➢ Attorneys make opening statements ➢ Plaintiff introduces evidence to establish truth of allegations made in the complaint ➢ Directed verdict: Motion by defendant ➢ Lawyers summarize the evidence ➢ Jury instructions: Judge informing the jury with the law applicable to the case 4-30 Burden of Proof ➢ Criminal cases ➢ Beyond a reasonable doubt ...
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School: Duke University

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