Chapter 1 - An Introduction to Dynamic Business Law
CHAPTER OVERVIEW
Chapter One lays the foundation for the textbook. Make sure you look on the publisher’s
web site for information about how business law intersects with the six functional areas of
business. The authors encourage students to “connect to the core,” and remember the ways
in which law intersects with other areas of study, including corporate management,
production and transportation, marketing, research and development, accounting and
finance, and human resource management.
This manual supports the “connecting to the core” theme by giving ideas for assignments
that encourage students to integrate their business law knowledge with knowledge they are
acquiring from their other business classes. The manual also encourages professors to
improve their teaching skills. Finally, the manual suggests teaching ideas for both beginning
and experienced teachers.
LEARNING OBJECTIVES
After reading this chapter, students will be able to answer the following questions:
1. What is business law?
1. How does business law relate to business education?
2. What are the purposes of law?
3. What are alternative ways to classify law?
4. What are the sources of law?
5. What are the various schools of jurisprudence?
lecture notes with definitions
In the news… Teaching tip: For each chapter, consider asking students to relate current
news items to material from the chapter.
In addition to ideas students come up with on their own, consider weaving in
news stories provided by the McGraw-Hill. Stories are available via a
, McGraw-Hill DVD, and on the publisher’s web site.
For Chapter One, McGraw-Hill offers the following stories:
“Smoking Ban: Tobacco Tyrants: Gone Too Far? Many States Are Putting
Stronger Restrictions on Where You Can Smoke”
• Have states gone too far in banning smoking?
• Whose interests are state legislatures looking out for in banning
smoking?
“College Officer Dealings With Lenders Scrutinized.”
• Should regulators take a more careful look at college officers?
• Why created changes in the ways college officers interact with
lenders?
What is business law? Business law consists of the enforceable rules of conduct that govern
commercial relationships.
How does business Business law applies to the six functional areas of business:
law relate to business
education? • Corporate management
• Production and transportation
• Marketing
• Research and development
• Accounting and finance
• Human resource management
What are the purposes • Providing order
of law?
• Serving as an alternative to fighting
• Facilitating a sense that change is possible
• Encouraging social justice
, • Guaranteeing personal freedoms
• Serving as a moral guide
What are alternative One way to classify law:
ways to classify law?
Private law involves disputes between private individuals or groups.
Public law involves disputes between private individuals or groups and their
government.
A second way to classify law:
Civil law involves the rights and responsibilities involved in relationships
between persons and between persons and their government.
Criminal law involves incidents in which someone commits an act against
the public as a unit.
Teaching tip: Ask students to give an example of a fact situation that led to
both criminal and civil lawsuits, e.g., the O.J. Simpson trials.
What are the sources Sources of business law are:
of law?
1. Constitutions
Constitutional law refers to the general limits and powers of governments as
stated in their written constitutions.
2. Statutes or legislative actions
3. Cases
Case law (or common law) is the collection of legal interpretations made by
judges.
Stare decisis means courts are relying on precedent.
Teaching tip: The first time your students encounter an appellate case in the
readings, show them what stare decisis looks like in the context of a real case.
4. Administrative law
, Administrative law is the collection of rules and decisions made by
administrative agencies.
5. Treaties
A treaty is a binding agreement between two states or international
organizations.
6. Executive orders
An executive order is a directive that comes from the president or state
governor.
What are the various Schools of jurisprudence are common guides to legal interpretation.
schools of
jurisprudence? • Natural law—certain ethical laws and principles are morally right
and “above” the laws devised by humans.
• Legal Positivism—assumes the legitimate political authority
deserves our obedience when it issues a rule.
• Identification with the Vulnerable—emphasis on fairness and
looking out for those with the least power.
• Historical School/Tradition—emphasis on the use of stare decisis.
• Legal Realism—judges consider social and economic conditions.
• Cost-benefit Analysis—make calculations to maximize the ratio of
benefits to costs.
Teaching tip: Consider using “The Case of the Speluncean Explorers (link
below) to make the schools of jurisprudence come alive.
Global and At this point in the textbook, students should merely have an awareness that
Comparative Law globalization has affected the scope of business law. Consequently, we
highlight the definitions to the following key terms that will come up later in
the book:
• Trade, i.e. the exchange of goods or services, on a global scale has
led to the creation of trade agreements that serve as de facto rules
CHAPTER OVERVIEW
Chapter One lays the foundation for the textbook. Make sure you look on the publisher’s
web site for information about how business law intersects with the six functional areas of
business. The authors encourage students to “connect to the core,” and remember the ways
in which law intersects with other areas of study, including corporate management,
production and transportation, marketing, research and development, accounting and
finance, and human resource management.
This manual supports the “connecting to the core” theme by giving ideas for assignments
that encourage students to integrate their business law knowledge with knowledge they are
acquiring from their other business classes. The manual also encourages professors to
improve their teaching skills. Finally, the manual suggests teaching ideas for both beginning
and experienced teachers.
LEARNING OBJECTIVES
After reading this chapter, students will be able to answer the following questions:
1. What is business law?
1. How does business law relate to business education?
2. What are the purposes of law?
3. What are alternative ways to classify law?
4. What are the sources of law?
5. What are the various schools of jurisprudence?
lecture notes with definitions
In the news… Teaching tip: For each chapter, consider asking students to relate current
news items to material from the chapter.
In addition to ideas students come up with on their own, consider weaving in
news stories provided by the McGraw-Hill. Stories are available via a
, McGraw-Hill DVD, and on the publisher’s web site.
For Chapter One, McGraw-Hill offers the following stories:
“Smoking Ban: Tobacco Tyrants: Gone Too Far? Many States Are Putting
Stronger Restrictions on Where You Can Smoke”
• Have states gone too far in banning smoking?
• Whose interests are state legislatures looking out for in banning
smoking?
“College Officer Dealings With Lenders Scrutinized.”
• Should regulators take a more careful look at college officers?
• Why created changes in the ways college officers interact with
lenders?
What is business law? Business law consists of the enforceable rules of conduct that govern
commercial relationships.
How does business Business law applies to the six functional areas of business:
law relate to business
education? • Corporate management
• Production and transportation
• Marketing
• Research and development
• Accounting and finance
• Human resource management
What are the purposes • Providing order
of law?
• Serving as an alternative to fighting
• Facilitating a sense that change is possible
• Encouraging social justice
, • Guaranteeing personal freedoms
• Serving as a moral guide
What are alternative One way to classify law:
ways to classify law?
Private law involves disputes between private individuals or groups.
Public law involves disputes between private individuals or groups and their
government.
A second way to classify law:
Civil law involves the rights and responsibilities involved in relationships
between persons and between persons and their government.
Criminal law involves incidents in which someone commits an act against
the public as a unit.
Teaching tip: Ask students to give an example of a fact situation that led to
both criminal and civil lawsuits, e.g., the O.J. Simpson trials.
What are the sources Sources of business law are:
of law?
1. Constitutions
Constitutional law refers to the general limits and powers of governments as
stated in their written constitutions.
2. Statutes or legislative actions
3. Cases
Case law (or common law) is the collection of legal interpretations made by
judges.
Stare decisis means courts are relying on precedent.
Teaching tip: The first time your students encounter an appellate case in the
readings, show them what stare decisis looks like in the context of a real case.
4. Administrative law
, Administrative law is the collection of rules and decisions made by
administrative agencies.
5. Treaties
A treaty is a binding agreement between two states or international
organizations.
6. Executive orders
An executive order is a directive that comes from the president or state
governor.
What are the various Schools of jurisprudence are common guides to legal interpretation.
schools of
jurisprudence? • Natural law—certain ethical laws and principles are morally right
and “above” the laws devised by humans.
• Legal Positivism—assumes the legitimate political authority
deserves our obedience when it issues a rule.
• Identification with the Vulnerable—emphasis on fairness and
looking out for those with the least power.
• Historical School/Tradition—emphasis on the use of stare decisis.
• Legal Realism—judges consider social and economic conditions.
• Cost-benefit Analysis—make calculations to maximize the ratio of
benefits to costs.
Teaching tip: Consider using “The Case of the Speluncean Explorers (link
below) to make the schools of jurisprudence come alive.
Global and At this point in the textbook, students should merely have an awareness that
Comparative Law globalization has affected the scope of business law. Consequently, we
highlight the definitions to the following key terms that will come up later in
the book:
• Trade, i.e. the exchange of goods or services, on a global scale has
led to the creation of trade agreements that serve as de facto rules
