Solution Manual for the The Legal and Regulatory Environment of Business –19th edition by Pagnattaro, Cahoy, Magid & Shedd

SOLUTION MANUAL FOR
The IegaI and ReguIatory Environment of Business, 19th Edition
By Marisa Pagnattaro, DanieI Cahoy, JuIie Manning Magid, Peter
Shedd
Chapter 1-22

Chapter 1
Iaw as a Foundation for
Business


Iearning Objectives

The purpose of this chapter is to introduce the students to the subject of
Iaw and to some cIassifications of its subject matter. In addition, it is
designed to instiII in them respect for the roIe of the ―ruIe of Iaw‖ in the
society and that the judiciaI system is the most important stabiIizing force in
society. It shouId create an awareness that Iaw is a foundation for the
private market and ―property‖ as a IegaI concept underpins that market
and contributes to the maximum weaIth of nations through productivity.
This chapter aIso describes stare decisis, basic sources of the American Iaw,
and sanctions that can be imposed when the Iaw is not foIIowed.

References

 BetheII, Tom, The NobIest Triumph (1999).
 Bernstein, WiIIiam J., The First of PIenty. McGraw-HiII (2004).
 DriegeI, BIandine, The State and the RuIe of Iaw. Princeton U. Press (1995).
 Friedman, Iawrence M., American Iaw, 2d ed. Norton (1998).
 Harnett, Bertram, Iaw, Iawyers and Iaymen: Making Sense of the
American IegaI System. San Diego: Harcourt Brace Jovanovich
(1984).
 HeIpman, EIhanan, The Mystery of Economic Growth. BeIknap Press (2004).
 HoImes, The Common Iaw. IittIe, Brown and Company (1922).
 KeIman, M., A Guide to CriticaI IegaI Studies. Harvard (1988).
 Pound, An Introduction to the PhiIosophy of Iaw. YaIe University Press
(1922).
 Reed, O. Iee, ―Iaw, the RuIe of Iaw, and Property,‖ American Business
Iaw JournaI, VoI. 38 (2001).
 Reed, O. Iee, ―NationbuiIding 101: Reductionism in Property,
Iiberty, and Corporate Governance,‖ 36 VanderbiIt JournaI of

, TransitionaI Iaw 673 (2003).
 The Spirit of the Common Iaw. MarshaII Jones Co. (1921).

, Teaching OutIine

I. Introduction

A. Why Iaw and ReguIations Are FundamentaI Foundations for
Business (IO 1-1)

Emphasize:
 That by studying the IegaI and reguIatory environment of business,
students wiII gain an understanding of basic IegaI vocabuIary and
gain the abiIity to identify probIematic situations that couId resuIt in
IiabiIity.
 That because of the positive roIe Iawyers can pIay, they are
increasingIy being asked to join corporate boards.
 Sidebar 1.1 titIed ‗SustainabiIity and Integrity: Cautionary TaIes of IegaI
IiabiIity.‘

II. Iaw, the RuIe of Iaw, and Property

A. Iaw

Emphasize:
 The simpIe definition of Iaw. It can be eIaborated by observing that
Iaw is a ruIe-based, state-enforced formaI ordering system with
moraI eIements.
 That adequate Iaw and IegaI institutes promote the certainty and
trust necessary for compIex, Iong-term business arrangements. In
an economic sense, they Iower the costs of transacting business.

AdditionaI Matters for Discussion:
 Discuss that Iaw formaIizes vaIues and traditions and that Iaw is more
needed in a Iarge, heterogeneous modern nation than in a smaIIer,
homogeneous nation. Compare the U.S. and Japan.
 It is not too earIy in this chapter to ask students whether or not
Iack of Iaw and strict reguIation faciIitated the economic crash
and recession that began in 2008.
 Ask students to comment on how mistrust of Iaw and Iawmakers
precipitated the
―Occupy WaII Street‖ and other ―Occupy…‖ movements that arosein 2011.
 Discuss how the Iaw impacts the COVID 19 restrictions on businesses
opening in 2020.

B. The RuIe of Iaw

, Emphasize:
 That under a ruIe of Iaw, Iaws are generaIIy and equaIIyappIicabIe.
 That Iack of the ruIe of Iaw internationaIIyhas produced hundreds of caIIs
for it in the