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1-1 Laws and Their Ethical Foundation

Business Law - Chapter 1
by

Terrie Clink

on 3 February 2013

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Transcript of 1-1 Laws and Their Ethical Foundation

The Four Stages of Law Most societies go through four distinct stages in forming their legal systems:

1.Individuals are free to take revenge for wrongs done to them. (Revenge)
2.A leader acquires enough power to be able to force revenge-minded individuals to accept an award of goods or money instead. (Corruption)
3.The leader gives this power to a system of courts. (Court system)
4.The leader or central authority acts to prevent and punish wrongs that provoke individuals to seek revenge. (Authority formed)

In the first stage, injuries inflicted on one human being by another are matters for personal revenge. Those who are wronged feel that justice can be done only through personally punishing the wrongdoers. Gang wars in the inner cities often result from this type of attitude. Whether the occur in a big city or in a developing society such events usually disrupt the normal productive routine of the people and result in harm to innocent bystanders. What is Law? Law is a system of rules and guidelines which are enforced through social institutions to govern behavior. Laws may be grouped into an organized form referred to as a code. Law code, also called Legal Code, is more or less systematic and comprehensive written statement of laws. Law codes were compiled by the most ancient peoples. The oldest evidence for a code is tablets from the ancient archives of the city of Ebla (now at Tell Mardikh, Syria), which date back about 2400 BC. The best know ancient code is the Bablyonian Code of Hammurabi. Hammurabi was the King of Babylon and he enacted the code, which consisted of 282 laws that had scaled punishments. It had sections on criminal law, property law, business law, family law, personal injury law, labor law, and others. Such coverage is similar to that found in the U.S. law codes today. The need for law has not changed much over recorded history. People still make the same mistakes and still need the same protections from the conduct of others. Laws and Legal Systems Common Law Versus Positive Law Laws reflect the wisdom or lack thereof of their creators. In any society laws should be both predictable and flexible. A system of laws that is not predictable will not produce a stable society. Chaos, unrest, and the replacement of the system by one that can exercise control and restore peace will follow.

A legal system that is too controlling and too rigid to change with the wants and needs of the people also will be overthrown. The best system of laws is always evolving towards a form that matches the current standard of the people.

Law based solely on the current standards or customs of the people is called common law. Common law, also known as case law or precedent, is law developed by judges through decisions of courts and similar tribunals.

A positive law is dictated from a sovereign or other central authority to prevent disputes and wrongs from occurring. The Origins of Common Law Before the English common law system developed, feudal barons acted as judges within their territories. Disputes were settled on the basis of local customs and enforced by the barons' power. Because of this, the laws of England differed from region to region. Such differences were difficult for people to follow. They also made it hard for a central government to maintain control.

KING'S BENCH Around 1150 King Henry II decided to improve the situation. He appointed a number of judges from a group of trusted nobles. King Henry gave these judges the power to order that wrongdoers pay with money or goods the parties they injured.

The baron's courts, which heard local cases before the King's courts were created, kept the power to decide some of the minor cases. However the King's courts always had jurisdiction - the power to decide a case--over the most important cases. Advantages of English Common Law The judicial process described in the example was repeated over and over in England throughout the centuries. As a result, a uniform web of custom-based common law developed across the whole country. The process used to achieve this end is called the English common law system achieves uniformity while maintaining an ability to adapt to changes in society. It has been a model for legal systems worldwide, including that in the United States. Chapter 1 Laws and Their Ethical Foundations The resulting chaos often leads to one individual taking power and exerting control to bring peace to the society. To achieve this peace, the powerful leader or authority often called the sovereign, hears and resolves disputes between the people. The sovereign then forces the injured parties to accept awards of money or goods as a substitute for their taking revenge. This is the second stage in the growth of law.

In many civilizations, the sovereign ultimately becomes faced with more cases than one person can handle. As a consequence, the sovereign sets up a system of courts and gives them powers to decide certain types of disputes. Elders or priests generally preside over these courts. However the sovereign still presides over the most important matters.

In the final stage, the sovereign takes a step beyond

being merely a passive authority working only to resolve disputes after they occur. Instead the sovereign tries to prevent breaches of the peace before they can occur. The sovereign does this through enforcing a set of laws and matching punishments. The world’s two great systems of law are the English common law and the Roman civil law. Countries with systems patterned after the Roman civil law have adopted written, well organized, comprehensive sets of statutes in code form. The laws in these codes are typically only changed by the central government, not by the judges who administer them. Only one state in the United States—Louisiana—has a civil law system. The legal system used in the other 49 states is based on the English common law. JURY King Henry recognized that it was important to decide the court cases in harmony with the customs of the people. To do otherwise would cause unrest, if not revolution. Therefore, the judges were instructed to choose citizens from each region to help interpret that region's customs for the court. This panel of citizens evolved into what we know today as the jury. The jury is an institution unique to the English common law system. An Example of English Common Law The early system of English common law worked something like this. Imagine that a farmer named William is on his way to market one morning in his ox cart. He is traveling through an unfamiliar region. As he approaches an intersection, he sees another person in a similar ox cart coming into the intersection from his right.

In William's home region the right of way at an intersection goes to the person on the left. So he continues on, expecting the other person to rein in. The other party, a local resident named Gwen, does not yield and a collision results. Both William and Gwen are injured. Their oxen are gored. Their carts and other property are destroyed. As a consequence, the next time the circuit-riding judge comes into Gwen's region, both people appear in court and request damages (a monetary award) for their losses.

The judge needs to know who is at fault in the case in order to decide who must pay. To find out, the judge chooses a jury of 12 residents to decide which person, according to their customs, acted improperly. The jury hears evidence to allow it to understand the facts of the accident. Then it determines that, because the right of way customarily goes to the person on the right in their region, William is at fault and must pay Gwen damages. The judge accepts the decision and orders William to pay. The decision, however, upsets William. He knows that throughout most of his travels the right of way is given to the person on the left. Therefore, he decides to take his case to the higher, or appellate, court--King's Bench in London--on appeal. That court will not be in session for several months yet, so William uses the time to collect information on the law used in other courts in England that have ruled on the issue of right of way. Finally, the time comes to appear before King's Bench. The judges listen to William's appeal and Gwen's defense of the lower court's decision

The appellate court judges review the information presented to them by both parties, including the laws used by other courts to settle like issues. They decide that it would be wisest to reverse the holding in the lower court (that the right of way should go to the person on the right). Instead, says King's Bench, the right of way will be given to the person on the left. They send the case back down to the lower court with instructions to enter a judgment for damages in William's favor.

From that point on,anyone in the kingdom will need to give the right of way to the person on the left. If any lower court, including the one in Gwen's region, decides a case using a different rule, the result can be appealed to King's Bench where it will be reversed. Equity: An Alternative to Common Law The common law courts carefully follow precedent. This means the courts use prior cases as a guide for deciding similar new cases as would be done with the decision in William v. Gwen as discussed earlier. Following precedent helps to provide stability in the law. However, if overdone it can have the disadvantage, as came to be the situation in old England, of requiring a rigid adherence to proper form. For example, a misplaced period or misspelled word could nullify, or void, the effect of a document.

Another disadvantage of the early common law system was that its courts could only grant the remedy of damages. This meant that common law courts had to wait until the harm actually occurred befoe they could take action.

For example, if a farmer decided to dam up the stream that watered the neighbor's crops and animals, the courts of law had to wait until the harm had occurred and then award the neighbor damages for what the farmer did. The courts of law could not order the farmer to stop building the dam. This inability to stop a wrong before it inflicted actual harm often resulted in a waste of resources from the perspective of the courtry as a whole.

However, if the neighbor were a noble, he might be able to get around the courts and directly petition the king for help. The king would refer the matter to his chancellor, who was usually a high clergyman respected for his equity, or fairness. The chancellor would conduct a hearing under rules different from those of a common law court. There would be no jury, for example, and the remedies the chancellor could impose in the king's name were different from those available to the law courts.

For example, the chancellor might issue an order to compel that something be done. Or, he might issue an injunction, which stops something from being doen. For example, the chancellor could issue an injunction to stop the dam from being built. Hoever, if the neighbor were not a noble, he would not have been able to petition the king. The harm would be allowed to occur.

Eventually the king sensed a need for access to equitable remedies for all citizens. He created a system of equity courts and placed them under the chancellor's control. These courts were given the power to issue injunctions or to compel specific actions. In the United States today, law courts and quity courts generally are merged. Consequently most American courts can award damages or issue orders or both. Completed 1-1 Go to Moodle and complete the Quiz for section 1-1 http://moodle.maisd.net/macc/mod/quiz/view.php?id=2580
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