- BLAW

- Key function of legal system

o LAW: may views as collection of rules or principles that limit and direct human behavior.
Productive for business if it creates predictability and some uniformity of acceptable
social conduct.
o Improving social stability by influencing behavior
 Legal system helps defines social behavior
 Restrict activities damage public interest
 Restrict business practice believe outside ethical norm
 Encourage certain social and political goals
 Law in different jurisdiction reflect other social norms
o Improving social stability and change
 Law reflect social values and customer which may change
o Conflict resolution
 Court are one mechanism for resolving disputes
 Business turning to formal private settlement techniques—alternative
dispute resolution systems outside the court.
o Countries with corrupt governments have legal systems that people want to avoid
because they usually exist just to extort bribes rather than deal in a fair manner with
disputes. Corrupt governments usually control the legal system to help achieve the goals
of the people running the government. Such places are almost always poor because
honest people cannot run businesses properly in such places.
o
- Sources of Law in the US
- Law comes from 3 main branches federal gvt and the states, international have small impact
except business working countries.
o Constitutions US—was written to create gvt and grant it certain powers and limit
powers
 Fundamental law of land
 Establish limit and power of gvt
 Oldest written constitution in force in the world
 Establishes legislative, executive and judicial branches of gvt
 Creates the separation power.
o State constitution
 Create legislative judicial and executive branches of state gvt like us
constitution.
 Often long and detail
 Amending state constitution usually much easier than amending us constitution
 Structure state gvt and authority
 Many states have long constitution as they can be easy to change
o Federal and state Legislatures and status
 Legislatures create statutory law.Federal Laws.State Laws.Municipal Laws
 Judges interpret-- Laws must pass Constitutional “muster”
  A the federal and state levels, legislatures create statutes. Judges ensure the
statutes do not violate the Constitution and that agencies that have authority to
regulate under a statute do not exceed their authority by violating the intention
of the legislature.
o Administrative agencies and regulation
 Congress creates a statute.
 Statute names administrative agency.
 Agency makes regulations.
 Sometimes both Congress and states enact regulations in the same area of
concern.-- Ex: Environmental regulations
 Agencies and Regulations – Major affects on the legal environment of business
 Agencies are given power by statutes to create rules. Those rules have the same
force of law as the statutes passed by the legislature. Agencies are the main
enforcers of statutes, so can greatly impact business.
o Judiciary and common law
 Comes from old English system.
 Judge follow earlier decisions that resolved similar disputes.
 Legal principles from cases is called “precedent.”
 Cases published in case reporters.
 Use of precedent is Stare Decisis.
 A new issue? Judge makes new common law based on logic from existing law.
 Common law varies by state; but there is consistency.
 Provides stability but allows change as technology and social attitudes evolve.
 When the United States broke away from England, the government changed but
the common law remained. It is based on judges deciding cases based on
principles established from earlier cases. This helps provide certainty over time,
but rules can change with social evolution. The rules differ some from state to
state but basic principles are consistent.
o Davis v. Baugh Industrial Contractors INC. (changing the common law)
 Glacier Northwest hired Baugh to build a facility that included an underground
pipe system.
 3 years later, Glacier suspected a pipe leak. Davis assigned to uncover the leak.
While he was in a hole to get to the pipes, a wall collapsed, killing him.
 Pipes should last 100 yrs. These were likely damaged during installation, causing
the leak. Davis’ daughter sued Baugh for negligence in her father’s death.
 Trial court used precedent: When a contractor finishes work and owner accepts
it, the contractor (Baugh) no longer liable; only the property owner could be
liable. But Glacier did nothing wrong. Suit dismissed by trial court.
 Appealed to Supreme Court of Washington
 The Baugh Industrial case is an example of how the common law changes.
Under the old rule in Washington state, when a contractor turned over a
finished construction job to the owner, the contractor was no longer liable for
problems. A problem in construction was related to the death of an employee
whose family sued.
  HELD: Reversed and remanded. Court rejected previous common law rule and
adopted a new approach:
 The contractor (Baugh) is liable for injury to 3rd parties as a result of negligent
work, even if the work was accepted by the property owner (Glacier).
 Construction has become highly complex. Landowners rely on a contractor’s
expertise. Property owners (Glacier) often do not know of poor performance by
the contractor.
 Liability may be imposed on contractor when it is “reasonably foreseeable” that
injury could occur due to negligence in construction.
 The Washington Supreme Court held that it was time to change the rule. It may
have been sensible decades ago, but not in the day of complex construction
where the owner is unlikely to know of defects, so the common law rule of
liability in such instances changed going forward.
o CIVIL LAW SYSTEMS
 Civil law systems dominate in most countries:
 Europe
 Central & South America
 Parts of Asia and Africa
 Civil law roots are often from Roman Empire law.
 3 major characteristics differentiate a civil law system from common law; civil
law systems:
 are inquisitorial rather than adversarial.
 are code-based rather than case-based.
 are influenced more by academic experts than by practicing lawyers.
 In most countries, civil law dominates. Unlike the common law, the courts have
little ability to make law. Judges must follow written codes that give the rules to
be used. Trials in most countries are also very different—judges can demand
what evidence be produced, unlike in the US where each side tells their own
story and makes their own arguments.