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Business Law Exam I ReviewPage 8-17The Necessity of Law‘Where there is no law, there is no liberty” – Benjamin RushLaw provides a crucial predicate to economic growth. Laws produce order and maintain economic activity. (8)The types of law needed to protect the makers of wealth include property, contracts, crimes, finance, corporations, regulation, antitrust, labor law, taxation, and torts. (8)Law & Business StrategyIf a company is entering foreign markets, a manager must determine if contracts can be enforced, intellectual property such as trade secrets, trademarks and patents can be protected. (8)Many companies have been involved in scandals in which they have to pay billions of dollars due to discrimination or unethical behavior by the management. (8-9)Many firms have improved their legal departments in order to secure long-term competitive advantage. (9)What is the Law?Law is a form of social control, an instrument of the good life, the way to the discovery of reality, the true reality of the social structure – Plato (10)General purpose of law is ensuring of orderliness to all human activity. (10)Primary Sources: Contain legally binding rules and procedures, include federal and state constitutions, statutes (legislative enactments), administrative agency regulations and court decisions; also included are federal treaties and city ordinances. (10)Secondary Sources: Summarize and explain the law, and sometimes criticize and suggest changesin it. Such sources are not legally binding, but are frequently referred to and used by courts, administrative agencies, legislative staff members and practicing attorneys. (10)Requisites of a Legal SystemFor a legal system to function properly, the laws should be (1) relatively certain, (2) relatively flexible, (3) known or knowable, and (4) apparently reasonable. (10)Certainty: One essential element of a stable society is reasonable certainty about its laws, not only at a given moment but over long periods of time. This ensures that many of activities, particularly business, will remain stable and not cause chaos. (11)Flexibility: As technology advances, the law has to be flexible and adapt to it. For example, landowners had unlimited rights to the airspace above their property but the introduction of theairplane limited this right. (11)Problems such as abortion, disability and etc. require solutions and sometimes the law is flexible to give rights to these people. (11)
Knowability: One of the basic assumptions are that the great majority of its citizens are going to obey its laws voluntarily. It’s necessary that the law be in such form that the lawyers can determine their client’s position and provide them the most advantageous courses of action.