he law is of interest to all persons, not just to lawyers.
Those entering the world of business will find them-
selves subject to numerous laws and government regulations.
A basic knowledge of these laws and regulations is beneficial—
if not essential—to anyone contemplating a successful career
in today’s business world.
Although the law has had and will continue to have differ-
ent definitions, they all are based on the general observation
that, at a minimum,
enforceable rules governing
relationships among individuals and between individuals and
These “enforceable rules” may consist of unwrit-
ten principles of behavior established by a nomadic tribe. They
may be set forth in an ancient or a contemporary law code.
They may consist of written laws and court decisions created
by modern legislative and judicial bodies, as in the United
States. Regardless of how such rules are created, they all have
one thing in common: they establish rights, duties, and privi-
leges that are consistent with the values and beliefs of their
society or its ruling group.
In this introductory chapter, we first look at an important
question for any student reading this text: How does the legal
environment affect business decision making? We next
describe the basic sources of American law, the common law
tradition, and some general classifications of law. We con-
clude the chapter with a discussion of the U.S. Constitution
as it affects business.
As those entering the world of business will learn, laws and
government regulations affect virtually all business activi-
ties—hiring and firing decisions, workplace safety, the man-
ufacturing and marketing of products, and business
financing, to name just a few.
To make good business deci-
sions, a basic knowledge of the laws and regulations govern-
ing these activities is beneficial, if not essential. In today’s
world, though, a knowledge of “black-letter” law is not
enough. Businesspersons are also pressured to make ethical
decisions. Thus, the study of business law necessarily involves
an ethical dimension.
Many Different Laws May
Affect a Single Business Transaction
As you will note, each chapter in this text covers a specific area
of the law and shows how the legal rules in that area affect busi-
ness activities. Although compartmentalizing the law in this
fashion facilitates learning, it does not indicate the extent to
which many different laws may apply to just one transaction.
Suppose that you are the president of NetSys,
Inc., a company that creates and maintains computer network
systems for its clients, including business firms. NetSys also
AND THE LEGAL ENVIRONMENT
AFTER READING THIS CHAPTER, YOU SHOULD BE ABLE TO ANSWER THE FOLLOWING QUESTIONS:
What is the Uniform Commercial Code?