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business exam 3 revised

business exam 3 revised - 18:16 Law Uniform Commercial...

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18:16 Law Uniform Commercial Code- (UCC) the basis for most business law in the US, covers a wide range of topics from sales laws, warranties, etc. Its purpose is to provide uniformity between states. Functions of Law - defines relationships among members of society by establishing what activities are ok and not ok -allocates authority -needs to be able to adapt and redefine relationships as life changes Ideal of Legality - essential element in our rule of law is restraint of official power by rational principles -legality imposes an environment of constraint -legality is about how polices and rules are made and applies rather then the content -arbitrary elements should be minimized in legal norms and decisions, in order to maintain fair and quit able decision-making. Types of Law 1. Contract Law- negotiated agreements, with create enforceable rights and responsibilities between negotiating parties. 2. Tort Law- tort is a civil wrong inflicted on a person or person’s property. 3. Law of Agency- when one part has trust of another and is to act in the “others” best interest and then there is a fiduciary relationship. The (agent) is the “fiduciary” and the part on whose behalf is being acted on is the “principal” 4. Statutory & Regulatory Law- the legislative branch of government that creates administrative agencies to oversee certain aspects of commerce. Legal Relationships -Decision Maker with Stockholder- Contract (obligation for return), Law of Agency (fiduciary responsibility), Regulatory (SOX, SEC) -Decision Maker with Employees- Contract law and Regulatory Law (minimum wage, OHSHA, EEOC) -Decision Maker with Customer- Contract (actual transaction), Tort (liability), Regulatory (government regulations)
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-Decision Maker with Supplier- Contract (purely contractual) -Decision Maker with Society- Regulatory (EPA, etc) 3 Different Economic Markets Free Market- When buying and selling of goods can be done without regulation and there is not government intervention. Mixed Economy - a mixture of free and planned market. There is some government regulations and laws but businesses also have freedom in the market. (United States Economic System) Planned Economy- Government runs the economy and the businesses in its market. (Chinese market) Managerial Capitalism Managerial Capitalism- In return for controlling the firm, managers can pursue market transactions with other stakeholders in an unconstrained way. Invisible Hand- The ability for a market to allocate factors and goods to their most valuable use. Generating the greatest good for the greatest number. Challenges with Managerial Capitalism Economic Argument Monopoly Power- market power due to only one producer/supplier.
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