Laws in business are necessary as they govern business operation and lay down the procedures which should be followed in case there are conflicts in business transactions?
- Common Law and Stare Decisis
The common law is the law that consists of all the judicial decisions both written, custom and the modern case laws as developed and amended as need arises as time passes. The requirements that the courts are supposed to follow in making decisions is based on the legal principle stare decisi which actually says standing by the decisions that have been made (Emerson & Robert, 2003).
It is therefore used in deciding legal controversies. Stare decisis as used in the high courts is similar in the lower courts and it can be changed through legislative procedures. “In business, Stare decisis is used within the Common Law principles such that when business decisions are made in court, they are final and standard and that the decisions made on similar cases can be applied to the business related case in court (Keller, 1990 ).”
Bailment refers to the legal relationship within the common law which talks of the transfer of ownership of property from one person who is the owner (bailor) to another person; the new owner (bailee), without necessarily the transfer of ownership. This transfer of control or care in the personal property most of the time is temporary (Emerson & Robert, 2003). In business, this may include businesses contacting warehouses so that they can be stored for goods, hiring services such as repair and maintenance of office facilities and also cleaning services. Because the bailor is offering the bailee business without gaining much from the bailor, the baliee is therefore held to a duty of extraordinary care therefore will be held accountable for the loss of the property or when it is damaged.
Statutes refer to the laws that govern business practices and they are found in the legislation and common law codes. “Statutes can be changed so as to fit with the requirements of the people and the changing business environment especially due to technological changes (Emerson & Robert, 2003,).” They are used to interpret business practices as required by the law. In business, the statutes are applied to various business aspects like hire purchase, rent restrictions, credit bargains, issues that deal with biasness in trade transactions among other things.
- Civil Law versus Criminal Law Federal and State Courts
Civil law as used in business refers to the law that deals with conflicts between people and organizations which may require certain parties involved to be compensated. In business, the civil law works through the commercial law which is one of its branches to deal with things like administrative, contract or property disputes. The Civil Law therefore focuses more on the legal status of businesses as opposed to the Criminal Law which mainly deals with matters of the state against various businesses. The Federal and State Courts deal with matters such as bankruptcy in accordance to the Federal Criminal Laws.
- Personal Jurisdiction, Subject Matter Jurisdiction and Venue
Personal jurisdiction refers to the powers the courts make decisions and rulings against certain defendant or property in question. “Subject matter jurisdiction is the power of a court to hear particular cases and make judgment concerning raised subject matters on particular business related issues. Venue refers to the state, county or district where the case is filed (Cornick, 1995).” This will entail filling lawsuits against people in the geographical areas where they live. All these factors are important because they help courts in making valid decisions. They help in business cases as they will guide the parties involved and also the states on what they are meant to do.
- Garnishment and Execution
Garnishment refers to the legal procedure whereby money that a person owes someone or that is being held by another person, is taken to settle a case in court. Bank accounts are an example of garnished property. In this case, the creditor has to present the bank with a bank notice such that they will be able to legally claim the money they are supposed to get. Execution basically refers to the procedures of getting the money owed as stated by the courts. “Execution therefore is necessary to get money owed back using debtors tangible assets within jurisdiction from when they have been served with the writ of execution (Schmudde & ALI, 2004).”
- Mediation, Arbitration and Accord and Satisfaction
Accord and satisfaction refer to the acceptance of compensation from the other party usually in contract law so that the other party can be released from the contract. Accord is agreeing to be released from the binding commitment while satisfaction is whereby both parties are in unison on how the events are unfolding. Mediation refers to an independent person or individuals working with two parties so that they can reach an agreement. “When mediation fails, then an arbitrator is used to try and solve problems between warring parties that are in agreement. This is necessary in business because it reduces costs which could other wise be used in legal proceedings and it manages conflicts (Abbott, Pendlebury & Wardman, 2007).”
- Intentional Torts, Negligence, and Strict Liability in Tort
Intentional tort refers to the negative things that a person charged in court was supposed to know but they ignored and that are why their businesses have been affected. Negligent tort occurs when a person or a company engages in unsafe business activities. Strict liability says that the wrongs committed do not necessarily occur because people were not careful enough but there are things which can still endanger others and in case of such occurrences, victims will require compensation. The tort law is the business law that safeguards other businessmen as well as the public from such instances.
- Requirements for an Enforceable Contract
When two or more people decide to conduct business together, they will have a contract but will go an extra mile to ensure that whatever they are engaging in is valid. The process of ensuring that they know what they are engaging themselves in before they actually sign it is referred to as enforcing a contract. This will entail, accepting the offer that has been presented if is inline with the things you want to achieve.
The next step will be considering if it is good for the business and if the conditions presented are in favor of everyone. The next thing will be looking at the legal requirements especially what will happen if the contract is breached and the amount of compensation plus the people who will be involved. The parties will then be checked to see of they are competent enough to fulfill their promises. Finally, the legal form will have to be filled so as to make it formal and legal.
- The Purpose of the Uniform Commercial Code and its Application to Contract Law
The Uniform Commercial Code states the codes that govern commercial transactions; what business should do in case of expansion both within the country and globally and sets standard laws that govern business legal procedures. The Purpose of the Uniform Commercial Code and its Application to Contract Law is that it ensures that the policies set are inline with what the Contract Laws state so that they do not contradict each other but enhance better business transactions between individuals and organizations.
- Click-Wrap Agreements and the Electronic Signatures in Global and National Commerce Act
Click-Wrap Agreements refer to the agreements that are made via the internet after the persons who want certain goods or services read through the requirements before accepting them. Electronic signatures are mostly used in trade transactions between organizations and people in different countries thus saving on transportation costs. The Global and National Commerce Act governs the use of electronic signatures by setting rules that regulate the usage of E-signatures, setting the type of businesses that are allowed to conduct such trade and the standard signatures in use. The act does this to promote the E-commerce as well as protect peoples businesses from people who may take advantage of them.
- Sole Proprietorship, Partnership, Corporation and Limited Liability Company
Sole Proprietorship refers to a person who runs a business solely therefore enjoys the benefits as well as the losses that will accrue to the business. Partnerships refer to two or more people and organizations that have decided to run a business together. A corporation is business entities that is largely owned by stakeholders who buy the corporation’s shares therefore are involved in major decision making in the corporations matters. A limited liability company is a corporation that gives its owners limited liability in that they can share in the company’s profits and losses in relation to their investments in the corporation. All these different forms of business ownership are important because there are rules and regulations that govern their formation as well as their dissolution in business practice as stipulated by the law.
- Fee Simple and Life Estate
Fee simple refers to the ownership of real estate property but with reservations for paying the government some duties in form of taxes well stipulated in the deeds. “There may also be private restrictions involved in certain regions. Upon the death of the owner, the property is then inherited to the next of keen (Galaty, Allaway & Kyle, 2001).” Life Estate as used in common law refers to the ownership of a piece of land for as long as the person is alive. Therefore, they will benefit from any profits got from rent or using the property. Businesses therefore, can benefit from life estate because for as long as the business is in operation and this is well said in the law.
- Warranty Deed and Quitclaim Deed
Warranty deed is a deed that guarantees ownership by a business to a certain piece of land after they sell it. When a business that is purchasing land is shown the warranty deed, it means that other financial institutions or creditors will not claim the property. Quitclaim Deed on the other hand is a deed that allows the transfer of ownership of property to the new person who will then posses it. When a business is presented with a quitclaim deed, it means that the seller does not really own it but is in charge of the property therefore it has certain risks.
- Adverse possession
Adverse possession in Common law the transfer of ownership in real estate without paying the owner. This is because the new owner stays with the property for a long time. This occurs in instances where a business might establish itself in someone else’s unused property and since they are not using it or claiming it, over the years it will fall under possession of the business as stated under the law. The statute of limitations has provisions that state the periods within which property can be adversely acquired. Government owned land cannot be acquired through such procedures (Emerson & Robert, 2003).
- Employment at Will versus Title VII of the Civil Rights Act of 1964
Employment at Will under the law states that the employer can terminate a person from working for them and also the employee can decide to stop working for a particular business so long as there was no contract binding them so long as the reasons for doing so are legal. “Employment at will therefore looks into matters like public policy violations, discrimination or retaliation so that they can protect the rights of employers and employees (DelPo & Guerin, 2007).” Title VII of the Civil Rights Act of 1964 was passed to look into various matters in relation to employee discrimination and compensation issues. These two rules ensure that the employer-employee relations are strengthened in business by each side knowing their rights and what the law expects.
- The Purpose of the Securities Act of 1933 and the Purpose of the Securities and Exchange Act of 1934
The Securities Act of 1933 was put in place to protect and regulate the sale of securities. On top of this, it enhanced transparency in financial statements and established laws against unlawful activities in the securities market. The Securities and Exchange Act of 1934 was enacted to control the work that was done by brokers in the exchange market and also to provide guidelines in security markets. This was necessary so that businesses and the public could gain from the stocks they have invested in.
- Sarbanes-Oxley Act
Sarbanes-Oxley Act was passed into law in 2002 and its main aim was to make companies or businesses open on how they conduct their finances thus making sure that they were accountable for the transactions they engaged in. This was to help in protecting the wealth of investors because certain businesses engage in unlawful business practices and cover up for loopholes in their financial statements thus ripping investors a lot of money which sometimes ends up being uncompensated.
- Common Law Legal System versus the Civil Law Legal System
The common Law legal system makes decisions using mostly Common Law policies and laws. Common law was formed from people’s beliefs and continues to be improved on. Civil law on the other hand was based on written doctrines and therefore does not pay much attention to the current facts. The common law is mostly coded while the Civil Law is not. The Common Law is very useful in dealing with most issues in business operations while the Civil Law deals mainly with individual freedom and the need for unity.
- Foreign Corrupt Practices Act
This code was put in place to deal with transparency in accounting procedures as used in business and to reduce corruption cases especially those related to bribing officials. This is good for business because it ensures that business do not engage in corrupt deals so that there is fairness in the business environment.
Abbott, K., Pendlebury, N. & Wardman K. (2007).Business Law 8th Ed, Cengage Learning EMEA, 2007 p. 64-65
Cornick, M. S. (1995). Practical Guide to Family Law, Cengage Learning, p. 108, 109
DelPo, A. & Guerin L. (2007). Dealing with Problem Employees: A Legal Guide
4th Ed. Nolo, p.34
Emerson, R. W. Robert J.D. E. (2003). Business law, 4th Ed. Barron’s Educational Series, p. 7, 8, 164
Galaty, F. W., Allaway, W. J. ; Kyle R. C. (2001). Modern Real Estate Practice in Ohio
5th Ed. Dearborn Real Estate, p. 123
Keller, W. D. Research ; Education Association (1990). The Essentials of Business Law
Research ; Education Assoc., p. 22
Schmudde, D. A. American Law Institute. (2004). A practical guide to mortgages and liens
ALI-ABA, p. 317