Back To CourseBusiness 103: Introductory Business Law
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Ashley is an attorney. She has taught and written various introductory law courses.
What is law? As students of the law, when we want to define a particular legal term there are a few sources we can legitimately look to. As with other subjects, let's start with the dictionary. When we want to define a legal term, we will look to Black's Law Dictionary. This is an important tool for attorneys and law students. This dictionary serves as the leading standard authority for defining legal terms and has been published since 1891. Black's defines law as 'that which is laid down, ordained, or established….'
It's important to note that although Black's Law Dictionary is a helpful tool, it is not, itself, law. The United States Supreme Court plays the final controlling role in defining legal terms. Through the case of United States Fidelity and Guaranty Co. v. Guenther, the Supreme Court states that: 'Law, in its generic sense, is a body of rules of action or conduct prescribed by controlling authority, and having binding legal force.'
This is a reliable and thorough definition of law, but there are many accepted definitions for what constitutes law. Generally speaking, laws are rules that the people in a society believe are important enough for the society to enforce. Law comes from an organized government, but our laws are designed so that they typically reflect what the majority of the people feel is just or right.
People make law, and it is made to reflect how the people feel about certain actions or conduct, such as murder, stealing or cheating on taxes. There is a purposeful and strong connection between law and that society's morality. This is a theme you will see often in business law and also throughout all other areas of the law.
So where does law come from? In America, our law system came from Great Britain. The settlers of the original thirteen colonies came from Europe, and they brought with them their own set of rules and principles to be used in their new society.
The English common law was the system of law in England at that time and was quickly adopted throughout the colonies. The English common law is rooted in centuries of English history. Much of the common law was formed in the years between the Norman Conquest of England in the early 11th century and the settlement of the American colonies in the early 17th century.
The English common law is based on a cultural system of settling disputes through local custom. The early tribes of England each held their own set of customs, but this system became increasingly formalized as those early tribal peoples came together and organized. These ancient customs are the basic principles that eventually became part of the American system of justice.
Under English common law, disputes between two parties were handled on a case-by-case basis. However, the decision-maker did not act without guidance. The decision-maker was required to look to similar, previously decided cases and use those established guidelines and traditions. The customs of England were built upon and expanded for centuries, all through court decisions. By carrying forward and preserving these customs, the courts assured that the law was truly 'common' to all.
For example, imagine that Smith and Jones own land adjacent to one another. Smith intends to build a barn on his own land, near his border with Jones. However, Smith inadvertently builds his barn on Jones's land. Jones claims ownership of the barn, and the two end up arguing their positions in court.
Let's say the court decides that Smith owns the barn that he built, and now also owns that small portion of land that the barn occupies. This is now the rule to be applied for those cases coming after Smith and Jones. From that moment forward, all landowners must be careful not to allow others to build permanent fixtures on their land. Otherwise, the rule now states they could lose ownership of that portion of their land. Scenarios like this created a gradual development of an extensive system of laws, even though these rules were mostly unwritten at that time.
Shortly before the American Revolution in the last half of the 18th century, Sir William Blackstone published Commentaries on the Laws of England as a complete overview of the English common law. This publication spanned four volumes!
Blackstone described the English common law as an ancient collection of unwritten maxims and customs upon which English judicial decisions were made. Judicial decisions are decisions made by a court and are also known as case law. Therefore, Blackstone defined the English common law at that time as a large collection of cases.
Blackstone's Commentaries were crucial during the formation of the United States of America. Our Founding Fathers were looking to establish a government, and they had no other viable reference to written law. The U.S. adopted this system of common law, and it is still used today.
A common law system is essentially a legal system that follows the rules set in previous cases. This is the current legal structure of the United States, England and many other territories. But this is not to say that our common law exists exactly as it did in Blackstone's time. Our law is ever-changing. The American common law system began with the adoption of Blackstone's English common law, but today, it includes centuries of subsequent American law.
In the United States, we have several different types of laws that make up our American common law system. Many of our laws are made through judicial decisions. This judge-made, or court-made, law is case law.
A legislative body, such as Congress or a state's legislature, can also make laws. This enactment of laws creates statutory law, or statutes. New law is constantly created through these two main methods, but there are also other sources of law in the United States. Sources of law also includes administrative regulations, local ordinances and treaties.
As we've discussed, our system of law has deep historical roots. The U.S. system of law grows upon English common law and inherited all of those established rules.
Blackstone's Commentaries and the English common law remain an important part of our current U.S. law system. The framers of our Constitution created the United States Supreme Court through Article III.
They felt there needed to be one court with final authority to determine cases that had not previously been settled. The Supreme Court has the final, or 'supreme,' say. This court's rulings are the last and final word. The Supreme Court settles disputes involving new law and also rules on the constitutionality of laws.
Early Supreme Court decisions cited the Commentaries often, because there were many new cases that did not exactly fit previous U.S. cases. But even in today's times, our modern Supreme Court often looks to the Commentaries for guidance in making new decisions. These new case law decisions then become a part of our American common law system.
Congress and state legislatures also add to our system of laws. Legislative bodies may generally enact new statutes that modify or build on our existing laws. For example, the United States Congress was created by Article I, Section 1 of our U.S. Constitution. This legislative body is made up of the Senate and the House of Representatives. They may make new statutes as long as those new laws do not conflict with the U.S. Constitution. These statutes are codified, or written down, and organized into codes, such as the U.S. Code, which contains all the laws made by the U.S. Congress.
Let's review. The English common law system was developed over centuries and is based on the principles of right and wrong originally established by ancient tribal peoples. Decision-makers issued decisions based on these customs, and future disputes were bound by these decisions. Our early colonists adopted this common law system, which was unwritten. Around the time of the American Revolution, Sir William Blackstone published his Commentaries as a thorough compilation of the English common law. This publication continues to shape our American law system. Our framers established our Supreme Court and our Congress. Together, these two federal entities make and interpret new laws. These newer laws build on Blackstone's work and American case law to form what we know as our modern American common law system.
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Back To CourseBusiness 103: Introductory Business Law
21 chapters | 160 lessons