Contents
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Legal Environment of Business
Rationale
Law[1] is a system of rules usually enforced through a set of institutions.[2] Law affects everyday life and society in a variety of ways. Contract law regulates everything from buying a bus ticket to trading swap options on a derivatives market. Property law defines rights and obligations related to buying, selling, or renting real property such as homes and buildings. Trust law applies to assets held for investment, such as pension funds. Tort law allows claims for compensation when someone or their property is harmed. But if the harm is criminalised, and the act is intentional, criminal law offers means to prosecute and punish the perpetrator. Constitutional law provides a framework for creating laws, protecting people's human rights, and electing political representatives, while administrative law allows ordinary citizens to challenge the way governments exercise power. International law regulates affairs between sovereign nation-states in everything from trade to the environment to military action. "The rule of law", wrote the ancient Greek philosopher Aristotle in 350 BC, "is better than the rule of any individual."[3]
Legal systems around the world elaborate legal rights and responsibilities in different ways. A basic distinction is made between civil law jurisdictions and systems using common law. Some countries base their law on religious scripts. Scholars investigate the nature of law through many perspectives, including legal history and philosophy, or social sciences such as economics and sociology. The study of law raises important questions about equality, fairness and justice, which are not always simple. "In its majestic equality", said the author Anatole France in 1894, "the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread."[4] The most important institutions for law are the judiciary, the legislature, the executive, its bureaucracy, the military and police, the legal profession and civil society.
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Learning Objectives and Outcomes
This is a non-taught unit designed for self-directed study by those interested in legal environments concepts and impact on international business.
After completing the course, student will
1. Understand the effects of political systems to legal and business environments
2. Explain the legal environments
3. Discuss the implications of different legal and regulatory systems for international business
4. Outline the issues that businesses have to consider in relation to the legal environment, including the increasingly important areas of intellectual property rights and e-commerce legal risks;
5. Consider the main features of the different types of legal systems and environments in which international businesses operate;
6. Identify and explain some of the key legal variables which influence international businesses in the assessment of their legal environment;
Skills
After completing the course, student will be able to
- Evaluate different legal and regulatory systems for their impacts on international business
- Analyse the the strengths, weaknesses, opportunities and threats of different legal and political systems for legal risk management
- Participate in the business planning and strategy development processes
Today's Videos
- Connect with us on http://www.youtube.com/finntrack
- Google's Playlists
Teaching and Learning Resources
The Foundations
- Business and Its Legal Environment
- The Court System
- Alternative and Online Dispute Resolution
- Ethics and Business Decision Making
A political system is a system of politics and government. It is usually compared to the legal system, economic system, cultural system, and other social systems. However, this is a very simplified view of a much more complex system of categories involving the views: who should have authority, how religious questions should be handled, and what the government's influence on its people and economy should be.
For further resources on political theory and the mechanics of political system design, see the Governance and Social Development Resource Centre's topic guide on political systems
Dispute Resolution is the process of resolving disputes between parties.
- Methods
- Judicial dispute resolution
- Extrajudicial dispute resolution
- Online dispute resolution
- References
- Further reading
- Alternative dispute resolution
- Conflict resolution
- Conflict resolution research
- Diplomacy
- Party-directed mediation
- Peacekeeping
- Restitution transfer and recoupment
- Restorative justice
- Additional resources
- Arbitrator.com: offers links to Arbitration and Mediation information.
- Peacemakers Trust offers extensive resources in the field of dispute resolution.
- Hong Kong Basic Law
- Law (principle)
- List of business law topics
- The Judiciary, Civil Rights, and the Rule of Law, Egypt
In the law, the Judiciary or Judicial System is the system of courts which administer justice in the name of the sovereign or state, a mechanism for the resolution of disputes.
The term is also used to refer collectively to the judges, magistrates and other adjudicators who form the core of a judiciary, as well as the support personnel who keep the system running smoothly.
Under the doctrine of the separation of powers, the judiciary is the branch of government primarily responsible for interpreting the law.
In common law jurisdictions, case law is created by the courts' interpretations as a result of the principle of stare decisis;
In civil law jurisdictions, courts interpret the law, but are, at least in theory, prohibited from creating law, and thus, still in theory, do not issue rulings more general than the actual case to be judged; in practice, jurisprudence plays the same role as case law;
In socialist law, the primary responsibility for interpreting the law belongs to the legislature.
This difference can be seen by comparing India, United States, France and the People's Republic of China:
1. In Indian democracy, courts have the final say until the constitution itself is amended although a supreme court judgement in 1970's ruled that Parliament doesn't have the authority to change the basic structure of Indian constitution.
2. in the United States government, the Supreme Court is the final authority on the interpretation of the federal Constitution and all statutes and regulations created pursuant to it;
3. in France, the final authority on the interpretation of the law is the Conseil d'État for administrative cases, and the Court of Cassation for civil and criminal cases;
4. and in the PRC, the final authority on the interpretation of the law is the National People's Congress.
5. Other countries such as Argentina have mixed systems that include lower courts, appeals courts, a cassation court (for criminal law) and a
Supreme Court. In this system the Supreme Court is always the final authority but criminal cases have four stages, one more than civil law.
Activities
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The Politics series |
Legal Governance, Risk Management, and Compliance or "LGRC", refers to the complex set of processes, rules, tools and systems used by corporate legal departments to adopt, implement and monitor an integrated approach to business problems. While Governance, Risk Management, and Compliance refers to a generalized set of tools for managing a corporation or company, Legal GRC, or LGRC, refers to a specialized – but similar – set of tools utilized by attorneys, corporate legal departments, general counsel and law firms to govern themselves and their corporations, especially but not exclusively in relation to the law. Other specializations within the realm of governance, risk management and compliance include IT GRC and financial GRC. Within these three realms, there is a great deal of overlap, particularly in large corporations that have legal and IT departments, as well as financial departments.
The Public and International Environment
Tutorials
- Constitutional Law
- Administrative Law
- Criminal Law and Cyber Crimes
- International and Comparative Law
Readings
Constitutional Law is the study of foundational or basic laws of nation states and other political organizations. Constitutions are the framework for government and may limit or define the authority and procedure of political bodies to execute new laws and regulations.
Administrative Law (or regulatory law) is the body of law that arises from the activities of administrative agencies of government. Government agency action can include rulemaking, adjudication, or the enforcement of a specific regulatory agenda. Administrative law is considered a branch of public law. As a body of law, administrative law deals with the decision-making of administrative units of government (e.g., tribunals, boards or commissions) that are part of a national regulatory scheme in such areas as international trade, manufacturing, the environment, taxation, broadcasting, immigration and transport. Administrative law expanded greatly during the twentieth century, as legislative bodies world-wide created more government agencies to regulate the increasingly complex social, economic and political spheres of human interaction.
Criminal Law, sometimes called penal law, refers to the body of law which deals with crimes and their consequences. Criminal acts are considered offences against the whole of a community. Responsibility for crime prevention, for bringing the culprits to justice, and for dealing with convicted offenders is carried out by the state. The police, the criminal courts and prisons are all publicly funded services, though the main focus of criminal law concerns the role of the courts, how they apply criminal statutes passed by legislatures as well as common law, and why they criminalise some forms of behaviour. What purpose overall criminal law serves is hotly contested. Some believe criminal law is about punishing offenders because they deserve it and the victim deserves remunerations. Others feel perhaps with enough punishment people will also be deterred from committing crimes in the first place. Perhaps criminal law is simply about removing people from society, to protect law abiding citizens by incapacitating the offender. Perhaps then, prisons can reform and rehabilitate people to go back into society. And perhaps in some way, offenders can be made to recognise their wrongs in relation to victims and make restitution for the harm. There are many more aims, which are often combined, which produces the mix of systems operating today.
The fundamentals of criminal law are known as the actus reus and the mens rea of the crime. These two Latin terms mean "guilty act" (doing that which is prohibited) and "guilty mind" (i.e. meaning to do it). The traditional view is that moral culpability requires one should have recognised or intended that one was acting wrongly. The loss of one's liberty and the power or the sanctions of the state against the individual are serious issues. Nevertheless, most jurisdictions have as many strict liability offences, which criminalize behaviour without the need to show moral wrongdoing. These are usually regulatory in nature, where the result of breach could have particularly harmful results, for instance drunk driving. Offences can range from ones resulting in fatality, such as murder and manslaughter, to non-deadly offences against people, such as actual or grievous bodily harm, to offences concerning people's property, like criminal damage, theft, robbery or burglary. Importantly, one can still be liable for helping another person's criminal act, conspiring to do something prohibited or merely attempting. Criminal law is concerned with seeking out wrongdoers and preventing wrongdoing, so the law casts a critical eye on all those involved in mischief. Defences exist to some crimes, so that a person who is accused can plead they are insane and did not understand what they were doing, that they were not in control of their bodies, they were intoxicated, mistaken about what they were doing, acted in self defence, acted under duress or out of necessity, or were provoked. These are issues to be raised at trial, for which there are detailed rules of evidence and procedure to be followed. Laws vary in detail between jurisdictions, particularly in relation to the sentences handed down, though the issues are the same and the need for just laws just as great in every place.
International Law can refer to three distinct legal disciplines.
A Brief Primer on International Law With cases and commentary. Nathaniel Burney, 2007. Official United Nations website Official UN website on International Law Official website of the International Court of Justice International Law Research Guide from the Mississippi State University Libraries United Nations Research Guide from the Mississippi State University Libraries |
Public international law, which involves for instance the United Nations, maritime law, international criminal law and the Geneva conventions. Private international law or conflict of laws, which addresses the question of which legal jurisdiction cases may be heard in The law supranational organizations, which concerns at present regional agreements where the special distinguishing quality is that laws of nation states are held inapplicable when conflicting with a supranational legal system.
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Comparative Law is the study of differences and similarities between the law of different countries. More specifically, it involves study of the different legal systems in existence in the world, including the common law, the civil law, socialist law, Islamic law, Hindu law, and Chinese law. It includes the description and analysis of foreign legal systems, even where no explicit comparison is undertaken. The importance of comparative law has increased enormously in the present age of internationalism, economic globalization and democratisation.
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Activities
- Legal Research Exercises on the Web - Constitutional Law
- Legal Research Exercises on the Web - Administrative Law
- Legal Research Exercises on the Web - Criminal Law and Cyber Crimes
- Legal Research Exercises on the Web - International and Comparative Law
The Commercial Environment
Tutorials
- Contract Formation
- Contract Performance, Breach, and Remedies
- Sales, Leases, and E-Contracts
- Torts and Cyber Torts
- Strict Liability and Product Liability
- Intellectual Property and Internet Law
- Creditor-Debtor Relations and Bankruptcy
Readings
A Contract is a legally binding exchange of promises or agreement between parties that the law will enforce. Contract law is based on the Latin phrase pacta sunt servanda (agreements must be kept).[1] Breach of contract is recognised by the law and remedies can be provided. Almost everyone makes contracts everyday. Sometimes written contracts are required, e.g., when buying a house.[2] However the vast majority of contracts can be and are made orally, like buying a law text book, or a coffee at a shop. Contract law can be classified, as is habitual in civil law systems, as part of a general law of obligations (along with tort, unjust enrichment or restitution).
Activities
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Electronic commerce, commonly known as e-commerce, ecommerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. Electronic commerce draws on such technologies as electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices and telephones as well.
A large percentage of electronic commerce is conducted entirely in electronic form for virtual items such as access to premium content on a website, but mostly electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers are now electronically present on the World Wide Web.
Electronic commerce that takes place between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants (private electronic market). Electronic commerce that takes place between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. There is often no intermediary service involved, and the sale or purchase transaction is completed electronically and interactively in real-time. However in some cases, an intermediary may be present in a sale or purchase transaction, or handling recurring or one-time purchase transactions for online games.
Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions.
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The Business Environment
Tutorials
- Sole Proprietorships, Partnerships, and Special Business Organizations
- Limited Liability Companies and Limited Partnerships
- Corporations
Readings
External Environment: introduction to the external environment
A business does not operate in a vacuum. It has to act and react to what happens outside the factory and office walls. These factors that happen outside the business are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies.
The main factor that affects most business is the degree of competition – how fiercely other businesses compete with the products that another business makes.
The other factors that can affect the business are:
Social – how consumers, households and communities behave and their beliefs. For instance, changes in attitude towards health, or a greater number of pensioners in a population.
Legal – the way in which legislation in society affects the business. E.g. changes in employment laws on working hours.
Economic – how the economy affects a business in terms of taxation, government spending, general demand, interest rates, exchange rates and European and global economic factors.
Political – how changes in government policy might affect the business e.g. a decision to subsidise building new houses in an area could be good for a local brick works.
Technological – how the rapid pace of change in production processes and product innovation affect a business.
Ethical – what is regarded as morally right or wrong for a business to do. For instance should it trade with countries which have a poor record on human rights.
Read More ...
Activities
- Legal Research Exercises on the Web - Sole Proprietorships, Partnerships, and Special Business Organizations
- Legal Research Exercises on the Web - Limited Liability Companies and Limited Partnerships
- Legal Research Exercises on the Web - Corporations
The Employment Environment
Tutorials
Readings
Labour Law (American English: labor) or Employment Law is the body of laws, administrative rulings, and precedents which addresses the legal rights of, and restrictions on, workers and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers and employees. In some countries (such as Canada), employment laws related to unionised workplaces are differentiated from those relating to particular individuals. In most countries however, no such distinction is made. The labour movement has been instrumental in the enacting of laws protecting labour rights in the 19th and 20th centuries. |
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Activities
- Legal Research Exercises on the Web - Agency
- Legal Research Exercises on the Web - Employment Relationships
- Legal Research Exercises on the Web - Employment Discrimination
- Legal Research Exercises on the Web - Labour Law
The Regulatory Environment
Tutorials
- Consumer Protection
- Environmental Law
- Land-Use Control and Real Property
- Antitrust and Monopoly
- Antitrust and Restraint of Trade
- Investor Protection and Online Securities Offerings
Readings
Consumer Protection is a form of government regulation which protects the interests of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food. Consumer protection is linked to the idea of consumer rights (that consumers have various rights as consumers), and to the formation of consumer organizations which help consumers make better choices in the marketplace.
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Consumer Complaint Form, U.S. Federal Trade Commission Consumer Education and Research Centre (CERC)(India) Consumer protection information (U.S.) List of Consumer Rights as stated by the Government of India |
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Activities
- Legal Research Exercises on the Web - Consumer Protection
- Legal Research Exercises on the Web - Environmental Law
- Legal Research Exercises on the Web - Land-Use Control and Real Property
- Legal Research Exercises on the Web - Antitrust and Monopoly
- Legal Research Exercises on the Web - Antitrust and Restraint of Trade
- Legal Research Exercises on the Web - Investor Protection and Online Securities Offerings
Recommended Texts
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West's
Legal Environment of Business,
5e
Check
the availability and buy your books from our Bookshop. |
Resources
Dictionaries
- Other sources
- The Australian Institute of Comparative Legal Systems
- Stanford Encyclopedia of Philosophy:
- The shared law in Jurispedia
- The Roman Law Library
- News and links
- Legislation and case law
- WorldLII - World Legal Information Institute
- AsianLII - Asian Legal Information Institute
- AustLII - Australasian Legal Information Institute
- Bailii - British and Irish Legal Information Institute
- NZLII - New Zealand Legal Information Institute
- PacLII - Pacific Islands Legal Information Institute
- LII - Legal Information Institute (US - Cornell Law School)