Key Terms
Core tension
Businesses act in self-interest; law is the constraint on that behavior.
Two questions law always asks
1. Who is responsible, and what is their liability?
Law
The system of rules a particular nation or community recognizes as regulating the actions of its members, which it may e
Rule of Law
A system in which laws are public knowledge, are clear in meaning, and apply equally to everyone.
Origin
Europe; based on Roman and Napoleonic law. Also called: code systems.
Precedent
A judicial opinion considered legal authority for future cases involving the same or similar questions of law.
Benefit of precedent
Consistency; disputes can be resolved without litigation because parties can predict outcomes based on past decisions.
Source
Sacred texts of religious traditions. Scope: usually applies to all aspects of life, including social and business relat
Most widely used
Islamic legal system — Sharia (the law) with Fiqh (Islamic jurisprudence).
Most nations
Use religious law to supplement their secular national system, not replace it.
Used by
Monarchies and tribes. Grants specific legal powers to kings, queens, sultans, or tribal leaders as heads of state.
Key problem
The ruler is seen as "above the law" because laws do not apply equally to the ruler and subjects.
Definition
Combination of two or more legal systems within one nation.
Result
Hybrid of common law + civil law + religious law
Social norms
Informal rules governing behavior in groups and societies.