1.1 What Is and Why Study Law?

Why Study Business Law?

The materials in this text are created for future business managers and leaders, shaping a foundation for understanding legal issues that those in these career paths will encounter in the workplace. The overarching goal of any course in Business Law is to develop the critical thinking skills that those in business professions will need to navigate and resolve legal conflicts.

As a basic text in Business Law, these materials will focus mostly on aspects of the law that impact business and commercial transactions. Because many areas of the law touch on business transactions, so, too, will these materials, in terms of topical coverage, in terms of examples, and in terms of questions and exercises. An important outcome in any Business Law course is one of protection. Knowing what is and isn’t lawful, and where to get accurate and credible sources of legal information, is paramount to protecting one’s products, one’s employer, and one’s employees. On the other hand, being unaware of the boundaries of lawful conduct can cause a manager to run afoul of the law, and expose the organization to complaints, lawsuits, and costly damage awards.

With this in mind, look for this course and these materials to provide knowledge and inquiry to aid in shaping the business leader you want to become. In order to start this journey, these materials assume no prior knowledge and start with very basic information about the law and the U.S. legal system.

What is Law?

Black’s Law Dictionary may well be the most popular and widely used legal dictionary in the United States. Black’s Law Dictionary says that law is “a body of rules of action or conduct prescribed by controlling authority, and having binding legal force. That which must be obeyed and followed by citizens subject to sanctions or legal consequence is a law.” Simply put, law is a system of rules that we, as members of society, live by.

To recognize a rule of law, there are several things that you can look for to help distinguish law from some other type of rule in our society. Determine where the rule comes from. Laws will come from a “controlling authority” such as a government body. Ask yourself if you can find the rule written somewhere. Laws that we must abide by are written down since law must be predictable. Finally, figure out if there is a consequence to not following the rule. If there is a consequence or detriment to ignoring or refusing to follow the rule that can be enforced by the government, you are likely dealing with a law.

Most likely, your favorite retail establishment has a return policy. That policy may be enforced without exception at that store, but that policy isn’t a law because it isn’t created by a controlling authority. If you go to another retail shop, the return policy may be different, or there may be no policy, leaving a store clerk to decide on a case by case request for a return. A business establishment that makes policies for its operations would not be making law. Contrast that example with a customer smoking inside your favorite retail establishment. In New Jersey, this would be a violation of a law because the New Jersey Smoke Free Air Act (the “Act”) states that “Smoking is prohibited in an indoor public place or workplace …” Written and voted on in our state legislature, signed by Governor Codey in 2006, subjecting smokers to fines for violating the Act – this is a good example of a law that impacts business.

Functions of the Law

Generally, the law can serve to (1) keep the peace, (2) maintain the status quo, (3) preserve individual rights, (4) protect minorities against majorities, (5) promote social justice, and (6) provide for orderly social change. Some legal systems are able to serve these purposes better than others. Still other legal systems might rebalance or remove one or more of these functions. For instance, there are some nations that do not have as a legal priority the function of preserving individual rights. Outside of the United States, some legal systems may incorporate other functions to promote a particular way of life, such as the maintenance of authoritarian rule, or to incorporate religious doctrine within the rule of law.

1.2 Schools of Legal Thought

There are different schools (or philosophies) concerning what law is all about. Philosophy of law is also called jurisprudence, and the two main schools of thought which are most influential in how people think about the law are legal positivism and natural law.

Legal Positivism: Law as Sovereign Command

As legal philosopher John Austin concisely put it, “Law is the command of a sovereign.” Law is only law, in other words, if it comes from a recognized authority and can be enforced by that authority, or sovereign—such as a king, a president, or a dictator—who has power within a defined area or territory. Positivism is a philosophical movement claiming that science provides the only knowledge precise enough to be worthwhile. But what are we to make of the social phenomena of laws?

We could examine existing statutes—executive orders, regulations, or judicial decisions—in a fairly precise way to find out what the law says. For example, we could look at the posted speed limits on most U.S. highways and conclude that the “correct” or “right” speed is no more than fifty-five miles per hour. Or we could look a little deeper and find out how the written law is usually applied. Doing so, we might conclude that sixty-one miles per hour is generally allowed by most state troopers, but that occasionally someone gets ticketed for doing fifty-seven miles per hour in a fifty-five miles per hour zone. Either approach is empirical, even if not rigorously scientific. The first approach, examining in a precise way what the rule itself says, is sometimes known as the “positivist” school of legal thought. The second approach—which relies on social context and the actual behavior of the principal actors who enforce the law—is akin to the “legal realist” school of thought discussed below.

Positivism has its limits and its critics. New Testament readers may recall that King Herod, fearing the birth of a Messiah, issued a decree that all male children below a certain age be killed. Because it was the command of a sovereign, the decree was carried out (or, in legal jargon, the decree was “executed”). Suppose a group seizes power in a particular place and commands that women cannot attend school and can only be treated medically by women, even if their condition is life-threatening and women doctors are few and far between. Suppose also that this command is carried out, just because it is the law and is enforced with a vengeance. People who live there will undoubtedly question the wisdom, justice, or goodness of such a law, but it is law nonetheless and is generally carried out. To avoid the law’s impact, a citizen would have to flee the country entirely. During the Taliban rule in Afghanistan, from which this example is drawn, many did flee.

The positive-law school of legal thought would recognize the lawmaker’s command as legitimate; questions about the law’s morality or immorality would not be important. In contrast, the natural-law school of legal thought would refuse to recognize the legitimacy of laws that did not conform to natural, universal, or divine law. If a lawmaker issued a command that was in violation of natural law, a citizen would be morally justified in demonstrating civil disobedience. For example, in refusing to give up her seat to a white person, Rosa Parks believed that she was refusing to obey an unjust law.

Natural Law

The natural-law school of thought emphasizes that law should be based on a universal moral order. Natural law was “discovered” by humans through the use of reason and by choosing between that which is good and that which is evil. Here is the definition of natural law according to the Cambridge Dictionary of Philosophy: “Natural law, also called the law of nature in moral and political philosophy, is an objective norm or set of objective norms governing human behavior, similar to the positive laws of a human ruler, but binding on all people alike and usually understood as involving a superhuman legislator.”

Both the U.S. Constitution and the United Nations (UN) Charter have an affinity for the natural-law outlook, as it emphasizes certain objective norms and rights of individuals and nations. The U.Ss Declaration of Independence embodies a natural-law philosophy. The following short extract should provide some sense of the deep beliefs in natural law held by those who signed the document.

Figure 1.1 Excerpt from the Unanimous Declaration of the Thirteen United States of America

The natural-law school has been very influential in American legal thinking. The idea that certain rights, for example, are “unalienable” (as expressed in the Declaration of Independence and in the writings of John Locke) is consistent with this view of the law. Individuals may have “God-given” or “natural” rights that government cannot legitimately take away. Government only by consent of the governed is a natural outgrowth of this view.

Civil disobedience—in the tradition of Henry Thoreau, Mahatma Gandhi, or Martin Luther King Jr.—becomes a matter of morality over “unnatural” law. For example, in his “Letter from Birmingham Jail,” Martin Luther King Jr. claims that obeying an unjust law is not moral and that deliberately disobeying an unjust law is in fact a moral act that expresses “the highest respect for law”: “An individual who breaks a law that conscience tells him is unjust, and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for law.…One who breaks an unjust law must do so openly, lovingly, and with a willingness to accept the penalty.”

Legal positivists, on the other hand, would say that we cannot know with real confidence what “natural” law or “universal” law is. In studying law, we can most effectively learn by just looking at what the written law says, or by examining how it has been applied. In response, natural-law thinkers would argue that if we care about justice, every law and every legal system must be held accountable to some higher standard, however hard that may be to define.

It is easier to know what the law “is” than what the law “should be.” Equal employment laws, for example, have specific statutes, rules and decisions about racial discrimination. There are always difficult issues of interpretation and decision, which is why courts will resolve differing views. But how can we know the more fundamental “ought” or “should” of human equality? For example, how do we know that “all men are created equal” (from the Declaration of Independence)? Setting aside for the moment questions about the equality of women, or that of slaves, who were not counted as men with equal rights at the time of the declaration—can the statement be empirically proven, or is it simply a matter of a priori knowledge? (A priori means “existing in the mind prior to and independent of experience.”) Or is the statement about equality a matter of faith or belief, not really provable either scientifically or rationally? The dialogue between natural-law theorists and more empirically oriented theories of “what law is” will raise similar questions. In this book, we will focus mostly on the law as it is, but not without also raising questions about what it could or should be.

Other Schools of Legal Thought

The historical school of thought believes that societies should base their legal decisions of today on the examples of the past. Precedent would be more important than moral arguments.

The legal realist school flourished in the 1920s and 1930s as a reaction to the historical school. Legal realists pointed out that because life and society are constantly changing, certain laws and doctrines have to be altered or modernized in order to remain current. The social context of law was more important to legal realists than the formal application of precedent to current or future legal disputes. Rather than suppose that judges inevitably acted objectively in applying an existing rule to a set of facts, legal realists observed that judges had their own beliefs, operated in a social context, and would give legal decisions based on their beliefs and their own social context.

The legal realist view influenced the emergence of the critical legal studies (CLS) school of thought. The “Crits” believe that the social order (and the law) is dominated by those with power, wealth, and influence. Some Crits are clearly influenced by the economist Karl Marx and also by distributive justice theory. The CLS school believes that the wealthy have historically oppressed or exploited those with less wealth and have maintained social control through law. In so doing, the wealthy have perpetuated an unjust distribution of both rights and goods in society. Law is politics and is thus not neutral or value-free. The CLS movement would use the law to overturn the hierarchical structures of domination in the modern society.

Related to the CLS school, yet different, is the ecofeminist school of legal thought. This school emphasizes—and would modify—the long-standing domination of men over both women and the rest of the natural world. Ecofeminists would say that the same social mentality that leads to exploitation of women is at the root of man’s exploitation and degradation of the natural environment. They would say that male ownership of land has led to a “dominator culture,” in which man is not so much a steward of the existing environment or those “subordinate” to him, but is charged with making all that he controls economically “productive.” Wives, children, land, and animals are valued as economic resources, and legal systems (until the nineteenth century) largely conferred rights only to men with land. Ecofeminists would say that even with increasing civil and political rights for women (such as the right to vote) and with some nations’ recognizing the rights of children and animals and caring for the environment, the legacy of the past for most nations still confirms the preeminence of “man” and his dominance of both women and nature.

1.3 Basic Concepts and Categories of U.S. Positive Law

Most of what we discuss in this book is positive law—U.S. positive law in particular. However, we will also consider the laws and legal systems of other nations. But first it will be useful to cover some basic concepts and distinctions.

Law: The Moral Minimums in a Democratic Society

The law does not correct (or claim to correct) every wrong that occurs in society. At a minimum, it aims to curb the worst kind of wrongs, the kinds of wrongs that violate what might be called the “moral minimums” that a community demands of its members. These include not only violations of criminal law but also torts and broken promises. Thus, it may be wrong to refuse to return a phone call from a friend, but that wrong will not result in a viable lawsuit against you. But if a phone (or the Internet) is used to libel or slander someone, a tort has been committed, and the law may allow the defamed person to be compensated.

There is a strong association between what we generally think of as ethical behavior and what the laws require and provide. For example, contract law upholds society’s sense that promises—in general—should be kept. Promise-breaking is seen as unethical. The law provides remedies for broken promises (in breach of contract cases) but not for all broken promises; some excuses are accepted when it would be reasonable to do so. For tort law, harming others is considered unethical. If people are not restrained by law from harming one another, orderly society would be undone, leading to anarchy. Tort law provides for compensation when serious injuries or harms occur. As for property law issues, we generally believe that private ownership of property is socially useful and generally desirable, and it is generally protected (with some exceptions) by laws. You can’t throw a party at my house without my permission, but my right to do whatever I want on my own property may be limited by law; I can’t, without the public’s permission, operate an incinerator on my property and burn heavy metals, as toxic ash may be deposited throughout the neighborhood.

Law and Politics

In the United States, legislators, judges, administrative agencies, governors, and presidents make law, with substantial input from corporations, lobbyists, and a diverse group of nongovernment organizations (NGOs) such as the American Petroleum Institute, the Sierra Club, and the National Rifle Association. In the fifty states, judges are often appointed by governors or elected by the people. The process of electing state judges has become more and more politicized in the past fifteen years, with growing campaign contributions from those who would seek to seat judges with similar political leanings.

In the federal system, judges are appointed by an elected official (the president) and confirmed by other elected officials (the Senate). If the president is from one party and the other party holds a majority of Senate seats, political conflicts may come up during the judges’ confirmation processes. Such a division has been fairly frequent over the past fifty years.

In most nation-states (as countries are called in international law), knowing who has power to make and enforce the laws is a matter of knowing who has political power; in many places, the people or groups that have military power can also command political power to make and enforce the laws. Revolutions are difficult and contentious, but each year there are revolts against existing political-legal authority; an aspiration for democratic rule, or greater “rights” for citizens, is a recurring theme in politics and law.

The Common Law: Property, Torts, and Contracts

Even before legislatures met to make rules for society, disputes happened and judges decided them. In England, judges began writing down the facts of a case and the reasons for their decision. They often resorted to deciding cases on the basis of prior written decisions. In relying on those prior decisions, the judge would reason that since a current case was pretty much like a prior case, it ought to be decided the same way. This is essentially reasoning by analogy. Thus, the use of precedent in common-law cases came into being, and a doctrine of stare decisis (pronounced STAR-ay-de-SIGH-sus) became accepted in English courts. Stare decisis, from Latin, means, “let the decision stand.”

Most judicial decisions that don’t apply legislative acts (known as statutes) will involve one of three areas of law—property, contract, or tort. Property law deals with the rights and duties of those who can legally own land (real property), how that ownership can be legally confirmed and protected, how property can be bought and sold, what the rights of tenants (renters) are, and what the various kinds of “estates” in land are (e.g., fee simple, life estate, future interest, easements, or rights of way). Contract law deals with what kinds of promises courts should enforce. For example, should courts enforce a contract where one of the parties was intoxicated, underage, or insane? Should courts enforce a contract where one of the parties seemed to have an unfair advantage? What kind of contracts would have to be in writing to be enforced by courts? Tort law deals with the types of cases that involve some kind of harm and or injury between the plaintiff and the defendant when no contract exists. Thus, if you are libeled or a competitor lies about your product, your remedy would be in tort, not contract.

The thirteen original colonies had been using English common law for many years, and they continued to do so after independence from England. Early cases from the first states are full of references to already-decided English cases. As years went by, many precedents were established by U.S. state courts, so that today a judicial opinion that refers to a seventeenth- or eighteenth-century English common-law case is quite rare.

Courts in one state may look to common-law decisions from the courts of other states where the reasoning in a similar case is persuasive. This will happen in “cases of first impression,” a fact pattern or situation that the courts in one state have never seen before. But if the supreme court in a particular state has already ruled on a certain kind of case, lower courts in that state will always follow the rule set forth by their highest court.

State Courts and the Domain of State Law

In the early years of our nation, federal courts were not as active or important as state courts. States had jurisdiction (the power to make and enforce laws) over the most important aspects of business life. The power of state law has historically included governing the following kinds of issues and claims:

• Contracts, including sales, commercial paper, letters of credit, and secured transactions
• Torts
• Property, including real property, bailments of personal property (such as when you check your coat at a theater or leave your clothes with a dry cleaner), trademarks, copyrights, and the estates of decedents (dead people)
• Corporations
• Partnerships
• Domestic matters, including marriage, divorce, custody, adoption, and visitation
• Securities law
• Environmental law
• Agency law, governing the relationship between principals and their agents.
• Banking
• Insurance

Over the past eighty years, however, federal law has become increasingly important in many of these areas, including banking, securities, and environmental law.

Civil versus Criminal Cases

The distinction between criminal law and civil law in the U.S. legal system ensures that different types of disputes and offenses are handled appropriately. As related to laws that pertain to the operation of business, this text focuses principally on civil law. That said, criminal cases are certainly of interest to business, especially because it is possible for a business organization to break a criminal law. At the same time, it is important to understand the differences between a criminal case and a civil matter – the type that we will be studying here.

A criminal case involves a governmental decision—whether state or federal—to prosecute someone (named as a defendant) for violating society’s criminal laws. The law establishes a moral minimum and does so especially in the area of criminal laws; if you break a criminal law, you can lose your freedom (in jail) or your life (if you are convicted of a capital offense). In a civil action, you would not be sent to prison; in the worst case, you can lose assets (usually property or money), such as when Ford Motor Company lost a personal injury case and the judge awarded $295 million to the plaintiffs or when Pennzoil won a $10.54 billion verdict against Texaco.

Some of the basic differences between civil law and criminal law cases are illustrated in the table below.

Figure 1.2 Differences between Civil Cases and Criminal Cases

	Civil Cases	Criminal Cases
Parties	Plaintiff brings case; defendant must answer or lose by default	Prosecutor brings case; defendant may remain silent
Proof	Preponderance of evidence	Beyond a reasonable doubt
Reasons	To settle disputes peacefully, usually between private parties	To maintain order in society To punish the most blameworthy To deter serious wrongdoing
Remedies	Money damages (legal remedy) Injunctions (equitable remedy) Specific performance (equity)	Fines, jail and forfeitures

You can often tell a civil case from a criminal case by looking at the caption of a case going to trial, because the caption of the case will show who the parties are. If the government appears first in the caption of the case (e.g., U.S. v. Lieberman), it is likely that the United States is prosecuting a criminal case on behalf of the people. The same is true of cases prosecuted by state district attorneys (e.g., New Jersey v. Seidel). That said, this is not a foolproof formula as governments can also bring civil actions – say, for example, to collect debts from or settle disputes with individuals, corporations, or other governments. Thus U.S. v. Mayer might be a collection action for unpaid taxes, or a criminal case where the federal government is prosecuting the Defendant for committing a crime. Governments can be sued as well. People occasionally sue their state or federal government, but they can only get a trial if the government waives its sovereign immunity and allows such suits. Warner v. U.S., for example, could be a claim for a tax refund wrongfully withheld or for damage caused to the Warner residence by a sonic boom from a U.S. Air Force jet flying overhead.

Substance versus Procedure

Many rules and regulations in law are substantive, and others are procedural. We are used to seeing laws as substantive; that is, there is some rule of conduct or behavior that is called for or some action that is proscribed (prohibited). The substantive rules tell us how to act with one another and with the government. For example, all of the following are substantive rules of law and provide a kind of command or direction to citizens:

• Drive not more than fifty-five miles per hour where that speed limit is posted.
• Do not conspire to fix prices with competitors in the U.S. market.
• Do not falsely represent the curative effects of your over-the-counter herbal remedy.
• Do not drive your motor vehicle through an intersection while a red traffic signal faces the direction you are coming from.
• Do not discriminate against job applicants or employees on the basis of their race, sex, religion, or national origin.
• Do not discharge certain pollutants into the river without first getting a discharge permit.

In contrast, procedural laws are the rules of courts and administrative agencies. They tell us how to proceed if there is a substantive-law problem. For example, if you drive fifty-three miles per hour in a forty mile-per-hour zone on Main Street on a Saturday night and get a ticket, you have broken a substantive rule of law (the posted speed limit). Just how and what gets decided in court is a matter of procedural law. Is the police officer’s word final, or do you get your say before a judge? If so, who goes first, you or the officer? Do you have the right to be represented by legal counsel? Does the hearing or trial have to take place within a certain time period? A week? A month? How long can the state take to bring its case? What kinds of evidence will be relevant? Radar? (Does it matter what kind of training the officer has had on the radar device? Whether the radar device had been tested adequately?) The officer’s personal observation? (What kind of training has he had, how is he qualified to judge the speed of a car, and other questions arise.) What if you unwisely bragged to a friend at a party recently that you went a hundred miles an hour on Main Street five years ago at half past three on a Tuesday morning? (If the prosecutor knows of this and the “friend” is willing to testify, is it relevant to the charge of fifty-three in a forty-mile-per-hour zone?)

In the United States, all state procedural laws must be fair, since the due process clause of the Fourteenth Amendment directs that no state shall deprive any citizen of “life, liberty, or property,” without due process of law. (The $200 fine plus court costs is designed to deprive you of property, that is, money, if you violate the speed limit.) Federal laws must also be fair, because the Fifth Amendment to the U.S. Constitution has the exact same due process language as the Fourteenth Amendment. This suggests that some laws are more powerful or important than others, which is true. The next section looks at various types of positive law and their relative importance.

1.4 Sources of Law and Their Priority

Sources of Law

In the United States today, there are numerous sources of law. The main ones are (1) constitutions—both state and federal, (2) statutes, (3) agency rules and regulations, and (4) judicial decisions. In addition, chief executives (the president and the various governors) can issue executive orders that have the effect of law.

In addition to the above sources of United States laws, in international legal systems sources of law include treaties (agreements between states or countries) and what is known as customary international law (usually consisting of judicial decisions from national court systems where parties from two or more nations are in a dispute).

There are many sources of law, and it is possible for laws to sometimes conflict. For example, a state law may conflict with a federal law, or a federal law might be contrary to an international obligation. One nation’s law may provide one substantive rule, while another nation’s law may provide a different, somewhat contrary rule to apply. Not all laws, in other words, are created equal. To understand which laws have priority, it is essential to understand the relationships between the various kinds of law.

Constitutions

Constitutions are the foundation for a state or nation’s other laws, providing the country’s legislative, executive, and judicial framework. Among the nations of the world, the United States has the oldest constitution still in use. It is difficult to amend, which is why there have only been seventeen amendments following the first ten in 1789; two-thirds of the House and Senate must pass amendments, and three-fourths of the states must approve them.

The nation’s states also have constitutions. Along with providing for legislative, executive, and judicial functions, state constitutions prescribe various rights of citizens. These rights may be different from, and in addition to, rights granted by the U.S. Constitution. For example, the New Jersey Constitution serves as the foundational legal document that outlines the fundamental principles and structure of governance for the state of New Jersey. The current state of New Jersey Constitution is relatively young, adopted in 1947, and is the third Constitution that has been adopted in New Jersey. Like the federal Constitution, the state Constitution establishes the framework for the executive, legislative, and judicial branches, delineating their respective powers and responsibilities. The Constitution also includes state-specific provisions, and can offer the citizens of the state of New Jersey enhanced protection from its federal counterpart. As a living document, the New Jersey Constitution has been amended over time to address evolving societal needs and values.

Statutes

In Washington, DC, the federal legislature is known as Congress and has both a House of Representatives and a Senate. The House is composed of representatives elected every two years from various districts in each state. These districts are established by Congress according to population as determined every ten years by the census, a process required by the Constitution. Each state has at least one district; the most populous state (California) has fifty-two districts. Representation in the House of Representatives is therefore directly proportioned to population. In the Senate, there are two senators from each state, regardless of the state’s population. Thus, Delaware has two senators and California has two senators, even though California is much larger and has far more people.

Each Congressional legislative body has committees for various purposes, including to discharge the lawmaking function of Congress. In these committees, proposed bills are discussed, hearings are sometimes held, and bills are either reported out (brought to the floor for a vote) or killed in committee. If a Bill is reported out to the full legislative body, it may be passed by majority vote. Because of the procedural differences between the House and the Senate, bills that have the same language when proposed in both houses may become different after approval by each body. If the House passes a different version of a Bill than the Senate passes, a conference committee will then be held to try to match the two versions. If the House and Senate can agree on identical language, the reconciled Bill will be sent to the president for signature or veto. The Constitution prescribes that the president will have veto power over any legislation. But the two bodies can override a presidential veto with a two-thirds vote in each chamber.

If the President signs the Bill, the Bill then becomes a Statute, part of federal law. The statutes of Congress are collected in codified form in the U.S. Code. The code is available online at http://uscode.house.gov.

State legislatures also enact statutes. The purpose of a state statute is to establish laws that govern various aspects of life within a specific state’s jurisdiction. State statutes are legislative enactments passed by the state’s legislative bodies (sometimes called assemblies) and signed into law by the governor. The process of passing a statute in New Jersey shares some similarities with the federal legislative process but follows the specific process for legislative action set out in the state Constitution. Like the federal process, the state process of creating and amending, or changing, laws is filled with political negotiation and compromise.

On a more local level, counties and municipal corporations or townships may be authorized under a state’s constitution to create or adopt ordinances, which are like statutes, but at the local level. The purpose of an ordinance is to regulate matters within the local government’s jurisdiction. Ordinances are typically used to address local issues, policies, and regulations that are not covered by state or federal law. Examples of ordinances include local building codes, zoning laws, and misdemeanors or infractions such as skateboarding or jaywalking. They have the force of law within the geographic boundaries of the jurisdiction that passed them, and no force outside of those boundaries. For example, the Borough of Paramus New Jersey has laws prohibiting contracting on Sunday which require most retail establishments to be closed with the Borough (we’ll study this more later in this course). Although no other animal is specifically prohibited, if you live in the Borough of Catasaqua, Pennsylvania, it is illegal to keep a pig, hog, or swine.

Treaties

In the United States, a treaty is a formal and legally binding agreement between the U.S. government and one or more foreign governments or international organizations. Treaties require approval from the U.S. Senate before they can be ratified and become legally effective.

When the Senate ratifies a treaty, it becomes part of federal law, with the same weight and effect as a statute passed by the entire Congress.

Rules and Regulations by Administrative Agencies

Although the U.S. Constitution does not expressly provide for administrative agencies, Congress has found it necessary and useful to create government agencies to administer various laws, and the U.S. Supreme Court has upheld this delegation of power. Using a statute called an enabling act or enabling law, Congress can therefore grant authority to an administrative agency, to carry out specific actions or functions. Typically, the enabling statute defines the scope of authority, responsibilities, and limitations of the agency it empowers.

Examples of administrative agencies would include the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), and the Federal Trade Commission (FTC). Congress does not have unlimited authority to delegate its lawmaking powers to an agency. Instead, it must delegate its authority with some guidelines for the agency and cannot altogether avoid its constitutional responsibilities.

In order to carry out the functions delegated to them, administrative agencies issue rules and regulations which are directives by that agency. A rule created by an agency is a general statement that guides the behavior, actions, or conduct of individuals, organizations, or entities subject to the agency’s jurisdiction. Rules are a form of administrative law that helps agencies fulfill their regulatory responsibilities. Rules are typically more specific and detailed than statutes and provide guidance on how to comply with legal requirements. Agencies propose rules in the Federal Register, published each working day of the year. Rules that are formally adopted are published in the Code of Federal Regulations, or CFR, available online at http://www.access.gpo.gov/nara/cfr/cfr-table-search.html.

A regulation is a broader term that encompasses a range of directives issued by administrative agencies. Regulations can include rules, standards, policies, procedures and other types of requirements established by agencies to implement and enforce statutes. Regulations often have the force of law and carry legal consequences for non-compliance. They are a crucial tool for administrative agencies to carry out their statutory duties effectively.

Judicial Decisions: The Common Law

The role of the courts in making law is a central aspect of the judicial system within a legal framework. While the primary responsibility for creating laws lies with the legislative branch of government, courts also play a significant role in shaping and interpreting the law through their decisions and rulings. This process is often referred to as “judge-made law” or “common law.”

In the United States legal system, courts are called upon to make decisions that require the interpretation of statutes, regulations, treaties, or even the Constitution. In addition to making these interpretations when necessary, courts also decide cases where there is no statutory or other codified law or regulation to be interpreted. These decisions make up what is called the “common law.” For example, a state court deciding what kinds of witnesses are required for a valid will in the absence of a rule (from a statute) is making common law.

United States law comes primarily from the tradition of English common law. By the time England’s American colonies revolted in 1776, English common-law traditions were well established in the colonial courts. English common law was a system that gave written judicial decisions the force of law throughout the country. Thus, if an English court delivered an opinion as to what constituted the common-law crime of burglary, other courts would stick to that decision, so that a common body of law developed throughout the country. Common law is essentially shorthand for the notion that a common body of law, based on past written decisions, is desirable and necessary.

In England and in the laws of the original thirteen states, common-law decisions defined crimes such as arson, burglary, homicide, and robbery. As time went on, U.S. state legislatures either adopted or modified common-law definitions of most crimes by putting them in the form of codes or statutes. This legislative ability—to modify or change common law into judicial law—points to an important phenomenon: the priority of statutory law over common law. As we will see in the next section, constitutional law will have priority over statutory law.

Priority of Laws