Part One:
Introduction to Law and Ethics
CONTENTS
Chapter 1 Introduction to Law
Chapter 2 Business Ethics
ETHICS QUESTIONS RAISED IN THIS PART
1. Are all laws moral? Should all laws be moral? How should morality be determined?
2. Are laws always just?
3. Which is more important, morality or justice?
4. Why is there a difference between the treatment of cases brought under civil law and those brought under criminal
law? Should there be a difference?
ACTIVITIES AND RESEARCH PROBLEMS
1. Have students draw a diagram of two overlapping circles, with one circle labeled “Moral” and the other labeled
“Legal.” The area of overlap would be both moral and legal. Then list several controversial topics of current
interest (e.g., abortion, genetic engineering, marijuana smoking, etc.) for students to place within an area of the
diagram (or outside the circles if it is neither moral or legal). Can any of these issues be absolutely determined to
be moral or immoral?
2. Have any laws in our country’s history been repealed on the basis of their immorality? Are there any laws still in
existence that should be repealed? Have students discuss their opinions.
3. How does American common law differ from English common law?
4. Have students write a fictitious case involving questionable ethics in a business decision.
, Chapter 1
INTRODUCTION TO LAW
A. Nature of Law C. Sources of Law
1. Definition of Law 1. Constitutional Law
2. Functions of Law 2. Judicial Law
3. Law and Morals a. Common Law
4. Law and Justice b. Equity
B. Classification of Law c. Restatements of Law
1. Substantive and Procedural Law 3. Legislative Law
2. Public and Private Law a. Treaties
3. Civil and Criminal Law b. Executive Orders
4. Administrative Law
D. Legal Analysis
Cases in This Chapter
None
TEACHING NOTES
Law concerns the relations between and among individuals as those relations affect social and economic order.
It affects the rights and duties of every citizen and many non-citizens.
Law is both prohibitory, meaning certain acts must not be committed, and mandatory, meaning certain acts
must be done, sometimes in a set way. Additionally, law is permissive: certain acts are allowed, but not
required by the law.
A. NATURE OF LAW
The law is a continuously changing process of developing a workable set of rules that balance the individual
and group rights of an always-changing society.
Definition of Law
Legal scholars have defined law in various ways, including:
• “predictions of the way that a court will decide specific legal questions”
• “a rule of civil conduct prescribed by the supreme power in a state, commanding what is right, and
prohibiting what is wrong”
NOTE: See textbook for a description of the law’s essential characteristics, as defined by Roscoe Pound, a distinguished American
jurist and former dean of the Harvard Law School.
, *** Chapter Outcome ***
Identify and describe the basic functions of law.
Functions of Law
The functions of law are to maintain stability in the social, political, and economic system through (1) dispute
resolution, (2) protection of property, and (3) the preservation of the state while at the same time permitting
ordered change.
1. Disputes are inevitable in a complex society and may involve criminal or noncriminal matters. Law
provides rules to resolve disputes and avoid personal revenge.
2. Law protects ownership of property and allows for agreements (contracts) to exchange property. (This
text deals with many aspects of this including contracts, sales, commercial paper, and business
associations.)
3. Law preserves the state. It ensures that changes are result of elections, legislation, and referenda rather
than revolution, sedition, and rebellion.
*** Chapter Outcome ***
Distinguish between law and justice. Distinguish between law and morals.
Law and Morals
Though law is affected by morals, law and morality are not the same. Some actions have no moral implications
but have legal sanctions, whereas other actions have no legal sanctions but do have moral implications. Some
actions have both moral impact and legal sanction.
NOTE: See Figure 1-1: Law and Morals.
Law and Justice
Law and justice are distinct but interrelated concepts.
• Justice may be defined as “the fair, equitable, and impartial treatment of the competing interests and
desires of individuals and groups, with due regard for the common good.”
• Justice depends on the law, but the law does not guarantee justice, since laws can be unjust. (Think
back to “legal” slavery and the “legal” actions of Nazi Germany.)
B. CLASSIFICATION OF LAW
Because the law is vast, it is helpful to organize it into categories such as: (1) substantive and procedural, (2)
public and private, and (3) civil and criminal.
Basic to understanding these classifications are the terms right and duty. A right is the ability of a person, with
the aid of the law, to require another person to perform or to refrain from performing a certain act. A duty is
the obligation the law imposes upon a person to perform or to refrain from performing a certain act. Duty and
right exist together: a person cannot have a right without some other person (or all persons) having the
corresponding duty.
NOTE: See textbook Figure 1-2, which outlines the classifications of law.
*** Chapter Outcome ***
, Distinguish between (a) substantive and procedural law, (b) public law and private law,
and (c) civil law and criminal law.
Substantive and Procedural Law
Substantive law creates, defines, and regulates legal rights and duties. Procedural law sets forth rules for
enforcing those rights that are created by the substantive law.
Public and Private Law
Public law is the branch of substantive law that deals with the government's rights and powers and its
relationship to individuals or groups.
Private law is that part of substantive law governing individuals and legal entities (such as corporations) in their
relationships with one another.
Introduction to Law and Ethics
CONTENTS
Chapter 1 Introduction to Law
Chapter 2 Business Ethics
ETHICS QUESTIONS RAISED IN THIS PART
1. Are all laws moral? Should all laws be moral? How should morality be determined?
2. Are laws always just?
3. Which is more important, morality or justice?
4. Why is there a difference between the treatment of cases brought under civil law and those brought under criminal
law? Should there be a difference?
ACTIVITIES AND RESEARCH PROBLEMS
1. Have students draw a diagram of two overlapping circles, with one circle labeled “Moral” and the other labeled
“Legal.” The area of overlap would be both moral and legal. Then list several controversial topics of current
interest (e.g., abortion, genetic engineering, marijuana smoking, etc.) for students to place within an area of the
diagram (or outside the circles if it is neither moral or legal). Can any of these issues be absolutely determined to
be moral or immoral?
2. Have any laws in our country’s history been repealed on the basis of their immorality? Are there any laws still in
existence that should be repealed? Have students discuss their opinions.
3. How does American common law differ from English common law?
4. Have students write a fictitious case involving questionable ethics in a business decision.
, Chapter 1
INTRODUCTION TO LAW
A. Nature of Law C. Sources of Law
1. Definition of Law 1. Constitutional Law
2. Functions of Law 2. Judicial Law
3. Law and Morals a. Common Law
4. Law and Justice b. Equity
B. Classification of Law c. Restatements of Law
1. Substantive and Procedural Law 3. Legislative Law
2. Public and Private Law a. Treaties
3. Civil and Criminal Law b. Executive Orders
4. Administrative Law
D. Legal Analysis
Cases in This Chapter
None
TEACHING NOTES
Law concerns the relations between and among individuals as those relations affect social and economic order.
It affects the rights and duties of every citizen and many non-citizens.
Law is both prohibitory, meaning certain acts must not be committed, and mandatory, meaning certain acts
must be done, sometimes in a set way. Additionally, law is permissive: certain acts are allowed, but not
required by the law.
A. NATURE OF LAW
The law is a continuously changing process of developing a workable set of rules that balance the individual
and group rights of an always-changing society.
Definition of Law
Legal scholars have defined law in various ways, including:
• “predictions of the way that a court will decide specific legal questions”
• “a rule of civil conduct prescribed by the supreme power in a state, commanding what is right, and
prohibiting what is wrong”
NOTE: See textbook for a description of the law’s essential characteristics, as defined by Roscoe Pound, a distinguished American
jurist and former dean of the Harvard Law School.
, *** Chapter Outcome ***
Identify and describe the basic functions of law.
Functions of Law
The functions of law are to maintain stability in the social, political, and economic system through (1) dispute
resolution, (2) protection of property, and (3) the preservation of the state while at the same time permitting
ordered change.
1. Disputes are inevitable in a complex society and may involve criminal or noncriminal matters. Law
provides rules to resolve disputes and avoid personal revenge.
2. Law protects ownership of property and allows for agreements (contracts) to exchange property. (This
text deals with many aspects of this including contracts, sales, commercial paper, and business
associations.)
3. Law preserves the state. It ensures that changes are result of elections, legislation, and referenda rather
than revolution, sedition, and rebellion.
*** Chapter Outcome ***
Distinguish between law and justice. Distinguish between law and morals.
Law and Morals
Though law is affected by morals, law and morality are not the same. Some actions have no moral implications
but have legal sanctions, whereas other actions have no legal sanctions but do have moral implications. Some
actions have both moral impact and legal sanction.
NOTE: See Figure 1-1: Law and Morals.
Law and Justice
Law and justice are distinct but interrelated concepts.
• Justice may be defined as “the fair, equitable, and impartial treatment of the competing interests and
desires of individuals and groups, with due regard for the common good.”
• Justice depends on the law, but the law does not guarantee justice, since laws can be unjust. (Think
back to “legal” slavery and the “legal” actions of Nazi Germany.)
B. CLASSIFICATION OF LAW
Because the law is vast, it is helpful to organize it into categories such as: (1) substantive and procedural, (2)
public and private, and (3) civil and criminal.
Basic to understanding these classifications are the terms right and duty. A right is the ability of a person, with
the aid of the law, to require another person to perform or to refrain from performing a certain act. A duty is
the obligation the law imposes upon a person to perform or to refrain from performing a certain act. Duty and
right exist together: a person cannot have a right without some other person (or all persons) having the
corresponding duty.
NOTE: See textbook Figure 1-2, which outlines the classifications of law.
*** Chapter Outcome ***
, Distinguish between (a) substantive and procedural law, (b) public law and private law,
and (c) civil law and criminal law.
Substantive and Procedural Law
Substantive law creates, defines, and regulates legal rights and duties. Procedural law sets forth rules for
enforcing those rights that are created by the substantive law.
Public and Private Law
Public law is the branch of substantive law that deals with the government's rights and powers and its
relationship to individuals or groups.
Private law is that part of substantive law governing individuals and legal entities (such as corporations) in their
relationships with one another.
