Introduction. The study of law is the study of people, a civilization, as it has existed

The study of law is the study of people, a civilization, as it has existed

and as it currently exists. As a discipline, the law embodies the history,

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values, and culture of a society. It is a series of concepts and rules that

shifts to meet social changes. The productive activity of a society – its

business practice – is one of the major facets of this study. The legal en-

vironment of business, therefore, involves the legal system, its principal

actors, and the major substantive rules of law that influence economic

activity.

Law is not separate from the culture, history, and times in which it

exists. The study of law is not limited to learning legal rules. Under-

standing the legal environment of business, therefore, requires a broad

understanding of the people and basic trends that influence the relation-

ship between law and business.

Business managers come into contact with law on a daily basis. They

are regularly confronted with contracts and the need to comply with

government regulations. At times, they may come into conflict in their

business relations, necessitating legal help. This legal involvement brings

managers in touch with legal jargon and lawyers. To gain an apprecia-

tion of law and to be effective as a manager, it is necessary to have some

understanding of the legal system – the purpose of law, sources of law,

classification of law, the interplay of law and morality, and the place and

function of lawyers.

Law impacts business decision making. Many recent surveys of busi-

ness executives disclose that a chief concern for the coming decades is

the legal environment within which business operates. From contracts

to products liability to international marketing and new technologies to

our environment, the law is the overriding factor in the businessperson’s

mind.

All the definitions of law imply that law regulates human conduct

and that through courts it resolves controversies. The goal of law is jus-

tice, but law and justice are not synonymous, just as legal justice and so-

cial justice are not synonymous. Justice has been defined as that which is

founded in equity, honesty, and righteousness. It is the attempt of honor-

able persons to do that which is fair. Justice is the purpose of government

and civil society. Apparently, the achievement of justice depends upon

the concept of right and wrong in the society involved.

Social justice recognizes more rights and duties than does legal jus-

tice, although the trend of the law is toward equating these concepts.

Perfect justice would require that all persons discharge all their obliga-

tions and duties so that all other persons may enjoy all their rights and

privileges. Our society through law determines which rights and duties

will be protected and strives through its judicial system for perfect jus-

tice. Of course, the law is incapable of perfect justice because it is in the

hands of imperfect people and operates with imperfect procedures. As

law approaches perfect justice, legal and social justice tend to merge.

The law has two basic functions in the conduct of business. First, the

law provides the information needed to educate business people. The

law’s major influence on business decisions is alternative courses of ac-

tion. The second basic function of the law is to resolve controversies and

to impose sanctions for conduct contrary to law. Such conduct may be

illegal in the sense that some law or legal principle is violated or it may

be illegal in the sense that a party did not perform as agreed or as the law

may require.

Text 2

Read the text. Be ready to answer the following questions:

1. What is law? 2. What have rules of conduct evolved to maintain?

3. What do these rules consist of in more primitive societies? 4. When

do rules of conduct become more formalized? 5. What is a legal system?

6. What does a legal system consist of? 7. What functions do the courts

serve? 8. What rules do the courts apply in performing these functions?