INTRODUCTION TO LAW

CHAPTER OUTLINE

I. INTRODUCTION
General rules. Law: (1) Blackstone: "Law is a rule of civil conduct, commanding what is right
and prohibiting what is wrong." (2) General definition: governmental rules that (a) govern conduct and (b)
carry a penalty for a violation. Business law: governmental rules that regulate business transactions.
Religious beliefs and social morals are not laws because (1) they are not adopted by the government and (2)
they do not impose a penalty for their violation.
Examples. Law: theft is forbidden by the state; it is punished by imprisonment.
Moral: society embraces belief that one should help the poor; there is no punishment for failing to do so.
Study hint. Laws may change due to society's changing perception of right and
wrong.
II. OBJECTIVES OF LAW
The law establishes rules of conduct so that: (1) society can resolve disputes; (2) individuals and businesses
can know the standards to which they must conform their conduct; and (3) society can effectively function
because there is a stable, yet flexible, framework.

III. ROOTS OF OUR LEGAL SYSTEM

The American legal system was primarily based on the English common law and equity.

IV. THE COMMON LAW

General rule. Common law is the body of judge-made law originating from English
custom.
Example. Courts have generally adopted the rule that minors can set aside
most contracts.
Study hint. Common law is a source of many modern laws, such as contract and
tort law.
V. EQUITY
General rules. Equity is a system of justice intended to provide (1) fairness and (2) judicial
remedies other than money damages. Equity courts decide a case on the basis of what in fairness and good
conscience should be done, not on the basis of fixed legal rules. Equity is carried out through certain
equitable remedies including: (1) specific performance (court order requiring performance of a contract); (2)
restraining orders (court orders temporarily prohibiting certain actions); and (3) injunctions (court orders
permanently prohibiting certain actions).
Limitation. Equitable remedies are available only if there is no adequate remedy at
law, i.e., damages (money a wrongdoer must pay) will not adequately compensate a party for a loss.
Study hint. In most states, every court can apply both legal and equitable
principles.

VI. SOURCES OF LAW

Sources of law are: (1) judicial decisions; (2) constitutions; (3) statutes; and (4) administrative agency rules.