Legal Business Environment Legal Environment Term Paper

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Fixtures are considered part of personal property, but in cases where they become a part of real property and cannot be removed, they are considered part of real property. Building on a plot of land is a fixture that is considered part of real property, similarly things that are fixed with the real property and can not be removed without damage can be considered part of real property. In case of sale of real property, it is appropriate to define the items of personal property that will be included with the real property and which will not be included.

The law does not recognize ownership achieved by deceitful means such as theft, fraud or force. Property may be acquired through:

Exchange: In exchange for money or other property

Possession: Being the first owner of previously un-owned property

Confusion: When ones property is mixed with someone else's property by mistake or confusion the partial owner acquires proportional share

Accession: If owner upgrades his property to something new he remains the owner of the new property.

Gift: When someone acquires property from someone else without exchange of resources but with acknowledged transfer of ownership such as by will, or by physical transfer to the person receiving the gift.

Type of ownership of property can be freehold (free to own, sell, and transfer; in effect having all rights), leasehold, life estate (for persons life time use only), joint ownership or joint tenancy. The owner obtains a 'title' of ownership which can be used or transferred according to the type of ownership [Reed et al., 2005]. Owners can use their property in any way they like as long as it does not interfere with common good, cause nuisance to others or is against the zoning regulation which regulate the type of use a property in a zone can be used for, for example a property in residential zone can not be used for industrial purposes.

Another legal right "Eminent Right" allows the government to acquire property with due compensation for use for common public good such as for building roads etc.

Intangible Property Rights

Intellectual property, patents, copyrights, trademarks, trade secrets and manufacturing processes are considered intangible property and are covered under the legal protection applicable to them. The law allows exclusive use of these intangible properties for varying periods as permitted under the law.

Impact of Tort and Criminal Law on Business operations

Tort Law protects and compensates owners through civil lawsuits when their resources including those they have in themselves are wrongly harmed by the action of others. The laws of Torts include protection against assault and battery, slander and libel, invasion of privacy, interference with contracts, negligence and product liability. The punitive damages for violating the laws of Torts include [Reed et al., 2005]:

Persons and businesses convicted of criminal conduct may be fined, imprisoned, or both.

A party that breaches a contract may be required to pay as compensatory damages to the other party the sum of money required to make the victim whole. In addition, special circumstances may justify consequential damages.

A tort victim is entitled to collect as damages the amount of money necessary to compensate the injured party for the total harm caused by the intentional or negligent conduct of the wrongdoer.

Punitive damages may be awarded in the case of intentional torts.

Statutes and regulations issued by government agencies often authorize sanctions similar to those used in the criminal law, contracts, and torts. They usually go further by using a multiplier for damages and award attorney's fees as well.

The criminal law applications cover both protecting businesses from criminal interference and protecting general public by crimes committed by businesses. Crimes against businesses include violent crimes such as arson, burglary, robbery, terrorism, sabotage and non-violent crimes such as white collar crimes.

The businesses also commit crimes to benefit their business and harm others, promoting corruption and bribery to win business, obtain favors from other organizations, all types of fraud such as embezzlement, false invoicing, criminal negligence in environmental matters, violation of constitutional rights of employees and customers, endangering workers are all punishable under criminal laws.


The Employment-at-will Doctrine and Exceptions

The employment-at-will concept reflected that people were free to enter employment contracts and free to leave at the end of the contract. In case no such employment contract was agreed both employer and employee were under no obligations. Employees were free to resign (according to the agreed contract) from their position and employers were also permitted to discharge employee if they wanted.

The employment-at-will contract allowed employers to wrongfully discharge employees in a number of cases and exceptions had to be incorporated to protect employees against wrongful dismissals [Muhi, 2001]. The major exceptions include:

Terminations for reasons that violate a State's public policy

Terminations after an implied contract for employment have been established;

Termination in violation of implied covenant of good faith and fair dealing into the employment relationship that is terminations must be for cause to meaning that terminations cannot be made in bad faith or with malice intended.

Florida, Georgia, Louisiana and Rhode islands do not recognize these exceptions, while Alaska, California, Idaho, Nevada, Utah and Wyoming apply all of the above exceptions to employment-at-will. The remaining states recognize some of these exceptions [Muhi, 2001]. Other Exception to employment-at-will contracts are [Reed et al., 2005]:

Labor-Management Relations Act

Fair Labor Standards Act

Occupational Safety and Health Act

Civil Rights Act

Age Discrimination in Employment Act

Employee Retirement Income Security Act

Clean Air Act

Clean Water Act

Consumer Credit Protection Act

Judiciary and Judicial Procedure Act

Impact of Regulation on the Employment Relationship and Collective Bargaining

Federal and state regulations have played an important role in balancing employer and employees responsibilities. The employers had upper hand in hiring and retaining employees and old dictatorial practices cannot be permitted any longer. While the regulations do not permit firing of employees on grounds of discrimination and malicious intentions, they still have full control over their workforce. The power of unions as seen in 1970s in UK is not practiced any where in the world now but collective bargaining protects the rights of the employer and employees.

Application of Agency Principles in Business

Any business has to get its work done through employees, contractors and service providers. These individuals or parties act as agents for the business and until they are viewed as the agents of the business, the business becomes responsible for their actions which can reasonably be viewed as action on behalf of the business.

The business getting its work through this agency principle is the 'Principal Party', the agent is the second party who has implied or written authority on behalf of the Principal party to conduct business with others (third party).

The business (Principal) has the responsibility to honor the commitments made by its authorized agent on its behalf until the authority is withdrawn and the third party is duly informed of this action. The Agent has the following duties [Reed et al., 2005]:

duty of loyalty to act for the principal's advantage and not to act to benefit the agent at the principal's expense duty to keep the principal fully informed duty to obey instructions duty to account to the principal for monies handled

In order to represent the Principal, the Agent must have actual, written or implied or apparent authority from the principal.

The agency law also applies to trading partnerships. A trading partner has implied authority to borrow money in the usual course of business. A non-trading partner of the business such as a service firm does not have that authority.


Business Litigation - An Overview, Retrieved from Internet on 27 May 2006.

Criminal Law, Wikipedia Encyclopedia, Retrieved from Internet on 27 May 2006.

Muhi, C.J., The Employment-at-Will Doctrine: Three Major Exceptions, Monthly Labor Review, January 2001

Reed, O.L., Shedd, P.J., Morehead, J.W., Robert N. And Corley, R.N., The Legal and Regulatory Environment of Business, ISBN: 0072881119, 2005, McGraw-Hill

Tort Law, Wikipedia Encyclopedia, Retrieved from Internet on 27 May 2006.

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