Role and Functions of Law Paper
The role of law in a free market system can be viewed as bilateral, one function being the enforcement of law to protect business’ interests while operations are conducted, and the other exercising protection for commerce and the consumers within it. In this paper, I will explore the primary functions of law and its role in the business world; providing ample examples, facts, and considerations of business law’s role in commerce. Correspondingly, this paper will briefly discuss federal, state, and local court systems that help companies enforce contractual obligations, ensuring that they do not face frivolous lawsuits from consumers, merchants, wholesalers, and/or vendors. Reference from the case Cipollone v. Liggett Group, Inc. will provide additional support on the importance of law, as well as a brief synopsis of how business law plays a role in my present job/industry. Primary Functions of Law
Briefly aforementioned we covered the bilateral functions of law in business society, for content purposes, I will focus on the business portion, as opposed to how it affects the consumer end. Laws are used as guidelines, rules, and regulations that create a structure that produces honesty, integrity, and accountability. Companies will use legal advice when making business related decisions to avoid potential liabilities in the form of lawsuits when selling/marketing goods and services. Law can assist a company with generating higher sales volumes through the use of contracts and agreements—think about your average cell phone contracts, and the amount of revenue they generate. Without law to uphold those agreements cellphone contracts would not be very useful.
Local, State, and Federal Laws Observed
There are three different levels of law and each are incorporated differently. Local laws are enforced and upheld in a specific region; laws in an urban/suburban city will have different local laws than that of a city surrounded by bodies of water. State laws typically follow the same suit, and are enforced only by the state in which the law exist; a law specific to California may not exist in New York. For example, in California it is currently legal to grow marijuana with a license, and it other states it is still considered an illicit substance. Then we have federal laws, these are laws that can be enforced in any state that is part of the union. When local or state laws conflict with each other or federal laws, the higher governing body trumps the other.
For visual evidence, FEDERAL > STATE > LOCAL, meaning that if state laws conflict with federal laws, than federal laws trump state laws, this is called supremacy. Meaning, a business selling marijuana in California is still susceptible to federal laws and can be shut down, and prosecuted on a federal level—similar to the Cipollone v. Liggett Group Inc. Moreover, we can look at how these same laws protect business from frivolous lawsuits as well as legitimate lawsuits, in the event that state and federal laws conflict. In the case, Cipollone v. Liggett group Inc. the plaintiff (Cipollone) claimed that the cigarette manufacturer (Liggett Group Inc.) were responsible for the death of his mother—an avid cigarette smoker—because the labels on the packages and advertisements were misrepresenting health risks. The plaintiff went on to exclaim the Liggett Group had indeed violated several New Jersey consumer protection statutes by engaging in false advertisement an misrepresenting the hazards of smoking.
The Liggett Group urged the court to dismiss the state law based on the grounds that they were preempted by two federal laws that protect their promotional activities: the Federal Cigarette Labeling and Advertising Act of 1965, and the Public Health Cigarette Smoking Act of 1969. The U.S. Supreme Court ruled in favor of the Liggett Group affirming that the state regulations were preempted by federal law (Melvin, 2011). Facts, Benefits, and Considerations
It isn’t a secret that most companies rely on external legal help for their business, but there are companies that have an internal legal representation team. Others will use prepaid legal services to keep lawyers on retainer for business resolutions. Alternatively, there has been a considerable influx of alternative dispute resolutions. Companies are heavily in favor of the option to resort to arbitration in attempt to get a legally binding agreement; mediation has also been heavily favored in finding a resolution while sparing time and cost. For the most part, the absolute benefit of law is for companies to protect themselves from stiff financial penalties from the judicial system. Nevertheless, with apposite legal advice, a company can have greater competitive edge over their competitors.
An example, is the right to protect proprietary goods, services, and brands through seeking trademark rights, patents, and copyrights which protect—example, Wahl (2005) “…Original works of authorship, such as writings, songs, artwork…” (“Common Questions about Copyright Law”)—from theft or dualities in the market place. Conclusion
Law is a detrimental element to keeping business fair, competitive, healthy, and protected. In my own experience, I worked in a non-profit organization for several years as a mental health coach, and administrator. During that time I have witnessed the dualities of laws and how they can attribute as well as prohibit success. In non-profit business, fiscal laws and regulations can make or break a non-profit, and over the years strict state fiscal policies severely limited resources forcing our company to downsize immensely. In turn, it began to lead to negative goodwill with our clients hindering our revenues for our services.
Melvin (2011) stated, “Article VI of the U.S. Constitution provides that valid federal laws (those made pursuant to Congress’s constitutional authority and that are constitutionally sound) are always supreme to any conflicting state law” (pg. 32). This called preemption, and it is proving useful in a current case against the State of California v. Sacramento Children Services—generic named due to trial being current, details also altered—where the state illicitly withheld funding, as part of a new State Law, but it has been founded to directly conflict with a Federal Law—in review—which has supremacy, if granted preemption, it will greatly benefit our organization. In light of this part, the very law that can prohibit our business ventures will attribute to our certain longevity.
Melvin, S. (2011). The Legal Environment of Business: A Managerial Approach: Theory to Practice. New York, New York: McGraw-Hill/Irwin.