Business law consists of many legal disciplines, including contracts, tax law, corporate law, intellectual
property, real estate, sales, immigration law, employment law, bankruptcy, and others.
Figure 1.4
Contract law is just one type of law that businesses need to be concerned about. (Credit: edar/
pixabay/ License: CC0)
As noted, business law touches upon a number of other legal areas, practices, and concerns. Some of the most
important of these, which are discussed in this section, are disputes and dispute settlement, business ethics
and social responsibility, business and the United States Constitution, criminal liability, torts, contracts, labor
and employment law, Unfair Trade Practices and the Federal Trade Commission, international law, and
securities regulation. Though they are discussed in much more depth in later chapters, the following gives a
brief overview.
Disputes and Dispute Settlement
In addition to the federal court and individual state systems, there are also a variety of mechanisms that
companies can use to resolve disputes. They are collectively called alternative dispute resolution (“ADR”), and
they include mediation, settlement, and arbitration. Many states now require companies to resolve legal
disputes using ADR before the initiation of any lawsuit to encourage speedy resolution, cost and time
containment, and reduced judicial dockets. Traditional litigation remains an option in most cases if other
efforts fail or are refused.
Business Ethics and Social Responsibility
In the routine course of business, employees are often required to make decisions. Business ethics outline the
ethical model, or framework, that companies expect employees to follow when making these decisions, as well
as the behavior that the companies deem acceptable. Sound and ethical decision making can also help
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Chapter 1 American Law, Legal Reasoning, and the Legal System
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