In every country, there are rules, regulations, and policies that govern how companies should operate their business operations. These rules and policies have a significant influence business in the private and public sector. However, private-owned businesses also have their policies that guide how they do business or how they recruit their workforce. A good business environment has order and harmony regulated by the rule of law. The law prescribes the code of conduct during operations and provides remedies whenever individuals or business entities exceed such installed limits. The law instructions are established by the Congress, enforced by the law enforcement agencies and the punishment for offenders is decided by the judiciary system. The following paper will give an overview of the origin of the judicial system of the United States and discuss the effects of legal systems on businesses.
Origin of the United States Judicial system
The federal judicial system of America was established under Article III of the Constitution of the United States. The Congress then enacted the Judiciary Act of 1789 that created the Supreme Court and divided the country into 12 judicial districts or circuits and into 94 other minor districts that are evenly distributed throughout the country. Every district has a regional district, court of appeal, and bankruptcy courts (Singh, 2012). The Supreme Court is headed by a chief justice and has eight other justices who hear cases relating to the interpretation and application of the law and the Constitution. It also hears appeals to decisions made by lower courts. The Court of Appeal also hears appeals to decisions made by district courts in that circuit. There is a Court of Appeal for the Federal Circuit whose jurisdiction is nationwide, and it specializes in international trade cases and cases involving patents.
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The district courts have original jurisdiction to hear all civil and criminal cases in their respective regions. Their decisions, as earlier stated, can be appealed to the Court of Appeal in the regional circuit (Singh, 2012). The Bankruptcy Courts hear and determine all bankruptcy cases. Other courts relevant under this scope include the U.S Court of International Trade that hears cases relating to trade relations between the U.S and other foreign countries and those relating to customs.
Effects and impact of the judicial and legal systems on businesses
A business entity can sue another business entity or an individual under civil law, and the business can also be sued in court for offences in civil law. Where the business application to the court is granted, the business can accrue benefits such as payments for damages suffered, lifting of trade bans, deadline extensions and acquisition of property rights among others. In a situation where a business has been sued and the court rules in favor of the plaintiff, the company can suffer legal fines and contingent losses that may even lead to its closure. Bankruptcy decisions affect both the debtor facing liquidation and the creditors because they may not recover the full amounts owed to them when liabilities are more than the assets (Cheeseman).
Some of the laws that have a significant influence on businesses include tax laws, organization laws and the law of contract. Any breach in any or all of them can bring the business to court either as a plaintiff, defendant, witness or as a concerned party to a case. The tax law affects businesses in very many ways. There are different types of taxes imposed depending on the type of business and the state it is domiciled. These taxes include income tax, corporate tax and gross receipt taxes among others. It is worth noting that the level of taxation may affect the business either positively or negatively. It negatively affects the company through high taxation that reduces profit margins and consumer spending (Cheeseman). On the positive perspective, taxation on imports can boost performance on firms dealing with local products.
The organization law relates to the formation and existence of the business as a legal entity. The entities provided for by law include sole proprietorship, partnerships, corporations, and companies, each with a different level of liability in case of bankruptcy. Each legal entity operates under a slightly different set of legal conditions such as tax and type of business they can engage in. The law of contract prescribes the behavior of the parties involved in a business contract. Breach of contractual obligations and rules entitles the aggrieved party to litigation when an application is brought to court and the court rules in favor of the aggrieved partner. Other laws that affect business operations are immigration laws in case of foreign staff, international laws when a business ventures a foreign market abroad and securities laws which involve financing and consumer protection laws, among others (Cheeseman).
Judicial review
This is the process through which the judiciary determines the legality of some laws enacted by the legislature or the executive. These laws are examined, and it is decided whether or not they are consistent with the constitutional requirements. In the United States, under judicial review, the court decides whether a treaty, regulation or statute violates provisions set under the State Constitution and the Constitution of the United States. It is through such violation of the constitution that judicial structures can invalidate an existing law.
Forms Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) is a way through which warring parties seek an outside court plan to resolve their differences (Brown et al. 2012). This process is cheaper and consumes less time as compared to judicial procedures. The various forms of Alternative Dispute Resolution include neutral evaluation, mediation, settlement conferences and arbitration.
Mediation is a process involving a third party who helps the warring parties reach an agreement. The mediator, in this case, should not impose decisions on the parties. He or she is also not allowed to force them to agree. The primary role of a mediator is to enhance communication between the parties. Mediation can be effective where two businesses are competing for control of a market, for example, media houses contesting broadcast rights to a football league. Arbitration requires a neutral party to listen to the content matter of the arguments then decide the outcome of the dispute. This decision may be binding or non-binding, depending on prior agreements (Brown et al. 2012). This form of a resolution would suit partners discharging a partnership when they conflict on how to share remaining assets.
Neutral evaluation is where the parties appoint a neutral evaluator to listen to their argument. The evaluator, usually an expert in the field of the conflict, analyzes the argument of each party, pointing its strengths and flaws. The evaluator then suggests possible solutions to the dispute and allows the parties to decide on how to agree by themselves. The evaluator only sets the basis through which the conflict could be resolved and, therefore, the opinion given is not binding (Brown et al. 2012). A business faced with a possible lawsuit due to an injury suffered by an employee could subscribe to legal opinion in such a matter.
In settlement conferences, both parties, together with their attorneys, discuss settlement disputes with the settlement officer. The officer analyzes each argument but does not decide how the settlement will be arrived at. This method is applied when settlement is optional. In a business set-up, this method of resolution is widely applied where an employee has been unfairly treated and dismissed from his or her workplace. A collapse in settlement talks may lead to litigation.
Impact of laws in global business
When a business ventures into the global business scene, it is faced with the dilemma of whether to conform to policies that the organization may not necessarily believe in or to forego the market in the foreign country. In most cases, companies decide to comply with the laws and policies governing business in the foreign country. When operating in a different country, every business has to conform to the laws of that country, which may undermine the objectives of the business (Cheeseman). In adverse occasions, foreign firms are forced to close down business when it is no longer reasonable to operate under such laws. Take for instance the case where Google Incorporation expanded its services to the Chinese market. The Google Company had to forego the liberal communication freedom enjoyed in the United States due to the oppressive approach of the China Government. After about four years of offering censored services, its clients suffered cyber-attacks, believed to be from government agencies. The company could no longer operate under the retrogressive circumstances and ended up shutting down its operations in the country (Spinello).
Effect of local and foreign laws on my current job
Local and foreign have a significant effect on my current job as an online marketer. Local laws on online marketing require that the marketers provide full disclosure of the products to be transported locally or abroad so that the buyers are aware of what to expect before they buy them. These laws within the United States are a lot more lenient due to payment procedures and shipping infrastructure available. The disclosure laws make it easier to build trust with consumers. Members of the Organization for Economic Cooperation and Development (OECD) have enacted guidelines on how to sell and buy products abroad through the internet. The guidelines have principles to regulate code of conduct for all online business transactions as well as offer advice to authorities on consumer protection strategies in this trade. Payment procedures are a little more complicated due to differences in currencies, shipping costs and customs duties and laws have to be considered. The shipping durations and clearance requirements vary from one country to another, making it challenging to trade abroad.
The existence of laws and sound legal structures creates a good business environment. These structures interpret the law, enforce obligations and offer litigation to ensure fairness. Should Congress enact legislation that is harmful to the business harmony in the country, an application to court can have that statute invalidated until it has been reviewed. It is also clear that businesses can settle internal and external wrangles without necessarily going to court hence reducing time and costs of the resolution process. From the paper, it is clear that laws have the ability to strengthen or threaten businesses especially those venturing in foreign markets. Therefore, businesses should be aware of the business-related laws and policies of the foreign country before venturing into the new market.
References
Brown, H. J., & Marriott, A. L. (2012). ADR: Principles and practices . London: Sweet & Maxwell.
Cheeseman, H. R. (n.d.). Business law .
Singh, U. (2012). Advanced readings in judicial system . New Delhi: Cyber Tech Publications.
Spinello, R. A. (n.d.). Google in China. Issues, Impacts and Practices Investigating Cyber Law and Cyber Ethics, 239-253. doi:10.4018/978-1-61350-132-0.ch011
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