American Legal System: Final Exam Review

This cheat sheet summarizes key concepts of the American Legal System, focusing on the structure of government, sources of law, legal principles, and business-related legal topics, designed for efficient final exam preparation.

Core Principles

Governments balance self-governance with consolidated power.
Markets range from free markets to collectivism, influencing economic regulation.
Laws are created through primary (mandatory) and secondary (persuasive) sources, with the Constitution at the apex.
Federalism divides power between federal and state governments, with the Supremacy Clause establishing federal law's precedence.
Legal analysis often follows the IRAC method (Issue, Rule, Application, Conclusion).
Property rights involve balancing the right to exclude with the right of access.

Action Steps

Review lecture discussions and slides thoroughly.
Prioritize understanding legal concepts and their application over rote memorization.
Consult the course syllabus for specific topics and emphasis.
Prepare a one-page notes sheet (front and back) for exam reference.
Ensure your laptop is charged for the timed exam.

Key Terms

Federalism: A system of government where power is divided between a national government and state governments.
Supremacy Clause: Article VI of the Constitution, establishing that federal laws are supreme over state laws when in conflict.
IRAC: A method for legal analysis: Issue, Rule, Application, Conclusion.
Preponderance of the Evidence: The standard of proof in most civil cases, requiring that the evidence shows it is more likely than not that the claim is true.
Beyond a Reasonable Doubt: The highest standard of proof, required in criminal cases, meaning the evidence is so convincing that there is no other logical explanation.
Freehold Estate: A type of real property interest that represents ownership, including land and improvements.
Leasehold Estate: A type of real property interest that represents the right to use property for a period, typically through a lease agreement.
Pass-Through Taxation: A tax system where business profits and losses are passed through to the owners' personal income without being taxed at the entity level.
Corporate Taxation: A tax system where the entity is taxed on its profits, and then owners are taxed again on dividends received (double taxation).
Antitrust Laws: Laws designed to promote fair competition and prevent monopolies and anticompetitive practices.
ESG/CSR: Environmental, Social, and Governance / Corporate Social Responsibility principles guiding business practices beyond profit maximization.

Pro Tips

Understand the difference between substantive and procedural law.
Distinguish between criminal and civil law, and law vs. equity.
Recognize the hierarchy of laws: Constitution > Statutes > Regulations > Case Law.
Pay attention to the standards of proof (Reasonable Suspicion, Probable Cause, Preponderance of Evidence, Beyond a Reasonable Doubt).
Differentiate between pass-through taxation and corporate taxation.

Pitfalls to Avoid

Relying solely on memorization instead of application.
Confusing primary and secondary sources of law.
Overlooking the nuances of federalism and state vs. federal law.
Misunderstanding the burden of proof in civil vs. criminal cases.
Failing to grasp the implications of different business structures on liability and taxation.

Real World Examples

A company engages in deceptive advertising.: This behavior may be prohibited by regulations and subject to penalties.
An individual drives recklessly, causing an accident.: This behavior is prohibited and can lead to criminal charges and civil liability.
A business owner wants to limit personal liability for business debts.: Forming a corporation or LLC provides limited liability, separating personal assets from business obligations.
A tech company develops a new algorithm.: They may seek patent protection to prevent others from using or selling their invention.