HR - Legal Environment of Business Lesson [LESSON]

Legal Environment of Business

Introduction

In this lesson, we will explore the legal areas that most commonly affect personal and business relationships. We will also discuss some of the legal requirements for starting and operating a business.

Knowledge Point

Consider for a few minutes the various legal areas that might impact business relationships as well as the legal requirements that might be required to start and operate a business. Using your note taking guide, complete column K of the KWL chart provided by answering the following question: What do you already know about legal areas that most commonly affect businesses?

Before continuing with this lesson, complete column W of the KWL chart by answering the following question: What do you want to learn about legal areas that might affect business relationships and/or legal requirements for starting and operating a business?

After filling in the first two columns of your KWL chart, dive into the lesson content by viewing the presentation below.

Legal Areas that Commonly Affect Personal and Business Relationships

Click each part of the menu to learn more. Take the time to read about each legal area.

📝 Contract Law (click to reveal)

• • • 📝 What is a contract? A contract is a legally binding agreement. It is a promise that both parties (or the people involved) agree to follow. 
    • 🤝 What are the elements of a contract?
      • Agreement: both parties must agree on the terms of the contract
      • Consideration: each person promises something of value in exchange for the specified action or non-action
      • Legal Intent: the agreement must be serious. For instance, it cannot be a joke or something that violates public policy or law.
      • Capacity: both parties must be old enough and mentally capable of understanding the contract terms
    • 📱 What are some examples of contracts?
      • Buying a phone: when you buy a phone, you usually enter into a contract to pay for the phone (and possibly phone service) and the store gives you the phone
      • Renting an apartment: when you sign a rental agreement, you promise to pay rent and the landlord promises to let you live there
      • Job contracts: when you get a job, you agree to work, and your employer agrees to pay you
    • 💥Breaking a Contract
      • If someone does not keep their promise, then it is like breaking the contract
      • In some cases, legal consequences can happen if someone tries to get out of the contractual agreement

 

💰 Bankruptcy (click to reveal)

• • • • 🏦 What is bankruptcy?
        •  Bankruptcy is like a legal reset button for people or businesses who are drowning in debt.
        • Imagine you are stuck in quicksand (debt), bankruptcy is the rope that helps you climb out.
      • 💵 What are the types of bankruptcy?
        • • There are different types of bankruptcy, but let’s focus on the two main ones:
          • Chapter 7: You sell some stuff (like non-essential belongings) to pay off unsecured debts. Unsecured debts are loans that are not backed by collateral. Collateral is something of value that a borrower pledges as security for a loan. After selling off items to help pay back debt, most of your remaining debt will be disposed of. People who have no valuable assets (they only possess essential items like household goods, clothing, and a personal vehicle up to a certain dollar amount) may end up repaying none or only a part of their unsecured debt.
          • Chapter 13: This is like a repayment plan in which you work out a deal with your creditors to pay back what you owe over time. This is for individuals who make too much money to qualify for Chapter 7. Usually, the repayment plans span three to five years, and the debtors are allowed to keep their property.
      • 🏥 Why file for bankruptcy?
        • Individuals: job loss, medical bills, financial mistakes, etc. create too much debt, and bankruptcy offers a second chance. Bankruptcy also helps protect assets allowing individuals to keep their homes, cars, and essentials safe.
        • Businesses: when a business cannot pay its bills, bankruptcy provides a lifeline to help. Businesses are able to restructure to fix internal problems and then get back on track.
      • 📈 What are the consequences of bankruptcy?
        • Your credit score will take a hit, but it is not forever! Remember there are things you can do to help improve your credit score (refer back to the Money Management module)
        • Bankruptcy gives you a chance to rebuild and learn from past mistakes.

 

⚖ Property Law (click to reveal)

• • • 🏡 What is property law?
      • Property law is the relationship between people and things. It is about who owns what and what you can do with it. Imagine you find a cool rock in the woods – you pick it up and now it is yours! That is possession and ownership.
    • 🔑 What are some key terms related to property law?
      • Ownership: the person who owns something has ownership over that item. There is real property like land and houses and also personal property like your phone.
      • Landlord-tenant rules: when you rent an apartment or an office space, you are a tenant. The landlord is the person who actually owns the place.
      • Zoning rules: cities have zones like residential, commercial, and industrial. This determines what you can build. For example, you cannot build a skyscraper in the middle of a quiet neighborhood.
      • Intellectual property: inventions and creative works also get legal protection. Have you ever invented something cool? Patents help to protect your creative works. Copyrights cover songs, books, and art.

 

💻 Computer Law (click to reveal)

• • • 💻 What is computer law?
      • Computer law is the set of rules that govern how we use computers, software, and the Internet.
    • 🔏 Privacy
      • One major concern for computer law is privacy. When you sign up for an app or you visit a website, they collect information about you.
      • Privacy laws make sure that the information they gather about you is handled responsibly.
    • 🧠 Intellectual property
      • Intellectual property is another major concern. This is like your digital rights and includes copyrights, patents, and trademarks.
    • 🐱‍💻 Cybersecurity and hacking
      • These laws are designed to keep hackers at bay and to punish those who attempt to break into computers and networks.

 

👎 Discrimination and Harassment (click to reveal)

• • • ♿ What is discrimination and harassment?
      • Discrimination and harassment are both illegal in the workplace
      • Discrimination is when people treat others unfairly or differently based on things like race, gender, age, or religion. Federal and state laws protect workers from unfair treatment and discrimination during hiring, firing, and while working on their jobs
      • Harassment is a type of discrimination that is also prohibited by law. It is when things are done that create an intimidating, hostile, or threatening environment.
    •  🙊 Examples of offensive conduct that could be considered harassment
      • Offensive jokes, slurs, or name-calling
      • Physical assaults or threats
      • Insults or put-downs
      • Offensive objects or pictures
      • Anything that interferes with work performance

 

Business Legal Requirements | Activity

Earlier in this course you learned about starting and operating a business. There are some legal requirements that are involved in this process. Click through the interactive below to learn more.

Legal Environment of Business | Self-Assessment

Practice your new knowledge by participating in the activity below. Match the term to the appropriate definition or description.

Reflection

Now that you have completed the Legal Environment of Business lesson, what did you learn? Complete the L column of the KWL chart provided in your note taking guide by listing a few things that you learned in this lesson.

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Business laws are in place to help protect businesses and direct them. The business legal environment includes elements of criminal law, contract law, property law, and computer law. There are also elements of conducting business such as bankruptcy, harassment and discrimination, and licenses and permits that business owners need to be aware of to ensure their businesses are protected and running smoothly.

 

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