Legal Systems Affect U.S. Businesses

1. What is one way the U.S. legal systems affects U.S. businesses? Answer: There are several ways the legal system can affect businesses but the one way the U.S. legal system affect U. S. businesses are the antitrust law which changed the way businesses operate. This law controlled some a banned others in the way businesses compete/operate. This law would hinder business from competing in the way they desire to. This law was passed to enable every organization the same opportunity to gain access to the free enterprise system (Jennings, 2006).
1.a. How do specific aspects of the U.S. legal system help further commerce? Answer: The first part of question #1.a.: The commerce is furthered by the international business and the creative business deals are accomplished to increase profits around the legal system. When combined with certain other aspects of the U.S. legal system (for example, class action litigation, high legal costs, joint and several liability, and contingency fee structures), the potential for a significant award—even if it is perceived as unlikely and unmerited—can create a strong incentive to settle an actual or threatened case. This incentive exists even though it is recognized that actual punitive damages awards are unusual and that, even when punitive damages are awarded by a jury, they can subsequently be reduced by a court decision (Diamond, Levine, and Madden, 2008).
1.b. What would happen if those characteristics were not present? Answer: The first part of question #1.b.: The legal system would become more arbitrary, and people as a whole would have less faith in the ability to produce just outcomes.” The area of tax law would be much less influential if the characteristics were not present (Diamond, Levine, and Madden, 2008).

2. Reflect on characteristics of the traditional litigation system, such as suit, answer, discovery, trial, or jury. What are risks organizations encounter when dealing with traditional litigation? Answer: Naturally, business managers should take professional legal advice at every stage where their vulnerability analysis shows exposure to risk. Thus, all strategic and operational planning should consider the potential liability in contract and tort, recommending change to systems to reduce the risks of negotiating contracts which contain adverse terms, of breach of any existing agreements, of breach of any duty of care in tort, etc. Avoidance strategies for litigation should include effective commitment to ADR, and so on. In other words, attorneys keep firms out of trouble (Jennings, 2006).
2.a. What measures might managers take to reduce exposure to those risks? Answer: The first part of question #2.a.: Risk management involves identifying threats to business and creating ways to reduce their impact. The goal of risk management is to use knowledge about potential losses and risks to avoid, reduce or transfer the risk before unexpected events occur. Risk exposure varies widely from industry to industry and even from business to business within the same industry. Unexpected losses can derail even established, well-run businesses. When used in combination, risk management and insurance provide business owners with a powerful underpinning of security. Adopting good risk management techniques will have the added benefit of improving your company’s operations. It can also distinguish you from your competitors. Nothing is more appealing to prospective clients than a firm that is quality-driven (Jennings, 2006).
3. Select a dispute that commonly arises in a business or commercial situation. Answer: Problems arise every day between businesses, their customers, suppliers, partners and employees. Most of the time these are dealt with quickly and efficiently through common sense. A small percentage, however, escalate into a dispute. Disputes that remain unresolved may start affecting the profitability and productivity of the business. 3.a. Which ADR process would be best suited to resolve this dispute? Explain why? Answer: ‘Alternative Dispute Resolution’ (ADR) instead of litigation, where it is appropriate. In most cases ADR can offer small business a low-cost, quick and flexible system for resolving disputes. ADR is a viable alternative to litigation, typically achieving a success rate of around 80%, without costly and time-consuming legal action. For example, some studies show that using ADR in a dispute can cost as little as five percent of the cost of going to court.
3.b. Which processes would not be suitable? Why not? Answer: The first part of question #3.a.: Arbitration is submission of a dispute to one or more impartial persons for a final and binding decision. The arbitrators may be attorneys or business persons with expertise in a particular field. The parties control the range of issues to be resolved by arbitration, the scope of the relief to be awarded, and many of the procedural aspects of the process. Arbitration is less formal than a court trial. The hearing is private. Few awards are reviewed by the courts because the parties have agreed to be bound by the decision of their arbitrator. In some cases, it is prearranged that the award will only be advisory. The reason why it would not be suitable because both sides might not like the decision the arbitrator might make toward the decisions of both companies (‘Lectric Law Library, 2010).
References
http://www.lectlaw.com/files/adr11.htm