Business Law

Bule Exam #2 Review

Chapter 4: Constitutional Authority

Federalism = The U.S. Constitution established a federal form of govt in which govt powers are shared by the national govt and the state govts. This is called federalism.

Separation of Powers = At the national level, govt powers are divided among three branches: 1) legislative – branch that makes the laws

2) executive – branch that enforces the laws

3) judicial – branch that interprets the laws

Separation of Powers is a system of CHECKS AND BALANCES: system that allows each branch of the govt to limit the actions of the other two branches, thus preventing any one branch from exercising too much power.

Commerce = all business dealings; interstate commerce = commerce among the states; intrastate commerce = commerce within a state.

The Commerce Clause (Article 1, Section 8) = permits Congress to regulate interstate commerce; prevents states from establishing laws & regulations that would interfere with trade and commerce among the states.

Expansion of the commerce clause = 2 cases:

1) Gibbons vs. Ogden – The federal govt has the power to regulate commerce that “substantially affects interstate commerce”.

2) Wickard vs. Filburn – The Supreme Court held that wheat production by an individual farmer intended wholly for consumption on his own farm was subject to federal regulation. The Court reasoned that the home consumption of wheat reduced the market demand for wheat and thus could have a substantial effect on interstate commerce.

US vs. Lopez, 1995 = This is an example of the Supreme Court restricting the reach of the commerce clause. The Supreme Court struck down an Act of Congress on the basis that the Act attempted to regulate an area that had nothing to do with commerce. (The Act prohibited the possession of guns within 1000 ft. of any school zone) This was the first time in 60 years that Courts restricted congressional use of the commerce clause.

Dormant Commerce Clause =...