Many people assume that a government acts from a vague position of strength and can enact any regulation it deems necessary or desirable. This chapter emphasizes a different perspective from which to view the law: action taken by the government must come from authority and this authority cannot be exceeded.
Neither Congress nor any state may pass a law in conflict with the Constitution. The Constitution is the supreme law in this country. The Constitution is the source of federal power and to sustain the legality of a federal law or action a specific federal power must be found in the Constitution. States have inherent sovereign power—that is, the power to enact legislation that has a reasonable relationship to the welfare of the citizens of that state. The states delegated the power of the federal government to it while the states retained their power, when the Constitution was ratified.
The Constitution does not expressly give the states the power to regulate, but limits the states’ exercise of powers not delegated to the federal government.
Additional Resources —
The following video supplements relate to topics discussed in this chapter—
To highlight some of this chapter’s key points, you might use the Lecture Review PowerPoint slides compiled for Chapter 2.
Business Law Digital Video Library
The Business Law Digital Video Library at www.cengage.com/blaw/dvl offers a variety of videos for group or individual review. These clips apply legal concepts to common experiences to ignite discussion and illustrate core concepts. Clips on topics covered in this chapter include the following.
• Drama of the Law
Free Speech: Constitutional Issues—The right to free speech is guaranteed in the Constitution. When an individual chooses to speak freely about a business, there may be legal consequences.
• Legal Conflicts in Business
Privacy in Information Sharing—Solicitation of potential customers, by phone or direct mail, is a common practice for businesses to generate interest in their products. When a customer list is obtained under questionable circumstances, however, the “common practice” may pose a problem.
• Ask the Instructor
Constitutional Law: Monitoring Employees’ E-mail and Internet Usage—The constitutional right to privacy protects us from government intrusion. But employers in the private sector are free to monitor their employees, subject only to specific state laws.
I. The Constitutional Powers of Government Before 1789, the Articles of Confederation defined the central federal government, which was perceived as too weak when state laws interfered with commerce. A national convention was called to amend the Articles, but instead the delegates drafted the U.S. Constitution.
A. A Federal Form of Government The U.S. Constitution established a federal form of government, through which the states and the national government share sovereign powers. The states regulate affairs within their borders through their police powers, which derive in part from the Tenth Amendment. These powers are exercised to protect or promote the public order, health, safety, morals, and general welfare.
B. Relations among the States
1. The Privileges and Immunities Clause Under the Constitution’s Article IV privileges and immunities clause, when a citizen of one state engages in basic and essential activities in another state, the foreign state must have a substantial reason for treating nonresidents differently than its own residents and the reason must be substantially related to its ultimate purpose in adopting legislation or an activity.
2. The Full Faith and Credit Clause The Constitution’s full faith and credit clause ensures that rights established under deeds, wills, contracts, and so on in one state will be honored by other states. It also ensures that judicial decisions with