Business Law Notes: Constitutional Law


course notes from my core business law MBA class covering constitutional law
Subject: Business Law

Separation of Powers

  • 3 branches of government: legislative which makes laws; executive which enforces them; judicial which interprets them.
  • Each branch has some power to limit the actions of the other two, thereby establishing a system of checks & balances

Commerce Clause

Congress has power to regulate commerce with foreign nations & among states.

Regulatory power of national government

Usually interstate, however intrastate for cases impacting more than one state.

Regulatory powers of the states

  • States possess police powers
  • Right of state governments to regulate private activities to protect promote the pub order, health, safety, morals & general welfare

The Supremacy Clause

Article VI of the constitution provides that the constitution, laws, & treaties of the US are “the supreme law of the land.” In conflicts between federal & state law, the state law is rendered invalid.

Taxing Power

Congress has the power to lay & collect taxes, duties, imposts, & excises

Spending Power

Congress has the power to pay the debts & provide for common defense & general welfare of the US.

Bill of Rights

  • Freedom of religion, speech, & the press & the rights to assemble peaceably & to petition the government
  • Right to keep & bear arms
  • Prohibits, in peacetime, the lodging of soldiers in any house without the owner’s consent
  • Prohibits unreasonable searches & seizures of persons or property
  • Right to indictment by grand jury, due process of law, & fair payment when private property is taken for public use; also prohibits compulsory self-incrimination & double jeopardy (trial for the same crime twice)
  • Right to a speedy & public trial by an impartial jury; with counsel; right to cross-examine witnesses
  • Right to a trial by jury in civil case involving at least $20
  • Prohibits excessive bail & fines as well as cruel & unusual punishment
  • Establishes that the people have rights in addition to those specified in the constitution
  • Establishes that those powers neither delegated to the federal government nor denied to the states are reserved for the states.


Government appropriation of private property for which just compensation is usually due (physical invasion or denial of economic benefit due to government regulation; taking farm land to build highway, new zoning codes, endangered species, nuisances like concert park or junk yard).

Constitution requires the government to pay just compensation depending on:

  • Economic impact of the regulation, with particular regard to the extent to which the regulation has interfered with distinct investment backed expectation
  • Character of the public activity, for example, a physical invasion will more readily be identified as a taking than a regulation which merely adjusts the benefits & burden of economic life to promote the common good
  • History of sustaining reasonable police power regulation that destroyed or adversely affected recognized real property interests, & which have been viewed as permissible government action.
  • Supreme Court:
    • “While property may be regulated to a certain extent, if regulation goes too far, it will be recognized as taking.”
    • Compelling the property owner to suffer a permanent invasion requires compensation
    • Violation occurs when the land-use regulation doesn’t substantially advance legitimate state interests or denies an owner economically viable use of his land
    • Property owner may expect some rights to be limited, but not for all economically viable use to be eliminated
    • A land use regulation is more likely to survive a takings challenge if:
      • It incorporates a standard rather than prohibiting specific activities
      • It includes special permit & variance procedures to avoid prohibiting all use of the property
      • It has reasonable & fair provisions for administrative enforcement
      • It documents nuisance reduction objectives
      • If it is totally prohibitory, it is limited to narrow areas & provides, where appropriate, transferable development rights
      • The right to exclude others from property is essential
      • The burden of proof is on the taker

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