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Stare Decisis

In a dispute between Cloud Computing Corporation and Digital Enterprises, Inc., the court applies the doctrine of stare decisis. What is this doctrine? What does this doctrine have to do with the American legal system? Can this doctrine ever be overruled or overturned? If so, how? Lastly, do you believe most businesses in the United States agree with stare decisis or disagree with the concept? Why?

Your paper should be 500-750 words and should have at least two external resources, cited appropriately.


Hello class, and welcome to the week one lecture for Business Law I. We will begin with an introduction to the law and the American Legal system. Law is a grouping of rules governing relationships among individuals and between individuals and their society. The function of the law is to maintain stability while allowing for change when necessary. As we will discuss, this law originates from many sources.

To start, America has a rich common law tradition. Common law dates back to the English Court system. This common law developed through the slow accumulation of decisions over many hundreds of years. At bottom, judges generally apply the principle of Stare Decisis or the application of principles applied in earlier cases with similar facts. These earlier cases are known as precedent. This principle is important because it allows for a modicum of stability in the law as the idea is that similar cases will be decided in similar ways. However, this system allows gives the common law some flexibility. Judges may decide that old precedent is no longer applicable, for example, due to changes in society’s attitudes or in technology. When this situation occurs, the judge can create a new precedent.

The constitution provides another source of law. The federal constitution creates the rules for governing the country. It specifies which powers each branch of government may wield, and any state or federal law found to be in conflict with the constitution by the courts will be found to be invalid. A third source of law is statutory law. This source of law includes the statutes and ordinances of Congress and state legislatures. This is a very important source of law, and much of the work of the courts is consumed by interpreting these statutes.

The final source of law to discuss is the administrative law. The development of this law has become increasingly important. As the economy began to grow more complex, Congress devolved some of its powers to administrative agencies (generally under the supervision of the executive branch) to regulate the economy. For example, the Clean Air Act requires the Environmental Protection Agency (EPA) to keep the air safe. This mandate empowers the EPA to pass and enforce regulation protecting society from airborne pollutants. Although this area of law gets less coverage from the press, it can be critically important as these regulations have a monumental impact on the economy. Judges are frequently called upon to determine if the agencies have exceeded the scope of their mandate.

Another important distinction involves the relationship between the federal and state courts. Each state and the federal government has its own court system. And each of these entities will often have different statues, common law, administrative law, and constitutions. States are generally required to follow the decisions of other court’s due to the full faith and credit clause of the constitution, and where there is a conflict between state and federal law, the federal law ordinarily takes precedence because of the supremacy clause of the United States Constitution unless the federal government action is found unconstitutional.

Finally, most court systems (including the federal court system) have different levels. First, a court of original jurisdiction will rule on a case first. This court will hear evidence from witnesses, and it may have a jury verdict depending on the case. At this point, most state courts and the federal court system have an intermediate appellate court. Often, these courts operate on a regional basis. For example, the federal courts have eleven circuits. The first circuit, for example, includes Maine, Massachusetts, Rhode Island and New Hampshire. This circuit will hear appeals from any district court within those states. At the highest level, there is a court of final appeal. In the federal system, this is known as the Supreme Court. These courts often have the discretion to choose which cases they will rule upon. It should be noted, however, that some state court systems have only a court of original jurisdiction and a court of final decision.

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