Business Law examines many substantive legal rules that tell us how to behave in business and in society. Examples include the principles of contract, tort, and agency law, as well as those of many other legal areas addressed later in this text. Most of these principles are applied by courts as they decide civil cases involving private parties. It lays a foundation for the text’s discussion of substantive legal rules by examining the court systems of the United States and by outlining how civil cases proceed from beginning to end.

The chapter also explores related subjects, including alternative dispute resolution, a collection of processes for resolving private disputes outside the court systems. The United States has 52 court systems—a federal system plus a system for each state and the District of Columbia. This section describes the various types of state courts. It also considers the important subject of jurisdiction, something a court must have if its decision in a case is to be binding on the parties. Minor criminal cases and civil disputes involving small amounts of money or specialized matters frequently are decided in courts of limited jurisdiction.

Examples include traffic courts, probate courts, and small claims courts. Such courts often handle a large number of cases. In some of these courts, procedures may be informal and parties often argue their own cases without representation by attorneys. Courts of limited jurisdiction often are not courts of record— meaning that they may not keep a transcript of the proceedings conducted. Appeals from their decisions therefore require a new trial (a trial de novo ) in a trial court.