What Is Law?
Law is a set of rules created and enforced by social or governmental institutions to regulate behavior. Its precise definition is a matter of longstanding debate, but a core component is that the legal system must be clear, publicized, stable and equal in application to ensure that human rights are protected, contracts are enforced, and property and torts are fairly adjudicated. It is also necessary that the process of lawmaking, administration and adjudication be accessible, efficient and fair, and that justice is administered by a diverse group of representatives and neutrals who reflect the community they serve.
Law governs every aspect of society, from the simplest to the most complex. Contract law governs agreements to exchange goods or services, from buying a bus ticket to trading options on a derivatives market; property law defines people’s rights and duties toward tangible property like land and buildings, and intangible assets like books, clothes and cars; criminal law punishes crimes committed against individuals, businesses and groups, from burglary to murder; and tax and financial laws set regulations for the amount of taxes companies must pay, how much banks can invest, and best practices for investment.
In “common law” systems, judicial decisions are explicitly recognized as “law” on an equal footing with statutes adopted through legislative processes and regulations issued by the executive branch. This “doctrine of precedent”, or stare decisis, means that a court’s decision binds lower courts to assure consistency in the application of law; and it establishes a body of case law that provides future judges with guidance when deciding similar cases.