What do we mean by applicable laws?
Applicable laws are the legal guidelines or regulations that must be followed in various scenarios. The term is used to refer to the laws of various jurisdictions which are associated with standards imposed by authorities. These laws usually apply to the entire location — town, county, state — and should be practiced from top to bottom. They may also pertain to specific types of activity.
An applicable law may stem from multiple sources. They may include common law, bylaws, passed legislation and the decisions of elected officials, such as mayors or governors. Their specific details will vary greatly by locality. Applicable laws take into account what is generally acceptable within a community or region, and is expected to be understood and followed. These laws are sometimes referred to as "local ordinances," and in many cases, districts and municipalities will often have detailed regulations on many topics. These may or may not ultimately intersect with applicable laws on a national or federal level.
One example which may be applicable is local laws which pertain to non-smoking ordinances . Many states, and even local municipalities, have instituted non-smoking bans in public facilities. These bans can range from buildings, such as convention centers and schools, to public spaces, such as parks, sidewalks and plazas. Some states go as far as to ban smoking completely in public places, such as restaurants and sporting venues. Local ordinances prohibiting public smoking have been put into place in order to help curb the effects of second-hand smoke in public places.
The interpretation, application and enforcement of applicable laws can be decided at different levels. For example, an applicable law may have been established on a state level, yet local municipalities have the right to broaden or narrow down their interpretation. Out of concern for certain issues, a locality may choose to impose stricter standards than those that are applied on a state level.
Applicable laws may be found on a state, county and city level. While incorporated towns will frequently have more extensive and specific laws, other unincorporated areas may be able to institute specific standards.
What are the different kinds of applicable laws?
There are three primary types of laws that come into play when we talk about which "laws apply" to a situation. The first is federal law. Federal law includes laws promulgated by federal agencies such as the Federal Trade Commission (FTC), the Federal Communications Commission (FCC) and the U.S. Securities and Exchange Commission. Federal laws set the floor for what is allowed or not allowed at the federal level. Most federal laws – FTC’s CAN-SPAM Act, Internal Revenue Service’s tax laws, FDA advertising restrictions, etc. – impose minimum requirements. Federal laws will often include a right of private action – the ability for private citizens to bring a private action for enforcement.
A company may be subject to more than one federal law, with all laws being enforced by different federal agencies. In some cases, one agency enforces many federal laws; for example, the FTC autonomously enforces several federal laws including laws restricting advertising (CAN-SPAM Act, FCRA, COPPA, TCPA).
The second type of law is state law. Similar to federal laws, state laws may be codified in a state’s statutory code; for example, California Civil Code § 17529.5 prohibits spammers from falsifying the "from address" lines of email messages or from failing to include opt-out notice in email messages. Other state laws may not be codified, but can be enforced by a state agency; for example, California’s Office of Privacy Protection is responsible for administering state privacy laws.
The third type of law is local law. Local law includes ordinances or administrative code sections enacted by cities (for example, the Los Angeles Municipal Code) and counties (for example, the Los Angeles County Code). Cities and counties enact ordinances, codes and regulations that are more specific than those enacted at the state or local level, or that address issues not addressed at the state or local level.
Enforcement of local laws can be tricky, particularly when an ordinance requires that an alleged violator of the ordinance take action to do something that the street or county’s administrative code does not require. For example, the Los Angeles County Administrative Code prohibits "unwanted" transmissions, including e-mailed unsolicited commercial messages (a/k/a "spam"); by contrast, California state law (Civil Code § 17429.5) provides that unsolicited commercial e-mail means "an e-mail message that has csubject or other demonstrable indications of similarity to another e-mail message that was unsolicited". An alleged violator of the Los Angeles County Ordinance may be able to argue that because there is a tension between the two laws, that there is not enough clarity to reasonably understand the elements of an offense, which could result in no enforcement of the law. Another problem with local laws is that it may be difficult to determine whether the local law applies to a particular person, particularly if the person does not live or work in that city or county but rather the Ad that the person created or controlled was published or performed in the jurisdiction. This is similar to the issue of whether a person is subject to the jurisdiction of a state or country.
Therefore, it is important to research not just the federal and state laws that can be brought to bear on an individual situation, but also local laws.
How to determine applicable laws for businesses
With the explosion of online activity, it can be difficult for business owners to determine which laws apply to them. The answer to this question generally varies according to the following:
Location
A business is subject to the laws in every state, country, etc. Where it has a physical presence. Physical presence means an office, manufacturing facility, warehouse, retail store, warehouse or other location where the business conducts regular operations. Although some companies rely on registered agent services that do not perform active business operations, such services are "catch-all" coverage, and they do not replace the need to comply with local laws.
In addition to physical location, maps and other modern technology allow companies to sell products and services around the world. As a result, many companies expand services to out-of-state and abroad. Businesses that make on-site service calls or provide inspections are also expected to be licensed in every jurisdiction where services are provided.
Every business should carefully review laws in any location where the Company interacts with customers, clients, employees, vendors, or other stakeholders.
Industry
Industry specific laws may apply on a state, federal, and/or international level. Professional and occupational boards often set licensing requirements and continuing education obligations. An occupational license is separate from a business license and is required even when a business is registered. Others include environmental and safety regulations, confidentiality requirements, human resources, sales tax, worker’s compensation, and other specialized laws that are not applicable to every industry.
Every business should conduct a thorough review of industry specific laws as they can change frequently and impact operations and sales across all divisions.
Operations
Every business has policies and procedures, including rules for employees, data protections, patient care, and provision of goods. These internal processes and guidelines should be evaluated to ensure that they comply with applicable laws.
The main challenges when it comes to satisfying applicable laws
Despite a system of laws designed to govern human conduct and a mechanism of enforcement, violations of law persist and remain prevalent in society. This is because the laws that are said to apply to us all are not so easy to abide by after all. For instance, you could be violating the law while reading or sharing a blog post like this one. Why? Because you may not be aware if sharing intellectual property and following the copyright rules regarding the same are not going to cost you.
Everyone who engages in a business or for personal use whether as a Creator, Owner, Designer, Seller, Manufacturer, Distributor, Importer, Exporter or Reseller is failing to comply with the applicable laws and as result can be getting themselves liable to face an array of consequences because of the ignorance and negligence of understanding the laws that apply to their business or situation . Although there is no exact way in which to translate those laws into plain language, but the challenge goes beyond just interpreting or explaining the statutes. Sometimes it is not so easy to determine exactly which law applies in a given situation. Many people face the difficulty that although they know there exists a certain law that may seem relevant to their situation, they are not sure if the law will actually apply to them.
Legal advice is never free and most people commonly avoid hiring legal professionals. But as the law develops and changes, applying the right law to any situation is getting harder and harder. In that risk-averse environment individuals and businesses should not take chances as it could ruin them financially, reputationally or both.
Consequences of failing to comply with applicable laws
Failure to comply with applicable laws can lead to a number of consequences, both legal and financial. Depending on the severity of the breach, an organization may face legal action from regulators, local authorities or other third parties. For example, in Great Britain in 2017, a developer was found guilty of a criminal offence when it failed to comply with a request for documentation in relation to new apartment blocks it was building in London. The developer was fined £120,000 and ordered to pay £8,530 in costs. Non-compliance with data protection laws is another area that is gaining increasing attention and is having a growing impact. For example, in 2015, Google was fined $22.5 million by the Federal Trade Commission in the United States, when it was found that the company had breached an earlier settlement by misleading users about the type of data it was collecting via the Safari web browser. The fine was the result of one of the largest privacy investigations that the Commission has undertaken to date and is a signal that non-data privacy protection authorities are interested in ensuring that organizations are complying with their internal policies and procedures. Another example is the 2017 "Michaels" case in the United States, where a class action lawsuit was filed against Michaels Stores Inc. after it was revealed that hackers had accessed customer payment card information in 2013. The lawsuit alleged a breach of contract and failure to implement adequate security measures, and it has since settled for $7.4 million. The way that non-compliance claims are brought is also evolving, creating additional, and sometimes unexpected, costs for organizations. In the Michaels case, for example, the lawsuit also claimed that customers had lost the benefit of their bargain, i.e. they paid full price for the store’s products which were worth less after the breach, because they were now subject to a greater risk of identity theft than consumers as a whole. Though the claim was not proven, it is an example of how these types of claims are developing and demonstrates the need for organizations to ensure their data protection policies and procedures are adequately compliant to avoid having to compensate a wider group than just those who suffered harm.
Keeping track of applicable laws
Applicable Law Research Tools
Both during the negotiation of a contract and throughout the life of the contract, parties will want to become familiar with the laws applicable to the contract. How you do such research will vary greatly depending on the applicable laws. In some cases, particularly the laws of particular sovereign nations, the applicable law may be a written statute, making it advisable to have a lawyer versed in such law provide assistance. In most cases, however, you can at least get a rough idea about what laws you face by developing a good understanding of the laws of the United States, the various states, and wherever else the contract may apply. Some basic research resources include:
Law Library: All major law libraries, including those available online, include legal research guides. If you have a library near you maintained by either a federal or state government , you will be able to access both free of charge (and easily) using other resources. If you do not have a library nearby, you can still get access to such libraries and may be able to conduct research through your computer.
State Bar Association: Most state bar associations—each of which is dedicated to both the education of legal professionals and the public at large—have their own sections on the websites that address both lawyer research and public resources.
Data64: For the most common U.S. business laws, Data64 is the go-to research site. For around $1,500, you will have access to summaries of hundreds of business laws applicable to all 50 states and territories as well as the District of Columbia. The summaries, in many cases, provide just enough information to point individuals in the right direction while also being complete enough to understand what the laws entail (including how they may differ from state to state).