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When businesses are confronted with legal problems one of the hardest things for the owners to often understand is that what they “think” is the issue or problem is probably a symptom or just an observation but it is not the “legal” problem or what the law considers “the issue.”

When businesses are confronted with legal problems one of the hardest things for the owners to often understand is that what they “think” is the issue or problem is probably a symptom or just an observation but it is not the “legal” problem or what the law considers “the issue.” This is critically important to understand because not every business problem is a legal issue that the courts will be able to help you with. There must be some legal issue, as accepted by the courts, that can be litigated and resolved by the courts.

For example, if the business owner says “my employee took money out of the cash register” that is an observation, or an opinion, and it might even be a fact. But that does not mean that there is a legal issue of “theft” or “embezzlement.”

So the first thing that has to be determined is what, exactly, is the ISSUE — the legal issue. For example “Theft” is a legal issue. Then, once you know the issue, you have to find the legal “rule” — the actual law — that states what, precisely, constitutes “theft.” For example, a common RULE of law that defines theft is “A person commits theft when they control the property of another, without permission or authorization, and they have the intent to deprive that person of the property.”

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After you determine the ISSUE and the RULE, you must apply the facts (what happened) to that rule. For example: “Jane picked-up Franco’s iPhone from Franco’s desk; therefore, she controlled Franco’s property. She put it in her purse and planned to sell it at a pawn shop; therefore, she intended to deprive Franco of that property. Jane did not have Franco’s permission to do this; therefore, Jane did so without permission or authorization. This process of matching facts (what happened) to the rule is what’s called the APPLICATION.

Finally, based on your application of the facts to the rule, you must reach a CONCLUSION. By “conclusion” we mean “what can you conclude/deduce” based on your application. For example: “Because Jane controlled Franco’s phone and intended to deprive him of it without his permission, we can conclude that Jane is guilty of Theft.

Taken together these steps (ISSUE, RULE, APPLICATION, CONCLUSION) form what is known as the “I.R.A.C.” method of legal analysis. It is the way in which lawyers and judges evaluate claims.

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