BUSINESS REGULATIONS

Module:-1

INTRODUCTION

INTRODUCTION TO LAW

Law is essential to any society such that it provides the standards by which people and
businesses interact. Law affects almost every function and area of business. This is because
almost every business decision has legal consequences, whether it is a decision to start a
business, to obtain finance, to protect patent knowledge used to develop products/services, to
enter into contracts to purchase raw materials, to ensure that products meet safety standards, to
dispose plant wastes, to promote and price products/services, to enter into contracts to sell
products/services, or provide product warranties and after sales service.

MEANING OF LAW:

Law is a set of rules, enforceable by the court, which regulates the government of the state and
governs the relationship between the state and its citizens and between one citizens to another.

DEFINITION:

According to Duplessis and o’byrne :- Law is a set of rules and principles intended to guide and
commercial interactions & providing mechanisms for disputes recognition.

CLASSIFICATION OF LAW

The classifications of law are the different categories into which all areas of law can be collated.
A particular classification of law encompasses all types of law but it distributes them according
to a particular unique characteristic. The following are the major classifications of law:

• Public and Private Law: Public Law can be defined as that aspect of Law that deals
with the relationship between the state, its citizens, and other states. Examples of public
law include Constitutional Law, Administrative Law, Criminal Law, and International
Law and so on. Private law, on the other hand, is that category of the law that concerns
itself with the relationship amongst private citizens. Examples include the Law of Torts,
the Law of Contract, the Law of Trust and so on.

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• Civil Law and Criminal Law: Civil law in this regard can be defined as the aspect of
Law that deals with the relationship between citizens and provides means for remedies if
the right of a citizen is breached. Examples of civil law include the Law of Contract, the
Law of Torts, Family Law etc. Criminal Law, on the other hand, can be referred to as that
aspect of law that regulates crime in the society. It punishes acts which are considered
harmful to the society at large.
• Substantive and Procedural Law: Substantive Law is the main body of the law dealing
with a particular area of law. For example, the substantive law in relation to Criminal
Law includes the Criminal Code Act and the Penal Code Act. Procedural law, on the
other hand, is law in that deals with the process which the courts must follow in order to
enforce the substantive law. Examples include the rules of the various courts and the
Administration of Criminal Justice Act 2015, which is the procedural law in relation to
the Criminal Code Act and Penal Code Act.
• Municipal/Domestic and International Law: Municipal/Domestic law is the aspect of
law which emanates from and has effect on members of a specific state. International
law, on the other hand, is the law between countries. It regulates the relationship between
different independent countries and is usually in the form of treaties, international
customs etc. Examples of International law include the Universal Declaration of Human
Rights
• Written and Unwritten Law: A law would not be regarded as written just because it is
written down in a document. Written laws are those laws that have been validly enacted
by the legislature of a country. Unwritten laws, on the other hand, are those laws that are
not enacted by the legislature. They include both customary and case law Customary Law
as part of its basic characteristic is generally unwritten. Case law, though written down in
a documentary format, would be regarded as unwritten law based on the fact that it is not
enacted by the legislature.
MEANING AND DEFINITION OF BUSINESS

Human beings are continuously engaged in some activity or other in order to satisfy their
unlimited wants. Every day we come across the word 'business' or 'businessman' directly or
indirectly. Business has become essential part of modern world.

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Business is an economic activity, which is related with continuous and regular production and
distribution of goods and services for satisfying human wants.

MEANING OF BUSINESS LAW/COMMERCIAL LAW:

Business law /commercial law is a legal framework that regulates &governs business activities. it
encompasses various legal aspects such as contracts, intellectual property, Employment law.

or

Business law is also known as commercial law and is that branch of law that deals with the legal
rights, duties, liabilities of parties involved in any kind of business transactions related to
commerce, trade, sales and merchandising. It is a branch of civil law and includes public as well
as private law.

DEFINITION OF BUSINESS LAW:

According to salmond: business is the body of principles recognized and applied by the state in
administration of justice.

SOURCES OF BUSINESS LAW

Sources of law in its narrow sense mean the origins of law, i.e. the binding rules governing
human conduct. More generally, it means any premises of a legal reasoning. Such sources may
be international, national, regional or religious.

Major part of Indian Mercantile Law or Commercial Law is based on English Law

The main sources of Indian Mercantile Law are:

1. English Mercantile Law.

2. Statute Law.

3. Judicial Decisions.

4. Customs and Usage.

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5. Expert opinions

6. Commercial treaty and agreements

1. English Mercantile Law

The English law is the most important source of Indian mercantile law. Many rules of English
law have been incorporated into Indian law through statutes and judicial decisions. The sources
of English law are:

a. Common Law

This law is known as judge made law. It is based upon customs and practices handed down from
generation to generation. It is the oldest unwritten law. The English Courts developed these over
centuries.

b. Equity

Equity is also unwritten law. It is based upon concepts of justice developed by the judges whose
decisions become precedents. It grew as a system of law supplementary to the common law and
covered the deficiencies of the common law. Its rules were applied in cases where the rules of
common law were considered harsh and oppressive.

The Judicature Acts of 1873 and 1875 abolished the distinction between Common Law and
Equity so that they are now applied to all cases.

c. Case Law

This is also an important source of the English mercantile law. It is built upon the decisions of
the Judges. It is based on the principle that what has been decided in earlier case is binding in
similar future case also unless that there is a change in the circumstances of the case.

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d. A Lex Mercatorian or Law Merchant

It is also one of the important sources of English mercantile law. A Lex Mercatorian or law
merchant consists of legal principles based on customs and usage. They developed first as a
separate system of law and subsequently became part of the common law.

2. Statute Law

A Bill passed by the parliament and signed by the President becomes a “Statute” or an Act. Most
of the Indian laws are embodied in the various Acts passed by the Central as well as State
legislators.

• The Indian contract act 1872

• The sale of goods act 1930

• The companies act 1956

• The Negotiable instrument act 1881

• The Indian partnership act 1932

3. Judicial Decisions

Judicial decisions are also called as case laws. They referred to as precedents and are binding on
all Courts having jurisdiction lower to that of the Court, which gave the judgment. The Courts in
deciding cases involving similar points of law also follow them.

4. Customs and Usage

Customs and usage plays an important role in regulating business transactions. A well-
recognized custom or usage can even override the statute law. Most of the business customs and
usage have been already codified and given legal sanctions in India. Some of them have been
ratified by the decisions of the competent Courts of law.

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5. Experts opinion

The experts can help us to make good business rules. Our law makers take opinion and
guidelines from the exports before making business rules. If we have good business rules our
businessman can managed, regulate and lead business organization successfully. The experts are
the manufactures helping WTO create good business environment in the business community so
experts are considered as a source of business law.

6. Commercial treaty and agreement: - WTO, etc.

Commercial treaty and agreement are business understanding and compromise between or
among the organization and countries. After making business agreement all the members of that
follow its provisions as its business rules. Commercial agreement is always made with a view to
develop and extend business relation between or among the business organization or countries.
The member countries or organization should make business rules according to provisions of that
agreement. For example, member countries of WTO etc. should follow its rules as their business
rule. Therefore, it is also considered is a source of business law.

TYPES OF BUSINESS LAW

There are several types of business law that are recognized and followed by countries the world
over.

Some of these include the types of business law sections that follow.

1. Contract Law

A contract is any document that creates a sort of legal obligation between the parties that sign it.

Contracts refer to those employee contracts, sale of goods contracts, lease contracts, etc.

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2. Employment Law

Employment law is where it is imperative for business and law to meet. These laws enforce the
rules and regulations that govern employee-employer relationships. These cover when, how and
for how much and how long employees should work.

3. Labor Law

Labour law also indicates the appropriate relationship between employee and employer, and also
pay grades and the like. However, an additional element to labour laws is the relationship of the
union with the employer and employee.

4. Intellectual Property Law

Intellectual property refers to the intangible products of the working of the human mind or
intellect, which are under the sole ownership of a single entity, such as an individual or company.
The validation of this ownership is provided by intellectual property law, which incorporates
trademarks, patents, trade secrets, and copyrights.

4. Securities Law

Securities refer to assets like shares in the stock market and other sources of capital growth and
accumulation. Securities law prohibits businesspersons from conducting fraudulent activities
taking place in the securities market. This is the business law section that penalizes securities
fraud, such as insider trading. It is, thus, also called Capital Markets Law.

5. Tax Law

In terms of business law, taxation refers to taxes charged upon companies in the commercial
sector. It is the obligation of all companies (except a few tax-exempt small-time companies) to
pay their taxes on time, failure to follow through which will be a violation of corporate tax laws.

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6. Business Formation Law

Formation law refers to the laws that a business must follow in order to be incorporated and
recognized as an official business by law. Without proper legal recognition by the law a business
cannot legally conduct activities.

Many of the elements of formation/incorporation law is filling out the right paperwork and
meeting the requirements to ensure a proper business classification. Businesses must choose a
specific classification and decide how they will want to operate.

7. Antitrust Laws

Antitrust laws are guidelines that seek to help maintain fair competition between businesses. The
goal through antitrust laws is to provide a playing field that is equal to all the players, or
businesses in a specific industry. These laws are set in place to help combat businesses that gain
too much power and act unfairly to the disadvantage of others.

8. Immigration Law

is the law which exclusively governs immigration in a nation. So far as foreign citizens are
concerned, Immigration Law is related to Nationality Law of a nation governing the matters of
citizenship.
International Law regulates Immigration Law concerning the citizens of a country. Foreigners
entering India are obliged to get visas from India Missions under the Passport (Entry in India)
Act, 1920. The statute also specifies which papers must be submitted during their lawful journey
in order to be admitted to the nation.

[Link] goods sale law

The Law of Sale of Goods provides such guidelines and liabilities for the safety and security of
the consumers. Any firm or person entering into the business of selling goods to consumers
should be aware of the fact that the law will impose certain terms and conditions on each
transaction.

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