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Legal Aspects of Business

Legal Aspects of Business

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Published by: mannishpatil on Jun 24, 2012
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Legal Aspects of Business Unit 1Sikkim Manipal University Page No. 1
Unit 1 Law
1.1 IntroductionObjectives1.2 Meaning and Nature of LawCharacteristics of lawLaw and moralityIgnorance of law is no excuse1.3 Sources of Indian LawPrimary sources of Indian lawSecondary sources of Indian law1.4 Legal Environment of Business1.5 Mercantile LawMeaning and natureObjectivesSources of Indian business law1.6 Some Basic Legal ConceptsConcept of legal entityConcept of legal rightsConcept of propertyIntellectual Property Rights (IPR)Concept of ownershipConcept of possession1.7 Essentials of Law1.8 Summary1.9 Terminal Questions1.10 Answers
1.1 Introduction
This unit, you begin by answering the question, “What is law?” This involves
the meaning and nature of law. The classification of law, such as civil lawand criminal law; substantive and procedure law is illustrated. In this unityou also study the different sources of Indian law such as custom,precedents and the legislation.
Legal Aspects of Business Unit 1Sikkim Manipal University Page No. 2
This introductory unit on law will help you get familiar with the concept ofbusiness law and other basic legal concepts related to law. After studyingthis unit, you should be able to:
Explain the nature of law
Describe sources of Indian law
Define business legal environment and mercantile law
Analyze the essentials of law
1.2 Meaning and Nature of Law
The term „law‟ is used in many senses: you may speak of the law of physics,
mathematics, science, or the laws of the football or health. In its widest
sense, „law‟ means any rule of conduct, standard or pattern, to which
actions are required to conform; if not conformed, sanctions are imposed.
When we speak of the law of a State, we use the term „law‟
in a special andstrict sense.
1.2.1 Characteristics of law
Law is a body of rules.
These rules prescribe the conduct, standard orpattern to which actions of the persons in the state are required toconform. However, all rules of conduct do not become law in the strictsense. We resort to various kinds of rules to guide our lives.
For example 
, our conduct may be guided by a rule such as “do not bearrogant” or “do not be disrespectful to elders or women”. These are
ethical or moral rules by which our daily lives are guided. If we do notfollow them, we may lose our friends and their respect, but no legalaction can be taken against us.2.
Law is for the guidance or conduct of persons 
both human and artificial.
The law is not made just for the sake of making it. The rulesembodied in the law are made, so as to ensure that actions of thepersons in the society conform to some predetermined standard orpattern. This is necessary so as to ensure continuance of the society. No
doubt, if citizens are „self 
enlightened‟ or „self 
controlled‟, disputes may
be minimized, but will not be eliminated. Rules are, therefore, drawn upto ensure that members of the society may live and work together in anorderly manner. Therefore, if the rules embodied in the law are broken,
Legal Aspects of Business Unit 1Sikkim Manipal University Page No. 3
compulsion is used to enforce obedience, and certain consequencesensue.3.
Law is imposed.
Law is imposed on the members to bring about anorder in the group, enabling it to continue and prosper. It is notsomething which may or may not be obeyed at the sweet will of themembers of society. If you cannot impose a rule it is better not to have it.Thus, law is made obligatory on the members of the society.4.
Law is enforced by the executive.
Obviously, unless a law is enforcedit ceases to be a law and those persons subject to it will regard it asdead.
For example 
, if A steals B‟s bicycle, he may be prosecuted by a
court and may be punished. Also, the court may order the restitution ofthe bicycle to its rightful owner i.e., B. If the government passes manylaws but does not attempt to enforce them, the citizens lose their respectfor government and law, and society is greatly weakened. The forceused is known as sanction which the state administers to secureobedience to its laws.5.
The state.
A state is a territorial division, with people therein subject to auniform system of law administered by some authority of the state. Thus,law presupposes a state.6.
Content of law.
The law is a living thing and changes throughout thecourse of history. Law responds to public opinion and changesaccordingly. Law can never be static. Therefore, amendments are madein different laws from time to time. For example, the Monopolistic andRestrictive Trade Practices Act, 1969, has been subjected to manyamendments since its inception in 1969.7.
Two basic ideas involved in law.
The two basic ideas involved in anylaw are: (i) to maintain some form of social order in a group and (ii) tocompel members of the group to be within that order. These basic ideasunderlie formulation of any rules for the members of a group. A group iscreated because first, there is a social instinct in the people to livetogether and secondly, it helps them in self-preservation. Rules are
made by the members of the group, so that the group doesn‟t whither 
Law is made to serve some purpose which may be social,economic or political.
Some examples of „law‟ in the widest sense of the term. „Law‟ in its widest sense may include: (i) Moral rules or 

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