INTRODUCTION TO BUSINESS LAW

LECTURE 1
INTRODUCTION
PRIMARY SOURCE: COMMERCIAL LAW AND INDUSTRIAL LAW, 27TH EDITION BY ARUN
KUMAR SEN AND JITENDRA KUMAR MITRA

Course Instructor: Farzana Tazin

 Learning Objectives
To Learn- 1. What is business
2. Business and environment
3. What is law
4. Need for the knowledge of Law
5. Business Law
6. Purpose of Business Law
7. Functions of Business Law
8. Importance of Business Law
9. Sources of Business Law
Legal Environment of business
 What is Business?
• Provide things to enjoy life
• Development
• Productive utilization of wealth producing
resources.
• Leads to innovation and improvements in
production process- enriches the life.
• Today Business Enterprises dominate our
lives.
 Power of Business

• The wealth of a country is, to great extent, is created

and controlled by BUSINESS.
• This gives business and the executives thereof the
‘enormous power’ to affect the lives of different
segments of society, such as customers, employees,
shareholders , etc.
 Business Environment

Business environment means the sum of all

external forces and conditions that
influence business and potentially affects
its performance which includes economic
factors, socio-cultural factors, politico-legal
factors, technical factors and international
factors .
 Relationship Between Business and its
Environment

• Various interest groups: Consumers,

Employees, Owners, Creditors, Suppliers,
Distributors, Competitors, the Governments,
etc.
• Survival and Growth of business will depend
upon its relations with all these interest
groups.
• Law and business are closely related disciplines
(complementary)
 What is Law ?
1.A citizen may think of ‘law’ as a set of rules
which he/she must obey.
2. A lawyer who practices ‘ law’ may think of
law as a vocation .
 What is Law ?
3.A legislator may look at ‘law’ as a something
created by him.
4.A judge may think of ‘law’ as a guiding
principles to be applied in making decisions.
 Meaning of Law
Law includes all those rules and
regulations which regulate our relations
with other individuals and with the state.
 Meaning of Law
Itmay be defined as the rules of conduct, recognized
and enforced by the state to control and regulate the
conduct of people, to protect their property and
contractual rights with a view to securing justice,
peaceful living social security.
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 The law is not rigid, it is flexible.
Since the value system of society keeps on
changing , the law also keeps changing , according
to the changing requirements of the society.
Example: Digital Security Act , 2018 is exchanged
by ICT act 2006.
 Why should one know law ?

 Because ignorance of law is no excuse.

 Ex : 1 If X is caught traveling in a train without ticket, cannot plead
that he was not aware of the rule regarding the purchase of ticket and
therefore he may not be excused.
 Ex : 2 If Y is caught driving scooter without driving license, he
cannot plead that he was not aware of the traffic rule regarding the
obtaining of a driving license and therefore, he may not be excused.
 Business Law
 Business laws are those which regulate the conduct of the business.
 Business law, also called commercial law or mercantile law, the body
of rules, whether by agreement, or national or international legislation,
governing the dealings between persons in commercial matters.
 Business law falls into two distinctive areas: (1) the regulation of
commercial entities by the laws of company, partnership, agency and
(2) the regulation of commercial transactions by the laws
of contract and related fields.
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 Business law encompasses all of the laws that dictate how
to form and run a business.
 This includes all of the laws that govern how to start, buy,
manage and close or sell any type of business.
 Business laws establish the rules that all businesses should
follow. A knowledge businessperson will be generally
familiar with business.
 Purpose of Business Law

1. Establishing standards identifies what types of

behaviour are and are not accepted in society.
 For example, damage to person or property is
considered a crime because it is not tolerated by society.
2. Maintaining order is necessary for a civilized society.
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3. Resolving disputes allows for the mitigation of issues that
arise between those with different wants, needs, views, and/or
values. Disputes can also be resolved through alternative dispute
resolution, which are official but less formal methods such as
mediation and arbitration.
4. Protecting liberties and rights ensures each individual is
allowed his or her constitutional rights, including freedom of
speech and so forth.
 Functions of Business Law

Businesses large and small must comply with the same legal
regulations. Some of the largest legal areas necessary in business
include the following:
 Contract law includes drafting, rights assignment, work
delegation, transactions, agreements, breach of contract, and
remedies for a breach.
 Intellectual property law including trademarks and patents,
prevents others from profiting from your ideas and creations.
 Functions of Business Law

 Corporate law governs the formation of corporations and

sale of corporate justices.
 Tax law determines how different types of businesses are
taxed.
 Employment law governs how employers interact with
their employees and the rights and responsibilities of each,
minimum wage law, workplace safety, and overtime rules.
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 Environmental law tries to mitigate the impact businesses
have on the environment by limiting water and air pollution,
regulating pesticide and chemical use, and establishing
penalties for violating these laws.
 Business organization laws define major business entities,
such as partnerships, limited liability companies, sole
proprietorships, and corporation.
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Property law governs personal and real property.

Negotiable instruments law includes governance of
secured transactions.
Computer law analyses and governs the impact of
computer technology on other areas of business law.
 Importance of Business Law
 The business law studies are very important as it helps the
management professionals in realizing the business ethics, he
or she must follow in order to run a proper & authenticated
business.
 This must be in accordance with the law & regulations
fundamental in the society.
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 Doing a proper business with an authenticated business license
and registration gives confidence.
 It gives huge confidence in handling day to day business
requirements to those who know the legal aspect of a business.
 It's important for business owners, managers, and other
professionals to have a basic understanding of business law to
help them make better decisions.
 Sources of Business Law
 English Mercantile Law
English laws are the primary sources of Indian Mercantile Law.
English laws are based on customs and usages of merchants in
England.
Example: Indian Contract Act, 1872, The Sale of Goods
Acts,1930, The Partnership Act, 1932, The Negotiable Instrument
Act 1881, The Companies Act, 1956.
 Sources of Business Law
 The Statute Law
The various Acts passed by the Indian Legislature are the main sources
of mercantile law in India .
Examples : Traffic regulations, tax laws, company formation regulations
 Customs and Usages The customs and usages of a trade are also one
of the sources of mercantile law in India. These customs and usages
govern the merchants of a trade in their dealings both each other.
Some Acts passed by the Indian Legislature the importance of such
customs and usages.
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 The Common Law
This source consists of all those unwritten legal policies
representing customs and traditions developed over centuries
by the English courts. Thus, the common law is found in the
collected cases of the various courts of law and is sometimes
known as ‘case law’.
Example of common law is a rule that a judge says that
people have a duty to read contracts.
 Assignment for the Next Class

1.Why Business students should study

Business Law?
2. Purpose of Business Law
THANK YOU