Introduction of Business law

Business law is a
fusion of two words-
business and law

What is Law? Law

is a valid instrument
to govern the
society. Law is
binding to all.

Law is a means of
rendering justice,
maintaining
discipline, peace and
security for the
protection,
promotion and
betterment of the
society.

Law is a set of rules

and regulations,
body of principles,
which governs
control and manages
the society.

Law punishes wrong

doers i.e who
disobeys or breaks
the law.

Law is above all. No

one is above the law.

It treats equally to
all. No one will be
discriminated on the
basis of cast class,
religion, gender,
status.

Law is to be obeyed
and followed by all.
“Ignorance of law is
no excuse”.
Everyone is
supposed to have the
knowledge of law.

Law is a social
science. Law is
concern to all the
members of the
society. It grows
and growth with
the development
of the society. It
controls,
regulates,
manages, and
governs the
human behavior
and conduct of the
members of the
society.

Law is of
dynamic nature. It
keeps on changing
as per the need of
the society. The
definition given
once may not be
valid for all the
time to come. It
keeps its pace
with the
development of
the society.

Types of law:
There are various
types of law. In
substance it can
be classified as
Substantive law
and procedural
law
Substantive law is
a law related to
rights and duties
and their
enforcement. e.g
Right to freedom
of speech.
Substantive law is
law of principles.
Procedural law is
a law related to
the process of
enforcing rights
and duties
provisioned by the
substantive law. It
prescribes the
method of
enforcing rights,
where it is
restricted or
prevented from
enjoying the
thereof. It is a
practical law.
As per the subject
matter of law for
our concern, it
may be further
classified as
criminal law and
civil law.
Criminal law
refers to the law
of crime i.e. an act
done against the
state. The
wrongdoers will
be punished under
it in terms of
penalty or
imprisonment or
both.
Civil law refers to
the law related to
the property and
rights breach of
which the persons
will be punished
in terms of the
fine but not
imprisonment.

Business law
comes under the
scope of the civil
law.

Business law: Business law

is a part of general law. It
falls under the family of
civil law.
Business law is a law
related to business
activities.
It describes process of
establishment of business
organization, its operation,
extension, and dissolution.

The rights, duties,

liabilities of the members
of the business of society is
the key concern of the
business law.

The facilities, concessions

available while conducting
business are the scope of
the business law.
Business law is also
concern with the
governmental control or
interference thereof
regarding business
activities.

Thus, the law which

regulates controls, governs,
or manages the business
activities in the business
community is known as
business law.

Business refers to
human activities
or means of
earning money
through
enterprise,
profession,
service etc.

Business law is
also known as
commercial law,
mercantile law,
trade law, and law
of contract which
deals with
business
activities.

Therefore
business law
includes various
laws relating to
business activities
like: company,
partnership, law
of contract, sale
of goods, law of
carriage, law of
agency etc.
Hence it can be
defined that,
business law is
that part of
law,which
regulates the
business
transaction of the
businesscommunit
y.

Business law is a
part of civil law.
Business law
includes the rules
relating to the
right and
obligation of the
members of the
business society.
Itdetermines the
right and duties
and obligation of
the members of
the business
society engaged in
the
businessactivities.

Business law
brings the
uniformity in the
business
transaction. A
business
transaction may
be carried through
sole enterprises,
partnership or
company as per
the business law.
 Generally a
dispute where
arises in business
dealings will be
resolve through
the Special law
like:
 Law of
arbitration,
 Mediation,
 Tribunal
other than that of
the process of the
regular court.

Importance of
business law:
 To carryout
business in a
systematic and
proper way
 To avoid
uncertainty and
confusion among
the members of
the business
society
 To develop the
business activities
for the economic
 development of
the nation
 To protect and
promote the
interest of the
members of the
business society
 To maintain peace
and security in the
business society
 To create good
and friendly
environment in
the business
society i.e by
extending the
good faith and
good cooperation
between business
persons and non
business persons
and other
institutions
 To induce the
intended investors
to take part in the
business activities
by providing
various facilities.
 To make aware to
the business
persons regarding
their rights and
obligations.
 To settle the
disputes
prescribing the
modes and
process of dispute
settlement
mechanism i.e
without going to
the court
procedure.
 To maintain
friendly
environment in
the business
society by
discouraging
monopolistic
approach and
difficulties arising
in the course of
business

Sources of Law:

Sources refer to the place from where law origins or

derive.

It also refers to the place from where law emerges and

obtains validity

Sources of law can be classified as follows:

a. Binding sources
b. Secondary/Persuasive sources

Binding sources:

It can be listed as
follows:

a. Legislation: It
is a supreme
source of law.
Legislation is
an authentic
body. Law
made by
legislation
carries validity.
It can
formulate new
law, amend
existing law
and also repeal
the existing
law.

b. Precedent:
Precedent
refers to the
judge made
law. The guide
lines, ratios
developed by
the court in the
course of
adjudication
carries the
validity and
 applicable as
an existing law
for future
similar cases to
come.
Precedent
fulfills the gap
of law through
interpretation
of the court.
While
formulating
law, reference
will be taken
from such
ratios and
guidelines of
the court.

c. Custom or
usage:
Custom refers
to the practices
that have been
prevailed and
recognized by
the society as a
conduct of the
human being
since long
time. Such
custom and
usages play
significant role
in the course of
 the making
law and
regarded as
sources of law.

d. International
Conventions:
Conventions
means
agreement
made by
parties in the
course of their
dealings. Such
conventions
carries binding
force to the
concern parties
by virtue of
Treaties Act.
The terms and
conditions and
the principles
adopted by
those
conventions
converted to
the general
rules
subsequently
which becomes
relevant in the
course of law
making
process. (UN
 Conventions,
ILO
Conventions,
WTO etc.)

Secondary Sources/Persuasive sources

Secondary sources can be listed as follows:

a. Public opinion

b. Professional or Experts or scholars view

c. Writers view

d. National or International
periodicals/journals

e. National or International Business

Agreements (Commercial treaties)

f. Foreign laws

g. Foreign precedent

h. English Mercantile law ( specially for

business law)

Britain has
got long
history in
the area of
business
transaction.
British
traders have
developed
various
rules and
principles
for business
dealings
and
transactions
, later on it
was
converted
as
mercantile
law. East
India
company as
business
company
came in
India which
brought
various
practical
rules
principles
for business
purpose.
Subsequentl
y they are
adopted in
India as
guidelines
and
principles
for trading
activities.

Nepalese
business
affairs were
also
influenced
by the
trading
activities of
India due to
the open
boarder
system,
cultural
religious tie
up between
two
countries
and also
close
political
relationship
with British
rulers at
that time.
Hence there
was directly
or indirectly
influence of
the business
law,
practices of
India in
Nepal. In
consequenc
e, various
laws during
early time
 in Nepal
have been
formulated
with
reference to
the British
legal
principles
adopted in
India.

Sole proprietorship
Partnership- depends on Mutual agencies (legal relationship between partners in
a partnership where each partner has authorization powers and the
ability enter the partnership into business contracts), Unlimited liability.
It may dissolve any time on interest of partner.
Company: East India Company Firstly it was just profit motive but now
company are also being registered for charitable, not profit distribution
company.