Legal Environment of Business PUTTU GURU PRASAD INC GUNTUR

Introduction to Legal
Environment

Chapter I The Objectives of chapter-I •Philosophy of Law •Classification of Law •Torts •National and International law •Justice Delivery System in India

Meaning of Law
The body of rules recognized and enforced by the courts of law ( Salmond) • Law is command of the sovereign ( Austin) • Holland's definition can be explained as follows: 4. Law is a rule relating to actions of human beings 5. It regulates external actions of human beings. 6. It is enforced by the state •

Why should Managers study Law

Law has its origin in Morality and Moral reasons. Most of the laws are backed up by moral rules or its source is in morality

Moral and Legal Rules

Please refer SS Gulshan ( Mercantile Law) for further reading

Environments to by understood by Managers
Legal environment

Economic environment

Social environment

Business
Environment

Political environment

Cultural and Other environment

Purpose of Law
1. To maintain law and order and secure justice within a given society. 2. Law secures justice as it has the sanction of the state power behind it. 3. To protect the interest of individuals, their rights- Fundamental rights and other legal rights ( Rights are legally protected interests)

Advantages of Law
• Provides uniformity, certainty in administration of justice. • It provides fixed principles to avoid arbitrariness, bias, dishonest decisions etc. • It takes the individual judgment beyond errors • Reliable

derive or obtain the knowledge of law. • LegislationStatutory law or enacted law by the law making body( by parliament or legislature including delegated legislation)

* Meaning- where we

Sources of Law
Precedents

Stare decisis

• Case laws – Precedents • Customary law

Ratio decidendi

Obiter dicta

(Juristic writings, literary works foreign decision are historical sources of law)

• • • • • •

Imperative law Natural law Moral law Conventional law Customary law Constitutional Law

Classification of Law

• Civil Law- Individual Rights • Criminal Law- Individual and State ( state takes action) • National / Municipal law • International Law-(Private
( Law of the land) International law and Public International Law)

(Fundamental Rights are guaranteed from Article 12-32 of the Indian Constitution)

Different classifications of Civil Laws
Law of contracts Including Special contracts Civil Laws Negotiable Instruments Act, 1881 Insurance Act, 1938 Limitation law and Stamp Law Transfer of property Act Partnership Act, 1932,
Sale Of Goods Act, 1930

Law of Torts

Civil Procedure code which deals with administration of all civil matters

Distinction between Civil (including Torts) and Criminal law

Private body or individual takes action ( Tort is a wrong ● Police, government and intoto the State prosecutes the accused or defendant. against individual. The injured party called Plaintiff files a suit against the defendant)

Administered by Civil Courts by following Civil Procedure Code (CPC). (Torts cases to be filed in Civil Courts)

The State takes action in the criminal courts according to the Criminal Procedure Code ( Cr PC) If the accused is proved guilty , he or she is punished with fine, imprisonment or death penalty.( punishment is the purpose of crime) Continued

If the plaintiff proves his case he wins the case and is awarded • damages or other remedies (The loss is compensated monetarily to restore the status of the individual, which is the purpose of torts)

Continued
• The burden of prove is prima facie on the plaintiff to prove his case, but it may shift to the defendant later. The proceedings are through writ petitions, or by summons under CPC Tortious actions are compoundable. • Burden of proof is always on the State unless the accused is claiming any of the defences provided under law. The proceedings is always by the State it, the proceedings commences either by arrest or by issuance of summons. The criminal law is not compoundable unless specified in the schedule of Cr PC • •

Law of Torts
• Tort- “tortum” ( Latin) i.e. wrong, crooked or twisted • Civil wrong- Constituents elements to be proved by the aggrieved party ( Plaintiff) to make the other party (defendant) is that, that the defendant had a  Legal Duty  He or she breached that legal duty  It caused an injury or a Legal damage

• To constitute a tort- an act should be done- the act can be positive act or negative act • Tortious acts are committed by any of the following ways Malfeasance- Actual commission of wrongful or  Misfeasance- Improper performance of a lawful  Non- feasance- Non - performance of an act
duty unlawful act

Tort

General Principles of Torts
• Ubi Jus Ibi Remedium - where there is a • Injuria Sine Damnum- Injury without • Damnum Sine Injuria- Damage without
Injury Damage
( Ashby vs. White, Marzetti vs. Williams) ( Gloucester Grammar School Case, Ushaben vs. Bhagyalaksmi chitra mandir) If the plaintiff succeeds proving his case in the court, he is awarded damages or any other legal remedies are ordered by the courts (Civil courts)

right there is a remedy

It evolved through• Merchants own law and courts • Common Law • Customs • Usages • Practices SourcesLex mercantoria Legislation, Judicial decisions Common law, Principles of equity, and Unwritten Law

Evolution of Mercantile/ Business Law

International Business Law
• IBL is International co-operation to regulate the policies of different governments and to influence the trade. • Policies are based on the social, economic, political and economic factors based on the particular country. • The planning is done by the International organizations or regional organizations particularly based on monetary, cultural, social, political, economical aspects etc IBL helps on deciding on foreign exchange, export import policies, free trade, tariffs etc

WTO deals with the international rules on trade and tariff to allow free flow of trade and settlement of disputes between the parties. WTO assists in respecting the Multilateral and bilateral treaty. WTO objectives are: 4. To raise standard of living 5. Ensure full employment 6. Ensure steady growth of income 7. Expansion of production of goods and services

GATT and WTO

• Courts, quasi judicial bodies administers justice • “Court”- is a body in government to which administration of justice is delegated

Justice delivery System in India

Hierarchy of Courts
Supreme Court

High Court

Criminal Courts

Civil Courts

Statutory authorities & Other Quasi judicial bodies are under the HC

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