Law as the Foundation of Business

Law

Definition:
“Law is a set of rules and regulations
enforced by the state through its
institutions which is binding upon human
society.”
Law, the Rule of Law and Property
• In the modern world it is important to
implement the law in any nation with the will
of the people.
• Property is an ownership of a person legally
without the interference and rights of the
State.
• Owner has the liberty to use his property for
his interest not contrary to the law of land.
• The property based legal system that
enables such control by allowing people to
exclude others from interfering with what their
efforts produce.
Continued……….
 Law, the Rule of Law and Property
contd…

• Contract Law enables the owner to

exchange and use his property for
business and commercial purpose.
• Regulatory law both protects ownership
and said limits on private resource use for
the property purpose. However, Anti
Trust Law forbids owners from
monopolizing classes of resources and said
rules for how business can compete to
acquire ownership in new resource.
 Classification of Law

• Types of law:
• Substantive Law
• Procedural Law
• Civil Law
• Criminal Law
• Public Law
• Private Law
1. Substantive Law

• Substantive law is a statutory written law

that governs rights and obligations of
those who are subject to it.
• Substantive law defines legal relationship
of individuals with each other or between
them and state.
• Substantive law stands in contrast to
procedural law which comprises the rules
by which a court hears and determines
what happens in civil or criminal
proceedings.
2. Procedural Law

• Procedural law deals with the method and means by

which substantive law is made and administrated.
For example: A specific time allowed for one party to
sue another and rules of law governing the process of
the litigation.
• Substantive law defines crimes and punishments and
civil rights and responsibilities in civil law and criminal
law.
• It is codified in legislated statutes (Acts) or can be
enacted through the presidential orders (Ordinance).
3. Civil Law

• Civil law is dealing with matters other than

criminal law.
For example:
A suit for breach of contract, tort cases,
commercial litigations, and cases for
compensation of damages.
• Civil cases may include suits for breach of
contract or tort cases such as suits for personal
injuries under tort law. In such case there always
an element for compensation of damages in term
of money as relief. At this stage it does not
involve punishment for accused.
4. Criminal Law

• Criminal law is also called penal law. It

covers punishments and penalties for
crimes committed by any person
against any person or state.
• Criminal punishments depend on
gravity of crime. In extreme cases like
murder the capital punishments like
sentence to death (execution) or life
time imprisonment may be awarded.
5. Public Law

• Public law is governing the relationship

between individuals, organizations,
corporations, and the state.
• Civil law, criminal law, administrative
law, procedural law are the sub-
divisions of public law.
6. Private Law

• Private law deals with relationship of individuals to each

other.
• Private law covers law of contract, tort, obligations and
rights.
• Private law also covers private relationship between
governments and private individuals based on law of
contract or law of tort
• It is distinguished from public law which deals with law
involving the state including regulatory statutes, criminal
law, and other laws.
• Public law involves interaction between general public and
state while private law involves interactions between
private citizens.
Sources of Law

Sources
Sources of law are the material and
processes out of which law is developed.
Basic sources are:
1. Constitution
2. Statutes
3. Case Laws
1. Constitution

Constitution is a system for state governance

and codified as a written documents that
provides the framework for running the affairs
of state through rules, regulations, and
principles.

There are two type of constitutions:

1. Written constitution (Pakistan, USA, India etc)
2. Un-written constitution (UK, Saudi Arabia,
Israel etc).
Constitution
Salient features of constitution:
• It defines political principles, procedures,
powers, functions of institutions, duties of
government, and fundamental rights.
• Constitution is the supreme law and it
supersedes all other laws of land.
2. Statutes

• Statute is a set of written enactment of

a legislative authority that governs
specific affairs of state.
• Statutes are the result of parliamentary
legislation as Acts.
• Statutes basic function is to command
or prohibit acts.
• Statutes are primary source of law.
3. Case Laws

Case law is also known as decisional law or

legal precedent. It is based on the courts
judgments. Judicial judgments and opinions
are the basic rules providing guideline to
state institutions to run their day to day
affairs in accordance with law.
3. Case Laws

• Case law is judge-made law.

• Judge interprets law, statutes, and regulations.
• If a lower court judge acts against any precedent and
that judgement is not challenged in higher court that
judgement will stand active.
• A court may rule against a precedent that is outdated and
ground realities are changed.
• A court may over rule its own previous judgement.
• A court may review its own decision and may pass order
vice versa of previous decision.
• Court may take suo moto notice of any government
discriminatory decision or action that is contrary to law
Legal Sanctions
• For the rule of the law it is the duty of State to
implement the law in the society without any
distinction.
• Law Enforcement Departments are
responsible to ensure the compliance of law,
while court use several methods to encourage
or to force compliance with the obedience to
the law, generally it is known as SANCTIONS
may be used against any person or
department who has failed to comply with the
law.
Continued……….
 Legal Sanctions contd…..
Preventive Function of Sanctions

• The sanctions also have a preventive sanction

because it usually results in compliance with
the requirements of law implemented by
the State.
• For this purpose punishment is used to ensure
the true compliance of laws in the democratic
society.
 Property based Legal System
and Corporate Governance
• Corporate governance is the set of laws
and rules monitoring and regulating the
business organizations in the corporate sectors
• The Business Organization are being regulated
by the Government Regulatory Authorities
through the legal system.
• Corporate Governance deals with the laws
protecting the owners of a business
organizations from the Managers who run their
business.
Question and Answer
Session
Thank You