BBS 3rd Year TU

Unit 1: Introduction to Law and Business Law LH 8

• Nature and characteristic of law

• Types and sources of law
• Meaning and characteristic and source of Nepalese
business law
What is Law?

Individual Family Community Society State

International
Community
Different Perception of different people about law.
• Individual says, a set of rules or police is law,
• Practitioner lawyers may say law is a vocation,
• Legislator claims that law is something created by him,
• Judges say that law is the guiding principle,
• Business owner or professional says that law is the regulator or protector of
trade.
Due to these vary perception; the definition of law is not uniform, because law
is not static. Definition of law varies from person to person and time to time.
There are so many laws. Among them civil law, criminal law, mercantile law,
industrial law, cyber law, air and space law etc. are the example of these vary
laws.
Some Definition of Law:
• According to Halland, "Laws as rules of external human action
enforced by the sovereign political authority e.g. state."
• According to Salmond, "Law is the body of principles recognized and
applied by the state in the administration of Justice"
• According to Austin, "Law is the rule of conduct imposed and
enforced by the sovereign"
Elements of Law:
• Law must be promulgated or published
• It must be intelligible
• It must be prospective in nature
• It should not be contradictory
• It must be equally applicable
• It should avoid impossible demands
• It should avoid frequent change
• Official action must be within the promulgated rules.
Nature of Law:
• Law treats all people alike
• Everybody is equal in the eye of law
• Ruler and the ruled (people) are equal before the law
• Law does not discriminate people based on race, caste, religion, sex,
wealth etc.
• Nobody is above the law
Characteristics of Law:
• Law is the set of rules
• It is made and enforced by state or sovereign authority
• It regulate external human action
• It maintains peace and justice in the society
• Law protect life, liberty and property of the people
• If the is not followed, then the person will be punished according to
the law
• It is made for all and it should be followed by all.
Types of Law:
• Imperative law (Law is the command of Sovereign)
• Physical Law; natural law and principles, universal truth, planetary motion, law of light,
principle of uniqueness etc.
• Moral Law
• Ethics and morality
• Conventional law; like international instruments
• Customary law; Customs, Religious, Belief etc.
• Practical or Technical Law; copyright, trade
• International Law; this is very vague term
• Civil Law
• Criminal Law
Types of Law:
• Types of law on the basis of individual duties towards society
• 1. Criminal Law
• 2. Civil Law
• Types of law on the basis of territorial limits of operation
• 1. National Law
• 2. International Law
• Types of law on the basis of nature of law
• 1. Substantive Law
• 2. Procedural Law
• Types of law on the basis of subject matter of law
• 1. Public Law
• 2. Private Law
Substantive and Procedural Law: (This is
important)
• According to W.W. Cook, "Substantive law gives knowledge about
people's right where as procedural law gives knowledge about the
legal procedures that an individual can exercise to achieve such rights
if he/she looses them."
• According to Salmond, "Substantive law is concerned with the ends,
which the administration of justice seeks, whereas procedural law
governs the process of litigation." Substantive law deals with right and
remedies whereas procedural law is the law of action that include all
legal proceedings civil and criminal.
Distinction between Substantive and Procedural Law
Substantive Law
It discusses about the rights. Who holds the
right to property is the question of substantive
law.
It is concerned with the subject matter and
purpose of litigation.
Substantive law deals with the ends which the
administration of justice seeks.
Substantive law regulates the matters outside
the courts.
Substantive law status the facts (actions) that
may constitute a wrong.
Substantive law creates and defined the right
and obligation of the persons.
Procedural Law
It discuss about the process. How to litigate a
person to acquire his lost right is the question
of procedural law.
It governs the process of litigation. It relates
civil and criminal law.
It deals with the means and instruments by
which the ends of justice may be attained.
Procedural law regulates the affairs inside the
court.
Procedural law status the actions that may
constitute proof of a wrong.
If these rights are taken away or any person
broke those rights, the procedural laws will
show the path or way to get back those rights.
 Source of Business Law:
• Tradition, Custom and Usages
• Law made by parliament of legislature
• Precedent
• Treaties and Agreement Relating to Business
• Laws of Other Countries
• Writing or Opinion of the scholar or expert.
Binding Sources Persuasive Sources
Legislation Provision of English Law
Precedent Decision of Foreign Court
Custom and Usages Foreign Laws
Agreements/Conventions Opinion of expert or jurist
Text book journal
Moral/ Religion
 Source of Business Law: A brief explanation
• Tradition, Custom and Usages: In ancient period of time people use various
ways to trade the things. E,g. Barter system, There is uniqueness in traditional
ways of trading of goods e.g. trading with Tibetan people for this reason,
tradition, custom and usages plays important role in the development of
business law.
• Laws made by parliament: parliament makes or enacts that law which
enhances or promotes the business. It will also amend or repeal those laws that
are not necessary. In another words legislation is the main source of law. Law
made by the legislative body and enforced upon public by sovereign although
in the country is called the statutory law. This law in recognized by the courts
as the major source of law. This law in recognized by the courts as the major
source of law. In democratic country. There is a legislative body, which is
entitled and reportable to make laws for different activities.
 Cont.
• Precedent: It is earlier decision of the Supreme court which can be used in the later case of similar nature. The court while deciding the disputes may put forward some interpretation of
law of decide some disputed fact by applying rational principles that could be used in the similar nature of case .
• Treaties and Agreement relating to Business: Bilateral or Multilateral agreement or treaties are another important source of business law. WTO, SAFTA are the example of the
agreement which have great impact upon the business Law.
• Laws of other countries: British mercantile law is considered the source of Nepalese Business law, it is recognized all over the world that England was the first country to develop its
market economy in the world; It is because of number of favorable law that was enacted by England for its industry.
• Writing or opinion of the scholar of Experts: Writings of Scholar, Professionals or expert are another source of business law. In the in depth research and analysis of the scholar or
professional, on the business area will definitely help of develop the business law.
 Important of Business Law
• Business law is one of the vital necessities to a business
person or a business firm. It is a much necessary for a
business firm as civil law for a Society. In the absence of
civil law, the society cannot go ahead. Likewise in the
absence of business law, business cannot prosper and
without the progress of a business in a society, the
economic development is out of question. Hence
Business law is important not to the business firm alone
but also to the society as a whole.
The importance of business law can be stated as follows
• Business Law regulates all the business activities by making various rules regulation and
provisions.
• It guarantees remedies in case of problem or uncertainties that cause in the business. By
this the business firm can continue its operation smoothly on the society along with
economic development.
• It protects the rights and interest of the member of business and makes them aware of
business obligations.
• It provides the conditions where the law protector is to be recorded and law breaker is to
be punished. By these things more confidence among law protector to perform more well
as well as remove the conspiracy.
• It provides the provision for the establishment of business firms its internal management,
its formalities and procedure for its final stages.
• It lays down provision for the responsibility regarding its customers, community,
stakeholder, government and society and performs business ethnics and minorities.