School of Business

&Economics

Project Title: Business law is basically the branch of law which regulates a country’s
trade & commerce.
Course Title : Legal Environment of Business
Course Code: LAW200 (Section#14)

Prepared for:

Effat Sharmin (Efs)

Lecturer, Department of
Law North South University

Prepared by:

Team MARS
Name ID

Date of Submission: 3rd August 2019

 Table of Contents
Acknowledgement.................................................................................................................................3
Introduction...........................................................................................................................................4
Contract law..........................................................................................................................................5
Contract has some essential elements..............................................................................................5
In business there some legal terms and issues..................................................................................5
Labor Law..............................................................................................................................................6
Elements of labor law........................................................................................................................6
Sale of Goods.........................................................................................................................................7
The Essential Elements of Sale of Goods...........................................................................................8
Competition Law....................................................................................................................................9
In general, competition law prohibits two main types of anti-competitive activity...........................9
Implementation of Competition law..................................................................................................9
Negotiable instrument.........................................................................................................................10
The essential elements of Negotiable instrument...........................................................................10
Alternative Dispute Resolution............................................................................................................11
There are mainly three elements of ADR.........................................................................................12
Implementation...............................................................................................................................12
GOOD or BAD...................................................................................................................................12
Problems..........................................................................................................................................13
Conclusion...........................................................................................................................................14
Bibliography.........................................................................................................................................15
Acknowledgement
At first we want to thank almighty ‘’GOD’’ for enabling us to prepare this report and finish it
on time. There are some people without whom it would be impossible for me to make this
report. We want to thanks them for their help. Firstly, we want to thank our advisor “Effat
Sharmin” madam for giving the opportunity to make the report on “Business law is the
brunch of the law which regulates countries trade and commerce. Without heradvice and
instruction, it would be really tough and near impossible to prepare it. We would like to thank
her for her support.
Introduction
The practice of law and the commencement of business are the pillars of the growing
economy. Business law defines the laws includes contract law, corporate law, sales of good,
negotiation instruments, ADR, competition law, labor law etc. Many other economic law
bearing trade, industries and commercial law. And business law is the brunch of the law
which regulates a country’s trade and commerce. And it refers that rules and regulations
which governs formation and execution of business formation. These provisions compromise
the legal environment of business. Business law is intended to infuse the much needed
certainly in commercial dealings.
Contract law
(Contract Act, 1872.) A contract is a legally binding agreement which recognizes the rights
and duties to the agreements of the parties. An agreement is basically involving the exchange
of goods, services, money or promises of any of those. Body of law govern that written
agreements are associated with exchange of goods, services, money and properties. It
includes the nature of contractual obligations, actions, freedom, privacy, terminations. And it
covers also agency relationships, commercial paper, and contract of employment. In every
business there has many contracts. And for those contracts the business is running through
fluently. Law of contracts is the most important part of commercial law because every
commercial transaction starts from an agreement between two or more parties. A contract is
an agreement creating and obligations between parties. The contract law regulates trade and
commerce. All contracts are made when one party makes an offer to another party and that
other party accepts the offer. When the proposal is accepted then it becomes a contract. In all
business transactions contracts are made. Those can be verbal contract and also written
contract. When it is legally enforced then the term of obligations agreement become created.
In business there has such agreement; bills of sale, purchase orders and employment
agreement.

Contract has some essential elements:

1. Agreement: When an offer become accepted by other party, it becomes an
agreement.
2. Consideration: Both parties to a contract have to provide consideration. Each side
must promise to give something for the other side. Money is the number one form of
consideration.
3. Intention to create legal relations: Parties must intend that their agreement is to
have legal binding authority. This law won’t be concern itself with purely domestic or
social agreements between people. There must be an intention to create a legal
obligation.
4. Form: In certain contracts, it must be written agreement. And certain formalities must
be observed.
5. Capacity: Any party to a contract must be capable of entering into a contract.
6. Consent: Any agreement must have been entered into voluntarily. If the contract has
under duress, then it will be rescinded.
7. Legality: The purpose of any contract must not be illegal or contrary to public policy.
A contract that lacks one of these elements will be rendered void, voidable or
unenforceable

In business there some legal terms and issues:

 Binding: it has an obligation having power to bind.
 Business entity: an organization always apart from any interest, business or
personal.
  Civil Lawsuit: It is a claim when one person suffered loss for the another one.
 Contract: It’s a promise to provide something and in return for a valuable benefit.
 Legally binding: It’s a legal agreement and must be in written.
In terms of business there has contract law. And every purpose of business contract law uses.
Because without any contract no business can grow up or nothing can deal up. There every
business there must have agreement for any products/deals. Both party have to consider any
such of things. Then both party have to create legal relationship through business. They need
to fill up written agreement (Form) also. Both party have to capable for doing any contract.
The contract must be in voluntary. And it must be legal.
For any business there’s much important to have contract. Because without any contract there
has no legality. So contract law is much important.
Contract law is good for business law. Because it organized the law. And according to this
law every contract is signed.
Contracts are breached in two ways. These are- 1) Actual breach ,2) Anticipatory breach.
When any organization breach the law then have to be punished. Because everything is
binding into contract.

Labor Law
Labor law basically is some rules about the right of labors. Labors are the most important
assets for a firm. Labor law known as employment law. It is a law that administersaddressed
the legal rights of obligations and restrictions on working people and their organizations.
Labor law is applicable for employment system, trade unions and industrial relations.
Basically labor law is for improving people’s life in working place.
In early nineteenth century worker started to make unions for some problems. This is now
known as labor movement. Because of the employment conditions as they did not get proper
wages for their work many people join the newly formed union. In 1935 the National Labor
Relations Board was created.

Elements of labor law

 Employment: it is a basic concept of labor law.
 Individual employment relationships: The name of this law was law of master and
servant. This law is about aspects of promotion, transfer and dismissal procedures.
Individual contract of employment plays an important role in the civil law countries
than in common law countries.
 Conditions of work: Prevention of child labor, daily work hour, rest periods and
some special rules about women is part of the conditions of work.
 The administration of labor law: It involves the organization and functioning of
administrative authorities.
  Social security: income security for sickness, unemployment, retirement, maternity,
family, invalidity is under social security. This rule varies in different country.
 Health, safety and welfare: Accident prevention rules, rules for risky profession
such as mining, construction etc. Feeding, rest, transportation facilities is also under
this element.
 Trade unions and industrial relations: Workers consultation, their participation in
management, their representation on company boards, obligations of trade unions etc.
 Wages and remuneration: Wage arrangements, income policies, methods of
payment are under wages and remuneration.
 Special provisions for particular occupational or other groups: For some
profession as mining, transportation, agriculture has some specific rules

The labor law implemented completely because there is an act The National Labor Relations
Act which is enacted in 1935 as guarantees workers the right to form unions and engage in
collective bargaining. There is an another act which is The Age Discrimination in
Employment Act of 1967 prohibits employment discrimination based on age with respect to
employees of 40 years of age or older.
Labor law is good for a labor as well as for a country. Without labor law prevention of child
labor, daily work hour, rest periods and some special rules about women is part of the
conditions of work all of this couldn’t be happened.
For all reasons labor law is necessary for employees and business. Children under the age of
14, they are prohibiting by the federal fair labor standards act unless they work in a parents’
business.

Sale of Goods
The law relating to the sale of goods is guided by the sale of goods act, 1930. And this law is
relating with the business law. Because in every term of business there must have sales of
goods. Without sale or without buy there has no business in this world. So, every part of
business sale is needed thing.
In this act,

 Buyer: Who buys or willing to buy goods by section 2(1)

 Seller: Who sells or willing to sell goods by section 2(13)
 Goods: Every property what is easily moveable by section 2(7)
Buyers are buy the goods and sellers are sell the good. Without these two no business can
have happened. So, in every business there must have to buyer and seller. Both are very
important business. And also important the Goods. Without goods no selling buying is
possible. If there have no good then what will the seller sell? And what will the buyer buy?
So, three of these are important in every business.
There are three types of goods under sale of goods.
 1. Existing goods: The goods already own by someone and exist in
market. Existing goods can be
I. Specific goods: Goods that are clearly identified.
II. Generic goods: Goods that are indicated by description, but are not clearly
identified.
2. Future goods: The goods produced by seller after an agreement of sale has been
made.
3. Contingent goods: The acquirement of such goods depends on contingency.

The Essential Elements of Sale of Goods

There are six essential elements of sale of goods given below: In business law these are most
important.
1. There must be a contract for the exchange of goods for money.
2. Contract of sale involves a change of ownership. Buyer and seller must be different
persons.
3. A contract of sale made by an offer to buy and sell goods for a price and the
acceptance of such an offer.
4. A contract of sale can be
I. In writing
II. Viva voce
III. implied
5. The parties may agree upon any term concerning the
I. Time
II. Place
III. Mode of delivery
6. A contract for the sale of goods must meet all of the essential elements of a valid
contract.
The law relating to the Sale of goods discuss all the rules and regulation about buying and
selling products. With this law people can buy and sell all goods in a proper way without face
any problem. So in 1930 when this law is ascertaining, people take it warmly as it is very
important and relatable with their daily life. People allow it for their wellbeing. If people,
follow sale of goods law in their daily life there are less chance to face any problem related
with money or goods. Worldwide we can see the implementation of sale of goods law. We
can say that this law is not only good but also necessary for our regular life. According to the
sale of goods law act 1930 we find the duties of a seller and buyer. It is so important to know
their duties so that they cannot cheat each other. According to this act buyer must have to pay
the price of goods according to the contact and the seller have to deliver the goods. So this act
is good for our life.
Competition Law
Competition law is a part of business law which regulates healthy competition in the market
that ensures precise trade and commerce between companies to provide goods or service to
the consumers without harming ideal competition scenario. Competition law was originally
designed to ensure greater fairness in the marketplace and protect consumers from corporate
injustices.
In details, Competition law is a branch of law that promotes or seeks to maintain market
competition by regulating anti-competitive conducts by companies. The primary purpose of
competition law is to protect free market from various situations that can break down the free
market system.
For historical reason in US Competition law is known as “antitrust law”. Competition law is
also known as “anti-monopoly law” in China and Russia.

In general, competition law prohibits two main types of anti-competitive activity

 Prohibiting Cartels: Cartels is where two or more businesses agree not to compete
with each other, are the most serious form of anti-competitive behavior. That
agreement does not have to be in writing, nor does it even have to have been carried
out. Simply making a cartel agreement is illegal. Because of cartels price will
increase, quality of products will be decreased and choice for consumers will be
narrower. The cartel offence stands out from most other offences in that consumers
typically do not know that they have been a victim.
 Banning abuse of a dominant position: Competition law tries to ban abusive
behavior by a company dominating a market, or anti-competitive practices that tend to
lead to such a dominant position. Practices controlled in this way may include
predatory pricing, Exclusive dealings, refusal to deal, and many others.

 Predatory pricing: In order to drive competitors out of the market selling a

product or service below its cost.
 Exclusive dealings: where a company ‘ties’ a retailer or wholesaler to purchase
from them on the promise that no other company will be supplied in that area.

Implementation of Competition law

In terms of Bangladesh, Competition Act 2012 isn’t completely implemented for various
drawbacks. Few important drawbacks are:

 Overlapping Functions and Conflict of Interests: The main functions of the

competition commission are defined in chapter two of the competition Act, 2012.The
duty of the Commission to eliminate practices of unhealthy competition, promote and
sustain competition, and protect the interests of consumers and ensure freedom of
trade carried on by other participants, in markets in Bangladesh. But no other details
 procedure was mentioned in the Act to perform their duties. On the other hand, those
functions are not specifically vested to the competition commission. More always
same functions are also counted as the functions of the TCB and consumer rights
protection authority under the Consumer Rights Protection Act, 2009. For this all
other related authority neglect to perform their act and depends on one another. The
Commissions functions may overlap with that and also it can make a conflict between
both commissions because of different interest.

 Lack of Clear Proposition: The competition Act, 2012 discussed about anti-
competitive agreement. But the discussion wasn’t precise enough to determine which
agreement will be considered as anti-competitive or an action of dominant position.
Also it has not defined in any section that how competition commission is going to
determine time to time market price which an agreement would become anti-
competitive.

 Poor Commission: In the Competition Act, 2012 it was mentioned that there should
one chairman and not more than four members in competition commission. But in
present context of Bangladesh the composition of the commission is too poor and
short. If the members could be at least more than 10, then it’ll be more effective. On
the other hand, the Act of 2012 is remain silence to make any others wing to assist in
the functioning of the commission.

Negotiable instrument
It is an instrument where one person will give instrument and another person will receive
that. According to the section 13 which is proposed in 1881. In that section, negotiable
instrument is a cheque or exchange bill which proposed for a specific person and he must
have to pay that. In business these instruments are use. And these are considering as a binding
contract.

The essential elements of Negotiable instrument: Negotiable instruments have some

features. These are given below:
1. An instruments must in written containing.
2. It must be unconditional.
3. It must have to pay by the maker without any conditions.
4. It must contain a certain sum of money.

This law is very essential for trade and commerce. It’s very helpful for buyers. Other side
the makers get legal bond in business. Bearer is a person who bear the negotiable
instruments, which is payable.

1. Exchange bill: one person who want something from another person and for improve their
business relation or shortage of money or any legal action will have done by exchange bill.
This type of bills has price as like of cash. Another person or givers get assurance from the
debtors.
2. Cheque: Now a day a cheque is used only for take or give. Cheque have many business
terms in use, like ordinary cross cheque, specially crossed cheque, Bearer cheque and order
cheque.

 Ordinary crosses cheque: when a cheque has two parallel straight lines in the top
and in that lines indicate co name instrument can’t exchange etc. called that is
ordinary crossed cheque.

 Specially crossed cheque: A crossed cheque which indicates bank name and other
things that is called a specially cheque.

 Bearer cheque: Anyone can use this type of cheque the bank doesn’t take any special
security to give the money. When a person shows a bearer cheque in the bank he will
get the money.

 Order cheque: order cheque usually used for big transaction. It is very safe and the
bank also take steps to give the money. A creditors give the permission then the
bearer become a real holder.

 Account payer crossings: It is a sign of general crossing. When a crossing cheque

sent to payer account then the holder can receive the money. It is very easy and safe
for money transaction.

Negotiable instrument law has reactions. It has a good effect. Negotiable instruments are
specially used for export import business and also used internal business. It provides legal
assurance to each other. Which makes a comfortable way for business inside the country and
outside the country.

Trade and commerce is a great word for a country. It depends on export and import project.
Any government can control internal and external environment of trade and commerce
increase and develop a country in every sides. In this law have some actions and terms like
C&F, CIF back to back letter of credit negotiable banking, GSP bill of entry etc.

At least we can say this law is need for trade and commerce and no need to improve this law
right now.

Alternative Dispute Resolution:

Alternative Dispute Resolution also known as ADR is settling disputes outside of courtroom.
When parties settle disputes without litigation it is called ADR or Alternative dispute
resolution.
ADR is usually a less costly and less time-consuming process for any settlement that parties
want to be solved within a short amount of time and money. ADR has gained widespread
acceptance among both the general public and the legal professionals in recent years.
There are mainly three elements of ADR
1. Negotiation
2. Mediation
3. Arbitration
Negotiation:
This is the simplest form of alternative dispute resolution. Two parties negotiate for a
solution between themselves and it’s a very cheap and fast way to resolve a dispute and it
can be done when there is any kind of privacy issue for one or both parties to share it with a
mediator or any other third party.

Mediation:
Mediation is an informal alternative to litigation. Mediation involve a third party know as a
Mediator. Mediator listen to both parties’ evidence and try to understand what both parties’
want from this dispute and try to resolve it by helping them what is best for both and how
it can be beneficial for both parties.

Arbitration:
Arbitration is slightly more formal than Mediation and both parties here choose a neutral
third party also known as Arbitrator to resolve the matter. This is like a court trial but
happening outside the court where both parties present their evidence in front of the
Arbitrator and agree to settle with whatever decision the Arbitrator makes for them.

Implementation:
Alternative Dispute Resolution is one of the most popular methods used to resolve any
dispute in Bangladesh. It is very common in rural areas of this country and for almost all kind
of disputes. Businesses also use alternative dispute resolution to resolve their disputes with
other businesses as it is very important for them to maintain a very good relationship in order
to survive in the market and do business regularly with each other. Whenever business uses
alternative dispute resolution rather than using court room for the issue they save their
valuable time and money and also they can keep their matters private in this ADR process.

GOOD or BAD?
Alternative Dispute Resolution is a good method in the right hand however there are
situations where it can be used in wrong ways. Any kind of criminal case cannot be resolved
through ADR and if it is done then that’s completely illegal. Biased arbitrator can come to a
decision that favors one party in the cost of other party. Arbitrator can take bribe from one
party to come to a decision that is suitable for the party. These things can make alternative
dispute resolution look bad idea to resolve any dispute however for many disputes it is not
possible to go through all the legal process and wait for a long time to come to a decision.
Financial factors also make ADR very important for many businesses and people to resolve
their disputes. It is not possible for any country’s legal system to handle every dispute in
the courtroom, it will put pressure on that system and bad decisions can also result from
there.
Problems:
Alternative Dispute Resolution is important for every country. There should be proper law
for arbitrator if there is someone found to be guilty of taking bribe or making biased decision
in any dispute he or she should be punished accordingly. This is the only way to prevent any
one
Conclusion
Therefore, we see that all the important business laws are affecting business, trade and
commerce in numerous ways. The laws protect the business men as well as the customers
which is essential to have a good relation between these two parties otherwise business firms
will not run. Laws are necessary to incorporate a business firm, to run a business firm and to
dissolve it. It is also essential to ensure a smooth flow of trade and commerce.
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