SHWETHA S

Asst.Professor.

UNIT-1

INTRODUCTION TO BUSINESS LAW

Meaning And Definition of Law

Law means a set of rules it may be defined as the rules of conduct recognised and enforced by the state to control
and regulate people behaviour with a view to securing justice peaceful living and social security.

Objectives of Law
● To establish standards- an important function of loss determine a minimally acceptable behaviour in a
society some activities are considered to be crime because the law of the country has determined that it
will not tolerate certain behaviour.
● To Maintain order- this is an offshoot of established standard. The law when enforce provide order
consists with societies guidelines.
● To Resolve disputes- the law provide a formal means for resolving disputes the court system.
● To protect liberty and rights- function of laws to protect the various liberties and rights from violation
by person or organisation or government.

Nature of Law

Any system of regulations to govern the conduct of people of a community society or Nation in response to the
need of regularity consistency justice based upon the collective human experience.
Law on the basis of form can be divided into different types
1. Institution.
The following will fall under the form of Institutions
● Parliament- it makes laws like statues and regulations
● Courts- it makes laws by interpreting the law made by Parliament and by changing in the common law
the court resolve the dispute by referring to both set of law.
● Prison - It serves as a sanction or penalty for those who are convicted of breaking the law.
2. Personnel - It may equate law with specific personnel who carry out law roles legal rules.
● Police- who are part of the government Bureaucracy police help administer and force the law.
● Legal professionals- who represent clients that try to persuade the courts or judges to accept the
legal argument and interpret the law in favour of the client.
● Judges- to make law by interpret in Parliament Made law and common law cases.
● Formal legal process- equating law with it legal process
example judging of cases by judges.

Meaning of Business Law

Business law also called as commercial law or mercantile law, is that branch of legal system which regulate
business activities.
 SHWETHA S
Asst.Professor.

Definition Of Business Law

According to S R Daver, " Business law is the branch of law which is applicable to or concerned with trade and
commerce in connection with various business transaction".

Scope Of Business Law

There is a wide very scope of business law. It includes laws relating to contract, partnership, sale of goods,
Negotiable Instruments, companies, insolvency, insurance, carriage of goods etc.

1. Indian Contract Act of 1872- it is the oldest and widely preferred act of Indian business act, this act was
passed by British and based on the principles of English common law this act helps to people to bind and
maintain legally enforceable relation and conduct business and non business transaction. It focuses on
offer and acceptance in legal transactions.

2. The Negotiable Instrument Act 1881- it is a act that defines and amend the laws relating to promissory
notes, bill of exchange and cheque.

3. The Indian Sale of Goods Act 1930- this act regulates the sale and purchase of all the transactions of a
company. It is a contract through which the seller transfers or agrees to transfer the good the buyer for a
price.

4. The Contract of Partnership Act 1932- it is an act enacted to regulate the partnership of the firms
determine the rights and duties. Of the partners of the contract have to abide by to carry on the business.

5. Insurance Act 1938- this act was originally passed in the year 1938 this Law governs all the forms of
insurance and provide strict control over insurance business.

6. The Indian Patent Laws 1970- this Act was enacted to grant the exclusive rights over the invention the
patent act also ensures commercial returns the inventor for the time and money spent in generating a new
product.

7. The Consumer Protection Act 1986- this Act was enacted to protect the interest of the consumers in
India it makes provisions for the establishment of consumer councils and other authorities in order to
settle consumer disputes.

8. The Environment protection Act 1986- the purpose of the act is implemented decisions of the United
Nations Conference on the human environment it grants the protection and improvement of human
environment and the prevention of hazardous to human beings and the living creature plants and
property.
9. The Competition Act 2002- this act was established to prevent the activities that has an adverse effect
on the competition in India this act ban the abusive situation of the market monopoly.

10. The Companies Act 2013- this is the most important mercantile act it regulate the incorporation of a
company responsibilities of a company directors and dissolution of a company this act replaces the
Companies Act 1956.
 SHWETHA S
Asst.Professor.
11. The Information Technology Act 2000- this is an act to provide legal recognition for transaction carried
out by means of electronic data interchange and other means of electronic communication commonly
referred as Electronic Commerce.

12. Foreign Exchange Management Act 1999- it was an act passed in the winter session of the parliament
in 1999 which replaced Foreign Exchange Regulation Act this act seeks to make offences related foreign
exchange civil offences. It extends the whole of India.

Sources of Business Law

The important sources of Business Law :

1. English Mercantile Law

2. Statute Law
3. Judicial Decisions
4. Custom And Usage

1. The English Law- it is the most important source of Indian mercantile law the sources of English Law
are
● Alex Mercartoria or law merchant- It consists of legal principles based on custom and usage they
developed the first as a separate system of law and subsequently became part of the common law.
● Common law - this law is known as judge made law it is based upon customs and practices handed
down from generation to generation. It is old is handwritten law.
● Equity- it is based upon concept of justice developed by the judges whose decisions become
precedents.
● Statute law- It is laid down in Act of parliament. Hence it acts as the most superior and powerful
source of law.

2. Statute Law- a Bill passed by the Parliament and signed by the president become the statute on most of
the Indian laws are embedded in the various acts passed by the central as well as state legislators.

3. Judicial Decisions-these are called as case laws. They are referred to as precedents and binding on all
courts having jurisdiction lower to that of the court which gave the judgement.

4.Custom and Usage- a well recognised custom or usage can even override the statute
law most of the business custom and usage have all been already been codified and given
legal sanction in India
● Observant over a long period - customer are observed by large number of people over a long
period Acquire the force of law thus the custom of granting 3 days of Grace in calculating the
date of maturity of bill of exchange has come to have the force of law.
● interest of the society- customs rest on the popular conviction that it is in the interest of the society
this conviction is so strong that it is not found desirable to go against it.
SHWETHA S
Asst.Professor.