BUSINESS LAW

Fall
2021 – 2022
AUST

Instructor: Me. Sandy El Masri

BUSINESS LAW

Introduction

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 Outline

I. General Concept
II. Definitions
III. Sources of Business Law

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I. General Concept

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 A. Defining Law

• Law: “the enforceable body of rules

that govern any society”.
Oxford dictionary of law 5th edition
Oxford university press 2002.

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 A. Defining Law (ct’d)

•No universal definition of Law.

•However, a number of common elements can be found in the

various definitions of law:

–Society/Community
–Rules/Modes of Conduct
–Binding/Obligatory Factor
–Order, Security and Justice
–Government /Authority
–Enforceability: Sanctions/Penalties

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 A. Defining Law (ct’d)

• Law consists of a group of legal rules which

govern the relationship between individuals in
a community.

• Such rules are necessary to guarantee order,

security and certainty and avoid chaos.

• In case rules are not complied with, sanctions

and penalties will be forced: the rules are
enforceable by an authority (the government).
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 A. Defining Law
1. Sources of Law Law
(Formal/Procedural)

Jurisprudence
National
Custom / Usage

Sources of Law Legal Doctrine

Treaties
International
Custom/Usage
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 1. Sources of Law
Definitions
• Law (formal/procedural): written rules and regulations
enacted by the competent authorities (generally the
Parliament).

• Custom: A usage or practice of the people, which, by common

adoption and acceptance and by long and unvarying habit, has
become compulsory, and has acquired the force of a law.

Black’s Law Dictionary.

• Usage: A long-established and well-known practice in a

particular market or trade.
Oxford dictionary of law,Me.
Instructor: 5thSandy
edition.
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 1. Sources of Law
Definitions
• Jurisprudence: A group of decisions rendered by the courts of a
country and settling a legal issue by determining a certain solution,
and which are used as an authority to settle similar cases on the
basis of the same solution (case law/precedents).

• Treaties: An agreement in written form between one or

more nation-states and/or international organizations.

• Agreement between parties/Contracts: Constitutes the law of the

Parties.

• Legal Doctrine: The opinions of legal scholars and law practitioners

on law matters (in research papers, theses, academic articles, …
etc) – more of a moral authority rather
Instructor: Me. Sandy than a source of law per se.10
El Masri
2. Distinction between Civil Law legal systems and
Common Law Legal Systems
• Civil Law Systems (Written Law Systems): where legal rules are
primarily established by the Law in a formal sense i.e. the written
rules enacted by the authorities (Parliament, Government).
Jurisprudence is also a source of law in such systems but it plays a
secondary role since court precedents are not binding and courts
may render different judgments on the same issue.

• Common Law Systems: where legal rules are primarily

established by jurisprudence. In such systems, a decision
rendered by a court is binding and mandatorily followed by the
other courts.

• Common Law Legal Systems: in England and the USA.

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 3. Principal Actors of the Law
Judiciary Responsible for
Enforcing the Jurisprudence
(Courts)
laws

People Custom/Contracts

Responsible for
Legislator Laws/Constitutio
(parliament) passing the laws n

States Custom/Treaties
Responsible for
Executive Implementing the
Decrees
(Government) laws
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4. Hierarchy of Norms In Civil Law Systems
Lebanese and French Legal Systems

Constit
ution

Treaties

Law (formal)

Decrees/Administrative Acts
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5. Sources of Law: Jurisprudence
Civil Court System in Lebanon

Court
Of

Cassa
tion

Courts of Appeal

First Instance Courts

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 B. Defining Business Law
• Business: Work relating to the production, buying and selling of goods or
services.

• Business Law: A branch of private law which includes a set of compulsory

rules governing a certain type of activities (commercial/business
transactions) and a certain type of persons (businessmen, merchants or
traders) and their relationship amongst each other and with their
customers.

Main Areas of Study:

• Commercial/Business Acts
• Businessmen
• Business Concern
• Negotiable Instruments
• Commercial/Business Contracts
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 B. Defining Business Law
1. Classification of Laws

Commercial
Civil
Private Corporate
Business
Banking
Law Public
Criminal
Commercial
Agency
Mixed Procedural

Labor

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 B. Defining Business Law
• Which society or community is governed by Business
Law?
– Businessmen; and
– Commercial/Business Transactions

• Is there a need for an independent body of rules

applicable to business?
Yes!
Given the characteristics of business transactions:
Rapidity, Flexibility, Trust, Evolution and Globalization.
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 2. Characteristics of Business
and Consequences on Business Law

• Freedom of Proof: Contrary to civil acts which must

be evidenced in writing, all means of proof are
accepted to evidence transactions entered into
between businessmen, merchants or traders
(including evidence by witness or by oath).

• Exception: However, there are exceptions to this

rule such as the acquisition or sale of a business
concern.
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II. Definitions

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1. Commercial Law/Business Law:
Legal term used to designate the whole body
of laws and regulations applicable to the
rights and obligations of the parties enrolled
in commerce, commercial professions or
business.

2. Commerce/Business:
Exchange, promotion and transportation of
goods, services, products and property of any
kind.
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3. Internal and International Commerce:
The commerce is internal (domestic) or
international whether it concerns individuals
or corporations within the same country or in
different ones.

4. Commercial Establishment:
Place where commodities are exchanged,
bought or sold.

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5. Business concern:
Legal concept designating a group of tangible (stock
in trade) and intangible elements (business premises,
lease rights, trade name, customers, goodwill, etc…)
and which constitute together the instrument or tool
of a business or commercial enterprise.

6. Commercial Representative:
An agent who, by reason of his habitual and
independent profession, and without being bound by
an employment agreement, undertakes commercial
activities and provides services in the name of and
for the account of a principal (generally the
manufacturer or provider of products or services). 22
Instructor: Me. Sandy El Masri
III. Sources of Business Law

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 1. National Sources:
Written Rules and Regulations
The Law (formal)

• Code of Commerce (C.C.) issued in 1942 (and Law

No.126 of 29/03/2019 modifying certain provisions).

• Legislative decree n°11 of July 11, 1967 governing

business concerns.

• Legislative decree No. 120 dated September 16, 1983

(as amended by virtue of decree No. 4729 dated
30/3/1988 and by Law No. 418 dated 15/5/1995)
regulating the Beirut Stock Exchange.
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 2. National Sources: Legal Texts
• Legislative decree n°34 of August 5, 1967 governing
commercial representation.

• Legislative decree of 1967 governing limited liability

companies (S.A.R.L.)

• Code of Obligations and Contracts issued in 1932 (C.O.C.):

general law that governs the contractual relationships and
whose provisions are applicable in commercial matters if no
solution can be found in the Code of Commerce (and only to
the extent that said provisions are in compliance with the
principles of business law).
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 3. National Sources: Usages, Jurisprudence
and Contracts

• Jurisprudence. In the absence of any applicable legal

provision, the judge can draw upon previous cases or
precedents for guidance or even rule on equity.

• Internal and International Usage and Customs of Trade. The

judge is also required to apply the customary rules or usages,
unless such rules or usages are contrary to mandatory legal
rule or the parties have contractually agreed otherwise.

• Agreement between parties or contract. The law of the

Parties.
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 4. International Sources

• Treaties

• International Commercial Usages or Custom

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 General insight Regarding Contracts
Under Lebanese Law
Conditions of Validity of a Contract:

• Existence of an object.

• Existence of a cause.

• Absence of a vitiated consent:

• legal capacity of the contracting parties;
• No substantial inequality of bargain;
• No error;
• No fraud (deceit); and
• No duress (violence). Instructor: Me. Sandy El Masri 28
END OF SLIDES

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