What is Law in Business?
After study this, we will learn about:
- About Law & Business Law
- Law of Contract
- Law of Partnership
- Law Relating to Negotiable Instruments
- Law Relating to Sale of Goods
- Law Relating to Carriage
- Law of Insurance
- Law of Solvency
- Consumer Protection Act, 1986
- Company Law
- Information Technology Act, 2000
- Value Added Taxation
Law: Law is the command of the Sovereign. It means (i) law has its source in sovereign authority (ii) law is accompanied by sanctions and (iii) the command to be a law should compel a course of conduct.
Being a command the law must flow from a determinate person or group of persons with the threat of displeasure, if it is not obeyed. Sovereignty is, however only a part of the state. So, law emanates from the state. Thus the term law is used to denote rules of conduct emanated from and enforced by the state. People living in an organized society have to follow certain common rules, otherwise peaceful living is impossible. It is the function of the state to enforce these rules.
According to Holland, Law has three essential characteristics. These are:
- Law is a rule relating to the actions of human beings.
- Law attempts to regulate the external actions of human beings.
- Law is enforced by the State.
Rule of Law: The modern view is to apply the same law overall persons in the State and to give all persons equal rights and privileges for the protection of their human liberties. Law has three rules, below mentioned:
1. The rule of Law states that, no man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law established in the ordinary legal manner before the ordinary courts. In other words, (i) there must be supremacy of law (ii) no one shall be punished except for definite breach of law and (iii) the breach of law must be proved in a duly constituted court of law. No citizen can be arrested, unless he violates specifically any law of the country in force and is accused of a charged by the court.
2. Second place, Rule of Law means that, “no man is above law”. Every man whatever his rank or condition, is subject to the ordinary law of the State and amenable to the jurisdiction of ordinary tribunals.
3. Third place, the Rule of law is the result of statutes and judicial decisions determining the rights of private persons.
Business Law: The law of country relate to many subjects. The term business or commercial law is used to include only the last aforesaid subjects, viz., rules to industry, trade, and commerce.
Law of Contract:
The law of contract deals with agreements which can be enforced through courts of law. The Law of Contract is the most important part of commercial law because every commercial transaction starts from an agreement between two or more person. According to Salmond, a contract is “an agreement creating and defining obligations between the parties.” According to Sir William Anson, “A contract is an agreement enforceable at law made between two or more persons, by which rights are acquired by one or more to acts of forbearances on the part of the other or others.
An agreement comes into existence whenever one or more persons promise to one or others, to do or not to do something, “Every promise and every set of promises, forming the consideration for each other, is an agreement.
Law of Partnership:
Partnership Act defines a partnership as follows: “Partnership is the relation between persons, who have agreed to share the profits of a business carried on by all or any of them acting for all.” A partnership Act defined must have three essential elements. These are:
- There must be an agreement entered into by two or more persons.
- The agreement must be to share the profits of a business.
- The business must be carried on by all or any of them acting for all.
Law Relating to Negotiable Instruments:
Negotiable instrument is documents of a certain type, used in commercial transactions and monetary dealings.
Negotiable” means transferable by delivery and “instrument” means a written document by which a right created in favor of some person. A negotiable instrument means a promissory note, bill of exchange.
“A promissory note is an instrument in writing containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to certain person.”
Law Relating to Sale of Goods:
The law relating to the sale of movable goods is contained in the sale of Goods act. Came on 1st July-1930.
Buyer: means a person who buys or agrees to buy goods. Sec. 2(1)
Seller: means a person who sells or agrees to sell goods. Sec. 2(13)
Goods: Goods includes every kind of movable property except (i) actionable claims and (ii) money. Sec. 2(7).
Goods may be classified into three types: Existing Goods, Future Goods, and Contingent Goods.
Law Relating to Carriage:
The law relating to carriage may be studies under three heads. These are (i) Carriage by Land- common carriers Act-1865, 1890 (ii) Carriage by Sea-Indian landing Act-1856, 1925, 1958, 1963 and (iii) Carriage by Air- Act- 1972.
Any person or an organization by an express contract, with or without remuneration, carries goods or passengers, is called a carrier.
Law of Insurance:
Insurance Law has four parts, such as:
- Principles of Insurance
- Life Insurance
- Marine Insurance
- Fire and other Insurance
Law of Insolvency:
Insolvency: Popular usage an insolvent is one who is unable to pay his debts. But no man can be called ‘insolvent’ unless a competent court declares him an insolvent.
Arbitration means the settlement of a dispute by referring the dispute to a third party and abiding by this decision. Arbitration is less costly than a suit in a court of law, it is also more expeditious. The law relating to arbitration in India is contained in the arbitration Act of 1940.
An arbitration agreement is a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.
Securities related word is mortgage. Mortgage is specific immovable property is made the security for the payment of money or the performance of an obligation, the transaction is called a “Mortgage”.
Consumer Protection Act, 1986:
Consumer is the pivot of all production and progress of a nation.
Objects: The Consumer Protection Bill, 1986 seeks to provide better protection of interests of the consumers. For that purpose, to make provisions for establishment of consumer councils and other authorities for the settlement of consumer’s disputes and for matters connected therewith.
First Indian Act, regarding companies, was the Joint Stock Companies Act of 1850. This was based the English Act of 1844.
Company law has more part;
- The Memorandum and Articles of Association
- The Formation of a Company
- Capital, Share and Shareholder
- Meeting and Resolutions
- Company Management
- Accounts and Audit
- Borrowing Powers and Debentures
- Control over Companies
- Winding Up
Information Technology Act, 2000:
We are now familiar with computer, digital technology, and new communication systems. Now consumers and businessmen are increasingly using computers for creation, transmission and storing information in the electronic form. However, now two principal hardels which stand in the way of facilitating electronic commerce and electronic governance are the requirements as to the writing and signature for legal recognition.
Understanding these problems, United Nation Commission on International Trade Law adopted the model Law on electronic commerce in 1996. The Information and Technology Bill was introduced in UN parliament in 1999 and passed and received assent of the president on the 9th June, 2000 and came into force on 17th October,2000.
Value Added Taxation:
The value added tax is based on the value addition to the goods. That’s calculated by deducting input tax credit from the tax collected on sales during a given tax period.
Value Added Tax was first introduced in Brazil in 1960. Vat entered into several parts of Europe during 1970.