Amity School of Business 1 Amity School of Business BBA ( GEN),IMBA,M&S,F&A- III Semester BUSINESS LAW Swati Mittal

Amity School of Business 2 LAW Code of CONDUCT Set of RULES

Amity School of Business 3 What is Law? “Law is the body of principles recognised and applied by the state in the administration of justice.” -Salmond “ Law is a rule of conduct imposed and enforced by the sovereign” -Austin Law is always preceded by adjective e.g.: Civil law, criminal law, mercantile law, industrial law etc.

Amity School of Business 4 What is Law? Law consists of rules that regulate the conduct of individuals, businesses, and other organizations within society. It is intended to protect persons and their property from unwanted interference from others. Enforceable rules governing relationships among individuals and between individuals and their society

Amity School of Business 5 Legal Environment of Business Law and business are closely related disciplines. They complement each other. Law is a major factor in business decision making. Almost every aspect of business is regulated by law. For instance: 1.Companies Act 1956: For the incorporation and commencement of business. 2.Labour Laws: For the welfare of the workers. 3.MRTP Act, 1969: To control concentration of economic power in the hands of business.

Amity School of Business 6 CHARACTERISTICS OF LAW Law is a body of rules. Law is for guidance of conduct of persons both human and artificial. Law is imposed. Law is enforced by the executive The state Content of law. Two basic ideas involved in law - To maintain some form of social order in a group - To compel members of the group to be within that order. Law is made to serve some purpose which may be social, economic or political.

Amity School of Business 7 Need of Knowledge of Law “Ignorance of law is no excuse” As no one can be exempted on the basis of ignorance of law. Ignorance of law is no excuse. If a person is found guilty in the eyes of the law, he or she cannot be forgiven on the basis of ignorance. It therefore becomes important to know the law of the land where one lives. For e.g.: If Mr. B is caught driving car without driving license, he cannot plead that he was not aware of the traffic rules regarding the obtaining of a driving license. Thus the person cannot escape liability on the ground of ignorance of law.

Amity School of Business 8 Functions of law Keeping the peace Shaping moral standards Promoting social justice Maintaining the status quo Facilitating orderly change Facilitating planning Providing a basis of compromise Maximizing individual freedom

Amity School of Business 9 Basic Sources of Law Customs & usages Constitution Statutes and Ordinances Decided cases and Precedents Foreign Law Miscellaneous a. Administrative Law b.Treaties c.Executive Orders

Amity School of Business 10 Customs and usages: Customs and usages established by long use and constantly put into practice becomes binding. A custom in order to be binding on the parties must be ancient, reasonable, certain, definite, consistent and uniformly recognised. Constitution: establishes the structure of the government (legislative, Executive, Judicial ) Statutes: written law enacted by the legislative branches of union and state governments Ordinances: law enacted by local government bodies Foreign Laws: law inspired by the law of other nations

Amity School of Business 11 A treaty: compact made between two or more nations. Administrative Law: legislative and executive branches of union and state governments establish administrative agencies to enforce and interpret statutes enacted by union and state legislatures. An executive order: an order issued by a member of the executive branch of government. Judicial decision: law based on previous judicial decision

Amity School of Business 12 Doctrine of Stare Decisis Stare decisis—Latin for “to stand by the decision”— means adherence to precedent. Based on the common law tradition, past court decisions become precedent for deciding future cases. Precedent is a rule of law established in a court decision. Lower courts must follow the precedent established by higher courts. Judges use precedent (decisions in previous cases) to determine the outcome of a current case Functions of stare decisis: efficiency, uniformity, stability, and predictability However, some cases are “cases of first impression”.

Amity School of Business 13 Classification of Law Substantive or Procedural Law Civil or Criminal Law Public and Private Law

Amity School of Business 14 Classification of Law Public Law- Determines and regulates the organisation and functioning of states Regulates the relation of the state with its subjects. Public law includes Labour law, municiple law, Constitutional law, Criminal law etc Private law Regulates those of the relations of the citizens with one another as are not of public importance. Concerned with the rights and duties of individuals to each other. It includes Contract law, Corporation law

Amity School of Business 15 Classification of Law Civil law is primarily concerned with the rights and duties of individuals towards each other. It includes mainly private law, Contract law, Property law Objective is to restore plaintiff to the original position. Criminal law Characterizes certain kinds of wrong doings as offences against the state. Crime is an unlawful act which is an offence against the public and renders the person guilty of the act liable to legal punishment. Criminal law is a part of public law as the society or the people are directly involved. Criminal law is enforced in behalf of or in the name of the state.

Amity School of Business 16 Classification of Law Substantive law Defines, in regard to specific subject Legal rights, obligations and relationships of people with other people or as between them and the state. Procedural law Deals with the methods and means by which substantive law is made and administered. It lays down the rules governing the manner in which right is enforced under civil law. Provisions of substantive law defines rights and duties while procedural law provides the machinery for enforcing those rights and duties.

Amity School of Business 17 Essentials of Law 1. Predictability : Law must be such that one is enabled to predict with some accuracy the legal consequences of an action. 2. Flexibility : Law must be flexible to mould to the present. 3. Reasonable application and coverage: Wide publicity should be given to the law enacted so as to give an opportunity to those affected by it to know its requirements and consequences for non-compliance of those requirements.

Amity School of Business 18 What is Commercial law? Commercial law (sometimes known as business law or Mercantile Law) is that branch of law which governs business and commercial transactions. A branch of civil law and deals both with issues of private law and public law. Commercial law includes within its compass such titles as principal and agent; carriage by land and sea; merchant shipping; guarantee; marine, fire, life and accident insurance; bills of exchange and partnership. It can also be understood to regulate corporate contracts, hiring practices, and the manufacture and sales of consumer goods.

Amity School of Business 19 Objectives of Commercial Law 1.Law lays down the framework within which business activities shall be carried out. 2.A Business person can resort to various judicial and quasi judicial authorities against the government in case his legal rights have been infringed. 3.Some laws are made to facilitate the business persons to achieve their goals smoothly. 4.Business law has social objectives too. 5.Business law aim to prevent concentration of economic power and help in the adjustment of claims of individuals against each other.

Amity School of Business 20 Laws included in Mercantile Law. Contract Act Companies Act Intellectual Property Rights Negotiable instruments Act Sale of Goods Act Financial regulation Tax law Arbitration Act