Legal Environment of Business

Noor Nahar BegumLecturerFaculty of Business StudiesBangladesh University of Professionals (BUP)

Chapter 1

Introduction to Law

Learning Outcome DefinitionImportance of lawBranches of lawSources of business lawScope of business law

What is Law ?The law is a set of legal rules that governs

the way members of a society act towards one another.

Law is “ that portion of the established habit and thought of mankind which has gained distinct and formal recognition in the shape of uniform rules backed by the authority and power of the Government”. – Woodrow Wilson

Laws are required in society to regulate the behaviour of the individual, to correspond with what is acceptable to the majority of individuals,

Importance of LAWWithout law, life and business would become

a matter of survival, not only of the fittest but also of the most ruthless.

Laws are required in society to regulate the behaviour of the individual, to correspond with what is acceptable to the majority of individuals,

Law is the potential tool of social change.If fact law and society are complementary. No society can exist without law. It is essential for up keeping of peace in the society.

BRANCHES OF LAWCONSTITUTIONAL LAW ADMINISTRATIVE LAW CRIMINAL LAW CIVIL LAW COMMERCIAL LAW

CONSTITUTIONAL LAWIs the law which regulates the structure of

the principal organs of the government and their relationships to one another and determines their principal functions.

The rules consist both of legal rules and of usages, commonly called conventions, which without being enacted are accepted as binding by all concerned with the government

ADMINISTRATIVE LAWIt is the law that governs the executive

branch of the government. It is as old as the executive.

CRIMINAL LAWSAre the laws which wrong doers are

punished. At the same time, civil laws are those laws with which the private rights of an individual are enforced

MERCANTILE LAWSIt deals with the rights and obligations of

Commercial persons emerging from commercial transactions in respect of commercial property.

SCOPE OF BUSINESS LAWThe scope of the business law has enormously

widened due to the increasing complexities of the modern business world.

It usually covers topics of law of contracts, law relating to Agency, law relating to sale of goods, law of partnerships, law of companies, law relating to negotiable instruments, law of banking, law relating to insurance, pollution control etc.

These and other topics are covered by legislations enacted by Central and State Governments.

SOURCES OF BUSINESS LAWStatutory law: Acts passed by ParliamentEnglish mercantile lawLocal Customs and usageEquity: Judges follow decisions that had

been made in similar, previously decided cases, with remedies based on fairness.

Common law - Judges follow decisions that had been made in similar, previously decided cases, with the remedy of damages.