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Chapter One:Chapter One:
UnderstandingUnderstanding
Commercial LawCommercial Law
11
Law MerchantLaw Merchant::
 MedievalMedieval
 EuropeEurope
 EvelvedEvelved  Common usagesCommon usages
22
OriginsOrigins::
 RulesRules
 MerchantsMerchants
 Common usages, CustomsCommon usages, Customs
 Civil lawCivil law  ...
The Medieval Law MerchantThe Medieval Law Merchant::
 Merchant courtsMerchant courts  tradetrade centres &centres &
rou...
The Need for Quick and EffectiveThe Need for Quick and Effective
JusticeJustice::
 customs and practices among traderscus...
Choice of JudgeChoice of Judge::
 commercial backgroundcommercial background
 practical knowledge.practical knowledge.
...
Legal Concepts Introduced byLegal Concepts Introduced by
the Law Merchantthe Law Merchant::
 Based on: Less procedural fo...
The Evolution of the LawThe Evolution of the Law
MerchantMerchant::
 Law MerchantLaw Merchant  cosmopolitan -cosmopolit...
Codification andCodification and NationalisationNationalisation
of the Law Merchantof the Law Merchant::
 Nationalisation...
The Development underThe Development under
the Common Lawthe Common Law::
 English Courts appliedEnglish Courts applied ...
International CommercialInternational Commercial
Law and ArbitrationLaw and Arbitration::
 Law Merchant was reaffirmed in...
Evaluation, Law MerchantEvaluation, Law Merchant
of the Futureof the Future::
 Medieval Law MerchantMedieval Law Merchant...
Islamic CommercialIslamic Commercial
LawLaw
1313
IntroductionIntroduction
 The numerousThe numerous eventsevents of the past few years…attacks on the Twinof the past few ...
The Development of IslamicThe Development of Islamic
Commercial LawCommercial Law::
 Muslim great deal ofMuslim great dea...
 commentatorscommentators argue about ‘why reformers looked toargue about ‘why reformers looked to
Europe rather than bui...
 4.4. European tradersEuropean traders …using the French Commercial Code…using the French Commercial Code
as a customary ...
The Significance of IslamicThe Significance of Islamic
Commercial Law TodayCommercial Law Today
 Few people are intereste...
 It is not possible to achieve aIt is not possible to achieve a total isolationtotal isolation ofof
commercial law. e.g.,...
Islamic Commercial Law inIslamic Commercial Law in
Modern WorldModern World
 The reasons for theThe reasons for the adopt...
 shari’ashari’a is more than adequate and have played ais more than adequate and have played a
significant role in the fa...
Commercial LawCommercial Law
2222
Definition of Commercial LawDefinition of Commercial Law::
 Commercial law is vague!Commercial law is vague! Derived ...
 Commercial law haveCommercial law have evolved from private lawevolved from private law
 General principles of private ...
BusinessBusiness
 BusinessBusiness: in economics, is a legally recognised: in economics, is a legally recognised
organisa...
 TheThe etymologyetymology of "business" relates to the state ofof "business" relates to the state of
being busy either a...
CommerceCommerce
 CommerceCommerce: is a: is a divisiondivision of trade orof trade or
production which deals with thepro...
Modern Concept ofModern Concept of
Commercial LawCommercial Law
 Modern trends in commercial lawModern trends in commerci...
 New contractsNew contracts: in France in recent years: in France in recent years 
sales through agencysales through ag...
The Distinction betweenThe Distinction between
Commercial and Civil ActsCommercial and Civil Acts::
 TheThe provisionspro...
 SpeedSpeed is a fundamental elementis a fundamental element  hashas
an impact on the legal systeman impact on the lega...
Characteristics ofCharacteristics of
Commercial LawCommercial Law
The Features of commercial law are related toThe Feature...
 Second:Second: Speed Business TransactionsSpeed Business Transactions: (Time: (Time
has great values in business transac...
 Fourth:Fourth: Openness/Publicity of CommercialOpenness/Publicity of Commercial
ActivitiesActivities::
 Commercial acti...
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Commercial Law

commercial Law discus about rules of business and how u communicate with people and behavior of the business.

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Commercial Law

  1. 1. Chapter One:Chapter One: UnderstandingUnderstanding Commercial LawCommercial Law 11
  2. 2. Law MerchantLaw Merchant::  MedievalMedieval  EuropeEurope  EvelvedEvelved  Common usagesCommon usages 22
  3. 3. OriginsOrigins::  RulesRules  MerchantsMerchants  Common usages, CustomsCommon usages, Customs  Civil lawCivil law  not responsivenot responsive  A need for: effective, quick,A need for: effective, quick, comprehensible and acceptable System &comprehensible and acceptable System & specialised courtsspecialised courts  International commercial law today isInternational commercial law today is affected (affected (usages, customs..)usages, customs..).. including.. including  arbitrationarbitration 33
  4. 4. The Medieval Law MerchantThe Medieval Law Merchant::  Merchant courtsMerchant courts  tradetrade centres &centres & routesroutes..  Legal system developed andLegal system developed and administered by Merchantsadministered by Merchants  States or local authorities seldomStates or local authorities seldom InterferenceInterference  Trade flourishedTrade flourished  Increasing tax revenuesIncreasing tax revenues 44
  5. 5. The Need for Quick and EffectiveThe Need for Quick and Effective JusticeJustice::  customs and practices among traderscustoms and practices among traders  solve disputes rapidlysolve disputes rapidly least costs byleast costs by most efficient meansmost efficient means  Public courtsPublic courts  delay their business, anddelay their business, and that meant losing moneythat meant losing money  Law MerchantLaw Merchant  quick and effective justicequick and effective justice informal proceedingsinformal proceedings fair price, good commerce, and equity.fair price, good commerce, and equity. 55
  6. 6. Choice of JudgeChoice of Judge::  commercial backgroundcommercial background  practical knowledge.practical knowledge.  Their reputationTheir reputation  expertise in merchant tradeexpertise in merchant trade  a “a “professional judiciaryprofessional judiciary” developed” developed through the merchant judges.through the merchant judges.  serve as important measures in theserve as important measures in the appointment of internationalappointment of international commercial arbitratorscommercial arbitrators todaytoday.. 66
  7. 7. Legal Concepts Introduced byLegal Concepts Introduced by the Law Merchantthe Law Merchant::  Based on: Less procedural formalityBased on: Less procedural formality  However, practical needHowever, practical need  “writing“writing obligatory”.obligatory”.  creditors could freely transfer the debts.creditors could freely transfer the debts.  displace the need for more complexdisplace the need for more complex forms of proof,forms of proof,  party autonomy:party autonomy:  the parties free to take a case to court,the parties free to take a case to court,  what evidence to submitwhat evidence to submit  which law to apply.which law to apply. 77
  8. 8. The Evolution of the LawThe Evolution of the Law MerchantMerchant::  Law MerchantLaw Merchant  cosmopolitan -cosmopolitan - internationalinternational  declined towards the end of medieval timesdeclined towards the end of medieval times  due to the adoption of nationaldue to the adoption of national commercial lawcommercial law  increasing modification of local customsincreasing modification of local customs to protect the interests of localto protect the interests of local merchants.merchants.  The resultThe result  loss of autonomy of merchantloss of autonomy of merchant tribunals to state courts.tribunals to state courts.  The reason wasThe reason was  protection of stateprotection of state interestsinterests 88
  9. 9. Codification andCodification and NationalisationNationalisation of the Law Merchantof the Law Merchant::  NationalisationNationalisation of the Law Merchantof the Law Merchant  diddid not neglect thenot neglect the practisespractises of merchantsof merchants  Some institutions continued toSome institutions continued to function,function,  state judges were appointed for theirstate judges were appointed for their merchant expertisemerchant expertise  as modernas modern commercial arbitrators.commercial arbitrators.  The law of the merchants wasThe law of the merchants was  simplysimply codified. National codes built on:codified. National codes built on:  the principles laid down by tradethe principles laid down by trade commercialcommercial practisepractise  they embodied Law Merchantthey embodied Law Merchant 99
  10. 10. The Development underThe Development under the Common Lawthe Common Law::  English Courts appliedEnglish Courts applied  merchantmerchant customscustoms if:if: they were consistent with lawthey were consistent with law were proven before the courtwere proven before the court  In the US, Law Merchant prevailed inIn the US, Law Merchant prevailed in general principles & doctrines ofgeneral principles & doctrines of commercial jourisprudencecommercial jourisprudence.. 1010
  11. 11. International CommercialInternational Commercial Law and ArbitrationLaw and Arbitration::  Law Merchant was reaffirmed in newLaw Merchant was reaffirmed in new international mercantile lawinternational mercantile law  directeddirected at market effeciency.at market effeciency.  Dispute resolutions have evolvedDispute resolutions have evolved  International commercial arbitrationInternational commercial arbitration became available.became available.  The principles of the medieval LawThe principles of the medieval Law MerchantMerchant  are applied in arbitrationare applied in arbitration 1111
  12. 12. Evaluation, Law MerchantEvaluation, Law Merchant of the Futureof the Future::  Medieval Law MerchantMedieval Law Merchant  far fromfar from destroyed.destroyed.  AA modernmodern variant of the Law Merchant isvariant of the Law Merchant is  the evolving law and dispute resolution inthe evolving law and dispute resolution in cyberspacecyberspace..  Internet traders solve disputes onlineInternet traders solve disputes online  seldom challenged before traditionalseldom challenged before traditional courts of law.courts of law.  Problem of enforceability.Problem of enforceability.  Merchants are reluctant to surrender theMerchants are reluctant to surrender the efficiencies of merchant practice to stateefficiencies of merchant practice to state confinementconfinement 1212
  13. 13. Islamic CommercialIslamic Commercial LawLaw 1313
  14. 14. IntroductionIntroduction  The numerousThe numerous eventsevents of the past few years…attacks on the Twinof the past few years…attacks on the Twin Towers and London, the invasions of Afghanistan and Iraq.Towers and London, the invasions of Afghanistan and Iraq.  interest in Islaminterest in Islam, particularly in ‘Islamic revival’. One result is an, particularly in ‘Islamic revival’. One result is an awareness of the role and importance of law in the life of Muslims.awareness of the role and importance of law in the life of Muslims.  Islamic lawIslamic law covers all aspectscovers all aspects of human behaviour from political toof human behaviour from political to sale of real property, from hunting to the etiquette of dining,sale of real property, from hunting to the etiquette of dining,  It is much wider than the Western understanding of ‘law’, andIt is much wider than the Western understanding of ‘law’, and governs every detail…including commercial transactions.governs every detail…including commercial transactions.  There isThere is no Christianno Christian law of contract nor of property, whereaslaw of contract nor of property, whereas bodies of law dealing with such matters do exist in shari’a.bodies of law dealing with such matters do exist in shari’a.  it would make no sense to refer to ‘Christian commercial law’, it isit would make no sense to refer to ‘Christian commercial law’, it is meaningful to speak of ‘Islamic Commercial Law’.meaningful to speak of ‘Islamic Commercial Law’.  The shari’a… abandoned and substituted by Western law. However,The shari’a… abandoned and substituted by Western law. However, as a result of theas a result of the Islamic revivalIslamic revival, the possibility of adapting the, the possibility of adapting the shari’a to the modern world has been considered recently.shari’a to the modern world has been considered recently. 1414
  15. 15. The Development of IslamicThe Development of Islamic Commercial LawCommercial Law::  Muslim great deal ofMuslim great deal of tradingtrading activity.activity.  EconomicEconomic environment…industry, manpower, free workers,environment…industry, manpower, free workers, goods production and export and large quantities of coins.goods production and export and large quantities of coins.  Developed aDeveloped a systemsystem … served the needs of participants well.… served the needs of participants well.  The Muslim world wasThe Muslim world was overtakenovertaken by theby the WestWest in technology,in technology, warfare and commercial techniques.warfare and commercial techniques.  a long series ofa long series of eventsevents, … conquest of Egypt by the French, … conquest of Egypt by the French in 1798, the European domination of trade.in 1798, the European domination of trade.  consequence was a wish toconsequence was a wish to imitateimitate and adopt those ideasand adopt those ideas and institutions which seemed to have given Europe theand institutions which seemed to have given Europe the advantage.advantage.  The imitation movement led to the shari’a being ‘The imitation movement led to the shari’a being ‘abandonedabandoned with astonishing speed in all areas except family law; shari’awith astonishing speed in all areas except family law; shari’a commercial law disappeared from almost the entire region.commercial law disappeared from almost the entire region. 1515
  16. 16.  commentatorscommentators argue about ‘why reformers looked toargue about ‘why reformers looked to Europe rather than build on pre-existing shari’aEurope rather than build on pre-existing shari’a  NapoleonNapoleon brought with him to Egypt the French idea ofbrought with him to Egypt the French idea of separating commercial and non-commercial law… specialseparating commercial and non-commercial law… special courts were set up to deal with commercial disputes.courts were set up to deal with commercial disputes.  The adoption by the Ottoman Empire in 1850 of largeThe adoption by the Ottoman Empire in 1850 of large parts of the French Commercial Code was made as partparts of the French Commercial Code was made as part of a long and complexof a long and complex secularisationsecularisation processprocess  the following factors have played a partthe following factors have played a part::  1. European dominance of trade;1. European dominance of trade;  2. The desire of European merchants to avoid2. The desire of European merchants to avoid locallocal courtscourts and local law;and local law;  3. The perception that an obligation to use the shari’a3. The perception that an obligation to use the shari’a disadvantaged local merchants asdisadvantaged local merchants as against their Europeanagainst their European counterparts, who could use Western lawcounterparts, who could use Western law 1616
  17. 17.  4.4. European tradersEuropean traders …using the French Commercial Code…using the French Commercial Code as a customary law to aid the resolution of theiras a customary law to aid the resolution of their disputes;disputes;  5. A familiarity with the idea and practice of secular5. A familiarity with the idea and practice of secular legislation in certain fields;legislation in certain fields;  6. The influence of the6. The influence of the Ottoman eliteOttoman elite from trade withfrom trade with Europe, and the governmental desire to please them;Europe, and the governmental desire to please them;  7. A perception that commercial matters were of7. A perception that commercial matters were of lessless religious significancereligious significance … a perception which may have… a perception which may have been influenced by the Egyptian experience.been influenced by the Egyptian experience.  what is certain is … major parts of the Frenchwhat is certain is … major parts of the French Commercial Code 1807 were imported as the OttomanCommercial Code 1807 were imported as the Ottoman Commercial CodeCommercial Code 18501850..  SubsequentSubsequent developments in state lawdevelopments in state law followed thefollowed the pattern of a divide between commercial and non-pattern of a divide between commercial and non- commercial matters.commercial matters. 1717
  18. 18. The Significance of IslamicThe Significance of Islamic Commercial Law TodayCommercial Law Today  Few people are interested in the Islamic commercialFew people are interested in the Islamic commercial lawlaw  However, theHowever, the Islamic revivalIslamic revival has very significanthas very significant changes. The most striking manifestation of the newchanges. The most striking manifestation of the new situation is the growth insituation is the growth in Islamic financeIslamic finance andand insurance,insurance,  a growth has accelerated as a result of the steadya growth has accelerated as a result of the steady and dramatic rise inand dramatic rise in oil and gas pricesoil and gas prices over the lastover the last decade.decade.  The subject is also of considerable significance as aThe subject is also of considerable significance as a result of theresult of the islamisationislamisation of state-based law. Despiteof state-based law. Despite the fact that only non-commercial law is islamised,the fact that only non-commercial law is islamised, 1818
  19. 19.  It is not possible to achieve aIt is not possible to achieve a total isolationtotal isolation ofof commercial law. e.g., in the UAE, the fundamentalcommercial law. e.g., in the UAE, the fundamental law is the Civil Code, based on the shari’a. Thelaw is the Civil Code, based on the shari’a. The Commercial Code is a set of variations from, andCommercial Code is a set of variations from, and additions to, the Civil Code. So the Commercialadditions to, the Civil Code. So the Commercial Code is subject to shari’a.Code is subject to shari’a.  In addition, theIn addition, the Civil CodeCivil Code includes bodies of rulesincludes bodies of rules relevant to commercial matters, but drawn from therelevant to commercial matters, but drawn from the shari’ashari’a..  Examples include the general law of contract, theExamples include the general law of contract, the law of property, and the law relating to thelaw of property, and the law relating to the transfer of rights. The commercial aspects of thetransfer of rights. The commercial aspects of the shari’a cannot, therefore, be ignored.shari’a cannot, therefore, be ignored. 1919
  20. 20. Islamic Commercial Law inIslamic Commercial Law in Modern WorldModern World  The reasons for theThe reasons for the adoption of Western lawadoption of Western law are notare not entirely clear. The justification given by the draftingentirely clear. The justification given by the drafting committee of thecommittee of the MajallaMajalla ((the Ottoman codificationthe Ottoman codification of the Hanafi schoolof the Hanafi school) for the enactment of the 1850) for the enactment of the 1850 Commercial Code was that only Western law couldCommercial Code was that only Western law could deal with thedeal with the complexitiescomplexities of modern commerce.of modern commerce.  This notion dominated thinking until quite recently,This notion dominated thinking until quite recently, and many lawyers still believe it.and many lawyers still believe it.  However,However, shari’ashari’a was a legal regime with many of thewas a legal regime with many of the elements considered essential for the properelements considered essential for the proper functioning of a commercial law system, i.e.functioning of a commercial law system, i.e. ‘certainty, flexibility and pragmatism’.‘certainty, flexibility and pragmatism’. 2020
  21. 21.  shari’ashari’a is more than adequate and have played ais more than adequate and have played a significant role in the facilitation of commerce, with asignificant role in the facilitation of commerce, with a sophisticated law of sale, financial instruments,sophisticated law of sale, financial instruments, different kinds of partnership, and so on.different kinds of partnership, and so on.  What matters wereWhat matters were customscustoms, where strict rules of the, where strict rules of the books of fiqh were abandoned ‘inbooks of fiqh were abandoned ‘in favourfavour of theof the merchants’ customs’,merchants’ customs’,  a position justified bya position justified by Prophetic TraditionProphetic Tradition::  ‘‘My community will not agree on an error’.My community will not agree on an error’.  The possibility of adapting the shari’a to the modernThe possibility of adapting the shari’a to the modern world was not considered until very recently… as aworld was not considered until very recently… as a result of theresult of the Islamic revivalIslamic revival, there was a call for a, there was a call for a return to thereturn to the totality of the shari’atotality of the shari’a, including its, including its commercial aspects.commercial aspects. 2121
  22. 22. Commercial LawCommercial Law 2222
  23. 23. Definition of Commercial LawDefinition of Commercial Law::  Commercial law is vague!Commercial law is vague! Derived from theDerived from the practices of traders.practices of traders.  scholars define it as "scholars define it as "body of legal rules that applybody of legal rules that apply to commerce, commercial transactions, andto commerce, commercial transactions, and organises merchants' professionorganises merchants' profession."."  It regulates relations arising from explicitIt regulates relations arising from explicit businessbusiness actions and behaviour.actions and behaviour.  Commercial law is the branch of private law, whichCommercial law is the branch of private law, which applies toapplies to business transactionsbusiness transactions, and to a certain, and to a certain category of people,category of people, merchantsmerchants..  Commercial transactionCommercial transaction is the core of the legalis the core of the legal rules governingrules governing business dealingsbusiness dealings..  The most common types of commercialThe most common types of commercial transactions istransactions is salesale of goods.of goods.  All commercial transactions have one thing inAll commercial transactions have one thing in common: they serve to transmitcommon: they serve to transmit economic valueseconomic values.. 2323
  24. 24.  Commercial law haveCommercial law have evolved from private lawevolved from private law  General principles of private law were the essenceGeneral principles of private law were the essence of the general principles of the transactions ofof the general principles of the transactions of individuals.individuals.  This is due to:This is due to:  the quality of activities orthe quality of activities or  the privacy of the profession andthe privacy of the profession and  the swift transaction between traders and hastethe swift transaction between traders and haste process of business and commerce.process of business and commerce.  It is often considered to be aIt is often considered to be a branch of civil lawbranch of civil law..  Many countries have adopted civil codes whichMany countries have adopted civil codes which contain comprehensive statements of theircontain comprehensive statements of their commercial law.commercial law.  Accordingly,Accordingly, commercial law (business law) iscommercial law (business law) is “the“the body of law which governsbody of law which governs businessbusiness,, commercecommerce andand consumer transactionsconsumer transactions.”.” 2424
  25. 25. BusinessBusiness  BusinessBusiness: in economics, is a legally recognised: in economics, is a legally recognised organisationalorganisational entity (also refered as a firm)entity (also refered as a firm)  designed to selldesigned to sell goodsgoods and/orand/or servicesservices toto consumers or other businessesconsumers or other businesses in an effort toin an effort to generategenerate profitprofit..  InIn capitalistcapitalist economies (most businesses areeconomies (most businesses are privately owned) businesses are formed to earnprivately owned) businesses are formed to earn profit and grow personal wealth of their owners.profit and grow personal wealth of their owners.  The owners of a business aim to generate aThe owners of a business aim to generate a financial return in exchange for their work andfinancial return in exchange for their work and their acceptance of risk.their acceptance of risk.  Exceptions to this rule include cooperativeExceptions to this rule include cooperative businesses and government institutions.businesses and government institutions.  SocialisticSocialistic systems, involves either government,systems, involves either government, public, or worker ownership of mostpublic, or worker ownership of most sizablesizable businesses.businesses. 2525
  26. 26.  TheThe etymologyetymology of "business" relates to the state ofof "business" relates to the state of being busy either as an individual or societybeing busy either as an individual or society   doing commercially viable and profitable work.doing commercially viable and profitable work.  The term "business" has at leastThe term "business" has at least three usagesthree usages:: 1.1. the singular usage (above) to mean a particularthe singular usage (above) to mean a particular company or corporationcompany or corporation 2.2. the generalised usage to refer to a particularthe generalised usage to refer to a particular market sector, ormarket sector, or 3.3. the broadest meaning to include all activities bythe broadest meaning to include all activities by the community of suppliers of goods & services.the community of suppliers of goods & services.  However, the exact definition of business is aHowever, the exact definition of business is a matter of debate.matter of debate. 2626
  27. 27. CommerceCommerce  CommerceCommerce: is a: is a divisiondivision of trade orof trade or production which deals with theproduction which deals with the exchangeexchange of goods and services fromof goods and services from producer to final consumer.producer to final consumer.  It comprises theIt comprises the tradingtrading of something ofof something of economic valueeconomic value such as goods, services,such as goods, services, information or money between two orinformation or money between two or more entities.more entities.  CommercialisationCommercialisation consists of theconsists of the processprocess of transforming something into aof transforming something into a product, service or activity which oneproduct, service or activity which one may then use in commerce.may then use in commerce. 2727
  28. 28. Modern Concept ofModern Concept of Commercial LawCommercial Law  Modern trends in commercial lawModern trends in commercial law  reconsiderreconsider thethe provisionsprovisions of commercial law.of commercial law.  Commercial law is the law ofCommercial law is the law of economiceconomic oror business. This concept, wouldbusiness. This concept, would    cover allcover all topics involve economic activities undertopics involve economic activities under commercial lawcommercial law  Rules of commercial lawRules of commercial law  constant evolutionconstant evolution changing rapidlyrapidly  Progress in the field of industry, tradeProgress in the field of industry, trade  newnew products, markets, toolsproducts, markets, tools  new legalnew legal versionsversions  Commercial law evolves more rapidly than anyCommercial law evolves more rapidly than any other branches of lawother branches of law 2828
  29. 29.  New contractsNew contracts: in France in recent years: in France in recent years  sales through agencysales through agency  Cars' factory with a distributor in an areaCars' factory with a distributor in an area  The owner of an oil company with theThe owner of an oil company with the distributors in petrol stationsdistributors in petrol stations  Working in mines (coal, iron and oil) isWorking in mines (coal, iron and oil) is considered business activitiesconsidered business activities  The concept ofThe concept of economiceconomic process is moreprocess is more important hereimportant here  In this context, the rules of commercial lawIn this context, the rules of commercial law werewere developed fromdeveloped from activities fromactivities from civil lawcivil law.. 2929
  30. 30. The Distinction betweenThe Distinction between Commercial and Civil ActsCommercial and Civil Acts::  TheThe provisionsprovisions of commercial lawof commercial law  business and commercebusiness and commerce  Most contracts in the commercial lawMost contracts in the commercial law were quoted from civilian lifewere quoted from civilian life  andand have created special provisionshave created special provisions such as commercial contracts,such as commercial contracts, commercial papers, and bankruptcy.commercial papers, and bankruptcy.  Scholars recognise thatScholars recognise that speedspeed andand trusttrust in conducting business activitiesin conducting business activities  important in commerceimportant in commerce  recognised inrecognised in commercial law.commercial law. 3030
  31. 31.  SpeedSpeed is a fundamental elementis a fundamental element  hashas an impact on the legal systeman impact on the legal system  “freedom of proof”“freedom of proof”  TrustTrust: business requires large numbers of: business requires large numbers of transactionstransactions  entail trustentail trust  thus commercial law strengthen thethus commercial law strengthen the credit/trust by:credit/trust by: increasing creditors' guaranteesincreasing creditors' guarantees imposing harsh sanctions on theimposing harsh sanctions on the failing debtors.failing debtors. 3131
  32. 32. Characteristics ofCharacteristics of Commercial LawCommercial Law The Features of commercial law are related toThe Features of commercial law are related to the business environment.the business environment. Providing legal toolsProviding legal tools  enable traders toenable traders to conduct transactions smoothlyconduct transactions smoothly  simplersimpler than the civil lawthan the civil law  First:First: Making ProfitMaking Profit: result is established: result is established (purpose of commerce)(purpose of commerce)  actorsactors ofof commercial law are individuals, companiescommercial law are individuals, companies and businesses, have the ability to achieveand businesses, have the ability to achieve that objective (making profit) throughthat objective (making profit) through transactionstransactions 3232
  33. 33.  Second:Second: Speed Business TransactionsSpeed Business Transactions: (Time: (Time has great values in business transactions)has great values in business transactions)  In the past, merchants used oral transactionsIn the past, merchants used oral transactions  Today through rapid electronic processesToday through rapid electronic processes  Hence, a need for rulesHence, a need for rules  accustomed toaccustomed to the speedthe speed  justified by the principles of freedom ofjustified by the principles of freedom of proofproof and the possibility ofand the possibility of transmittingtransmitting commercial rightscommercial rights  Third:Third: Strengthening Credit/TrustStrengthening Credit/Trust::  In commercial transactionsIn commercial transactions  deadlinesdeadlines oror pledge to pay debts based on a combinationpledge to pay debts based on a combination of time and moneyof time and money  will bear the riskwill bear the risk  legallegal rulesrules to protect commercial playersto protect commercial players  to strengthen the system of interest onto strengthen the system of interest on commercial debtcommercial debt 3333
  34. 34.  Fourth:Fourth: Openness/Publicity of CommercialOpenness/Publicity of Commercial ActivitiesActivities::  Commercial activities must be exposedCommercial activities must be exposed  merchantsmerchants  register at the chamber ofregister at the chamber of commercecommerce  publishing sentences of bankruptcypublishing sentences of bankruptcy  in order for the law to protect othersin order for the law to protect others  Fifth:Fifth: Goodwill and Integrity of BusinessGoodwill and Integrity of Business::  in contracts, negotiating them, conclusion,in contracts, negotiating them, conclusion, and implementationand implementation  DealsDeals are carried out mostly orallyare carried out mostly orally  nono proof or witnessesproof or witnesses  It is based on the presumption of merchants'It is based on the presumption of merchants' confidenceconfidence 3434

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commercial Law discus about rules of business and how u communicate with people and behavior of the business.

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