introduction to business law

1. Business Law
Part – I
By : Prabesh. Shrestha
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2. Law:-
The word term law in legal sense can be taken as the purely the product of State or
Govt. The State for the purpose of maintaining peace in a country or State, will make the law
with the helps of which, it brings the better relations between the people. The better relation
between the people, surely help in the mentainence of peace in a country, which is the main
factors, which help to develop the country.
History:-
No laws were there in the early period, where the peoples lives in a groups as a tribes,
in a jungle to control the acclivities of men by which might prevails as a rights. Because being
mights as a right, poor or weak person had to face the domination of mighty persons.
The weaker person could not utilize even their natural rights due to
disturbance of their mighty persons and they cannot fill secure about their lives. They are liable
to attack at any time at the whime of those mighty persons. Similarly there was no any system of
giving punishment to the wrong doer because having no government or even being government
who is too weak could not administered the system of punishment to the wrong doer. Hence in
such a situation every person was made a sole measure of rights. The person or people use to
follow the system of giving the punishment in that time was private vengeance or private
revenge and violent self-help. The person who commit the crime or criminal could be punished
by his own hands probably supported by the hands of friends and kinsmen. Thus this system
creates the conflict between groups and tribes and consequently one group or tribes became the
victim for the cause of one man. It create the circumstances where no people could remain in
peacefully, and every people in this stage have to carry his life in his own hands In other words
only that person who have strong hands or strong, can exist in society otherwise not.
But with the growth of the government and its power, gradually try to control the unwanted
activities by giving the law of tooth for tooth or eye for eye, no tooth for eye and no eye for
tooth on the basis of principles of equality and justice. This principle was based on the thought
that unless the equal punishment is given to the criminal the injured or kinsmen of injured
person will not satisfied. The unsatisfied system of punishment may create another problem
when the chance will be available to the injured party. The governments with this process supply
the full-fledged law to the society with its growing power. Therefore considering above it can be
said law is as purely the product of State.
Nature of Law
The term Nature of law even it indicate the characteristic or features of law,
Charactortics of law will be little bit inconsistent unless and until it will be clear about the term
or meaning of law which will be helpful by the discussion of some of the definitions of law.
Definition
A. Bedha - Law is the king of the king
The law is that rules which have to obey or follow even by the king for the proper
administration and to be good king. The law is that rules which he have to follow in the running
of his country and even to be the king. Hence it can be said that law is more powerful than the
king. The king is to work under the direction of law not as his will.
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3. B. General - Law may be defined as a body of rules and regulation,
enforced by the State (with the help of force)
Law may be said as a body of rules and regulations provided they are
enforced by State. This definition is based in legal scene, and therefore the definition said
firstly to be the law it must be of body or groups of rules and regulations which was made
by the people to control and to regularize their own conduct or activities. In other words
the people made the rules and regulations with the objects of controlling their unwanted
activities, which affect the development of society and country. Similarly they are made
with the object to regularize their conduct, which is quite helpful for the development of
society and county. Therefore the rules and regulation can be said as accepted principles
or conduct of people, which is made by themselves for controlling or regularizing their
own conduct.
The rules and regulation were made with the object of making possible to live the persons
in a groups for their own benefit for living peacefully and as well as for the benefit of the
country. The rules and regulation even thought they are made for above objects cannot be
law in legal scene unless it is enforced by the state. The rules and regulation not enforced
by the State only will be accepted principles by people. But that accepted principles to be
law first of all, State must recognized it. The recognizition by the State is possible only
when State realized it as good rules. Good rules in the scene, that rules will be said as good
rules when it help for the development of society, country and will help for maintenance of
peace in the country other wise not. Similarly only recognization by the State is not
sufficient to be the law. To be the law the main things beside the recoganization is the
application of law. The best rules or good rules if not applied by the State cannot be said as
law. Hence with the recognization by the State the rules must apply in the country with the
help of force without which the application of rules is not possible even the government
want to apply.
C. Hooker- Any kind of rules or canon whereby action are framed is law
Hooker says in simple sense, any kinds of rules or canon, which is made by the people
with the objects, of defining and explaing the action of the people, which can be or cannot
be done by the people, is said as law. This definition can be said as based on principle not
in legal sense because it is silent with regards to the enforceability by State.
D. Holand-Law is a general rule of external human actions, enforced by a
sovereign political authority:
Law is nothing but rules or accepted principles or thought of mind kind
which is made by themselves to control or to regulate their conduct for the purpose of
living in a groups or in a society. According to the Holand even though the rules are made
for the above said object only the rules of general nature will come under the heading of
law. Because every law in legal sense must be of that type which will apply to all not to
special persons or groups’ which comes under the term law.
The definitions of Holand indicate the term law is that general rules
which try to control external human action not the internal actions.Because there are no
rules which control the internal action or activities of the mankind. Hence every rule even
general nature can control or regulated only the external activities of mankind.
The term law in legal sense according to the Holand , those general rules
of external human action which is enforced by a sovereign political authority. In other
words those general rules of external human action will be law only when they are
recognized and applied in case of need by the sovereign political authority (Govt)
otherwise not.
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4. 1) Salmond-The law is the body of principles recognizes and applied by the
State in the administration of the justice.
The law according to Salmond is the body or groups of accepted principles or concept or
thought of mankind created by them to control and to regulate their activity for the purpose
of living together in the society, which is recognized and applied by the State. The law is
nothing but the body of rules which is recognized and applied by court in the time of
providing and administering the justice
2) Austin-Law is a rule of conduct imposed and enforced by sovereign:
Law is nothing but only the rules, which define or explain the conduct or activities of the
people, which is used for controlling or regulating their activities for the purpose of living
in groups provided it is imposed and enforced by Sovereign State. The rules, which are
imposed in the form of command by the sovereign authority for the purpose of
enforcement of it to the people can be, said law.
3) Woodraw Wilson-Law is that portion of establish habit and thought of
mankind which has gained distinct and formal recognization in the
shape of uniform rules backed by authority and power of government
Law is nothing but it is that part of establishment habit of the people which is arise out of
the thought of mankind and has become popular as distinct and formal recognization as in
shape of uniform rules which apply to all without any discrimination and help or backed
by authority or power of the government in the process of utilizing it to the people. The
definition of Woodraw Wilson with regards to the term law means:
a. It is that part of establish habit of people and
b. It is arise out of the thought of mankind and
c. It become popular as distinct rules and
d. It is formally recognized as uniform rule which applied to all without any
discrimination among the people and
e. It got the help or back of government in the process of utilizing it in the administration
of justice.
Nature and characteristic of law
1. It is conducted by sovereign authority: The law in legal sense is of such a nature, which
will be use or enforce by a person or by any institute who has sovereign authority. Term
sovereign authority indicates that power which he or they got from Govt or country or
the constitution of that independent country. The law can be made or can be enforced by
only that persons or institutions that have sovereign authority not by other.
2. It is the sets of rules of conduct of the society: The law always can be understood as a
sets or body or groups of rules, regulation, principles and conducts made by the society
for to control their harmful activities and to regularize or to encourages or to help to the
activities for the development of society which is quite essentials to the people to live in
a groups or in a society peacefully. Hence all these rules will be included in the term law
provided they are recognized and applied by the State.
3. It regulate the external human behavior: The law always try to control and regulate
only the external human behavior not the internal. Because no rules and regulation can
control the internal behavior or activities of mankind, being internal activities always
relate to the thinking process of the brain of the people which can not be known or
decide by a independent person that what the other person is going to do. But the
external activities are that activities for which one independent person can know what the
other person is going to do. Hence the rules and regulations or law can regulate only the
external human activities not internal one.
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5. 4. It has uniformity in action: The law has its uniformity when it has to bring in action. In
other words when laws have to apply to the people it will apply in uniformity without
discrimination among the people in the similar cases. Hence we can say that the law will
treat equally to the people in the similar cases.
5. It is more powerful in the world than the lawmaker: The law even though made by a
persons or groups or institution, it is more powerful than the maker. Because after
making the law, they themselves will be under that law and they have to follow or obey
that the rules. Hence it can be said that the lawmaker always makes their master who
control them.
6. It helps people to live in a peaceful manner: The law always helps people to live in a
peaceful manner. The law which will not help to live the people in a peaceful manner can
not be said as law. Because one of the object of the introducing law to a society is to
mentaining the peace in the society which is quite essential for the development of
society and the country. Hence it is rightly said that imagination of developed society
and country can not be done in the absence of peaceful environment in the society.
7. It stops or protects the people from committing the harmful or unwanted activities:
The law by enforcing it always stops from committing unwanted activities of the people
by creating fear in their mind that when they commit it, they will surely punished.
Hence it indirectly protects them from doing such unwanted activities.
8. It is inevitable to develop the society: The development of society and country can not
be imagine in the lacking of better legal system or better law in the country. Because the
law always help to develop the society and the country. Therefore it can be said as it is
inevitable to develop the society.
9. It is related to justice: The term law always is related to justice. In other words the law
will be necessary when there arise the needs of giving justice to the people. The courts
always try to find out the law or take the help of law, when there arise the need of
providing justice in a case. Hence there is relation between law and justice.
10. It is administered by court: The administration or application of law is done in the court
when there arise the dispute or cases between people and when they applied for justice.
Thus it can be said the law will apply by the court if the cases is filed by the people.
11. It must accept by all the people or Citizen of the country: The law enforces by the
Sovereign State or authority must accept or obey by all the people or citizen of that
country. Because it can be said as it is command of the State to its people which all the
people have to accept. Similarly it can be said that the law is made for the benefit of the
people or country and that is why it must be accepted by all the people.
12. It is dynamic not static in nature: The term law for this purpose as understood in legal
sense it can be said as dynamic. In other word it can be change according to the need and
situation of the country, not being static. The law which cannot be changed according to
the need of the country can not help for the development of society and the country. The
change of law may arise because wrong rules may be made by the maker and change is
inevitable for the correction of mistake committed by the lawmaker.
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6. Types of law
The term law can be divided in various groups. In other words the law can be divided in
different groups from the various points of view, which are as follow:
1) From the point of view of its source: -
The law can be separated from one to another or can
be given special name to the law from its source. The term sources means, it indicate that
hole or point from which the law origin. From the point of origination of law it can be
divided in different types, which are as follow: -
a) Imperative law:-It is law, which arises out of the order of the superior
power to the people, or persons who have to obey it. It can be said as command
of a superior power or person given to the people, or can be said that rules or regulation
which is imposed by the superior power one who have the authority, giving no choice to
the people to accept or not i.e. the order of the king to the people and the order of
commander in the military force which have follow or obey by the soldiers.
b) Physical or scientific law: - The physical or scientific law is the rules
which concern with the nature of science, which is perfect and sure and
will not change in any case and will be same in all over the world. The
physical or scientific law is the law, which is concern with nature. It can be said as
natural law even though it is said as physical or scientific law. Because every scientific
or physical law can be found in natural law. The natural law or rules propounded by the
scientists said as scientific law. Hence every scientific or physical law is concern with
the nature of science. It being natural law it is perfect and sure in comparison to man
made law and will not change and will not change in any case and will be same in all
over the world. i.e. the rule of life and death of the people.
c) Moral or natural law: - It is that law which depends upon the rules of
morality and natural justice and natural reasons. All the rules or law will be
made on the basis of certain reasons or can be said depend upon certain reasons. But that
law can be said as Moral or natural law, which is based upon the rules of morality. The
rules of morality depend upon the natural reasons. The activities that are supported by
goods natural reasons can be said as moral one and the activities which is supported by
unnatural reasons or which is treated, as not goods by natural reasons can be said as
immoral one. Therefore moral or natural law being based on reasons it can be said as law
of reasons. It is unwritten law depending upon the morality of persons.
d) Conventional law: - Any rules or system of rules agreed upon by persons
for the control and regulation of their own conduct can be said as
conventional law. The law made or created by the process of agreement between the
parties or persons for the purpose of controlling and regulating their own conduct or
activities with the aim of living all peaceful manner. The conventional laws only apply to
those who agreed to that law. It cannot be applied to the persons who do not agree.
Hence it can be said private or rules of particular groups not being of all the people of the
country.
i.e. the rules of clubs which try to control the activities of the member of the club who
agreed to obey the rules.
e) Customary law: - Any rules of action which is actually observed by men
or people as their customs is known as customary law. The law, which is,
arises out of the custome or rules, which is accepted or observed by the people known as
customary law. It is to be noted that to be the customary rules the rules must be observed
by the people since immemorial period or time and still continued to the present time. i.e.
the rules of marriage of the people.
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7. f) Practical or technical law: - practical or technical law is that law which is
made for the fulfillment of certain object of the persons. The rules which is
used as in practice for the fulfillment of set objective of the people or such technique or
methods used to get the fulfillment of the set object is known as practical or technical
law, The rules which have to follow to make them success in fulfilling the object can be
said as practical law. i.e. moving of two legs is essential for the fulfillment of the object
of moving men from one place to another.
g) International law: - The rules that determine the conduct of general body
of civilized state in their mutual dealing are known as International law.
The rules which explain and define the activities or conducts of general body of civilized
State which they have to observed or follow in their mutual dealing to bring the better
relation between the civilized State is known as International law. The international law
will be followed by only that country who agreed it not by other. The acceptance or
observation of this law depends upon the option of the country. No country binds another
country to observed this law.
h) Civil law or State law: - The law that applied by the State in the country is known as
State or civil law. It is State law because of, it being made or creates by State by
fulfilling the proper process, and which have to accept or follow by all the citizens or
people of the country.
2) From the point of view of substantive and procedure:
The law can be divide in different groups from the point of view of substantive and
procedure. In the other words from the point of view of fact and procedure, which are
as follow: -
a) Substantive law or law of fact: - Substantive law or law of fact is that
law which create and define the rights and obligation of a persons in a
given circumstance. It provide the knowledge to the persons with regards to their
rights and obligation in a given circumstances or cases. Similarly it provide the
knowledge to the persons, what we can do against the other persons and what we
must do to the other persons in a given circumstances.
b) Procedural law: - procedural law is that law which prescribed the rules
or procedure which is to be fulfill or follow by a person in the process
of utilizing the rights in case of violation of the rights. It gives the
knowledge to the persons with regards to the rules or steps to be followed to get the
object is done. The procedural law gives the knowledge with regards to the rules of
filing and defending the case and rules of proceeding and finalizing the case.
Differences between substantive and procedural law
The substantive and procedural law can be differentiate from the following point of
views: -
1) From the point of rights and duties: The substantive law define and
explain with regards to the rights and obligation of a person in a particular
circumstances, i.e. who have the rights to get the goods when it is purchased or
who have the rights of ownership of goods and who have to pay the price of the
goods purchased, while in case of procedural law it discuss the procedure or
rules to be observed in utilizing or getting the rights when it is violet by another
party, i.e. the rules is to be follow in filing the case.
2) From the point of view of fact and procedure: The substantive law
relate or concern to the subject matter or fact of the case, i.e. whether the
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8. particular circumstances is the murder or the theft or not is the relation or
question of fact, while procedure law relate or concern only with the procedure
to be observed in the case, i.e. whether a person commit murder or not.
3) From the point of view of relation of the parties in a case: Only the
relation of concerning party is considered in substantive law. The substantive
law concerned with the applicant and defendant of the case while procedural
law beside the relation of concerning parties, the relation of court too will be
considered. Because rules of procedure is to be followed in the court or
according to the order of court for the purpose of proving certain facts in a case.
4) From the point of view of finding out crime and proof of crime:
Substantive law always try to find out where a person commit the crime or not
in a given circumstances or cases, while procedural law try to find out what
circumstances can be taken as proof of committing crime in a given cases.
5) From the point of view of punishment: Substantive law determine
whether a person should be punished by sending in jail or imposing the fine
only while procedural law determine what procedure should be followed in
determining the case and giving the punishment.
6) From the point of view of object and means: Substantive law is
concerned with the main object of the administration of justice, i.e. whether the
criminal or wrongdoer should be punished or not is the concern of substantive
law while procedural law is concern with the means or medium of getting the
fulfillment of main object. In other words substantive law is made with the
objective of administration of justice and procedure law is made to prescribe
the procedure to be followed in the administration of justice.
3) From the point of view of activities of the mankind
The law can be divide in to the different groups from the activities
done by the people which are as follow: -
a) Criminal law: - the law concerning the criminal activities or the
law, which try to control, the criminal activities is known as
criminal law. The term criminal activities indicate those activities of
mankind which is restricted by law, because of affecting the life, property or
fame of the persons for which punishment is quite essentials. Because of the
provision of punishment it try to control the unwanted activities of mankind.
b) Civil law: - Civil law deals with the rights on property, status and
position of a person. In other words the civil law is related to getting the
rights in property or rights to get the particular position or status of which the
punishment will be given in terms of compensation for the damages caused to
the injured or affected party.
Difference between Criminal and Civil law
The criminal law and civil law can be differentiate from the
following points: -
1) From the point of view of crime and rights: The criminal law always
deals with the criminal activities of the people or it try to find out whether
crime is committed or not, while civil law deals with regards to the rights of a
person, it try to find out whether a person do have a rights in a given
circumstances or not.
2) From the point of view of activities: The criminal law includes the
activities of the people which affect the state or crown, which affect the life and
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9. property and defamation of the persons while civil law include the case of
succession of property, rights relating to immoral property, contracts and
guarantee etc.
3) From the point of view of object: Giving punishment and utilizing
the rights. The criminal law is made with the object of giving punishment by
sending in jail to the person who commits the crime. The criminals try to
control the criminal activities by making provision of punishment. The
determination of quantum of punishment will be done on the basis of nature of
crime. But civil law is made with the object of giving opportunity to utilize the
rights in case of violation of a right by another party.
4) From the points of view of sending in jail and compensation: the
person violet the criminal law is treated as criminal and will be punished by
sending in jail while one who violet the civil law will be punished by giving
order to compensate loss or damage caused to another party.
5) From the point of view of place of filing the case: the cases under the
criminal law is to be file where the crime is committed but the cases under the
civil law is to be filed where the property lies if it is related to property.
6) From the point of view of detentions to the person: The person who
commit the crime will be detain in jail for the proceeding the criminal case,
while in case of civil nature no one can detain for the proceeding of the case.
7) From the point of view of authorization to deal the case: the
authorization to another person to deal in the proceeding is allowed in civil law
while in case of criminal law the court may reject the authorization to another
person in proceeding the case.
8) From the point of view of court fee: The people who want to file the
civil case under civil law have to pay the court fee but not in case of criminal
case.
9) From the point of view of evidence: The written document, registration
of documents and utilization of property will be taken in the form of evidence
while in case of criminal law, witness, surjamine and recommendation of
specialist will be taken as evidence.
Sources of law
The term sources of law indicate that particular hole or fountains from which
the law comes into existence in the country or world. The different writer or
judges had given the different view with regards to the sources of Law: -
Austin: State three groups with regards to sources of law: -
A) Direct or immediate authority:
i) Parliament: The person who works The direct or immediate authorities as a
source of law, indicates those persons or institutions from which the country will get the
law directly. In other words it indicate the lawmaker who will directly made the law. The
parliament is treated as that institution that works as main body of making law. Hence it
can be taken as one of the source under the heading of direct or immediate authority.
ii) Ministry: the ministry too can be taken as a source of law under the direct or immediate
authority because in the time of parliament session is not going on and there arise the need of
making new rules, the ministry can make the law on the condition it will be send in
parliament for approval latter on.
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10. iii) Groups of persons: The groups of persons too can be considering as a source under
the direct or immediate authority. Because the groups may make the rules of conduct or
custome for their own purpose and the court later on will be treated as law
iv) Parties: By making agreement between two or more party too create the law provided
the agreement made by them recognised by the court. Every agreement made between the
parties if it is enforced by court is said as contract, which will be treated as law to those
parties. Hence parties to the agreement too can be taken as a source under the direct or
immediate authority.
B) Historical document
The historical document too can be taken as a source of law. Because in
the process of making the law the lawmaker may take the help of historical
document or books. The lawmaker when takes the help of historical document,
they will be treated as sources of law.
C) Causes: The cause or cases, which create the precedent, will be treated as
law and the law being arisen because of cause or case, they can be taken as
source of law.
2) Holand: Holand groups the sources of law in four sectors, which are
as such: -
a) Books or comment or explanation of prominent persons: Books,
comments and explanation of the prominent figure of the country may be the
source of law provides the court in the time of administration of justice takes the
help of books, comments and explanation of prominent figure. Who simply write
in the form of books, comment and explanation not in the form of law.
b) State or government: The State and Govt too can be taken as one of the
source of law .Now a days most of the law are made and enforced or apply by the
authority of making and cancellation of law is given. Hence under that authority the
State will be made and enforce the law in the country
c) Custome and religions of the people: the Custome and usages and
religions belonging the people too can be taken as a source of law provided the
court in the time of administration of justice takes the help of it. In other words
in the time of giving judgment if the judges takes the help or follow that
customary rules or religions rules.
d) Judge made law or case law: the judges too may be sources of law in case
they gives the decision in a case in the absence of any written law and lack of
customary rules in the country. Because in the lacking of written law and
customary rules, the judges use to give their decision in the case, which is
purely the product of judges and if that decision given by the judges followed
by other judges in similar case with out any change will be treated as Precident
and will be law later on. Thus it can be easily said that judges can be the
sources of law. The law made by the judges know as judge made law or case
law.
3) Salmond: Salmond divide the sources of law in two groups, which are as
follows: -
a) Historical sources: The law may have its source from history of the past of
that country. Because in the time of administration of justice in a case, if the
judges takes the help of historical events or rules it will comes in the form of
law and will be as a sources.
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11. b) Legal source: The term legal source indicates that source of law, which is
made by fulfilling all legal procedure of making law. i.e.
i) Parliament: Parliament can be taken as one of the legal source. Because in present time
only the parliament do have the authority of making the law. The parliament not only have
the authority of making new law in the legal process but also do have the authority of
cancellation of existing law in legal process.
ii) Precident: The decision of judges in the case as Precident too will be the sources of
law. Because in the time of giving the decision judges can give their own verdict, in the
lacking of any written law and customary rules of the people in the country. The decision
given in such case if followed by other judges in the similar cases lateron , it will be treated
as Precident and recognised as law and in such a way the Precident will be source of law.
iii) Customary law or custome of the people: The customary law or custome of the
people is such rules which was made by the people themselves as custome from immemorial
period and observed or accepted or used till the present time. These customary rules will be
law, when the rules apply by the judges in the administration of justice or recognised by
court as law for the purpose of giving decision in a case. The laws have taken the help of the
customary rules and because of it customary rules can be taken as a source of law.
iv) Conventional law is that law which arise out of the agreement between the
concerning parties. The agreement or rules which is made or agreed between the parties for
the purpose of controlling or regulating their own conduct may be one of the source of law
when these agreement or rules is recognised as a law by the court and enforce in the court in
the time of giving decision in a case.
Business law
Business law even it seems separate law it is one of the types of law under the civil law of
country. The country may have different laws, which is made for proper running of the
country. Among them business law also a types of law as among the other laws. Hence it is
said business law is only one branch of law. The business law will not includes other types
of law. The business law is made to regulate the business activities of the country. In other
words the Business law is connected with business activities or can be said as that rules or
law connected with trade commerce and industries. It deals with the rights and obligation of
a businessman that arise out of the business transaction in respect of business property. Thus
it can be said as all rules and regulation made for the smooth running, for developing for
protection of business property and solving the disputes of the businessmen in the business
as business law.
Definition
1) N.D.Kapoor: Business law is the aggregate body of those legal rules,
which are connected with trade, industries and commerce. The term business
laws indicate those bodies of rules, which is recognised by the law, and have the relation
with trade, industries and commerce. In other words it explain and define the activities of
businessmen related with trade, commerce and industries in a country.
2) A.K.Sundaran: Business law provides legitimacy, security, and control
and incurs rage to business activities. Business law is that body of rules with the
recognisiton by law, provides the legitimancy to the business. In other words law provide
or recognised the legal entity of the business in the country without which all the
activities of business will be invalid in the eye of law. Similarly business law provides
the security to the business. Every activities and the interest of the business institution
will be protected. Hence business law will control the unwanted activities of business
and by providing incentives incurrage the wanted activities of the business.
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12. 3) M.C.Sukla: Mercantile law is that branch of law, which deals with the
rights and obligation of Mercantile persons, arising out of Mercantile
transactions in respects of Mercantile property. Mercantile or business law is
only that branch of law among others, which means only one types of law not all. It deals
only with the rights and obligation of Mercantile persons not of all persons. Mercantile
law being a part of civil law, it deals only with the rights and obligation of the Mercantile
persons, which indicate a sole trader, partner in the firm, company and corporation who
runs the business not of other persons. Hence mercantile law will not deals with the
rights and obligation of non Mercantile persons. Similarly Mercantile law explain and
define the rights and obligation of Mercantile persons arising out of the Mercantile
transaction (transaction of selling and purchasing) Mercantile law will not deal with the
rights and obligations of Mercantile persons provided that if it is not related to
Mercantile transaction. In the same way Mercantile law deals with the only that rights
and obligation of Mercantile persons arising out of Mercantile transaction if it is related
to Mercantile property not of personal or non Mercantile property. The term Mercantile
property indicate the property in which the business institution used to conduct as a
business not of other property.
Hence considering all these facts the Mercantile or business law can be said that
the law which is totally related to business activities of business man and business institution
which provide legal entity, provide the security and control and incurrage the conduct
business activities to the businessmen.
Features, Importance of Business Law
The business law totally being related to business, it is quite important for the
businessman to conduct the business. The importance of business law can be determine
because of having its special feature which are as follows:
1) It regulate every business activities of business community relating to
trade commerce and industries. Business law, which are quite necessary for
the development of business institution. The development of business institution is
possible only with goods law, which will incurrage to businessmen for the
development of their institution. Hence for the above stated purpose the business law
is quite important in the country.
2) It helps to develop the business by proving company law, partnership
law, law of agency, law of sales of goods etc. Hence it is rightly said that by
providing different law in case of needs it help in developing the business activities
in the country.
3) It protects the rights and interest of business. The Business law always
protects the rights and interest of business by making rules in case of need, in the
absence of proper law it cannot be imagined with regards to the existence and
development of business. The development of it and the protection of business
houses become possible only with the help of business law.
4) It deals with the rights and obligation business institution. Business law
being that law which deals with the rights and obligation of the business institution it
helps in the smooth running of business. The problems faced by the business and
businessmen may be quite different from that other person for which if the Govt or
laws neglect it, the smooth running of the business cannot be imagine. Hence for the
purpose of solving the problems of business and businessmen, Business law is quite
necessary.
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13. 5) It helps in bringing the better relation with other countries. The Business
law help in bring the better relation between the different countries. Keeping
business relation between the different countries becomes the needs of present time.
Because no country is in self sufficient in all things. Hence it becomes quite
necessary to keep the better relation in business with other country, which makes
possible by business law.
Sources of Business law
Business law too being one type of law which origins or comes from
certain point and that point can be said as sources of business law. Hence the term
source indicates that part of rules, which helps in the process of making the business
law. For the purpose of determining of its sources, it is quite necessary to determine the
sources of English business law, which are as follow: -
1) Common law of England: Common law is a unwritten law of
England based on old continuous general custome preveling
through out the realm or country. The common law is the rules, which
arise out of old continuous general custome of English people. The general
custome of English people when apply in a particular case in the time giving
decision by the judges and followed lateron by the another judges in the similar
cases will be the law. Hence the common law being based on the custome of
English people is unwritten law, being custome is not available in written form.
But in the process of making the English Mercantile law it takes the help of the
common law and it become one of the source of English Mercantile law.
2) Law of Equity: The law equity means the body of that rules or
principles, which is made on the basis of Precident lay down by the
judges in the equity court. The law of equity is the rules and principles,
which is made or arise by the decision of judges in the equity court as in the
form of Precident. It arises because of rigidity of common law. When the
English people could not get proper justice in common law court or when the
common law court begins to discriminate among the people, who used to
approach to the king for justice. The king too used to give the decision on the
basis of natural good consence and equity. Lateron all the cases of these natures
forwarded to the special counselor and thus it formed the equity court. Thus
whatever the decision given by the judges in equity court if followed by the other
judges in the similar cases lateron becomes the Precident and become the law of
equity. Therefore in the process of making the business law, it takes the helps of
law of equity and thus it becomes the one of the sources of business law. i.e.
Rights of injunction and Specific performance.
3) The law of Merchant: The law of Merchant is a kind of private
international law, administered by the tribunals consisting
principlely of merchant themselves. The law of Merchant which they
made in the time of need for conducting or smooth running of their business
because of the negligence of the Govt in providing the new rules for them.
Hence it being the rules made by Merchant for the purpose of controlling their
activities is known as private International law. i.e. Sea law ,maritime law, law
of insurance and law of partnership. In this case if there arise the dispute
between them they themselves administered by the tribunals consisting of
Merchant themselves. But all these law of merchant recognized by the court as
law. Thus in the process of making Mercantile law it takes the help of law of
Merchant and it becomes one of the sources of Mercantile law.
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14. 4) Statutory law: Statutory law too can be taken as a source of Mercantile law,
because Mercantile law includes some of the law made by the State in proper
Legal process. Hence statutory law means the law given by the State in legal
process.
Sources of Nepalese Mercantile Law
The sources of Nepalese Mercantile or business law indicate that
resource or cause from where law origin or start. While considering the sources of
Nepalese business law the following facts are to be consider which are as follows:-
1) Custome and usage: The rule which arise out of custome of the
people of that country is know as customary law. The rules which
arise out of the custome and usage of Nepalese businessmen is known as
Customary rules. The Customary rules of Nepalese businessman Contribute
in the process of making the Nepalese Mercantile law. Hence custome and
usages of Nepalese businessmen will be taken as a source of business law.
2) Statutory law: The law given by State or by Legislature or
parliament in legal process is known as statutory law. The
statutory law can be said as the outcome of demand of people in the time of
need in the country. In other words parliament make the law only when it is
demand by the society or people. Because making new rules and canceling
the existing rules can only be done by parliament, which will be done, when
it is demand by the society. Thus the Statutory law too becomes as a sources
of Nepalese business law because in the process of making business law it
contribute lots or in other words in the process of making business law it take
help of the statutory law.
3) Judicial decisions: The judicial decisions are the principles
created by the judges for the purpose of giving justice to the
people in a particular case, when they could not find out the
basis in the written text and in the prevailing custome of the
people. The judges in the lacking of written text on custome, they use to
give the decision on the basis of Natural justice and good consence and that
decision if followed by another judges in the similar cases Lateron will be
Precident and will be the law for that purpose. The judge made law even
though it is made by judges, that is because of case, therefore it can be said
as case law. The judge made or case law can be taken as one of the source of
business law because in the process of business law it takes the help of the
judge made law or judge made law contribute in the process of making
business law.
4) English and Indian Mercantile law: The English and Indian
Mercantile law too can be taken as of the sources of Nepalese Mercantile
law. Because Nepalese Mercantile, includes so many rules lying in Indian
and English Mercantile law. i.e., Company law , partnership law etc.
5) Business treaties or agreement or convention: The Nepalese
mercantile law beside the other law, it includes the business treaties made
with other country or business agreement and convention. Because
businessmen can not conduct their export and input business or foreign
business unless they follows that business treaties made by his country with
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15. other countries. Hence these treaties become the part of rules, which included
in Mercantile law and become the one of the source.
6) Opinions of expert: the opinion of expert in the particular field too can be
taken as a source of Nepalese Mercantile law. Because Govt may request to
give the opinion or view of the expert for the purpose of making the rules or
law which become quite necessary in the country. The view given by the
expertise if consider in the process of making the law, the opinion of the
expertise will be as a source of law. Similarly in the process of making
Nepalese Mercantile law, Govt has taken or consider, the view or opinion of
expertise and hence it become one of the source of Mercantile law.
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