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Introduction

Meaning of Law:

A very wide term and includes different sets of rulesregulating external human actions and conduct ofindividuals in their dealings with other individuals andwith the government.

The term law refers to rules of conduct enforced bythe State to maintain peace and order in the society.

Legally, a set of rules alone is not sufficient unless:

(i) it is enforced by the State;

(ii) the State to enforce law is a Sovereign State(iii) it receives due recognition;

(iv) it attempts to achieve some sort of security anduniformity in its application.

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Definition of Law

A law is a rule of conduct imposed and

enforced by the sovereign.

Austin Law is the body of principles recognized and

applied by the state in the administration ofjustice -Salmond

According to Anson the object of law is order,and the result of order is that men are enabledto look ahead with some sort of security as tothe future. Although human actions cannot bereduced to the uniformities of nature, men havenow endeavored to reproduce by law

something approaching to this uniformity. 2

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Contd

Law when enacted has to observe the followingprinciples:

(i) It should as far as possible be in conformity with

custom and usage of the people, i.e., it should notoffend local customs and usages of the society;

(ii) It should move with the society, i.e., it should bevulnerable to changes. It should not be a static or rigidpiece of legislation. Law, therefore, is not static. Itchanges with times, customs and needs of the society.

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Purpose of Law

The primary object of law is to regulate human

relations with other individuals and with theState. As a social being, man comes in contactwith people in different capacities; with landlordas a tenant, with Government as a tax payerand so on and so forth. In all these associationshe is expected to observe a code of conduct ora set of rules. This set of rules embodies in Law

are enforced by the State to make humanassociations possible and conducive to thewelfare of the State and its people.

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What is Business Law

Business Law refers to a set of rules and regulations framedto regulate business transactions. Business law is a branch ofcivil law that aims at protecting civil rights.

The terms business, commercial' and mercantile' aresynonymous. It is a branch of General Law. It relates to

industry, trade and commerce. It includes law relating tocontracts, sale of goods, partnerships, negotiableinstruments, companies, co-operative societies etc.Consumers are a special constituent of any business. Theconsumers movement has gained significant importance oflate. Consumers Protection Act not only recognizes theimportance of safeguarding the right and interest of theconsumers but also puts every business on alert andanswerable to the consumer, the ultimate master.

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Contd.

The Law of Contract embodied in theIndian Contract Act, 1872 is considered asthe mother of all other business laws

which regulate the trade and businesscontracts. All business transactions arebased on the elementary rules of Indian

contract Act.

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Types of Business Law

Sale of Goods Act, 1930: deals with therules and regulations pertaining to the saleof moveable goods.

Partnership Act, 1932 deals with the rulesrelating to formation and regulation ofpartnership relations.

Indian Companies Act, 1956 deals with therules relating to formation, functioning andwinding up of companies.

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Contd.

Patents Act, 1970: It aims at grantingprotection to the intellectual property right. Itis a right granted to the inventor.

Copy Right Act, 1959 aims at granting

protection to the art work, literature, drama,etc., created by artists and writers.

Trade and Merchandise Marks Act, 1958

protects the trade marks used by companieswhich enables to distinguish the products ofdifferent companies.

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Contd.

Law of Agency: It deals with the formation,functioning and termination of agency.

Environment Act, 1986: It devises rules andregulations for protecting the environment.

Consumer Protection Act, 1986: It protectsthe rights of consumers.

Sick Industrial Companies Act, 1985: It aimsat providing financial assistance to sickindustries covered under the Act for revival.

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Contd.

Security Contract Regulation Act, 1956regulates the aspects relating to sale, transferand transmission of shares.

Air (Prevention and Control of Pollution) Act,1981 aims at preventing and controlling airpollution, in turn environment.

Water (Prevention and Control of Pollution)Act, 1974: aims at controlling and preventingwater pollution.

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Sources of Indian Mercantile Law English Mercantile Law:

Indian Mercantile Law is largely based on English MercantileLaw. As a matter fact, even after independence, in theabsence of provisions regarding any matter of the Indian Law,the provisions of the English Law are generally accepted inthe Indian Courts.

Statutes of Indian Legislatures:

Most of the Indian Laws are in the form of Acts passed by theLegislatures. Both the Central Legislatures (i.e., the

Parliament) and the State Legislatures are empowered toenact laws relating to matters which come within theirjurisdiction. For example, the Companies Act, 1956 has beenenacted by the Parliament while the different StateLegislatures have enacted the Sales Tax Acts applicable to

their respective States. 11

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Contd..

Judicial Decisions:Past judicial decisions acquire the force of precedents andare generally followed by law courts in deciding similar cases.In our country, the courts have been divided into threegroups: (i) the Supreme Court, (ii) the High Courts and (iii) theSub-ordinate Courts. The SC is the final court of appeal. Forthe court of same stature, earlier decisions have only aguiding and persuasive value. However, for a court of a lowerstature, the decision given by the court of a higher stature

regarding the same subject matter is usually taken as havingbinding effects.

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Contd..

Customs and Usage:

Customs and Usage also play a significant role inregulating business transactions. Customs and usagesshould be ancient, reasonable and constant. Customswhen accepted by the Court and incorporated in a

judicial decision become a legal custom.

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Key Terms

Law: Rules of conduct enforced by State to maintain peaceand order in the society.

Mercantile Law: Legal rules which govern and regulatemercantile transactions.

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Test your Understanding

Laws are framed by the State to maintain peace andorder in the society. T/F

Mercantile Law ,Law Merchant, Business Law,Commercial Law are synonymous. T/F

Customs and Usages have no role to play in regulatingbusiness transactions. T/F

Past Judicial decisions have to be accepted by the lawcourts while giving decisions in future. T/F

Both the Parliament and State Legislatures have thepower to make laws. T/F

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