BUSINESS LAW

Lecture 1

Introduction to Business Law

Rana Muhammad Zawar Khan

 TODAY’S AGENDA
 Meaning and Nature of Law
 Definition of Law
 Origin and Nature of Law
 Purpose of Law
 Types of Law
 Sources of Law
 Meaning of Business Law
 Features of Business law
 Importance of Business Law
 Sources of Business Law
 Significance of the
Subject
 It develops critical thinking skills in examining international
dimensions of the legal environment of law.
 The study of the legal process and our present legal system,
as well as alternative dispute resolution systems.
 The study of the administrative law process and the role of
business people in that process.
 It develops critical thinking skills.
 It helps to establish legal literacy.
 It develops an understanding that the law is dynamic not
static.
 It deals with real-world problems.
 It is interdisciplinary.
Study of Law & Business:
Reasons
 Becoming aware of the rules of doing business.
 Recognizing the legal limits on business freedom.
 Becoming aware of potential misconduct of competitors.
 Appreciating the limits of entrepreneurship.
 Being able to communicate with your lawyer
 Making you a more fully informed citizen. Developing an
employment-related skill.
 Exploring the fascinating complexity of business
decisions.
 Providing a heightened awareness of business ethics.
 Opening your eyes to the excitement of the law and
business
 What is Law?
► A set of rules put in p l a c e
to regulate social and economic
behavior. Consists of rules a n d
re g u l a t i o n s
established and enforced by a governing body.
► Different from Rule of Law…
► Is the orderly passage and execution of laws by a
governing body.
► Applies uniformly to all individuals.
► Enforcement of the law is done to both maintain order within
the community and to create a system in which individuals
 Nature And Origins Of The Law
• A law is a rule which governs or regulates the
conduct of persons and businesses
• I n g e n e ra l , t h e l a w i s a j u r i s d i c t i o n - b a s e d
collection of rules which impose penalties when
the rule is ignored or disobeyed
• In other words……what might be legal in some
jurisdictions may not be legal in others.
• The functions of law include:
 Purpose of Law
The purpose of law is concerning to meet or fulf il l the certain
objectives, which are as follow:
To maintain the peace and security in society.
To maintain the social and political stability in the society.
To maintain the social solidarity and harmony in the society.
To contribute for strengthening the public welfare, national economy
and individual and commercial interest.
To prohibit criminal activities and harmful human conduct in society.
To contribute to make developed, prosperous and civilized country in
the international community.
 Meaning of business Law
• Business is a part of social activity, regulated by the law. Business law is the law
connected with business. It is an aggregate of those rules which are connected with
trade, commerce and industry.
• It is known as commercial law and mercantile law.
• The term business law may be def ined as that branch of law which is concerning to
trade, industries and commerce. It is an ever growing branch of law with the changing
circumstances of trade and commerce.
• It is concerning with the establishment, operation, development, expansion and winding
up of any business activities. It regulates the relation between business entities in
regard to contracts, sale of goods, partnership, companies insurance, insolvency,
carriage of goods, arbitration and so on.
• Thus business law is that part of law which deals with all the laws connected with every
activity of business and rights and obligations of business persons and business f irms
arising from the business transactions. It helps the business community to carry it's
transactions without and fears and uncertainty with certainty and confidence.
 Features of Business law
Basic features of business law are as follows:
 Business law is the fast growing part of law.
 It regulates industry, trade and commerce.
 It regulates every business activities of business community.
 It includes the law of contract, company, agency, banking, insurance,
arbitration.
 It protects rights and interest of business community.
 It is most important means to create positive environment for the
prosperity of business.
 Importance of Business Law
Business law is a part of law which is relating to trade, commerce and industry. It is very much important in
business community from starting point to ending point of every business activity. Establishment,
operation, winding up of business institution should be recognized by law and it provides validity for
business activities. As a regulating and controlling instrument, the business law signif icantly contributes
to develop the business area. The need and important of business law can be mentioned as follows:
 To establish and run the business activities.
 To increase and maintain business transactions.
 To develop capital market.
 To develop the economic activities.
 To prepare the foundation for national development.
 To create employment and support the national interest.
 To create the environment for investment.
 To regulate the behavior of businessmen and officials of the business sectors.
 To develop the new principle of business.
 To increase the knowledge of international business.
 It helps to protect public health, safety and environment protection.
 To settle the commercial disputes.
 To aware and caution to obligations and duties of businessmen and firms.
Classifications &
Categories of LAW
 Types of Laws
Law is an instrument to regulate and control the society.
There are several types of laws in existence. The basis of
classif ication is also different among them. Therefore it is
very dif fic ult task to give particular classif ic ation which
may be acceptable for all. There are three general types
which are common in most of the countries.
• From the point of view of creation and nature of law. e.g.

Substantive and Procedural law

• From the point of view of jurisdiction. e.g. Criminal and
 From the point of view of creation and
nature of law
Substantive Law:
It is fundamental part of law and it is related. to the Rights, Duties and liabilities of persons.
It specif ie s the def initions of such rights, duties and liabilities of a person in the country.
Law that defines the rights, duties, and obligations of citizens and government.
• Your conduct is governed by substantive law
• Is the content of the law
• Examples include right to own and protect property, entering contracts, and the
rules of the road
Substantive law: General principles and detailed rules defining legal rights and duties.
Procedural Law:
The Procedural law deals with how the content of law is implemented while substantive
law deals with the content of law. It is related to the procedure of legal proceedings. It also
determines the steps of process of legal remedy in the case of violation of substantive law.
It is supplementary parts of substantive law. It deals with the process regarding how to
acquire remedy. If refers to the procedure for putting law into practice.
Procedural law: General principles and detailed rules that define the methods of
 From the point of view of jurisdiction
Criminal Law:
Criminal law determines the crime and punishment. A punishment will be
determined for them under the criminal law. It is believed as a rigid law. It
deals with the crime against the state. Criminalization, de-criminalization
and recriminalization of human conduct are the subject matters of it. This
law prohibits such types of human activities which are regarded as harmful
to the society or state.
Criminal law: Body of law dealing with crimes and their punishment
Civil Law:
Civil law is that part of law, which is related with the property and position of
persons. It is made and enforced by the state to regulate the society. Civil
law deals with the wrong doing of the individuals. Like; land law, contract
law, and commercial law are the illustrations of civil law.
 Contrast Between Civil And Criminal Law

Civil Criminal

Nature Rights and duties of Wrongs against

individuals to each society as a whole
other
Person Initiating Action Plaintiff or person Either federal, state,
injured or local prosecutor

Burden of Proof in Trial Preponderance of Beyond a

the evidence reasonable doubt

Result sought Money damages or Death, fine or

equitable remedy imprisonment
 From the point of view of legal effect
Public Law:
Public law deals in the public matters. It defines and regulates the relation
between the state and people. Public law is related to the public interest and
crimes regarding the security, public health and so on. e.g. Constitution
deals with the jurisdiction of Governmental bodies and dispute between
local and national governments.
Public law: Body of law directly concerned with public rights and obligations.
Private Law:
This part of law is very much important and necessary for general people for
their daily activities. It regulates the relations between two or more persons.
It deals with the personal rights, duties and liabilities. And it may be civil and
criminal in nature. Contract law, Commercial law, Family law are the
illustrations of this category of law.
The term source indicates that the place of thing from where
something emerges or come into existences. Source means
origin of law. The source of law is relating to its validity. There is
no unanimous view in respect of source of law among the
thinkers. Here are f ive major sources of law which are discussed
here under.
▶Legislation Law
▶ Ordinance
Precedent and regulation
▶
Custom and usage
▶Convention
▶

▶
Legislation: Legislation is the main source of law in the modern states. It
enjoys the law making power of country. It is made according to the
change of time and it is the outcome of a long series of discussions
among the representatives of people. It is made by legislative body and
enforced by the supreme power.
Precedent: Judicial decisions are called precedents. A precedent is a
judicial decision which contains in itself a principle said judicial authority
in course of verdict of the business case which is applicable to other
similar nature of case in future. It is also known as case made law.
Custom and Usage: Custom is the oldest source of law. Custom is
particular way of behaviors. The rule developed from custom is customary
rule. The customary rule is binding, whereas it is ancient, reasonable,
proved to be immemorial continuously followed and recognized by the
state. For this reason traditional custom and usages play important role in
the development of business law.
Convention: Convention means agreement between two or more
parties for their dealings. Conventional law is derived form the
convention and treaty and it is applicable for the concerned parties.
Although it is regarded as weak source of law.
Ordinance and regulation: An executive body also makes laws in the
name of the ordinance, order and regulations. It also fulfills the vacuum
of law and is more useful to maintain day to day administrative
functions of state.
Characteristics
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 Assignment 1

Formation of Law