Introduction, Nature of Law, Meaning and Definition of Business Laws

Business Law governs the world of commerce. We call all these rules as Merchantile Law or Commercial law. The Business Law governs all dealings of businesses and the conduct of people associated with such businesses. In India, some of the Business Laws followed are from the pre-independence era, however, newer Business Laws are always being passed.

The business law is a branch of law which deals with the set of governance rules related to certain business transactions and relations between business representatives, dealers, customers, and suppliers.

Commercial suit it refers to the suit between bankers, merchants, and traders relating to mercantile transactions.

Various Definitions of Law

There are broadly five definitions of Business Law. Let’s walk through each of them briefly.

1. Natural School

In the natural school of thought, a court of justice decides all the laws. There are two main parts of this definition. One, to actually understand a certain law, an individual must be aware of its purpose. Two, to comprehend the true nature of law, one must consult the courts and not the legislature.

2. Positivistic Definition of Law

John Austin’s law definition states “Law is the aggregate set of rules set by a man as politically superior, or sovereign to men, as political subjects.” Thus, this definition defines law as a set of rules to be followed by everyone, regardless of their stature.

Hans Kelsen created the ‘pure theory of law’. Kelsen states that law is a ‘normative science’. In Kelson’s law definition, the law does not seek to describe what must occur, but rather only defines certain rules to abide by.

3. Historical Law Definition

Friedrich Karl von Savigny gave the historical law definition. His law definition states the following theories.

• Law is a matter of unconscious and organic growth.
• The nature of law is not universal. Just like language, it varies with people and age.
• Custom not only precedes legislation but it is superior to it. Law should always conform to the popular consciousness because of customs.
• Law has its source in the common consciousness (Volkgeist) of the people.
• The legislation is the last stage of lawmaking, and, therefore, the lawyer or the jurist is more important than the legislator.

4. Sociological Definition of Law

Leon Duguit states that law as “essentially and exclusively as a social fact.”

Rudolph Von Ihering’s law definition: “The form of the guarantee of conditions of life of society, assured by State’s power of constraint.”

This definition has three important parts. One, the law is a means of social control. Two, the law is to serve the purposes of the society. Three, law due to its nature, is coercive.

Roscoe Pound studied the term law and thus came up with his own law definition. He considered the law to be predominantly a tool of social engineering.

Where conflicting pulls of political philosophy, economic interests, and ethical values constantly struggled for recognition.

Against a background of history, tradition and legal technique. Social wants are satisfied by law acting which is acting as a social institution.

5. Realist Definition of Law

The realist law definition describes the law in terms of judicial processes. Oliver Wendell Holmes stated: “Law is a statement of the circumstances in which public force will be brought to bear upon through courts.”

According to Benjamin Nathan Cardozo who stated “A principle or rule of conduct so established as to justify a prediction with reasonable certainty that it will be enforced by the courts if its authority is challenged, is a principle or rule of law.”

As the above law definitions state, human behavior in the society is controlled with the help of law. It aids in the cooperation between members of a society. Law also helps to avoid any potential conflict of interest and also helps to resolve them.

Nature of Business Law

The nature of business law depends on the location of the business and its area of activities. Apart from these two conditions governance authority also affects the nature of the law. The main areas included under the business law are:

• Starting a business

The business laws are applicable to all types of business organizations. There are certain rules for each business entities including corporations, limited liability, partnership and more. For instance, let’s assume you want to start a business but what type of business it would be? And what papers you need to file for it? After this what are the certain legal rules you need to follow or how to pay the taxes? To answer all this question you need to hire a business lawyer. The hire lawyer can help you with intellectual property law which includes patents, copyrights, trademarks and other intangible assets. Along with intangible assets the lawyer will look after the business like consumer protection law, licensing and permits.

• Taking over/ buying a business

Now, not everyone starts with buying a business some goes for taking over or buying an existing one. When it comes to buying or taking over an existing business the company need a lawyer to deal with contracts, employment laws, real estate laws and consequences after the breach of contract.

• Managing a business

Running a business is not an easy task as there are several aspects that are involved in managing a business. As you already read mention a business involves lots of contracts, joint-ventures and employment laws. The government of the country create and enforce the federal laws on the business. To deal with all of these aspects the company needs a business lawyer. Although it may sound appealing to become a business lawyer it is not as easy as it sounds.