Online Business School is now open. Business/Management
and Research curriculum and learning contents subscriptions
are available to International Universities,
Colleges, Management Development and Training Centres and their
Students and Staff throughout the world.
Commercial
law (sometimes known as business law ) is the body of law which governs business and commerce . It is often considered to be a branch of civil
law and deals both with issues of private
law and public
law . Commercial law regulates corporate contracts , hiring
practices , and the manufacture and sales of consumer goods .
Many countries have adopted civil
codes which contain comprehensive statements of their
commercial law. In the United States, commercial law is the
province of both the United
States Congress under its power to regulate interstate
commerce and the states under their police power. Efforts
have been made to create a unified body of commercial law
in the US; the most successful of these attempts has resulted
in the general adoption of the Uniform
Commercial Code .
Various
regulatory schemes control how commerce is conducted. Privacy
laws, safety laws (i.e. the Occupational
Safety and Health Act in the United States), food and
drug laws are some examples.
A business
environment is the social, technological, economic
and political environment in which a business functions. The business
environment affects organizational decisions, strategies, processes
and performance.
The
internal business environment consists of customers, suppliers,
employees, board of directors, creditors. The external environment
consists of factors and forces which are beyond the control
of the organization, such as the economic environment, technical
environment, legal environment, political environment and
cultural environment.
The
legal environment plays a very important role. The laws of the country,
the judicial system, and the laws which affect business are important.
For example, there might be a sudden prohibition of tobacco.
The
political environment is a very important factor that needs to be
taken into consideration. The example of Augusto
Pinochet serves as a classic example. Political lobbying, the
practices of the ruling parties and the stability of the ruling
parties plays a very role as in developing countries as the political
system keeps on changing.
A contract is a legally binding exchange of promises or agreement
between parties that the law will enforce. Contract law is based on the Latin phrase pacta
sunt servanda (pacts must be kept). [1] Breach
of contract is recognised by the law and remedies can be provided. Almost everyone makes contracts every day.
Sometimes written contracts are required, such as when buying a
house. [2] However, most contracts can be and are made orally, like buying
a law text book, or a coffee at a shop. Contract law can be classified,
as is habitual in civil
law systems, as part of a general law
of obligations (along with tort , unjust
enrichment or restitution ).
By
Salmond : A contract is "an agreement creating and defining
the obligations between two or more parties".
Employment is a contract between two parties, one being the employer and the other being the employee . An employee may be defined as: "A person
in the service of another under any contract of hire, express or
implied, oral or written, where the employer has the power or right
to control and direct the employee in the material details of how
the work is to be performed." Black's
Law Dictionary page 471 (5th ed. 1979).
In
a commercial setting, the employer conceives of a productive activity,
generally with the intention of creating profits , and the employee contributes labour to the enterprise , usually in return for payment of wages .
Employment
also exists in the public , non-profit and household sectors.
To
the extent that employment or the economic equivalent is not universal, unemployment exists.
Agency is an area of commercial
law dealing with a contractual or quasi-contractual tripartite set of relationships when an Agent is authorized to act on behalf of another (called the Principal ) to create a legal relationship with a Third Party. [1] Succinctly, it may be referred to as the relationship between
a principal and an agent whereby the principal, expressly or impliedly,
authorizes the agent to work under his control and on his behalf.
The agent is, thus, required to negotiate on behalf of the principal
or bring him and third parties into contractual relationship. This
branch of law separates and regulates the relationships between:
Agents
and Principals;
Agents
and the Third Parties with whom they deal on their Principals'
behalf; and
Principals
and the Third Parties when the Agents purport to deal on their
behalf.
The common law principle in operation is usually represented in the Latin phrase, qui facit per alium, facit per se , i.e. the
one who acts through another, acts in his or her own interests and it is a parallel concept to vicarious
liability and strict
liability in which one person is held liable in Criminal
law or Tort for the acts or omissions of another.
Companies
law is the field of law concerning business and other organizations. This includes corporations , partnerships and other associations which usually carry on some form of
economic or charitable activity. The most prominent kind of company,
usually referred to as a "corporation", is a " juristic
person ", i.e. it has separate legal personality, and those
who invest money into the business have limited
liability for any losses the company makes, governed by corporate
law . The largest companies are usually publicly listed on stock
exchanges around the world, while private companies choose
who their shareholders are.
The defining feature of the corporation
is that shareholders own the sole rights to vote under the company constitution
and to appoint the directors who control the company. Companies
known as partnerships have a different system of voting, whereby the partners own
and vote for who controls the company. Partners may or may not limit
their liability for company losses, although this is increasingly
popular. Even single individuals, also known as sole
traders may incorporate themselves and limit their liability
in order to carry on a business. All different forms of companies
depend on the particular law of the particular country in which
they reside.
Government
seeks to facilitate investment in profitable operations
by creating rules that protect investors in a business from
being held personally liable for debts incurred by that
business, either through mis-management, or because of wrongful
acts.
Regulation can be considered as legal restrictions promulgated by government authority. One can consider at least two levels in democracies
-- legislative acts, and implementing specifications of conduct
imposed fine . This administrative
law or implementing regulatory law is in contrast to statutory or case law .
Regulation
mandated by a state attempts to produce outcomes which might not otherwise occur,
produce or prevent outcomes in different places to what might otherwise
occur, or produce or prevent outcomes in different timescales than
would otherwise occur. Common examples of regulation include attempts
to control market entries, prices , wages , pollution effects, employment for certain people in certain industries , standards of production for certain goods , the military forces and services . The economics of imposing or removing regulations relating to markets is analysed in regulatory
economics.
