Business is a legal entity separate from its owner and employee. Business Law or Commercial Law governs the legal rules to start, buy, sell, manage or close any type of business. It deals with topics that impact the operation of a business and gives a fair opportunity to every participant in the marketplace to succeed. It benefits the economy and provides efficient transactions.
Business law is important for all businesses to maintain their activities and operate efficiently. It defines rights and obligations the business has against other parties and businesses in various contracts, such as agency agreements, guarantees, and contracts for carriage, purchase and sale of goods. It is important for business owners, managers, and supervisors to understand their rights against other individuals and businesses.
Definition of Business Law
Business law, also known as mercantile law or commercial law, includes state laws and federal laws, as well as administrative regulations. It governs the rules of business dealings between the persons or companies involved in commercial matters. These laws are enacted by:
- International or national legislation
It deals with the rights, liabilities and duties of individuals or businesses involved in all business transactions relating to trade, sales, commerce, and merchandising.
Example: Starting a business, buying, or selling a business, Creditor and consumer protection, insurance, will and estate planning, managing contractors, employer and employee, etc.
What are the branches of Business Law?
Business law governs the business and commerce .It is a branch of civil law that deals with both public law and private law. Business law is a broad scope of laws dealing with different types of Laws. They are as follows:
- Tax law
- Intellectual property
- Real estate
- Employment law
- Relationship between principal and agent
- Indemnity and guarantee
- Commercial paper
- Insurance (accident, life, marine, or fire)
- Consumer protection
- Insurance among others
What are the Functions of Business Law?
Law is a body of rules created and enforced to maintain order and regulate human behavior. Business law regulates contracts, hiring, manufacture and sales of consumer goods. A unified body of business law is created in the US for the adoption of the Uniform Commercial Code. There are six main functions of business laws. They are
- To maintain the peace and safety
- Promoting social justice
- Protecting rights and liberties
- Facilitating orderly change
- Resolving disputes and
- Shaping moral standards
What are the Areas of Business Law?
The two main areas of business law are:
- The Regulation of company laws, partnership, bankruptcy, agency for commercial entities
- The Regulation of contract laws for commercial transactions and related fields.
Characteristics of Business Law
Business Law examines the topics that impact the operation of a business. Its main characteristics are as follows
- Contract Fraud
- Contract Litigation
- Commercial Contracts
- Breach of Contract
- Business Formation
- Business Litigation
- Business Planning
- Business Reorganization
- Business Start-Ups
- Franchise Law
- International Commercial Contract
- International Contracts
- Joint Ventures
- Limited Liability Company Law
- Partnership Law
- Privatization, etc.
How does Business Law Affect Business?
Business laws affect every national and international business transactions. Any change in Business Law results in a change the way businesses operate. These rules and regulations are imposed by governments to ensure that every business follow the business codes and ethics.
Business Law and Ethics
Business law deals with the subjects that impact the business operations. It is important that all business owners, managers, and other professionals must have a basic understanding of business law to help them make better decisions and more efficient transactions. As there are laws for individuals, there are laws for businesses as well that help to protect the public, provide certainty and stability and provide a mechanism to resolve business disputes.
Why Study Business Law?
A basic knowledge of business law can help you to deal with legal issues, make better decisions, and know when to seek help of business law attorney. It helps in decision-making required on daily basis.
Should You Hire a Business Law Attorney?
Business law attorneys deal with the transactional work of a business. The business lawyers are often hired to take care of all the legal aspects of the business transaction to avoid any kind of future litigation. In addition to researching your case and strengthening your legal position, your attorney can also help you with filing a lawsuit and represent you in the court. Indeed, a business law attorney is the right person to direct your business towards profits and without breaking the rules and regulations of Law.
Business Law & Contracts
A contract is a legal agreement between two or more parties that is enforceable by law. It deals with the rights and duties that arise from agreements. The transactions made without a clearly defined contract will be risky as there would be no assurance that the other party will honor the transaction. However, there are certain rules which should be followed while making these agreements to make it enforceable by law. Contract law regulates the rules and enforcement of contracts and the remedies available in case of a breach of contract. The essential elements of a valid contract are:
- Offer: The party intending to enter into a contract must propose an offer with the terms of the contract with an intention of entering into a contract enforceable by law.
- Acceptance: The other party must accept the offer unconditionally, and convey it to the offerer. Conditional acceptance or counter offers from the offeree do not form a valid contract.
- Consideration: Consideration is the exchange of something value in the eyes of law for another. It can either be a promise to do or abstain from doing something. A contract is void without consideration.
Contract law regulates the formation and enforcement of legally valid contracts and the remedies available in case of a breach of contract by parties.
What is International Business Law?
International business Law governs the legal rules, conventions, domestic legislation, treaties and commercial customs or usages, for international business transactions. It is qualified as international business transaction if more than one country are involved.
What are the 3 Legal Forms of Business?
Business is a legal entity where people work together to provide goods or services to customers in consideration for money or other goods and services. The three types of legal Business organizations are as follows:
1. Service Business
It offers service or professional skills, expertise, advice, and other similar products.
Examples: Intangible products of service like firms, salons, repair shops, schools, banks, etc.
2. Merchandising Business
Merchandising business is also known as “ buy and sell business”. This business make profits by purchasing products at wholesale and sell it to the customers at retail price higher than the cost price.
Example: grocery stores, convenience stores or other resellers.
3. Manufacturing Business
A manufacturing business buys products to make new products and sell it to the customers unlike merchandising business. The production process includes raw materials, labor, and overhead costs.
4. Hybrid Business
It can be classified as fourth type of business .the businesses dealing with more than one type of the above mentioned business is known as hybrid business.
What are the 6 Types of Business?
The first thing to be decided to start a business is the type of business structure. The business organizations are classified into six types. They are as follows:
- Sole proprietorship
- General partnership
- Limited liability partnership
- Limited partnership
- Limited liability company
- Business corporation
- C corporation
- S corporation
What are Legal documents in Business?
- Memorandum of Understanding
- Memorandum of Association & Articles Of Association
- Company bylaws for corporations.
- Shareholder’s Agreement.
- Non-Disclosure Agreement
- Meeting minutes
- Directors’ Service Agreement
- Employment Agreement
- Terms & Conditions For The Supply Of Goods Or Services
- Website T&Cs
- Software Development Agreement ,etc.
How many years does it take to study business law?
In USA Business administration degrees are among the most popular college courses. You can start a career in any industry. There are many schools which offer different business administration courses.
- A two-year associate’s degree – Jobs of trainee in the sales or retail industry, office manager , project coordination, etc.
- A bachelor’s degree in business administration – employment as human resources generalist, business analyst, operations manager , marketing specialist, etc.
- A master’s degree (MBA)-employment into leadership positions like CEO or CFO.
- A doctor of business administration (DBA) DBA prepares professionals in leadership and management principles.
What are the Sources of Law?
The legal system of every country has its own sources of laws. Laws are the rules established to maintain safety and justice in a community. The four main sources of law in the USA at the state and federal levels are:
- The constitution of USA
- Federal and state statutes
- Administrative regulations and
- Case laws and judicial opinions.
What are the Classifications of Laws?
The laws are classified into different categories based on their unique characteristics. The major classifications of law are as follows:
- Public and Private Law
- Civil Law and Criminal Law
- Municipal and International Law
- Substantive and Procedural Law
- Written and Unwritten Law
How can I study for law exam?
After you complete a pre-law bachelor’s degree in any field, the law degree at graduate level is required in order to practice. The USA offers a Juris Doctor (JD). It is a three year course. You can also do a one year Master of Laws (LLM) degree in the subject of specialization after a JD. The students in the US must pass the Law School Admission Test (LSAT) to practice in the court.