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What is Business law ?

Business law is a legal system that governs the actions of companies, businesses and organizations. Businesses must ensure their transactions comply with the relevant laws in each country where they operate. Businesses are also subject to general commercial laws about, for example, fair trading and competition.

What is business law all about?

Business law is about the legal obligations that businesses have towards each other, their customers and the public in general. These include:

  • ensuring property rights for businesses;
  • ensuring that businesses are run fairly and efficiently;
  • ensuring that customers get what they pay for; and
  • protecting the environment so as to protect health and safety of the community in which they operate.


Types Of Business Law

  1. Contract law

Contract law is one of the ways business law deals with commercial relationships between two or more parties. These are usually written down in a contract, which sets out how the parties will make decisions, how they will share risks and rewards, what happens if things go wrong, and so on. It is surprising how many people are surprised to learn that there are written legal contracts for everything from buying a newspaper at a train station to buying a house.

  1. Corporate law

Corporate law deals with important legal questions raised by the existence of companies. For example, what are a company’s directors’ duties? What happens when they breach their duty? What happens when they die or become mentally incapable? Corporate law also deals with takeovers, mergers and insolvency: that is, how to deal with businesses that can no longer afford to trade and still have obligations to pay their creditors (debtors).

  1. Insolvency law

Insolvency law deals with cases where one party is unable to pay his debts. This can happen when the company has gone bust or, more often, when a company is so insolvent that it has no assets left.

  1. Unfair business law

Unfair business law is part of company law. It is concerned with making sure those companies and other businesses behave fairly towards their customers. If a company gets in financial difficulties and needs to be restructured, they must try to do so in a way which gives their customers the best possible chance of getting back what they are owed. One way of ensuring that this happens is to ensure, by statute, that directors have a duty to the business (so called “fiduciary duties”).

Importance Is Business Law

  1. Business law deals with the rules and regulations of business

The law of each jurisdiction provides guidelines on what is allowed or prohibited in doing business. Businesses codify these laws into codes and statutes, which they use as a guideline to ensure that they do not violate any legal requirements. Businesses are legally obliged to comply with the codes and statutes. Breaching these codes and statutes can lead to legal consequences such as fines or being barred from carrying out further business activities.

  1. business laws provide guidelines on what is called ‘Contract law’, which is basically a set of rules that govern the agreement between two parties. Contract law covers almost any business transaction or contract through which one party agrees to supply goods or services and the other agrees to purchase it.

Contract law is essential for businesses to protect themselves from legal liability arising from their agreements with other parties. For example, suppose that you go into a dry cleaner’s shop and leave your suit for cleaning safely in their care.

  1. Business laws provide guidelines on what is called ‘Trade practices’, which regulate unfair competition among businesses or individuals in trade or commerce.

Businesses often promote themselves and their products through advertisements, displays, sales promotions and other methods. Competitors can take legal action to stop such false and misleading advertisements. Competitors may also compare their own prices with the prices of other companies in order to give consumers information which will enable them to make comparisons and decide whether they want to buy from a particular company or not.

  1. It establishes systems for dealing with claims such as breach of contract and product liability. Businesses have to be prepared to deal with claims made against them by either consumers or other businesses. For example, a consumer could claim that they bought an unsafe product or service, or a business could claim that they were not paid for goods or services delivered on time.
  2. It establishes whether a firm or corporation has a legal basis for undertaking its operations in certain jurisdictions, and is applied to issues such as bankruptcy, shareholder protection, and company law. For example, a firm or corporation that has a legal basis in one country but not in another country can operate as a foreign company and may be sued by its shareholders or customers.

Units Under Business Law As a Course

  1. Administration
  2. Business Studies
  3. Personnel Management
  4. Business Policy
  5. Business Paper Writing
  6. Commercial Law
  7. Corporate Law
  8. Economic Doctrine and Institutions
  9. Human Resources Management
  10. Post-Graduate Studies in Business Administration
  11. Public Administration and Management Studies

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