Unit-1 Law

Program : MBA
Semester : III
Subject Code : MB0051
Subject Name : Legal Aspects of Business
Unit number :1
Unit Title : Law
Lecture Number :1

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 Unit-1 Law

Lecture Outline

• Introduction
• Meaning and Nature of Law
• Sources of Indian Law
• Legal Environment of Business
• Mercantile Law
• Sources of Indian business law
• Some Basic Legal Concepts
• Essentials of Law

• Activity

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 Unit-1 Law

Law

Objectives

• Explain the nature of law

• Describe sources of Indian law
• Define business legal environment and mercantile law
• Analyze the essentials of law

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 Unit-1 Law

Introduction

• In this unit we will begin by answering the question, “What is law?”

• We discuss the meaning, nature and classification of law, different sources

of Indian law such as custom, precedents and the legislation.

• Law is a system of rules, usually enforced through a set of institutions. It

shapes politics, economics and society in numerous ways.

• Serves as a primary social mediator of relations between people.

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 Unit-1 Law

Meaning and Nature Of Law

• In general terms, we discuss about the law to Physics, Law of Science, Law
of Mathematics, health or football.

• ‘Law’ means any rule of conduct, standard or pattern, to which actions are
required to conform; if not conformed, sanctions are imposed.

• “A rule of being or of conduct, established by an authority able to

enforce its will; a controlling regulation; the mode or order
according to which an agent or a power acts.”

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 Unit-1 Law

Characteristics Of Law

• Law is a body of rules.

• Law is for the guidance or conduct of persons – both human and

artificial.

• Law is imposed.

• Law is enforced by the executive.

• The state.

• Content of law.

• Law is made to serve some purpose which may be social, economic or

political

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 Unit-1 Law

Law and Morality

• There is close relationship between

Law and Morality.
• A person may not be legally bound
towards all the times but morally.

Example:
A appoints B as his agent. B enters
into contact with C on behalf of A. B
commits fraud in the transaction
and thereby injures C. A is bound to
compensate C.

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 Unit-1 Law

Ignorance of Law is no Excuse

• Every Person of the society is presumed to know the legal rules.

• He cannot take the plea that he did not know the rules.

• One can obtain expert guidance from those who posses legal Knowledge.

• Ignorance of law is not a good excuse.

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 Unit-1 Law

Sources of Indian Law

SOURCES OF INDIAN LAW

Primary sources Secondary sources

Customary Judicial Statues Personal English Law Justice Equity

law precedents Law and good
conscience

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 Unit-1 Law

Main Sources of English law

• Common law also known as “Case law” consists of all those unwritten legal
doctrines embodying customs and traditions developed over centuries by
the English courts.

• Equity means natural justice. It means a body of legal doctrines and rules
emanating from the administrations of justice, developed to enlarge,
supplement or override a narrow rigid system of existing law of the land.

• Statue Law is written law passed by the Parliament Constitution.

• The law Merchant or lex mercatoria is a law based on customs and

usages prevalent among merchants and traders of the middle ages.

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 Unit-1 Law

Legal Environment of Business

• Every Civilized society needs a proper legal order.

• Law and business are closely related and controlled almost every aspect of

business is regulated by law.

• The law may require business to provide certain facilities to its employees,

even when the contract does not provide therefore.

• The decision making process of business is guided by law, right from its

very inception.

• Illegal conducts acts or omissions are subject to sanctions.

• There may be fines or imprisonment if the conduct is declared a crime.

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 Unit-1 Law

Mercantile Law

Meaning and Nature

A branch of law which prescribes a set of rules for the governance of certain
transactions and relations between:

Business persons themselves

Business persons and their

customers, dealers, suppliers,
etc.

Business persons and the state

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 Unit-1 Law

Objectives

• Lays down the framework within which business activities shall be carried out.

• A businessperson can resort to various judicial and quasi-judicial authorities

against the government in case his legal rights have been violated.

• To facilitate the business persons to achieve their goals smoothly.

• It aim to prevent concentration of economic power and help in the

adjustment of claims of individuals against each other.

Example:
A Ltd. issues an advertisement disparaging the products of its rival- B Ltd. Further A
Ltd. prohibits its dealers to deal in the products of B Ltd. These acts of A Ltd. are not in
conformity with some legal rules prescribed by some statute or the other. Thus B Ltd.
can enforce its right which have been infringed by the A Ltd.

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 Unit-1 Law

Sources of Indian Business Law

Statutes

Common Law

Custom and Usages

Precedents

Justice, equity and good Conscience

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 Unit-1 Law

Some Basic Legal Concepts

Concept of legal entity

Concept of legal rights

Concept of property

Intellectual Property Rights (IPR)

Concept of ownership

Concept of possession

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 Unit-1 Law

Essentials Of Law

• Predictability

• Flexibility

• Reasonable application and coverage

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 Unit-1 Law

Activity

Activity 1
Identify a recent amendment in the law which will have a significant impact on
business organizations in general. The change in the law may be in the form of
an Act of Parliament, delegated legislation or judicial decision.

Activity 2

“Even a wrongful possession is protected. What is your opinion on this?

Activity 3

Suggest your overview on “Ignorance of law is no excuse”.

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 Unit-1 Law

THANK YOU

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