Sample Pictures.

lnk

Legal Environment of Business

By Prof. B V Ramana

INTRODUCTION TO Legal Environment

Can Individuals & Organizations conduct their activities/Business without the commands and Controls of Law ?
Law is an instrument of Social justice

of the State which seeks to provide justice, stability & security in the Society

It regulates the behaviour & interactions

of individuals against each other

Meaning and Philosophy of Law

Body of rules accepted by a community Command of the sovereign (State) Body of rules recognized and enforced by

courts of Law Abstract norms that makeup legal order Means of Social Engineering Balancing of conflicting interestssecuring satisfaction of maximum wants with minimum clash
Hyper

Law is a rule relating to the actions of people and

attempts to regulate the external actions of human beings and Law is enforced by the State

Purpose, Advantages and Sources of Law

Purpose of Law:

To maintain order and secure justice within a given society.

(Law has the sanction of State power behind it)

Advantages of Law :
Uniformity and certainty in admn. of justice Existence of fixed principles avoids dangers

of arbitrary, biased and dishonest decisions.

Sources of Law:

Sources from which law derives its force and validity

(Formal & Material -legal, historical sources) hyper*

Classification of Law
Imperative Law-Imposed /Compulsion Physical /scientific Law Laws of science Natural /Moral LawPrinciples of natural justice Conventional Law -System of rules agreed by persons Customary Law

-Customs established and enforced

by the authorities of the State E.g. Laws of architecture etc.,

Practical /technical Law Rules for attaining some ends

Civil Law

-Law of the State or Land Criminal Law-litigations arising out of criminal acts Law of Contracts -Relations established between persons -Natural, social and contractual

The Law of Torts

The law of Tort enforces logical behavior and respect for rights and interests of one another. The term Tort is derived from Latin word Tortum Tortum means twisted/crooked (not a lawful conduct)
Tort is a form of Civil wrong (If one breaches legal duty owed to another it is Civil wrong)

Tortuous act is explained in terms of

Malfeasance* commission of an unlawful act

* hyper

Misfeasance* Act is lawful but becomes unlawful by the manner in which it is done Nonfeasance*omitting to do some thing which a prudent man would do Tort vis--vis Contract

Tort vis--vis Crime *hyper

General conditions of Liability in Torts

To constitute Tort 3 conditions must be fulfilled:

1. There must be a wrongful act committed by a person (The wrongful act may be malfeasance, misfeasance or nonfeasance (violation of legal right of other person) 2. Wrongful act must result in a legal damage (Legal damage is also called injury) The damage must be recognized by law
Legal damage will have 3 ingredients Infringement of a legal right, Presumption of damage/

injury in law and proof of actual damage suffered.

3.The nature of wrongful act must be such that it should give rise to legal remedy in the form of action for damages.
Ubi jus Ibi Remedium speaks of the cardinal principle of Law (where there is a legal right, there is a remedy.) Injuria Sine Damno / Damnum Sine Injuria *hyper

National Law and International Law

National Law:
It is the Law of the Land (Republic of India)

(National Law is also known as Municipal Law)

Constitution of India is the Supreme Law*

*hyper (Organs of the State Legislative, Judiciary and Executive are limited by the Constitution of India) Laws made by the Statethrough legislative powers are subordinate to the Supreme Law.

International Law:
Law of the Nations- It is the body of rules &

principles regulating the conduct & relations of the sovereign civilized nations. It is not a true Law some say but others argue that it is a true Law.

Evolution of Mercantile Law / Business Law

Origin of Mercantile Law:
Mercantile Law originated in the middle of 18th Century Merchants had their own courts- courts of piepoudrous

which were incident to fairs and market places

Merchant courts settled disputes of litigant tradesmen Common Law courts in England did not like these

non-official courts and assumed their jurisdiction Customs, usages and practices of merchants became part of the English Common Law ( Law merchant )
The 4 sources of Mercantile Law in England:

Law merchant, Legislation, Common Law and Principles of Equity

Mercantile Law of England as modified by acts of the

central /provincial legislatures is the Indian mercantile law. Codification of Indian Mercantile law began with contract Act,

1872 (which came into force from 1st Sept,1872)

International Business Law

International trade relations of a country are regulated

by the policies of the government based on social, technological, economic and political factors.

The foreign economic policies formulated by the Govt. International economic relations are the result of the Countries have formulated various strategic Trade

will greatly influence the international trade dimensions.

trade transactions of nations since times immemorial.

policies to suite their interests, such as :

Monetary policy of the host country Defense policies of the host countries Customs and cultural factors

Instruments of Trade policies of the countries

Tariffs : A tariff is a tax levied on imported goods Tariffs are protectionist measures (as they increase the price of the imported goods) Tariffs are 2 kinds Specific and Advalorem Charging tariffs on imported goods would benefit the government and the industry
The 5 different reasons for imposing tariffs:
Consumption effect

Protective effect
Revenue effect Welfare effect

: Reduces consumption in importing country : Increases domestic production of products

Balance of Trade effect : Improves balance of trade' position

: Generates revenue for importing country

:Reduces economic welfare in the importing country

World Trade Organization & International Trade

WTO is the only global international organization WTO is guided by a cluster of agreements negotiated & signed by most of the worlds trading nations. WTO facilitates free flow of international trade and lays ground for settlement of disputes impartially WTO assists implementation, administration and operation of WTO agreement & multilateral trade agreements WTO administers the trade policy review mechanism which is designed to maintain transparency & understanding of the trade policies and practices of WTO members
WTO enhances improved adherence to rules, disciplines

dealing with rules of trade between the nations

and commitments of multilateral trading system

Principles and objectives of WTO

Objectives : To facilitate & promote world trade among member nations To raise standard of living in member countries To ensure full employment in exporting & importing nations To ensure large & steadily growing real incomes & demands To expand production and trade of goods and services Principles of the WTO Trade without discrimination No most favored Nation Treatment No National Special Treatment Freer trade (it cuts the cost of living) Binding the tariffs (promising not to raise tariffs) Promoting fair competition Encouraging development and economic reform

Justice delivery system in India

Court means: A body in the Government to which

the administration of justice is delegated Court system meansthe net work of courts in a jurisdiction All Courts in a country follow uniform working system
The Courts are administered and supervised by the

Apex court the Supreme Court of India.

Judiciary has divided the courts hierarchy

on the basis of jurisdiction, nature of offence (civil /criminal), claims etc Judiciary is independent, impartial and guided by the doctrine of Rule of Law
The main aim of the court system is to deliver

justice to individuals in the society

Classification of Courts in India

Indian judiciary took origin from judicial system

that existed in British India Judiciary is independent of other two organs of the State Legislative and Executive Indian Constitution provides unified court system with three tier judiciary - Subordinate courts ; High Court and the Supreme Court of India.
Civil and Criminal Law

Law is broadly classified into two categories Civil and Criminal based on the nature and principal substance of law. Civil law is based on personal laws. it governs litigation between individuals over properties, monetary matters, etc(as per civil procedure code) Criminal law is based on- litigations arising out of crime such as theft, murder, cheating etc ( Govt. takes initiative) (The criminal law is governed under Criminal Procedure Code)

The Indian Judicial Hierarchy

Supreme Court: As Apex Court heads the Indian judiciary As Central court of the country it heads entire court system in India. It is court of records As Appellate court -It deals with all types of casescivil, criminal, administrative & service matters High Court:
Second in the hierarchy of courts. All the subordinate

courts in a state are under the control of the High Court. High courts are appellate courts and court of records

Subordinate courts Civil courts to administer the civil law disputes- at city &

District level with assigned territory and pecuniary limits Criminal Courts- to administer criminal law disputes at both
city & district level. Awards punishment: both fines & imprisonment

The Indian Judicial Hierarchy

Tribunals are Courts constituted

under special statutes A board of officials are appointed to adjudicate disputes Tribunals are guided solely by principles of natural justice
Tribunals deal with problems related to taxation,

foreign exchange, land reforms, labor disputes, etc.,

Central & State Administrative Tribunals They adjudicate disputes relating to Govt. employees on recruitment, promotions and other service matters
Industrial Tribunals: Deal with industrial disputes on wages, hours of work, retrenchment etc., Labor Tribunal: Disputes between employers & employees Railway Tribunal: Deal with complaints against railways Consumer dispute Redressal Tribunal: Consumer cases