Introduction

Meaning of Law: A very wide term and includes different sets of rules regulating external human actions and conduct of individuals in their dealings with other individuals and with the government. The term law refers to rules of conduct enforced by the State to maintain peace and order in the society. Legally, a set of rules alone is not sufficient unless: (i) it is enforced by the State; (ii) the State to enforce law is a Sovereign State (iii) it receives due recognition; (iv) it attempts to achieve some sort of security and uniformity in its application.
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Definition of Law
A

law is a rule of conduct imposed and enforced by the sovereign. Austin Law is the body of principles recognized and applied by the state in the administration of justice -Salmond According to Anson the object of law is order, and the result of order is that men are enabled to look ahead with some sort of security as to the future. Although human actions cannot be reduced to the uniformities of nature, men have now endeavored to reproduce by law something approaching to this uniformity. 2

Contd

Law when enacted has to observe the following principles: (i) It should as far as possible be in conformity with custom and usage of the people, i.e., it should not offend local customs and usages of the society; (ii) It should move with the society, i.e., it should be vulnerable to changes. It should not be a static or rigid piece of legislation. Law, therefore, is not static. It changes with times, customs and needs of the society.
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Purpose of Law
The primary object of law is to regulate human relations with other individuals and with the State. As a social being, man comes in contact with people in different capacities; with landlord as a tenant, with Government as a tax payer and so on and so forth. In all these associations he is expected to observe a code of conduct or a set of rules. This set of rules embodies in Law are enforced by the State to make human associations possible and conducive to the welfare of the State and its people.
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What is Business Law

Business Law refers to a set of rules and regulations framed
to regulate business transactions. Business law is a branch of civil law that aims at protecting civil rights. The terms business, commercial' and mercantile' are synonymous. It is a branch of General Law. It relates to industry, trade and commerce. It includes law relating to contracts, sale of goods, partnerships, negotiable instruments, companies, co-operative societies etc. Consumers are a special constituent of any business. The consumers movement has gained significant importance of late. Consumers Protection Act not only recognizes the importance of safeguarding the right and interest of the consumers but also puts every business on alert and answerable to the consumer, the ultimate master.
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Contd.
The

Law of Contract embodied in the Indian Contract Act, 1872 is considered as the mother of all other business laws which regulate the trade and business contracts. All business transactions are based on the elementary rules of Indian contract Act.

Types of Business Law

Sale

of Goods Act, 1930: deals with the rules and regulations pertaining to the sale of moveable goods. Partnership Act, 1932 deals with the rules relating to formation and regulation of partnership relations. Indian Companies Act, 1956 deals with the rules relating to formation, functioning and winding up of companies.
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Contd.
Patents

Act, 1970: It aims at granting protection to the intellectual property right. It is a right granted to the inventor. Copy Right Act, 1959 aims at granting protection to the art work, literature, drama, etc., created by artists and writers. Trade and Merchandise Marks Act, 1958 protects the trade marks used by companies which enables to distinguish the products of different companies.
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Contd.
Law

of Agency: It deals with the formation, functioning and termination of agency. Environment Act, 1986: It devises rules and regulations for protecting the environment. Consumer Protection Act, 1986: It protects the rights of consumers. Sick Industrial Companies Act, 1985: It aims at providing financial assistance to sick industries covered under the Act for revival.
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Contd.
Security

Contract Regulation Act, 1956 regulates the aspects relating to sale, transfer and transmission of shares. Air (Prevention and Control of Pollution) Act, 1981 aims at preventing and controlling air pollution, in turn environment. Water (Prevention and Control of Pollution) Act, 1974: aims at controlling and preventing water pollution.
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Sources of Indian Mercantile Law

English Mercantile Law: Indian Mercantile Law is largely based on English Mercantile Law. As a matter fact, even after independence, in the absence of provisions regarding any matter of the Indian Law, the provisions of the English Law are generally accepted in the Indian Courts. Statutes of Indian Legislatures: Most of the Indian Laws are in the form of Acts passed by the Legislatures. Both the Central Legislatures (i.e., the Parliament) and the State Legislatures are empowered to enact laws relating to matters which come within their jurisdiction. For example, the Companies Act, 1956 has been enacted by the Parliament while the different State Legislatures have enacted the Sales Tax Acts applicable to their respective States. 11

Contd..

Judicial Decisions: Past judicial decisions acquire the force of precedents and are generally followed by law courts in deciding similar cases. In our country, the courts have been divided into three groups: (i) the Supreme Court, (ii) the High Courts and (iii) the Sub-ordinate Courts. The SC is the final court of appeal. For the court of same stature, earlier decisions have only a guiding and persuasive value. However, for a court of a lower stature, the decision given by the court of a higher stature regarding the same subject matter is usually taken as having binding effects.

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Contd..

Customs and Usage: Customs and Usage also play a significant role in regulating business transactions. Customs and usages should be ancient, reasonable and constant. Customs when accepted by the Court and incorporated in a judicial decision become a legal custom.

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Key Terms

Law: Rules of conduct enforced by State to maintain peace and order in the society. Mercantile Law: Legal rules which govern and regulate mercantile transactions.

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Test your Understanding

Laws are framed by the State to maintain peace and order in the society. T/F Mercantile Law ,Law Merchant, Business Law, Commercial Law are synonymous. T/F Customs and Usages have no role to play in regulating business transactions. T/F Past Judicial decisions have to be accepted by the law courts while giving decisions in future. T/F Both the Parliament and State Legislatures have the power to make laws. T/F

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