Business Law - BBA TU Note- Bikram Adhikari

Law has been used in our society as an instrument to regulate the external human  actions  from  the  ancient  period  of  time,  without  precise  and  universally  accepted  meaning  of  it.  In  general,  law  can  be  defined  as  a  rule  regulating  the  human  actions.  There  are  various  rules  operating  in  our    society    traditionally    in    the    form    of    morality,    religion    and    consciousness,  and,  at  the  same  time,  our  activities  are  governed  by  the  different  formal  rules  as  set  and  enforced  by  the  state.  Hence,  our  activities in one hand are regulated by the moral rules, norms and values followed by a community from the early age of human civilization and on the  other  hand  by  the  formal  rules  enforced  by  the  state.  Similarly,  the  term  law  is  used  in  physical  or  natural  science,  for  example,  the  law  of  gravity,  the  law  of  reflection  or  law  of  friction  or  law  of  inertia,  etc.  but  these rules or expressions cannot be defined as law.

Along  with  the  development  of  time  and  knowledge,  different  jurists  have  been  defined  and  characterized  the  law  in  different  manner  and  various schools of law have been developed to answer the question what the law is. In spite of these great efforts, still there is no such a definition of  law  which  can  be  applied  in  a  perfect  manner  in  all  the  cases  and  accepted  universally.  Problem  is  not  in  its  necessity  but  in  its  definition  because the definitions have been made for the different purposes and in the  different  context  as  required  to  deal  with  a  particular  problem  of  a  particular society at a particular period of time

Difficulties  arise  because  of  the  difference  in  the  definitions  of  law  not  because  of  its  necessity.  The  term  law,  in  its  most  common  and  widest  sense, is used to denote any rule of action, that is to say, any standard or pattern,  a  canon  or  norm  to  which  actions  are  required  to  confirm,  or  by  which the actions of things are to be regulated. And in strict sense, law is only  a  rule  of  human  actions  enacted  or  issued  by  state  and  enforced  by  punishment.

At  present,  there  are  two  extreme  positions  of  law.  One  emphasizes  its  coercive  character  and  describes  the  law  as  the  command  of  the  highest  sovereign  authority,  and  holds  that  the  law  must  be  free  from  ethics,  sociology,  history  and  political  philosophy;  and  it  is  enforced  by  the  physical  power  of  a  state-  punishment.  By  contrast,  the  other  lays  stress  on  the  social  acceptance  of  law.  It,  hence,  emphasizes  on  the  actual  observance,  the  growth  of  customs,  the  living  law  of  community  and  nation  as  the  decisive  elements.  This  thought  admits  that  the  law  may receive  authoritative  confirmation  from  the  sovereign  but  not  created  by  him. However, the differences between these two approaches are relative rather than absolute. It is essentially the matter of emphasis.

In  fact,  social  acceptance  with  certainty  and  effective  enforcement  with  uniformity is the basic notion of law. The law has created a boundary line within  which  all  of  our  activities  are  confirmed  and  the  rights  and  obligations  are  defined.  When  the  law  takes  its  form  through  social  acceptance  and  enforced  by  the  state,  it  becomes  binding  for  all  and  the  human  actions  are  to  be  conducted  as  per  these  confined  rules.  It  is  the  fundamental concept of rule of law. 

Meaning of Business Law

Now, we can refer some prominent definitions given by the jurists which may help us to understand the meaning of law with possible clarity.  

Black  Stone  says:  Law,  in  its  most  general  and  comprehensive  sense  signifies  a  rule  of  action  and  has  applied  indiscriminately  to  all  kinds  of  action, whether animate, rational and irrational. 

Similarly, Hooker  defines  law  as  "any  kind  of  rule  or  canon  whereby  actions are framed ..." 

Austin defines "law is a general command of the sovereign (individual or body)  issued  to  those  in  subjectivity  and  enforced  by  the  physical  power  of  the  state.  According  to  him,  law  is  a  general  command  that  a  state  or  sovereign issues to the people by laying down a rule of action, of enforced by  the  judicial  and  administrative  tribunals.  He  has  propagated  that  law  is  a  command  which  imposes  a  duty  and  the  failure  to  fulfill  the  duty  invites sanction. For him law has three main features:   

i.    Law is a command. 

ii.   It is issued and enforced by a Sovereign authority.  

iii.  It has a sanction behind it. 

Austin's  theory  of  command  has  much  criticized  by  other  jurists  in  different  aspects.  In  spite  of  all  criticisms,  the  fact  remains  constant  that  laws  is  a  command  issued  from  the  sovereign  power  and  do  depend  greatly  upon  the  coercive  factor  or  sanction.  Experience  and  empirical  evidence have shown us that laws without sanction are not effective. It is indeed  the  fear  of  punishment  which  deters  a  great  majority  of  people  from  committing  crimes.  This  is  the  true  merit  and  contribution  of  the  Austinian   theory.   But   his   exclusion   of   law   from   sociology,   political   philosophy history and other social phenomena never be tenable.

Holland defines, "Law is a general rule of external human action enforced by a sovereign political authority".

According to Gray, "The law of the state or any organized body of men is composed of the rules which the courts lay down for the determination of legal rights and duties".

Similarly, Salmond states, "Law is the body of principles recognized and applied by the state in the administration of justice."

The  law  differs  from  the  past  because  the  social  phenomenon  changes  continuously.  The  law  differs  from  country  to  country  because  of  the  variation  in  social  factors,  e.g.,  development  of  society,  traditions  and  customs of society, its need and the consciousness of the people. 

Thus, Savigny admits that the nature of any particular system of law is a reflection  of  the  spirit  of  the  people  who  evolved  it.  He  defines,  so,  "all  law  is  the  manifestation  of  the  common  consciousness  of  people".  He  wrote  "law  grows  with  the  growth,  strengthens  with  the  strength  of  the  people, and finally dies away as the nation loses its nationality".

Ihering  defines  law  as  "the  sum  of  conditions  of  social  life  as  assured  by  the state through the means of external compulsion."

Roscoe  Pound  states  "In  order  to  achieve  the  purpose  of  the  legal  order  there  has  to  be  recognition  of  certain  interests,  their  limitations  and  a  mechanism to secure of those interests within such limits, so that, for him, law is a means for balancing the competing interests. 

At last but not the least, law requires a minimum degree of regularity and certainty  as  defined  by  Austin,  Holland,  Grey  and  Salmond  for  without  this  it  would  be  impossible  to  assert  that  what  was  operating  in  a  given  territory  amounted  to  a  legal  system.  Similarly,  the  law  also  has  certain  minimum  degree  of  social  acceptance  by  the  people  to  whom  it  is  addressed.  Therefore,  it  is  rightly  said  that  law  without  regularity  and  certainty becomes   an impotent   or ineffective,   law   without   social   acceptance becomes tyrannous and law without both become nothing. 

Prof. Lon Fuller, thus, has marked eight (Sine qua non) essentials of a legal system; hence, law must possess the following characteristics: 

i.    The laws issued from such a source must be promulgated.  

ii.   It must be intelligible.  

iii.  It must be prospective in nature.

 iv.  It shouldn't be contradictory within the provisions.  

v.   It must generally be applicable equally to those in the same situations. 

vi.  It should avoid impossible demands. 

vii. It should avoid frequent change.  

viii. Official actions must be congruent with the promulgated rules.

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