The law and the legal system are very important in any civilisation. In modern times, no one can imagine a society without law and a legal system. Law is not only important for an orderly social life but also essential for the very existence of mankind. In the absence of clear law people make decisions that will be solely based on their principles which may lead to disaster to the society. Eventually, the society will be full of crimes, murders and illegal actions. The health and wealth of a nation is dependent on how far the rule of law is maintained and observed in a nation.
Meaning and Definitions of Law
Law means a 'set of rules' of conduct recognised and enforced by the State to control and regulate the conduct of people, to protect their property and contractual rights with a view to justice, peaceful living and social security. Law in a broader sense includes rules, regulations, guidelines and principles which seek to regulate relations of citizens with the State and between one citizen and another.
According to Salmond, "Law is the body of principles recognised and applied by the State in the administration of justice"
According to John Austin, "Law is a rule laid down for the guidance of an intelligent being by another intelligent being having power over him".
Importance / Need / Purposes / Functions of law
1.Serves as a norm of conduct: The law is important for a society as it serves as a norm of conduct for citizens. It also provides proper guidelines and order on the behaviour of all citizens and to sustain equity.
2. Keeps the society running: The law is important because it keeps the society to function properly. Without law, there would be chaos and it would be the survival of the fittest.
3. Acts as a guideline: The law is important because it acts as a guideline as to what is accepted in society. Without it there would be conflicts between social groups and communities. ALL OF HOTTUORTAL
4. Easy adoption to changes: Since the value system of society keeps on changing, the law also keeps on changing according to the changing requirements of the society.
5. Gives protection to the victims: The law can give protection to the victims and will punish those who have done unlawful actions. If the society do not have a system of law to control the people, then there would not be a society to live in. The most important function of law is to defend the society from all evils.
6. Promoting the common good: The law serves as a mediator of relations between people. It is a formal mechanism of social control which helps to control the behaviour of its members. Thus, the law helps in promoting human welfare.
7. Resolving disputes over limited resources: Resources are always limited. In any country there will be dispute over limited resources. Law is needed to resolve these disputes.
8. Encouraging people to do the right thing: The law has a role to play in encouraging the people to do the right thing. So, there is widespread acceptance that the health and wealth of a nation is dependent on how far the rule of law is maintained and observed in those nations. Legal system always has to limit people's freedom.
Thus, the law is highly essential to promote equality and uniformity, to maintain impartiality, law and order, to maintain social control, to resolve conflicts and to deliver justice.
Importance/Objectives of Mercantile Law
1. Brings definiteness in commercial dealings: When there is a clear law or provision relating to a dealing, there comes a definiteness to the transaction.
2. Determines the validity of a contract: Provisions in the mercantile law bring about validity of a contract and prescribe the mode and manner of their performance.
3. Deals with different types of contracts: Commercial law deals with various types of contracts such as contracts relating to sale of goods, contract of agency, contract of bailment and pledge, contract of indemnity and guarantee, partnership agreement, etc.
4.Serves as a vehicle of social change: In a society like ours, law serves as a vehicle of social change and social justice. This law is mainly designed to bring about all round welfare and improvement of the community.
5. Establishes socio-economic justice: The mercantile law helps to establish socio economic justice and remove the existing imbalance in the socio-economic structure.
6. Helps to maintain order: The law helps to maintain order in a society and the result of order is that men are enabled to look ahead with some sort of security as to the future.
7. Helps to regulate the activities of individuals: Mercantile law serves the requirements of people of India and regulates their activities and their relations with one another. This is because the law is made not merely for them but by them through their representatives.
Sources of Mercantile or Business Law
In India, Mercantile Law is basically an adoption of the English Mercantile Law with some modifications and reservations which are necessitated by the peculiar conditions prevailing in India.
The main sources of Indian Mercantile Law are:
1. The English Mercantile Law: English mercantile law constitutes the foundation on which the superstructure of the Indian mercantile law has been built. Even now the Indian judiciary generally take recourse to the English law where some principles are not expressly dealt within an act or where there is an ambiguity.
The sources of English mercantile law are:
(a) The Common law of England (b) The Law of Merchant
(c) Principles of Equity (d) The Statute Law.
2. Indian Statute Law: When a bill is passed by the Parliament and signed by the President, it becomes an Act or a Statute. Most of the Indian Laws are embodied in various Acts passed by the Central as well as State Legislature. Indian Contract Act 1872, The Sale of Goods Act, 1930, The Indian Partnership Act 1932, The Negotiable Instrument Act, 1881, The Companies Act, 2013, etc. are the instances of statute law.
3. Judicial Decisions: The past judicial decisions of English and Indian courts are also one of the sources of Indian mercantile law. Wherever the law is silent on a point, the judge has to decide the case according to the principles of equity, justice and good conscience. The past judicial decisions are followed by the courts while deciding similar cases before them.
4. Customs and Usages: The customs and usage of trade are also one of the sources of mercantile law in India. These customs and usages govern the merchants of a trade in their dealings with each other. Some Acts passed by the Indian Legislature recognise the importance of such customs and usages.
Other Business Regulations
There are large number of other laws, regulations and rules which have been eventually developed due to necessity. Some of them are:
1. The Companies Act, 2013
2. The Partnership Act, 1932
3. The Information Technology Act, 2000
4. The Foreign Exchange Management Act, 1999
5. The Competition Act, 2002
6. The Consumer Protection Act, 1986
7. The Factories Act, 1948
8. The Employees Compensation Act, 1923
9. Right to Information Act, 2005
Statutory and Professional Objectives of Mercantile Law
Statutory Objectives
1. To develop and support commercial laws
2. To deal with laws relating to contracts, partnership, companies, negotiable instruments, principal-agent relationship, insurance, etc.
3. To state the rights and obligations arising out of mercantile transactions.
4. To explain the framework within which business activities shall be carried out.
5. To act as an effective tool for addressing and solving business problems. 6. To be made applicable not only to business but also to day-to-day personal dealings.
7. To facilitate effective operation of commercial transactions.
8.To make the business responsible and accountable to the nation at large.
Professional Objectives
1. To provide flexibility to traders to establish business arrangements tailored to their own requirements.
2. To help the business professionals in realizing how to use and work within the legal boundaries to build their business.
3. To help to realize the business ethics.
4. To guarantee orderly conduct of business affairs and settlement of legitimate disputes. accountable for their actions.
Business Regulatory Framework
The objectives of our subject, 'Business Regulatory Framework' are to provide a basic idea about the salient features of contracts and also to provide a brief idea about the framework of Indian business laws.
'Business Regulatory Framework' deals with various types of business laws such as Law of General Contract, Law of Special Contract like Indemnity and Guarantee, Bailment and Pledge, Contract of Agency and Sale of Goods Act, 1930, Regulatory Authority like IRDA, TRAI, Right to Act, Intellectual Property Rights, Patent Act, Trademark Act, Copyright Act, Plagiarism.