Very Short Question Answer

1. State any two nature of law.
  • Law consists of a rule.
  • Law is backed by sanction/ punishment.
2. Give any two differences between substantive law and procedural law.

The differences between substantive law and procedural law can be stated as follows:

Substantive Law Procedural Law
It creates and defines the rights and duties of an individual. It states the way and manner to achieve remedies when the rights and duties are violated.
ii. It is concerned with the end of law. It is a means to achieve the end
3. What is legislation?

Legislation is a written statue law or rules issued by the supreme or sub ordinate legislative body. Therefore, it is the law made by then parliament or law making authority under the constitutional limits.

4. When a custom becomes a binding source of law?

In the following conditions a custom becomes a binding source of law:

  • Antiquity
  • Continuity
  • Certainty
  • Reasonability
5. What is precedent?

Precedent is an earlier decision of a supreme or superior court which is used as a rule of law while deciding the later cases of similar facts. In general, it is the law made by the competent court while deciding the dispute between the parties.

Short Question Answer

1. What is Business Law? Is there any clear-cut line of demarcation between business law and other branches of law?

There are different types of human activities in a society such as: criminal, family constitutional, banking corporate, academic etc. and all these human actions are subject to a legal system where each and every human activity is regulated by the different laws such as criminal law, family law, constitutional law, banking law, corporate law, educational law, business law, etc. Therefore the business law generally regulated the different business and commercial activities and manages all the transactions of business community. In other words, it is the law which provides the different provisions to the commercial community and regulates their activities relating to the trade and commerce. The business law lays down the various rules which must be followed by the business community i.e. a business person, firm, company and its managers or staffs and consumers. There is no single statute or law to that we can give the name of business law. There are different laws in which the significant provisions are made to regulate the business related activities and in totality these laws are known as business law. For example:-company law, contract law, law of agency, arbitration law, law of sale of goods, banking law, insurance law, consumers protection law insolvency law or labour law etc.

DEMARCATION BETWEEN BUSINESS LAW AND OTHER BRANCHES OF LAW

The law, which has been used as an important instrument to regulate the activities of human beings in each and every society. In spite of its fixed or clear meaning it has been operating and enforced to create a peaceful society by maintaining law and order to provide justice to the people by state. In a stat there are number of human activities and are required to regulate, hence, the different laws are to be made by the state. These different laws to regulate different kinds of activities are called by the different names, e.g. constitutional law, administrative law, criminal law, fiscal law, family law, educational law, business law etc. Therefore from the view point of definition the business law only deals and regulates the business activities of a person and other laws regulate other respective activities.

Business law being a part of legal system of a country it is recognized applied and enforced by state through its different organs which are created by other laws. A legal system can not operate or work without enforcement of the different laws. Almost all laws are made by legislative body, the legality of all laws and determination of all rights and duties are carried out by judiciary and these rights and duties under the law are executed by the executive. If law is violated by a person or business person he/she should be punished in jail or may be fined which are established and regulated by some other laws. In this sense, only after combination and co-ordination of all factors, i.e. law, law making body and law enforcing agencies a legal system becomes completes Therefore, at last, we can say there is no such clear-cut line of demolition between business law and other branches of law. But it should be noted that, the business law is a branch of civil law, basically it is a part of private law, violation of it results fine or compensation and a person is responsible for his acts mainly towards another person. These elements may be different in other branches of law.

2. Give the concept of business law and explain its importance.

In general terms, the law which regulates the trade or commercial activities of a person in a state is called as business law. It is a branch of civil law which deals with the various business activities of people involving in the trade and commercial transactions and provides different provisions and principles to the commercial community or business world. The business law lays down various rules and principles which must be followed by the business community, i.e. a business person, firm or company its staffs and all the persons including consumers in a business transaction. The different laws regulating trade and commercial activities for example, company law, contract law, industrial laws, labour law, banking law, insurance law, monetary law, license law, import-export law, foreign investment law, agency law, consumer protection law etc. as a whole are called by business law.

IMPORTANCE OF BUSINESS LAW

A businessman, a business firm or a commercial community can not be indifference with the knowledge of business law. Because it regulates and affects since before the establishment of a business firm, while conducting the business and to its final stages. Business being the backbone of national economy, must be in sound position otherwise, the nation can not be developed. This objective only can be achieved if the business law of that nation is good and conducive for the business transactions. Success of a business man and a firm greatly depends upon the business environment and the business law is the most important factor of business environment.

The importance of business law can be stated as follows:

  • Business law provides legitimacy, security and peace to a business firm, its employees and consumers.
  • It provides such grounds or conditions where the law-abiders are to be awarded and law-breaker are to be punished.
  • It regulates the business activities directly or indirectly by making various provisions or rules.
  • It guides us what can be done or what kinds of business can not be established and conducted.
  • It provides the provisions for establishment of business firm, its formalities, internal management and procedures for its final stage.
  • It lays down provisions for the social responsibility of any business firm and business ethics and moralities.

Thus business law is important that influence a firm’s ability to carry out its operations efficiently to obtain its objects as well as personal dealings and transactions of a businessman and business community.

3. Explain the nature and importance of business law.

NATURE OF BUSINESS LAW

  1. Business law consists of rules.
  2. It regulates the trade and commercial or business activities.
  3. It treats all persons in the same situation, equally.
  4. It is a branch of civil law.
  5. It provides the validity and gives security to the business transactions.
  6. It creates the peaceful business environment.
  7. It is enforced by state by punishment.
  8. It maintains law and order situation in an industry or work place providing justice to all the stake-holders.
  9. It provides the various provisions and principles to manage and regulate the internal management or operation and business ethics of a firms, company or business organization.

IMPORTANCE OF BUSINESS LAW

  1. Business law provides legitimacy, security and peace to a business firm, its employees and consumers.
  2. It provides such grounds or conditions where the law-abiders are to be awarded and law-breaker are to be punished.
  3. It regulates the business activities directly or indirectly by making various provisions or rules.
  4. It guides us what can be done or what kinds of business can not be established and conducted.
  5. It provides the provisions for establishment of business firm, its formalities, internal management and procedures for its final stage.
  6. It lays down provisions for the social responsibility of any business firm and business ethics and moralities.

Thus business law is important that influence a firm’s ability to carry out its operations efficiently to obtain its objects as well as personal dealings and transactions of a businessman and business community

4. What is substantive law? How does it differ with the procedural law?

Law in the process of regulating human behaviours it recognizes and confers certain rights and, imposes certain duties, and enforces such rights and duties in the name of justice. The law which creates, defines and enforces legal rights and duties that law known as substantive law. So it is related to the rights and duties of a people in society. For example, every person has the rights to make profit from the legal business, notice to be given before making an arrest, a person has right to use the property which is in his lawful possession, etc.

Thus, the substantive law deals with:

  • The rights and duties given to a person.
  • The consequences or end result of failure to perform duties and of misuse the rights so created.
  • The remedies available if such rights and duties are breached or violated. Thus, the substantive law provides and guarantees the rights, duties and remedies.

PROCEDURAL LAW

By contrast to the substantive law, the procedural law creates and defines a mechanism or way by which the rights and duties are enforced by the legal institutions. To provide rights and remedies is not sufficient and has no effect if there is no effective way to achieve the remedies. The procedural law deals with the way and manner of achieving remedies, protecting rights and imposing the duties when the rights established by substantive law are broken. When the rights and duties are broken, while providing remedies the procedural law guides us:

  • where we have to go to get remedies,
  • when and who we should go; and
  •  how we should collect and produce the evidence to establish our claim.

Thus, the procedural law deals with the process of achieving the remedies when our interests are jeopardized or put in stake or danger.

DIFFERENCE BETWEEN AND PROCEDURAL LAW

SUBSTANTIVE LAW PROCEDURAL LAW
1. It creates and defines the rights and duties of an individual.

2. It is concerned with the end of law.

3. It tells what the rights and duties are.

4. It provides remedies in case of breach of rights.

5. Substantive law comes in operation first.

6. Substantive law cannot be used retrospectively but prospectively.

1. It states the way and manner to achieve remedies when the rights and duties are violated.

2. It is a means to achieve the end.

3. It tells how we can enforce it.

4. It guides for the enforcement of  such remedies.

5. Procedural law follows the substantive law.

6. It can be used retrospectively.

Long Question Answer

1. Define business law. Explain any three major sources of Nepalese business law.

There are different types of human activities in a society such as: criminal, family constitutional, banking corporate, academic etc. and all these human actions are subject to a legal system where each and every human activity is regulated by the different laws such as criminal law, family law, constitutional law, banking law, corporate law, educational law, business law, etc. Therefore the business law generally regulated the different business and commercial activities and manages all the transactions of business community. In other words, it is the law which provides the different provisions to the commercial community and regulates their activities relating to the trade and commerce. The business law lays down the various rules which must be followed by the business community i.e. a business person, firm, company and its managers or staffs and consumers. There is no single statute or law to that we can give the name of business law. There are different laws in which the significant provisions are made to regulate the business related activities and in totality these laws are known as business law. For example:-company law, contract law, law of agency, arbitration law, law of sale of goods, banking law, insurance law, consumers protection law insolvency law or labour law etc.

SOURCES OF THE NEPALESE BUSINESS LAW

The term source of Nepalese business law denotes two meaning. Firstly, the place or point from where the rules of business activity begins and secondly the place from where the rules of business activities get legal authority or binding force. The different sources of Nepalese business law can be divided into two divisions. Namely

1. Binding or legal source

It includes

  • Legislations
  • Precedents
  • Customs/usages
  • Agreements/conventions

2. Persuasive or historical source

It includes

  • Provisions/principles of foreign laws
  • Decisions of the foreign courts
  • Opinion of experts
  • Moral or religious rules
  • Text books, journals, periodicals
  • Principles of English business law vii. Principles of Indian mercantile law

Brief explanation of these sources is as follows:

Binding or legal source

  • Legislation: In simple words it is the law made by parliament or law making body of a state. The parliament or law making body has got right to make any laws, repeal them and amend them whatever it is pleases within a constitutional limit. Legislation has a prominent role in shaping, developing, directing and controlling the business activities. At present, most of the business activities are regulated by the law made by parliament by legislation.
  • Precedent: Precedent is the earlier decision of the Supreme Court which is taken as a rule while deciding the later cases. Where there is legislation to deal the problems the court must follow it but where there is no law to deal the problems in such case the court can make decision in the light of justice and equity such decision are treated as law for that matters. In history, in the time development of business law, the precedent had played a major role. Most of the modern principles of business law were developed by the court through precedent.
  • Customs/usages: The custom is known as particular way of life or behavior. If such behavior is followed is followed continuously by the peoples in society, it becomes customs or usages which are important sources of law. It there is no legislation, no precedents the matter is to be decided by the custom or usage of that particular.

Other sources of law are as follows:

  • Agreements/conventions
  • Previsions/principles the of foreign laws
  • Decisions of the foreign courts
  • Opinion of experts
  • Moral or religious rules
  • Text books, journals, Periodicals
  • Principles of English business law Principles of India mercantile law

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