Decoding Business Law

What is the difference between law and business law? The nuances of law and its varied forms were discussed at the Coimbatore Management Association meet, which saw the speaker Prasath Vedgarb giving his insight into different laws that are being practiced in our country.

What is law? Law is a set of rules which are created and enforced through social or governmental institutions to regulate behavior among different segments of society. The formation of laws itself may be influenced by a constitution, written or tacit and the rights encoded therein.

Now what is business law? Business law is a set of rules that have been laid down governing business and commerce and is often considered to be a branch of civil law and deals with issues of both private and public law.

Each nation has its own constitution and it cannot be borrowed. We ourselves framed laws based on our habits, customs and dimensions.

In some countries like UK, there is no written constitution, but it is based on convention. Unless there is absolute power vested with the government, enforcement is not possible. There should be some laws framed based on social customs that are positive in nature can be imposed. Business is all about profit making and providing employment.

Can we imagine what will happen, if there are no laws? Competition will be ruthless and people will be exploited, leading to utter chaos. Without law life and business will become a matter of survival, leaving only the most ruthless indulging in monopoly.

Prasath believes, law is a potential tool for social change. Without society law cannot exist, and without law society cannot exist either.  Both are complimentary in nature and that is why business law is very important for society.

As a Manager, especially for those who are Managers in making or may be even managers, there is no space in business if there is no law.

Law applies even in matters as small as constructing a compound wall. There is a certain height beyond which one cannot construct it.

There are different approvals which need to be taken for such things. So, the awareness of law is very much essential for every individual running any firm or company irrespective of its level, which will always need to adhere to the basics laws of business. Business law has a lot of branches, but as Business Managers, it is very important to understand it. Branches of law include criminal law, civil law, commercial law, administrative law, constitutional law etc. Understanding of law enables managers at lower, middle and higher levels to take better decisions. Even a rental agreement has to be carefully read.

Most people sign the rental agreement without going through it properly and it leads to unnecessary trouble. If you know the basics of law, you can save your skin in tough situations.

Business laws covers sale of goods, compensation and other areas. The mother of all business laws is Contract law. He also spoke on Bank Guarantee, Letter of Undertaking, Letter of Understanding, Memorandum of Understanding, Articles of Association and Company Act.