Business Law Notes
1. Definition of Business Law
Business Law (also known as Commercial Law or Mercantile Law) refers to the legal rules and
regulations that govern the formation, operation, and dissolution of businesses and commercial
transactions.
It ensures fair practices, protects rights, and promotes ethical conduct in business environments.
2. Sources of Business Law
Constitutional Law (e.g., right to trade)
Statutory Law (e.g., Companies Act, Contract Act)
Case Law / Judicial Precedents
Customs and Usages
International Commercial Laws (e.g., WTO, trade treaties)
3. Key Areas of Business Law
A. Law of Contract (e.g., Indian Contract Act, 1872)
Contract: A legally binding agreement.
Essentials of a Valid Contract:
o Offer and acceptance
o Lawful consideration
o Free consent
o Lawful object
o Competent parties
o Not expressly declared void
Types: Valid, void, voidable, illegal
Discharge of Contract: Performance, agreement, breach, impossibility
Remedies: Damages, specific performance, injunction
B. Law of Agency
A relationship where one person (agent) acts on behalf of another (principal).
Creation: By agreement, ratification, estoppel, necessity
Termination: By agreement, death, insanity, performance, revocation
C. Partnership Law
(e.g., Indian Partnership Act, 1932)
Partnership: Association of 2+ persons to carry on business and share profits.
Essentials: Agreement, profit-sharing, mutual agency
Types: General and limited partnerships
Registration: Not compulsory, but beneficial
Dissolution: By agreement, notice, court order, insolvency, etc.
D. Company Law
(e.g., Companies Act, 2013)
Company: A legal entity formed under law with perpetual succession and limited liability.
Key documents: MOA, AOA
Types: Private, public, OPC
Corporate governance, meetings, directors' duties
E. Sale of Goods Law
(e.g., Sale of Goods Act, 1930)
Sale: Transfer of property (ownership) in goods for a price.
Essentials: Buyer, seller, goods, price
Conditions vs Warranties
Rights of unpaid seller
Transfer of ownership and risk
F. Negotiable Instruments Law
(e.g., Negotiable Instruments Act, 1881)
Instruments: Promissory note, bill of exchange, cheque
Characteristics: Transferability, title, written, signed
Crossing of cheques, dishonour, notice, penalties (e.g., Section 138)
G. Consumer Protection Law
(e.g., Consumer Protection Act, 2019)
Aims to protect consumers from unfair trade practices and defective goods/services.
Rights: Protection, information, redressal, choice
Consumer Forums: District, State, National
Recent addition: E-commerce regulations
H. Intellectual Property Rights (IPR)
Laws protecting creations of the mind:
o Trademarks
o Patents
o Copyrights
o Designs
o Trade secrets
I. Employment and Labour Laws
Regulate employer-employee relationships.
Key areas:
o Wages
o Working conditions
o Social security (e.g., EPF, ESI)
o Termination and retrenchment
Important Acts: Factories Act, Industrial Disputes Act, Payment of Wages Act
4. E-Commerce and Digital Law
Governs online transactions and digital contracts.
Covers:
o Cybercrime
o Data protection
o E-signatures
o IT Act, 2000 (in India)
5. Importance of Business Law
Provides a legal framework for business operations.
Protects rights and interests of parties.
Reduces disputes and fraud.
Promotes trust and fairness in the market.
