01-Introduction to Legal Environment

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Sample Pictures.lnk


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By

Prof. B V Ramana

Legal Environment of Business


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INTRODUCTION TOLegal Environment

Can Individuals & Organizations conduct theiractivities/Business without the commands andControls of Law ?

Law is an instrument of Social justiceof the State which seeks to provide

justice, stability & security in the Society

It regulates the behaviour & interactionsof individuals against each other


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Meaning and Philosophy of Law

Body of rules accepted by a community Command of the sovereign (State)

Body of rules recognized and enforced bycourts of Law

Abstract norms that makeup legal order Means of Social Engineering

Balancing of conflicting interestssecuringsatisfaction of maximum wants withminimum clash

Hyper

Law is a rule relating to the actions of people andattempts to regulate the external actions of human

beings and Law is enforced by the State
http://about%20law.doc/http://about%20law.doc/


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Purpose, Advantages and Sources of Law

Purpose of Law:To maintain order and secure justice

within a given society.

(Law has the sanction of State power behind it)

Advantages of Law :

Uniformity and certainty in admn. of justice

Existence of fixed principles avoids dangers

of arbitrary, biased and dishonest decisions. Sources of Law:

Sources from which law derives its force

and validity

(Formal & Material -legal, historical sources) hyper*
http://sources%20of%20law.doc/http://sources%20of%20law.doc/


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Classification of Law

Imperative Law-Imposed /CompulsionPhysical /scientific Law Laws of science

Natural /Moral LawPrinciples of natural justice

Conventional Law -System of rules agreed by persons

Customary Law -Customs established and enforcedby the authorities of the State

Practical /technical Law Rules for attaining some ends

E.g. Laws of architecture etc.,Civil Law -Law of the State or Land

Criminal Law- -litigationsarising out of criminal acts

Law of Contracts -Relations established between persons

-Natural, social and contractual


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The Law of Torts

The law of Tort enforces logical behavior and

respect for rights and interests of one another. The term Tort is derived from Latin wordTortum

Tortum means twisted/crooked (not a lawful conduct)

Tort is a form of Civil wrong

(If one breacheslegal dutyowed to another it is Civil wrong)

Tortuous act is explained in terms of

Malfeasance*commission of an unlawful act *hyper

Misfeasance*Act is lawful

but becomesunlawful by themanner in which it is done

Nonfeasance*omitting to do some thingwhich a prudent man would do

Tort vis--vis Contract

Tort vis--vis Crime *hyper
http://malfeasance%20-misfeasance%20%26%20onfeasance.doc/http://difference%20between%20tort%20and%20contract.doc/http://difference%20between%20tort%20and%20contract.doc/http://malfeasance%20-misfeasance%20%26%20onfeasance.doc/


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General conditions of Liability in Torts

To constitute Tort 3 conditions must be fulfilled:

1. There must be a wrongful act committed by a person(The wrongful act may be malfeasance, misfeasance ornonfeasance (violation of legal right of other person)

2. Wrongful act must result in a legal damage

(Legal damage is also called injury) The damage must be recognized by law

Legal damage will have 3 ingredients Infringement of a legal right, Presumption of damage/

injury in law and proof of actual damage suffered.

3.The nature of wrongful act must be such that it shouldgive rise to legal remedy in the form of action for damages.

Ubi jus Ibi Remedium speaks of the cardinal principle of Law(where there is a legal right, there is a remedy.)

Injuria Sine Damno/ Damnum Sine Injuria *hyper
http://ubi%20jus%20ibi%20remedium.doc/http://ubi%20jus%20ibi%20remedium.doc/


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National Law and International Law

National Law: It is the Law of the Land (Republic of India)

(National Law is also known as Municipal Law)

Constitution of India is the Supreme Law* *hyper

(Organs of the State Legislative, Judiciary andExecutive are limited by the Constitution of India)

Laws made by the Statethrough legislativepowers are subordinate to the Supreme Law.

International Law: Law of the Nations- It is the body of rules &

principles regulating the conduct & relationsof the sovereign civilized nations.

It is not a true Law some say -but others argue that it is a true Law.
http://constitution%20of%20india.doc/http://constitution%20of%20india.doc/


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Evolution of Mercantile Law / Business Law

Origin of Mercantile Law: Mercantile Law originated in the middle of 18th Century Merchants had their own courts- courts of piepoudrous

which were incident tofairs and market places

Merchant courts settled disputes of litigant tradesmen

Common Law courts in England did not like thesenon-official courts and assumed their jurisdiction

Customs, usages and practices of merchants becamepart of the English Common Law ( Law merchant )

The 4 sources of Mercantile Law in England:Law merchant, Legislation, Common Law andPrinciples of Equity

Mercantile Law of England as modified by acts of thecentral /provincial legislatures is theIndian mercantile law.Codification of Indian Mercantile law began with contract Act,

1872 (which came into force from 1st Sept,1872)


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International Business Law

International trade relations of a country are regulatedby the policies of the government based on social,technological, economic and political factors.

The foreign economic policiesformulated by the Govt.will greatly influence the international trade dimensions.

International economic relationsare the result of thetrade transactions of nations since times immemorial.

Countries have formulated various strategic Tradepolicies to suite their interests, such as :

Monetary policy of the host country

Defense policies of the host countries

Customs and cultural factors


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Instruments of Trade policies of the countries

Tariffs :A tariff is a tax levied on imported goods Tariffs are protectionist measures

(as they increase the price of the imported goods)

Tariffs are 2 kinds Specific and Advalorem

Charging tariffs on imported goods would benefitthe government and the industry

The 5 different reasons for imposing tariffs:

Consumption effect : Reduces consumption in importing country Protective effect : Increases domestic production of products Balance of Trade effect : Improves balance of trade' position

Revenue effect : Generates revenue for importing country

Welfare effect:Reduces economic welfare in the importing country


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World Trade Organization & International Trade

WTO is the only global international organizationdealing with rules of trade between the nations

WTO is guided by a cluster of agreements negotiated &signed by most of the worlds trading nations.

WTOfacilitates free flow of international trade and laysground for settlement of disputes impartially

WTO assists implementation, administration andoperation ofWTO agreement & multilateral trade agreements

WTOadministers the trade policy review mechanism which is designed to maintain transparency & understandingof the trade policies and practices of WTO members

WTO enhances improved adherence to rules, disciplines

and commitments of multilateral trading system


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Principles and objectives of WTO

Objectives : To facilitate & promote world trade among member nations

To raise standard of living in member countries

To ensure full employment in exporting & importing nations

To ensure large & steadily growing real incomes & demands

To expand production and trade ofgoods and services

Principles of the WTO Trade without discrimination

No most favored Nation Treatment

No National Special Treatment

Freer trade (it cuts the cost of living)

Binding the tariffs (promising not to raise tariffs)

Promoting fair competition

Encouraging development and economic reform


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Justice delivery system in India

Court means: A body in the Government to which

the administration of justice is delegatedCourt system meansthe net work of courts in a

jurisdiction

All Courts in a country follow uniform working system

The Courts are administered and supervised by theApex courtthe Supreme Court of India.

Judiciary has divided the courts hierarchyon the basis ofjurisdiction, nature of offence

(civil /criminal), claims etc Judiciary is independent, impartial and guided

by the doctrine of Rule of Law

The main aim of the court system is to deliver

justice to individuals in the society


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Classification of Courts in India

Indian judiciary took origin from judicial systemthat existed in British India

Judiciary is independent ofother two organs ofthe State Legislative andExecutive

Indian Constitution provides unified court systemwith three tier judiciary - Subordinate courts ;

High Court and the Supreme Court of India. Civil and Criminal Law

Law is broadly classified into two categories Civil and Criminal based on the nature andprincipal substanceof law.

Civil law is based on personal laws. it governslitigation between individuals over properties,monetary matters, etc(as per civil procedure code)

Criminal law is based on- litigations arising out of crime

such as theft, murder, cheating etc ( Govt. takes initiative)

(The criminal law is governed under Criminal Procedure Code)


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The Indian Judicial Hierarchy

Supreme Court:As Apex Court heads the Indian judiciary

As Central court of the country it headsentire court system in India. It is court of records

As Appellate court -It deals with all types of cases-civil, criminal, administrative & service matters

High Court: Second in the hierarchy of courts. All the subordinate

courts in a state are under the control of the High Court.

High courts are appellate courts and court of records

Subordinate courts Civil courtsto administer the civil law disputes- at city &

District levelwith assigned territory and pecuniary limits

Criminal Courts- to administer criminal law disputes at both

city & district level. Awards punishment: both fines & imprisonment


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The Indian Judicial Hierarchy

Tribunals are Courts constitutedunder special statutes

A board of officials are appointed to adjudicate disputesTribunals are guided solely by principles of natural justice

Tribunals deal with problems related to taxation,

foreign exchange, land reforms, labor disputes, etc.,

Central & State Administrative Tribunals

They adjudicate disputes relating to Govt. employeeson recruitment, promotions and other service matters

Industrial Tribunals: Deal with industrial disputes on wages, hours of work, retrenchment etc.,

Labor Tribunal: Disputes between employers & employees

Railway Tribunal: Deal with complaints against railways

Consumer dispute Redressal Tribunal: Consumer cases


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01-Introduction to Legal Environment

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