Purposes and Functions of Business Law
The purposes and functions of business law include maintaining order, protecting rights and liberties, establishing standards, and resolving disputes.3 min read
The purposes and functions of business law include maintaining order, protecting rights and liberties, establishing standards, and resolving disputes when it comes to businesses and their interactions with individuals, government agencies, and other businesses.
Purposes and Functions of Law
- Establishing standards identifies what types of behavior are and are not accepted in society. For example, damage to person or property is considered a crime because it is not tolerated by society.
- Maintaining order is necessary for a civilized society.
- Resolving disputes allows for the mitigation of issues that arise between those with different wants, needs, views, and/or values. The court system is the formal legal method for resolving disputes and consists of both state and federal courts. Disputes can also be resolved through alternative dispute resolution, which are official but less formal methods such as mediation and arbitration.
- Protecting liberties and rights ensures each individual is allowed his or her constitutional rights, including freedom of speech and so forth.
In addition to these four core functions, the law serves many other specialized functions.
Business Law Background
This practice area includes regulations and statutes related to businesses, individuals, and families in their roles as workers, citizens, and consumers. As business becomes increasingly globalized, the business laws of various governments and nations may be in conflict. It's important for business owners to understand how business law impacts commerce both domestically and abroad.
Business law standards include having expectations for following laws of other countries, distinguishing between unethical and legal behavior, and establishing social responsibility as a cornerstone of global citizenship. Most recently, new areas of business law must navigate the effects of modern technology. In fact, computer law is even a subspecialty within business law because of its importance in this realm.
Functions of Business Law
Businesses large and small must comply with the same legal regulations. Often, this involves the expertise of a specialist who can help entrepreneurs succeed in an area such as law or finance. Some of the largest legal areas necessary in business include the following:
- Legal basics such as ethics, court system structure, substantive law, and procedural law are foundational.
- Contract law includes drafting, rights assignment, work delegation, transactions, agreements, breach of contract, and remedies for a breach. The Uniform Commercial Code (UCC) is part of contract law governing sales.
- Intellectual property law (IP), including trademarks and patents, prevents others from profiting from your ideas and creations.
- Corporate law governs the formation of corporations and sale of corporate equities.
- Tax law determines how different types of businesses are taxed.
- Antitrust and competition are also included.
- Employment law governs how employers interact with their employees and the rights and responsibilities of each, minimum wage law, workplace safety, and overtime rules.
- Environmental law strives to mitigate the impact businesses have on the environment by limiting water and air pollution, regulating pesticide and chemical use, and establishing penalties for violating these laws.
- Business organization laws define major business entities, such as partnerships, limited liability companies, sole proprietorships, and corporation.
- Property law governs personal and real property.
- Negotiable instruments law includes governance of secured transactions and bankruptcy.
- Computer law analyzes and governs the impact of computer technology on other areas of business law.
Functions of Commercial Law
Commercial law, a branch of civil law, comprises governance of commercial and business transactions in both the public and private realms. Areas of commercial law include land and sea transportation, agent and principal, merchant shipping, insurance, partnership, guarantees, corporate contracts, sale and manufacture of consumer goods, hiring practices, and bills of exchange.
Commercial law has developed substantially over the years, but in general, it is designed to allow those engaged in business flexibility to administer their business within legal guidelines. Legislation in this area is designed to promote free trade.
Reforms to the commercial code focus on identifying and correcting inconsistencies and gaps in the law. Courts can also look to other legal systems to find remedies to complex legal issues. For example, recent updates focus on the impact of technology on these areas and how it affects business dealings. However, more restrictive trade practices have also been introduced in the modern era.
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