Types Of Commercial Law: Everything You Need to Know
Types of commercial law include laws to regulate sale and distribution of goods, financial transactions, business dealings, consumer protection, and commercial operations.3 min read
Types of commercial law include laws to regulate sale and distribution of goods, financial transactions, business dealings, consumer protection, and commercial operations.
Commercial Law vs. Business Law
Business and commercial laws often overlap each other. Commercial law usually deals with the sale and distribution of goods, business practices, financial transactions, consumer dealings, and commercial operations. Business law, on the other hand, focuses on business issues like company formation, lease and transfer of property, issue of shares, distribution of profits, and mergers and acquisitions.
Business law derives its power from both, state and federal statutes. The federal government creates and implements laws for issues like employment, workplace safety, environment protection, and raising of loans and capital. State governments can further substantiate the federal laws and can even pass their own laws on certain other areas. These are usually in the form of licensing requirements and establishing rules for various businesses and professions.
UCC or the Uniform Commercial Code sets out the model commercial law aimed at bringing in uniformity between the laws of different states. Most parts of the UCC deal with sale and lease of goods, financial instruments, and secured transactions. It's not binding on the states to base their laws on the UCC. However, almost all states have adopted at least some part of it in one form or the other.
Things to Consider While Hiring a Commercial Lawyer
It's always advisable to have a knowledgeable attorney by your side while negotiating sales of goods since you need to know the requirements under your state law (which is usually a modified form of the UCC).
Lack of legal knowledge may result in cancellation of contracts, loss of revenue, or even financial penalties. Consulting a commercial law attorney for contract negotiation helps you better protect your legal rights.
Hire an attorney experienced in the area of your business. He will be able to give you practical advice and solution after taking into consideration business ethics and practices prevailing in your industry.
Never delay in hiring an attorney if you are sure you need one. He may not be able to help you much when it's too late.
Joint Jurisdiction of Commercial and Cyber Laws
Online businesses and commercial activities that make use of computer networks and virtual marketplace must be conducted in an ethical and legal manner. Commercial and cyber laws working in conjunction with each other look after the operation and facilitation of such activities. Electronic commercial law is usually based upon the physical marketplace law.
Electronic commercial law includes provisions for investigation and prosecution in the case of virtual frauds. Following are the most common types of frauds covered:
- Virtually soliciting and obtaining information in an illegal and invasive manner.
- Trying to conduct an unethical dealing online by making it appear like a legitimate business.
- Misappropriating funds and earnings in a fraudulent manner.
Joint Jurisdiction of Commercial and Consumer Laws
Consumer law deals with rights and liberties given to consumers involved in commercial dealings. It's applicable for both types of transactions, physical and virtual. Provisions of consumer law in a commercial environment include the rights to investigate the legality and ethics of a commercial marketplace.
Just like consumer law, commercial law also aims at preventing the exploitation of consumers. It includes provisions for investigation and prosecution, mostly in the following cases:
- Misleading Advertisements: They fall under the category of misrepresentation of products and services, which is a criminal activity under commercial law.
- Product Liability: Under commercial law, a product being offered for sale must be safe for its intended use, and it must possess the required structural integrity. The seller may be held liable in case of injuries sustained by its use.
- Insurance and Warranty: They are considered as a legal instrument. Commercial law defines them as a bond created between a seller and a consumer. A consumer has the right to expect that the product he is buying is functional and satisfactory.
Joint Jurisdiction of Commercial Law and the Better Business Bureau
The Better Business Bureau (BBB) is not a legal establishment, but it mediates to resolve disputes between consumers and businesses. If a consumer feels that he has been meted out injustice in a commercial transaction, he can report such injustice to the BBB, which then communicates the consumer's complaint to the concerned business and asks for its response.
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