Business law is the legal code that governs what occurs between private commercial entities, and basically, there are two categories: corporate law and commercial law. Corporate law involves government policy concerning corporations and their interaction with one another, while commercial law deals specifically with commercial dealings between people. In the United States, however, six main commercial law jurisdictions are considered to be part of the business world. These are the state-level jurisdictions, the District of Columbia, the possessions of certain American Indian tribes, the six territories (including Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands, the Bay Islands, and Guam) in the American continental system, and the American possessions. There are also some international relations cases concerning foreign corporations setting up shop in the United States.
Corporate and commercial law
The powers of corporate law and commercial law are both interrelated. In the realm of business law, corporations and enterprises are regarded as legal entities that can have rights, privileges, obligations, and powers that bind them in the contract. On the other hand, commercial law recognizes private individuals and companies as legal entities that have rights, powers, and obligations that do not bind them under any contract. It is important to remember that the powers conferred on corporations and enterprises are limited in nature, while the rights granted to individuals are broader.
There are many instances throughout history where business law has been used to address various disputes involving commercial entities. One of these is the U.S. vs. Thirault. This case involved disputes between an American company and a French businessman concerning the boundaries of a river.
Another area of business law that often comes into play when one or more parties are the subject of a lawsuit or arbitration, is tort law. Tort law is primarily governed by civil laws, which are laws that fall outside of the jurisdiction of a government agency. Common examples of these types of civil laws are a breach of contract, negligence, consumer protection, and negligence. The purpose of tort law is to protect the rights of the victims of actions undertaken by third parties. For instance, a person injured by another person’s defective product may be able to seek damages based upon the person’s role in that product’s manufacture.
Several business laws directly impact small businesses and entrepreneurs. One of these is the establishment of partnerships. Partnerships are designed to increase a business’ resources and income potential. These businesses must maintain separate legal structures for shareholders, officers, and partners.
Another area of business law that directly impacts businesses is the implementation of anti-trust laws. Anti-trust laws attempt to prevent businesses from monopolizing or charging unreasonable fees for goods and services. Additionally, several laws attempt to create more open access to information and promote competition within the industry. One of these laws is the Wiretap Act, which prohibits the disclosure of confidential communications by wireline carriers without the consent of the sender or recipient.
Other areas of business law directly impact businesses and entrepreneurs are securities laws, intellectual property laws, and commercial litigations. Securities laws attempt to govern the purchase, sale, and ownership of securities. This includes stock options, mutual funds, bonds, and corporate bonds. Similarly, various commercial litigations attempt to determine the validity of business contracts, personal contracts, commercial leases, and real estate contracts.
To sum up
The purpose of these laws is to ensure that both parties agree to and are harmed by the transactions. In business law, it is essential to understand that contracts are always trumped by ethical conduct. Therefore, a business owner can never enter into a contract that would give them a clear advantage over their employees. Ethical conduct also prevents a business owner from discriminating against employees, hiring incompetent workers, or engaging in other bad business practices. Business contract laws are almost as old as business itself, as contracts were created long before contracts were invented, business was in the market, and the need for contracts arose. However, today contract laws are applied to all types of transactions including employment contracts, commercial contracts, insolvency agreements, land contracts, and marital relations.