1.1. Introduction
This
course is designed to introduce students to some important aspects of Business
Law, particularly, the Law of Contract and Commercial Law. The aspect of the
law of contract will include definition and sources of law of contract,
formation and ingredients of a valid contract, contractual capacity, vitiating
elements and remedies for breach of contract. While the aspects of commercial
law will include sale of goods, law of agency and Hire purchase.
1.2.
Course
Justification
Commercial
agreements have come to be a part of man’s daily activities. While some
agreements are legally binding others are not necessarily binding, depending on
the intention of the parties to such agreement. For an agreement to be legally
binding, some elements need to be present which may be hitherto unknown to the
intending parties to contract. It therefore becomes imperative to deal with
those important elements in order to distinguish agreements that are legally
binding from those that are not. Be that as it may, it is therefore necessary
to introduce the students to specific principles guiding the formation of
contractual agreements between the parties.
1.3.
Course
Objectives
The
general objective of the course is to introduce students to the basic
principles of law within the scope of business law. At the end of the training,
students are expected to:
1.
Understand
some aspects of business law in Nigeria.
2.
Appreciate that
the law recognizes
the freedom of
individual to enter
into contractual and commercial transactions.
3.
Appreciate
the working of the guiding principles of business law derived from the case law.
4.
Understand
the role of law of contract as the basis
or foundation of business transaction in Nigeria.
1.4.
Lecture
One
Definition, Scope and Sources of Business law
Objectives of Lecture One: At
the end of lecture one, students should be able to:
1.
Explain
the meaning and nature of business law.
2.
Outline
the Scope of Business Law.
3.
Analyze
the functions and importance of Business Law.
4.
Identify
the sources of Business Law in Nigeria.
Meaning and Nature of
Business Law
What is Business law?
Business
law is the body of enforceable principles, rules, regulations and practices
governing the various interactions between parties to a commercial transaction.
In other words, business law is
the legal framework
through which economic
and business activities
are conducted and regulated.
Scope
of Business Law:
Business
law pervades different aspects of law, including the following:
a.
Law
of Contract: This is the branch of
business law which regulates the formation, terms, performance, discharge and
remedies for breach of enforceable agreements (contracts) between parties.
b.
Law
of Agency: Law of agency is an area
of commercial law dealing with a set of contractual, quasi-contractual and
non-contractual relationships that involves express or implied derivation of
authority by one party, the agent, from the other party, the principal. It is
the branch of business law which regulates the relationship between principals and agents. The law of agency itself deals primarily with the
relationship which arises where one person, expressly or implied employs
another or is by law deemed to have employed such person, to perform some tasks
for and on his behalf.
c.
Sale
of Goods: This is the aspect of
business law which regulates the contract of sale of goods. By Section1 (1) of
the Sale of Goods Act 1893, it is a contract whereby the seller transfers, or
agrees to transfer,
the property in
goods to the
buyer for a
money consideration called the price. The essence of a Sale of Goods
Contract is that the parties intend to transfer ownership of property in the
goods from the seller to the buyer.
d.
Hire
Purchase: The hire purchase law is a
branch of business law that regulates the formation of a hire purchase contract
and the respective rights and liabilities of the parties to the transaction. A hire-purchase
agreement is an agreement under which the owner of goods hires them to another
person called the hirer, the agreement also providing that the hirer shall have
the option to buy the goods if and when the number of installments specified in
the agreement had been paid.
e.
Law
of Partnership: The law of partnership is
the branch of business law that regulates the rights and liabilities of the
partners among themselves and their rights and liabilities in dealing with
third parties.
f.
Company
Law: Company law is a branch of
business law which regulates the formation and dissolution of various types of
business organizations, such as companies, business names, partnerships and
incorporated trustees. Company law regulates the process of incorporation, management
and financing of the company, the extent of the powers of the company and its
officials.
g.
Industrial
Law: This branch of business
law governs the relationship between employer and employees and the regulation
of their rights and liabilities. Industrial law also covers the formation and
regulation of the activities of trade and employers unions and their members in
other to achieve industrial peace and harmony.
h.
Insurance
Law: This branch of business
law regulates the establishment and the conduct of the insurance business and
the contract between the insured and the insurer as well as their rights and
liabilities. Thus a contract
of Insurance is one whereby a person or company (the insurer) agrees in
consideration of a single or periodical payment (called the premium) to pay a
sum of money to another person or company (the insured) on the happening of a
certain event or to indemnify
against loss caused by the risk
insured against.
i.
Law of
Banking and Negotiable
Instruments: This
is the aspect
of business law regulating the establishment, management
and control of banks and the different modes of effecting payment for goods and
services in form of cheques and other types of bill of exchange.
TAKE NOTICE that apart from the foregoing,
the scope of business law also includes Law of Taxation, Intellectual Property,
Shipping and Admiralty, and Alternative Dispute Resolution.
FURTHER TAKE NOTICE that the Law of Contract is the
foundation or ‘mother’ of business law. This is because a contract lies at the
root of any business or commercial relationship, be it in the sphere of agency,
sale of goods, insurance, banking, hire purchase, industrial law, etc. As a
matter of fact, all other branches of business law represent an adaptation of the
general rules and principles of the Law of Contract to the peculiarities of the
relationships.
Functions
of Business Law
The
principles and rules of business law have been developed over the years to
achieve certain objectives, including the following;
a.
Ensuring orderliness
in the various
interactions and dealings
between parties to commercial contracts.
b.
Promotion
of justice in commercial transactions through the balancing of the conflicting
interests of all the parties to commercial contracts.
c.
Provision
of appropriate remedies where a party has suffered injury due to the action or
inaction of the other, example in cases of breach of contract.
d.
Protection
of certain classes of people like infants and illiterates from being exploited
or defrauded in a contractual relationship because of their special
circumstances.
e.
Promotion
of trade and commerce within a particular society.
Importance
of Business Law
It
is imperative for a business man to study business law for the following
reasons;
a.
To
enable a business man take a quick and snap decision under a pressing
situation, without necessarily consulting a solicitor.
b.
A
knowledge of business law will enable a business man discuss matters
intelligently with his solicitors and properly appreciate any legal advice
proffered.
c.
Knowledge
of business law will enable the businessman to run the business as much as
possible, in a litigation-proof manner and avoid the cost, inconvenience and
sometimes the embarrassment of litigation.
d.
The
more a business man is knowledgeable in business law the more he will be
helpful to the lawyer in the conduct of the case.
e.
Business
law will enable a business man breach the gap between the rule of law and the
knowledge of the business through his knowledge and experience.
From
the foregoing, it is clear that it is imperative for a business man to have a
fairly good knowledge of the principles of business law notwithstanding that he
may have legal staff, department or external solicitors.
Sources
of Business Law:
The primary and secondary sources of business law in Nigeria are as follows;
Primary Sources: These include;
a.
The
received English law (comprising of the Common Laws of England, the Doctrines
of Equity and the Statutes of General Application that were in force in England
as at 1 of January, 1900).
b.
Nigerian
Legislation (Comprising of our Constitution, Acts, Laws, Decrees, Edicts, Bye
Laws, Orders in
Council, Proclamations, Directives
and Government White
Papers, among others).
c.
Case
Laws or Judicial Precedent.
d.
Delegated
Legislation
Secondary
Sources: These Include;
a.
Customary
Law
b.
International
Law such as International treaties, Charters, etc.
c.
Books,
Legal Dictionaries, Periodicals, Newspaper Reports, etc.
Revision
1. What is business law?
2. What is the scope of business law?
3. What are the functions and importance of
business law?
4. What are the sources of business law?
Suggestions for Further
Reading
1.
A.
O. Sanni, Introduction to Business Law (Lagos:
Malthouse Press Limited, 2005).
2.
Ezejiofor,
Okonkwo & Illegbune, Nigerian
Business Law (London: Sweet & Maxwell, 1982).
3.
M.
O. Adesanga and E. O. Oloyede, Business
Law in Nigeria (1985).
4.
M. O.
Sofowora, General Principal of
Business and Co-operative
Law (Lagos: Soft Associates,
1999).
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