What is ‘Business Laws Business law consists of selected rules of law that are of particular relevance to business activities. For example, business law includes aspects of contract, tort law, criminal law, plus selected topics from other rotational divisions of law. Knowledge of business law is important because it enables a person to: 0 recognize the legal aspect of typical business situations and understand the legal rules involved 0 know the extent to which they can rely on legal rights and duties 0 know how to use the law constructively to achieve desired outcomes.

For example: o intolerance agreements Tort goods Ana services can De created; o property rights can be acquired and protected; o business organizations can be created; and o financial systems can be used. 3. Legal and non-legal rules Law consists of rules of conduct or organization that are recognized, applied and enforced by the power of the state. Non-legal rules are rules of conduct or organization that are enforced by things such as peer pressure, a need for co-operation, feelings of goodwill, or convenience. Of 2 Non-legal rules are derived from: 0 moral or philosophical beliefs; 0 religious beliefs; 0 social values; and 0 rules that have become customary in a community. Non-legal rules work well enough in smaller groups or communities but in larger groups they come inadequate. Law tends to emerge in all larger societies as a necessary means of regulating conduct. 4. Some important terms and phrases Legal ‘principles’ are statements of the broad fundamental viewpoints that set the policy and philosophical direction of an area of law. Legal rules’ are the more detailed mechanisms by which the principles are given effect. ‘Legal system’ means all the legal principles and rules that exist in a particular country. ‘Legal system’ also means all the additional things that contribute to the operation of law in society, that is: 0 mechanisms for creating and changing the law; 0 mechanisms for administering and enforcing the law; and 0 mechanisms for preserving and perpetuating the law. 5. Law and Justice In basic terms, legal rules are applied to specified facts in order to decide the outcome.

In other words, the proper outcome or result of a case is deduced by applying the relevant rules of law to the proved facts. For example: Facts: Peter has been found guilty of serious theft. Rule: Anyone found guilty of serious theft must go to prison. Decision: Deciding questions in this way can be described as a strictly “legal” approach. The correct decision is normally presumed to result from the logical process. Generally, as well as being logical, legal decisions ought to be ‘Just’.

Justice can be thought of as involving at least two elements: 0 everybody should be treated in the same way unless there are significant differences in the circumstances; and 0 outcomes should not be unduly harsh. 3 of 3 Sometimes, the strictly logical application of rules needs to be adjusted to achieve a just outcome. In other cases, Justice may require recognizing additional facts as significant. For example: Facts: William has been found guilty of serious theft. Rule: Anyone Tuna guilty AT serious tenet must go to prison. Years old.

Decision: Revised Rule: The strictly logical application of existing rules promotes certainty and predictability. The fair and Just nature of decisions promotes respect and support for the law. These considerations must be balanced. Case study Law as a mechanism of organization and regulation Legal and non-legal issues In any given situation it is likely that there will be a variety of important issues. For example, in a sale transaction, there are often economic and practical issues as well as legal issues to take into account.

It is important to be able to analyses a situation, identify the legal issues and separate them from other issues. For example, in deciding whether to buy an item in a local shop or in an on-line auction, there may be financial issues (the cheapest price); practical issues (how to pay, delay in getting delivery); and legal issues (non-delivery, faulty goods, etc). Case study: The coffee shop Stella decides to open a coffee shop in Melbourne. Rather than operate as a sole trader, she registers a company as the owner of the business.

Acting on behalf of the company, Stella leases business premises, employs waiters, gets a loan from the bank and purchases equipment and supplies. She gets permission from the local council to put chairs, tables and umbrellas on the pavement outside the coffee shop. When she opens for business the following things happen: 0 Stella does not properly secure one of the umbrellas and a customer is injured when it blows over in a gust of wind. The customer demands compensation. 0 The espresso machine she bought to make coffee turns out to be defective. Stella wants to return it. A health inspector says that Stall’s kitchen is dirty. Stall’s company is prosecuted and fined $1,000. 4 of 4 John, who owns the shop next door to the coffee shop, claims that Stall’s tables are encroaching on his space but Stella ignores his protests. John is thinking of Just pushing the tables away each day. (a) Do you recall which aspects of this case that related to the following areas of law: Criminal law 0 Tort law 0 Contract law 0 Property law 0 Corporations law (b) How does the law allow Stella (or others in the case study) to do the following things: 0 Organize and plan with reasonable certainty. Lay down the rights, duties and powers of members of different classes and groups. 0 Permit, encourage, forbid or Electorates particular actively. U creates rulings Ana outlets Tanat can De entrance u Provides remedies when rights are interfered with or duties are not discharged. (c) Why is it important to know the law? Are people expected to know the law? 5 of 5