An Introduction to Business Law
The term "business law" generally refers to the body of law involved with private business transactions. It can be defined as a field of law that applies to the rights, relations and conduct of persons and businesses engaged in commercial activity. It is a broad field that covers all areas of commerce from the sale of goods to the financing of a variety of ventures. It has been referred to as commercial law, mercantile law, trade regulation law, and law merchant. The distinctions between these areas of commercial law are not sharp, and in many case they overlap.
Although there is no clear separation between them, there are two major areas of business law. One is public, associating the government and the public as a whole with the commercial transaction . The other is private, dealing only with the various members of the commercial enterprise.
Public regulation of business is authoritative, dealing with the power of the state or government. Public business regulation may be enacted administratively and enforced by various departments and agencies. The United States Constitution is the basis of much of public business regulation and is the source of many such regulations.
Private commercial governance involves individuals and businesses and judges case-by-case to settle issues arising from commercial transactions between them. This includes the formation, performance, and breach of contracts entered into by individuals and businesses. Private business law is usually found in civil court and is normally enforceable by the offended party.
Some Influential Treatises on Business Law
The first attempt at codifying commercial law on a modern basis was the French Code de commerce of 1807, which was designed for merchants and established a system of trade tribunals that proved highly influential on the modern law. The related Belgian Code de commerce drew also from the earlier Dutch legislation and has also proved very influential in the development of business law. It is in this code, for example, that partnership law in its modern form was codified.
In England there were attempts at reforming and codifying the law of property as early as the seventh century, but these were largely unsuccessful until James I, in 1625, commissioned a codification of the law of wills, which he called An Act of the Settlement of Estates and the Quieting of Mens Estates; this Act forms the basis of the current law of property.
In the twentieth century, perhaps the most influential text upon the development of English law was the English Sale of Goods Act 1893, which codified common law relating to sales and was also influential on the development of sales law in many European nations.
The United Nations Convention on Contracts for the International Sale of Goods, adopted in Vienna in 1980, has had a considerable impact on international sales law, and is recognised as the international standard regarding sales contracts for goods. The UNIDROIT Principles of International Commercial Contracts are a related text, written by a non-governmental organisation, but also accepted as a reasonable codification of international business law (although it is, necessarily, only advisory). Academic writing relating to contract law is also highly influential.
The subject of corporate liability is particularly influenced by the writings of Edward Coke’s institutions of laws, began a long tradition of judicial deference to learned texts, and his definitions of tortious liability, particularly in Blyth v Birmingham Waterworks Co are still applied 150 years later.
Significant Cases Involving Business Law
In tandem with the evolution of legal scholarship, significant strides have also been made in creating groundbreaking jurisprudence in business law through judicial precedents. Some landmark cases that shaped major doctrines of business law include: United States v. Paramount Pictures, Inc. 334 U.S. 131 (1948). Paramount Pictures is the quintessential antitrust case concerning the collusive conduct of the major Hollywood film studios in the 1920’s and 30’s. The substantive ruling in this case included a rejection of the pro-competitive justification for vertical restraint such as use of block booking for cinema distribution and inclusion of an antitrust injury requirement under the Clayton Act of 1914. Rasul v. Bush, 542 U.S. 466 (2004). Rasul v. Bush is another exemplary case on the issue of judicial intervention into the executive branch’s matters. The decision in this case resulted in the Supreme Court issuing a writ of habeas corpus to the Guantanamo Bay detainees who sought redress, either on an enemy combatant status or substantive due process claims. This case is particularly noteworthy for its breadth of influence, resulting in the United States government creating a detention center apart from the Guantanamo Bay for enemy combatants pending their status determinations. Petrie v. Haskins & Sells, 397 N.E.2d 419 (1980). Petrie is a seminal case in defining the auditor’s duty of care and other relevant concepts for establishing liability for accountants and auditors. In this case, a high accounting firm was found liable for failing to detect and rectify certain evidence of fraud and misrepresentation in annual statements by an independent company. Tennis v. California Pac. Bank, 127 Cal. Rptr. 3d 108 (2011). Tennis is a seminal case concerning director liability under the business judgment rule and its exceptions. In this case, even finding flaws with the approval process for a merger, the Court nevertheless vacated the award because in the context of a limited liability firm, a majority vote from the shareholders could merely invalidate the approval process rather than prevail against the business judgment rule. The aforementioned few just scratch the surface as to the innumerable influential cases that make up the ever-increasing body of business law. Establishing a legal precedent that receives wide acceptance among the courts and increases the predictability in the outcomes of business litigations and transactions is an exceedingly challenging endeavor, yet we have witnessed remarkable success in instances such as United States v. Paramount Pictures.
The Importance of Business Law Case Studies
Case studies are essential for law students. They’re thinly disguised future exams, and present students with the same challenges they will face going into the legal world. But the "case study" is also used by students of philosophy, social studies and humanities scholars, and those who want to study the real-world of business law.
In business and commerce, a case study is an enterprise defined by a problem to be solved, or something to be improved. For example, this could be something like "What would you do if your company sales team is underselling in comparison with new competitors?" Most business schools love to use case studies to illustrate their theory.
Lawyers historically keep themselves distant from the world of business. They deal in legislation and precedents, things that as far as they are considered, are immutable facts. But what about the practicalities of this? At the end of the day, any lawyer – from a corporate lawyer, to one who specializes in family law – will have had to deal with situations where legislation is much easier to navigate and apply than the realities of the situation, or where in a client meeting, it’s simply impossible to follow the textbook answer, so irrelevant does it seem to the current situation. Case studies bridge this gap.
In the case of business law , there’s no shortage of case studies to study. It’s a thriving sector with all the right academic credentials; business lawyers will deal with situations where communication expectations change, where they have clients who need to adapt to a changing world, where they need to anticipate future developments and exactly how it will impact the case before them.
For example, imagine making a case study around a business law matter regarding data encryption, intellectual property (or lack thereof) and freedom of speech. In modern democracies, this has been a hotbed of political debate, all centered around one above all other case studies, which is the U.S. Department of Justice versus Apple case. During the course of that legal dispute, two things happened. One is that it showed how many people were still in favor of freedom of speech, were apathetic and didn’t care how it was exploited by many. The second was that new technology started providing new solutions – new businesses were created to help fight the good fight.
Now data encryption in the world is taken completely differently. For the average person, it’s not just a way of communicating securely on the internet; it’s how they now expect to communicate. And any lawyer needs to be fully aware of their new reality, their new expectations. As the world of commerce has changes, so too has business law. Eva Withely is constantly studying, on top of her field, and most importantly, on top of her industry.
Present-Day Issues in Business Law
In the modern landscape, business law is inextricably linked with digital technology. E-commerce transactions, once a fringe element, have become ubiquitous. But with this increased convenience comes new challenges. For instance, cybersecurity presents significant new challenges to defending clients against unauthorized access to digital information. Legislatures and courts are grappling with how to maintain privacy in the age of cloud storage and constant surveillance. The groundwork for protecting personal information was laid in Roman law; modern texts seek to preserve that framework while adapting with changing technology. XML and RDF ontologies require that our concepts about business law be reimagined both intuitively and mathematically. Lawyers have to develop new ways to classify and analyze digital contracts. Recent cases address these issues. Courts have begun to construe a "reasonable expectation of privacy" in the context of ever-present surveillance technology. Long-standing principles of agency law are being reinterpreted with regard to online intermediaries. Mergers and acquisitions are increasingly likely to involve virtual companies that exist only in cyberspace. The work that lawyers do has changed quickly, with no end in sight.
Conclusion: Modern Business Law
In this article, we have explored some of the most important and defining texts and cases in the field of business law. We began our journey with ancient texts such as the Code of Hammurabi, the Twelve Tables, and the English Common Law, and moved through pivotal moments in the development of business law such as the Commercial Code, the Uniform Commercial Code, federal legislation such as the Securities Act of 1933 and the 1934 Securities Exchange Act, and landmark Supreme Court decision such as Citizens United and recent interpretation of the Fifth and Fourteenth Amendments. Along the way, we also discussed the important role of law in regulating and sustaining a business environment, including the fundamental implications for business operations, employment, inheritance, bankruptcy and a host of other business-related issues. Importantly, we also acknowledged the role of intellectual property in today’s business environment. The ever-changing aspects of trade secrets, trademarks, copyrights and patents are becoming inextricably intertwined with the escalation of technology in the business world.
However, the evolution of business law doesn’t end with ancient texts and historic cases. It is an ever-evolving field and one that requires our constant attention as changes continue to take place. As we look to the future , we must also consider how these older texts and cases impact our world today, and how they may continue to do so in the years to come. The heart of this article is to highlight the most important writings in business law and to guide readers through the early history of commercial law and the advent of modern business law from natural law to the regulation of e-commerce and the Internet. But the discussion doesn’t end here and it shouldn’t. As the world becomes more and more interconnected, the need to understand all aspects of doing business continues to grow. Practicing business law has always been a complex responsibility. It represents a blend of intellectual disciplines that continues to evolve over time. Not only must you be able to understand the historical context of your task or transaction, but you also need to be able to access immediate legal resources that are current and accurate. This means that to be good attorney, or even to be a good businessperson, you need to stay informed both of the legal texts that have shaped our world and of the emerging legal trends that may shape our world tomorrow.