BUSINESS LAW
HBT 2206: BUSINESS LAW
CHAPTER ONE
NATURE, PURPOSE AND KINDS OF LAW
After studying this chapter, you should be able to:
Define law and its various terminologies
Distinguish between law and morality based on various aspects
Explain the role of law in the society
Explain the relationship between law and ethics
Distinguish between different classification of the law such as civil law and
Criminal law based on various aspects
INTRODUCTION & DEFINITION OF LAW
Many of us spend the greater part of our lives without occasion to consider just what it is that is
contained in the law and, what exactly do we expect from the legal system of the country. In fact,
we may argue that the need to understand the need for law springs from the necessity to clarify,
first and foremost, just what is law? This basically is a question about law, not a question of law.
Occasionally it also comes to our attention, when our property or person is offended, that some
behaviour should be regulated or at least that some protection is necessary and that this may be
provided by the law.
“Life is like a play,” says Shakespeare. But the more complex the play, the more likely are disputes
to arise. So no really good play can progress without rules. Life is more complicated than any sport
you can ever imagine of – There are more players, bigger field, almost unlimited activities played
round the clock. So, it’s an inevitable fact that in life, we need rules, laws and regulations for every
situation.
In our contemporary world, it’s impossible to even imagine life without law. Some eminent jurists
like Rousseau, Montesquieu, and Locke have, after detailed study and analysis concluded such a
state of existence to have been short, brutish and nasty. Thus there arose need for law to govern
human existence.
According to various schools of thought, law is important for the following purposes and functions
inter-alia; law has been held to be instrumental in the maintenance of law and order in the country,
it performs police functions. Plato opines that ‘mankind must either give themselves a law and
regulate their lives by it or live no better than the wildest of the wild beasts.’
Hobbes says that ‘law was brought into the world for nothing but to limit natural liberty of
particular men in such a manner as they might not hurt but assist one another and join together
against a common enemy.’
1
,Locke on the other hand says that ’the end of law is not to abolish or restrain but to preserve or
enlarge freedom.’
Bentham sees the need for law in maximizing happiness of the greatest people in the society in
question.
There are four purposes of law according to Roscoe Pound: to maintain law and order in a society,
to maintain status quo in a society, to enable individuals to have maximum freedom to assert
themselves and lastly for maximum satisfaction of the needs of the people.
Holmes opines that the object of law is not the punishment of sins but to prevent certain external
results.
According to Mohammedan law, the purpose of law is the discipline of the soul, the improvement
of morals and the preservation of life, property and reputation.
According to Salmond, the object of law is justice.
It can be said that the function of law is to achieve stability and peaceful change in a society.
Law also has certain advantages, these include;
(i) Provides uniformity and certainty to the administration of justice.
(ii) Existence of fixed principles of law avoids danger of arbitrary, biased and dishonest
decisions.
(iii) Fixed principles of law also protect the administration of justice from errors of
individual judgment.
(iv) Law is more reliable than individual judgment.
Some of the disadvantages of law however are;
o Its’ rigid in nature, and requires constant change with change in needs of society.
It’s conservative in nature and often static.
Law has many formalities which sometimes waste time and results in injustice.
Law is also unnecessarily complex.
The laws of state consist of those rules of conduct and standards prescribed by the people in
authority for governing and regulating peaceful relations between members of a particular
community or state. These rules may originate from Acts of parliament, customs and other sources
and are enforced by the duly constituted courts of law. Enforcement by the courts usually takes
the form of punishment in criminal cases or an order to pay damages or other remedies e.g account
of profits, delivery of property, injunctions, specific relief, etc in civil actions.
2
,The concepts of law however may differ, just like the concepts of justice. Thus, the duty of courts
is usually to administer justice in accordance to the law which exists within a state. Justice is a
much difficult term to define. Rather, in one sense, it may be said to be what is deemed to be fair
by any ordinary person looking at the circumstance.
There is no universally recognized definition of law either, in fact, Thurman Arnold (a renowned
jurist) in his writings, thinks that obviously, law can never be defined but adds that the adherents
of legal institutions must never give up the struggle to define law because it is capable of definition,
albeit its objectives undisputedly, are the maintenance of peace and order. A few popular attempts
of jurists to define law are given below;
Law is a general rule of external human action enforced by a sovereign political authority.
(Holland)
Law consists of a body or rules which are seen to operate as binding rules in that community by
means of which sufficient compliance with the rules may be secured to enable the set of rules to
be seen as binding. (Paton)
The law is the body of principles recognized and applied by the state in the administration of
justice. (Salmon)
LAW & MORALITY
In identifying various rules which regulate human conduct, we may recognize various kinds, ie
law itself, rules of morality, ethical rules and standards etc. Violation of these rules is viewed as a
‘wrong’. With reference to law and morality, Wrongs may be defined as
- Legal wrongs and
- Moral wrongs respectively.
Legal wrongs should be distinguished from rules of morality, which are enforced by the courts
unless the moral wrongs are also part of laws of the state. Moral rules may be derived from religion,
customs and other informal sources.
If a person fails to honor his parents, he has broken the fifth commandment, but has not broken the
law, and so not liable to any courts proceedings.
However, there are certain moral wrongs which also amount to legal wrongs, thus attract legal
sanctions i.e. if one steals, he has broken the eighth commandment of the Christian community
and would be liable to prosecution in a court of law as well.
In earlier times, there was no distinction between law and morals and in the middle ages, Christian
morals were considered the basis of law. The study of various legal systems clearly shows that law
and morals have had a long union with occasional desertions but have never been truly divorced.
Some distinction however came to be made later on in actual practice and new trends have
developed. The rule of law must be enforced by an action in courts of law. Furthermore, the rules
3
, of law are always defined by the law itself and can therefore be ascertained with specific reference
to statutes. They also apply to the citizens of Kenyan state as a whole.
Rules of morality on the other hand, vary from one community to the other. Morality does not
attract the sanction of courts for its enforcement. However, when they become enforceable by
courts, they then become more than rules of morality, they become law as well.
Occasionally, the law does still deliberately set out to punish for breach of moral rules. For
example, In a British case; Shaw Vs. Director of Public Prosecution (1961) Mr. Shaw had
published a ‘ladies directory’, which was in fact a list of prostitutes and their telephone numbers.
To publish such a directory was not a criminal offence known to the statute books, but Shaw was
convicted of the offence of ‘conspiring to corrupt public morals’. The decision of the court in this
instance, made an immoral wrong to become a legal criminal offence.
In the divided opinion of the Judges, Lord Reid expressed the view that “there was no general
offence of ‘conspiracy to corrupt public morals’ known to law. No one has ever been charged with
it before. Notoriously, there are wide differences of opinion today as to how far the law ought to
punish immoral acts…parliament is the proper place and I am firmly of the opinion the only proper
place to settle that… where the parliament fears to tread it is not for the courts to rush in”.
However, in Kenyan legal system, the Criminal code and the Constitution makes it only a criminal
offence that which is identified as such criminal offence and punishable at the time it was
committed.
CLASSIFICATIONS OF LAW
There are many classifications of law. Some of the main classifications are;
1. Public n & Private Law
2. Civil & Criminal Law
3. Procedural & Substantive Law
4. International Law & Municipal Law.
PUBLIC LAW
This may be described as the branch of law which:
- Regulates relationship between citizens and the state and,
- Regulates the operations of the various organs of the state
They mainly includes the branches of law in which the state can be said to have an interest in
Examples are:
- The constitutional law.
- Administrative law.
4
HBT 2206: BUSINESS LAW
CHAPTER ONE
NATURE, PURPOSE AND KINDS OF LAW
After studying this chapter, you should be able to:
Define law and its various terminologies
Distinguish between law and morality based on various aspects
Explain the role of law in the society
Explain the relationship between law and ethics
Distinguish between different classification of the law such as civil law and
Criminal law based on various aspects
INTRODUCTION & DEFINITION OF LAW
Many of us spend the greater part of our lives without occasion to consider just what it is that is
contained in the law and, what exactly do we expect from the legal system of the country. In fact,
we may argue that the need to understand the need for law springs from the necessity to clarify,
first and foremost, just what is law? This basically is a question about law, not a question of law.
Occasionally it also comes to our attention, when our property or person is offended, that some
behaviour should be regulated or at least that some protection is necessary and that this may be
provided by the law.
“Life is like a play,” says Shakespeare. But the more complex the play, the more likely are disputes
to arise. So no really good play can progress without rules. Life is more complicated than any sport
you can ever imagine of – There are more players, bigger field, almost unlimited activities played
round the clock. So, it’s an inevitable fact that in life, we need rules, laws and regulations for every
situation.
In our contemporary world, it’s impossible to even imagine life without law. Some eminent jurists
like Rousseau, Montesquieu, and Locke have, after detailed study and analysis concluded such a
state of existence to have been short, brutish and nasty. Thus there arose need for law to govern
human existence.
According to various schools of thought, law is important for the following purposes and functions
inter-alia; law has been held to be instrumental in the maintenance of law and order in the country,
it performs police functions. Plato opines that ‘mankind must either give themselves a law and
regulate their lives by it or live no better than the wildest of the wild beasts.’
Hobbes says that ‘law was brought into the world for nothing but to limit natural liberty of
particular men in such a manner as they might not hurt but assist one another and join together
against a common enemy.’
1
,Locke on the other hand says that ’the end of law is not to abolish or restrain but to preserve or
enlarge freedom.’
Bentham sees the need for law in maximizing happiness of the greatest people in the society in
question.
There are four purposes of law according to Roscoe Pound: to maintain law and order in a society,
to maintain status quo in a society, to enable individuals to have maximum freedom to assert
themselves and lastly for maximum satisfaction of the needs of the people.
Holmes opines that the object of law is not the punishment of sins but to prevent certain external
results.
According to Mohammedan law, the purpose of law is the discipline of the soul, the improvement
of morals and the preservation of life, property and reputation.
According to Salmond, the object of law is justice.
It can be said that the function of law is to achieve stability and peaceful change in a society.
Law also has certain advantages, these include;
(i) Provides uniformity and certainty to the administration of justice.
(ii) Existence of fixed principles of law avoids danger of arbitrary, biased and dishonest
decisions.
(iii) Fixed principles of law also protect the administration of justice from errors of
individual judgment.
(iv) Law is more reliable than individual judgment.
Some of the disadvantages of law however are;
o Its’ rigid in nature, and requires constant change with change in needs of society.
It’s conservative in nature and often static.
Law has many formalities which sometimes waste time and results in injustice.
Law is also unnecessarily complex.
The laws of state consist of those rules of conduct and standards prescribed by the people in
authority for governing and regulating peaceful relations between members of a particular
community or state. These rules may originate from Acts of parliament, customs and other sources
and are enforced by the duly constituted courts of law. Enforcement by the courts usually takes
the form of punishment in criminal cases or an order to pay damages or other remedies e.g account
of profits, delivery of property, injunctions, specific relief, etc in civil actions.
2
,The concepts of law however may differ, just like the concepts of justice. Thus, the duty of courts
is usually to administer justice in accordance to the law which exists within a state. Justice is a
much difficult term to define. Rather, in one sense, it may be said to be what is deemed to be fair
by any ordinary person looking at the circumstance.
There is no universally recognized definition of law either, in fact, Thurman Arnold (a renowned
jurist) in his writings, thinks that obviously, law can never be defined but adds that the adherents
of legal institutions must never give up the struggle to define law because it is capable of definition,
albeit its objectives undisputedly, are the maintenance of peace and order. A few popular attempts
of jurists to define law are given below;
Law is a general rule of external human action enforced by a sovereign political authority.
(Holland)
Law consists of a body or rules which are seen to operate as binding rules in that community by
means of which sufficient compliance with the rules may be secured to enable the set of rules to
be seen as binding. (Paton)
The law is the body of principles recognized and applied by the state in the administration of
justice. (Salmon)
LAW & MORALITY
In identifying various rules which regulate human conduct, we may recognize various kinds, ie
law itself, rules of morality, ethical rules and standards etc. Violation of these rules is viewed as a
‘wrong’. With reference to law and morality, Wrongs may be defined as
- Legal wrongs and
- Moral wrongs respectively.
Legal wrongs should be distinguished from rules of morality, which are enforced by the courts
unless the moral wrongs are also part of laws of the state. Moral rules may be derived from religion,
customs and other informal sources.
If a person fails to honor his parents, he has broken the fifth commandment, but has not broken the
law, and so not liable to any courts proceedings.
However, there are certain moral wrongs which also amount to legal wrongs, thus attract legal
sanctions i.e. if one steals, he has broken the eighth commandment of the Christian community
and would be liable to prosecution in a court of law as well.
In earlier times, there was no distinction between law and morals and in the middle ages, Christian
morals were considered the basis of law. The study of various legal systems clearly shows that law
and morals have had a long union with occasional desertions but have never been truly divorced.
Some distinction however came to be made later on in actual practice and new trends have
developed. The rule of law must be enforced by an action in courts of law. Furthermore, the rules
3
, of law are always defined by the law itself and can therefore be ascertained with specific reference
to statutes. They also apply to the citizens of Kenyan state as a whole.
Rules of morality on the other hand, vary from one community to the other. Morality does not
attract the sanction of courts for its enforcement. However, when they become enforceable by
courts, they then become more than rules of morality, they become law as well.
Occasionally, the law does still deliberately set out to punish for breach of moral rules. For
example, In a British case; Shaw Vs. Director of Public Prosecution (1961) Mr. Shaw had
published a ‘ladies directory’, which was in fact a list of prostitutes and their telephone numbers.
To publish such a directory was not a criminal offence known to the statute books, but Shaw was
convicted of the offence of ‘conspiring to corrupt public morals’. The decision of the court in this
instance, made an immoral wrong to become a legal criminal offence.
In the divided opinion of the Judges, Lord Reid expressed the view that “there was no general
offence of ‘conspiracy to corrupt public morals’ known to law. No one has ever been charged with
it before. Notoriously, there are wide differences of opinion today as to how far the law ought to
punish immoral acts…parliament is the proper place and I am firmly of the opinion the only proper
place to settle that… where the parliament fears to tread it is not for the courts to rush in”.
However, in Kenyan legal system, the Criminal code and the Constitution makes it only a criminal
offence that which is identified as such criminal offence and punishable at the time it was
committed.
CLASSIFICATIONS OF LAW
There are many classifications of law. Some of the main classifications are;
1. Public n & Private Law
2. Civil & Criminal Law
3. Procedural & Substantive Law
4. International Law & Municipal Law.
PUBLIC LAW
This may be described as the branch of law which:
- Regulates relationship between citizens and the state and,
- Regulates the operations of the various organs of the state
They mainly includes the branches of law in which the state can be said to have an interest in
Examples are:
- The constitutional law.
- Administrative law.
4
