Business Law

David Kelly, Ruby Hammer, Janice Denoncourt, John Hendy

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000073928
• Edition: 4
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

This fourth edition of Business Law offers comprehensive and accessible coverage of the key aspects of business law. Established legal topics such as the English legal system, Contract, Consumer, Intellectual Property, Company and Employment Law, and emerging areas such as Health, Safety and Environmental Law are all addressed in the context of business.

The work has been thoroughly updated to include all the major recent developments in business law, such as the new EU Trade Secrets Directive and case outcomes decided since the publication of the last edition. The book also discusses the impact of Brexit. In addition, the book features extensive diagrams and tables, revision summaries, reading lists, and clear key case boxes for easy reference.

This book is ideal reading for undergraduate law and business studies students, while also applicable to practitioners and those with a more general interest in business law.

Part 1

Law, legal sources and dispute resolution

1 Law and legal sources

2 The criminal and civil courts

3 Alternative dispute resolution

Business activity takes place in the context of a legal environment that structures, regulates and controls its operation. The greater part of this book will focus on the substantive legal rules and procedures that apply to such business activity. However, in order to understand the content of ‘business’ law as such, it is necessary to have a general understanding of the legal context. It is the purpose of the first part of this book to supply this necessary general introduction to the level required to allow the business student to understand and deal with specific legal rules. It has to be emphasised that no business-related modules, courses or indeed textbooks look to make lawyers of those who study them, but they do look to make their students aware of the inescapable interface between law and business activity.

This part of our book introduces the reader to the study of law and provides the basis for the later study of more detailed specific areas of business law. The first chapter addresses what law is and where it comes from. In doing so it looks to explain different types of law, particularly legislation and the judge-made common law. The chapter also introduces two further aspects of law that must constantly be borne in mind by businesses: the first of these is the Human Rights Act 1998, the provisions and principles of which apply pervasively throughout all aspects of business. The second specific area of attention is the impact of the UK’s membership of the European Union – which has been the source of many of the legal regulations that apply to business activity. At the time of writing, we are unaware of what the UK’s future relationship will be with the EU, although following the EU (Withdrawal Agreement) Act 2020, it will no longer be as a member, but in any event many current laws will either remain in force or will be required to be reintroduced. Where legal problems arise they are usually dealt with in the courts, and Chapter 2 introduces the reader to the courts, both criminal and civil, and explains the relationship between them.

However, it is not always in the parties’ interest to take disputes to court and Chapter 3 looks at the alternatives to taking court action and the reasons why such alternative dispute resolution procedures are sometimes preferred.

Chapter 1

Law and legal sources

Chapter contents

Law in context

1.1 The nature of law

1.2 Categories of law

1.3 Human Rights Act 1998

1.4 The European Union: law and institutions

1.5 Domestic legislation

1.6 Case law

1.7 Statutory interpretation

1.8 Custom

1.9 Law reform

Summary

Further reading

Law in context: the provision of legal services

In the following chapter you will develop an understanding of how law regulates nearly every aspect of social order within society and the impact it has upon the organisation and regulation of business activities. Whilst the English legal system is comprised of a rich tapestry of both common law and legislative legal rules, one of the biggest changes in recent times is the deregulation of the legal profession that interprets such rules. The Legal Services Act 2007 effectively introduced the concept of ‘alternative business structures’ (ABS). The outcome being that for the first time in history law firms can operate with capital investment from non-legal investors. Many law firms are already inviting investment from non-lawyers and several brand names have entered the legal service marketplace. This has revolutionised the availability of legal advice to both the private and business sectors although not without criticism. Many argue that the quality of service and integrity of the legal profession will suffer. Students embarking on a study of business law should remain alert to how the changes work out as they will have considerable implications for business and commerce.

1.1 The nature of law

To a great extent, business activity across the world is carried on within a capitalist, market-based system. With regard to such a system, law provides and maintains an essential framework within which such business activity can take place, and without which it could not operate. In maintaining this framework, law establishes the rules and procedures for what is to be considered legitimate business activity and, as a corollary, what is not legitimate. It is essential, therefore, for the business person to be aware of the nature of the legal framework within which they have to operate. Even if they employ legal experts to deal with their legal problems, they will still need to be sufficiently knowledgeable to be able to recognise when to refer matters to those experts. It is the intention of this textbook to provide business students with an understanding of the most important aspects of law as they impinge on various aspects of business activity.

One of the most obvious and most central characteristics of all societies is that they must possess some degree of order, in order to permit their members to interact over a sustained period of time. Different societies, however, have different forms of order. Some societies are highly regimented with strictly enforced social rules, whereas others continue to function in what outsiders might consider a very unstructured manner, with apparently few strict rules being enforced.

Order is, therefore, necessary, but the form through which order is maintained is certainly not universal, as many anthropological studies have shown (see Mansell W, A Critical Introduction to Law, 2015).

In our society, law plays an important part in the creation and maintenance of social order. We must be aware, however, that law as we know it is not the only means of creating order. Even in our society, order is not solely dependent on law, but also involves questions of a more general moral and political character. This book is not concerned with providing a general explanation of the form of order. It is concerned, more particularly, with describing and explaining the key institutional aspects of that particular form of order that is legal order.

The most obvious way in which law contributes to the maintenance of social order is the way in which it deals with disorder or conflict. This book, therefore, is particularly concerned with the institutions and procedures, both civil and criminal, through which law operates to ensure a particular form of social order by dealing with various conflicts when they arise. Law is a formal mechanism of social control and, as such, it is essential that the student of law is fully aware of the nature of that formal structure. There are, however, other aspects to law that are less immediately apparent but of no less importance, such as the inescapably political nature of law. Some textbooks focus more on this particular aspect of law than others and these differences become evident in the particular approach adopted by the authors. The approach favoured by the authors of this book is to recognise that studying English law is not just about learning legal rules; it is also about considering a social institution of fundamental importance.

There is an ongoing debate about the relationship between law and morality and as to what exactly that relationship is or should be. Should all laws accord with a moral code, and, if so, which one? Can laws be detached from moral arguments? Many of the issues in this debate are implicit in much of what follows in the text, but the authors believe that, in spite of claims to the contrary, there is no simple causal relationship of dependency or determination, either way, between morality and law. We would rather approach both morality and law as ideological, in that they are manifestations of, and seek to explain and justify, particular social and economic relationships. This essentially materialist approach, to a degree, explains the tensions between the competing ideologies of law and morality and explains why they sometimes conflict and why they change, albeit asynchronously, as underlying social relations change.

1.2 Categories of law

There are various ways of categorising law, which initially tends to confuse the non-lawyer and the new student of law. What follows will set out these categorisations in their usual dual form whilst, at the same time, trying to overcome the confusion inherent in such duality. It is impossible to avoid the confusing repetition of the same terms to mean different things and, indeed, the purpose of this section is to make sure that students are aware of the fact that the same words can have different meanings, depending upon the context in which they are used.

1.2.1 Common law and civil law

In this particular juxtaposition, these terms are used to distinguish two distinct legal systems and approaches to law. The use of the term ‘common law’ in this context refers to all those legal systems that have adopted the historic English legal system. Foremost amongst these is, of course, the US, but many other Commonwealth and former Commonwealth countries retain a common law system. The term ‘civil law’ refers to those other jurisdictions that have adopted the European continental system of law, which is derived essentially from ancient Roman law but owes much to the Germanic tradition.

The usual distinction to be made between the two systems is that the former, the common law system, tends to be case centred and, hence, judge centred, allowing scope for a discretionary, ad hoc, pragmatic approach to the particular problems that appear before the courts, whereas the latter, the civil law system, tends to be a codified body of general abstract principles that control the exercise of judicial discretion. In reality, both of these views are extremes, with the former overemphasising the extent to which the common law ...