The terms business commercial and mercantile are synonymous Day-to-day transactions between individuals, or between individuals on the one hand and Government or local bodies on the other involving one or the other form of obligation is a business transaction.
The growth of business made it imperative for the Parliament and State Legislature to introduce new piece of legislation and amend the existing legislations to regulate various business transactions. As huge amount of labor and capital are involved, it is obvious that in a socialistic form of State like India, wealth should be adequately distributed to bridge the gap between the haves and have-nots. To achieve this object, law regulates the various transactions of the business community. Although it is not possible for a layman to learn every branch of law yet he must acquaint himself with the general principles of law of the country for, ignorance of law is no excuse.
Business Law is a branch of General Law. It relates to industry, trade and commerce. It includes law relating to contracts, sale of goods partnerships, negotiable instruments, companies, co-operative societies etc. Consumers are a special constituent of any business. The consumer movement has gained significant importance of late. Consumers Protection Act not only recognizes the importance of safeguarding the right and interest of the consumers but also puts every business alert and answerable to the consumer , the ultimate masters.
Prior to the enactment of the Indian Contract Act 1872, English Common Law was applied indiscriminately to Indian natives which led to many inconveniences. Status were, therefore, enacted to super-cede English Law and to regulate the contracts where parties were Mohammedans and Hindus. The rights of Hindus and Mohammedans were regulated by their own laws and usages. If both parties were Hindus, they were regulated by the Hindu law ad where both parties were Mohammedans, Mohammedan Law applied. Where, however, one party was a Mohammedan and the other Hindu then the law of defendant applied. Only where laws and usage of Hindus or Mohammedans ere silent on any point, English Law applied. Gradually, importance of the enactment id general law regulating the contracts ad to define and amend certain parts of law relating to contracts common among all the parties t the contract was realized and this gave birth to the Indian Contract Act, 1872.
The Law of contract is embodied in the Indian Contract Act, 1872. The Indian Contract Act incorporates many features of English Law. It is not an extensive code, because besides the Sales of Goods Act and the Indian Partnership Act, the Act des not incorporate the Negotiable Instruments Act, Transfer of Property Act, Insurance etc., which also deal with certain types of contracts. It defines and amends only certain parts of he law relating to contracts (Preamble). A particular usage or custom is allowed to prevail and remain unaffected. It should be reasonable certain and should be well known. However, usages shall not be inconsistent with the provisions of the Act. Where the Contract Law is silent on any matter, Hindu or Mohammedan Law relating to contracts shall apply. It is, therefore, not a complete code and, therefore not exhaustive.
Importance of the law of Contract
The law of Contract is the most important branch of business law. It affects everybody more so, trade, commerce and industry. All contracts are based on agreements which are either express or implied. Disputes do arise, sometimes as to the existence of the obligation and sometimes as to the nature and extent of the obligation.
In commercial and ordinary life, promises are made. Promise arises out of the acceptance of an offer or proposal. Sometimes, promise are performed sometimes breach is committed. The Law of Contract deals with such promises which create legal obligations. This excludes those promises made in common life which may be morally binding but create no legal binding. These promises are made without a view to obtain the assent of the other. No value is given to such promises made. Such promises are not covered by the Indian Contract Act except for those provided under section 25 of the Act.