THE EFFECTIVENESS OF COMMERCIAL LAW

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This article is written by Priyadarshini Chakraborty of 7^th Semester of Jogesh Chandra Chaudhuri Law College, an intern under Legal Vidhiya

Abstract

Commercial Law is popularly and more commonly known as trade law or mercantile, retail, saleable, or marketable law. It is that specific vital organ of the law that refers to the rights, institutions, and manners or behaviours of individuals and conducts of business engaged and involved in trade, commerce, accounts, sales, and marketing strategies of such individuals. It is therefore considered to be the branch of law that thoroughly deals with, legislates, and adjudicates private as well as public law. Commercial Law involves, integrates, and incorporates within its preview such titles as head or principal and agent, transportation by sea or land, instruments of negotiable conduct, merchant trading, accident insurance, life, bills of exchange, negotiable instruments, contracts, or partnerships. Such content and preview fall under the jurisdiction of Financial Law which also falls under the jurisdiction and enactment of Commercial Law, pertaining and relating specifically to financing and finance law. The concept of Commercial Law could also be understood to initiate contracts, and practices for hiring, manufacturing, and selling of consumer products and goods. Most countries worldwide have adopted a general civil code and regulations that consists of comprehensive statements and contents about their commercial law. In the USA different and distant regulatory techniques of custody elaborates on how commerce or financial matters are conducted and carried on effectively and smoothly without any backlog or disruption. Privacy laws and safety laws have been introduced specifically keeping in mind the states and situations of the employees and customers. Examples of such are food and drug laws, the best and most popular example of it is the Occupational Safety and Health Act in the United States of America.

Keywords: Commercial Law, Financial Law, banking, private law, public law, Intellectual property rights, English Law, Characteristics and nature of Commercial Law, the historical development of Commercial Law, sources of commercial law, The Indian Contract Act of 1872, Indian Partnership Act 1932

Introduction

It is obvious for one individual to wonder what Commercial Law in total deals with and what precisely is commercial law. With varied versions of the forms of regulations maintained to strictly monitor private as well as public law, it is important and at most necessary to understand and get hold of the concept of Commercial Law in a more specific way. In general and more common terms Commercial Law determines and interprets a very wide and broad frequency of the legal services, usefulness, favours, advantages, assistance, and benefits specifically designed and well-planned to help support and aid businesses, corporations, firms, or industries, or private individuals to benefit in making money on the exchange of their products and services to the people and gradually also aiding to the capital of the country, therefore benefiting the entire economic cycle. For a better understanding of the people, Intellectual Property Rights are vital and essential for industries and manufacturers to benefit and earn profit from their innovative sales based on their services for both domestic and international based contracts, agencies, or agreements that are made to sell the goods and services in a better, efficient way so that it can render its services more widely.

Characteristics of Commercial Law

Before trying to make any attempts to precisely define and make crystal clear to any individual about the exact concept behind Commercial Law it is quite important to understand and comprehend the legal reality that it controls and presides over. In general ways commercial law contracts and tackles legal associations and affinities of any private individual, due to this specific reason it is more popularly known and also classified as private law. Although distinguishing issues between the civil and commercial statutes as a particular and specific legal organization and contracts, for example, purchase, society, deposit, credit, market, etc. are overseen by both the codes. In the mere dearth, lack, and absence of a precisely developed legal explanation of the term Commercial Law, different types and varied ways have been sought by different writers to explain the definite concept of Commercial Law. Following are a few such explanations given by different authors:

HW Disney observed and clarified in his written text ” The Elements Of Commercial Law”, that Commercial Law is that specified phrase or a term that is indeed difficult to define but such considerations should also be taken into account that it is used to indicate and refer to all the vital organs of the English Law that spotlights and indeed highlights well with definite explanations of the term trade, commerce and business.
HC Gutteridge in his written text namely, ” Contract and Commercial Law” hypothetically observed and explained well about the sole reason and goal of commerce is to make marketings in derivatives, and commercial law can be defined well and thoroughly described as that specific and particular law that devote and spread to the agreements and arrangements for the sale of products if this specific criterion is in the application.
The merchandise nature and characteristics of the specific context and subjects thoroughly operate and drive through all of the above-mentioned as well as general definitions and explanations of commercial law. The law of commerce is also generally known as the Commercial Law. Many diversified spheres and areas of the concept of Commercial Law are covered in whole and also in part are mostly covered by such commercial activities and assignments. An elongated and exhaustive list of the subject matter of the index is neither possible nor probable nor is it desirable. Moreover, Commercial Law is a definite field that is practical, empirical, or reasonable. and an important relevant subject that solely aims and targets with clean interest to make the corporate community’s social work and procedures of working more smooth, swift, and easy functioning. As those detailed and distinct specified practices gradually change and alter themselves with the changing times and durations just to evolve and accommodate new technologies, the same applies to the contents and subject matter of commercial law or business law. A specified, monitored, or same subject matter or content from time immemorial or without any changes will only lead to unwanted problems and utter confusion in the entire process.

Chronological Development of the Commercial Law

The chronological or historical development of Commercial Law can be classified into various periods, such periods namely are:

The Historical Development in the Middle Ages: The origination and the birth of modern business can be traced back to the middle ages (Lex Mercatoria). Back in those days and periods, many merchants would travel for quite a long juncture across the continents especially Europe to make a fair deal of their products in the urbanized market. If any conflicts or disputes would arise, it was settled by Jurists or Judges who themselves were merchants in the Special Local Courts especially made for this sole purpose.
The developments during the Common Law: The honourable Court of Admiralty continued to acknowledge and determine the concept of Lex Mercatoria which adjudicated its jurisdiction over the business of the merchants and traders during the fifteenth as well as the sixteenth century. Although during the seventeenth century, the jurisdiction of the commercial disputes and competence of the Naval Courts was taken over by the common law courts. Due to the gradual extinction of the majority of the Merchant’s court during that time, the Common Law court was compelled to take over the litigations of the majority of the country’s mercantile litigations.
The rise of the concept of consumerism: The gradual rise and establishment of the Welfare State was evidently seen to come into existence after the second world war. It was remarkably significant and substantial that the next major era of the transformation rapidly came into existence after the rise of the Welfare State. Specifically During this period of time, a gradual shift from the Victorian concept of commercial trade and contract sanctity (the concept of laissez-faire economics based on the values) was seen, the gradual lean of protection towards the economically weaker sections of the community rather than the economically stronger became more evident during this specific period.
Developments during the 20th century: The very specific concept and subject matter of the Commercial Law returned back to its old conception and subject matter during the twentieth century, that is the restrictions of rights and duties of various specific people. The concept of merchants was well-established, discussed, and prominently in existence during the Middle Ages but during the twentieth century, the concept of merchant was replaced by terms and subject matter of enterprise and entrepreneur.

Origins and Conceptions of Commercial Law

Sources of Commercial Law are as follows:

Contracts: The very foundation and conception of the commercial law comes from the law of contract. According to the conditions and norms of the contract negotiated between business handling individuals. According to the conditions of the contract negotiated between business individuals based on it, the goods and services are provided. In many cases, it is seen that contract terms are individually negotiated by parties. In reality, the contract is the basic and most vital part of the commercial law.
Custom: The customs and traditions of commerce or trade have been for a long phrase of time a source or origination of legislation in the orb of Commercial Law. A custom is generally a regulation and legislation that has a law in a specific area, whereas an implementation of the same is the establishment of the practice of a certain trade, business, or profession. It is a mere matter of fact that the Honourable Court at times disregards the technical differences between the customs and use, conflicting between the ideas of the two concepts.
Common law: When a specific vital part of the commercial law does not consist of any criteria or measures to make its enforcement when there is tradition, common law during this situation is used to control or resolve any commercial issues or disputes.

Classification of Commercial Law in India

Following are the few classifications where litigation is solved:

The Indian Contract Act of 1872: The Indian Contract of 1872 is the most popular law enforcement in our country covering and playing a very fundamental as well as vital part in the business law foundation. It came into force on the date of 1st September 1872 and “applied to the whole country of Inetc except to the state of Jammu and Kashmir with few exceptions”. The Indian Contract Act of 1872 consists of 266 sections. The fundamentals are made well understood to the people in the rulings and sections of the Act. The main essential and crucial requirements are free consent or mutual consent of both parties, consideration, essentials for a valid contract, credibility, and eligibility. A legitimate and valid contract should follow all the rules and regulations of the provisions laid down in the Indian Contract Act of 1872.

The Indian Partnership Act, 1932: According to the provisions of the Indian Partnership Act of 1932 by the sense of ” partnership” it is merely meant a relationship that exists between two or more parties who mutually agree to share the earnings of a business, where all or more persons act as the partners of the shares. It is defined as the association of two or more individuals and formed as a result of a contract or an agreement agreed upon by all the parties signing the contract. Another thing about the partnership is that it cannot be inherited, it must be mutually approved upon. Generally, “a partnership agreement can either be written or be oral in nature”.

Apart from the provisions of the Indian Contract Act of 1872, and the Indian Partnership Act of 1932 the jurisdiction of commercial law also falls under the provisions of matters of litigation under the Limited Liability Act, of 2008, Companies Act of 2003, and Arbitration and Conciliation Act of 1996.

Case Law

ACCORDING TO THE RULING OF THE SUPREME COURT ON CZECH REPUBLIC CASE NO. 27 Cdo 3330/2020 of 9th March 2020

The honourable Supreme Court held and made itself quite clear that the only sole organ which has been vested and has the original power to decide on the provisions of advancement of shares in any profit and payoffs of a joint stock company is the governing body itself. The law does not give the exclusive powers of such to any of the bodies of the joint stock companies.

Conclusion

The commercial governs the various litigations, subject matter, and conceptions of any commercial marketing, interchanges, transactions, and any procedures between business enterprises, regulatory bodies, or the government itself. With changing times Commercial Law has been trying to change itself but indeed it is true that the sole purpose of Commercial Law is to restrict a few prohibitory actions of people which would be violative and destroy the actual purpose of the Commercial Law.

Reference