What is the Purpose of Business Law?

In transactions between companies, the purpose of business law is to provide protection for all parties. With laws in place, business owners quickly understand legal requirements and business expectations. Signing and honoring contracts with multiple companies becomes an easier and more reliable process.  

Overview

Business law, also known as commercial law, covers the domain of contracts, commerce and manufacturing. Each jurisdiction establishes, in contract form, the specific procedures and expectations for how business must be conducted. Product manufacturing must meet regulations. Laws in the business world also provide protection for consumers.

Definitions

Without laws, business practices would suffer from chaos and lack of clarity. Business law definitions offer direction for business owners. Someone who wants to run a franchise, for example, gains clarity by first understanding its definition. It is generally understood that running a franchise requires obtaining permission from an already established business to use its trademarks, branding and corporate techniques.

Efficiency

Business law offers corporate owners an efficient way to approach everyday practices. Once a corporate executive learns and understands pertinent laws, signing multiple contracts with similar vendors becomes an easy task. Whether importing merchandise or issuing permission to a new franchise owner, procedures and next steps are immediately apparent.

Disputes

Commercial law also provides a framework for settling disputes between companies. Without a set of procedures and stipulations, it is difficult to assign rights and determine responsibility in business transactions. Business law offers both direction and protection to corporate leaders, particularly during disputes with others in the same jurisdiction.