Commercial law or business law is a broad body of legal rules that individuals, businesses, merchants and others must follow when they engage in business activities among themselves and with consumers. In general, commercial law governs the rights, conduct and relations of people and businesses involved in trade, sales, merchandizing and commerce.
What is Commercial Law?
In many cases commercial law is seen as a branch of civil law. It can deal with public or private law issues. Commercial law can be defined with varying expansiveness, depending on the situation. But it generally governs the sale of goods and services, leases, security interests, negotiable instruments, contracts of carriage, agent and principal relationships and other elements of commerce. In a broader sense it can also include tax planning, bankruptcy of a business and other related issues. It is useful to see commercial law as a set of rules and guidelines to address legal issues before a lawsuit is initiated, as different from litigation, which refers to legal issues that crop up after a lawsuit has been filed. In other words, commercial law helps with the process of entry into business deals.
What Do Commercial Lawyers Do?
Commercial lawyers help clients negotiate business deals. Drafting contracts, negotiating them and helping their clients enter into business deals is one of the primary jobs of commercial lawyers. These professionals work on a variety of transactions, from advertising arrangements, logistics or warehousing, insurance and day to day manufacture to joint ventures, outsourcing and other areas. They may draw up contracts for complex M&A (mergers and acquisitions) and other financial transactions as well. Commercial lawyers work with a broad spectrum of clients, including local authorities, small and medium businesses, as well as more complex financial transactions. These lawyers have a good understanding of their clients’ business, its structure, current financial strategies, future strategies, relationships with suppliers, customers and partners etc.
Drawing Up A Contract
At the core of modern commercial law is the ability to draw up and negotiate contracts. Only when contracts are in place can buyers and sellers make any transaction. Contracts give each party the guarantee that the other side will honor their bargain. They are a far more formal set of rules agreed upon by both parties, than a proof of goodwill however. It gives involved parties the assurance that if the rules are not met, their terms can be enforced legally. In order for a contract to be created under commercial law, there have to be three elements: an offer made to a party in definite and clear terms, an acceptance of the terms by the other party, and consideration. Consideration refers to the promise of a benefit in return for the acceptance of the offer.
Business law essentially regulates hiring practices, corporate contracts, sale and manufacture of goods etc. There are civil codes in several countries that describe their commercial law in great depth. The United States Congress has the power to regulate commerce across states in the US, and the Uniform Commercial Code has been generally adopted across the country.