Business Law and Commercial Law Lesson Note
Learning Objectives
This SS3 COMMERCE lesson note covers Business Law and Commercial Law for First Term, Week 1.
Lesson Note
Learning Objectives
i. By the end of the lesson, students should be able to:
ii. Define business law and commercial law.
iii. State and explain the branches of commercial law.
iv. Define a contract and explain the law of contract.
v. Identify and explain the types of contracts.
vi. State the essential elements of a valid contract.
vii. Explain hire purchase and sale of goods.
DEFINITION
1. BUSINESS LAW
Meaning of Business Law
Business law refers to the body of rules and regulations that governs business activities and relationships between individuals, firms, companies, consumers and government.
2. BRANCHES OF COMMERCIAL LAW
Commercial law is the aspect of law concerned with business and commercial transactions.
The major branches include of commercial law:
i. Law of tort
This deal with injury caused to a person by other individuals or companies
ii. property law: this law deals with the ownership and use of property
iii. contract and commercial laws: deals with matters that involves contract among people
iv. family law: govern the legal aspect of the family such as the rules of adoption , marriage divorce
v. corporate law: deals with business and stake holders
3. CONTRACT
Meaning of a Contract
A contract is an agreement between two or more parties which is intended to be enforced by law
Example:
If A agrees to sell a laptop to B for ₦200,000 and B agrees to buy it, the agreement may constitute a contract if all legal requirements are satisfied.
*Law of Contract
The law of contract is the body of legal rules that governs the formation, validity, performance and termination of contracts.
4. TYPES OF CONTRACT
i. Valid Contract
A valid contract is one that satisfies all the legal requirements necessary for it to be enforceable.
ii. Void Contract
A void contract has no legal effect and cannot generally be enforced by law.
iii. Voidable Contract
A voidable contract is valid until the party entitled to avoid it chooses to cancel it.
iv. Express Contract
This is a contract in which the terms are clearly stated, either orally or in writing.
Example: A written agreement to sell a house.
v. Implied Contract
This is a contract in which the terms are inferred from the conduct or circumstances of the parties.
vi. Bilateral Contract
This is a contract in which both parties make promises to each other.
Example: A agrees to sell a phone and B promises to pay the agreed price.
5. CLASSIFICATION OF CONTACT
Contract can be classified into formal and informal
Contract of deed: they are promises written on paper signed sealed and delivered
Contract e record: these are obligations imposed by the court they are not true contract but contract which are acknowledged before a law court
INFORMAL CONTRACT
Are contract which must possess all the essential characteristics of a valid contract
6. ESSENTIAL ELEMENTS OF A CONTRACT
i. Offer
An offer is a definite proposal made by one party to another indicating willingness to enter into a contract on specified terms.
ii. Acceptance
Acceptance is the unconditional agreement to the terms of an offer.
iii. Consideration
Consideration is something of value exchanged between the parties to a contract.
Example: Money paid for goods is consideration for the goods.
iv. Intention to Create Legal Relations
The parties must intend that their agreement should create legal obligations
v. Genuine Consent
The parties must enter the contract freely, without factors such as fraud, undue influence, misrepresentation or duress affecting their consent.
7. HIRE PURCHASE
Meaning of Hire Purchase
Hire purchase is a system of acquiring goods in which the buyer takes possession of the goods immediately but pays for them by instalments,
9. SALE OF GOODS
Meaning of Sale of Goods
A sale of goods is a contract in which the seller transfers or agrees to transfer ownership of goods to the buyer for a monetary consideration called the price.
10. AGENCY
Meaning of Agency
Agency is a legal relationship in which one person, called an agent, is authorised to act on behalf of another person, called the principal, in dealing with third parties
Evaluation
OBJECTIVES QUESTIONS
1. What is business law?
A. Law governing only government workers
B. Rules and regulations governing business activities
C. Rules governing family relationships
D. Rules governing sporting activities
2. A contract is best defined as:
A. A social relationship between friends
B. An agreement that creates legally enforceable rights and obligations
C. A casual promise between people
D. A business advertisement
3. The law of contract deals mainly with:
A. Formation and enforcement of agreements
B. Marriage ceremonies
C. Criminal offences only
D. Election procedures
4. Which of the following is an essential element of a valid contract?
A. Friendship
B. Offer
C. Advertisement
D. Competition
5. Acceptance in a contract means:
A. Rejecting an offer
B. Changing the terms of an offer
C. Unconditionally agreeing to an offer
D. Ignoring an offer
6. Consideration in a contract refers to:
A. Something of value exchanged between the parties
B. A person's opinion about the contract
C. The place where the contract is signed
D. The age of the parties
7. Which of the following is NOT an essential element of a contract?
A. Offer
B. Acceptance
C. Consideration
D. Friendship
8. A contract in which both parties make promises to each other is called:
A. Unilateral contract
B. Bilateral contract
C. Void contract
D. Implied contract
9. A contract whose terms are clearly stated orally or in writing is known as:
A. Express contract
B. Implied contract
C. Void contract
D. Unilateral contract
10. A contract in which the terms are inferred from the conduct or circumstances of the parties is called:
A. Express contract
B. Bilateral contract
C. Implied contract
D. Voidable contract
Theory Questions
What is commercial laws
List and explain the classification of contract
List four essential elements of a contract