Company Law - level 5

  1. What is the definition of Law?
    'Law is a formal mechanism of social control', Business Law 5th Edition, David Kelly, Ann Holmes andRuth Hayward

    Human society has developed over thousands of years from a primitive culture where the very survival ofthe species was at stake to the complex, diverse and dominating species that humans are today.Much of the success of this development can be attributable to rules and regulations laid down bysociety.

    With a little further study the need for such rules becomes clear. In the early days of humanexistence, survival was achieved by working as a group. There was a fine line between life and death, forexample the stealing of food from another group member could eventually result in starvation or death ofthe victim.Social order, created by rules is at the foundation of the society that we see today.

    The framework that was created influences how individuals interact and how businesses operate. In other words, it providessocial control.The framework of social control can be viewed as having two aspects:

    • 1. Formal control mechanisms
    • 2. Informal control mechanisms

    Law is a formal control mechanism.

    It provides a structure for dealing with and resolving disputes thatmay arise, as well as providing some deterrent to those wishing to disrupt social order.

    Informal mechanisms include ethical and moral guidance. These are 'norms' or behavioural expectationsthat society has developed over time through its culture.

    • Such mechanisms have little formal structure toorganise, control or to punish – such matters are dealt with informally by pressure from other individualsor groups.
  2. What are the types of Law? (Hint 4 main types)
    The English legal system distinguishes several different types of law.

    • 1. Common law and equity
    • 2. Statute law
    • 3. Private law and public law
    • 4. Criminal law and civil law 

  3. What is Common Law?
    Common law and equity

    The earliest element of the English legal system is common law, a system of rigid rules laid down by royal courts following the Norman conquest.

    Application of law was by judges who travelled around the countryto keep the King's peace and judgements often resulted in harsh consequences.The judges actually made the law by amalgamating local customary laws into one 'law of the land'

    Remedies under common law are monetary, and are known as damages.However, there are times when money is not a suitable remedy.

    For example, you have agreed to buy aunique painting from an art dealer. Should the dealer at the last minute sell the painting to someone else,damages are unlikely to be acceptable, after all you wanted that painting.
  4. What is Equity?
    Equity was developed two or three hundred years after common law as a system to resolve disputes where damages are not a suitable remedy and to introduce fairness into the legal system.
  5. What is Statute Law?
    Whilst the judiciary is responsible for the creation of common law, Parliament is responsible for statute law.

    Statute law is usually made in areas so complicated or unique that suitable common law alternativesare unlikely, or would take an unacceptable length of time, to develop – company law is one example of this.

    As is parking regulations issued by local councils
  6. What is Private Law?
    Most of the law that you will be studying is private law. That is law which deals with relationships and interactions between businesses, and private individuals, groups or organisations.

    The state provides a framework for dealing with disputes and for enforcing decisions, but it is for individuals to handle matters between themselves.

    For example, the Sale of Goods Act 1979 regulates the sale of goods. It provides rules that must be adhered to when making a sale. Should any dispute arise thatis covered by the act, it is up to the parties to resolve the matter themselves using rules laid down by thelegislation, the state does not get involved.
  7. What is Public Law?
    Public law is mainly concerned with government and the operation and functions of public organisations such as councils and local authorities.

    It will not be of great interest to you in your studies of corporatelaw, however examples of public law can be found in planning rules that must be adhered to when building or expanding offices.

    A key distinction between public and private law is who takes up the case when a wrong is committed.

    The state prosecutes the alleged perpetrator under public law, whereas we have already seen, under private law it is for the individual concerned to take action.
  8. What is Criminal or Civil Law?
    It is often the criminal law about which the general public has a clearer perception and keener interest. Some of the high profile criminal cases at London's Old Bailey are deemed extremely newsworthy.

    Civil law, on the other hand, receives less overt media coverage. However, every time you buy or sell goods, or start or finish an employment contract, your actions, and those of the other party, are governed by civil law
Card Set
Company Law - level 5
Level 5, Company Law - hull University - 2012/2013