The Impact of Commercial Law on Business and Society

Businesspeople and commercial law are two elements that cannot go separately. When doing business, commercial law is always present and has to be taken into account in order to fulfill the law and have legal effects. But now, how is commercial law developed in business? What is the impact on it? Is it positive? Or negative? All those questions will answer an important matter regarding business and law, two keys that have a huge impact in nowadays society and life.

Defining Commercial Law

First of all, it is needed to define what commercial law is in order to understand which are the matters and issues that are affected. It is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.

Protecting Business Innovations

Moreover, we should differentiate the two main factors in business. Business people and customers. Law protects and rewards business innovative ideas and provides the creators a term for the exploitation of their work, the industrial property rights and the intellectual property rights. The copyright or author right is related with artistic and scientific work, while the industrial right has to do more with commerce. We could say that patents, know-how, trademarks, etc. are very positive elements of law in order to protect businesspeople. This legal issues would not exist if there was not competition in the market. Regarding customers, there is laws that protects them, but still they are not very effective because customers are sometimes almost obliged by monopolies to do things as they want (gasoline or telephonic companies are some examples).

Regulating Competition

Competition has positive effects (low prices, more choice) and it has to be regulated in some way, it is difficult but there is some principles and laws that the EU try to manage. For example, the agreements between companies that restrict competition or the abuse of a dominant position. These are situations that without the commercial law could not be regulated or controlled in some way, which would lead to harm the market significantly. Entities like World Trade organization or Comisión general de los mercados y de a competencia are in charge of this.

Importance of Contracts

We could, in some way, say that the relations between competitors, and also between businesspeople and customers are expressed by contracts. Agreements between two or more parties to create rights and obligations. Without contracts we would not have evidence, and therefore lack of legal effects regarding those rights and obligations mentioned.

Conclusion

While a mercantile advice costs money and a priori constitutes an indirect cost for companies, the truth is that you can end up assuming savings because you confer greater protection on the market (competition with other companies, disputes with consumers and even allows you to maximize opportunities within the law).

To sum up, I consider commercial law essential to regulate the markets, protect business people and control the competition. Even though, there are some points to which law cannot arrive, without all the elements mentioned above, business would be a chaos plenty of inequalities. Excessive regulation hinders competitiveness because it does not allow the free market. The lack of regulation prevents the free market due to lack of protection.