1. Introduction to Business
Lecture 5
Introduction to Business
Business law & regulations

2. Law
A standard or rule established by a society to govern the behavior of its members.
Reasons why law was established
Personal, group and organizational disputes
To maintain a standardized way of doing things.
To put everyone of the society into one equal account.

3. The court system
Courts are jurisdictions who make decisions to settle disputes between two parties.
US: specialized court, state court, & federal court.
BD: magistrate court, high court, judge court & supreme court.
Jurisdiction: Is the right, power and authority to interpret and apply laws.

4. The law of contracts
A contract is a legally enforceable, voluntary agreement two or more parties.
Breach of contract: The failure of one party to live up to a contractual agreement.
Consequences can be severe when someone breach the contract. One might loose his land, car or any property if it was mortgaged.

5. Requirements of a contract
Voluntary agreements
Both must agree the terms voluntarily
Consideration
Each must provide something of value to the other, such as money.
Contractual capacity
Each must be in a normal situation.
Minor, mentally handicapped or intoxicated person are not acceptable
Legality
It must not involve any unlawful act.

6. The law of sales
The body of law involving the sale of goods and services for money or on credit.
Express warranty
Oral or written assurances made by the seller regarding a product.
Lifetime warranty, free services, etc.
Implied warranty
Warranty legally imposed on the seller.
The warranty which everyone considers as universal.

7. The law of property Property is what we can own and use.
Real property: Real estate, land, buildings, parks, etc.
Tangible personal property: Physical items like tools, machineries, products, cars, etc.
Intangible personal property: Property represented by a document or written statement. Checks, money orders, stocks, bonds, receipts, etc.

8. Forms of intangible property
Trademark
A name or symbol, registered with the trademark office, that guarantees the owner exclusive rights to its use.
examples Coca-Cola, Microsoft , etc.
Patent
The exclusive right of an inventor to make, use or sell the registered product.
Copyright
Protection of an individual’s exclusive right to publish and sell original written materials.

9. Bankruptcy
Bankruptcy is the legal procedure for individuals or companies that cannot pay their debts.
What happens when a firm goes bankruptcy?
Surrenders to court to release it from financial obligations from the society.
The court sells it’s assets to pay off the creditors as much as possible.
Sometimes, the court orders the bank to provide some flexibility to the firm for paying the debt within a specific period.

10. Government deregulation
The process of reducing government involvement in the regulation of business, by eliminating legal restraints on competition.
Industries which are most affected:
Airlines
Banking
Telecommunications & internet
Automobiles

11. Government taxation What is tax?
A mandatory payment for everyone in the community for the support of government activities.
Revenues from taxes pay national defense, roads, education, medical care, social programs, & for other governmental expenditures.
Categories include personal income tax, goods & service tax (vat), corporate/business income tax, currency transfer tax, import tax, municipal tax, property tax, etc.