The Roles and Functions of Law in
Business and Society
Introduction
William O. Douglas said, "Common sense often makes good law." Well
that is what laws essentially are, rules and regulations that make sure
common sense is followed. One could even say that laws are enforced
ethics. Laws serve several roles and functions in business and society,
and this paper will discuss those roles and functions.
What is law?
According to Reference.com (2007), law is defined as: "rules of conduct
of any organized society, however simple or small, that are enforced by
threat of punishment if they are violated. Modern law has a wide sweep
and regulates many branches of conduct." Essentially law is the rules
and regulations that aid in governing conduct, handling disputes, and
dealing with criminal actions.
Roles of Law
The law serves many roles in business and society. Where this is most
apparent is in its three classifications:
1. Criminal and Civil Law – Criminal law is the law through which
public commitment of crimes are prosecuted by governing bodies,
whereas civil law is the law through which private parties may bring
lawsuits against one another for real or imagined wrongdoings. That is,
criminal law would deal with the prosecution of a crime such as one
person hitting another with their car, and civil law would deal with the
lawsuit, as the person hit would sue the driver of the car for monetary
compensation.
2. Substantive and Procedural Law – Substantive laws are the social
rights and duties of people, and procedural law are guidelines through
which government bodies or courts deal with breaches in substantive
law. In other words, substantive law would state that hitting someone
with a car and driving off is a crime, while procedural law would define
how the courts could try and sentence in the case.
3. Public and Private Law – Public law is the framework of guidelines
defining the relationship between the government and individuals, and
private law is the guidelines through which individuals or groups
interact with one another. For example, public law has subdivisions that
include constitutional, administrative, and criminal law, whereas private
law would cover such areas as contracts and privately-owned properties.
These three classifications of law affect both business and society,
through not only the guidelines defining what is and is not a crime, but
also through protection for both. The examples above talked about a car
hitting an individual. If it were taken one step further and the car
belonged to a business, there are laws in place safeguarding the
culpability of the business from the incident since though it is a
company car, the company itself was not driving it. Instead the driver
and only the driver would be the one at fault, and the victim would have
only the driver to seek compensation or prosecution against.
Functions of Law
Whether it is corporate, personal, or societal, laws are created to protect
the interests of the masses. According to the textbook, Business Law:
The Ethical, Global, and E-commerce Environment, the most important
functions of law include the following:
1. Peacekeeping2. Checking government power and promoting personal
freedom3. Facilitating planning and the realization of reasonable
expectations 4. Promoting economic growth through free competition5.
Promoting social justice6. Protecting the environment
These functions of law protect the interests of individuals and businesses
through a system of rules, enforced by governing bodies. These systems
of rules, as listed by Reference.com (2007), include the following areas
of law:
Constitutional – provides a framework for creating laws, protecting
human rights, and electing political representatives
Administrative – provides the means by which citizens can challenge
government powers International – regulates the way in which nations
deal with one another, ranging from trade
to environment to military actions Contract – regulates everything from
buying a new computer to selling a business
Property – defines the rules and obligations in renting, buying, or
selling property, whether it is a home, business, or land
Tort – defines the means by which an individual or company can
receive compensation if themselves or their property are damaged or
harmed in some way
Trust – defines the rules applied towards assets such as investments
Criminal – defines the means through which any criminal act can be
prosecuted and sees that
the perpetrator is punished
Conclusion
The roles and functions of law provide rules and guidelines for just
about everything one could encounter, both socially and professionally.
The law provides not only rules for those things that are not acceptable,
but provides the means by which to protect one’s self or challenge
injustices. In a world that is continuously growing through populations
while seemingly shrinking in size, without these rules and regulations
there would be a boom in criminal actions as well as increased atrocities.
While “common sense makes good law”, criminals and the dishonest do
not necessarily have common sense, and it is up to governing bodies to
protect not only the innocents from the criminals, but also to protect the
criminal from themselves.
References
Bushman, M. (2007). The Role and Functions of Law in Business and
Society. Retrieved on Apr 30, 2007, from
http://www.associatedcontent.com/article/139783/the_role_and_functions_of
_law_in_business.html
Mallor, J., Barnes, A., Bowers, L. and Langvardt, A. (2004). Business Law:
The Ethical, Global, and E- commerce Environment, 13th Edition. Retrieved
on Apr 24, 2007, from University of Phoenix Resource.
