Chapter1Introduction2LegalFramework

1

Chap 1

INTRODUCTION TO LEGALFRAMEWORK

2

Means/device to regulate the economic and social behavior of society

Laws are required in society to regulate the behaviour of the individual, to correspond with what is acceptable to the majority of individuals,

Law also works to preserve our freedom, enabling free enterprise and providing a means to settle disputes amicably.

The law is a set of legal rules that governs the way members of a society act towards one another.

Business law-shapes commercial enterprise

1: WHAT IS LAW ?

3

Without law, life and business would become a matter of

survival, not only of the fittest but also of the most ruthless.

Laws are required in society to regulate the behaviour of the individual, to correspond with what is acceptable to the majority of individuals,

Law is the potential tool of social change. In fact law and society are complementary. No society can exist without law. It is essential for up keeping of peace in the society.

NEED FOR LAW

Cont.

> Oxford Dictionary:

The system of rules which aparticular country orcommunity recognizes asregulating the actions of itsmembers and which it may enforce by the impositionpenalties.

Source: Oxford dictionary.Copyright lecture notes prepared by Miss

Fadhilah binti AbdulGhani

10

Cont.

> Sir John Salmond(1862-1924):

The body of principlesrecognized and applied by thestate injustice.(body of rules enforced by the state)

the administration of

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. 11

6

John Austin – Another exponent of law

His book, “ The Province of Jurisprudent Determined” describes law as a command set by a superior being to an inferior being and enforce by sanctions(punishments)

The superior being is the stateThe inferior being is the individual

Sanctions are wide and include imprisonment, fines, damages, injuctions and decrees of specific performance

7

Law is defined both by Article 160(2) of the Federal Constitution 1957 and Item (43C) of section 2(1) of the Interpretation and General Clauses Ordinance 1948 to include :a)Written lawb)Common lawc)Any custom law in the Federation

In Malaysia 2 types of constitution involves : Federal Constitution State Constitution ( Undang-Undang Tubuh Kerajaan Negeri)

A. WRITTEN LAW

1. Federal Constitution:--

Supreme law of MalaysiaProvides the powers ofFederal & StateGovernmentsProvides fundamental

the

-rights of individual

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011. 19

Cont.

2. State Constitution:- Regulates State Governments

- Contains provisions derived from the Federal Constitution

8th schedule of

3. Legislation:

- enacted by Parliament and the state assemblies

••

Act: laws made after 1957Ordinances: - laws made 1946-1957

- laws in Sarawak

Source: Lee Mei Pheng & Ivan Jeron Detta, Commercial law, Oxford Fajar, 2011.

20

10

LAW IN RELATION TO JUSTICEAims to maintain justice in society

Justice- an abstract idea of right and wrong, fairness and equality

Law attempts to present what society believes is right or fair.

However, in its application to a particular set of circumstances, a law may not always appear to be just

For eg Under section 378 of Penal Code of Malaysia, theft is punishable by imprisonment or a fine or both

Law appears to be just : thieves must be punishedBut when a destitute man steals to feed his starving children- the same law appear to be unjust

When society evolveds, legal system should evolve as well

11

LAW and ETHICSEthics- moral standards and beliefsEthics is about what is right and what ought to be, not simply accepting what is

Law and ethics, are often related particularly in the area of business law

Although business often use legal standards to carry out their activities and decision-making, businesses also adopt codes of ethics/conduct to guide employers and employees when considering ethical issues during decision-making process

Eg : bankers are guided by BNM/GP 7 ( Code of Ethics issues by BNM- sets the minimum standards required in the respective bank’s code of conduct

12

Some of the legal rules that are relevant to business law which have ethical considerations :

a) Assumption that all parties will exercise good faith when entering into contract

b) Web issues such as privacy and cyber-squatting (registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark belonging to someone else)

c) IP considerstaions : coypyright, patents, designs, trademarks, use of confidential information and passing-off (have not registered TM but can sues someone who uses your TM on their goods and services)

d) Restrictive trade practicese) Consumer protectionf) Regulation of directors under company lawg) Principle of uberrimae fidei (each party will exercise the

utmost good faith towards the other party when entering into the contract) as applied in insurance law

h) Aspects of employment and industrial law which impose obligations on employers and in relation to anti-discrimination, occupational health and safety, minimum wages and conditions, and insolvency while employees are expected to exercise a duty of fidelity

13

RULE OF LAW

-laws should conform to a minimum standard of fairness in both content and procedure-formulated in the late 19th century by eminent Oxford academic lawyer, Professor Dicey-it’s the heart of our present legal systemIt involves 3 propositions La)No person must be punished except for a breach

of law.-means a person should be able to know whether what they may want to do is lawful or unlawful. It also recognizes the law as the highest authority in societyb) All persons are equal before law irrespective of status or positionc) The rights or freedoms of citizens are enforceable in the courts

14

LAW, THE STATE AND THE CONSTITUTION

-Law in Malaysiaa) Malaysia consists of Peninsular Malaysia, Sabah and Sarawak is

one political unit but it is not governed by the same set of lawsb) 2 important links that unite the 2 parts of Malaysia- the

Parliament and the Federal Court. Parliament can and does legislate (make) for the whole country. Federal Court acts as a final court of appeal for the whole country

-What is a “ State”?Legal systems are ad ministered almost entirely ont eh basis of the political unit known as the state.

• International purpose- Malaysia is one state• Within Malaysia 13 states – all the state in Peninsular, Sabah,

Sarawak and FT of KL, Labuan and Putrajaya

Each state has a government and has rules that lay down who shall govern and how.

15

LAW in Malaysia

We have written constitution called Federal Constitution.

Federal Constitution declares itself to be the supreme law of the Federation

Article 4(1) of the Federal Constitution states:

4. Supreme Law of Federation(1)This Constitution is the supreme law of the Federation and any

law passed after Merdeka Day which is inconsistent with this Constitution shall, to the extent of the inconsistency be void

The Federal Constitution confers legislative power to the Federal Parliament and the state legislatures. Article 73 reads :

73. Extent of Federal and State LawsIn exercising the legislative powers conferred on it by this Constitution :a) Parliament may make laws for the whole/any part of the

Federation and laws having effect outside as well as within the Federation

b) The legislature of a state may make laws for whole of any part of the state

16

Parliament make laws for the whole of Malaysia.

Article 84 of the Federal Constitution provides that Parliament may make laws with any respect to any matters listed in the Federal List or the Concurrent List

Refer pg 6-7

State covers:a) Islamic law and personal and family law of Muslims-offences

by Muslimsb) Landc) Agriculture and forestryd) Local governmente) Local servicesf) State works and waterg) Machinery of the state governmenth) State holidaysi) Offences against state lawj) Inquiries for state purposesk) Indemnityl) Turtles and riverine fishing

17

Classification of Law

Legal system of the world are classified into 3 main typesa) Civil law- Derived from Roman law- Complete code of written laws whose primary source of law is

legislation- Inquisitorial in form- Forms the basis of most Western European countries, Japan,

former colonies of France, Spain, Portugal, Indonesia, Vietnam and parts of Africa

b) Common law-is derived form case law ( or predecent) and statute (law made by Congress/Parliament)-it is accusatorial in form with an emphasis on remedies-forms the basis of English law and cange found in US, as well as Commonwealth nations : Australia, Canada, Singapore, Malaysia, NZ, parts of Africa, India and Pakistan

c) Socialist law-based on Karl Marx (eradication of capitalism and elimination of private ownership)

18

Malaysian Legal System-system inherited from England and similar system found in British colonies : Australia, US, Canada, NZ and Singapore-is a common law system where legal principles are developed by judges through case-law.

CLASSIFICATION OF LAW

LAW

PUBLIC LAW

RELATIONSHIP BETWEEN

INDIVIDUAL AND STATE

CRIMINAL LAW

CONSTITUTIONAL LAW

PRIVATE LAW

RELATIONSHIP BETWEEN

STATES

PRIVATE

PUBLIC

INTERNATIONAL LAW

RELATIONSHIP BETWEEN

INDIVIDUALS

CONTRACT LAW

TRUSTS

PUBLIC LAW

It governs the relationship between individuals and the state

i) Constitutional Law

Lays down the right of indv. In the state.

Deals with questions such as supremacy of Parliament & rights of citizens. It also covers areas dealing with state and federal powers

ii) Criminal Law

Codifies the various offences committed by indv. against the state.

e.g murder, cheating, criminal beach of trust, forgery, causing grevious hurt, theft, robbery and counterfeiting.

Essential elemnts of crime are : actus reus( wrongful act) and mens rea ( guilty mind)

INTERNATIONAL LAW

A body of law which is composed to lay down principles and rules of conduct which the States feel themselves need to observes in regulating the relationship with each other.

i) Public International Law

The law that prevails between Statesii) Private International Law

Consists of the rules that guide a judge when the laws of more than one country are involve in a case.

PRIVATE LAW

Concerned with matters that affect the rights and duties of individuals amongst themselves.

i)Contract( agreements)

Essential of a contract

a) Offer

b) Acceptance of offer

c) Both parties making the contract must have the capacity to contract

d) There must be no mistake, misrepresentation or undue influence

e) The object must be lawful

f) Both parties must intend to enter into legal relations

g) There must be consideration ( Chapter 4)

23

ii)Tort (civil wrong) a civil wrong or wrongful act, whether intentional or accidental, from which injury occurs to another. Torts include all negligence cases as well as intentional wrongs which result in harm. Therefore tort law is one of the major areas of law (along with contract, real property and criminal law) and results in more civil litigation than any other category. Some intentional torts may also be crimes, such as assault, battery, wrongful death, fraud, conversion (a euphemism for theft) and trespass on property and form the basis for a lawsuit for damages by the injured party. Defamation, including intentionally telling harmful untruths about another-either by print or broadcast (libel) or orally (slander)-is a tort and used to be a crime as well.

CONT’

24

iii) Trust- an equitable obligation binding a person ( who is called a trustee) to deal with property over which he as control ( trust property) for the benefit of persons ( called beneficiaries).

CONT

32

Substantive law defines or creates the rights and obligations of persons and governments.

Procedural law provides the steps one must follow in order to avail oneself of one’s legal rights or enforce

another’s legal obligations.

SUBSTANTIVE VS. PROCEDURAL

33

Legal cases are identified by a “legal citation” (or a “cite”) as the example below:

Federal Express Corp. v. Federal Espresso, Inc., 201

F.3d 168 (2nd Cir. 2000).

READING & UNDERSTANDING CASE LAW

Title: First Party is Plaintiff, second party is Defendant. The parties are either

italicized or underlined.

34

Legal cases are identified by a “legal citation” (or a “cite”) as the example below:

Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168 (2nd

Cir. 2000).

READING &

UNDERSTANDING CASE LAW [2]

Case is found in volume 201 of the 3rd Federal Supplement,

page 168.

35

Legal cases are identified by a “legal citation” (or a “cite”) as the example below:

Federal Express Corp. v. Federal Espresso, Inc., 201 F.3d 168 (2nd

Cir. 2000).

READING &

UNDERSTANDING CASE LAW [3]

Case was decided by the United States Second Circuit Court of Appeals

in 2000.

36

Laws regulate all areas of business.

Factors business owners must consider:

Is contract enforceable?

Contract for goods vs. services?

What happens if someone breaches the contract?

Dispute Resolution?

BUSINESS PERSONS AND THE LAW

37

THANK YOU