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. Peacekeeping 2. Checking government power and promoting personal freedom 3. Facilitating planning and the realization of reasonable expectations 4. Promoting economic growth through free competition 5. Promoting social justice 6. 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 Ecommerce Environment, 13th Edition. Retrieved on Apr 24, 2007, from University of Phoenix Resources.