An overview of commercial laws in India

Saptaparni Raha
Aug 19, 2022
2 min read

Written by Saptaparni Raha, Lawyer

Introduction:

Commercial laws hold the most important position in the legal area. These laws deal with business-to-business and customer-to-business transactions. These are also known as mercantile or trade laws as they deal with the rights and relationships of people involved in merchandise. In other words, commercial laws are used to refer to every law involved with commerce, trade, and business. The main aim of commerce is to transact in products. Therefore, going by these criteria, this law applies to contracts for the sale of things.

The Indian Contract Act, 1872:

When we talk about commercial or business laws, the Indian Contract Act occupies the very first place. This Act came into force on September 1, 1872. It applies to the whole of India except Jammu & Kashmir. This Act has 266 Sections, and its fundamentals take roots from numerous rulings pronounced by the Indian Judiciary under the 1872 Act. There are a few requirements for a legitimate contract like free consent, consideration, competency, etc. These requirements should be followed; otherwise, contracts would be null and void.

The Sale of Goods Act, 1930:

The Sale of Goods Act, 1930 deals with the contracts and agreements involved in the sale of goods. The sale of goods is the most important transaction in India. Being one of the greatest economies and magnificent country, India has to check and safeguard in place to ensure the safety and prosperity of its business. This act defines the terminology related to the sale of goods and the exchange of commodities.

The Indian Partnership Act, 1932:

This act establishes a relationship between two or more parties who agree to share the earnings of a business, either all or merely one or more persons acting for them. A partnership is a legally binding agreement. It is created through a contract or agreement between two or more persons. Such agreements can be written or oral. The partnership is not a result of any operation of law, and it does not allow inheritance.

The Limited Liability Partnership Act, 2008:

According to the Limited Liability Partnership, 2008, an alternative corporate company allows the partners to restrict the liability while incurring low compliance costs. Partners are also allowed to organize their internal structure in the same way a typical partnership does. It is a legal entity and is accountable for the entire amount of legal assets.

Companies Act, 2013:

Due to the changes in the domestic and international landscape, the Indian Government chose to amend the Companies Act 1956 and bring a new act in 2013. This act discusses the definition and characteristics of a company and fundamentally transformed India's corporate regulations by introducing several ideas.

Arbitration and Conciliation Act, 1996:

Arbitration and Conciliation procedures are controlled by this act. It aims to consolidate and reform the laws regarding domestic and international commercial arbitration and foreign award enforcement in India.

Conclusion:

In India, all commercial transactions, operations etc., are governed by commercial laws. This is the reason why commercial laws are critical for the fair, lucrative operations of every enterprise for sectors like commerce and economy.

References:

Harman Juneja. (September 2, 2021). Commercial law: Setting the business framework for businesses in every society. retrieved from https://blog.ipleaders.in/commercial-law-setting-framework-businesses-every-society/