Business Law Lec. 1 PDF

BUSINESS LAW Dr. Mona Mahmoud FIRST SECTION 1- Introduction and Sources of Commercial Law - Definition of the Commercial Law - Commercial law is a private law -Sources of Commercial Law - Aspects of Differentiation between Civil and Commercial Law 2-The Merchant - The Requirement for obtaining...

BUSINESS LAW Dr. Mona Mahmoud FIRST SECTION 1- Introduction and Sources of Commercial Law - Definition of the Commercial Law - Commercial law is a private law -Sources of Commercial Law - Aspects of Differentiation between Civil and Commercial Law 2-The Merchant - The Requirement for obtaining the State of a Merchant - Legal Duties of a Merchant 3- Trademarks. - Definition - Trademark protection according to Egyptian Law Second SECTION Company Law: 1. General partnerships, 2. Limited Partnerships, 3. Silent Partnerships, 4. Partnerships limited by shares, 5. Limited Liability Company, 6. The One-Man Company 7. Joint Stock Company INTRODUCTION AND SOURCES OF COMMERCIAL LAW Definition of commercial Commercial Law is provided in the commercial Code. Law No. 17 of 1999 as the law states the provisions and rules shall apply to: a) Commercial Acts; and, b) Every natural and legal person who acquires the status of a merchant. Thus, commercial law applies to commercial acts which are generally performed by merchants. However, in some cases non merchants carry out commercial acts and consequently commercial law applies to these acts, although they are performed by non- merchants. Commercial Law is the branch of law that governs commercial acts and merchants. Branches of the Law The legal system in Egypt is divided in two main branches as follows: A) Public Law: involves legal relations in which the state is involved as a “Sovereign State” (meaning an entity with special powers) and not as a private person. Public law includes the following branches: Public international law, criminal law, constitutional law and administrative law.  B) Private law: involves relations where the parties act as private persons dealing with equal standing. Private law involves: the law of civil and commercial procedures, maritime law, private international law, and commercial law. Commercial Law is a branch of Private Law. WHY WE NEED TO APPLY COMMERCIAL LAW? FEATURES OF COMMERCIAL TRANSACTION The Egyptian legislator provided distinction between civil and commercial laws. The Egyptian legislator recognized that we need to apply more flexible rules on the commercial activities which are based on swiftness and credit. These features are usually not applicable to civil law transactions. We shall briefly examine these features. A) Swiftness B) Credit Commercial Law is required as commercial acts depending on two elements; swiftness and credit. SWIFTNESS Civil transactions are usually preceded by extensive and lengthy bargaining. This is not the case in commercial transactions which are concluded swiftly without need to many of the formalities associated with civil law. Also, commercial dealings are subject to frequent and do not only involve a single transaction as the case in civil dealings. Accordingly, the rules governing commercial activities involve special provisions to account for the swiftness requirement, such as the flexibility regarding the rules of evidence and non-allowance of judicial grace periods except under special circumstances. We shall deal with these provisions in detail when we speak about aspects of differentiation of commercial law and civil law CREDIT Commercial transactions involve credit that deals are often concluded and payment is often delayed. For instance, a retail merchant buys from a wholesale merchant with credit and usually a bank loan is obtained. Payment is usually affected after the products are sold. The same is true for the wholesaler. Thus, a chain of credit is involved. If one party defaults, the other parties will be affected. Accordingly, special rules exist in commercial law to accommodate the requirement of credit such as bankruptcy, the assumption of solidarity between debtors of a commercial debt and the high commercial interest compared to the rate of interest in civil matters. SOURCES OF COMMERCIAL LAW Every Law has official sources which the judge is obliged to apply and non-official sources (secondary) sources which although the judge is not obliged to apply, it is customary for a judge to consult these sources. Official sources : The judge is required to apply these sources It includes Agreements, Commercial Legislation, Commercial Customs and Commercial Usage and the Civil Law. Secondary sources include Judicial decisions and the doctrine. NOTE THAT: Commercial Law has Official Sources and Secondary sources.  OFFiCIAL SOURCES Official Sources of Commercial Law are sources which the judge is obliged to apply. According to the article 2 of the Commercial Code, the sources of commercial law are as follows: 1. The provisions of the agreement between the parties shall apply to commercial matters. 2. If there is no agreement between the parties, then the laws related to commercial matters shall apply. 3. In the case of neither an agreement or commercial laws found, the judge shall apply the rules of commercial custom and commercial usage. 4. If the above four sources are missing, then the civil law shall finally be applied and governs the act. It must be noted that the commercial Code provided that agreements, commercial customs and commercial usages must not be inconsistent with the public order and morals. AGREEMENT The cardinal rule is that “The contract makes the law of the parties”, meaning that the parties to a contract are free to regulate their contractual relationship as they wish, and the courts have to honor the agreement of the parties However, the agreement of the parties may not contradict the public order or the mandatory provisions of the law: e.g. parties cannot agree to deliver illegal goods. COMMERCIAL LEGISLATION Commercial legislation includes commercial law No. 17 for the year of 1999, and also includes auxiliary commercial legislations to complement the Commercial Code: The other commercial legislation includes: Law No. 82/2002 concerning the protection of Intellectual Property such as patents, trademarks, industrial designs, geographical indications and plant varieties. Law No.55/1951 which regulates trade names. Law No. 159/1981, as amended, which relates to Joint Stock Companies, Partnership Limited by Shares and Limited Liability Companies. Law No. 11/ 1940 concerning the sale and mortgage of trading shops. Law No. 34/1976 concerning the Commercial Register. Law No. 388/1953 concerning Commercial Books. Law No.88/2003 concerning the Central Bank and the Banking Institutions and Currency as amended. Law No. 80/2002 concerning Money Laundry as amended COMMERCIAL CUSTOM Can be defined as the group of rules that have been consistently followed by merchants combined with the belief that these rules are binding. Commercial custom may be general that is followed in the whole territory of the country or local followed in a specific city or region. Commercial custom has played and continues to play in an important role in the development of commercial law. This is especially evident in the field of banking law such as rules relating to documentary credit and letters of guarantee COMMERCIAL USAGE As for commercial usage it is a rule, consistently followed by merchants, but it lacks the binding force attributed to custom. An example of commercial usage is decreasing the price instead of the revocation of the sale contract if the quality of the delivered goods is not conforming to the standards agreed upon or it, they were of lesser quantities. To apply commercial usage, it has to be general meaning it must be common in a certain trade or market, but it does not have to be common in the whole nation. COMPARISON BETWEEN COMMERCIAL CUSTOM AND COMMERCIAL USAGE Commercial Custom Commercial Usage Binding Is not binding Unwritten Should be written - By including it to the agreement. - Interested parties should invoke it. Judges shall apply it on their Judges shall not apply it on Initiatives their initiatives CIVIL LAW We mean the civil code issued in 1948. The provisions of civil law shall be applied in the absence of the previously mentioned Four sources, namely: agreement, commercial legislation, commercial custom, and commercial usage SECONDARY SOURCES First: Judicial Decisions Second: Doctrine (jurisprudence), writings of law professors