CHAPTER ONE
OVERVIEW OF LAW-GENERAL INTRODUCTION
Introduction
In this chapter, we will consider the definitions given to the ‘law’. Next, we shall discuss the
basic features of law. There are different theories with regard to the concept of law. Considering
those theories would help us to understand the concept of law. Thus, we will be considering
these theories. It is not only law that regulates human conducts; but also there are other social
norms that shape human behavior. Here, discussion has also made regarding the difference
between law and other social norms. Laws in general and Business law in particular is not
without function; it is promulgated to perform certain purposes.
Meaning of Law and Schools of Thought
There have been and will continue to be different definitions of law. Various renowned scholars
and jurists have so far been making their own assertions of what law is, and almost none of them
concur on the definition of law.
For instance, the Greek philosopher Aristotle for instance thought of law as a “pledge
that citizens of a state will do justice to one another”.
Plato asserted that law was a form of social control.
Cicero, a Roman philosopher, believed law was the agreement of reason and nature, the
distinction between the just and the unjust.
The British legal scholar Sir William Blackstone described law as “a rule of civil
conduct prescribed by the supreme power in a state, commanding what is right and
prohibiting what is wrong”.
The famous US Supreme Court Justice Oliver Wendell Holmes on his part contended
that law was a set of rules that allowed one to predict how a court would resolve a
particular dispute – “the prophesies of what the courts will do in fact and nothing
more pretentious …”.
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The most important schools of thought are:-
1. The Natural Law School (theory)
2. The Positivists (Imperatives) School of thought
3. Realists School of thought (Legal Realism)
The Natural Law Theory
It is the oldest of all schools of thought. It originated in ancient Greek. It was developed in
Greece by philosophers like Heraclitus, Socrates, Plato and Aristotle.
According to the philosophy of followers of this school of thought there are two sets of laws that
govern the relation of the human society. These are Natural law which is eternal and
unchangeable and the man made law which differs in place and time. The natural law is a set of
rules that are given by super natural power- God- in the form of justice and morality and it is to
serve as a standard against which man made laws are to be tested for their validity. Natural law
which id eternal and unchangeable and whose content is justice and morality is once handed by
God and the power of men in making laws is to discover these principles of justice and morality
by the dictate of reason and logic. The man made law , although it differs from one country to
another and from time to time due to different conception of justice and morality of societies at
different times and places, must follow universal principles of morality, justice and reason.
The Positivist Theory
According to this school of thought, law is the command of the sovereign. Law has three
characteristic features:
It is a type of command;
It is laid down by a political sovereign; and
It is enforceable by sanction.
Commands are expression of desire given by superiors to inferiors. A sovereign is a political
superior whom the bulk of the society obeys habitually, and who does himself habitually obey
some other person or persons. This theory stresses that law is only law if it is effective, and this
can only be by being generally obeyed. Without general obedience, the lawmaker's laws are as
empty as a language no longer spoken or as money longer in use. For this school of thought, law
is something for the citizen to obey not as he pleases but whether he likes it or not.
This is done through sanctions. Sanctions then are a logical part of the concept of law. They
consist of the penalties inflicted on the orders of the sovereign for the violation of the law.
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Legal Realism Theory
This theory has its basis in the common law legal system in which the decision previously given
by a court is considered as a precedent to be used as a law to decide future similar case. Realist
theory of law is interested in the actual working of the law. Accordingly, rules not put to use to
solve practical cases are not laws but merely existing as dead words and it get life only when
applied in reality. It believes that the lawmaker is the judge and not the legislative body.
It has been said positivism regards law as the expression of the will of the state through the
medium of the legislature or the lawmaker.
Like the positivists, these theorists also consider law as the command of the sovereign, but their
sovereign is not parliament or legislature instead the judge. In other words, for the realists the
sovereign is the court. Law is administered and applied by the courts. Thus, the realists define
law as the actual practice of the courts or what the judge decides in court. Law is the decision of
the courts and not the legislation that is considered. They argue what the courts will do in fact
cannot be deduced from the rules of law in the textbooks since it the courts to say what those
words mean. The courts put life into the dead words of the law.
Basic Features of Law
i) Generality
The most obvious feature of law is its generality. Law is a general statement regarding a possible
human conduct. Any valid legal norm is applicable to all the subjects in the author’s territory.
Law is not meant to shape the behavior of a certain category of persons and leave others; every
one is subject to the application of any duty existed law, saving extremely exceptional
circumstances (such as exemption from legal liability to a certain degree because of immunity
provisions). For instance, laws passed by the Ethiopian legislator (the House of Peoples
Representatives) demands all Ethiopians to comply with it, irrespective of race, language,
religion, social status, sex and political outlook. The generality of laws also implies that a law is
applicable to all similar cases, and it does not leave others and govern some.
ii) Normativity
Another basic feature of law is its normative aspect. This accords with the philosophical
discourse on the dichotomy between the “is” and the “ought”. The characterization of law as a
normative statement refers to the “ought” aspect of the discourse, the statement of what should
be rather than what is.
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Law is not a factual statement (description is not in the nature of law); it is rather a prescriptive
tool which purports to shape human behavior in the future. In other word, law does not simply
describe or explain the human conduct it is made to control. It is created with the intention to
create some norms in the society. Laws create norms by allowing, ordering or prohibiting the
social behavior. It is interested in stating what ought to be done or what must not be done in the
future. The law describes a certain human behavior and takes position towards that behavior.
Based on the position that they take towards specific behavior legal norms or laws are classified
into:
A. Permissive norm: - such rules allow or permit persons to do certain act. I.e. it is the
choice of the individual whether to do such behavior. No obligation is imposed.
B. Directive norm: - this type of legal norms command individuals to something. It imposes
a positive obligation. Refrain from doing such acts results in penalty.
C. Prohibitive norm: - it prohibits a person from acting a certain behavior. It states what
individuals must not do. Refrain or abstain is required here. There is punishment if
individuals performed these acts.
D. Rewarding norm: - these kind of legal norm entitle a person to receive some benefits in
return for the useful activity that an individual performed.
iii) Establishment in Permanence
The coming into force of law presupposes, at least presumably, its indefinite existence in the
future. It is unusual to fix a time-limit for the application of law. A frequently changing law
creates social instability and more prone to losing legitimacy. This does not mean, however, that
laws live forever. They have to be reasonably flexible to accommodate changing social realities.
iv) Intimacy with Human Behavior and State
Law is a social norm and its ultimate concern is regulation of the social behavior of human
beings. The claim of law would naturally be made by men with respect to or as against each
other. Law cannot be employed to govern relationships of other animate or inanimate things as
among themselves; it is not concerned with a claim between humans and other things either.
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v) Strongly Institutionalized
We have said above that law is backed by an established system of a state. The state is known for
its strong institutionalization and this provides the law with institutionalized system of
enforcement. The state is constituted by centrally established institutions of legislature, executive
and judiciary entrusted with the tasks of law making, law enforcement and interpretation of laws
respectively. The combined operation of these organs sanctions the law by a strong force.
The Functions of Law
The simple and common sense response you might make is perhaps that law is an instrumentality
for maintaining order and security. Imagine what would happened if there were no law to curtail
the conduct of gang of robbers breaking into your abode and taking away the property you have
gained over time through exerting your energy and investing your money. Think also of a
reckless conduct that sets fire to a building in which you run your business affairs which results
in a looting of essential documents. I hope you openly unwelcome such a situation. In the
absence of law, persons might excessively and arbitrarily behave and you would also be
discouraged to undertake proper business activities for fear of the risk of losing it some day. So,
laws, especially criminal laws, would become indispensable tools to stop unwelcoming conducts
and to create peace and stability for proper life of the society.
It is important to note that haw delves into almost every social interaction. It regulates the way a
particular relationship is to be created, maintained and broken. Law is not limited to mere
maintenance of peace and order; it also steps in to govern detailed individual interactions. Laws
of family for instance are concerned with the regulation of the institution of marriage and
matrimonial affairs. Contract and property laws administer contractual bonds and property
relationships of individuals respectively. Business laws, on the other hand, intend to shape
behavior in commercial transactions and ensure the interaction is conducted in healthy and
effective manner.
Law protects citizens from arbitrary and excessive governmental actions. That body of law
which sets out structure of the state and the relationship the government of that state would have
with citizens is referred to as constitutional law. The powers and functions of the government are
usually defined by a constitution, and this law restrains undue governmental encroachment in the
affairs of subjects.
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Human rights provisions are typical examples in this regard – that they call upon the government
to either act or refrain from acting in the protection and enforcement of human rights. Law of
constitution can function in such a way that the various organs constituting the government
discharge their tasks in an atmosphere of harmony and transparency. The principle of checks and
balances incorporated into most republican constitutions reveals the possibility of review of
actions or decisions of the legislative, executive or judicial bodies by one another.
Laws are also instrumental in fighting harmful traditional practices (HTPS). Early marriage has
been the widespread practice in many parts of Ethiopia. Marriage is a big affair upon which
family, the fundamental unit of the society, is found. Yet, such purpose is served only if spouses
are psychologically and biologically developed enough. Ignorant of such fact, most Ethiopian
parents force their teenage children (especially girls) to marry while they are in fragile mental
and physical conditions, exposing them to various economic, social and biological problems. The
same is true of Female Genital Mutilation (FGM). The law is a typical tool in reducing, and
ultimately eradicating, these harmful traditional practices.
Law also pays a prominent role in improving the life of the society through the encouragement of
innovation and creativity. Law encourages individuals to engage in innovative tasks by granting
them rights to exclusive enjoyment of their inventions via issuing patents, copyrights, trademarks
and the like. These mechanisms bestow inventors and authors of new ideas with economic and
moral benefits, thereby helping society to make use if better means of life.
Classifications of Laws
Public versus Private Law
Public law addresses the relationship between persons and their government, and between
various governments. It regulates the legal relationship in which a state as a public power
involved. They are public in the sense that the interest of the public at large is at stake as
represented by the government. It determines the organization and scope of public powers and
their exercise in relation to those who are governed. It defines a person’s rights and obligations
in relation to government. Furthermore, it also describes the various divisions of government and
their powers.
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Private law governs direct dealings between persons. In other terms, private law regulates the
relationship between two or more private individuals. When persons deal or affect other persons,
such as in a contractual relationship, the law governing these relationships is classified as private
law. Private law may ultimately advance societal interests as a whole, but its immediate concern
is with individual transactions that affect the legal positions of the transacting persons. Agency,
law of commercial paper, trade and business organizations, sales, torts, insurance and any other
area of business law is essentially classified as private law.
Substantive and Procedural Law
Substantive law includes all laws that define, describe, regulate and create legal rights and
obligations. This body of law establishes acts and situations producing effect at law. For
instance, a rule stating that promises are enforced only when each party has received something
of value from the other party is part of substantive law. So, too, a rule stating that a person who
has injured another through negligence must pay damages. Most of the bodies of law we have
highlighted above, both public and private, are substantive laws. Substantive law tells us what
our rights are.
Procedural law sets out the methods of enforcing the rights established by substantive law. It is
the method or system or means by which claims of persons are adjudicated and by which rights,
privileges and duties are determined and enforced by the appropriate legal tribunal.
Civil versus Criminal Law
Civil law is concerned with the duties that exist between persons or between citizens and their
government (the latter as a ordinary legal person)
Criminal law, in contrast to civil law, is concerned with wrongs committed against the public as
a whole. It is a part of the law which characterizes certain kinds of wrongdoing as offences
against the state, not necessarily violating any private rights, and punishable by the State.
Municipal/Domestic and International Law:
Municipal/Domestic law is the aspect of law which emanates from and has effect on members of
a specific state.
International law, on the other hand, is the law between countries. It regulates the relationship
between different independent countries and is usually in the form of treaties, international
customs etc. Examples of International law include the Universal Declaration of Human
Rights and the African Charter on Human and People’s Rights.
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Business Law
“Business law” refers to the whole regulatory environment in which individuals or
‘organizations’ engage regularly for the purpose of securing commercial returns. It is a legal
regime with the object of shaping the behavior of “actors” in business transactions. There is a
vested interest for the law, like any other human relationships it claims to regulate, to step into
the work-for-profit areas in order to ensure that commercial interactions are conducted in a
proper manner. The legal regulation of business is even more sensitive because engagement in
business is an extension of a constitutional right to property so that there must be a mechanism of
the law that enables individuals to be shielded against unwelcoming practices that prejudice their
right without of course affecting the rights of others. The law of commerce is indispensable not
only from the view point of individual right to property but also because it constitutes a
fundamental economic unit of a nation’s economic performance and status as a whole. In this
sense, business law makes a huge contribution to the strong economic wellbeing of a state and to
the accompanying betterment of society’s economic position. The legal framework that governs
business activities prescribes the conduct required of business-persons in their commercial life,
and solves business disputes in the ultimate aim of keeping the tranquility of the business
environment.
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