Business and the law intersect in several ways such that there is the interplay between the two. However, it is the law that affects most aspects of the business by trying to regulate the manner in which business activities are conducted. Some of the areas in which this intersection plays out include torts, intellectual property, employment, and contracts.
Firstly, the law impacts business in various ways. For instance, through the legal principles of tort such as the law of negligence, the law ensures that business people are held responsible for selling defective products. Product liability suits have become common against companies these days, and so are personal obligations of individual owners of business. Further, through intellectual property law, the law impacts business by ensuring that business innovation is protected and that creativity in business is given legal recognition and rewarded (Cahoy, Oswald & Elgar, 2013). This is so in cases where an individual copies another’s business idea without their permission. In such a case, the law intervenes and awards the owner of the IP damages and issues an injunction against the other party. This promotes business growth. Moreover, employment law ensures that the rights of employers and employees are protected and that businesses do not oppress their employees. The law of contract also impacts on business by regulating how people negotiate business deals and agreements in such a way that neither the buyer nor the seller is disadvantaged. Further, according to Hamilton (2004), legal ethics affects business by requiring business organizations to adhere to moral principles and not engage in fraudulent activities. An example of this is the case of the collapse of Enron.
On the other hand, business impacts the law mainly creating new areas which need to be regulated by the law. For example, there are some activities such as gambling and casinos that were previously not controlled by the law, but because of increasing commercial interest in them; the law has to come in to control how they are conducted. Furthermore, according to Jennings (2010), business influences law by providing areas and activities that policy makers and legislators find necessary to regulate for efficiency and protection of the society from harm likely to be caused by such business activities.
References
Cahoy, D.R., & Oswald, L.J. (2013). The changing nature of US patent law and its impact on business strategy. Cheltenham, UK & Northampton, MA: New Horizons in International Business.
Hamilton, N.W. (2004). Understanding the intersection of business and legal ethics. The university of St. Thomas Law Journal, 1(2), 781-790.
Jennings, M.M. (2010). Business: Its Legal, ethical, and global environment. New York: Cengage Learning
