A source of Business Law means an origin, place, cause, resource or institution from where Business Law emanates and derives its force and validity. Major source of Nepalese Business law is British and Indian Mercantile law it is because India remains British Colony for Hundreds of Years and she enacted a number of laws, rules and regulation for Indian. So, most of the law in India is found to be derived from British Mercantile law. Similarly, India being adjoined to the Nepal from three sides with open border having cultural and religious ties/relations since ancient times, Indian Commercial law has its big impact upon the Nepalese Business Law. A large part of Nepalese Business Law is found to be derived from Indian Commercial Law. Thus Both British Law and Indian Mercantile Law is very big source of Nepalese Business Law.
The source of Business Law may be differ from country to country on the basis of social, political, economic, cultural, religious and geographical situation and environment of the country. Hence the source of Nepalese Business Law can be summarized as follows:
- English Business Law:
English Business Law is major source of Nepalese and Indian Business Law. Following things comes under British Business Law:
a. Common Law of England:
The combination form of custom and usages is called Common Law of England which is established in England as a law since the beginning of 12th Century. Generally courts in England are recognizing Common Law and it is one of the major sources in England.
b. Law of Merchant:
Since the beginning of 14th century, Merchants in England have started to develop Mercantile Law and usages on the basis of mutual conduct and also started to develop Tribunals to settle the disputes on the basis of mutual understanding. Hence, the Law of Merchant is a set of principles established by Courts during course of the settlement of Disputes in the court and collection of rules made by the Merchants during the course of Business Conduct. It is also one of the major sources of Business Law.
c. Principle of Equity:
Equity is principle of justice outside Common Law or Statue Law. It is used to correct laws when it would apply unfairly in special circumstances by the judge. Principle of Equity comes into existence when the Judges have started to deliver justice on the basis of Good Conscience to the person or victims who do not get justice on the basis of Common or Statute Law. Generally Judges delivers justice on the basis of Good Conscience when there is vacuum of law. So it is also important source of law. It is also one of the major sources of law.
d. Statue of Legislature:
The laws enacted by parliament are also one of the major sources of Business law. Parliament can repeal old and enact new law.
2. Custom and Usages:
The custom is the habit or conduct of people established by long usage from time immemorial and recognized as a law by the particular locality or society. In fact large part of Nepalese Business Law is derived from Custom and Usages. In ancient time there were no appropriate rules to regulate the Business. So people made some rules suitable and convenient to them. For example: rules for lending and borrowing of money, buying and selling of goods and properties, transportation of goods from one place to another, providing indemnity and guarantee, Bailment and Pledge of Goods etc. They made different contracts mentioning different terms and conditions which governs the parties to perform their respective duties. Gradually these rules changed into custom and usages and got the legal recognition from the state later. Thus the rules made by ancient businessman for their mutual protection, benefit and convenience became the source of Business Law. But In order to be a valid custom, it must fulfill the elements/certain requirement of Immemorial, continuity, certainty, consistency, conformity with law, reasonableness, compulsion, and peaceful enjoyment.
3. Statutory or Legislative Acts:
The Law made by competent authority or parliament or legislature of the state is called Statutory Act. Legislative Acts are regarded as one of the most important source of Business Law because firstly it involves laying down of legal rules by legislatures which the state recognizes as law and secondly it has the force and authority of the state. In every democratic country there is Legislative body which is entitled to make laws for different activities using lawmaking power of the country. It makes, amend and ratified the laws according to change of time. Legislation is superior to all sources of law. For example: Contract Act 2056, Company Act 2063, Banking Act, Partnership Act, Sale of Goods Act etc.
4. Judicial Decision or Precedent:
A precedent refers to the Judicial Decision made by a court according to the principles of Justice, Equity and good Conscience which contains in itself a principle. Such principle created in the course of verdict of the Business Cases, which fulfill the vacuum of law. Such principles is regarded the law for cases of the same nature and is binding to the subordinate courts. Precedent is also called Judge Made Law or Case Law. Such precedent is also taken as another important source of Business Law.
5. Writings and Opinions of Scholars:
Writings and Opinion of Experts or Jurists are also called Juristic Law because Juristic writings have played important role in the development of Business Law. The opinion of Jurists or experts helps to give proper instruction for Lawmakers where existing law is not sufficient and it also helps the Judges in the course of making Verdict when there is vacuum of the law. So Opinions of Jurist or Legal Experts is regarded one of the important sources of Business law.
6. Commercial Treaties, Agreements & Conventions:
The Treaties, Bilateral and Multilateral Agreements signed between the countries as well as Conventions of the Business Communities for the regulation of their business is also regarded one of the important sources of Modern Business Law. For example: Indo-Nepal Treaty of Transit, BIPPA, WTO, GATT, WTO, EU, SAFTA etc. It determines the right, duty and liabilities of the parties concerned and the Courts give legal recognition to it is as much significant as the Statutory Act.