Uploaded by Kevin Gundran

Business Law and Obligations and Contract

1. What is law? What are the general divisions of law?
Law is the system of rules which a particular country or community recognizes as
regulating the actions of its members and which it may enforce by the imposition of
penalties. The general divisions of law are the divine law and human law.
By divine law is meant that in which God himself is the legislator who has
promulgated the law.
By human law is meant that which is promulgated by man to regulate human
2. What are the concepts of law? explain each
These includes, right, duty, power, privilege, liability, and immunity.
To understand the concept of 'rights' and 'duties', it is important to understand
the meaning of the term 'legal concept'.
A privilege is a legal rule that protects communications within certain
relationships from compelled disclosure in a court proceeding.
Liability, in law, a broad term including almost every type of duty, obligation,
debt, responsibility, or hazard arising by way of contract, tort, or statute. In most
countries, an individual may be held legally liable to another for acts or
omissions and be required
Legal immunity, or immunity from prosecution, is a legal status wherein an
individual or entity cannot be held liable for a violation of the law, to facilitate
societal aims that outweigh the value of imposing liability in such cases.
3. What are the characteristics of law? Explain the necessity and functions of law.
The characteristics of law are:
It is a rule of conduct – Law tells us what shall be done and what shall not be
done. As rule of human conduct, law takes cognizance of external acts only.
It is obligatory – Law is considered as positive command imposing a duty to
obey and involving a sanction which forces obedience.
It is promulgated by legitimate authority – In a democratic country, like
Philippines, the legitimate or competent authority is the legislature. Under the
constitution, laws called “statutes” are enacted by Congress which is the name
of the legislative branch of our government; local government units are also
empowered to enact ordinances which have the binding force of laws.
It is common observance and benefit – Law is intended by man to serve man.
It regulates the relations of men to maintain harmony in society and to make
order and co-existence possible. Law must, therefore, he observed by all for
the benefit of all.
Necessity and functions of law
What would life be without law? If we can answer this question, we can answer
the more basic question of whether law is necessary. If life without law would
be the same as it is now, obviously law is not necessary. Society comes into
existence because its members could not live without it. The need for internal
order is as constant as the need for external defense. No society can be stable
in which either of these requirements fails to be provided for.
What does law do? It has been said that law secures justice, resolves social
conflict, orders society, protects interests, controls social relations. Life without
basic laws against theft, violence, and destruction would be solitary, nasty,
brutish, and short. Life without other laws such as those regulating traffic,
sanitation, employment, business, redress of harm or of broken agreements,
etc. - would be less orderly, less healthful, less wholesome, etc.
What is our duty as members of society? No society can last and continue
without means of social control, without rules of social order binding on its
members. The sum of such rules as existing in each society, under whatever
forms, is what, in common speech, we understand by law or is also referred to
as the legal system. Since we find law necessary, every citizen should have
some understanding of law and observe it for the common good.
4. What are the sources of law?
The principal sources of law in the Philippines are the Constitution, legislation,
administrative rules and relations, judicial decisions, and customs.
5. Compare law with other means of social control.
There are several basic differences between social control through law and control
through other methods.
Laws are made and administered by the only institutions in society authorized
to act on behalf of the entire citizenry. Churches, for example, act only for their
Only the legal institutions within the society can make rules, regulations, and
orders with which the entire citizenry must comply. The rules, etc., of social and
economic organizations, for example, govern only limited numbers.
People associated with an organization can ordinarily terminate their
relationship and thereby free themselves from the impact of its rules and
regulations. Citizens of a state, however, cannot do this unless they choose to
leave the geographical area in which the state is sovereign.
The sanctions or techniques of control through law are more varied and
complex than the techniques available to organizations such as churches,
labor unions, and political parties. Expulsion is usually the most powerful
technique available to such organizations to secure compliance with their rules,
etc. For the employee, it is the loss of his job.
Aside from imprisonment and deportation, there are many other sanctions
available to the law, including denial or revocation of license, confiscation of
property, imposition of civil liability for certain kind of conduct, dissolution of
organizations, and denial of privileges. A sanction is remedial if the object is
the indemnification of the person who has suffered damages or injury from a
violation of law, and penal if the object is the punishment of the violator; and
Before the law "operates" against an individual, various procedural steps are
required. Thus, the individual must ordinarily be given a hearing and a fair
opportunity to show why he should not, for example, be ordered to pay money
to a claimant, or be deprived of his liberty. Such steps are commonly referred
to as "due process" of law.
Organs of social control other than those provided by law are generally not
required to comply with such procedures in acting against individuals except
when their rules provide therefor.
6. What are the classifications of law?
The methods for classifying law are many. For our purposes, it would be best to
consider the main classifications of law, first, as to its purpose, and second, as to its
As to its purpose:
(A) Substantive law or that portion of the body of law creating defining and
regulating rights and duties which may either be public or private in
character. An example of substantive private law is the law on obligations
and contracts; and
(B) Adjective law or that portion of the body of law prescribing the manner or
procedure by which rights may be enforced or their violations redressed.
Sometimes this is i called remedial law or procedural law. The provision of
law which those actions for the recovery of real property says shall be filed
with the Regional Trial Court of the region where the property or any part
thereof lies, is an example of private adjective law.
Rights and duties are useless unless they can be enforced. It is not enough, therefore,
that the state regulates the rights and duties of all who are subject to the law; it must
also provide legal remedies by which substantive law may be administered. Hence,
the need for adjective law.
The adjective law in the Philippines is governed by the Rules of Court promulgated by
the Supreme Court and by special laws
As to its subject matter:
(A) Public law or the body of legal rules which regulates the rights and duties
arising from the relationship of the state to the people.
An example of public law is criminal law, the law which defines crimes and provides
for their punishment. In legal theory, when a person commits a crime, he violates not
only the right of the individual victim but primarily that of the state because the crime
disturbs the peace and order of the state.
Also included are international law or that law which governs the relations among
nations or states; constitutional law or that which governs the relations between the
state and its citizens; it establishes the fundamental powers of the government;
administrative law or that which governs the methods by which the functions of
administrative authorities are to be performed; and criminal procedure or that branch
of private law which governs the methods of trial and punishment in criminal cases.
(B) Private law or the body of rules which regulates the relations of individuals
with one another for purely private ends. The law on obligations and
contracts comes under this heading because it deals with the rights and
obligations of the contracting parties only. The state, however, is also
involved in private law; it enforces private law but simply as an arbiter and
not as a party.
Included in private law are civil law, commercial or mercantile law, and civil procedure.
Civil procedure is that branch of private law which provides for how private rights may
be enforced.
7. Define law on obligations and contracts.
The law of obligations and contracts is the body of rules which deals with the nature and
sources of obligations and right and duties arising from agreements and the contracts.