INTRODUCTION: LAW AND THE BUSINESS ENVIRONMENT
Students of accounting may be wondering what a chapter on commercial law is doing in an accounting textbook – perhaps a misprint that should have gone into a law book? Rest assured that this is not the case.
Accounting is mainly concerned with businesses, and businesses in every civilized society are operated under a set of laws we can loosely term ‘commercial law’. These laws prescribe the terms and conditions of various types of business contracts. It also involves situations where there are no specific contracts between parties but legal responsibilities exist, e.g. in case of the tort law of negligence.
Commercial laws set out rules by which, if and when the transacting parties are in dispute, the courts ...