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The study of law, especially commercial law, is far too important to leave to just the lawyers. Students studying for careers in business and management need to be familiar with at least the major features of the Business Law landscape.
Statutes such as the Trade Practices Act, the Corporations Act and recent reforms to employment law are just a few examples of how the law impacts upon starting and running a business.
From time to time the media runs stories of disasters in business. Environmental catastrophes, the Insurance crisis caused by the collapse of HIH, the One Tel disaster, the damage to the Canterbury (Rugby) Football club’s brand due to off-field misbehaviour, stock market collapses due to poor lending practices are just a few of the areas where the law, and its close associate, ethics, have important perspectives to contribute.
In business the law is everywhere- influencing the choice of both the initial and subsequent structure of the business, staffing matters, advertising and marketing matters and how much tax you have to pay because eof the decisions you have made.
The lack of legal awareness and the ability to spot potential legal issues and compliance and risk management issues in time can mean disaster for a business.
More optimistically, measures taken to put oneself in a good legal position can often mean your firm is in a good negotiating position in making various deals and if all goes well you will keep away from the courts and the stress and interrupted productivity that going to court can involve.
Major legal issues will always require formal legal advice from lawyers, but business is dynamic, and major disasters can arise due to ignorance or disregard of the relevant laws that effect your business.
Usually this failure greatly increases the expense and decreases the effectiveness of professional legal advice once you get around to obtaining it. Any communication you have with lawyers will also be facilitated by an informed awareness of the relevant legal issues related to the business you own or work for.
You will be better able to understand and evaluate the advice you receive and to factor legal issues in to your overall business planning. In some businesses the trend is also for multi-disciplinary practices where a knowledge of a number of core subjects contributing to business culture is expected.
In this respect a study of Business law contributes to your general business and management awareness and literacy. The court cases studied offer insights into different ways of structuring and doing business, and make you aware of the mistakes-both business and commercial-that you should avoid.
It also makes you aware of your rights as it is not only consumers who are ripped off by poor business practices. A rival’s (illegal) exclusive dealing or price fixing practices can lock you out of markets and a competitor’s deceptive advertising practices can steal your customers. Indeed, most major consumer protection cases are actually brought by businesses that realise that a rival’s sharp practices hurts both customers and firms that are doing the right thing.
Businesses can vary in size from large transnational corporations through to various forms of small businesses, through to owner –operated businesses that may provide goods and /or services to just one other business.
All of these relationships are regulated by law and ignorance of the relevant law can harm your position, and, in the event of basic mistakes, cost jobs or even the loss of the business.
Studying business law at University is not intended to make you lawyers but to improve your expertise in “business health” and business and management decision making.
Studying law subjects also helps you improve your general problem solving and negotiating skills, help you to improve your skills in identifying and preventing or at least resolving key issues and problems, and generally contributing to make you the rounded business professional.
Some of the business law units you learn are required units for careers in accountancy or other financial service or management careers.
Other units are elective units to help equip you for the modern world of fierce competition, e-commerce, internationalisation, globalisation, and focussed customer services.
The most suitable elective units to choose will often depend on your emerging career interests and opportunities.
By John Carmichael and Wes Obst, Deakin School of Law.