Difficulty: ★★★ | High-yield focus: Learn the definition of law, the 4 primary sources of business law in Nepal, and criminal vs civil law. Key exam mastery: Master judicial precedent (stare decisis) under Supreme Court of Nepal rulings and international commercial treaties.
Part 1: Core Concepts (2 Marks)
- Business Law (★): The branch of civil law that governs the rights, relations, and conduct of persons, partnerships, and corporate enterprises engaged in commerce, trade, sales, and industry.
- Precedent (Stare Decisis) (★): A judicial principle established in a previous legal case that is either binding on or persuasive for a court when deciding subsequent cases with similar issues or facts (under Article 128 of the Constitution of Nepal, Supreme Court rulings are binding law).
- Legislation (Statute Law): Formal written laws enacted by the sovereign legislative parliament (Federal Parliament of Nepal) and authenticated by the President.
Part 2: Structural Frameworks (10 Marks)
Hierarchy of Sources of Business Law in Nepal
- The Constitution of Nepal (Supreme Law):
- Sets fundamental rights: Freedom to practice any profession, trade, business (Article 17); Right to property (Article 25).
- Statutory Acts of Parliament:
- Muluki Civil Code 2074 (Part V: Contract Law), Companies Act 2063, Labour Act 2074, Industrial Enterprises Act 2076, Consumer Protection Act 2075.
- Delegated Legislation (Rules, Regulations, Directives):
- Directives issued by regulatory authorities (Nepal Rastra Bank, SEBON, Insurance Authority).
- Judicial Precedents (Nepal Kanoon Patrika - NKP):
- Authoritative landmark interpretations by the Supreme Court of Nepal resolving statutory ambiguities.
- Customs and Usages of Trade:
- Long-standing, reasonable, continuous, and universally accepted commercial practices.
Part 3: Distinction Tables
| Dimension | Civil Law (Commercial Law) | Criminal Law |
|---|---|---|
| Primary Objective | Redress private wrongs; compensate injured party (Restitution). | Punish social offenses; maintain public peace and deterrence. |
| Litigation Parties | Aggrieved individual/firm (Plaintiff) vs Defendant. | State (Government of Nepal / Prosecution) vs Accused. |
| Burden of Proof | Preponderance of probabilities ( |
Beyond all reasonable doubt (highest evidential standard). |
| Typical Remedies | Monetary damages, specific performance, injunctions. | Imprisonment, criminal fines, asset confiscation. |
Part 4: Worked Problems & Exam Traps
Solved Archetype: Analyzing Sources of Business Law (5 Marks) (★)
Problem (TU Past Board): A commercial bank refuses to honor a trade credit draft citing an outdated local merchant custom. The supplier cites Section 504 of the Muluki Civil Code 2074. Which legal source prevails, and why?
Solution:
- Prevailing Source: Statutory Legislation (Muluki Civil Code 2074).
- Legal Rationale:
- In the Nepalese legal hierarchy, statutory acts enacted by the legislature strictly override uncodified customs and mercantile usages.
- For a custom to have force of law, it must not contradict any written constitutional or statutory provision. Because Section 504 specifically governs the transaction, the statutory code prevails conclusively over the custom.
Students lose marks here because they argue that ancient business customs always supersede statutory legislation in merchant banking, failing to cite constitutional hierarchy.