Podcast transcript
How business law works
Dr Lola Akin Ojelabi
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Transcript
- Matt Smith
Hello there and welcome to a La Trobe University podcast. I'm your host Matt Smith and my guest today is Dr Lola Akin Ojelabi, a senior lecturer at the La Trobe Law School. She’ll be discussing business law with me today and if you’re interested in this you might also want to track down the Introduction to Business Law, which is a course she’ll be teaching at La Trobe University on iTunes U.
- Lola Akin Ojelabi
Business law is a law about business, simply, and it’s about the rules, the regulations, the obligations and the rights of business people, so if A and D decide to start a business, there are rules, there are obligations, there are rights that they have under the law. And when we talk about the law, we’re talking about statutory provisions, which is legislation as well as common law. So it’s about the rights, obligations and duties of persons who are decided to enter into a business relationship.
It’s also about the relationship between business owners or persons carrying on business and their clients or customers, because we have a consumer protection aspect of legislation as well, so business law is about all those things, simply the rights, duties, obligations of persons who are in a business relationship.
- Matt Smith
How does it differ from other forms of law then?
- Lola Akin Ojelabi
There are several areas of laws so we can talk about generally, public law and private law. Business law will fall under the private law area of law, and it also differs from of course, criminal law and also the law of negligence which is another area of torts law. So there are different areas of law and business law is about the law that regulates businesses.
- Matt Smith
Is it simply set up uniquely? Do they have a lot in common with each other? Can somebody who practises primarily in business law have a lot to do with other forms of law?
- Lola Akin Ojelabi
Yes, that’s possible. So, for example, when we’re talking about business law and things that say, persons who want to start a business should have regard to, or consider in starting their business or establishing their business, they need to cut across different areas of law. In starting a business you also have to think about insurance law, for example, which is a separate field of law, but there are aspects of it that are well of course, to businesses. They also need to think about torts law, the law of negligence because for example, if you operate a restaurant, you need to be careful. There are risks in carrying on business and so insurance, property law, where do I have my office? Is there going to be a lease? Am I going to buy the property? There are intellectual property issues like copyrights, patents, so business law cuts across various areas of law.
- Matt Smith
It sounds like it might get very complicated quite quickly. Is this a help or a hindrance to somebody who wants to start a business?
- Lola Akin Ojelabi
Well, some people say, well in this business because if you’re for example, work related issues, I want to hire casuals because it means better profit for me, and things like that, people can begin to think that it’s a hindrance, but not necessarily. I think that business law, once you understand why, the purpose of the principles and the rules, then you begin to see how you can those principles to your advantage as a business person. So, for example, you want to establish a business, you know that there are relevant insurance provisions you need to comply to protect yourself, and to protect your customers.
- Matt Smith
And if something goes wrong, that’s going to be a benefit to you, so at that point business law is a good thing.
- Lola Akin Ojelabi
It’s a good thing. And also from contractual principles point of view. You want to say for example, you’re a small business owner, and you receive supplies from other businesses, there are contractual principles that apply, and you can use those principles to protect yourself as a business person. So, it depends on where you’re looking, what angle you’re coming from.
- Matt Smith
How much can laws in business be interpreted? Is there more than one interpretation of a law?
- Lola Akin Ojelabi
There are statutory provisions which are legislative provisions, statutes, acts of parliament. And there are common law case laws as well, so this is law developed through the courts. There are rules of statutory interpretation. I don’t want to make it so complex. So that if it’s a legislative provision, for example, we have the Australian Consumer Law, there are provisions that prohibits misleading or deceptive conduct. If a matter comes before the court, and the subject matter is the particular section or provision of the issue in relation to misleading or deceptive conduct, the court would have to interpret that particular provision in order to arrive at a conclusion. There are rules of statutory interpretation that the courts would need to apply, generally speaking. I mean, the courts would want to interpret statute based on the purpose of the statute, so that the court would ask the question, was the purpose of this statute, and does this interpretation either defeat the purpose or does it enhance the purpose of this statute. So there are three different approaches. We have the literal rule, we have the purposive rule and we have the rule that just takes care of the ambiguities in interpretation. So if the wording of the legislation is ambiguous or you would arrive at an opposite conclusion, then the courts are seen to operate in a manner that would enhance the particular provision.
- Matt Smith
How do you think business law works in Australia compared to other countries?
- Lola Akin Ojelabi
Australia is a common law country. Common law countries are generally countries that have some form of connection to the United Kingdom. Common law also refers to law that developed at that time in England which the expansion of the United Kingdom were taking to other countries, so for example, Australia and some African countries, Canada and the United States. We see common law in that regard. Common law also refers to law that is made by the courts through the judges, and so there are different ways of looking at it, but generally speaking, common law applies in countries that adopted the laws of the United Kingdom.
- Matt Smith
Okay, so business law is going to have a lot in common with a lot of countries.
- Lola Akin Ojelabi
Exactly.
- Matt Smith
Is there other systems of business law out there that you know of that you think work quite well?
- Lola Akin Ojelabi
No, like I said, there are common law countries. There are also countries that are referred to as civil law countries. Most of the time the difference is in the way the courts operate, so rather than going through the adversarial process, where the lawyers go to court and they argue the case and the judge has to look at the evidence and arrive at a conclusion. Most of the time in civil law countries, the judge is more involved in the case and it’s perhaps an enquiry rather than an adversarial process or inquisitorial.
- Matt Smith
Say I wanted to start a business. How much law would I need to be familiar with?
- Lola Akin Ojelabi
Like I said, business law cuts across different areas of law, but if you want to start a business, the first thing is to think about what business do I want to carry on, what’s my business, and then to think about the risks that are involved in carrying on the business, to think about whether you have sufficient capital to start the business, or would you want to borrow money from a bank. Do you want to manage the business yourself? And so on. So there are different areas, and once you start thinking of those things, you’re thinking about for example, if you want to start a company, you’re thinking about law that relates to company, which is Corporations Law. If you’re thinking about the risks, you’re thinking about Insurance Law. If you’re thinking about of course, you would have dealings with people, suppliers, customers, you’re thinking about Contract Law. If you’re thinking about duty of care, and breach of the duty of care, you’re thinking about Torts Law. If you’re thinking about whatever could happen in the business, there are issues for example if it’s a restaurant, you’re thinking of the Food Act and things like that and that could be in breach of any health provision. And of course if you’re going to start a business, you need a property, you need a place so you’re thinking about Property Law and if you’re going to be having patents, you need to think about Intellectual Property Law. So that’s about several areas of law that I've talked about already. So sometimes it’s really very complex and the advice is anyone who wants to start a business should consult a lawyer.
- Matt Smith
Yeah, it definitely doesn’t sound like something that anybody should try to wade into by themselves, especially if they’re intending to build a big business.
- Lola Akin Ojelabi
Exactly. Well again, we talk about the choice of the structure of the business, so you can either start as a sole trader, or you can have a more complex structure, which is a public company, listed on the Stock Exchange and there are different rules that apply to that.
- Matt Smith
You’d have your own lawyer by then.
- Lola Akin Ojelabi
You would, definitely. Yeah, so it’s a bit complex. It’s a different set of considerations if you want to, for example, start a milk bar in your home as compared, with, well a mining business.
- Matt Smith
That was Dr Lola Akin Ojelabi, and don’t forget she’s teaching the Introduction to Business Law, a course at La Trobe University on iTunes U, in Semester 1 of 2013. That’s all the time we have today for the La Trobe University podcast. If you’d like to send any questions, comments or feedback from this podcast, or any other, then send us an email at podcast@latrobe.edu.au.
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