BME 1506 Business Law

Course Code BME 1506
Course Title Business Law
Number of Credits 5
Academic Year 1

The course is designed to provide students with the knowledge and understanding of the fundamental principles of Commercial law relating to commercial sector. The basic principles of commercial law which are vital for day today commercial transactions are incorporated in the syllabus. Along with an introduction to legal system and judiciary in Sri Lanka this preliminary level course includes Contract law, Property law, Delict law, Environmental law, Bills of Exchange, Intellectual property law and Company law.

The course attempts to provide students  with knowledge concerning,

  • The basic legal concepts relating to commercial law.
  • Legal rules and constraints applied to business.
  • Legal issues when making business decisions and how to avoid litigation.

Legal problems in “real-life” scenarios and advice for their solutions.

Upon completion of this course, the students will be able to:

  • Identify and familiar with basic legal principles, rules, regulations and Acts relating to the business environment
  • Minimize and avoid litigations in connection with the business

Apply the knowledge to solve problems in simple situations.

Main Topic Sub Topic No. of Hours
1.      Introduction to the commercial law, legal system and the court system of Sri Lanka 1.1  Definition of Law

1.2  General classification of Legal Subjects

1.3  Legal system of Sri Lanka

1.4  The Court System

1.5  Sources of Business Law

1.6    The Constitution and the Business

1.7     Alternative Dispute Resolution

2        The Law of Contract and Delict(Tort) 2.1    Agreement and the contract

2.2    Requirement of a valid contract

2.3    Formation of a contract

2.4    Operation of a contract

2.5    Terms of a contract

2.6    Termination of a contract

2.7    Remedies

2.8    Contractual obligations and Delictual obligations

2.9    Delict, Criminal act and Breach of contract

2.10   Delict in business law

2.11   Negligence

2.12   Duty of care

2.13    Management and Delict law

2.14    Consumer Affairs Authority Act of 2003

3        The law of agency; 3.1   Formation of agency contract;

3.2   Categories of agents

3.3   Authority of agents

3.4   Contracts made by agents;

3.5   Rights and duties of principal and agent;

3.6   Termination of agency

4        sale of goods contracts;


4.1 Contract of sale;

4.2 Sale and other supply contracts

4.3 Formation of a contract of sale

4.4 Passing of property

4.5 Implied terms and conditions

4.6 Exception clauses

4.7 Remedies of a seller/buyer

5        Insurance law, leasing and Hire purchase 5.1 The importance of insurance

5.2 Definition and explanation of insurance contract

5.3 Classification of insurance

5.4 Insurable interest, utmost good faith, material facts, Non-disclosure

5.5 Meaning of Leasing and Hire purchase

5.6 Benefit of leasing

5.7 Different type of leasing

5.8 Leasing Act

5.9 Hire Purchase and other sales contract

5.10 Rights of the owner

5.11 Consumer Credit Act

6        Law relating to cheques, bills of exchange and promissory notes 6.1 The banker customer relationship

6.2 Comman law privileges of bank

6.3 Advantages of a cheque as means f payments

6.4 Distinction between a cheque and a bill

6.5 Crossing on cheques

6.6 Antedated and post dated cheques                   6.7 Legal restrictions to the payments of cheques by banks                                                                 6.8 Conversion of cheques by collecting banks    6.9 Nomination of beneficiaries in bank account  6.10 Law applicable to credit cards                      6.11 Bills of exchange                                         6.12 Promissory notes

7        Environmental law 7.1 Environment and environmental law

7.2 Areas covered by environmental law

7.3 Environment-a global issue

7.4 National environment Act

7.5 Law cases on the environment

8        Property Law and law relating to intellectual property 8.1 Meaning of Property

8.2 Classification of property

8.3 Real property and personal property

8.4 Fixtures

8.5 Condominiums in property law

8.6 Registration of deeds

8.7 Registration of tittles

8.8 Importance of protection and promotion of intellectual property

8.9 History and background of intellectual property

8.10 Main provisions of intellectual property Act

8.11 Case law on intellectual property


9        Law relating to partnership and Companies 9.1 Definition of a partnership

9.2 Requirement of a partnership

9.3 Comparison  of partnership and limited liability company

9.4 Rights and duties of partners

9.5 Dissolution of partnership

9.6 The concept of corporations

9.7 Companies

9.8  Incorporation

9.9 The veil of incorporation

9.10 Types of companies

9.11 Capital/shares/debentures

9.12 Directors

9.13 Business judgment rule

9.14 Majority rule and minority protections

9.15 Share holders

9.16 Meetings

9.17 Winding up

Mode of Study Lectures, seminars, course manuals, workshops, assignments, self study
Mode of Evaluation: Final examination will be held

Prescribed Legislation

  • Partnership Act of 1890
  • Bills of Exchange Ordinance No. 25 of 1927
  • Sale of Goods Ordinance No. 11 of 1896
  • Industrial Disputes Act No. 43 of 1950
  • Value Added Tax Act No. 14 of 2002
  • Inland Revenue (Amendment) Act No.10 of 2006
  • Finance Leasing Act No. 56 of 2000
  • Consumer Credit Act No.29 of 1982
  • Regulation of Insurance Industry Act No. 43 of 2000
  • Consumer Affairs Authority Act of 2003

Essential Reading:

  • A Textbook of Commercial Law (Business Law)

By Dr. Wickrema Weerasooriya, PIM,     University of Sri Jayawardenapura

Additional Reading:

  • Contract Law by C.G. Weeramanthry
  • Commercial Law by Robert Bradgate, Butterworths, 2000
  • Atiyah, Sale of Goods, 11th ed, 2005 (UK)
  • Fisher, Commercial and Personal Property Law, Butterworths, 1997
  • Law of Contract, Volume I and II by R.K. Bangia
  • E – Resource