Regulation In Commercial Law?
Businesses are highly regulated, by both state and federal governments, as well as through “private” law or agreements between the parties involved in the transaction that further specify actions and consequences. Any contractual agreement must also be legal under the existing laws and regulations.
Regulations can either be statutory or regulatory. Statutory regulations are created by a legislative body in the government and are codified in law. Regulatory regulations are enacted by various governmental agencies that are tasked with specific oversight of certain aspects of different, specialized types of transactions. The Federal Trade Commission (FTC), which protects consumers, and the FDA, or Food and Drug Administration, which regulates things like food and medicine safety, are examples of governmental agencies, but there are too many to list here.
Commercial law is also subject to common law. When a regulation doesn’t specifically address a novel situation, then the parties need to look beyond regulations to the actual law, state or federal. An example would be laws regarding the growing of hemp or cannabis, or certain types of advertisements on social media. Additionally, the parties must also consider any court decisions, in which judges apply the laws and regulations in existence to a specific issue. The result of that court decision may be considered applicable to future similar situations.
Regulations are constantly under review, laws change, and the different courts make decisions all of the time that have varying levels of applicability. The busy business owner knows it’s important to stay up-to-date on the latest developments in commercial law, but it’s also important to keep the company running profitably!
An experienced commercial lawyer can guide the business owner by determining which laws and regulations are relevant and making sure the business stays compliant in its business operations.
Commercial law also regulates how a business is created, operated and even transferred or terminated. This is done at the state level. The type of business entity formed can create, or reduce, additional taxation and reporting requirements, and the scenario can get even more complex if additional states, or countries, are involved. Also, if it is a family-owned business, there could be issues with succession or legacy planning that are important to consider.
It’s important to have contracts in place that are compliant and that benefit the business. Even if it’s a form contract that the business owner uses frequently, with fill-in blanks, it’s important to have it reviewed to make sure that the user of the contract understands what the obligations of all the parties are and to make sure nothing is missing, out-of-date, or ambiguous.
After having a commercial attorney review the contract, the business owner can be confident and use it over and over again. There should be a complete understanding of the contract and the consequences to each party in using it.
If it’s a new contract, or one presented by the other party, it’s definitely important to have it reviewed and negotiated with the help of a commercial lawyer.
The commercial attorney will help make sure the business is protected, the contract is valid and enforceable, and can identify the risks that are inherent in any contract.
The business owner can make a decision, based on all of the facts, about if the contract will be overall beneficial for the business. Once it’s signed, it’s really hard to change the transaction, so it’s important to negotiate and understand everything before entering the contract, not after.
I hope this information has been helpful. I’m Jenna Zebrowski, and I’m a real estate lease lawyer, but I’m not your lawyer yet. This information is provided not as specific counsel, but as general information to help you make an informed decision about your commercial lease. Remember, hiring a lease lawyer in often much cheaper than getting in a bad business situation. Give me a call if I can help (817) 841-5762.