Commercial Law

Commercial Law is the body of law concerned with the conduct, rights and relations of persons and businesses engaged in trading. It concerns agreements made between consumers and businesses, the express and implied terms of those agreements, as well as methods of trading and the various types of business structures.

The development of agency, personal property, domestic sales, international commercial transactions, as well as areas of insurance, credit, financing, securities, bills of exchanges, and banking come within the umbrella term of Commercial Law.

Here is what Commercial Law covers:

Advertising Standards

Advertising Standards are set out by the Advertising Standards Authority (ASA), an independent advertising regulator, that covers a wide range of advertisements. When businesses use adverts, they must comply with regulations and procedures put in place by the ASA, or risk legal consequences. For example, advertisements must be legal, honest and decent, and must not cause harm or offence.

Credit Agreements

A Credit Agreement is a contract between a lender and a borrower, in which the terms of a loan are set out. The lender will agree to supply the borrower with credit, for instance, through a credit card, and the contract details the terms on which the borrowed funds are to be repaid to the lender. An interest rate is applied to the borrowed amount, which can build up, the longer the funds are borrowed. Also, some agreements have additional fees attached to them. A fixed term to pay back the borrowed funds at a specific rate of interest is agreed in the contract, and there are consequences for the borrowers' breach of these terms.

Distribution Agreements

A Distribution Agreement is a legal contract between a supplier/manufacturer of a product, and a distributor of that product. The distributor purchases the goods from the supplier, and then resells them to its customers. A Distribution Agreement can be exclusive, non-exclusive, or selective. If exclusive, the supplier is restricted from selling its products to other distributors or others in that same territory. Selective agreements allow the supplier to contract with distributors only if they meet a certain criteria. Non-exclusive agreements give freedom to the supplier to contract with as many distributors as they wish.


E-commerce is the term associated with the buying and selling of products and services over the internet. Transactions made on websites between consumers and businesses, services provided business to business, or even products sold and bought from consumer to consumer, all fall under the concept of e-commerce.

Franchise Agreement

A Franchise Agreement is a legally binding contract between a franchisor and a franchisee, and concerns the transferring of the right to open shops and sell products or services using the franchisor's brand and assets. Essentially, the agreement should set out how the brand can and cannot be used by the franchisee. Franchising is used to expand businesses and make the brand's products and services accessible on a national or international scale.

Hire Purchase Agreement

A Hire Purchase Agreement is a form of borrowing, and involves a consumer hiring a product from a lender for use, in exchange for payment in instalments. Until the consumer has paid the entire value of the product to the lender, they may not sell or dispose of the product without the lender's permission. If payments are not made on time, the lender has the right of repossession of the product.

Joint Ventures

A Joint Venture is a business arrangement between two or more parties, whereby each participant contributes money or resources to achieve a common goal or succeed in a task, such as a new business idea. Each participant is responsible for profits, losses and costs of the venture. If successful, the profits are split among the participants of the joint venture.

Motor Loan Agreements

A Motor Loan Agreement is an agreement between a consumer, lender and vehicle company, whereby the consumer agrees to pay monthly instalments in exchange for exclusive use of a vehicle. The lender then transfers the full price of the vehicle to the car company, and retains ownership of the vehicle until the final payment is made to them, at which time the consumer can choose to make a balloon payment and keep the vehicle, or sell the vehicle.

Trading Licences

A trading licence is a licence legally required by a business in order to commence trading activities. The licence provides legal recognition to the business and permits the activity of buying and selling products or services.

Trading Practices

Trading Practices concern the methods of competition and business procedure that are to be followed when carrying out the activity of trading. Unfair trading practice examples include misleading a consumer or using deception to make a trade, and anti-competitive conduct, business practice which unlawfully reduces competition in the market.

Sale and supply of goods

The Sale and Supply of Goods is governed by the corresponding legislation, which regulates commercial contracts. Through this legislation, implied terms are inserted into commercial contracts for the supply of goods, such as the obligation to ensure that goods are of satisfactory quality and sellable.

Supply of services

The Supplying of Services is regulated by supply of goods and services legislation, concerning the regulation of businesses providing a service (the action of helping or doing work for someone). When supplying a service, a contract is normally drafted, containing both express terms and implied terms, depending on the context of the contractual relationship. The implied terms apply under statute and cannot be excluded.