This paper examines the foundational role and functions of law in business and society. It defines law as a system of rules prescribed by controlling authority and analyzes how legal frameworks operate across multiple domains: general social control, business operations (taxation, competition, employment, intellectual property), and the hospitality industry. The paper emphasizes that laws maintain social structure, protect individuals and businesses, resolve disputes, and regulate behavior. Without legal systems, the paper argues, social collapse and commercial dysfunction would follow. The analysis demonstrates why legal literacy is essential for business professionals and citizens alike.
According to Melvin, law is defined as "a body of rules of action or conduct prescribed by controlling authority, and having legal binding force" (2011). The main purpose of law is to govern a society and to control the behavior of individuals. Law can be viewed as a form of social control as it establishes rules and regulations.
Law rules every phase of business. All businesses rely on law to protect their business from lawsuits brought by consumers, vendors, suppliers, and employees. Business law details what a company can and cannot do as well as certain things that must be done. There are laws that control taxation, competition, intellectual property, employment, and environmental concerns (Bushman, 2012).
The law affects how business is formed and structured. Employment laws protect individuals and employers as it defines ways to handle conflicts, provide fair platforms to conduct business, and ensure equal opportunity. For example, the law states that businesses must provide equal opportunity to potential employees during the hiring process. An employee should be hired based on their qualifications and not by their race, gender, or background.
The role of law in society is to maintain social control and create discipline. Laws were created for a society to understand what is acceptable and what is not. Functions of law in society include peacekeeping, promoting personal freedom, regulating government power, promoting economic growth, and protecting society and environment (Vago, 2011). According to Melvin, the federal law is superior to state laws, and if a state law conflicts with a federal law it is not effective (2011).
Without laws, society would have no ethical structure or rules. Without laws to govern the actions of people in society, it is highly likely that all social structure and commerce would collapse (Melvin, 2011). If there are no laws within a society, then there is no control. Without laws, there would be no structure for people to settle disputes. With laws in place to protect individuals, it provides peace of mind, understanding the value of confidentiality, freedom, and security.
Understanding the law in business is important to the hospitality industry. Hospitality law is a legal practice related to the treatment of a person's guests or those who patronize a place of business. Hospitality law is related to the concept of legal liability. It is intended to protect both the business and guests against injury, whether accidental or intentional. Hospitality law does not just involve one area of law. It encompasses a wide variety of practice areas, including contracts, antitrust, and tort law.
Recent spurts of food poisoning cases and increasing awareness of food illnesses have brought hospitality laws to the forefront of public consciousness. Restaurants have a duty to sell food that is suitable for human consumption. Many states have enacted "Truth in Menu" laws governing descriptions of food items on menus to allow customers to make healthier choices and to ensure that the customer receives exactly what they ordered. The federal government also has extensive food regulations that restaurants must abide by, such as warnings regarding trans fats. Restaurants must also protect customers against slips and falls, food poisoning, and other personal injuries.
Although the law can be very complex, it is necessary and it plays a very important role in our everyday lives, especially in business and society. Laws set rules maintaining control within society and establish ethical behavior within businesses and create social boundaries. Without laws, society would be chaotic. Law allows society to prosper by understanding what can and cannot be done, provides acceptable means of resolving disputes, and regulates business standards.
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