The law makes it possible for people to do business with each other in a way that is fair and
reliable. The law gives us confidence that we can trust other people and their promises, so we
can invest in them. And the law protects us from being cheated or exploited by others.
The law regulates economic activity in many ways:
It sets out rules governing how businesses operate, including what they must provide consumers
(such as goods or services) and how they must treat employees.
It sets out rules governing how people can buy, sell and trade with each other (such as through
contracts).
It imposes taxes on businesses; these taxes help pay for public goods such as roads and schools.
The law is a foundation of society and the economy. Without laws, people would be free to do
whatever they want, including steal, murder and rape. That’s why there are laws against those
things.
But there are also other reasons why the law is important in business. Here are some examples:
To protect property rights
If you own a business, you have the right to keep your profits and property (such as buildings).
The government will protect your right to own these things. If someone tries to take them from
you without your permission, the government can punish them for doing so.
To prevent fraud or deceitful practices
Businesses aren’t allowed to lie or trick people into buying their products by misleading them
about how good they really are or what their benefits really are. If they do this, they can get into
legal trouble with the government or other companies who have been affected by their actions.
To protect consumers from dangerous products and services
The government wants to make sure that products and services being sold in stores or online
don’t hurt anyone when they use them — especially consumers who buy them because they
trust what they’re getting will be safe for them to use. This is why there are laws against selling
unsafe products like medicine
The law is the backbone of the economy.
