What is Law? There are many different interpretations of the definition of law depending on where it is being interpreted. According to the Oxford Business English Dictionary (2008), law is “the whole system of rules that everyone in a country or society must obey”. This is general definition. Law is not only a system of rules but it also contains a contextual framework such as: human law, divine law, natural law, scientific law and also moral law. Each contextual framework has its own role and origin and there are rules and codes of conduct that also have law-like characteristics.
In terms of business law, Kimuli (1994) discusses its role of “guiding, regulating and controlling behaviour, conduct, activities, transactions and relations” in Papua New Guinea. In relation to the mentioned sentence law is “a tool of social control; acquires significance from – and in turn – influence social contents and forces (Ghai and Regan, 1992); a product of society; and influences how that society develops”, (Cox, 2004). On the topic of how law is a product of society and influences how that society develops, there are two law systems that are either a convergence or clash within the society. These two law systems are the western legal system and customary law.
According to Cox, “...custom and western law have often been falsely compared, and that this false comparison largely occurred on the basis of the prevailing legal theories at the time”. However, despite the false comparison between the two they have certain characteristics that differentiate them from each other.
Western legal system is simply law introduced to the country by former colonial power, during the colonial period. In other words western law is introduced law. However, Aleck (1990) put it slightly differently when he asserted that it is all the “operative mechanisms, processes and institution” that give effect to the jural values of a society....