CMA Foundation · Fundamentals of Business Laws and Business Communication
Sources of Law for CMA Foundation Paper 1
Sources of law are the places from which a legal system draws its binding rules. In India these include the Constitution, statutes passed by Parliament and State Legislatures, delegated legislation, judicial precedents, customs and usages. To solve MCQs, identify which source the question describes and match it to its key feature.
What this chapter covers
This chapter opens Paper 1. It answers a basic question: what is law, and where do legal rules come from? You first learn what law means and what makes it different from a moral or social rule. Then you see how law is divided into groups, such as public and private law, civil and criminal law, and substantive and procedural law.
The second half deals with the sources of Indian law. You study the Constitution, legislation made by Parliament and State Legislatures, delegated legislation made by authorities under powers given by a statute, judicial precedents, and customs and usages. Other sources such as personal laws and international conventions may also appear. Expect questions that ask you to match a description with a source.
The chapter links to the rest of the paper. Later chapters such as the Indian Contract Act, the Sale of Goods Act and the Companies Act are all legislation. When you know how a statute differs from delegated legislation or a precedent, you read those Acts with more clarity. The vocabulary here is also reused in other chapters.
This is a concept chapter with little calculation, so it is one of the easier places to score in Paper 1. Questions are usually direct: a definition, a classification or a match of term to meaning. Since all 50 questions in the paper carry 2 marks each and there is no negative marking, a few secure marks here help you reach the 40% minimum in the paper. The chapter is also short enough to revise many times, which makes it good value for your time.
Sources of Law: topics in the order to study them
- 1Meaning and Nature of LawStart here because every later topic uses the idea of law as a binding rule backed by the State.
- 2Classification of LawOnce you know what law is, learn the standard pairs such as public and private, civil and criminal, substantive and procedural.
- 3Sources of Indian LawThis gives you the full map of sources before you study each one in detail.
- 4Legislation, Delegated Legislation and PrecedentsThese are the most important and most testable sources, so study them once the map is clear.
- 5Customs, Usages and Other SourcesFinish with the remaining sources, which are easier once you understand how they differ from legislation and precedent.
How to prepare Sources of Law
Treat this as a concept chapter. Aim to understand each idea in your own words, then train on MCQs.
- Read the first topic and write a one-line meaning of law and its main features in your own words.
- Make a short table in your notebook of the paired classifications, with one example for each side.
- List every source of Indian law on one page, and write one defining feature beside each.
- For legislation, delegated legislation and precedents, write what each is, who makes it and how they differ.
- Study customs and usages last, noting what makes a custom valid and how it differs from legislation.
- Solve MCQs topic by topic, and for every wrong answer note which feature you confused.
- On the last day, read only your one-page source map and the quick revision points.
Common mistakes in Sources of Law
Mixing up substantive law and procedural law
Fix: Remember that substantive law gives the right or duty, and procedural law gives the method to enforce it. Attach one example to each.
Confusing legislation with delegated legislation
Fix: Ask who made it. Parliament or a State Legislature means legislation. An authority acting under a power given by a statute means delegated legislation.
Treating a precedent as the same as a statute
Fix: Remember that a precedent comes from court decisions, not from a legislature, yet courts follow it in similar cases.
Assuming any old practice is a valid custom
Fix: Learn the conditions for a valid custom, such as long use and not being against statute or public policy.
Skipping this chapter because it looks theoretical
Fix: Give it short, regular revision. Its questions are direct and can be answered quickly in the exam.
Learning definitions word for word without examples
Fix: Link each term to a simple Indian example so you can recognise it when the MCQ words it differently.
Last-day revision: Sources of Law
- Law is a set of rules of conduct enforced by the State.
- Public law deals with the relation between the State and individuals; private law deals with relations between individuals.
- Criminal law deals with wrongs against society; civil law deals with private rights and remedies.
- Substantive law defines rights and duties; procedural law lays down how they are enforced.
- The Constitution is the supreme source of law in India.
- Legislation is law made by Parliament or a State Legislature.
- Delegated legislation is made by an authority under power given by a statute.
- A judicial precedent is an earlier court decision followed in later similar cases.
- A custom is a long-followed practice that has gained the force of law.
- A custom must not be against statute or public policy to be accepted by courts.
- When a question describes who made a rule, use that to identify the source.
- There is no negative marking, so attempt every question.
Sources of Law practice questions
- Which of the following is generally treated as a source of law in India in addition to legislation, custom and judicial precedent?
- Meena says that a rule becomes law only if it is made by a body with authority and applies uniformly to all persons within its territory. Wh…
- In the context of sources of law, a custom becomes binding as law when it satisfies certain tests. Which of the following is one of the esse…
- A High Court holds that a long-standing local practice in a district allowing a landlord to demand an extra levy from tenants is a binding c…
- Which of the following best describes 'law' in the sense used in a legal system, as distinct from a mere moral rule?
- A local trading community in a market town has for generations followed a practice that goods sold in the grain market are weighed with a de…
- Which of the following is correctly described as substantive law?
- Meera says, 'It is morally wrong to break a promise to a friend, so a court must always punish a person who does so.' Which feature of law s…
Sources of Law in other exams
The same ground in other exams, if you are preparing for more than one or want another angle on it.
Sources of Law: frequently asked questions
Is Sources of Law a difficult chapter for CMA Foundation?
No. It is a concept chapter with no calculation. If you understand the key terms and their differences, most questions can be answered quickly.
What is the difference between legislation and delegated legislation?
Legislation is made directly by Parliament or a State Legislature. Delegated legislation is made by another authority using power that a statute gives it.
How should I prepare Sources of Law for MCQs?
Build a one-page map of the sources with a defining feature for each. Then practise matching-type and definition-type MCQs and note why each wrong option was wrong.
Does this chapter help with other chapters in Paper 1?
Yes. The Contract Act, Sale of Goods Act and Companies Act are all legislation. Knowing how law is made and classified helps you understand how those Acts work.