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International Law for Business

International Law for Business. 3. Major Western Legal Traditions Arvind Ashta Groupe ESC Dijon-Bourgogne Course presented at American Business School, Paris Groupe IGS 2002 Based largely on: Carolyn Hotchkiss: International Law for Business, McGraw Hill Intnl, 1994. Outline.

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International Law for Business

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  1. International Law for Business 3. Major Western Legal Traditions Arvind Ashta Groupe ESC Dijon-Bourgogne Course presented at American Business School, Paris Groupe IGS 2002 Based largely on: Carolyn Hotchkiss: International Law for Business, McGraw Hill Intnl, 1994 International Law: A. Ashta

  2. Outline • Introduction • Common Law • Canada • Civil Law • West Germany • Socialist Law • Conclusion International Law: A. Ashta

  3. Introduction • Legal tradition: • Different ways of thinking about law. • Underlying attitudes • Law depends on economics: • With collapse of socialist economies, socialist legal tradition my collapse International Law: A. Ashta

  4. Common Law • England and its colonies • US, Canada, Australia, New Zealand, India • Not Scotland • Origin of idea • Travalling judges apply law uniformly • Sources of Common Law • Legislation: blanket rules • Case Law: specific circumstances • Tradition and custom: influential role International Law: A. Ashta

  5. Case Law • Principles deduced from rules • Apply principles to new facts • Ensures legal evolution • Similar disputes – similar results • Precedence • Earlier case from a higher court in same jurisdiction • Earlier cases from same court • Leads to stability • Note: SC of one State: no authority over SC of another State • Legislation over-rides earlier case law International Law: A. Ashta

  6. Canadian Legal System(except Quebec) • Constitution • 1867 BNAA • 1982 Constitution and Charter of Rights and Freedoms • Bicameral Parliament • Commons • Senate PM Cabinet Minister of Justice Commons Judges People International Law: A. Ashta

  7. Canadian Common Law • Case Law • Judge legislates creatively • But only if there are gaps • Otherwise, applies old principles • Legislative Supremacy • Law supercedes previous case law • Governs subsequent cases • Parliament can override the Charter of Rights • Customs and Convnetion • Consistent practice • Royal prerogative (notional) • Through Governor General and Lt. Governors International Law: A. Ashta

  8. Canada • Lawyers • 3 years LL.B. after B.A. • 1 year articles of clerkship • Admission to bar • Regulatory Environment • National and Provincial • Ministers, Councils, Boards, Commissions • Disputed area: Review of Admin. Action • Legislation tries to prohibit courts • Courts try to enter • Contracts • Offer, Acceptance and consideration • Writing (only in some provinces) International Law: A. Ashta

  9. Petrogas v. Westcoast • Facts • P sells gas to W • « take or pay » clause: •  minimum quantity to be paid for • Price control: •  government increases price • Dispute • P: We invested based on contract: W should pay • W: Terms have changed: old contract illegal • Court agrees with W • Unforeseen event (price control) • No provision made for such event • Illegality is neither temporary nor trifle International Law: A. Ashta

  10. Civil Law Tradition • Where • Europe, South America • Some parts of Asia, Middle East • Quebec, Lousiana • Codes • Large comrehensive grouping of statutes • Origin • Romans took their laws with them when they conquoured new land • Justinian Cde (Byznatine) 6th Century (revival 11th century) • National codes: Scandinavia: 17th, 18th century • Napoleonic code (1804) exported by France International Law: A. Ashta

  11. French v. German Codes • Napoleonic Code (1804) • Simplify law: comprehensible to people • Security of Private property • Freedom to contract • Value of traditional family • Germanic Code (1896) • Scientific reasoning to law • More detailed and specific code • Influenced China, Japan, E. and Central Europe International Law: A. Ashta

  12. German Civil Law (1989-90 Extended to E. Germany) • Federal system •  division of political authority •  Two houses • Bundestag: directly elected, elects Chancellor, President (nominal) • Bundesrat: State representatives •  division of legilsative authority •  Competencies • Exclusive federal (defense, foreign affairs) • Concurrent (Crime, Labour, Social Security) • Exclusive State (Education, culture, local) International Law: A. Ashta

  13. Sources of German Law • Legislation (Dominant source) • Customs • Courts role is less important • In absence of law, court looks at customs • Technically, no « precedence » • But judges are influenced by earlier decisions International Law: A. Ashta

  14. German Laws • Public Law: (Individual and State) • Crime • Administration • Tax • Private Law (between persons) • Civil Code (Agency, Contracts, Torts, Property, Family) • Corporate (role of managers, directors) • Labour (social securit, participation) • Commercial Code (Merchants, negotiable instruments, banking, transport, sales) International Law: A. Ashta

  15. System of Courts Federal Level State disputes State Level International Law: A. Ashta

  16. German Legal System • Judges • Inquisitorial System • Commercial courts: 3 members • 2 businessmen + 1 legal person • Decision largely based on written briefs • Lawyers • 3 years, then State exam • 2  years, another State exam • Minmum fees specified by law • Contingent fees not allowed • Notaries • Regulatory Environment • Large administration • East German businesses have to be privatized International Law: A. Ashta

  17. German Contracts • Formation • Offer and acceptance • Offer held to be open for reasonable time • Acceptance effective when received • No need for consideration (gifts enforceable) • For merchants: silence no: Must affirm no! • Performance and Breach • Impossibility • Delay • Positive breach (shipping defective goods) • Doctrine of Good Faith • from IMPOSSIBILITY to IMPRACTICABILITY • Interesting • Lower quality goods, buyer can accept and pay less International Law: A. Ashta

  18. Socialist Legal System • Similarities with Civil Law • Extensive codes • Legislation is primary source • Judiciary is secondary in importance • Differences • Philosophy of transforming society • Each gives according to ability • Each gets according to needs • State ownership of means of production • Collective use of land • Limited private property rights • Centralized decision making and standards International Law: A. Ashta

  19. Post-communism • Socialism collapsing • Some will go towards civil law • Some may go towards islamic law • Reforms • Legalizing private property rights • Use of property • Privatization • Monetary System • Convertibility • Interest rate regulation • Privatization of banks • Investment: Stock exchanges • New Commercial Law: • companies, partnerships, antitrust International Law: A. Ashta

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