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Summary Pages International Business Law to know for the exam
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This document contains all the right pages to know for the course International Business law. The whole book has been split up in the right chapters.

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  • December 29, 2022
  • 123
  • 2021/2022
  • Summary

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  • international business law

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, COMPARATIVE L EGAL SYSTEMS


created a layered legal architecture, the new overlaying the old.”5 The most recent examples can be seen in the
transplantation or reception of Western commercial laws by former Soviet-bloc countries and China as it transi-
tioned from a planned socialist to a market economy. See Chapter 9 on “Emerging Economies: China.” Historically,
the dominance of the civil and common law systems is due to the transmission of their systems through their former
colonial empires throughout the world.
The virtue of comparative law is that it can be used as a method to better understand the evolution of law.
Comparative law is also a powerful tool for reforming law as it provides options used in other systems. Alan
Watson notes that the formal rules being transplanted are subject to interpretation by the courts of the receiving
country. This disconnection between text and context means the rules “may equally operate to different effect in
the two societies, even though they are expressed in apparently similar terms.”6 This is especially the case when
introducing a Western, highly formalized law into a country with non-Western cultural and legal traditions. In
China’s case, cultural tradition is heavily based upon the social and status-based influences of Confucianism7
in which formalized private law has historically played a far lesser role and where cultural norms play a greater
role in business relationships, and where resort to the courts as a means of dispute resolution is disfavored.
One example of this tradition is the Chinese concept of guanxi in which business transactions are regulated by
informal social and status-based relational norms. Guanxi places a great deal of importance on respect and
reputation, and not on the enforcement of formalized contractual rights.
There are two traditional approaches used in comparative law studies—the common core and the better rules
approaches. The first approach, championed by Continental European Scholars, such as Rodolfo Sacco at the
University of Turin, as well as Rudolf Schlesinger at Cornell University in the 1950s and 1960s, analyzed
the commonalities among different legal systems. The second approach analyzes the differences among legal
systems and assesses which of their different rules are the “better” ones. This comparative law methodology seeks
through a comparison of the legal rules and techniques of different jurisdictions the best solutions to legal problems.
The aim is to identify better solutions in foreign legal systems and then to recommend their incorporation into
domestic law.

Major Legal Traditions
This part will focus on the largest or most important legal traditions and legal families—Chinese, Civil, Common,
Hindu, and Islamic. It also reviews the mixed jurisdictions of Scotland and South Africa. It finishes with a dis-
cussion of the idea of an evolving transnational law. It is important to note that the role of law in society and the
role of court systems can be heavily influenced by broader historical and societal practices, known as customary
law. As noted in Chapter 9 and above (discussion of guanxi), despite China’s adoption of Western commercial
laws, old customary practices of status, respect, relationships, and regard for the community persist in how Chinese
view the law and their disdain for litigation (although litigation rates have increased in recent years). Mongolia is
one of the few remaining legal systems that rely primarily on customary law.



Customary Law: As the term implies, customary law is based upon the customs of a community. Common attributes of
customary legal systems include an oral tradition, an organized set of rules regulating social relations, and that members
of the community approve of the rules and customs. Customary law is the basis of or has influenced the present-day laws
in approximately 40 countries, mostly in Africa, but some in the Pacific Islands, Europe, and the Near East. Customary
law is also referred to as “indigenous law” or “folk law.”



Civil Law Tradition
The civil law tradition emanated out of continental Europe and spread throughout the world during the era of
empire and colonialism involving France, Netherlands, Portugal, Spain, and Germany. It is the legal tradition found


293

, LEGAL SYSTEMS, CONTRACT, AND SALES LAW


throughout Europe (except for the United Kingdom and Ireland), most of Africa, South America, and Asia. See
Figure 10.3 on the “Evolution of Civil Law Systems.”
The common law is based upon judge-made or case law, especially in the areas of private law—contracts,
property, and torts, while the civil law is a code-based legal system. The civil law traces its origins to Roman law.
The modern continental European legal systems are far more advanced and comprehensive than the Roman legal
system, but Roman law is still taught in many European law schools. However, Roman law was not directly
adopted into the legal systems of Europe. After the collapse of the Roman Empire in the eastern part of Europe,
Roman law was no longer used except in a few parts of Italy. Instead law was much more rudimentary based upon
local customary, folk, or tribal law. Theses “native” laws, such as the law of Germanic tribes, were mainly
unwritten. It also served to support the Feudal system of land ownership, which bound most of the people (serfs) to
the land. Roman law was “rediscovered’ in the eleventh century.8 This rediscovery of Roman law was at least
partially a reaction to the expansion of Arabic law as the Arabs gained control of much of the Mediterranean Sea,
including Spain. Part of the legal void was filled by the expansion of Catholicism and the use of canon or church
law. Canon law did not replace Roman law, but worked together to replace the local, traditional laws.
The creation of the nation-state and the separation of church and state required a grander and more rational
system of law. Inspired by nationalism and using Roman law as a guiding force, French law emerged in the
sixteenth century, culminating later in the codification of a Civil Code under Napoleon in 1804. It was the
“world’s first national, systematic and rational codification of law.”9 About a century later a more advanced
code developed in Germany with the enactment of the German Civil Code (Bürgerliches Gesetzbuch) of 1900.
The German Civil Code was seen as a highly rational law that continued in service until its replacement by a
revised code in 2002.
The three most important features of the civil law system that distinguishes it from the common law include:
(1) the dominant source of law are codes, usually consisting of a grand Civil Code, along with more specific codes,
such as commercial law codes; (2) judge-controlled investigative form of procedure; (3) rejection of judicial cases
or court decisions as a form of lawmaking; and (4) the importance of legal academics to the lawmaking process in
the enactment of new statutes or in the interpretation of statutes. Under the civil law tradition judges are empowered
to establish or find the facts. This approach, known as the inquisitorial or investigative style of civil or criminal
procedure, places the judge as an active investigator in uncovering the facts of a dispute or prosecution. In contrast,
in the common law, the judge is detached from the fact-finding process, leaving to the lawyers for each side of the
case to present the facts, often through witness testimony, to the court. This system is referred to as the adversarial
system of civil or criminal procedure.
The Napoleonic Code or Code Napoleon, and officially Code civil des Français, was established under
Napoleon I (Napoleon Bonaparte) in 1804. The code forbade privileges based on birth, allowed freedom of reli-
gion, and specified that government appointments should go to the most qualified. The categories of the
Napoleonic Code were not drawn from earlier French laws, but instead from Emperor Justinian’s sixth-century
codification of Roman Law, the Corpus Juris Civilis, and, within it, the Institutes, which divides the law into
persons, things, and actions; likewise, the Napoleonic Code is divided into the laws of persons, property, and
acquisition of property (contracts).
The French Civil Code has influenced the development of the laws of Argentina, Austria, Belgium, Bolivia,
Chile, Colombia, Costa Rica, Croatia, Czech Republic, Democratic Republic of the Congo, Dominican Republic,
Ecuador, Haiti, Lithuania, Netherlands, Slovakia, Spain, and Vietnam.
The German Civil Code has influenced the development of the laws of Denmark, Estonia, Finland, Greece,
Japan, Mongolia, Norway, Serbia, Slovenia, Sweden, Switzerland, Taiwan, and Turkey. The Scandinavian
countries are a unique civil law system with German and purely Scandinavian law influences and are sometimes
categorized as the Scandinavian legal system. German law has also had a strong influence on the development of
modern Chinese law, as well as traditional customary law and Soviet law. Other mixed but primarily civil law
systems include Portuguese Civil Law, which was influenced by the Napoleonic Code and German Civil Code.
Macau, a special administrative region of China, is based on Portuguese Civil Code. There are also a number of
unusual transplantations of foreign laws. For example, Romanian law is based upon the Civil Code of Quebec.


294

, COMPARATIVE L EGAL SYSTEMS




Roman Law




Franco-
Germanic
Romantic




Spain Argentina Austria Dutch Japan Switzerland Scandinavia




Chile Czech Slovakia Turkey Serbia



Figure 10.3 Evolution of Civil Law Systems.



Common Law Tradition
The common law countries are the English-speaking countries of the English Empire and subsequently were part of
the British Commonwealth of Nations. The United States was an exception, having separated from England by way
of a revolution ending with the 1783 Treaty of Paris. Upon its independence, the U.S. adopted the English common
law as the law of the new American states. The American Revolution separated the U.S. from England much earlier
than the other common law countries, and, therefore, U.S. common law has diverged from English law in important
ways. Thus, the two most influential common law systems are the English and American, which are popularly
referred to as Anglo-American law. The other common law countries include: Australia, Bahamas, Bangladesh,
Canada (except for the Province of Quebec), Cyprus, Hong Kong, India, Ireland, Israel (with influences from civil
law and Halakha), Jamaica, Malaysia, Myanmar (formerly Burma), New Zealand, Nigeria, Pakistan (with Islamic
law influences), Singapore (with Islamic or Shari‘a law), and Uganda. See Table 10.1 for a “Comparison of Civil
and Common Law Systems.”
It is interesting to note that Rome controlled most of England for four centuries ending in 410 CE. However,
Roman law had no lasting effect on the development of law directly related to the Roman conquest. After the
collapse of the Roman Empire, there was no uniform system of law; instead, law was found in customary law and
practices mostly at the local level. The common law tradition evolved in England after the Norman Conquest of
1066. William the Conqueror became king after winning the Battle of Hastings in 1066. See Image 10.3 for a sketch
of the “Battle of Hastings.” William the Conqueror centralized the political system, which allowed for the
development of a court system and a more “national” law. The Norman Conquest laid the groundwork for the
beginning of the common law in the early twelfth century.
Landmark events in the development of English law include: (1) Doomsday Book (1086), which catalogued all
land ownership in England, allowing the king to more effectively collect taxes; (2) Magna Carta (1215), signed by
King John, that recognized limitations of the king’s power; (3) Statute of Westminster (1285), which recognized
the writ system and the ability to appeal from the local courts to the royal courts. A writ is an order from a court to
proceed with an action. It is the predecessor to what we know as causes of action (breach of contract, negligence,
trespass, and so forth). However, the writs were narrow, and a party could not pursue a legal action in many cases
since there was no applicable writ. For example, there was no writ for a breach of contract until the writ
of assumpsit, which was an action in tort (harm to person or property), was extended to breach of contract in


295

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