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International Law and Business, a Global Introduction Summary CH 1-14
- Instelling
- Universiteit Van Amsterdam (UvA)
Summary of chapter 1 till 14 for the course Business Law and Ethics
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Voorbeeld van de inhoud
Chapter 1Substantive law – is composed of legal rules that define the content of just behavior
Think of these as the general laws that a society must follow such as a speed limit. These are laws that govern
how citizens must act in a society
Formal law – is composed of legal rules that maintain substantive law
Think of these as the procedures or punishments that follow someone violating a law. Formal law enforces the
law and spells out how the laws should ‘work’ in a sense.
o Example: the point system in Morocco for traffic violation. In addition to fines one may lose ‘points’ everytime
they break the law. If they get enough points (new high score!) They can no longer drive within the country.
1.1.2 Public vs Private Law
Public law - the law that regulates the relation between a government and its citizens - enforcement of the law. Such as
traffic codes, etc.
Public formal law – regulates the legal procedures. (aka how the law is to be enforced/regulated in legal practice.
Private law - The law that regulates the relation between citizen or those who act as citizens (legal persons)
Important to note that a company can also
act as a private person. When you steal
apples at the AH because you’re too lazy
to weigh them this violation would fall
under private law.
1.2 The Meaning of Just Behavior
3 Components:
1. Justice is the moral conviction of a
given society expressed in law (codification)
o Justice can be thought of as the moral standards or values that is shared amongst a society. Such as the general
agreement that killing other people is not cool. Important to note that the idea of justice can differ for
individual people because not all people agree that killing people is uncool (I.E Charles Manson.)
2. Opportuness is the expression of effectiveness by a given society in law (modification)
o This is an unclear way of saying that laws should be the efficient and pragmatic. An example of this would be
during the Greece crisis, while they were in debt they lowered salaries and raised the age of retirement. This
was not seen as justice as many Greek people disagreed with these changes, but this was the most pragmatic
way to solve the fact that they were billions of dollars in debt.
3. Legal certainty is the expression of legality in a given society (predict the legal consequences of behavior)
o Fancy way of saying that for something to be considered just behavior the action must first be known to be
illegal, so someone can’t plead ignorance when they commit a crime. Also, important to note, you can
persecute a person for a crime that wasn’t a crime during the time it was committed.
Origin Of Laws:
Natural law – In a natural law approach it is assumed that laws emerge from nature
Pro: Natural law defines the human rights so they are reasonable to imply
Con: Natural law is vulnerable to perspective and therefore due to legal uncertainty
o Problematic because in 1940 Germany the Nazi’s thought it was natural to assume that Jewish people were
inferior and it became codified in their law (Nuremburg Laws.) If you are familiar with history, this didn’t turn
out too well.
Positivist Law - In a positivist law approach, it is assumed that law comes forth from codification (being written down
and formalized)
, Pro: Protection of people from extreme understandings of natural law
Con: Written law is always behind on reality
o Also lack of generalizability. Positivist laws are extremely specific, so though the law may be clearly understood,
it cannot be generalized to other situations where the slight differences in the wording of the law making it
inapplicable. Thus codified laws should be generalizable by making the wording open to different situations
instead of just one.
Legal Sources: (ranked from legal
positivism to natural law)
1. Codified Stands
2. Application of Law
3. Legal writings and teaching
4. Religious Writings and
Teachings
5. Customary Law
6. Legal Principles
Codified Standards: written rules produced by a legislator
Essentially just written laws. Important that there is room for interpretation and a certain flexibility, so the
codified standards can be applied in various cases
Legal positivists assume that the codification of legal rules is the ultimate source of law
Basis of civil law which will be discussed in latter chapters 😊
International treaty is a contract between states who consider themselves bound to its content relative to each other
Either Bilateral (2 countries) or Multilateral (more than 2 countries)
Need to Signed and ratified. Signing is done by a representative of the state or country. Ratification happens when
the congress/legislation approves the treaty following the signing sof the treaty.
o Monism: Treaty enacted immediately. Laws conflicting new treaty are immediately invalid as the treaty is now
the new law.
o Dualism: Laws are first transformed so that they are congruent with the new laws set forth by the treaty.
Application of Law: The legal standard needs to be concretized to a specific case – this asks for interpretation
Fancy way of saying that laws are enacted on the basis of precedents or former court rulings. High courts may rule
in a certain way for a case, their ruling then becomes the basis for which future decisions need to be based upon.
o Stare decisis is a legal principle in which courts have to follow the legal reasoning as applied in previous
cases. (what I just explained above.) Lower courts must rule in the same way that higher courts once did.
Basis of common law - will be discussed in later chapters. (Predominantly Anglo- Saxon countries)
Legal Writings and Teachings: Scholars as experts will comment on legal developments or collect and structuralize legal
information
Legal decisions can be based upon pre-existing legal writings and teachings. This was the case for a major Canadian
Supreme court decision.
Religious Writings and Readings: law can be based upon religious beliefs/values
Non secular – make laws based on religion
Secular – separation of church and state. (not based on religion)
Most common = Sharia law (based on teachings of the Quran.)
Customary Law: In this case, a written standard is not the source but an established pratice, accepted as a source of law
by its users
, Usus – people can reasonably expect the application of this legal practice, for it has become a sort of a tradition
Opinio iuris sive necessitates – a legal custom can only be a valid source of law when those who are involved with
its application are of the opinion that the custom should indeed be a legal rule
Essentially laws are based upon the customs of the society, was once common in African tribes.
Legal Principle: general value that applies in law
A general value would be something like that the general agreement that torturing other people is indeed not cool.
ius cogens – fundamental right
o universally binding legal principles
Chapter 2 Comparative Law and legal systems
Goal of the chapter is to explain the purpose of comparative law and then looks at its application. Then It will look at the
legal families used through out the world. Finally it will offer explanation on how to law comparison is actually done.
2.1 The Purpose of Comparative Law
Comparative law dates back to ancient Greece but hasn’t been prominent since until the 1900 Congress for Comparative
Law brought it back to the forefront for academic studies in law. The author is saddened because comparative law is
mostly reserved and utilized by PHDs and academia rather than actually used in practice.
According to Zweigert & Koetz, comparative law has five main purposes:
1. Gaining of Knowledge
2. Evaluating the better law
3. Substantiate the application of law
4. Improve legal education
5. Unification of law
These will be discussed in more detail below and as usual with this book it repeats it self countless times in each section
so for simplicity sake I often repeat along with it. Key Takeaway – All 5 purposes are interdependent and thus have
significant overlap in achieving each.
2.1.1 Gaining of Knowledge
By using comparative law (looking at laws across different countries and societies) one is able to broaden their scope of
what law is and better be able to understand the purpose and potential of law. It applies to business because if you can
understand how laws are different and see the implications the differences have on similar scenarios one is better able
to determine the cost of conducting business in a country compare to others. KeyTakeaway – This section just rambles
about how the Dutch and Belgians are different but basically keeps repeating that you can be smarter if you try to find
the differences between countries legal systems.
2.1.2 Evaluating the better law
Comparative law attempts to determine which law is the best (and thus superior). This is down by first gaining the
knowledge of the laws of each country, and then evaluating (with methods not discussed) which is better. Legislative
bodies often look to ally or similar nations to see how their laws are before passing a law regarding a similar topic. This is
because they can see how different versions of a law impacted each society and then decide what best works before
passing the bill.
Businesses conduct a DESTEP analysis which the last P stands for “politics and legal aspects.” It is very important to
overlook the potential implications a nations legal and political environment could have on the potential costs and
benefits of conducting business in a country.
2.1.3 Substantiate the application of law
Before applying law governments and courts will often compare the law with similar nations to see how the implement
the law so they can best understand what needs to be done to most effectively implement the law.
,An Example is the former states of the British Commonwealth which all have similar legal systems. When one country
wants to implement a new law it’s best bet is to look at one of the other former member states and see how (if they
have a similar law) they implemented it.
2.1.4 Improve Legal Education
Comparative law serves to broaden the horizons and understanding of law students. This helps the student to “crawl out
of his shell” and better be able to determine his/her own view point on ethics and legal perspective. If one doesn’t
practice comparing law their opinion will be heavily influenced by their local legal system and political environment.
Second comparative law is excellent when applied by international businesses looking to start operations in a new
country. (again, to be able to see the costs or benefits related to the legal system)
For example, in the US liability insurance under it’s common law system will be much higher than in the French civil law
system.
2.1.5 The Unification of law
KeyTakeaway- Just lowering trade barriers isn’t enough to insure effective international trade. If laws are very different
than the cost of international trade goes way up. The rules of the game need to be leveled and by using comparative
law, nations are more likely to choose to structure and create laws that are similar to the best examples of a law
regarding whatever topic. Nations may go even farther and make a formal unification of various laws such as in the EU
as a means to prevent costs due to legal difference when conducting business in multiple member states.
2.2 Macro Comparison: Legal Families
Legal comparison is done at the macro level.
Macro comparison is the activity in which the main characteristics of legal systems are compared.
A legal system is a coherent collective of legal rules in which the same hierarchy of legal sources applies, mostly
determined by the boundaries of a state (please note a state could be a national government, a zone such as the EU or
a province or state like California).
Macro Comparison is a good starting point when conducting a comparative law analysis as it lets you get to see the
broad similarities and differences between states before delving into the finer details. In many cases it seems that a legal
system overlaps with the territories of a state due to similar backgrounds of the citizens of the state. An example where
this is not the case is Hong Kong and China where Hong Kong and it’s people are completely different in their economic
and cultural values compared to mainland China.
People who study and conduct comparative law are given the silly name of “Comparists.” Notice words lack of
acknowledgement for the word. These people work to divide legal systems into sub groups called legal families.
A legal family is a group of legal systems that share the same basic characteristics in law, including at similar hierarchy
of legal rules.
The term legal family has been contested by many because it is considered to rigid to describe law because many legal
systems have aspects of multiple families in them. Law is thus considered a flexible study object and is thus the reason
some Comparists prefer to use the term “legal culture”
2.2.1 Common Law Systems
A common law system is case driven. This means that
it’s the interpretations and decisions by judges that
primarily determines the law and not the legislature. This
means common law places emphasis on the procedural
matters of law. Written standards do still exist, but for
, the most part in a traditional common law system these written standards are created from the decisions and views of
judges and serve to formally recognize a precedent.
Legislators do have some say in the law, but again common law focuses on what the judges decide.
The concept was first developed in England and is thus why almost all former colonies of England either utilize common
law systems or have a system with prominent aspects of it.
The development of Common law in England
- England is different from most other countries in Europe because it was influenced by the Roman Empire. This led
to the notion of autonomous development meaning unlike occupied Europe, England was able to develop it’s legal
system independently of other nations.
- The origins of Common law come from the introduction of the feudal system in 1066 by King William I. The King
thus owed all the land and people could utilize the land in exchange for paying tax on the land they managed. This
gave great power to the tax-collecting institutes. These institutes over time began to function like a court would.
The King also realized that peace was key to him being able to collect substantial tax payments and thus he
developed a criminal court system to handle issues. Overtime the jurisdiction was expanded to many different
legal matters. Courts were given great discretion to make decisions for the good of peace (under the eye of the
Crown). As such this led to a common law system because standard laws were forming from the precedent of
previous court cases.
- Because of this lawyers and judges were never focused on academia instead they were focused on the application
of law. This is why in most common law nations lawyers identify and meet with legal societies instead of
universities (doesn’t make too much sense when you watch Suits and see them all boasting about Harvard, but its
what the book says).
- In England there are two forms of a lawyer in General
1. A solicitor advises clients on legal matters in general and represents them in lower court
2. A barrister is specialized in appeal cases or cases that are dealt with in the higher courts
- In the lowest courts English Judges are not usually legal professionals instead they are often retired people. (I guess
they can’t get enough formally trained professionals to handle all the drunken fights and broken windows). In
higher courts judges are usually professional with a background as a solicitor or barrister.
2.2.2 Civil Law Systems
A civil law system is driven by codified standards. Advocates believe that written standards are the best way to
organize society. It was developed most during the Enlightenment. Courts apply these written standards without much
room for interpretation. The issue with a purely civil law system is that it’s impossible to develop codified standards that
apply to every situation. As such in practice a court is suppose to apply the codified standards as precisely as possible to
each case and in the spirit of the law. This means that even if it isn’t exactly spelled out as illegal in the law the court
should apply it as would be expected if it was written for the case.
As such legal professionals in a civil law system are academically oriented. Training starts at a university level.
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