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• 2 Business Law 1

• 2.1 Legal Systems: Civil and Common Law Systems

• Private Law, ius privatum

  Private law only affects the horizontal dealings among the private parties. Private law concerns in particular the legal relationship between individual, businesses and companies. The main areas of private law are contract low, tort law, property law, succession law, and family law.

• Public Law, ius publicum

  Public law is the law that pertains to the government or to the vertical relation between the government and individuals. Public law deals with issues that affect the general public or state. Some of the law that its wide scope covers are administrative, constitutional, criminal, municipal, international law.

• Interrelations between Private and Public Law

  o Ex: States provide the means of enforcing arguments that individual contracting parties have freely entered into. In this regard, public courts are destined to decide disputes between parties, which arise out of private law.
  o Ex: Several private-law projects depend on public law permits, e.g., if a production plant shall be built. In this respect, parties are free to agree on a construction contract but without public law permits – in particular concerning the construction itself – the parties won’t be able to begin or even complete the construction works. 

• 2.4 Law enforcement and dispute resolution

• Law and enforcement and dispute resolution

  · The selection of a specific method depends on the individual case and inter alia the states, wherein the parties are situated.
  o Ex: Within the EU judgements can be enforced on the basis of the Brussels I a regulation
  o In contrast, a judgement of a German court cannot be enforced at all in the Kingdom of Saudi Arabia. In this regard, arbitration might be the preferable dispute resolution method, as the New York Convention enables to enforcement of arbitral awards in all countries to the convention. 

• 2.5 Challenges of Doing Business Abroad

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• Challenges of doing business abroad

  · Cultural differences, Traditions, Language, Currency,
  · AND Legal Systems

• Legal Systems: Civil Law

  o influenced by Roman Law; code-based law; judge apply the provisions of applicable code;
  § judicial precedents are not binding: only validity for particular case; unless the German Federal Court of Justice is basically leading instance courts in their decisions 

• Legal Systems: Common Law

  o relies on precedents; case-based law; judges make rulings, and set precedents; judicial precedents are 100% binding
  § If judges in common law countries are given the freedom to interpret the law as they deem fit, how this system avoids multiple conflicting interpretations of the same law?
  §  then: “Stare decisis” = lower courts should abide by the precedents of higher courts when examining the same legal issue

• Legal Systems: General info

  · Every modern cross-border business or enterprise involves multiple contracts. Laws that can be involved are Civil Law (Swiss, French, German, etc.), Common Law (UK, US, etc.), International law, etc. 

• 2.6.1 Drafting Contracts

• Drafting Contracts: Civil Law

  o Civil Law: one of the evident features when a contract is drafts as per civil law is that is will be rather short and precise using broad terms, due to many provisions being implied into the contract through the law. 

• Drafting Contracts: Common Law

  o Common Law: A contract drafted as per common law tends to be extensive and descriptive. One consequence is that in contracts drafted common law, the scope of negotiations between the contracting parties and the risk of inserting legal intricacies through descriptive contract language is higher.