Thank you for contacting us. We will be in touch with you very soon. Hmm, there seems to be an error. Please check your form again. Send Email. As ordonnances are only granted by authorisation of Parliament, they represent a form of delegated legislation. Delegated legislation also exists in the form of reglements regulations , which are passed to facilitate the implementation of the lois. The situation in Germany is somewhat different.
As it is a federal state, legislative responsibility lies with both the federal parliament the Bundestag and the parliaments of the sixteen regional states the Lander. Under the constitution Grundgesetz the Lander have the right to enact legislation for the region except in those areas reserved for the federal parliament by the constitution. Although the Lander, through their representatives, participate in various ways in the federal legislative process, their exclusive law-making competence is, in reality, limited, being restricted mainly to local government, police, educational and cultural matters.
At both federal and regional levels, primary legislation manifests itself in the form of Gesetze statutes. As in other systems, power to legislate in Germany is also delegated to individuals and other bodies and institutions. Case law judicial precedent In addition to legislation, law can derive from judgments given by courts when deciding cases brought before them.
As a source of law, this is known as precedent. As has already been explained, a defining characteristic of common law systems is the role that the courts have played in creating law in this way. This is not to say that in civil law jurisdictions the courts do not fulfil an important function, but any role they perform in establishing legal principles for application in future cases differs, in theory at least, from that of their common law counterparts.
The common law doctrine of judicial precedent basically embodies the principle that, in deciding a case, a judge will be bound by the previous decision of a higher court. This idea needs further explanation. The precedent is not the decision itself reached by the court but the rule of law contained within that decision. At the end of a case, a judge, before handing down a ruling in favour of one or other of the parties, will give his or her reasons for the decision.
Collectively these comprise the judgment. In contrast to the brevity which typically characterises court judgments in civil law jurisdictions, the judgment of common law judges can be extremely lengthy and detailed. Most of the judgments given by the higher courts will be published in one or more of the series of law reports available, thus giving lawyers, academics and other interested parties the opportunity of subjecting every phrase and sentence to detailed scrutiny.
An essential task in identifying the precedent established by a previous case is to isolate the ratio from those parts of the judgment which are merely obiter. For example, the fact that a motorist who causes an accident was, at the time, driving without lights at 80 mph in foggy conditions might all be material facts upon which to base an allegation of negligence, but the fact that he was at the time sporting a beard and moustache would not. As far as the parties to the action are concerned, the most important part of the judgment is 3 because, subject to the possibility of an appeal, that decides the issue between them.
However, as far as future cases are concerned, 1 , 2 and 3 are all important because, together, they comprise the ratio. The ratio of a case can be summarised as those statements of law cited by the judge which, when applied to the legal issue posed by the facts found to be material, lead to the decision in the case. It is important to emphasise that it is the statements of law applied to the actual facts of the case before the court that form the ratio. The theoretical reason for this, which, however, does not reflect the reality of the situation, is that judges must concern themselves with finding the law and applying it to the case before them, not making law which is the prerogative of the Legislature.
I would have decided. It should not be assumed, however, that obiter dicta are devoid of value in future cases for, as will be explained below, in some circumstances they might have significant persuasive authority, even though they do not constitute binding precedent. Whether a statement is ratio or obiter is not decided by the judge in the instant case because, in the course of the judgment, he or she will make no distinction between the two.
Thus, depending on the level of abstraction adopted by the court in the later case, the ratio as found in the earlier decision can be broad or narrow. By way of illustration, take the example quoted above. Supposing the motorist, X, while driving his car at 80 mph without lights in foggy conditions collides with a car been driven by Y, injuring him. Following the accident Y sues X for compensation and the judge finds X liable. In extracting the ratio of this case, a later judge can restrict its significance by defining a narrow ratio or, on the other hand, establish a wider principle of law through a broader definition.
A ratio so defined would, in fact, represent the essential principle underlying the law of negligence. The above explanation stresses the fact that the precedent established by an earlier case lies in the ratio of the decision. But when does such a precedent become binding on a court hearing a case raising a similar issue in the future? The answer basically depends on which court decided the earlier case.
The courts of most jurisdictions are structured within a hierarchy.
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For example, in England and Wales, except for questions relating to European law see below , the Judicial Committee of the House of Lords is the final court of appeal. Below this is the Court of Appeal, followed by the High Court and other courts of equivalent status. There are additional courts below the level of the High Court, but for the purposes of binding precedent, they can be ignored. All lower courts must apply a precedent set by the House of Lords. Precedents established by the Court of Appeal bind the High Court and courts coming below it.
The Court of Appeal is also bound by its own previous decisions, although there are a number of exceptions to this rule. Decisions of the High Court bind all courts below but do not bind the High Court itself. It should be stated, however, that a court does not always slavishly follow precedent and that there are a number of devices at its disposal should it wish to avoid following an otherwise binding precedent.
As was explained above, an integral part of the precedent are the facts to which the stated principle of law was applied. This, therefore, provides the judge in the later case with an opportunity to find essential differences in the facts of the case before him as compared with those in the earlier one. Some precedents are distinguished so often that effectively they are shunted off into a siding and rarely followed subsequently.
The above discussion concerned precedents which are binding on a court when reaching its decision. Not all precedents are of this nature. This may occur, for example, when a case raises a legal problem which is not covered by an established binding precedent. The judge hearing the case may look to other sources having persuasive authority, some of which may be more persuasive than others. Obiter dicta from courts at all levels can be influential, particularly those originating from the House of Lords or Court of Appeal.
The decisions of lower courts might have persuasive authority so far as higher courts are concerned. For example, the Court of Appeal may decide to follow an earlier decision of the High Court where there is no precedent set by either the Court of Appeal or the House of Lords. The same cannot be said as regards civil law countries.
In France, for example, there is no fundamental axiom of French law that a judicial determination, even by the highest court in the land, the Cour de cassation, has binding effect in any other case. The function of the courts is not to make law but to interpret the law and apply it to individual cases. Although this may represent the theoretical position, practical reality is somewhat different. It would be a mistake to suppose that the decisions of French courts jurisprudence have no authority beyond the individual case in hand.
They are widely cited by lawyers and by textbook writers. Indeed, it would be difficult to express an opinion as to the meaning of a provision of, say, a code without knowing how it had been interpreted by the courts. Many of the decisions of the higher courts appear in law reports, much like in England. These are accepted as having persuasive weight, which only increases as the courts progressively settle down to a uniform and consistent attitude on any particular point.
The result is that an undeviating line of reasoning — for example, of the Cour de cassation — has an authority, judged from a practical point of view, barely distinguishable from a decision of the House of Lords.
Again, in Germany, precedent Prajudizien , in theory at least, is not regarded as a source of law. As in the case of France, however, the formal decisions of the higher courts and in particular those of last resort — for example, the Bundesgerichtshof — have great persuasive authority and are never lightly disregarded. Over the years the courts have given it detailed consideration and, as a result of the numerous decisions as to its true interpretation, it is possible to specify with reasonable precision the type of conduct which will fall foul of the prohibition.
Academic writing In many civil law jurisdictions, academics have had a significant influence on the interpretation and development of the law. While not representing a formal source of law in the same sense as legislation, for example, the opinions of leading academics and commentators are, nevertheless, given substantial weight by the legal profession and judiciary alike. Both in France and Germany, the works of highly reputable university professors have great persuasive authority and are regularly quoted by lawyers when presenting cases and, indeed, referred to by judges in court decisions.
In England, on the other hand, it is comparatively rare for a lawyer to cite the opinions of even leading academics when presenting a case before a court. At one time, an author would have had to be dead before any credence was given to his work! Over the years, judicial attitudes have gradually changed to the point now where the views of modern-day eminent academics are given due consideration when the court thinks it appropriate.
In the coming years this number is set to increase. At the time of writing, a proposed European constitution is provoking a heated debate within and between Member States. Before it comes into force, the treaty embodying the constitution must be ratified by the parliament of each Member State. In addition, a number of countries are submitting the treaty to a referendum, through which the electorate can voice its opinion. Who is right, only time will tell. Whatever the future may hold for the development of the EU, it has not as yet achieved statehood in its own right.
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This said, however, there is no escaping the fact that, in the context of the present world order, the EU represents a powerful source of political and economic influence. As a source of law its importance cannot be overestimated, as an increasing number of matters, traditionally the preserve of national legislatures, are now being dealt with by the law-making institutions of the EU.
It should not be assumed that EU law applies only to businesses located within the EU itself. The American giant, Microsoft, has discovered this the hard way. In , after a five-year investigation, the competition authorities of the EU came to the conclusion that Microsoft was abusing its market power within the EU to the detriment of its competitors and consumers alike.
Four years earlier, the Japanese electronics company, Nintendo, had felt the full wrath of the EU competition regime when it was found guilty, along with its seven European distributors, of running a cartel. The corporate wallets of the various participants were somewhat lightened as a result. It is not only in the field of competition law that business can be affected by EU rules.
As will be explained in later chapters, employing labour, appointing agents, the exercise of intellectual property rights and liability for defective products are examples of other areas where the impact of EU law can be felt. EU law takes various forms. Primary sources include the various Constitutional treaties which bind the Member States together. Apart from the Constitutional treaties, an ever-increasing volume of law originates from secondary sources such as regulations and directives. A regulation is of general application and binding on all Member States in its entirety.
Unlike a directive, it is selfexecuting in the sense that it becomes law without the necessity of national implementing legislation. A directive, on the other hand, is binding on each Member State as to the result to be achieved. Provided that the aims and objectives of a directive are implemented locally, the precise method of achieving this is left to the state concerned. Whereas regulations are used primarily to achieve uniform legal rules throughout the EU, directives, in practice, are used mainly to effect approximation or harmonisation of the national laws of Member States. EU law, of whatever form, takes precedence over national law.
Where there is a conflict between the domestic law of a Member State and EU law, the latter prevails and the courts of that state must give effect to it in preference to national law. Its decisions are binding throughout the EU and must be followed by the national courts of Member States. In some contexts, EU law has direct effect. This means that it creates rights that can be enforced by individual citizens of Member States. This entitlement also extends to companies and their businesses.
Court systems In every jurisdiction, courts of one form or another will play a major role in the administration of the law. A court may have jurisdiction over a wide variety of legal issues or, alternatively, be restricted to certain specialist matters. To illustrate the above points, a general overview of the court systems of England and Wales, France and Germany follows. This court exercises both civil and criminal jurisdiction and, except for matters relating to European law, is the final court of appeal not only for England and Wales, but in some instances Scotland and Northern Ireland as well.
Appeals to the House of Lords are only allowed when a point of law of general public importance is involved. Leave to appeal must be granted either by the lower court against whose decision an appeal is being made or by the Appeal Committee of the House of Lords itself. The court can uphold or reverse the decision of a lower court or substitute a new judgment.
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Occasionally it may order a new trial. It sits in London and in twenty-seven regional centres. All three divisions can sit as a trial court where one judge sitting alone, having determined both the law and facts of a case, will pronounce a verdict. In addition, each division can sit as an appeal court hearing appeals from certain lower courts.
When exercising its appellate jurisdiction, the court normally consists of three judges. QBD is the largest division. Its workload mainly consists of matters relating to contract and tort, commercial law and admiralty. This involves an appeal from the lower court on the grounds that the decision of the lower court was wrong in law.
The court concerned must state a case for the opinion of the QBD. Such a ruling will then determine the success or otherwise of the appeal. The Family Division has jurisdiction over matters relating to divorce, nullity, children, financial support and matrimonial property. The Chancery Division has jurisdiction over matters relating to land, mortgages, trusts, revenue, companies and partnerships, administration of estates, insolvency and intellectual property.
The court also hears appeals from the County Court in such matters as insolvency and land registration. As a trial court it deals with the more serious criminal offences. Cases are heard by a single judge sitting with a jury. It is essentially a local court, there being over throughout England and Wales. Although it deals with broadly the same subject matter as the High Court, cases coming before the County Court tend to be less complex and involve smaller sums of money than those dealt with by the High Court.
Normally magistrates sit in benches of three and will be assisted by a legally qualified clerk to advise them as necessary on legal matters. In the context of the former, it tries cases involving less serious offences. France Since the Revolution, a strict demarcation line has been drawn between the institutions of state responsible for the administration of the country and the judiciary. It was long ago decided that legal issues involving the former should not fall within the jurisdiction of the ordinary courts but should instead be decided by a system of administrative courts.
The only exception to this is the right to appeal direct to the Cour de cassation on a point of law. The Tribunal de grande instance has two divisions: the chambre civil and the chambre correctional. The former has general jurisdiction over any private law matter except those specifically allocated to special courts — for example, commercial and employment-related disputes.
However, it enjoys exclusive jurisdiction over a variety of issues, such as marriage, divorce and separation, patents, land, and road accidents. Cases are heard by three judges who deliver a collective judgment. Unlike the decisions of English courts, there are no dissenting judgments. The court normally consists of three judges. They exercise jurisdiction over commercial disputes and bankruptcies involving merchants and commercial entities. They are staffed by lay judges who must be over thirty years of age and have been engaged in business for at least five years.
Judges are elected for terms of two years by and from among businessmen and women whose names appear on the local commercial register. As with the commercial court, the labour court is staffed by lay judges elected from the ranks of local employers and employees. A court consists of four judges, with employers and employees being represented equally. It consists of a judge of the local Tribunal de grande instance and one employer and one employee representative.
An appeal involves a complete re-hearing of the case and the court can substitute its view of either facts or law for that of the lower court. In addition to those chambres dealing with general civil and criminal appeals, there are specialist chambres responsible for hearing appeals from labour courts and social security courts.
Situated in Paris, the court, strictly speaking, is not a court of appeal.
Its principal function is to ensure that the law is interpreted uniformly throughout the country and to this end restricts itself to reviewing findings of law, not fact. It can only quash a decision of a lower court of which it disapproves. Where the Cour de cassation finds this to have happened, the case is remitted for further consideration not to the original court but to another court of equal jurisdiction. This court is bound to apply the law as stated by the Cour de cassation. Finally, it should be noted that, unlike decisions of the House of Lords, judgments of the Cour de cassation are not binding on courts hearing similar cases in the future.
However, a court which fails to apply the law as declared by the Cour de cassation runs the risk of having its decision appealed and successive judgments of the Cour de cassation affirming a particular point of view will be strong persuasive evidence of the law and its correct interpretation. Germany As compared with the English court system and even that of France, the system found in Germany places great emphasis on courts of special jurisdiction.
These courts are: revenue or finance courts Finanzgerichte ; administrative courts Verwaltungsgerichte ; labour courts Arbeitsgerichte ; and social security courts Sozialgerichte. The ordinary courts handle the bulk of the legal work in Germany and comprise the largest hierarchy. A brief overview of the courts found in this system follows.
Amtsgericht local court There are local courts throughout Germany. However, regardless of the sum in question, the local court will also deal with landlord and tenant disputes and various family matters. The local court also has jurisdiction to handle cases involving minor criminal offences. As stated above, the district court hears appeals in civil and criminal matters from the local court.
Cases are heard before a court consisting of three judges. However, if the litigation is between merchants, the court sits as a commercial court in which the presiding judge is the only legally qualified member, the other two judges being experienced businessmen or women. Oberlandesgericht appeal court The court of appeal is mainly concerned with hearing civil and criminal appeals from the district court. Except in the limited circumstances where leave is granted for a further appeal to the Bundesgerichtshof see below , the decision of the court of appeal is final.
The courts just described are the courts of the Lander. Above these in the hierarchy are the federal courts. These comprise the various federal courts of appeal for courts exercising ordinary and special jurisdiction and the federal constitutional court. Sitting at Karlsruhe, it hears appeals from the court of appeal but only if that court has given its consent. Such consent will normally be forthcoming only in those cases involving a novel and important point of law or where the decision of the lower court has deviated from a previous ruling of the BGH. Specialist federal courts of appeal As mentioned above, alongside the ordinary courts, there exist a number of specialist courts, each with their own appeal structure, at the apex of which is a federal court of appeal.
At the same level as the BGH, therefore, are also to be found the Bundesarbeitsgericht federal labour court , the Bundesverwaltungsgericht federal administrative court , the Bundessozialgericht federal social court and the Bundesfinanzhof federal tax court. The Bundesverfassungsgericht BverfG; the federal constitutional court The German constitution Grundgesetz provides for an independent court to hear cases of a constitutional nature.
In the next chapter and those following it, specific examples will be given of the significant divergences that can exist. Suffice it to say at this point that, for the practitioner conducting business on an international scale, such variations can present certain risks.
These can arise not only from exposure to differing levels of potential liability, but also from the threat to business interests resulting from the varying degrees of protection afforded by different jurisdictions. This said, however, it must be recognised that, in many areas, co-operative effort both by governments and nongovernmental bodies has resulted in a harmonised approach to many issues faced by international business. A number of such initiatives will be examined in their appropriate context in later chapters but, by way of example, mention can be made of the following organisations which, to the present day, have played a major role in smoothing the path along which international business is conducted and, no doubt, will continue to do so in the future.
Its membership currently consists of fifty-nine states. At its most formal, proposals for change might be the subject of an international Convention. Conventions traditionally tend to be given low priority by national governments when compared with other more pressing business.
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This, coupled with the fact that a considerable time usually elapses before they come into force, has prompted the frequent use of alternative forms of UNIDROIT instrument. Examples include model laws and general principles. The former, as the name suggests, represent a model set of laws on a particular subject which states can take into consideration when drafting national legislation on the topic concerned, the model Franchise Disclosure Law being an example. General principles, on the other hand, are addressed directly to judges, arbitrators and contracting parties who are left free to decide for themselves whether to use them or not.
Prominent among these are the Principles of International Commercial Contracts, which represent a codified statement of the law governing such contracts. It has, to date, a considerable number of documents to its credit, including Conventions and model laws spanning a wide range of issues affecting international business.
UNCITRAL has been active in areas as varied as the international sale of goods, the international transport of goods, commercial arbitration, electronic commerce, negotiable instruments, project finance, insolvency, counter trade, letters of credit and construction contracts. It plays a vital role in setting standards for the conduct of business that have global recognition. ICC Incoterms provide a standard definition of trade terms such as f. The ICC produces a wide variety of model contracts upon which parties can base their relationship.
Among the model forms available are those relating to international sales, commercial agency, distributorships and franchising. The ICC also facilitates the solution of business disputes through its arbitration and conciliation services, with the ICC International Court of Arbitration having a worldwide reputation in this field see Chapter 8. Above all, it provides a forum in which governments can discuss and, through negotiation, reach consensus on how to tackle the difficulties that often hinder the free flow of trade between countries. It also provides an institutional framework within which countries can seek to settle differences that can arise from the pursuit of conflicting national interests.
The WTO agreements cover a wide variety of issues ranging from agriculture, textiles and clothing, and banking, to telecommunications, industrial standards and product safety, intellectual property and much more. However, a number of basic tenets underlie each of the agreements no matter what their individual content. For example, trade without discrimination is a fundamental axiom of the entire system.
Thus, as a general rule, it is not permissible for a country to discriminate between its trading partners by, for example, lowering customs duties for one but not others. Nor should it discriminate between its own and foreign products, services or nationals. Therefore, once foreign goods have entered a particular market, they should be treated no differently from those produced locally.
Such equality of treatment should also apply to foreign and domestic services and intellectual property rights such as patents, copyright and trademarks. The promotion of freer trade based on fair competition also forms a thread running through the WTO agreements. The lowering of trade barriers, such as tariffs, quota restrictions and import bans, is generally seen as a way of nurturing greater trade between countries and therefore frequently appear on the negotiating agenda.
While increased trade should be encouraged, this should be done on a basis of open, fair and undistorted competition. The WTO recognises that the implementation of the agreements might cause difficulties for less developed countries and particularly for the poorest. As previously mentioned, the law imposes on us all a variety of obligations and a failure to abide by these can produce consequences which may be expensive.
However, obligations can also be created by agreement. If two or more persons enter into a contract in which they agree to honour certain promises, the law recognises the binding nature of these promises and should either of the parties fail to carry out their undertaking, the other can seek the assistance of the court.
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This is not just the position under English law; all systems recognising the concept of contractual obligations will take a similar stance. It allows us through agreement to establish a framework of rules tailor-made to cater for a particular set of circumstances and, subject to certain restrictions imposed by the law, some of which will be examined later, we are free to regulate our relationship in any way we see fit.
The essential value of such an arrangement is the certainty it provides. In other words, each party is entitled to rely on performance by the other of the promises made with the assurance that the law will hold to account a party in default. The security so generated has made the contract the cornerstone of business relationships. Whether one is considering a manufacturer channelling its products to the end-user through a distributor, a construction company erecting a dam for a foreign government, a venture capitalist investing in a start-up company or a firm of management consultants providing advice to a client, the bond between the parties is the contract they have made.
Very often, however, myth obscures reality. However, contracts are not always bulky nor are they always in written form. True, a major construction contract will involve enough paper to threaten a rain forest, but purchasing a cup of coffee from a vending machine will not. In both cases, however, there exists a contract; the distinction between them relates essentially to the subject matter and the scale and complexity involved.
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The comments above stress the idea that a contract results from a voluntary agreement entered into by the parties. However, while it may be true to say that all contracts are agreements, the converse is not true. Not all agreements are contracts. Nearly everyone during the course of a week will make a variety of agreements, some of which will be binding as contracts and others not.
Under most systems of law, in order to have the status of a contract, an agreement must display certain characteristics. Each of the above will now be considered. The problem with a purely oral contract, however, relates to proof. If one of the parties to such a contract alleges that the other has failed to honour its terms, the court will be unable to assist unless satisfactory proof can be produced showing precisely what was agreed. This requirement may be either formal or evidential. Where the requirement is formal the absence of the writing will make the contract void — that is, of no effect.
In civil law jurisdictions the most formal writing that can be required is the notarial act. Here a document is drawn up by and signed before an official known as a notary. Contracts involving the sale or mortgaging of land very often are required under civil law to follow this form and, depending on the particular jurisdiction, such a requirement may also extend to other types of contract. For example, under German law, a notary must authenticate the documentation setting up a company and the sale of shares in a company must be executed in a similar fashion.
There is no direct equivalent to the notarial act under English law. In such cases the contract must be contained in a formal document a deed that is signed by the parties in the presence of witnesses. There are, however, situations where writing is still a formal requirement but the solemnity of the notarial act or deed is not required. For instance, under English law a contract under which one person agrees to sell land to another must be in writing, as must certain financial instruments, such as bills of exchange and promissory notes.
In other cases the requirement of writing may be only evidential in the sense that if the transaction has to be proved, the party seeking to do so must produce written evidence. Such might be the case where a contract is concluded in circumstances where written contracts are not customary — for example, in the context of a particular trade or market. The only contract which today must be evidenced by writing is the contract of guarantee where a person promises to answer for the debt of another. Offer and acceptance As has already been emphasised, a contract is based on an agreement between the parties.
This is simple to state but there could be situations where it is not obvious whether agreement has occurred. In fact, this might be the very dispute between the parties, with one saying that agreement has been reached and the other denying this is the case. It is no use asking the parties themselves whether they have agreed on something because, depending on who is asked, a different answer would be forthcoming. Any system of law must include a mechanism for determining the presence of agreement. Common law and civil law both invoke the concepts of offer and acceptance.
Again, this may seem an idea of childlike simplicity but applying it in practice is not always so straightforward. International agreements such as joint ventures or consortium agreements are written contractual arrangements involving two or more companies, business partners or individuals from different countries who exchange resources, share risks and divide rewards from an enterprise.
These international contracts, whether a joint venture, consortium agreement or some other type international business agreement, lay out the understanding and governing terms between the parties, and are vital in preventing an international dispute or litigation. We execute a wide array of international business contracts, international joint ventures and consortium agreements, while taking into consideration US law, foreign law and international treaties and agreements.
We represent U. Similarly, we advise foreign businesses and investor on acquisitions of U. An international merger and acquisition transaction is a significant event for any company, and especially in the context that such a transaction provides access to infrastructure and customer base in another country. In this context, it is important to work with an international lawyer that is knowledgeable about international law, civil legal systems and regulatory frameworks and other local issues that are included in the structuring and closing an international merger and acquisition transaction.
We are familiar with foreign agencies that oversee international mergers and acquisitions and foreign licensing and intellectual property agencies, and combine international experience to execute, negotiate and close international mergers and acquisitions transactions.