SUMMARY BUSINESS LAW AND ETHICS
Summary Chapter 1 Business Law and Ethics:
THE ORGANIZATION OF JUST BEHAVIOUR
Law organizes just behaviour in a society, to regulate what is just to avoid
chaos.
Substantive law and formal law:
Substantive law is composed of legal rules that define the content of just
behaviour, these rules are about the content of what people are supposed
to do, or not to do.
Formal law is composed of legal rules that maintain substantive law, like a
fine when speeding.
Public law and private law:
Public law is the law that regulates the relation between a government
and its citizens.
The state adopts the substantive law for the benefit of society in general,
and acts when one misbehaves, for the sake of society. (public substantive
law)
There are formal rules that regulate the legal procedures that need to be
taken into account by the government when a citizen misbehaves. (public
formal law)
Private law is the law that regulates relation between citizens or those who
act as citizens.
Private law also regulates the relation between an individual and a
company, or between companies.
THE MEANING OF JUST BEHAVIOUR
Just implies a balance between the values justice, opportuness, and legal
certainty.
Justice:
Justice is the moral conviction of a given society expressed in law.
Opportuness:
Opportuness is the expression of effectiveness by a given society in law.
Legal certainty:
Legal certainty is the expression of legality in a given society.
The idea is that every citizen and the relevant government should be able
to know the legal consequences of their actions beforehand, and not
afterwards.
This means that a citizen cannot be punished for something that was not
forbidden at the time of his actions and it also means that a government
may not interfere in the life of its citizens without a valid legal ground that
is applicable at that time.
THE ORIGIN OF LAW
,Natural law:
In a natural law approach it is assumed that laws emerge from nature, this
means that a law does not need to be codified first to be a law.
The advantage is that law is not depending on any formalization and
therefore can be applied because it is only reasonable to do so.
The disadvantage is that natural law can be subdue to many different
forms of understanding, leading to legal uncertainty.
Positivist law:
In a positivist law approach, it is assumed that law comes forth from
codification, this means that law is only law when it has been written down
first.
The advantage is that people know beforehand what the rules of the fame
are, it protects people against extreme understandings of natural law.
The disadvantage is that written law is always two steps behind reality,
because one cannot create rules beforehand that flawlessly provide
solutions to every possible case.
LEGAL SOURCES
The following sources are generally used: codified standards, the
application of law, legal writings and teachings, religious writings and
teachings, customary law and legal principles.
Codified standards:
Codified standards are written rules produced by a legislator, started in
Roman Empire.
A treaty is a written contract between two or more states who consider
themselves bound to its content relative to each other.
A bilateral treaty is a treaty to which two states are party, such treaties
deal with matters that primarily relate to the interest of the two involved
countries only.
A multilateral treaty is a treaty to which more than two states are party,
such treaties deal with matters that relate to the interest of more than two
countries.
The signature of a treaty implies the consent of the responsible negotiator
on behalf of the state to the treaty.
The ratification of a treaty implies the consent of the responsible
Legislator on behalf of the state to the treaty.
Monism is an approach in law in which it is assumed that the content of a
signed and ratified treaty is automatically part of the domestic legal order.
In a monistic legal system, the international law is automatically a part of
the national legal order, and any contradicting national rules will not apply
any more.
Dualism is an approach in law in which it is assumed that a signed and
ratified treaty needs to be transformed into domestic law first before it
forms part of the domestic legal order.
In a dualistic system, a transformation is required in which the national
legislature usually adopts the content of the treaty and simultaneously
alters any contradicting domestic legal standards in line with the treaty.
,Application of law:
Case law is a chain of authoritative legal rulings in which the same
reasoning pattern of the court is applied in similar cases.
Stare decisis is a legal principle in which courts have to follow the legal
reasoning as applied in previous cases.
This means that lower courts may not rule in contradiction with the legal
reasoning of a higher court in a similar legal matter.
In case of equal courts, the precedent of a previous ruling should be
respected.
The administration is the branch in the public sector that executes the law
within the boundaries of its competences.
In some countries, entrusting power to the administration is formalized in
written standards while in other countries such power arises from
established practices.
The margin of discretion is the room allowed to the administration to
execute the law at their own discretion.
To guarantee equal and consistent law execution, the administration may
adopt policy rules to make sure that all their agents approach the
execution of law in a similar way.
In some countries the military is authorized to apply the law or parts of the
law.
Legal writings and teachings:
Scholars who are experts in law will regularly comment on legal
developments, or collect and structuralize legal information. Such works
and teachings can be used as a source of law.
Religious writings and teachings:
A non-secular state is a state in which governance and religion are mixed.
A secular state is a state in which governance and religion are separated.
Customary law:
A custom is an established and accepted legal practice.
A custom is a legal practice, this means that this source of law finds its
origin in the interaction between people, and not in a written standard.
A custom must be an established practice, this means that the practice
must last for a while in a consistent way. (usus)
A custom must be an accepted practice by its users, this means that 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. (opinio iuris sive necessitates)
Usually customary law may not be in contradiction with certain applicable
written standards and other sources of law.
Legal principles:
A legal principle is a general value that applies in law and that may not be
violated.
Ius cogens are universally binding legal principles, like the prohibition to
slavery.
, Summary Chapter 2 Business Law and Ethics:
THE PURPOSE OF COMPARATIVE LAW
Comparative law has 5 main purposes: gaining of knowledge, evaluating
the better law, substantiate the application of law, improve legal
education, unification of law.
Gaining of knowledge:
Constitutional differences between countries have a profound impact on
the way courts approach similar cases.
And even when the verdicts appear to be similar, the way towards this
conclusion as well as the broader context of the case is different.
Evaluating the better law:
Where in gaining knowledge the researcher has a neutral attitude towards
the data he finds, in evaluating, the researcher concludes which law is
best in a particular situation.
Substantiate the application of law:
Before applying the law, the courts, administration or even the military
might compare law first to make sure they apply the law correctly.
Improve legal education:
Comparative methods have an added value in legal education: it broadens
the view of students on law, comparative law can be widely used in
various forms of applied research.
The unification of law:
We often see attempts to harmonize or unify law, so that market players
are not confronted with too many legal differences within the same trade
area.
Legal differences in a free market economy have two side effects:
o Companies may have to adjust their products or services to each
legal system separately, which is a time consuming and costly
affair.
o Companies will probably use the legal system with the most flexible
rules to bring their product or service to the market.
MACRO COMPARISON: LEGAL FAMILIES
Summary Chapter 1 Business Law and Ethics:
THE ORGANIZATION OF JUST BEHAVIOUR
Law organizes just behaviour in a society, to regulate what is just to avoid
chaos.
Substantive law and formal law:
Substantive law is composed of legal rules that define the content of just
behaviour, these rules are about the content of what people are supposed
to do, or not to do.
Formal law is composed of legal rules that maintain substantive law, like a
fine when speeding.
Public law and private law:
Public law is the law that regulates the relation between a government
and its citizens.
The state adopts the substantive law for the benefit of society in general,
and acts when one misbehaves, for the sake of society. (public substantive
law)
There are formal rules that regulate the legal procedures that need to be
taken into account by the government when a citizen misbehaves. (public
formal law)
Private law is the law that regulates relation between citizens or those who
act as citizens.
Private law also regulates the relation between an individual and a
company, or between companies.
THE MEANING OF JUST BEHAVIOUR
Just implies a balance between the values justice, opportuness, and legal
certainty.
Justice:
Justice is the moral conviction of a given society expressed in law.
Opportuness:
Opportuness is the expression of effectiveness by a given society in law.
Legal certainty:
Legal certainty is the expression of legality in a given society.
The idea is that every citizen and the relevant government should be able
to know the legal consequences of their actions beforehand, and not
afterwards.
This means that a citizen cannot be punished for something that was not
forbidden at the time of his actions and it also means that a government
may not interfere in the life of its citizens without a valid legal ground that
is applicable at that time.
THE ORIGIN OF LAW
,Natural law:
In a natural law approach it is assumed that laws emerge from nature, this
means that a law does not need to be codified first to be a law.
The advantage is that law is not depending on any formalization and
therefore can be applied because it is only reasonable to do so.
The disadvantage is that natural law can be subdue to many different
forms of understanding, leading to legal uncertainty.
Positivist law:
In a positivist law approach, it is assumed that law comes forth from
codification, this means that law is only law when it has been written down
first.
The advantage is that people know beforehand what the rules of the fame
are, it protects people against extreme understandings of natural law.
The disadvantage is that written law is always two steps behind reality,
because one cannot create rules beforehand that flawlessly provide
solutions to every possible case.
LEGAL SOURCES
The following sources are generally used: codified standards, the
application of law, legal writings and teachings, religious writings and
teachings, customary law and legal principles.
Codified standards:
Codified standards are written rules produced by a legislator, started in
Roman Empire.
A treaty is a written contract between two or more states who consider
themselves bound to its content relative to each other.
A bilateral treaty is a treaty to which two states are party, such treaties
deal with matters that primarily relate to the interest of the two involved
countries only.
A multilateral treaty is a treaty to which more than two states are party,
such treaties deal with matters that relate to the interest of more than two
countries.
The signature of a treaty implies the consent of the responsible negotiator
on behalf of the state to the treaty.
The ratification of a treaty implies the consent of the responsible
Legislator on behalf of the state to the treaty.
Monism is an approach in law in which it is assumed that the content of a
signed and ratified treaty is automatically part of the domestic legal order.
In a monistic legal system, the international law is automatically a part of
the national legal order, and any contradicting national rules will not apply
any more.
Dualism is an approach in law in which it is assumed that a signed and
ratified treaty needs to be transformed into domestic law first before it
forms part of the domestic legal order.
In a dualistic system, a transformation is required in which the national
legislature usually adopts the content of the treaty and simultaneously
alters any contradicting domestic legal standards in line with the treaty.
,Application of law:
Case law is a chain of authoritative legal rulings in which the same
reasoning pattern of the court is applied in similar cases.
Stare decisis is a legal principle in which courts have to follow the legal
reasoning as applied in previous cases.
This means that lower courts may not rule in contradiction with the legal
reasoning of a higher court in a similar legal matter.
In case of equal courts, the precedent of a previous ruling should be
respected.
The administration is the branch in the public sector that executes the law
within the boundaries of its competences.
In some countries, entrusting power to the administration is formalized in
written standards while in other countries such power arises from
established practices.
The margin of discretion is the room allowed to the administration to
execute the law at their own discretion.
To guarantee equal and consistent law execution, the administration may
adopt policy rules to make sure that all their agents approach the
execution of law in a similar way.
In some countries the military is authorized to apply the law or parts of the
law.
Legal writings and teachings:
Scholars who are experts in law will regularly comment on legal
developments, or collect and structuralize legal information. Such works
and teachings can be used as a source of law.
Religious writings and teachings:
A non-secular state is a state in which governance and religion are mixed.
A secular state is a state in which governance and religion are separated.
Customary law:
A custom is an established and accepted legal practice.
A custom is a legal practice, this means that this source of law finds its
origin in the interaction between people, and not in a written standard.
A custom must be an established practice, this means that the practice
must last for a while in a consistent way. (usus)
A custom must be an accepted practice by its users, this means that 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. (opinio iuris sive necessitates)
Usually customary law may not be in contradiction with certain applicable
written standards and other sources of law.
Legal principles:
A legal principle is a general value that applies in law and that may not be
violated.
Ius cogens are universally binding legal principles, like the prohibition to
slavery.
, Summary Chapter 2 Business Law and Ethics:
THE PURPOSE OF COMPARATIVE LAW
Comparative law has 5 main purposes: gaining of knowledge, evaluating
the better law, substantiate the application of law, improve legal
education, unification of law.
Gaining of knowledge:
Constitutional differences between countries have a profound impact on
the way courts approach similar cases.
And even when the verdicts appear to be similar, the way towards this
conclusion as well as the broader context of the case is different.
Evaluating the better law:
Where in gaining knowledge the researcher has a neutral attitude towards
the data he finds, in evaluating, the researcher concludes which law is
best in a particular situation.
Substantiate the application of law:
Before applying the law, the courts, administration or even the military
might compare law first to make sure they apply the law correctly.
Improve legal education:
Comparative methods have an added value in legal education: it broadens
the view of students on law, comparative law can be widely used in
various forms of applied research.
The unification of law:
We often see attempts to harmonize or unify law, so that market players
are not confronted with too many legal differences within the same trade
area.
Legal differences in a free market economy have two side effects:
o Companies may have to adjust their products or services to each
legal system separately, which is a time consuming and costly
affair.
o Companies will probably use the legal system with the most flexible
rules to bring their product or service to the market.
MACRO COMPARISON: LEGAL FAMILIES
