LEGAL SYSTEMS

The rules & laws that regulate the behaviour & activities of individuals and organisations.

Country’s law Regulate business practice

Define manner in which business transaction are to be carried on.

Set rights & obligations of business related persons

Types of legal systems:

1.Theocratic Law:

• Based on religious precepts & teachings.

• Islamic Law best example of Theocratic law-found in muslim countries(eg.Saudi

Arab)

• Shair’a provides ethical & moral precepts & rules for public order.

• Based on:

o The Koran(sacred text)

o The Sunnah(decisions & sayings of prophet Muhammad)

 o Writings of Islamic scholars(derive rules by analogy from principles
established in Koran & Sunnah)

o The Consensus of Muslim countries’ legal communities.

• Islamic law prohibits payment & receiving of interest.

2. Socialist Law:

• Evolved from Marxist Socialist system.

• Socialist legal codes are designed to achieve personal & societal transformation

• Legal system not just set of institutions but means to achieve a communist
society,where each gives according to his/her abilities & takes according to his/her
needs.

• In this type of legal system,state enacts various social laws wherein the means of
production are owned by government,production & distribution decision taken by
central authority.

• Social Welfare is the top priority.

• Found in Russia & China

3. Common Law (Case Law) V/S Code Law (Civil Law) :

S.No. Common Law Code Law

1. Also called Case Law
2. Based on traditions, past
practices & legal precedents set
b y courts through interpretation
of statutes, legal legislation &
past rulings.
3. Derived from English Law
4. Found in England ,US, Canada
etc
5. Based on court’s interpretation
of events
6. Contracts tend to be detailed,
with all contingencies detailed
out & spelled out
Also called Civil Law
Based on all-inclusive system of
written rules (codes) of law.
Legal System(3 separate codes):
commercial, civil & criminal
Code law system---codified legal
system(based on detailed set of
laws that make a code)
Derived from Roman Law
Found in Germany ,Japan, France
etc.
Based on how the law is applied
to the facts
Contracts tend to be shorter &
less specific than common law
because many of the issues that
 common law contract would
cover, already included in civil
code.
7. More adversial Less adversial than common law
because judges rely on detailed
codes rather than on precedent.
8. Ownership is established by use Ownership is determined by
( of Intellectual property) registration
9. More flexible Less flexible