Uniform Private Law Complete Summary

business administration (T16)

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Uniform Private Law
Amalia Diurni

Andrea Dicorato

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 Andrea Dicorato

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Introduction
The phenomenon of globalization was possible through technology advancement and web revolution.
Geopolitically, it started with the European unification with continuously wider competences and increasing
number of members after the fall of the communist regimes in Eastern Europe in 1989 and continued with
the open policy of China sanctioned by its adhesion to the WTO in 2001. Legal systems are the result of the
evolution of societies. Actually, the possibility of crossing borders enjoyed by people, goods, services and
information, had increased the openness of legal systems to eternal influences of various nature, such as
economic, social, cultural, and strictly normative. Nowadays we are facing an incredible increase of “non-
national” legal systems beside traditional systems.
The aim of this course is to enlighten the interplay between traditional legal systems and the “non-national”,
supranational legal system. Law is the product of history, social and economic developments, intellectual and
legal culture, mentality and ideology, philosophy, religion and language. To understand deeply and globally
the complex eco-system in which the law is immersed, the so called ‘law in action’ and its dynamics (players,
instruments, purposes), an introduction to the comparative methodology is required.

Legal System
A legal system is a set of rules applied in a certain community. For example, in the only USA, there are both
federal and states law. There is even the legal system related to the personal status: if for instance a person
is catholic, it means that he will follow the rules of the catholic community to marry or bury someone.
Traditional legal systems are related geopolitically to a country. Non-national legal systems are instead
related to communities. We can attend to unify all social systems as state, religion, moral rules.

Social Rules System Theory

Legal systems are sets of rules. Among these rules there are also social rules like institutions, norms, laws,
statutes, regulations, but also customs and religion beliefs, taboos, values and miscellaneous concepts.

Formal v. Informal Rules

• Formal rules are found in sacred books, legal codes, handbooks of rules and regulations,
or in the design of organizations or technologies that an elite or dominant group seeks to impose
in a particular social setting. There are formal rules in the Constitution as in sacred books.
• Informal rules appear less “legislator” and more “spontaneous” than formal rules, they are
generated and reproduced in ongoing daily interactions. They continuously change forward; they are
not as binding as legislative rules, but they deal with the real life. This is also the uniform law is
created.
Formal diverges from informal rules at the point that there may be conflicts between the two. Studies have
demonstrated that official formal rules are not always those operating in practice. In some cases, the informal
unwritten rules not only contradict formal rules, but they lead over them under some conditions. The main
feature of these studies is language, cultural codes, forms, institutional arrangements, religious paradigms
and also the rules of a game. Application and implementation happen through processors of meaning, of
interpretation and of adaptation. Gift-giving and playing poker with friends are examples of informal rules.

Community as a legislator
We, as members of the community, produce social rules or give them social force every time we act in their
compliant. Sometimes, we do not even realize to be part of this rules production. These kind of production
of rules is important to understand how uniform rules are implemented in private law.

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Key Map of Jurisdiction
In the world, there are 320 legal systems, of which 280 are influenced in this way:
• Around 40% of global jurisdiction has been influenced by English Common Law.
• 30% by French legal system.
• 20% by the German legal system.

Uniform vs. Diversified Law

There are three dimensions that are fundamental at influencing and so creating a legal system: history,
culture and mentality.
• History includes social and economic developments. Legal systems that have the same level of social
development, usually develop very similar rules.
• Another feature is culture, composed by philosophy, religion and ideology. The thinking of important
people in a country have an important impact also on the society, the economics, politics and even
law-making.
• Diversification of law is also about mentality. Mentality is a concept already studied by Montesquieu
in “l’espirit des nations” and Savigny in his “Volksgeist”. Mentality is the idea that there is something
that we are sharing in our community. It comes from our history, our social, economic, political
situation but even from our DNA.
Dealing with this many different cultures makes the creation of uniform private law vary challenging.

Anthropology of law
Anthropology of law is specialized in the cross-cultural study of social ordering. It helps us understanding
reasons, similarities and differences between legal systems in the world, but it does not help us deal with
such differences. A rule is effective if the legislator can express it in a way that results understandable to
people.

Sociology of law
Sociology of law studies human behavior in society is so far as it is determined by commonly recognized
ethical-legal norms and in so far as it influenced them. Sociology helps to understand the reasons of
different people behaviors despite same rules or same behaviors despite different rules. They study the
society of the present, as the comparative scholars.

Civil Law
Ancient Roman Law (753 BC (Foundation of Rome) – 565 AD (enactment of Corps Juris Civilis)).
In the beginning, law was unwritten. It was guarded and interpreted by upper class priests. Then, a revolution
from the plebeian who wanted law to be written happened and, in 450 BC, the twelve tables were released.
After that, all the written rules were annotated and integrated with the formulary system by Gaius.
Another step was the compilation of the Corpus Juris Civilis: a collection of fundamental works
in jurisprudence, issued by order of Justinian. It was composed by three parts:
- Code: the compilation of imperial enactments.
- Digest/Pandects: extracts from Roman jurists’ writing.
- Institutes: student textbook; an explanation of ancient Roman law.
In France, just before the Corps Juris Civilis, the Visigoths in the south released the Lex Romana
Visigothorum, made by iura and leges. It constitutes a sort of a traditional law.
In the north, barbarians released the lex Salica, imposing their own barbarian customs.

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Ius Commune (XI - XV century). Between the V and the XI century, there was not any book enabling to save
the previous sources of law. The Ius commune brought a change in this situation. It was composed by
Canon Law (Roman law), Church and Corpus Juris Civilis, that was rediscovered after many centuries it was
being forgotten. The Corpus Juris Civilis was subject both to rejection in continental Europe, and also object
of studies, starting from the University of Bologna, which recomposed it after centuries.
With the beginning of the Renaissance, Legal Humanism happened (XV-XVII). Jurists began to consider roman
law as object of historical studies. On the other hand, they developed an interaction between the Ius
commune and Iura propria to build a new revolutionary system.
During the Enlightenment (XVII - XIX), national laws were developed. They mixed the heritage of Roman law
with national customs.
As already pointed out, the civil law family encompasses the jurisdictions of continental Europe. These
jurisdictions are usually characterized by the prevalence of statutory law as a source of law, namely for the
central role attributed to the civil code as the systematic foundation of private law.
The forerunner of all contemporary civil codes has been the French one, enacted in 1804 by Napoleon and
renamed in 1806 as the “Code Napoléon”.
This enactment was a historical event of extraordinary importance, because it paved the way for the season
of the major national codifications, which sentenced the “ius commune” to death, by definitively replacing
it. Even outside Europe, civil codes soon became the identity charters of national states, generally
accompanying their establishment.

Civil Law Countries

In civil law countries, the prevailing source of law is statutory legislation. The key feature of such jurisdictions
is that they have fully implemented the doctrine of separation of powers, the origins and genesis are
generally traced to the French Enlightenment. Montesquieu clearly advocated for the separation of three
lines of political power. This is also known as the Trias Politica principle.
In civil law jurisdictions courts are supposed to be the only “mouth that pronounces the words of the law”.
Legislative power is in the hands of Parliament, which is the only state’s organ holding the power to adopt
new legal rules.
The fact that a legal rule is valid, does not necessarily mean that it is effective. The former is known as validity,
while the latter as effectiveness.
The Constitution is at the top of the hierarchy of the sources of law. In most jurisdictions of civil law, the
Constitution is rigid, which means it cannot be amended through ordinary legislative acts; it can only be
modified by a specific procedure of constitutional review.
Statutory laws are subject to the constitutional test. If an act of legislation has no meaning that is consistent
with the constitution, it may be struck down (judicial review) by a specialized court.

Common Law
William I, or the Conqueror, conquered England in 1066 and imposed a new kind of feudalism, which sets
the basis for the distinction of common law. He stated that:
• All land belongs to the king, who can borrow them in return of military service and taxes to the lords.
William did not give lords a big piece of land to each lord to control them better.
• To impose a tax system and to assure its functioning, he released the Domesday book, a record of
all the lands.
• A jurisdiction on tax law was needed, so he appointed the Curia regis (royal court). The royal court
worked on forms of actions: setting how to behave in case law was not respected.

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Henry II made a new royal court, the Inns of Court, since the previous one was composed by priests only and
he did not want such influence on his decisions. Judges were also sort of teachers, since their students took
notes during the trials, the cases. It is from now that the principle of the binding precedent was
subconsciously conceived and Common law started developing. With the crystallization of the writs, the
royal censor could not develop any new forms of actions. With the principle of writs in consimili casu, which
means to applicate old writs to new cases. Analogies were found between new and old cases through the
writ of assumpsit.

Common Law vs. Equity; Judicature Acts

While common law was made by independent judges appointed by the king, the jurisdiction in equity was
developed by priests. The jurisdiction in equity intervened in case there were not any previous writs and
suggested the king to reach a decision under their advice, according to the God’s justice.
• The common law assumed an adversary approach: cases were discussed in the presence of witnesses
and a jury of free men;
• Jurisdiction in equity had an inquisitive approach, since that oaths and confessions under torture
were common methods to reach an understanding.
Finally, the Judicature Acts of 1873-1875 ended the dualism between the two jurisdictions, since all he
binding courts were consolidated into the only Supreme Court of Judicature, which was directed to
administer both law and equity.

Ius & Lex

aw is composed by the principles of Ius and Lex.
• Ius is the immortal unrecorded law of God, of our ancestors. It is contained by the legal culture of a
country. It is used in the interpretation of laws by judges.
• Lex represents the actual binding rules.
We have a translation of Ius and Rex for every language but English, which links them into the word “law”.

Common Law Jurisdictions

England never implemented the doctrine of separation of powers. As a result, common law jurisdictions have
been traditionally based upon cases decided by the courts (precedents), whereas legislative measures
(statutes) passed by the Parliament played a minor role until recent times.
The traditional explanation of the role played by the courts of the common law is that they would ascertain
and declare a law, which was already existing, thus bringing it to light (declaration theory of the common
law). The supremacy of judge-made law and the case to case approach inevitably lead to risks of
inconsistencies and inequalities, due also to an attitude of judges and interpreters of law. Therefore, it was
necessary to seek devices which could remedy this serious inconvenience.
By the end of the 17th century, the principle of binding was born. During the 19th century, it was eventually
considered a rule that a single precedent has an absolute binding force for a lower judge.
The doctrine of stare decisis, according to which courts look to past, similar issues to guide their decisions,
was established and is nowadays regarded as a staple of common law. The binding force of a precedent
ceases if and when a higher judge assesses it as unsound and wrong (overruling). Furthermore, a court is not
bound by a precedent insofar as it acknowledges that it is hearing a case which substantially different from
that previously adjudicated (distinguishing). Statutes are by now acknowledged as the primary source of the
English common law, and a similar consideration applies even more to US common law.
Accordingly, the rules governing interpretation of statutes significantly evolved over time.
Since the 19th century, courts have shown a growing attitude to interpret statutes beyond the words of their
provisions. The literal rule was therefore supplemented by the mischief rule.

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Mixed Jurisdictions
They are first round in those local contexts where a splinter of civil law coexists within a wider state context
which is denoted by the common law instead. This is the case of Scotland, Louisiana and Québec.
Moreover, a similar case can be found in Malta; but also, partially in Israel, which has built a legal system of
its own starting from 1948. A particular case is South Africa, where the Dutch-Roman law is applied.

Comparative legal system

The origin of law
If the law is surely the product of history, social developments and language it is also an intellectual product.
Legislators, scholars, judges, practitioners make up a small social élite which is influenced by the dominant
philosophical trends and ideologies. One has seen how much natural law theories and political thought have
contributed to shape legal systems.

One can also classify systems by tracing their philosophical ancestry: idealism and positivism in continental
Europe, realism across the Atlantic. There are no clear-cut distinctions between philosophical theories, and
the law is influenced by a great number of other factors. What deserves to be pointed put is that many of
the differences between legal systems are related to general epistemological approaches which not only
determinate how norms are set, but especially directs the minds of those who are in charge of drafting,
interpreting and implementing them. Law is part of a complex mental construction in which knowledge,
scientific theory, economic models and ideology contribute to what German philosophers called a Welt
Anschauung, a vision of the world.

Social norms vs. established laws

One of the most practical and relevant of these visions is social compliance with legal forms, i.e. norms set
by public authority. One is talking not only of compliance with typical criminal law rules which criminologists
carefully measure. What appears to be more important is compliance with

• private law, as payments od debts, relationships between neighbours, professional negligence…

• administrative law as traffic rules, construction permits, waste disposal…

at the end of the day what one might be more interested in is not differences in structure and content of the
systems and of their rules, but to what extent a legal system is effective.

One might even discover that different rules in the same fields are complied with equally in most countries.
Or that the same rules bear a very different rate of compliance. This research is more of a sociological nature.
From this perspective, one should consider the so-called “legal mentality”, which is not only how judges and
scholars perceive the law, but also how a community interprets it, meant as an order or an obligation of a
set of rules of conduct laid out by public authority. One could group systems in which norms are seen as an
essential element of the good functioning of society. Without norms, there is social disorder which birders
anarchy; an on the opposite side we find communities in which there is a deep scepticism in the usefulness
of such norms which are seen as an obstacle to individual freedom.
Comparative lawyers have always attempted to point out that formalized norms were and are only a small
part if a much boarder picture. Societies are governed not only through commands that come from
established authorities, but -especially in daily lives- through what are called ‘social norms’ which keep a
community together, set in the black-letters of law. Often social norms ignore State boundaries and a
continuous interplay between the two forms of law which try to prevail.

Law can in fact be expressed as a concept and a conception:

• Concept is the general and objective idea

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 • Conception is the subjective idea, the legal system of idea of contract. It depends on perception, and
how the concept is understood.
This distinction helps setting the boundaries of normative and linguistic determinants of legal content. Jurists
as lawyer, scholars and judges have an interest in maintaining a strategic form of communication between
them. Zencovich spoke about an élite language that they keep in order to maintain a certain power over it.

Global Rules & Private Actors

Economic activities require the existence of rules and their enforcement as preconditions that the market
cannot generate itself. Property rights, contractual rights and obligations, are minimal prerequisites for
modern societies that are provided and enforced by the state. Without such prerequisites, the market cannot
flourish. The state thus determines regulations and delineates the sphere of private freedom, within which
individual citizens and private institutions are entitled to conclude contracts with one another, to which the
system of property and contractual rights compels obedience.
• In the development of modern nation states, the state has been the guarantor of civil rights.
• In its role as a democratic constitutional state, it has also been the guarantor of political participation
rights, the right of the citizen to take part in the processes that determine public rules and issues of
public concern.
• Finally, in its role as a welfare state, it has provided social rights for citizens, such as the right to
education, to health care, and to other forms of welfare.
The combination of state-guaranteed civil, political, and social rights has provided legitimacy, solidarity, and
welfare to modem society, thereby contributing to peaceful, stable communities of anonymous individuals.
Following Matten and Crane we refer to this triad of rights as citizenship rights.
Today, the dimensions and the limits of state intervention, particularly the relationship between public care
and private responsibility, are widely discussed. Nevertheless, even classically liberal and libertarian authors
from economics such as Hayek, Nozick, and Friedman, agree that certain rules need to be implemented for
an economy to function properly. They suggest that these rules can only be created and enforced by the
state.
The implementation of transnational corporations
In a globalized world, however, global governance is no longer a task managed by the state alone. Today,
transnational corporations (TNCs), as well as civil society groups, increasingly participate in the formulation
and implementation of rules in policy areas that were once the sole responsibility of the state or international
governmental organizations. The activities of TNCs and civil society groups include involvement in peace-
keeping, protecting human rights, or implementing social and environmental standards. This development
indicates a shift in global business regulations from state-centric forms toward new multilateral, non-
territorial modes of regulation, with the participation of private and non-governmental actors.
Mathews has argued that international standards, as defined by corporations, nongovernmental
organizations (NGOs), or international organizations, create worldwide standards of conduct that are
"gradually beginning to override claims of national or regional singularity".

Zencovich: Models for a Globalized World

Legal systems are the result of the evolution of society, which are not confined within the boundaries of
national States. The two historical events that have produced the phenomenon of “globalization” are the fall
of communism regimes and the gradual opening to foreign trade for the Republic of China.
The systematic impact of globalization can’t be seen exclusively from a normative perspective. Uniform laws
can be seen as technical-legal standards which satisfy internal stakeholders. When a system encompasses
these laws, it creates a level playing field which reduces the differences from other systems.

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Since the Middle Ages merchants had created many autonomous procedural rules, which received approval
from the established authorities.
In systems without a code the parties had to engage in extremely complex drafting, establishing each time
terms and conditions. With globalization, the parties must agree on extremely complex and complete texts
which should be able to govern the whole transaction without having to use others’ legal norms. The result
is a very sophisticated legal system whose actors are most exclusively private parties of very large
dimensions. From a comparative legal systems approach, it would appear that global “Lex Merchatoria” is
an attempt to escape from the complexity of contemporary legal systems, which are subject to countless
variables. If this “Lex” is an attempt to create a self-sufficient legal system, international political and
economic relations have given birth to a host of institutions which are part of a broader system that imposes
itself over national systems.
During the last century, several examples of institutions were created:
- The main global organization is the United Nations (1945). It forms part of a wider system which
includes numerous other specific organizations (FAO, WHO, UNESCO);
The UN system represents clearly the limits of the universal legal principles. Its most founding text,
the “Universal Declaration of Human Rights” (1948), is substantially ignored by most of half of its
members.
- Two important institutions have a fundamental role: the International Monetary Fund (IMF) and the
World Bank (WB);
- The World Trade Organization (WTO) has the specific aim of favoring international trade through
the elimination or reduction of barriers.
We should take into account that international law, as we know it for the last centuries, is a typical product
of Western legal culture. Traditionally, international law is structured according to typical continental
European model.

Zencovich: Judges
The role of judges in a legal system has always been considered fundamental. The traditional common
law/civil law distinction is based on the historical fact that the former is a judge-made system, very different
from that of civil law, not only because judges have gradually built the systems through their decisions, but
also because of the procedures through which judges are appointed.
The first element that must be considered is the very long standing difference in the selection and
appointment of judges. A further element that must be considered is judicial organization. In the continental
European model, the judiciary, historically, is part of public administration and only rather recently it received
specific and constitutional guarantees of independence. Any judicial system stands on procedural rules, and
without procedural rules it cannot exist.

TAXONOMY

Taxonomy
Taxonomy is the branch of science concerned with classification. Taxonomy plays an important role:

• In transferring knowledge from one area of the law, the country or the world, to another.
• In the world of legal globalization, transfers of knowledge are needed not only within different areas
of a given legal system but also between different legal systems. The transfer of knowledge, rather
than being a pattern of communication and exchange between different legal systems, may become
a one-sided exportation of legal rules and concepts that usually end up being rejected, or creating
intellectual dependency.
• To identify deep differences or similarities on the path of legal systems.

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 o Wolf, Arminjon and Nolde (1950) classified legal systems as civil law, common law, mixed
and others.
o Renè David (1960 and 1970) as common law, civil law, socialist law and other conceptions of
law.
o Zweigert, Kotz (1971) as French inspired civil law countries, German inspired civil law
countries, Anglo-American common law, Scandinavian legal systems and religious or
philosophical influences on legal systems.
However, these approaches were Euro-American-centred since they imposed a western legal
imperialism.

Ugo Mattei
Mattei’s classification is based on the role of the law as a tool of social organization in the Weberian sense.
Ugo Mattei developed the theory of the three patterns of law. In every society, there are three main sources
of social norms:

• Politics (P) (legal process is often determined by political relationships)

• Professional law (L) (Wester tradition, includes civil and common law distinction)
• Tradition (T) (religious and philosophical)
Mattei thinks that legal systems are dynamic (“Legal systems never are, they always become”) and can
change their position over the triangle scheme over time. They are the result of a layered complexity that
stems from the accidents of legal history and from legal transplants. And what determines the becoming is
the variable role of different patterns within legal systems.
Consequently, legal systems can be grouped in families
according to the hegemony of one certain pattern.
A legal system never corresponds perfectly to a legal pattern. If
this correspondence actually happens it may be in a very
limited and exceptional historical moment.
Mattei’s classification is not rigid, it is based on an impression
of "hegemony", acknowledging that individual characteristics
of each legal family can be found in any of the others and thus,
in purist's terms, all legal systems are mixed.
In Mattei’s taxonomy, the traditional distinction between
common law and civil law is considered a subdivision within a
highly homogeneous family of legal systems: the western legal
tradition or, more appropriately, the rule of professional law.

LEGAL TRANSPLANTS

Comparative Legal System

The Origin of Law
If the law is surely the product of history, social developments and language, then it is also an intellectual
product. Legislators, scholars, judges, practitioners make up a small social élite which is influenced by the
dominant philosophical trends and ideologies. One has seen how much natural law theories and political
thought have contributed to shape legal systems.
One can also classify systems by tracing their philosophical ancestry: idealism and positivism in continental
Europe, realism across the Atlantic. Clearly there are no clear-cut distinctions between philosophical
theories, and the law is influenced by a great number of other factors. What deserves to be pointed out is

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that many of the differences between legal systems are related to general epistemological approaches
which not only determinate how norms are set, but especially directs the minds of those who are in charge
of drafting, interpreting and implementing them. The law is part of a complex mental construction in which
knowledge, scientific theory, economic models and ideology contribute to what German philosophers called
a Welt Anschauung, a vision of the world.

Legal Transplants thinkers

Prehistory of Legal Transplants
Savigny (German) and Montesquieu (French) are the most important personalities in the evolution of their
respective legal systems.
• Savigny was the promoter of the development of the German legal system during the 19th century.
His theory is based on countries’ custom and traditional values, leading to the transplantation of legal
systems. He criticized that imported laws are not suited for a certain local context.
• Montesquieu published in 1749 “De l’esprit des lois” in which he describes how every institutional
system is based on ethos, the customs of each country, composed of the climate, religion, laws, laws
government maxims, examples of past things, customs and manners.

Alan Watson (inventor, supporter)

The term legal transplant was coined in the 1970s by the Scottish-American legal scholar Alan Watson to
indicate the moving of a rule or a system of law from one country to another.
Watson thought that the proper task of comparative law, as an academic discipline, was to explore the
relationship between legal systems. He claimed that there was no necessary connection between laws and
the society in which they operated. According to him, laws were usually borrowed from elsewhere, so that
laws often operated in societies and in places very different from those in which they had initially developed:
there is not any necessary connection between laws in the society in which they operate and the society
itself. According to his thought, transplanting of laws was easy. The most criticized aspect of Watson’s
publication was not about the existence of legal transplant but that any idea could be transformed into
domestic law and no systematic knowledge of the law, neither political structure (Debate Watson/Kahn-
Freund).
For Watson, the value of comparative law lies fundamentally in its capacity to explain legal developments,
the relationship of law to society, and at this stage of its development the simplest way to exploit
comparative law is by examining, and accounting for, similarities and differences in systems that have a
historical relationship.
By the end of the first decade of the 21st century, the concept of legal Transplant as developed by Alan
Watson has become a standard way to approach Comparative law.

Rodolfo Sacco (supporter)

Rodolfo Sacco (1974) linked the phenomena described by Watson with methodological issues of comparative
law. In 1977 he presented the theory of legal formants: the legal landscape consists of components not
necessarily coherent with each other rather than of a hierarchical set of norms (law making is a confused
process that can also be in conflict with itself). The influence of Sacco in Italy and France further publicized
Watson’s work and made it familiar for Europeans. By 1985 there was no longer a blunt rejection of Watson’s
views (but rather a claim about the forces behind legal change): the basic thesis of legal transplant was now
claimed as accepted by all comparative lawyers.

To help this process, responsiveness, comprehensiveness and comprehensibility are necessary elements:
• Responsiveness: the more it adapts to the change in need of society, the better it is.
• Comprehensiveness: more answers it gives to law, the more comprehensive it is.
• Comprehensibility: the law has to be understandable by who is affected.

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Galindo (supporter)
Galindo was a law student in the universe of Edinburgh; he attended Watson’s classes and got a PhD with
him as tutor. Movement is, to him, what characterizes the idea of a legal transplant, a rule, institution or
knowledge identified in a social group is transported to another.
Watson’s version of legal transplants is characterized by a spatial dimension. Legal movement from one
localized place to another, such as a state or community, occurs frequently and, in turn, propels another
movement: the development or evolution of specific legal rules or a legal system.
For Galindo, there is another dimension, apparently neglected by most comparatists, that strongly affects
the way legal transplants operate: time. The attempt to transplant a rule or argument from one legal system
to another involves an expectation that someone wants to be fulfilled in the future. A legal transplant can
be viewed as a collection of experiences that happened in one legal system and are expected to be realized
in the future in a different legal system. Therefore, legal transplants are not devoid of a sense of the future;
as expectations, they try to anticipate the future and, consequently, change it.
In a broader perspective, this article aims to bring comparatists and legal historians closer together.

Milton Friedman (critic)

Milton Friedman considered Watson’s theory unconvincing because law is “confused” due to economic and
social pressures. About the borrowing factor, Milton states that law is always borrowed with the use of
decision-making.
Rodolfo Sacco supports Watson’s theory: he believes that it helps the sharing of the jurisdiction among the
world.

Pierre Legrand (critic)

Pierre Legrand is one of the old-fashioned comparatists, one of the main critics of legal transplants: he thinks
that they are impossible. According to Legrand, after transplantation, laws might look the same, but must be
implemented by official with radically different legal mentalities. Legal roots may be transferred, but the
ethos does not travel. Law simply could not be separated from its context. Law only has a meaning in context;
change the context and the law changes.

Bernhard Grossfeld (critic)

Bernhard Grossfeld argued that legal systems were very closely linked to culture generally, including
religion, language, and geography. So, he accepted some of what Watson reasoned; but disagreed with what
he considered as Watson’s optimism “about the possibility of transplanting legal institutions.”
He argued that law simply could not be separated from its context. In other words, law only has a meaning
in context; change the context and the law changes. Much of Legrand’s argument against transplants arises
from his opposition to the calls for a European Civil Code, in his opinion too difficult to create and enforce.

Otto Khan-Freund (critic)

Otto Khan-Freund believed that transplanting law is “un grand hazard”, as Montesquieu said, since any
attempt to use a pattern of law outside the environment entails the risk of rejection since all the factors
(mainly the socio-political context), and not only the legal one, have to be taken into account.
• In 1977, professor Merryman pronounced an important a unanswered question: ”are legal transplant
successful?”
• In 1981, Pnina Lahav tries to answer that question, claiming that the American law in Israel would be
rejected.
Alan Stain distinguished Watson and Khan-Freund’s works.
• Watson tended to take a macro legal view, contemplating the huge transplants, that appear as
milestones on the large scale of world history.

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 • Khan-Freund adopted instead a micro legal view, concentrating on modern law reform.

M. Graziadei – the micro perspective

Legal transplants are not exceptional or isolated occurrences, despite the economic, social, political and
cultural barriers that separate the world’s legal systems. The key notion advanced is the notion of mediated
action, which denotes actions performed by individuals making use of features of the environment as tools
to interact in a specific setting.
What he proposes is to add to an analysis of the "micro" level of individual action which is implicated in the
transplant. The analysis of the contexts in which discourse turns into action also shows the importance of
ideologies as a mean toward the legitimization of norms, including transplanted norms. Ideologies as forms
of action-oriented beliefs respond to the need to build consensus or resistance to the transplanted law. They
transform power into influence. The micro perspective on legal transplants advanced here conceives of
ideology in functional terms, as a means of coordinating the actions of the members of a group, whether
dominant or not. It is in the nature of ideology that its adherents will mostly act in the same way in a similar
situation, show willingness to carry out joint tasks, and contribute to group cohesion.

Grozev: Auto acculturation = norms replacing culture

Grozev formulates two plausible hypotheses.
1. First, that when a transplanted legal norm does not contradict an entrenched, strong local norms
become a default cultural preference via its prototypicality status.
2. Second, that when such transplanted legal norm does run contrary to a strong, incompatible cultural
preference, the norm achieves precedence over the cultural preference over a single generational
change.
To him, legal transplants are possible and sustainable, in part due to the fact that once transplanted, legal
norms achieve prototypicality in their own category, and furthermore over time become part of the same
local culture that initially may be largely incompatible with them; a phenomenon that may be termed auto
acculturation.

The Triumph of Legal Transplants: 1986-2013

In the last quarter-century, the use of the term “legal transplants” became universal. Watson’s arguments
have provided standard means of analysis in comparative law. What matters the most is the attitude of the
lawyers and the law-makers who may act as a filter of social demands.

Malicious Legal Transplants

If a country is facing certain problem, it can decide to adopt rules that have helped another country to solve
the same problem before. It is important thought that lender and the borrower country have similar
backgrounds, so to avoid malicious legal transplants. There is diversity as regards the circumstances that can
lead to a transplant. In the normative research about legal transplants, a helpful division is between optimists
and pessimists. The pessimists object that, in practice, legal transplants are often unfavourable to the
incoming legal system.
For ‘malicious legal transplants’ it follows that they can also concern any legal object and be either of an
involuntary or a voluntary nature. In addition, in order to be ‘malicious’ there needs to be intention to do
harm. Thus, ‘malicious legal transplants’ have an objective element (‘harm’), for example, where one group
in society imposes its social norms on another one without need. In addition, the subjective element means
that at least one actor of the transplant process recognises the use of the transplant in such a manner. Thus,
this is different from a situation where a legal transplant merely does not work well due to some kind of
unintended consequence

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 Legal transplants
Pros Cons
Even if a legal transplant does not perfectly fit, it can Legal irritants: legal transplants can have polluting
stimulate changes in the society it is applied in. or disrupting effects on the domestic legal order.
Transplanting law prevents law makers from the Legal transplants often fail due to lack of
costing of drafting a new law on their own. enforcements or general unsuitability.
The lender country can benefit from the law Where law and religion are not strictly separated,
transplant since it creates a familiar legal system there is a strong risk of authoritarianism.
that for example can make firms from the two
countries collaborate better.
The lender country benefits of the prestige of
having its law transplanted.

For example, it has been suggested that the US racial segregation laws of the nineteenth century seemed to
have influenced the laws of racial identification and purity in Nazi Germany. With more confidence it can be
said that the Nazi laws influenced the laws of Mussolini’s Italy. Examples have in common that the prior
position of the transplant country was receptive towards differences in race, religion and sexual orientation.
This situation is therefore different from the type of legal transplants, more frequently discussed in the
literature, where the traditional culture of the transplant country had been prejudiced towards the behaviour
that the transplant aimed to introduce; for example, transplants that aimed to liberalise family law in terms
of allowing no fault divorce or introducing same-sex unions.
The adoption of the foreign idea can have the aim of creating or fostering an international alliance with the
origin country. There can also be financial incentives, for example where the transplant country agrees to
follow certain rules of the origin country in exchange for foreign aid supporting its education, healthcare etc.
Westbrook - Diffusion of Law
Diffusion of law is a matter of comparative law. Professor Westbrook makes clear that globalization cannot
be avoided, and that diffusion of law is deeply related to it. The term “diffusion” suggests that law may lose
its identity in order to be spread all around the world. “Diffusion” is a term that defines a process, and that
can be replaced by the term “Modernization”. Globalization and diffusion of law cannot be separated. The
words “diffusion” and “globalization” share something important.
What he intends to sketch is what happens if we understand the “diffusion of law” as instances of the
modernization of authority. According to Westbrook, there are four different ways to define authority.

• Imperium (with imperialism)

A way to understand diffusion of law, in fact, is imperially. With imperialism we mean when sovereign
impress itself upon people outside its established borders, so expands commercially, military and
culturally. Thus, diffusion of law or modernization in that sense is accomplished by power.
However, imperial will is an insufficient way to understand the diffusion of law. First, imperialism simplifies
the relations between the law and the will of the sovereign, thus the relationships between political intention
and law must be even more complicated outside the jurisdiction of the sovereign we are considering. Law
simply is not some package of data that can be replicated everywhere. Indeed, the concept of law is also
linked to the recognition of the authority by the subjects of the laws. This means that power requires the
participation of the subjects, who conform themselves to some established standards.

• Fashion = people copy each other for fashion = modernization

Since diffusion of law is basically an adoption of law, then a legal system changes in accordance with what
people believe to be modern, and this belief is formed in view of the examples provided by other legal
systems. Rather than diffuse, we can say that modern laws are re-presented by other jurisdictions. So, law
is applied to a jurisdiction, in view of other legal systems’ examples. (Understanding the modern in terms of
fashion, is not restricted to law).

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Individuals and entire societies model themselves. Some contemporary scientists state that a tendency to
copy our fellows is a characteristic of humans. So, it is not surprising that legal system may adopt laws first
pronounced elsewhere. Cultural features, including law, are adopted because the people believe them to be
better, that is, modernization that is the adoption of a new way of doing things may happen because people
try to be modern.

• System = recent forming of new legal structures and pillar

Modernization can be also seen as the formation of new structures so, when considering a system, we must
take into account its different building pillars and its own distinct characteristics; and the new global scenario
is setting new rules, deeply changing the shape of what we have experienced till now. Socially speaking,
interactions have evolved and so the structures that regulate them, resulting in the aim to create a global
law.
• Tribe
Law can be formed among person without considering the location, like law between religious people. When
we say civil society, usually we mean legal relations that operate among people rather than state. To go
deeply it can be added that actually people gave the law to state, no the other way around. So, this
perspective says: state is not source of authoring, state does not occupy the foundational position in
positive thought. Instead, people occupy this foundational position. People are source of authority view. In
the nomadic state evoked by “tribal” we encounter the contemporary in its emphasis on people rather than
territory, the tribal imagination may be seen as a product, rather than a rejection, of globalization. Tribal
provides what culture once did, community solidarity.
The Tribal perspective, like the imperial one, focuses on the creation of social status, the classification of
people as members or non-members of the tribe, as insider or outside the bounds of the empire, as Greek
or barbarian. To counter the homogenizing connotations of the word globalization and diffusion of law we
need to focus on differentiation; so, understanding modern authority through Tribal perspective give us an
intellectual advance.

SACCO - LEGAL FORMANTS

Rodolfo Sacco on legal formants

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Rodolfo Sacco is a professor emeritus at the faculty of law at the University of Turin and is arguably one
of Italy's best known legal scholars and one of Europe's most famous comparative lawyers.
In his opinion, instead of speaking of "the legal rule" of a country, we must speak of the rules of constitutions,
legislatures, courts, and, indeed, of the scholars who formulate legal doctrine. The reason jurists often fail to
do so is that their thought is dominated by a fundamental idea: that in a given country at a given moment
the rule contained in the constitution or in legislation, the rule formulated by scholars, the rule declared by
courts, and the rule actually enforced by courts, have an identical content and are therefore the same. Even
the jurist who seeks a single legal rule recognizes that living law contains many different elements such as
statutory rules, the formulations of scholars, and the decisions of judges-elements that he keeps separate in
his own thinking. Sacco called the sources of law the "legal formants" (A formant is the judicial base over
which a legal system of a society develops). Within a given legal system with multiple "legal formants" there
is no guarantee that they will be in harmony rather than in conflict.

According to Sacco, every legal system is created by just three legal formants through books or actions:
• Judicial , typical of England and all common law countries, is based on case law and the principle of
stare decisis.
• Legislative, traditionally prevailing in civil law systems. it is historically linked to the French law (code
Napoleon).
• Doctrinal , which played the most important role in German codification and is still powerful in civil
systems. Doctrinal formant differs from legislative one on the interpretation of law.
These three formants play together.
• The fourth legal formant is practice , which is still into really recognized as such.

Comparison recognizes that the "legal formants" within a system are not always uniform and therefore
contradiction is possible.

Changes by legal formants: Imitation & Innovation

• Imitation
A legal system will tend to borrow from others when its incomplete or wants to look modern.

• Innovation
Innovation happens continuously. Innovation can be produced to seek harmony, analogy or
assimilation. It depends on:
o Social facts that go beyond the legal system.
o The evolution or revolution of the system of values.
o On the seizing of power by representation of new interest.
o On phenomena that are legal equal.

Sacco: The Aims of Comparative Law

Comparative law presupposes the existhence of a plurality of legal rules and institutions. It studies them in
order to establish to what extent they are identical or different.
The other comparative sciences realize that knowledge of these phenomena develops by comparison.
The primary and essential aim of comparative law as a science, then, is better knowledge of legal rules and
institutions. Nevertheless, knowledge of single systems can be the fruit of comparative studies.

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SOURCES OF LAW

Sources of law
The "legal formants" of a system of law are never in complete harmony. Nevertheless, the "sources of law"
are usually explained to suggest that they provide a single answer to every legal problem.
• Although the disharmony among legal formants of the system is most evident in France, the French
constitution preserves the ideas of the late eighteenth century according to which legal rules can
only be created by organs of government charged with legislative functions. In France, this
constitution is thought to explain completely the creation of rules. Nevertheless, in France, as
elsewhere, the civil law evolves incessantly, driven on by innovative judicial solutions.
• In other European countries as well, discussions of constitutional law typically mention one or a very
few of the legal formants of the system. Jurists in the fields of private law and labour law, however,
are not willing to ignore "practice" which, in continental Europe, consists of systems controlled by
judges and administrative organs. Some elements of the system are constitutionalized, and these are
the ones the constitutional lawyers refer to in their discussions. We might refer to them as enacted
legal formants as distinguished from those which have grown up without formal enactment.
Sometimes sources are recognized by speaking of a "constitution in action" or a living law and so forth. Others
speak as though in an ideal legal system the only sources of law would be those indicated in the constitution,
even though, in reality, many rules are created by courts, arbitrators, and administrative bodies. One can
believe both in the omnipotence of the legislator and in the creative power of the judge.
Statute and judicial practices are concerned with different legal formants, which themselves may have
different contents. One can affirm that the power of the legislator to make statutes without denying that
judicial decisions are another source of law. To do so, one must acknowledge that judicial decisions are a
source of law, whether or not they are mentioned in the constitution. Any account of the sources of law is
incomplete unless it describes all legal formants of the system.
To have a complete account, we must recognize the rules promulgated by organs of the state and enforced
by its coercive power are not the only sources of law. The positivist view that law is created and enforced by
the state creates a dangerous optical illusion. The organs of the state may choose to enforce rules created
elsewhere.
Law cannot be applied unless it is interpreted. When law is applied, there must be an interaction between
a primary source, such as statute or precedent, and an interpretation, often provided by judges.
Interpretation, in turn, is determined and disciplined by all those factors that affect the convictions of the
interpreter. Whatever affects the convictions of the interpreter is thus a source of law as applied. In truth,
legal science has not yet made the least effort to describe this phenomenon correctly.

Sacco: Problems of Translation Arising from Law

UNIDROIT is an international institute based in Rome founded to promote the unification of private law. In
1974, after an initiative in the field of international sale of goods, it began editing an international commercial
code. Article 2 of the draft dealt with "contract" and contrat, which are not the same thing. A deed
transferring property or creating a mortgage and an agreement for the management of an estate by a
nominee are "contrats" in France but are not "contracts" in England or the United States where they are
regarded as "conveyances" or "trusts."
Translation, then, requires the work of the jurist. To translate, one must establish the meaning of the phrase
to be translated and find the right phrase to express this meaning in the language of the translation. The real
difficulties of translation arise when the relationship between word and concept is not identical in different
legal languages. Word and concept may be related in different ways and any theory of legal translation must
consider them.

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Commercial law
History of Commercial Law
The codification of commercial law progressed throughout the 20th century in parallel with the codification
of civil law. Historically, it consisted of a body of trading principles used by merchants (lex merchatoria) and
applied by the courts of the corporations to their members.
Lex Merchatoria
Non-national legal systems are related to communities: one example is the “lex merchatoria”, active from
Ancient Rome to Middle Age, which regulated the trade between all merchants. Lex Mercatoria is the body
of commercial law used by merchants throughout Europe during the medieval period.
Beginning in the third century AD, banks in Persian territory began to issue letters of credit. These letters
were termed “cok”, meaning “document” or “contract”. The “cok” became the “sakk” later used by traders
in Arab-ruled lands. Transporting a paper “sakk” was more secure than transporting money. In the ninth
century, a merchant in one country could cash a “sakk” drawn on his bank in another country.
Italian republics
Italian municipalities and maritime republics played a vital role in shaping such legal concepts, particularly
the banking industry. Merchants’ trade associations had their own special courts, which applied commercial
and maritime law to settle disputes among their members and were free from any influence by local judges.
Throughout the centuries, many states created their personal commercial code.
Commercial law in US
In the US, the push for a uniform commercial law resulted in the adoption of the Uniform Commercial Code
(UCC) in 1952.
The UCC provides an optional model of legislation which is drafted using the restatement technique. Despite
its optional character, it was adopted across all 50 states.
Commercial law worldwide: ICC and INCOTERMS
Established in Paris in 1919, the International Commercial Chamber (ICC) was instrumental in developing
and applying uniform commercial law globally. The International Commercial Terms (INCOTERMS) were first
published in 1936 and have, since then, been revised time to time.

PRIVATE AND INTERNATIONAL LAW

The sources of international law

The sources of international law are:
• International conventions, whether with a general or particular nature, establishing rules expressly
recognized by the contracting states.
• International custom, as evidence of a general practice accepted as law.
• The general principles of law recognized by civilized nations.

Private Law
Private autonomy is the fundamental principle of private law: it states that private people can decide what
to do with their rights and duties. There are just few binding rules, while the rest is left to autonomy, to the
freedom of choice of people: there are some indications by the legislator for how to write a contract, how
to protect your ownership, but a private may change all these rules using his private autonomy. Social rules
are not binding as private law rules, but they are entrusted by the same importance.
The traditional distinction between private and public law can be explained as:

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 • Private law provides a legal framework for horizontal relationships between equals and freedom is
its guiding principle.
• Public law governs the vertical relationship between the authoritative state and individuals or
entities. The rise of public law has historically the effect of exempting the state’s authoritative power.
After WWI, private law has dramatically changed and become more “social”. Such developments emerged
as states were facing an increasingly severe crisis, which questioned their relationship with the legal system.
The relationship between the commercial and private law
The relationship between the commercial and private law has known different developments:
• On an international level, the ICC (International Chamber of Commerce) played a very important role
in developing and applying a uniform commercial law.
• In the European context, the founding Treaties regulate the structure and powers of European
institutions, laying down their principles and basis. Jurisdictions of continental Europe are generally
acquainted with the fundamental distinction between private and public law, which can be
understood as two complementary branches of each national law.
According to the ECJ jurisprudence, the EU Treaties apply directly not only to the Member States, but
also to their citizens, thus creating rights and obligations that are likely to be protected both by
national and European courts. Article 5 of TEU provides the fundamental principle of subsidiarity,
according to which the EU must give priority to the legislative power of Member States, as well as
to the freedom of individuals to choose which law should govern their contracts and their obligations.

EUROPEAN UNION

European Union
History
• The Treaty of Paris of 1951 created the first European Coal and Steel Community (ECSC), signed by
France, West Germany, Belgium, the Netherlands, Luxembourg and Italy, with Jean Monnet as its
president. Its theory was simply that war would be impossibly costly if ownership and production of
every country's economy was not mixed together. It was established:
o an assembly (now the European Parliament) to represent the people, who vote it,
o a Council of Ministers led by national governments,
o a Commission as the executive branch,
o a Court of Justice to interpret the law.
• In the Treaty of Rome of 1957, it was decided to launch the first European Economic Community
(ECC). It shared the Assembly and Court with the Coal and Steel Community but set up parallel bodies
for the Council and Commission. It sought to break down all barriers to trade in a common market
for goods, services, labor and capital, prevent distortion of competition and regulate areas of
common interest like agriculture, energy and transport. A separate treaty was signed for a European
Atomic Energy Community to manage nuclear production. The Merger Treaty 1965 finally placed the
ECSC and Euratom within the EEC.
• The Treaty of Maastricht of 1992 renamed the EEC as the European Union (EU), and expanded its
powers to include a social chapter, set up a European Exchange Rate Mechanism, and limit
government spending.
• A newly confident EU then sought to expand.
o The Treaty of Nice 2001 made voting weight more proportionate to population.
o The Euro currency went into circulation in 2002.
o In 2005 a Treaty establishing a Constitution for Europe was proposed. This "Constitution"
was largely symbolic but was rejected by referendums in France and the Netherlands. Most

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 of its technical provisions were inserted into the Treaty of Lisbon 2007, without the emotive
symbols of federalism or the word "constitution".

EU law
EU law is the system of laws operating within the member states of the EU. The EU has political institutions
and social and economic policies. As the European Court of Justice said, “the EU is not merely an economic
union but it represents a new legal order of international law and is intended to ensure social progress and
seek the constant improvement of the living and working conditions of its peoples.”
The EU's legal foundations are the Treaty on European Union (TEU) and the Treaty on the Functioning of
the European Union (TFEU), unanimously agreed by the governments of the 28 states that were members
at the time. New states may join the EU, if they agree to operate by the rules of the organization, and existing
members may leave according to their "own constitutional requirements".

The sources of EU law are divided into primary (or original) and secondary sources.
• The primary sources are about the creation of EU by member states. They are the Founding Treaties
and their revisions over time.
o Treaty on European Union TEU is the shortest of the 2 with its 55 articles. It is the legal
institution which sets out the most fundamental legal properties of the EU: the aim and the
objectives for which was set up, essential principles of conduct within the organization, how
to leave or become a member of the union an how its constitutional rules can change. In the
TEU key provisions of EU external relations are those stating the core legal principles
governing all EU action, including international relations and the relationship between the
TEU and the TFEU.
o Treaty on the Functioning of the European Union TFEU is instead a well-defined treaty
composed of 358 articles, which describe the functioning of this international organization
in which the EU institutions can adopt measures in pursuit of external objectives set out in
the TEU. The TFEU contains crucial provisions governing the relationship between the EU
and the international law both as regards itself and its own international agreement and the
legal position of the member states.
o The TEU and the TFEU addressed two fundamental pillars:
§ Competition
§ Fundamental freedoms.
o Since the judgement in “van Gend en Loos” case in 1963, the ECJ clarified that the Treaties
are directly applicable not only to Member States, but also to their citizens, thus creating
rights and obligations.
o The Charter of Nice binds the European Union in its entirety.
o The general principles drew by the Court of Justice drew in order to formalize some of the
distinctive characteristics of European law. Thus, member states are obliged to respect these
rights and the European Convention on Human Rights (ECHR).

• The secondary sources of EU law are regulations, directives and decisions:

o Regulations, which shall have general application.
o Directives are applied or implemented into national law through the specific tools provided
for by national legislation. Non-executive directives are not directly applicable to individuals,
but national laws must interpret cases in accordance with the directive.
o Decisions include:
§ Recommendations
Not legally binding
§ Opinions

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The EU Parliament has repeatedly solicited the adoption of a European civil code. The Commission has also
suggested that this proposal should be evaluated as a desirable option of EU legislative policy. Moreover, it
was suggested that a Common Frame of Reference (CFR) should be set in order to establish common
principles and language in the realm of contract law. The Draft of the CFR (DFCR) could be considered as a
project of a true codification of European private law.

Van Gend en Loos and Costa v. ENEL cases: the principles of direct effect and supremacy of
EU law
Van Gend en Loos v. Nederlandse Administratie der Belastingen (Dutch taxation)
Van Gend en Loos v. Nederlandse Administratie der Belastingen (1963) was a landmark case of the European
Court of Justice which established that provisions of the Treaty Establishing the European Economic
Community were capable of creating legal rights which could be enforced by both natural and legal persons
before the courts of the Community's member states. This is now called the principle of direct effect.

Facts
The claimants, the company van Gend en Loos, imported chemicals from Western Germany to the
Netherlands, where they were asked to pay import taxes at Dutch customs, the defendants, which they
objected to on the grounds it ran contrary to the European Economic Community’s prohibition on inter-State
import duties, as per Article 12 of the Treaty of Rome (now replaced by Article 30 TFEU), which stated:
Member States shall refrain from introducing between themselves any new customs duties on imports and
exports or any charges having equivalent effect, and from increasing those which they already apply in their
trade with each other.

The defendants contended that as the claimants were not a natural person but a legal person, they could not
claim such rights.

Held
The European Court of Justice found for the claimants, viewing that the European treaties gave rise to rights
for legal and natural persons alike. Further, the Court viewed that European Community law ‘not only
imposes obligations on individuals but is also intended to confer upon them rights.’

Conclusion
This decision represents an important passage within the EU evolution. Consequently, the case Costa v. ENEL
stated that the founding Treaties of EU made a new legal system arise, a legal system which recognizes States
and also their citizens. European law can be enforced by individuals through the national courts system of a
Member State, rather than necessitating that the European Commission bring a legal action against the State
in question for failure to comply with its international obligations.

Summary – principle of direct effect

In 1963, when asked by a Dutch court whether national courts could apply EU law themselves, the Court of
Justice replied that not only could they apply EU laws, but they were obliged to do so. This is the principle of
direct effect.

Costa v. ENEL
Case
Flaminio Costa was an Italian citizen, owner of shares of Edisonvolta. When the firm was nationalized, Costa
refused to pay a light bill. The national judges brought the case to International Chamber of Commerce and
then to European Court of Justice. Constitutional Court decided that, albeit Italian Constitution includes a

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limitation of sovereignty in favour of EEC, the Treaty of Rome, stated in 1958, could not interfere with the
nationalization of electricity in Italy (1963).

Held
By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal
capacity and capacity of representation on the international plane and, more particularly, real powers
stemming from a limitation of sovereignty or a transfer of powers from the States to the Community, the
Member States have limited their sovereign rights, albeit within limited fields, and have thus created a body
of law which binds both their nationals and themselves.
Any subject (individuals, public offices and national courts) within national legal system was to recognize the
direct applicability and prevalence of community law not applying national law.

Summary – supremacy of EU law

In 1964, an Italian court asked whether their laws nationalizing the electricity industry infringes EU law. The
Court of Justice replied that, because states have decided to share some of their powers at EU level, where
there is a conflict between national and EU law, the latter must prevail, and national law must be set aside.
This principle is called supremacy of EU law.

Fennelly: Judges & Procedures

The treaties and the laws made by EU institutions conferred rights and imposed obligations on the union
institutions, the member States and individuals. However, the Court of Justice does not add the power nor
the means of giving them effect. From an early date, in its judgment in “Van Gen den Loos” case, the Court
enlisted the national judges to do so. The task of the Court of Justice is to ensure that in the interpretation
and application of the Treaties the law is observed.
The Court added in “Costa vs. ENEL” that EU had “created its own legal system, superior to the one of the
Member States”. These propositions effect a revolutionary transformation of the constitutional role of the
national judge. The national judge administers justice at the intersection between two systems of law. His
task will be to resolve the conflicts between the two.
The principle of direct effect is the key instrument devised by the ECJ for ensuring the effectiveness of EU
Law. A particular provision of EU Law may be held to have direct effect in the sense that, when properly
interpreted, it confers rights that may be invoked by individuals before the courts of the Member States.
Where EU law confers rights, those courts have a duty to protect them.
The general rule concerning the application of EU law in the Member States is that the Member States
possess a so-called ‘procedural autonomy’.
The right to an effective judicial protection refers to a broad concept which generally encompasses various
core elements, including access to justice, the right to an effective remedy and the principles of fair trial and
due process of law.

The three main principles of EU

There are basically 3 main principles of the EU constitutional law pertinent to the external relations:

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 • Principle of conferral
conferral.. The EU is established among the member states as high contracting parties
and so they confer competences on the EU to reach objectives that they all have in common. This
means that the EU has limited legal capacity to pursue objectives that can only by legally permitted
by the members.
• Obligation of loyalty
loyalty.. The loyalty level and the unit of government must always act to ensure the
proper functioning of the system of governance as a whole.
• Principle of institutional balance , in which we find a principle of balance of power. There are 7
main European institutions: European parliament, the European council, the council of minister,
the European commission, the court of justice of the EU, the European central bank and the court
of Auditions. The principle of balance says that these institutions can be labelled as being part of
executive, legislative or judicial branch.

International agreements are the EU’s legal external relation’s tools per excellence, they create the right
situation to allow the union to play along in the global legal order. We can make a distinction between
instruments adopted within the EU legal order (internal) and those adopted by the Union and those adopted
by the EU alone (autonomous) or agreement between the union and counter party (conventional). These
instruments can be legally binding (hard law) or committing in other ways (not binding).

EU External Relationship Law

We define the EU as an international actor in abstract terms, as an entity which interacts with third countries
and international organizations (and its own member states) in ways which are distinguishable from its
constitutive member states. The EU is a “legal actor” since it is not a state but is subject to rules of
international law on the participation of global stage. There is still a big uncertainty whether the EU is an
international organization or something else.
In its famous ruling on the Lisbon treaty, the German Constitutional court held that the Union was designed
as an association of sovereign states to which sovereign powers are transferred. The EU is indeed considered
special not because of its identity problems but because the high degree of “constitutional” development,
supranational components and the rule of law features within this organization making it look almost like
a federation of states. The EU is bound by the international law and agreements to which it is a party as well
as to the customary parts of international law. So, we could consider the EU as an international organization
but exclusively competent to act in certain areas, as the rule that EU Members states feel that they should
give priority to the EU law in cases of a conflict with international law.
The characteristic of this international actor is that the EU is neither a state with full international powers
nor traditional international organization with limited powers to go against the will of its members; but, it is
based on the principle of conferred power. Conferred power means that it can only act where its member
states have given it the competence to do so. Therefore, depending on the legal contest and nature of the
EU’s external powers the member states have a lesser or greater degree a prominent role in the formation
and the execution of international actions in the relevant area.

COMMERCIAL LAW -> CONTRACTS

Commercial law and Contracts

There is no criterion to assess what fact is legally relevant: identifying events and behaviors that have legal
consequences depends on norms in force and what they purport to regulate.
• Some events do not have impact on social relationships and consequently do not need to be
regulated by society.

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 • Some others have consequences of social relevance but are not part of the legal realm but pertain
to etiquette.
Some events or acts that originally did not have legal consequences began to produce them and some others
which had legal consequences have now been amended or repealed. Examples may be the progressive
allowance of same-sex marriage and the restrictions over Jewish people enacted in the 30s.
In order to identify which events or acts of behavior have legal consequences, we state that “An event or act
of behavior has legal consequences if a norm establishes legal consequences to it. If a norm provides for a
state of affairs, then the event or act of behavior has legal consequence, if it does not provide a state of affair,
then it does not exist for the law.”

What is a State of Affairs?

A state of affairs provided for/by a norm may consist in a single event whose occurrence triggers the
established legal consequences, a simple IF-cause.
Others state of affairs consist on a whole chain of events and the relevant transaction is triggered by the
occurrence of all of them.
Any event or act of behavior which is included in the state of affairs provided by a norm is said to be legally
relevant. All events or acts of behavior that are legally relevant are classified as “judicial facts”, they form a
huge mass composed by contracts, torts, testaments, deaths, births and so on and each of them produces
different legal effects.
Introduction to contracts
• Legal facts are events connected with human action, where the will of the person is absolutely
irrelevant to produce effects.
• Legal acts are actions, declarations made by legal persons who had a certain will. They produce legal
effects under the assumption they have been conscionably and voluntarily kept by a person.
Contracts are an example of legal act, through which a party may bind himself to do or not to do something
for the benefit of the other party to the contract. It is focused on the will.
There is not a uniform definition of contract. What we can say is that it is an agreement enforceable by law
to produce legal effects between parties. Every contract is an agreement, but not all agreements are
contracts since they are not legal bound.
The Latins already talked about “obligatio”, the recognition of the right for a part and a duty for the other. A
contract is a legally binding agreement that recognizes and governs the rights and duties of the parties to the
agreement. A contract is legally enforceable because it meets the requirements and approval of the law. An
agreement typically involves the exchange of goods, services, money, or promises of any of those.

Contract Civil in Common and Civil Law

• Regarding contract law, under the Common Law the thing that matters most is the will of the parties
and what they have agreed; freely and willingly; the parties under the Common Law have the liberty
of form, always having in consideration principles such as good faith and the burden of disclosure
during negotiations. The entire contract will be built by the parties with a minimum intervention of
the law.
• In the Civil Law System all types of contracts (contract of sale, lease, donation etc.) are regulated
and listed in a code. Most of the contracts have many formalities regulated by law that must be
fulfilled if not the contract shall be unenforceable and invalid. In this case, the contract will be built
by the parties but following the structures and regulations set by the law.

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Differences of Contracts in Common and Civil Law
Civil law Common law
It is a branch of the law of obligations
Unilateral contracts: create a duty only for one of Unilateral contracts: there is the manifestation of
the parts of the contract. the will of one party.
Bilateral contracts: imposes a duty on both parties. Bilateral contracts: express the will of two parties.

Doctrine of Freedom of Contracts

Freedom of contracts is a legal concept which embraces two concepts:
• The creation of a contract is the result of a free choice, unhampered by external control.
A contract, in order to be considered as valid, requires the presence of six main elements:
1. The contract must have a legal purpose and cannot be used for illegal purposes.
2. An offer must be extended. This should include the terms and conditions of the agreement.
3. Mutual agreement between the parties.
4. Consideration, which is when both parties agree to provide something of value in exchange for a
benefit.
5. The parties must be legally competent. Minors and impaired cannot sign a contract.
6. All parties must come to an agreement based on their own will.

European Contract Law

The need of unification of Contract law in EU – the Lando commission
The Principles of European Contract Law (PECL) is a set of model rules drawn up by leading contract law
academics in Europe. It attempts to elucidate basic rules of contract law and more generally the law of
obligations which most legal systems of the member states of the EU hold in common. The Principles of
European Contract Law are based on the concept of a uniform European contract law system and were
created by the self-styled Commission on European Contract Law set up by Ole Lando ("Lando Commission").
In the broader sense the PECL proposals are a "set of general rules which are designed to provide maximum
flexibility and thus accommodate future development in legal thinking in the field of contract law."
The PECL is a harmonizing tool, it does not represent a legally enforceable regulation: "The term 'soft law' is
a blanket term for all sorts of rules, which are not enforced on behalf of the state, but are seen, for example,
as goals to be achieved." The common feature of all harmonizing instruments is that they can never obtain
any binding force upon their own motion. In order to gain a binding effect, a legislative act is necessary.

Another attempt: CFR and DCFR

In 2001, the European Commission issued a Communication in relation to possible developments in European
contract law. Following the review of submissions on the Communication, the Commission released an Action
Plan for a more coherent European contract law in 2003. The Action Plan began the process of creating what
is known as the Common Frame of Reference (CFR). The CFR is intended to provide a structure and guideline
for the development of harmonised European private law and has a specific focus on contract law. The Draft
Common Frame of Reference (DCFR), a joint project of the Study Group and Acquis Group, was published in
December 2007.

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Different theories of Contract
• Objective Theory of Contract
The objective theory of contract is the legal concept according to which a binding agreement exists
between two or more parties if a reasonable person would judge that an offer has been made and
accepted. Within this theory, the personal intents are not relevant.
• Subjective Theory of Contract
The subjective theory of contract is a legal doctrine based on the simple concept that a contract is
an agreement in which the parties have a subjective meeting of the minds as legally binding. The
subjective interpretation would have the courts settle the matter of the contract by determining
what the actual, subjective, mental state of the parties was at the time of the purported formation.
• Perceptive Theory of Contract
Recently, the perceptive theory has appeared. Neither the intention of a person nor the actual
declaration of a contract can be the actual essence of the contract. For this theory, it is the perceptive
content that constitutes the essence of that contract. In order to apply this theory, parties need to
prove their will to take part of that contract and to take all the responsibilities coming from it. This is
why the perceptive theory embraces the principle of protection of legitimate expectation.

Numerus Clausus (closed number) Property Rights

The numerus clausus is a concept of property law which limits the number of types of right that the courts
will acknowledge as having the character of "property". Several consequences follow from a right having
the nature of property, as opposed to being a personal right, like a contract or obligation to pay
compensation. Historically, the law has given privileged remedies to the holders of property rights over
personal claims. These have included priority in payment from an insolvent debtor, a greater likelihood of
being awarded specific performance, and security in remaining in possession of land or some other asset
against termination of the right to possess. It holds especial importance in land law and corporate law.

Hawking v. McGee Case

in 1929, the Supreme Court of New Hampshire decided about the Hawking v. Mcgee case.
After a patient injured his hand, he sought medical treatment from a doctor, the defendant. The defendant
proposed surgery by using skin from plaintiff’s chest and grafting it onto patient’s injured palm, and he
guaranteed that the patient could return to work a few days afterward with “a 100 percent perfect hand.”
Patient’s recovery time was longer, and the palm of his hand began growing thick hair like that on his chest.
Dissatisfied with the results of the operation, he sued defendant for breach of contract alleging that
defendant provided a warranty that his hand would be perfect. The court first observed that the
Defendant’s statements that the boy would be home from the hospital within three or four days and would
be back at work a few days after did not orm a contract. Instead, this was the Defendant’s opinion or
prediction. The court, however, found that the Defendant’s statement “I will guarantee to make the hand a
hundred per cent perfect hand” arguably “would establish the giving of a warranty in accordance with his
contention.” The court put credence in the fact that the Defendant repeatedly solicited the Plaintiff’s
father to perform the operation in which he had little prior experience. The jury reached a verdict in
patient’s favour and awarded him damages in accordance with the trial court’s instructions, namely
awarding him damages for the pain from the operation and the damage the operation had caused to his
hand.
In this case, the court decided according to the objective theory of law.

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Herbert v. Durand Case
Herbert v. Durand case was held by the Court of Cassation in 1952 in France. It is an example of subjective
theory of contract.
Durand, a tailor, got an order from Herbert to make two coats. However, once he finished his work, he
realized that his wage was too law and brought the case to the labour court. The court stated that the oral
agreement was contrary to public policy, since underpaying work is unethical.
In this case, instead, the court decided according to the subjective theory of law.

Vogenauer on Contract Law

The codification of general principles
The explicit and comprehensive codification of general contract law principles is a general phenomenon.
Regarding case-law, common law judges have been suspicious of broad and sweeping pronouncements.
Contrary to what one might believe, the codification of general principles of contract law is not a long-
standing feature of the civil law tradition either.

CONSUMER LAW

Twigg-Flesner on Consumer Law

Consumers are often unsure about what their rights are if they have encountered a problem, and it is not
easy for them to discover these. Similarly, traders often find it difficult to understand exactly what they are
required to do for the same reason, which can mean that they inadvertently fail to honour the rights their
customers have. Of course, both consumers and traders can seek legal advice, but this is rarely going to
provide the clarity that is needed. This complexity has been exacerbated by the adoption of consumer law
in response to specific problems, combined with a similarly piecemeal evolution of consumer law at the
European level.
It is therefore unsurprising that there have been initiatives to reform and modernise consumer law both at
the domestic and European levels. In UK, at the domestic level the Draft Consumer Rights Bill was established
in June 2013.
This flurry of activity at the domestic level was, in part, triggered by developments at the EU level. Over a 20-
year period, the EU had adopted a number of directives on aspects of consumer law, particularly consumer
contract law. Initially, these all followed the so-called “minimum harmonisation” approach, which left
Member States were free to introduce or maintain provisions in the field covered by a directive which granted
consumers a higher level of protection. More recent directives shifted towards “full” or “maximum”
harmonisation, essentially removing the discretion for Member States to have more protective domestic
laws in the area, and this became the stated policy of the European Commission. The academic debate both
about the substantive changes to existing law and the policy shift towards full harmonization was intense,
with few scholars supportive of the shift towards full harmonisation. At best, it was suggested that there
could be selective, or targeted, full harmonization of a few aspects. After a turbulent progress through the
legislative stages, political agreement on a Consumer Rights Directive was reached in June 2011. The final
Directive leaves the directives on unfair contract terms and consumer sales untouched, and primarily
standardises pre-contractual information duties and the right of withdrawal in “off-premises” and “distance”
contracts.

CONFLICT OF PRIVATE INTERNATIONAL LAW

Private International Law

Conflict of laws (sometimes called private international law) concerns relations across different legal
jurisdictions between natural persons, companies, corporations and other legal entities, their legal

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obligations and the appropriate forum and procedure for resolving disputes between them. Conflict of laws
especially affects private international law but may also affect domestic legal disputes e.g. determination of
which state law applies in the United States, or where a contract makes incompatible reference to more than
one legal framework.
The existence of a plurality of autonomous jurisdictions bring with itself the possibility of their conflict, when
the same fact has connections with more than one national law. A “choice of law” must be then accomplished
and it must be taken by the law itself.
In a potential case of conflict between international types of law, each jurisdiction must deploy rules designed
to carry out this very specific function, to make a choice. All the rules of this sort are contained in the branch
of law traditionally called private international law.
From a historical point of view, this was specifically addressed in France during the 16th century. Charles
Dumoulin and Bertrand d’Argentré are to be reckoned among the scholars who contributed the most. Since
private international law belongs to each national law, the question of their conflicts arises.
Towards uniform private international law
There is a tendency to uniform private international law by means of treaties between nations.
• In this regard, international bodies such as the Hague Conference have played an important role by
elaborating, in 2015, the “Principles of Choice of Law in International Commercial Contracts”.
• Sometimes, the convergence between legal systems has been achieved through a “legal transplant”.
According to Alan Watson, the Western legal systems as a whole would be the result of an overall
legal transplant of Roman Law.
• Since the end of the 19th century, international standardization has progressed in many areas of
private law, trade and labor law. During the last century, some of the most important conventions to
the uniformation of laws were drafted by UNIDROIT.
• In 1966, the UN established the UN Commission on International Trade Law (UNCITRAL). Its greatest
milestone was the Vienna Convention on the International Sale of Goods, which replaced two
previous treaties concluded in 1964.
One of the most serious issues with Uniform International Legislation is its heterogeneous implementation.
Therefore, the content of the uniform legislation must be implemented through national law of each
contracting state; its interpretation and application have to be carried out by national courts.
Indeed, as it is the case for the Court of Justice of the EU, the only way to ensure consistent application of
uniform legislation is to remit its interpretation to an international court created for that specific purpose.

Boele-Woelki: Conflicts
Traditionally, conflict of law rules designates only national law as the applicable law. Many unifying and
harmonizing substantive law instruments of both States and non-State organizations, however, are
designed specifically for application to cross-border relationships. Achieving this objective is, generally,
obstacle by conflict of law rules. The requirements which non-national law need to fulfil in order to be
accepted as the law governing a cross-border relationship deserve clarification. Not only uniform law, such
as the CISG (Convention on Contracts for the International Sale of Goods) and the European law, but,
particularly, instruments which are aimed at harmonizing substantive law and challenge the established
systems of conflict of laws. In seeking a positive approach towards the application of a law other than
national law, various aspects need to be considered:

1. is the decision taken by a court or an arbitral tribunal;

2. what field of law (contract/delict/tort) is involved;
3. the objective or subjective (choice by the parties) designation of the applicable law.

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Unification
The international unification of law is conceived of as the process of providing identical rules for different
countries so that the same solution applies everywhere. In all areas of law, the unification of the law has
taken place. The unification of private law and private international law is predominantly achieved by
international Conventions. The adoption of these instruments by international organizations does not per
se create unified or uniform law. The Conventions merely tend to unify the law but require the legislative
action by national states to be fully recognized and binding. Only after the ratification of the unifying
instrument has the unification of the law been achieved.
Preferably, in the optimum situation, States would have granted to a supranational court the authority to
take the final decisions in cases of different interpretations and applications of the unified rules. However,
except as the European Union, such a supranational court does not exist and adjudicators are only reminded
that, in the interpretation of uniform law, consideration is to be given to its international character and to
the need to promote uniformity in its application.

Harmonization
In contrast, the “harmonization” of the law is more likely to be achieved. Similar rules indicate that the laws
of the legal systems in a specific area are in harmony with each other. The differences are reduced to a
minimum. Harmonization activities by international organizations are aimed at elaborating non-binding rules
which could provide models for voluntary harmonization from court decisions and legislative measures by
national legislators which result in the approximation of the laws of different jurisdictions.

CISG and CESL

CISG - Convention on the International Sale of Goods
• CISG was adopted at a UN Conference in 1980.
• Its purpose is the global unification of the substantive law of professional international sales of
moveable goods.
• It covers the international sale of goods and excludes consumer sales.
• It is not concerned with the validity of the contract.
• CISG was made to buy and sell raw materials, commodities and manufactured goods easier and
cheaper in international commerce. CISG is a success since its purpose was to unify sales law on
international level and it has been is signed and agreed in 93 countries.

CESL- Common European Sales Law

• CESL was drafted by the European Commission in 2011.
• Its purpose is to improve the conditions for the establishment and the functioning of the
internal market by making available a uniform set of contract law rules.
• It applies to cross-border transactions between a trader and a consumer and a small/medium
sized enterprise (SME).
• CESL intends to facilitate international sales by offering a further (so called “second”) sales law
regime which in each Member State steps besides the existing domestic sales regime. The
“second” regime is identical to all Member States: however, it is only applicable if the parties
choose it.
• CESL was proposed to make the cross-border trade less complex and costly, give consumers more
choice options and make entering the market easier to businesses.
• In 2014 CESL was put to list of the proposals to be modified or withdrawn. In five years, it has
not been discussed because of political manner: nobody wanted to let European law change in
such a huge manner the national law.

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United Nations Commission on International Trade Law (UNICTRAL)
Private international law vs. International private law
What is UNICTRAL
UNICTRAL was established by the general assembly of the United Nations in 1966 to promote the progressive
harmonization and unification of international trade law. It utilizes conventions and model laws, focusing on
dispute resolution and facilitation of international commerce. It is composed by 60 states. Its members are
representatives of the world's geographic regions.
International Private Law covers comparative research based on law making for private law
relationship. UNCITRAL is an example of International private law.

Purpose
Its main purpose is to promote the harmonization and unification of international trade law
and to remove unnecessary obstacles caused by inadequacies or divergences in laws affecting international
trade. The techniques to achieve it are divided in three categories:

1. Legislative: conventions, model laws and legislative guides.

2. Contractual: texts such as The UNCITRAL Arbitration rules (1979) and The UNCITRAL Conciliation
rules (1980).
3. Explanatory: interpretative declarations.

UNIDROIT and PICC

The International Institute for the Unification of Private Law (UNIDROIT)
UNIDROIT (formally, the International Institute for the Unification of Private Law) is an intergovernmental
organization whose objective is to harmonize international private law across countries through uniform
rules, international conventions, and the production of model laws, sets of principles, guides and guidelines.
Established in 1926, as at 2019 UNIDROIT has 63 member states.

UNIDROIT has prepared multiple conventions (treaties), but has also developed soft law instruments. The
UNIDROIT Principles do not apply as a matter of law, but only when chosen by the parties as their contractual
regime.

The Principles of International Commercial Contracts (PICC)

The Principles of International Commercial Contracts (most frequently referred to as UNIDROIT Principles
and often also referred to as PICC) is a set of 211 rules for international contracts. They have been drawn up
since 1984 by UNIDROIT, and they were ratified by its Council representing 64 governments of member
states.
As soft law, these principles help harmonize international commercial contract law by providing rules
supplementing international instruments like the CISG and even national laws. Most importantly in private
practice, they offer a neutral contractual regime which the parties can choose, either by incorporation into
their contracts (in whole or in parts), or by a straightforward choice of the UNIDROIT Principles.

Considerations
The difficulty in the achievement of uniform law is not directly caused by globalization; on the contrary,
globalization itself gave rise to the necessity of adopting these instruments in order to guarantee uniform
and certain rules for the growing contacts among people. However, globalization travels very quickly,
therefore it is challenging for institutions to keep up with these changes in terms of creation of laws and
rules.
The political process to produce uniform law made by countries using diplomacy can last long before a

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