All entries for Thursday 20 October 2011
October 20, 2011
Doing the reading for these two weeks, I was reminded how much English Law caters to commercial folk. For example, the doctrine of consideration is a purely English phenomenon absent in the continental legal systems I have had the chance to study. Having started my law studies in England this gave me the impression that contracts are used as a tool to create legally binding obligations between people having commercial interests only. To me the English system seems very favorable to business by making it easy to get out of a contract without losing the goods to specific performance. But then what becomes of the ‘gentleman’s word’? Personally I feel the continental system which focuses much more on enforcing a promise provides for the establishment of a more ethical social structure: if people promise something, they cannot buy their way out of it. This generalization is crude but it, in my opinion, aptly summarizes what the lay-man would perceive as being the difference between the two systems.
On the other hand, English law has a mechanism unknown to continental system: the trust. My brief brush with this enigmatic notion has led me to understand why English contract law focuses much on the commercial. The trust fulfills certain roles, for example protecting a weaker party or assuring the financial security of future generations, much better than a contract (at least an English contract) could ever accomplish.
Finally, I would like to say a few words about the projects of creating a European Civil Code. From a purely economic point of view this would be a serious mistake. As it stands the multitude of legal systems provides for a healthy competition between Member States of the EU: all seek to find a balance between commercial viability and moral sustainability. Fusing all contract laws would rob the EU of its uniqueness in this respect.