Business Law I - Introduction Vocabulary/Concepts

Law

A structured body of rules established by a state’s sovereign authority to regulate conduct, typically within its jurisdiction. Is enforced through sanctions, aimed at ensuring social order, protecting rights and providing mechanisms for dispute resolution.

Wealth Distribution through Law

The manner by which legal frameworks allocate and preserve economic resources across individuals and entities.

Strategic Choice of Legal Systems

The deliberate selection of a specific legal jurisdiction by individuals or entities to secure predictable and favourable legal protection (e.g., English or New York law).

Public Law

The area of law governing relationships between individuals or entities and the state.

Constitutional Law

Part of Public Law.

Governs the structure and functions of government, establishing individual rights and defining the framework of the state.

Administrative Law

Part of Public Law.

Regulates the actions of government agencies, ensuring lawful implementation of policies and safeguarding public rights.

Criminal Law

Part of Public Law.

The body of law that defines actions considered harmful to society, prosecutes offenders and prescribes penalties to maintain public order and protect individual rights. It involves the state prosecuting individuals or entities, typically requiring proof beyond reasonable doubt.

Private Law

The area of law that governs relationships among private individuals or entities.

Property Law

Part of Private Law.

Governs the rights and duties relating to ownership, use and transfer of property.

Law of Obligation

Part of Private Law.

A general body of law covering obligations between individuals subdivided into:

• Contract Law

• Tort Law

• Delict

  • Unjustified Enrichment

Contract Law

Part of Law of Obligation.

Regulates legally binding agreements, setting out the rights and obligations of the contracting parties.

Tort Law

Part of Law of Obligation.

In common law systems, it addresses civil wrongs that cause harm or loss, providing remedies through compensation or restitution by the responsible party.

Delict

Part of Law of Obligation.

In Civil law systems, it governs wrongful acts causing harm, requiring the liable party to compensate for damages, often with outcomes similar to those of tort law in common law jurisdictions.

Unjustified Enrichment (and its four elements)

Part of Law of Obligation.

Branch of the law that addresses cases where one party gains unfairly at another’s expense. To determine if it applies, courts typically assess four elements:

1. Enrichment - did the defendant receive a benefit?

2. At the claimant’s expense - Was this benefit obtained directly from the claimant?

3. Unjust - Was the benefit gained under unfair circumstances, such as by mistake or coercion?

4. Defences - Are there any legal reasons that would justify keeping the benefit?

If the first three elements are confirmed and no valid defences apply, the law may require the benefit to be returned.

Ownership (incl. rights and authority)

Characterised by Dominium (control)

Encompasses three core rights:

1. Usus (the right to use)

2. Fructus (the right to enjoy benefits, such as income)

3. Abusus (the right to dispose of or alienate the property)

Provides the owner with exclusive authority to:

1. Possess & control

2. Use

3. Exclude

4. Transfer

Possession

Two elements:

1. Physical Control (corpus)

2. Intent to exclude others (animus possidendi)

Rule of Law

A foundational principle requiring that public authorities exercise only powers granted by law, ensuring checks on state action, protection of individual rights and access to an independent judiciary to uphold these principles.

Constitutional Acts (Sweden)

• The instrument of Government

• The Act of Succession

• The Freedom of the Press Act

  • The Fundamental Law on Freedom of Expression

Ordinary Acts (Sweden)

Legislative statues enacted by the Swedish Parliament, governing civil, criminal and commercial law. These statutes are subordinate to the Constitutional Acts and regulate specific areas such as contract law, family law and environmental protection.

Jurisdiction

The authority granted to a legal body to administer justice within a particular field or territory.

Personal Jurisdiction

The power of a court to exercise authority over individuals or entities based on their connections to the jurisdiction.

Subject-Matter Jurisdiction

The authority of a court to hear cases of a specific type or cases related to specific subject matter.

Appeal

A legal process whereby a higher court reviews the decision of a lower court to determine if legal errors were made that could affect the outcome. Appeals can affirm, reverse, or modify the lower court’s decision.

Criminal vs. Civil Law

Criminal law imposes state sanctions on actions violating societal norms, requiring proof “beyond reasonable doubt”, whereas civil law adjudicates disputes between parties based on the “balance of probability”, with remedies often in the form of compensation.

Arbitration

A private dispute resolution process where parties agree to submit disputes to one or more arbitrators for a binding decision, often preferred by businesses for its confidentiality and efficiency in commercial matters. Can’t be appealed.

Annulment

A judicial review process in which a court may annul or “set aside” an arbitral award if it finds procedural irregularities, lack of jurisdiction, or violations of public policy in the arbitration process.

Direct Effect

A principle, pronounced by the Court of Justice of the European Union allowing EU law to confer enforceable rights to and impose obligations upon individuals and businesses, enforceable in national courts of EU member states.

Supremacy of EU Law

A principle related to direct effect and pronounced by the CJEU according to which directly applicable EU law takes precedence over conflicting national law. A national judge confronted with such conflict is supposed to choose the EU rule over the conflicting national rule.

Mutual recognition

A principle of EU single market law, established by CJEU in the famous Cassis de Dijon ruling. Under this principle, goods legally produced and marketed in one EU member state must be accepted for sale in other member states, provided they meet the regulatory standards of the originating country. This decision promotes free movement of goods within the EU, strengthening the internal market by reducing regulatory trade barriers across member states.

Preliminary Rulings

In the EU, national judges can refer questions on the interpretation or validity of EU law to the Court of Justice of the European Union. Courts of last resort must make such referrals when there is uncertainty. This process ensures EU laws are applied uniformly across all Member States. Arbitrators cannot request preliminary rulings, which has led to significant rulings, like Achmea (2018). In this case, the CJEU ruled that intra-EU bilateral investment treaties (BITs) allowing arbitration are invalid under EU law, prompting Member States to terminate these agreements.

Corporate Sustainability Due Diligence Directive (CSDDD)

An EU directive requiring companies to conduct due diligence on human rights and environmental impacts across their operations and supply chains, imposing mandatory compliance obligations for EU-based companies and certain non-EU companies with a significant EU presence.

Extraterritoriality

The extension of a state’s legal reach beyond its borders, enabling the regulation of foreign entities or activities with significant connections to the enacting state.

Alien Tort Claims Act (ATCA)

A United Sates federal statue granting US courts jurisdiction to hear civil actions by non-US nationals for tort committed in violation of international law, particularly in cases of alleged human rights abuses.

Statue of Limitations

A statutory limit on the period within which legal proceedings must be initiated, providing certainty in legal matters and barring claims after the specified period.

Ne bis in idem

No one shall be tried twice for the same offense

Lex superior derogatory legi inferiori

Higher law overrides lower law

Lex posterior derogatory legislation priori

Later law repeals earlier law

Lex specialis derogat legi generali

Specific law takes precedence over general law

Ratio decidendi

The legal principle serving as the basis for a court’s decision.

Obiter dictum

A judge’s statement that is not essential to the decision and does not serve as precedent.

The Code of Capital by Katharina Pistor

A theoretical framework that examines how legal rules shape the creation and distribution of capital in modern economies.

Chattel

A type of personal property that is movable and not fixed to land, such as furniture or vehicles.

Lord Sumption

A prominent British lawyer and former Justice of the Supreme Court known for his influential opinions on legal issues. Argues that over-reliance on law can diminish personal freedom and reduce the space for democratic or individual choice.

Swedish Court Structure

1. District Courts (48)

2. Courts of Appeal (6)

3. Supreme Court

Lex posterior generalis non derogatory legi prior speciali

A later general law does not repeal a prior special law

Pactum Turpe

General legal principle in Sweden which gives the court the right to dismiss claims concerning immoral agreements.

Consensus ad idem

“Meetings of mind”: All parties must have the same understanding of the contract for it to be formed.

Jus Quaesitum Tertio

The general rule that a contract cannot confer rights on a third party.

Pacta sunt servanda

Agreements must be kept.

Clausula rebus sic stantibus

Allowing a contract to become inapplicable because of fundamental changes of circumstances.