law

Legal Systems That Influence Business in Different Nations

Legal System and Classification

A nation¡¯s legal system, which establishes and enforces laws, helps make its social, political, and economic institutions function effectively. The legal systems of foreign nations can differ widely, but generally the laws of most counties can be classified into two types: common law and civil law. Common law systems, sometimes called case law or judemade law, are derived from English law dating back hundreds of years and are based on the principle of following long-established customs that were written down in important court decisions, called precedents. These prior court decisions that were written and handed down over time have themselves formed a set of laws that help guide the proper behavior of people, businesses, and other institutions. Common law systems often have legislatures that pass laws as well. In the absence of a precedent or a clear legislative act, common la...