Comparative Law Outline

COMMON LAW & CIVIL LAW – COMPARISON OF METHODS AND SOURCES

1. Uses of Comparative Method

Uses of Foreign Law in U.S. Courts:

 Even where foreign law is not controlling, it may be used as factual evidence (as in
the case of defining a government official under the Foreign Corrupt Practices Act) to
determine liability under U.S. law.
 A witness can invoke the privilege against self-incrimination if it can be shown that
the answer to a particular question might give rise to a substantial risk of prosecution
under the law of a foreign country.
 Knowledge important to select foreign counsel, compensate them, and instruct them
in terms they will understand.

Bridging differences across legal systems:

 In nearly all fields of law, there exists a common core of legal concepts and precepts
shared by some or even most of the world’s legal systems.
 The resolution of international disputes and the formulation of rules of international
law may depend on whether court can find a sufficient core of agreement among the
legal systems of “civilized nations.”

2. Basic Nature of Law and Legal Systems

Legal Positivism (Lex v. Ius)

 Most European languages make a distinction between “positive law” (e.g., lex, ley,
loi, gesetz, etc.) and “law-as-such” (e.g., ius, droit, derecho, reicht).
 The first is the written form of the law, as it is found in codes and (in the common
law, especially) cases.
 The second is a broader conception of law which includes ideas of equity and perhaps
of natural law and justice.

Nationalism
 It was not always true that law adhered strictly to national boundaries. This was
especially true in the Middle Ages, when there was still a strong idea of a Christian
empire.
 The idea that the State and not intermediate groups such as universities and churches
should have a monopoly on the law is a relatively new idea.
 Civil law had a transnational character until the time of modern codifications.
 Varano points to extreme isolation that long existed within countries regarding law.

Varano’s Triad: Politics, Law, Tradition

Law

Politi Tradi
cs tion
 Questions facing any legal system:
 How to fill gaps: In the common law, gaps present opportunities to create new rules.
In civil law systems, gaps are filled by creative application of the code.
 Sources of authority: Both the common law and codes act as the background against
which later auxiliary statutes and regulations within their respective systems are read.

3. Some Distinguishing Features of Common and Civil Law

In re Shoop (p.174)
 Held that the Philippines more closely resembled a common law jurisdiction than a
civil law jurisdiction.
 Philippines DOES apply Anglo-American-style case law precedents when
interpreting statutory laws passed under both Spanish and American rule.
 Under Spanish law, court considers local customs before case law precedents. Under
Anglo-American law, court considers custom only when it doesn’t conflict with well
settled principles of law, including case law.
 Philippines cites Anglo-American cases and authorities much more commonly than
Spanish decisions.

Valle v. American International Insurance Co. (p.192)

 Held that all Puerto Rican cases cited which tend to solve civil-law problems through
common-law principles are reversed. Common law should only be used as a point of
reference for comparative law.

Alternative Ways of Grouping Legal Systems

 Federal versus unitary government structure
 Legal systems that provide for judicial review of legislative acts versus those that lack
such review
 Religious influences versus secularism
 Pluralistic (multiple source) legal system versus unitary legal system

Common Assumptions of Western Legal Systems

 Law is separate from (although not uninfluenced by) religion, morality, or other social
norms.
 Law is the primary and most important vehicle for ordering society and resolving
disputes.
 Law regulates the conduct of both individual citizens and the state.
 Only a narrowly defined set of facts are relevant to resolving a dispute. Intricacies of
the relationship between the parties and personal side-issues are considered
immaterial and to be ignored.
 Dispute settlement is a zero-sum game, as opposed to an attempt to reconcile the
parties.
4. History of the Civil Law

Roman Law
 The Justinian Code was a late innovation in Roman Law. It has 4 parts:
o Codex: Imperial Decrees from past emperors
o Digest: Compilation of opinions of 38 most famous imperial jurists. They
were holders of ius respondendi (right of giving legal opinions)
o Institutions: Legal textbook that took the force of law
o Novellae: New opinions enacted by Justinian
 Note that by the 2nd or 3rd century, Roman jurists had essentially stopped changing the
law. Up to that point, it had been a common law-type system.
 The Code introduced 2 lasting ideas into the civil law systems:
o Importance of an authoritative text – to some degree displacing other sources.
o Importance of scholars
 The casebook repeatedly calls Roman Law casuistic and practical, as opposed to
systematic and abstract.
 Roman Law was adopted by rulers in the Middle Ages because it was both advanced
and (since it was written in Latin) suitable for arbitrary rule. Also, medieval Holy
Roman Emperors considered themselves the successors of the Roman Empire.
 On one hand, because it was more casuistic and practical, Roman law in some ways
resembles present-day common law more than civil law. On the other hand, civil law
uses more Roman terminology and conceptualization than common law.

Canon Law
 Especially important in the development of civil procedure.
 The Church often decided disputes according to equitable principles. Because of the
Church’s spiritual leadership, its “paternal” attitude toward parties was seen as
legitimate.
 Remedies were developed under canon law.
 Civil law countries chose Roman Canon Law, as taught in universities, because their
monarchies did not have their own established court systems.

Universities and Scholars

 Since the universities were the custodians of Roman law, they held a monopoly on the
training of lawyers and jurists.
 In civil law tradition, there were three schools of jurists:
o Glossators (11th-13th centuries) created annotations to the text of the Corpus
Juris – explaining and systematizing the law.
o Commentators (14th-15th centuries) sought to adjust the law to the practical
needs of their times, often by taking great liberties in interpreting the Corpus
and reconciling conflicting passages.
o Humanists (16th-17th centuries) sought to uncover classical Roman law from
the annotations of previous scholars. They went back to pre-code Roman
sources. However, their scholarship did not have much practical influence.
 Scholars were often advocates of the idea of a Christian empire (e.g., Dante).
  Note that today, civil law judges cannot explicitly base their decision on the writings
of a scholar.
 While early universities (e.g., in Italy) were closely tied to the Church, Renaissance
city-states began opening universities to train lawyers for their own purposes – as
administrators and members of the court.
 Demerara Turf Club, Ltd. V. Wight (p.197)
o Lower court had decided case based on evidence of Roman-Dutch law found
in the writings of the jurist Matthaeus.
o Discussed whether evidence of Roman-Dutch law could be found among
jurists. Distinguished between jurists acting as witnesses of the state of the
law and as professors of jurisprudence.
o Since there was disagreement among jurists, there must not have been settled
law. Therefore, the scholar relied upon by the lower court must have been
writing in his capacity as a professor of jurisprudence.
o The majority of other professors opposed his view. Therefore, the court ruled
with the more common view and overturned the lower court.

Commercial Law
 Trade community developed its own customs and standards.
 Originally developed in mercantile cities of Italy, was spread through civil and
common law jurisdictions.
 Influenced modern law of contract.

Natural Law
 Changed attitude of scholars from interpretation of Roman law to finding the most
rational solution to legal problems, regardless of prior authority.
 Revolutionized methods of systemization by finding the foundations of law in a few
basic precepts and building those into a complete system.

Customary Law
 Spanish fueros
 Northern French customs

Enlightenment-Era Codes
 The revolution in France led to a radical overturning of old laws.
 The new code was written all at once, did away with all past sources of law.
 It was based on ideas of the individual and property.
 For example, the idea of freedom of contract developed out of canon law, merchant
law, and natural law. Contracts in civil law countries do not require “consideration”
but just the intention to create a legally binding obligation.

Constitutional Law
 Post-World War II, many countries adopted constitutions with “Bill of Rights”-style
provisions.
 European Union Law
 Includes provisions for the movement and services and the right to establishment that
directly affect the legal community.
 In 1998, the European Council issued a directive facilitating the right of
establishment.
 When national courts must apply European law, they can ask the European Court of
Justice for an interpretation.
 The European Convention on Human Rights also has a judicial function. European
Court for Protection of Fundamental Rights can take jurisdiction over claims of
individuals against states.

5. History of Particular Countries

France
 Northern France was influenced by customary Germanic laws. The customary law in
Northern France varied from city to city. Charles VII began a codification of the
customary law in 1453; the project lasted until end of 16th century.
 Southern France was influenced by Roman code.
 France was the first modern nation-state. Kings as early as the 15th century began to
turn to written law, in part codifying local custom.
 The “parlement”, a local court run by aristocrats, would adjudicate with effects going
beyond individual cases. Parlements were hated by common people for their
corruption and abuse of power, and the French reacted strongly against judge-made
law after the revolution.
 French Civil Code (Napoleonic Code) was enacted in 1804.

Germany
 During classical times, Germans ruled themselves through customary law.
 Coming into the modern age, the central imperial court was very weak. Thus,
universities (keepers of Roman law) were key institutions in promulgating the law.
 After the French Revolution, Germany debated codification for over 60 years.
During this time, Germans developed the idea of “legal science” – abstract law
separate from politics and custom.
 Most important step in unification of German law was the enactment of the BGB in
1896.
 The German code was thus based on the idea of the juridical act, any action or
statement by a private individual that had legally binding consequences. Juridical
acts include marriage, contracts, political speech, etc.

Great Britain
 England early developed a powerful central court system under the king.
 The bench and bar in England were strong and relatively independent, and thus could
develop their own rules and customs.
 There were fewer conflicts between the Church or universities and the Crown in
England. This encouraged the national court system.
  The bench and bar were also strong enough to absorb the once-independent
commercial law system in the 17th and 18th centuries.
 There was no revolution in England and thus no sharp break with the past.
 Since there is no constitution in England, there is less of a tendency to recognize “The
State” or governmental power in general. Instead, English legal thinking addresses
particular institutions, not a whole of government.
 Because common law courts, from early on, preserved their power to curb official
abuses of power, they took on the functions of ruling in “public law” areas – i.e., in
adjudicating disputes between citizens and the government.

Non-Western & Developing World

 Even where the civil or common law is developed, traditional legal sensibilities –
techniques, constellations of values, and share ways of perceiving reality – often
continue to influence the idea and application of justice.
 In some postcolonial countries, two-tier systems of customary and imported law
remain from colonial times.

Socialist Law.
 No longer presented in comparative law treatises.
 In general, socialist governments saw codes as transitional rules as the society moved
from capitalist to communist society. However, often the existing civil law codes
were kept after communist revolutions.
 In application, socialist jurists stressed the role of law in ‘educating the people’ about
socialist principles.
 What marked off “socialist” law as a distinct type of law were features not relating to
legal form or technique, but to extra-juridical factors (i.e., Marxism).

Chinese Law.
 After 1979, China adopted a civil law-style code. It had previously abolished its old
codified system in 1949.
 Socialist system remains in the public law.
 Confucianism has strongly affected criminal law.
 In general, courts try to mediate more than adjudicate. There is less resort to the
judicial system in general.
 Chinese law includes some degree of judicial review of precedents and has some
elements of common law procedure such as cross examination.
 Dissenting opinions are written but not publish, to advise the courts in future cases.

Islamic Law
 Pre-1970, Classical Islamic law was developed by scholars called Ulama. Important
methods of legal reasoning in Islamic law:
o Consensus of jurists
o Reasoning by analogy
 There are two main divisions in Islamic Law:
o Ibadat: regulates relationship between believer and God. Traditionally not
enforced by the state.
 o Muamelat: contracts, personal status, property, marriage, etc.
 Post-1970 Sharia law came from “Sunni-fied” Shiite movement led by Khomenhi.
Problem is that there is a difference between the ideal of divine law and practice of
applying it.

6. Comparison of Legal Education

General Impressions
 Legal education in the US is more “professional” while in Europe it is regarded as
more of a liberal art.
 There is much more competition during law school in the US. In Europe, competition
only begins when students complete the equivalent of the bar.

General Requirements for Practice

 Study at university for requisite period (often 3 years).
 Take initial examination for license or degree.
 Period of apprenticeship.
 Second examination.
 (optional) transnational degree, such as LL.M.

Legal Education in France

 There is an open admissions policy to university law faculties for any student with a
baccalaureat diploma. However, attrition after the first year approaches 50%.
 Class size, especially in Paris in the basic courses, is extremely large.
 First 2 years of the curriculum are a “first cycle” which includes political science,
legal history, etc. Completion of first cycle leads to a general studies diploma, which
may qualify candidates for some civil-service positions.
 Third year leads to license degree which is useful for business or related careers, but
does not qualify a student to take the legal qualifying exam.
 Fourth year leads to maitrise degree which qualifies students to take the entrance
exam for a one-year professional education program.
 The one-year professional education program is free and consists of classroom
simulations, lectures on professional ethics, and a legal internship.
 At the end of the year, students must submit a report summarizing their work
experiences. This is followed by an examination, which leads to the Certificat
d’Aptitutde a la Profession d’Avocat (CAPA).
 Finally, there is a two-year probationary period during which the new avocat may use
her professional title, but may not practice without a collaborator for one year and
must attend further legal education programs.

Legal Education in Germany

 Students begin legal study after secondary school. Once they enter university, they
have great flexibility in their schedules.
 After graduating, students take a first legal entrance exam. This exam has a moderate
rate of failure and gives honors to a very limited number of high-scoring students.
 If they pass the first legal exam, students take a 2-year legal practical training course.
This includes internships with government agencies and lawyers, and determine
which branch of law the student takes up.
 Students then take a second legal exam. More than 90% of students pass this exam,
but very few get honors grades. It appears that this qualifies them to practice.
 COMPARATIVE CIVIL PROCEDURE

1. Organization of the Legal Profession

General Observations
 In pre-codification civil law world, Latin and a university education were needed for
the higher courts ruled more prominently by Roman Law. Therefore, a split emerged
in the profession: “advocates” worked in the imperial courts and “procurators” in the
lower courts.

Types of Professionals
Notaries
 Profession developed in ancient Roman, originally to draw up public instruments for
illiterate citizens.
 The notarial profession survived the fall of the Roman Empire and reemerged as an
important part of the legal system as written public instruments developed.
 The profession is divided functionally between judicial and non-judicial notaries.
The former kept court records; the latter drew up public documents.
Judges
 Are career civil servants, generally have not been practicing lawyers.
Lawyers
 Divisions in France
o France retains a functional distinction between avocats and avoues. Today,
avocats are allowed to perform avoue functions in region where their offices
are located.
o Avocats function: to argue cases and give legal advice.
o Avoues function: [?] and argue before intermediate courts. Their numbers are
severely limited by statute.
o An unlicensed person may give legal advice in France, if they have at least a
licence degree in law.
 Divisions in Germany
o The Rechtsanwalt performs functions of both the avocat and avoue.
o There is no allowance for unlicensed legal advisors.

Treatment of foreign professionals

 In France:
o lawyers from any country (including non-EU countries) can become avocats
by passing an exam on French lawyer, as long as reciprocity exists with the
other country.

Lawyer’s Fees
 No Contingency Fees. These used to be verboten in civil law countries, but are
slowly becoming accepted. In 1991, France took a limited step toward recognition of
contingency fees.
 In Europe, lawyers’ fees are generally based on a fee schedule system.
  Winner-takes-all system is generally in place for civil litigation. Note that litigation
costs have traditionally been lower in Europe than in the United States.

Legal Aid
 In America, there is more of an emphasis on mass impact litigation than on individual
clients. System tends to be one of legal aid “staff attorneys.”
 In Europe, there is a ‘judicare’ system in which lawyers take on individual clients –
both poor and middle class.
 Need for lawyers partly mitigated in civil law systems and Britain because judges
play a larger role in conducting investigations.
 In France and Germany, a plaintiff may receive legal aid as long as the case is not
frivolous.
 In Germany, the court appoints legal aid advocates. In France, they are selected by
the client or appointed by the head of the bar association.
 In Germany, the legal aid lawyer is paid a legal aid rate if unsuccessful, but
compensated at the higher regularly statutory rate if successful.

2. Organization of the Courts

General Comments
 Used to be a standard dichotomy between the ‘adversarial’ common law and the
‘inquisitorial’ civil law.
 Since England passed civil procedure reforms in 1999, the judge now plays a much
larger role in running the trial – arguably even larger than in civil law countries.
 Germany and France now have a ‘main hearing’ that resembles a trial. This is done
for the sake of efficiency.
 U.S. remains most adversarial, in part because the jury system remains here in civil
cases (unlike in England).

Types of Courts
 Civil & Criminal
o These are also known as the ordinary courts.
o Courts of first instance are often three-judge panels.
 Commercial
o In Germany, commercial courts are one of the three chambers (others being
civil and criminal) of the courts of first instance. Appeals are heard by same
judges as in civil cases.
o In France, the commercial court is a separate court entirely composed of
merchant judges. On appellate level, the cases go to ordinary courts.
o In Italy and some other countries, commercial as well as civil cases come
before the civil chambers of the ordinary tribunals of first instance.
 Administrative
o These courts originated in the executive branch of government and handle
public law matters.
  Constitutional
o These are separate courts with judges at least partly chosen from among
politicians, scholars, etc.
o Civil law systems have ‘abstract review’ where a constitutional provision can
be challenged on its face, separate from any particular implementation.
o The Conseil Constitucional in France reviews almost every piece of
legislation before it is enacted – to make sure that it does not encroach on
executive power and that it is compatible with general provisions of the
constitution.
o Also in France, the Conseil d’Etat can rule on the constitutionality of
executive edicts.
o Constitutional courts may create gaps in Code because they may annul a
provision but may not offer an alternative (unlike common law Supreme
Courts, which can create a new common law rule compatible with the
Constitution).
o In Germany, there are three ways to file a claim in the Constitutional Court:
 First: an “abstract” review of norms. The Constitutional Court will
review a law upon request of the federal government, state
government, or a certain number of legislators.
 Second: individuals can file a “Constitutional Complaint” concerning a
violation of their rights by a judicial or administrative act after they
have exhausted all other judicial remedies.
 Third: a judge in the ordinary or administrative court system can refer
a constitutional question to the Constitutional Court.

Judicial Hierarchy and Appellate System

 Appeal Process Generally
o Appeal is much more common in civil law than in common law. In civil law,
there is almost a right to ‘double jurisdiction’ and a case is not truly closed
until it goes through two judicial panels.
o In civil law, new claims can sometimes be brought up on appeal.
o In most civil law countries, the firs appeal is on both the law and the facts.
o Civil law supreme courts are very large and include dozens or more judges in
several specialized panels. These courts traditionally do not have discretion to
turn down cases.
o Germany has instituted reforms that bar appeals to the highest court if they are
without merit or the amount in controversy falls under a certain level. May
not consider the workload of the court as a factor.
o Civil law supreme courts limit appeal to questions of law.
 Cassation
o Most supreme courts in civil law countries are “Courts of Cassation”, meaning
that they quash the judgment below and send the case back to lower court for
decision based on the rules announced by the highest court.
 o Note that Germany does not have a cassation system, but a revision system
under which the highest court may either reverse and remand to an
intermediate appellate court or itself enter a new judgment.
o In France, a lower court can actually refuse to obey the cassation rule on their
first remand. The decision will then go to a super panel for a final, binding
decision (check?)
 Super-panels
o These combine panels from different division of the Court of Cassation, e.g.,
commercial and civil, to settle contradictory decisions by different panels.
o French law provides for two different types of super-panels.
 The assemblee pleniere determines conflicts between Court of
Cassation and lower courts.
 The chamber mixte resolves conflicts among panels of the highest
court itself.

3. Jurisdiction

General Observations
 Linked to national sovereignty. Nations tend to be jealous of their jurisdictional
power.
 Reasonable grounds for jurisdiction include:
o Minimum contacts
o Location of property
o Consent (e.g., forum selection clauses)
o Location of tort
o Domicile or nationality
 ‘Exorbitant’ grounds for jurisdiction include:
o Nationality of plaintiff (France only)
o Physical presence (U.S. only)

Service of Process
 In civil law, service is not synonymous with attaining jurisdiction
 Service under civil law is an official act and not one that a private person can
accomplish alone.
 Signification au parquet was a procedure through which a document to be served
from a civil law country to another country was first transmitted to the local
prosecutor’s office who then attempts to have it delivered to the addressee, usually
through, typically slow, diplomatic or consular channels. Service was usually
considered completed by the delivery to the prosecutor.
 Note that signification au parquet could result in default judgments if the prosecutor
fails to deliver the service. Sometimes, the defendant’s right to appeal the default
judgment had passed under a statute of limitations before the defendant even knew
about that judgment.
 Signification au parquet has been modified under the Hague Convention, which now
requires that a reasonable attempt has been made to serve the defendant before a
default judgment can be entered.
 Letters of Rogatory
 These are requests for assistance made by a court in one country to a court in another
country in connection with litigation.
 Used for various purposes, including obtaining evidence located elsewhere, obtaining
depositions of witnesses, or effectuating service.

Abatement
 Brussels Convention Article 21 provides that where proceedings that involve the
same cause of action between the same parties are brought in courts of different
Contracting States, any court except the court “first seized” must stay its proceedings.
 Under German law, courts will dismiss an action if there had been an earlier action in
foreign courts that would have been entitled to recognition in Germany.

Transnational Issues
 Brussels Convention. Recently transformed into an EU regulation.
o Signatory states must recognize judgments of others except in case of
‘exorbitant’ bases. Note that judgments against non-member defendants under
France’s ‘exorbitant jurisdiction’ are still valid in other member States.
o All proceedings which have as their object rights in rem (e.g., quieting of title)
in immovable property or tenancies of immovable property are under the
exclusive jurisdiction of the State in which the property is located.
o Signatory states give full faith and credit to judgments of other members. In
cases in rem, the second court may not even reexamine the jurisdiction of the
original court; it may only review, in the case of a default judgment, whether
the defendant received adequate notice.
o Convention does not cover administrative law or cases involving divorce,
separation, or annulment.
 Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents
in Civil and Commercial Matters.
o Provides for the transmittal of documents to a central authority, which must
then make sure that the party is properly served.
o A default judgment may not be entered in a Hague Convention country against
a defendant in another signatory country unless actual receipt of notice has
been reasonably demonstrated by one of the several methods of proof of
service provided by the Convention.

4. Hearings, pre-trial, and trial

General Observations
 Because there was never a jury in civil law hearings, there was no notion of a ‘trial’ –
i.e., a single, extended hearing in which all of the evidence was presented and
arguments were made.
  Reacting against the Romano-Canonistic system of the past, civil law countries now
require that all proceedings shall be oral and public throughout.
 Thus, there was also no pre-trial or discovery.
 Because there is no trial, a sense of immediacy is lacking in civil law proceedings
compared to common law.
 Note that in France, a group of hierarchically organized government attorneys act as
both criminal prosecutors and interveners in the public interest in civil cases.

Role of the Parties

 Civil lawyers generally expect their clients to do most of the fact collecting.
 Civil lawyers rarely speak with witnesses and in some countries are barred from
doing so by codes of ethics.

Role of the Judge

 Britain introduced idea of ‘judge as manager’ of the trial in 1999.
 While parties in civil law countries may appoint their own experts, civil law courts
generally have judge-appointed experts
 Courts of 1st Instance often have 3-judge panels. An examining judge hears the
evidence and issues a report to the other judges.
 In Germany, the judge cannot rule on a legal issue or on legal grounds not raised by
the parties. If the judge suspects that there are legal grounds that the parties have not
addressed, she must discuss these grounds with the parties. This has been called the
“Magna Carta” of fair procedure. Means that the impact of having incompetent
counsel is reduced.
 Under the currently prevailing view, German statute does not apply to affirmative
defenses. The judge cannot raise an issue of affirmative defense, but can ask a
defendant to clarify hints of an affirmative defense. The contrary view is that judges
must help defendants find affirmative defenses.
 Under similar French and Japanese provisions, the judge may ask a party to clarify an
issue, but is not required to.

5. Evidence

General Observations
 Civil law courts allow parties to introduce evidence at any point during the hearings.

Exclusionary Rules
 Except for matters of privilege and of personal incompetence to testify, civilian codes
contain no exclusionary rules of evidence, and particularly no hearsay or opinion rule.
 Most of the grounds which under our law serve to preclude the admission of
evidence, according to the civilians merely affect its weight.

Written Instruments
 In France, one must execute an instrument in the presence of notaries or made under
private signature in all matters exceeding a sum fixed by Decree (about $1,000).
  French Commercial Code permits oral testimony for the proof of commercial
transactions.

Oral Testimony
 One group of civil law countries (France and Italy) use a device called the decisory
oath. In this case, if a fact is presumably to be only within the knowledge of one of
the parties, that party can take an oath. This oath is presumed to be conclusively
established.
 This group also has a supplementary oath. Here, there is evidence pointing to the
truth of a fact, but this evidence is not sufficient. The party may affirm the fact
through a supplementary oath.
 The other group (Germany and Austria) give the judge discretionary power to
interrogate the parties, but not under oath. After the interrogation, the judge may ask
the parties to affirm the testimony by an oath. The oath is not conclusive but carries
great weight.
 Civil law treats “parties” and “witnesses” as mutually exclusive categories.

Cross-Examination
 In some civil law countries, the court may permit counsel to address direct questions
to the witnesses, usually after interrogation by the court; but anything approaching a
real cross-examination is rare in civil law countries.
 Scholars think that common law method of examination by counsel is more vigorous
search for truth, but also makes proceedings much more expensive (due to coaching
of witnesses, etc.)

6. Discovery

In Civil Law
 Traditionally, there has been no process equivalent to discovery, where one party can
demand documents from the other.
 Devices used by the civilians to extract information or documents from an unwilling
opponent or third party are not as strong and as sweeping as they are here.
 Process of discovery is not separated from the process of introducing evidence into
the record.

Transnational Issues
 Hague Convention allows for letters of rogatory for courts to depose witnesses, and
even requires measures of compulsion if witnesses don’t cooperate.
 Because American discovery is much more elaborate than civil law fact gathering,
this would put a serious burden on foreign courts. Thus, the Hague convention gives
the option of not complying with pre-trial discovery requests.
 However, other countries are not willing to depart from the ‘judge-led’ model of fact
gathering and allow the parties to depose witnesses on their own. France, for
example, has enacted blocking statutes that make it criminal to answer requests for
depositions made without resort to the Hague Convention.
  The U.S. Supreme Court has decided that because the parties in U.S.-based litigation
are under the power of the U.S. court, they can be compelled to provide depositions
for discovery, even if this violates the Hague Convention. However, the court
strongly suggests that U.S. courts act diplomatically.

7. Court’s Decision

Style of Judicial Opinions

 In civil law jurisdiction, there are almost no judicial powers and remedies without an
express basis in written law. The French ‘astreinte’ is a very rare exception.
 In civil law courts, there is no distinction between law and equity.
 In civil law decisions, the “judgment” and “opinion” are contained in a single
document. Every final judgment must be accompanied by an opinion.

Dissents, Concurrences, etc.

 The tradition of dissenting opinions in England developed because the court reporter
would record disagreements among judges and between judges and counsel. Thus,
open disclosure of disagreements became the norm.
 Generally, there are not separate opinions in civil law decisions.
 Varano is very interested in the advantages of separate opinions:
o Sharpens reasoning of majority
o Shows prevailing trends in the law

Signed Decisions
 All civil law court decisions are per curiam. Partly because judges fear damage to
their legitimacy unless the entire court is behind the decision.

Res Judicata
 All systems have a concept of res judicata, but there is considerable diversity
concerning the detailed rules.
 Claim Preclusion. Civil law countries generally don’t have a rule against splitting a
cause of action. Thus, if a plaintiff claims the defendant owes him $500,000 and in
his complaint only asks for a judgment of $20,000, then this judgment will not
preclude him from filing other claims for the outstanding $480,000.
 Issue Preclusion. Legal systems are in open conflict as to whether and to what extent
the findings and conclusions underlying the prior judgment have any binding effect in
a second action brought on a different ‘cause of action.’

8. Overview of Criminal Procedure

General Observations
 In civil-law countries, a criminal defendant usually does talk on his behalf. This is
partly because
 The trial is not bifurcated into a first hearing devoted solely to the issue of guilt and a
subsequent hearing to deal with sentencing.
 The right to appeal is granted to both the defendant and the prosecutor.
  There is no plea bargaining between defendant and prosecutor.

Arrest and Pretrial Detention

 Question of whether a suspect should be detained pending trial is considered a
completely separate and distinct issue from the routine of initiating the proceeding.
Except in carefully defined emergency situations, a judicial order is required to detain
the suspect before trial.

Role of Counsel (Prosecutor and Defendant)

 Defense counsel has a basic right to inspect the entire dossier compiled by the
prosecutor. By contrast, no American jurisdiction gives the defendant the right to
continental-style inspection.
 Dossier records testimony of witnesses prior to hearing.

Defendant’s Testimony and Self-Incrimination

 Unlike in the U.S., where the defendant’s silence is expected and the jury is not
allowed to draw inferences from it, civilian countries allow the judges to draw logical
inferences from selective silence (but in the case of Germany, not complete silence).
 The admissibility of previous convictions never hinges on whether or not the
defendant testifies.
 By presenting his side of the story, the defendant has a chance to receive a mitigated
sentence.

Judicial Decision-Making
 Generally, there is a Presiding Justice, other professional judges, and lay judges.
Usually, they all have equal vote. Decisions do not have to be made unaminously.
 The Presiding Justice will usually be the only one familiar with the dossier.

Concurrent Civil/Criminal Liability

 Many civil-law jurisdictions give the injured party a right of election: he or she may
bring an independent civil action, or may intervene in the criminal action and become
a co-plaintiff together with the public prosecutor.
 In France and some other countries, when a prosecutor refuses to bring charges, the
victim may act directly to initiate a criminal proceeding.
 In Germany, the prosecutor is required to bring charges for all serious offenses,
except the crime of negligently causing bodily harm.

9. Overview of Public Law

General Observations
 The administrative courts that handle public law matters did not arise as specialized
arms of the court system. Instead, they arose from the executive branch of
government, as a means for citizens to appeal what they consider a wrongful
administrative act.
  An administrative act in a civil law country is similar to a court judgment in that it is
presumed to be legitimate until proven otherwise.
 In Latin America, partly for monetary reasons, special administrative courts were
never established.
 In France, since 1790 it has been the law that Judges who interfere with the execution
of the laws are guilty of a criminal offense.

Administrative Law
 France has not supplied legislative models for administrative procedure and
nonjudicial administrative recourse – any more than it has produced a codification of
administrative law (outside the realm of the legislature). Virtually all of this is still
the product of the jurisprudence – the decisional law – of the Conseil d’Etat.
 Still, France’s body of judge-made law has supplied the basis for codified
administrative procedure in other countries, like Mexico.
 European Union’s Principles of Administrative Law. Defines “administrative act” as
any individual measure or decision:
o which is taken in the exercise of public authority
o which is of such a nature as directly to affect – be it in a favorable or an
unfavorable way – the rights, liberties, or interests of private persons
o which is not an act performed in the exercise of judicial duties.

Benthem Case (European Court of Human Rights, 1985)

 Question was whether a garage owner who applied for a license, been granted it, and
then subsequently seen it revoked by the Crown (of the Netherlands) had been denied
his right to due process under European Convention for Human Rights §6(1).
 Applicant argued that the Dutch “Administrative Litigation Division” (which had
advised the Crown to revoke the license) was not a fair and impartial tribunal and did
not have binding force. Further, the Division was not obliged to give its views and
the text of its advice remained secret.
 Holding: The applicant’s initial appeal to the Crown was not valid under §6(1)
because it, too, was not an independent and impartial tribunal.
 The dissenters argued that the Crown’s action had not directly violated the applicant’s
rights, but had merely considered the public interest in executing a regulation.
 Nonetheless, The Netherlands implemented the Court’s decision quickly and now has
a two-level system of judicial recourse against administrative acts.

Handling Conflicts with Government

 In the “Franco-German” legal tradition, there is no notion of domestic sovereign
immunity.
 In France, when determining whether a contract or tort claim involving the
government is a public or private law matter, the essential criterion is the significance
of the public-law factors involved. Did the government reserve for itself one-sided
powers? If so, then it is an administrative court matter.
 In Germany, the decisive criterion is the legal nature of the legal relationship on
which the action is based. Decisive in this connection is:
 o Whether the parties are in a public-law relationship of authority and
subjection
o Whether the public authority involved resorts to special rules of public law

“Europeanization” of Administrative Law

 European administrative law has its roots in the codification of law relating to
particular fields of administration, such as the common agricultural market,
competition policy, or anti-dumping matters.
 The European Court of Justice has acknowledged a number of unwritten rules of
administrative law:
o Principle of legality of administration action (i.e., must be within scope of
administration’s jurisdiction)
o Requirements of the due process of law, especially the right to be heard
o Principle of equal treatment
o Protection of legitimate expectations
o Principle of proportionality
 On discretionary administrative powers, the administration still must observe
prescribed procedural steps.
 These newly established principles begin to influence the national legal orders.
 In Francovich et al. v. Republic of Italy, the ECJ ruled that EEC directives can give
rise to national liability in national administrative courts, even if the national
government has not passed enabling legislation. This is essentially “government tort
liability for legislative action or inaction.”
 In The Queen v. Secretary of State for Transport, ECJ ruled that breach of
Community Law by a nation must incur the same liability as breach of Community
Law by the Community itself. This liability may be determined in national courts on
a basis not less stringent than that used to determine liability in similar domestic
matters.

10. Reform Issues

General Observations
 A comparative approach to reform is most valuable in cases where the existing
institutions are not so strongly underpinned by cherished traditions.

International Civil Procedure

 Consensus is building for the international acceptance of certain widely used
institutions of civil procedure, including party-based system, right to counsel, right to
fair notice, exorbitant jurisdiction, and judge’s role in case management. Discovery is
also becoming more international.
 Evidence and the role of experts remain as important difference between civil and
common law systems.

Stuttgart Model
 This is a reform to the “piecemeal” nature of civil law hearings, and is supposed to
expedite proceedings.
 Upon receiving a complaint, the court may as an initial matter direct the parties to
answer certain questions, supplement factual allegations, address the court’s prima
facie attitude toward the complaint, etc.
 Court then sets a deadline for one oral hearing, at which all witnesses and parties
must speak.
 After hearing, court retires to reach a tentative conclusion, which it announces to the
parties. Parties are then permitted one more attempt to address outstanding points.
Then the judges make their final decision.
 ORGANIZATION AND INTERPRETATION OF CODES

1. System and Organization of the Codes

French Civil Code

 Drafted by 4 appointees of Napoleon – two from customary law North, two from
Roman law South.
 The organizational scheme of the French Civil Code is similar to that of Gaius’
Institutiones. Whether this similarity is accidental or due to the Roman law learning
of the Code’s draftsmen is somewhat controversial. Since the ideology of the Code is
implicated in the organizational scheme, what does that say about the Roman
ideology?
 Code is divided into 3 sections:
o Persons. Nationality, domicile, marriage, divorce, etc.
o Property
o Acquisition and Transfer of Property. Wills, contracts, torts, etc.
 System of torts (non-contractual civil liability) is based on principle of fault with a
few exceptions.

German Civil Code

 Was drafted after almost 100 years of debate.
 German civil code is a more ‘academic’ example of ‘legal science.’ Germans saw law
as systematic and pure – detached from both social sciences and search for values.
 Like the French, Germans emphasized property and individuals. However, by the
time it was passed, this was already regarded as a conservative position because labor
unions, corporations, etc. were much more important.
 First part of the Code deals with concept of ‘legal transactions’ (Rechtsgeschaft) –
any declaration of an intention which produces effects that the legal system
recognizes and guarantees. It embraces all the elements common to contracts, wills,
negotiable instruments …, and one sided declarations such as notices and
renunciations.
 There are separate abstract general provisions dealing with equity, justice, and good
morals that have been expanded to allow for positive rights.
 German Code (in contrast with French) contains a “General Part” which serves as a
reservoir of rules and principles of such abstractness and generality that they pervade
all of the – functionally quite diverse – areas of the law covered by the Code.
 Note that in some parts of the German code, there are exceptions to provisions in the
general part, for example, requiring personal declarations and thus precluding the use
of an agent for certain family and estate law acts.

Dualism of Civil and Commercial Codes

 Agreement between French and German systems that the total area of substantive
private law should be divided into (a) non-commercial (“civil”) law and (b)
commercial law, and that this division should be reflected in the enactment of two
separate codes.
  Argued by unitarists (opponents of the dual system) that with adequate education
available to all, there is no longer any need for a separate body of law governing the
transactions of the more sophisticated class, i.e., of the merchants.
 Swiss legislator unified the ‘law of obligations’ to cover the law of contracts, most
areas of commercial law, and the law of corporations.
 Italian and Dutch systems have also unified commercial and civil law by collapsing
the former in the Civil Code.

Particularities of Other Codes

 Netherlands code includes a German-style General Part, but limits its effect to those
areas of the law which deal with “patrimony,” i.e., with rights having a money value.
 Swiss Code is divided between the “Law of Obligations” (see above) and the Civil
Code, which deals with those parts of private law (family law, succession, etc.) not
already included in the law of obligations.

2. Adaptation to Social and Technological Change

General Observations
 Civil law judges are required to rule in all cases, even when the case is not governed
by a provision of the code.

Auxiliary Statutes
 Regulate legal issues that arose during the 20th century, such as labor law, corporate
law, environmental law, etc.
 Still read against the background of the civil code. Thus, civil code has a systematic
role like that of the common law – a foundation for interpreting new laws.
 Trend to replace provisions of the Commercial Code with separate statutes has been
particularly strong in France, where most “commercial” matters are now decodified.
 If follows that for purposes of research on questions arising under a civil-law system,
it is not sufficient to peruse the basic codes. Civilian has to search for auxiliary
enactments which may have a comparable impact upon the provisions, or the silence,
of the codes.

Analogy and Interpretation

 Study by MacCormick and Summers:
o Authors identify eleven basic types of argument employed in statutory
interpretation, ranging from ordinary meaning to subjective legislative intent,
which they found to be reducible to there main categories: linguistic,
systematic, and teleological-evaluative.
o In the U.K. and U.S.A., if a statute is not by its terms applicable, courts
frequently assume that any prior law continues to control, or that the matter is
left for common-law decision-making and refuse to apply the statute by
analogy; in civil law, by contrast, arguments from statutory analogy are widely
applied.
 To expand the law, judges treat the civil code generally and apply it by analogy to
new circumstances.
  Meanings change as they are applied and they become part of the national culture,
and thus a grounds for future court decisions.
 French Code provides a hierarchy of methods of interpretation:
o Textual (literal meaning)
o Analogy (applying specific provisions to related but new questions)
o General Principles (ruling based on general considerations of equity, as
described by the general clauses in the code)
 There are fewer auxiliaries to the French Civil Code because the French Bar has
lobbied vigorously against new legislation. Thus, France did not have legislation
covering automobile accidents until [1985]
 German decisions tend to use analogy when a specific provision is justified by a
general provision (e.g., shareholders rules are justified by principle of bones fides).
o In case of Matter of S.S. v. M.E. Corp, the German Reichsgericht found that a
provision preventing majority domination of a closed corporation could be
enforced by analogy even though the majority shareholders had created a
dummy corporation to avoid application of the law.
 German Code draws distinction between interpretation and analogy:
o Interpretation, however bold and extensive, means that the judge applies a
norm to the facts because the norm still covers such facts.
o Analogy the judge applies although he finds that the norm does not cover the
facts.
 If a statute was drafted specifically so that it will only cover certain fact patterns, then
one can argue that a different but analogous fact pattern was meant to be excluded.
This is argumentum a contrario.
 There is no rule of thumb telling courts how to choose between the two conflicting
approaches of argumentum a contrario and analogical reasoning. Whenever such a
conflict arises, the court will have to be guided by legislative history as well as policy
considerations.

Example of Strict Liability in Auto Accidents

 French Law of Torts
o Until 1985, France had no statutory or code provision for non-fault liability in
the case of automobile accidents.
o The only elements of the French Civil Code dealing with tort law required
“fault”, except in rare cases such as parent/child, master/servant, and
owner/animal situations.
o Responsible for damage of things “under one’s control.” (§1384(1))
 German Law of Torts
o Requires fault leading to harm or violation of a statute.
o Provisions for master/servant relationships, minors, and mental incompetents.
o Strict liability for damage caused by animals or collapse of a building.
 French courts have stretched the interpretation of §1384(1) to create a presumption of
liability when another is injured by a thing under one’s control. Only when the
victim’s conduct was completely unforeseeable and total unavoidable will liability not
be found.
  French courts have been uncertain and vacillating in ruling on liability in auto
accidents.
 In Germany, an 1871 century statute created strict liability in case of railroads, mines,
etc. This was not incorporated into the Civil Code, but is still in effect.
 In Germany, both the driver and the “halter” (i.e., the person – usually the owner –
entitled to use of the vehicle) liable. Latter can only avoid liability by proving that
the accident was unavoidable and not due to any mechanical failure.

Example of Products Liability

 French Civil Code Provisions
o Warrantee against hidden defects can be waved by contract, but is the default.
o Seller is liable for contract restitution for hidden defects.
o If the seller knew of the defects, then he is liable for restitution and damages.
 German Law
o Development of products liability law was initially through the courts in
Germany.
o Influenced strongly by U.S. products liability case law.
o In famous “Chicken Pest” case, Bundesgerichtshof held that manufacturer is
liable unless it can elucidate the events which caused the defect in the goods
and prove that they did not involve fault on his part.
 European Union/Community
o Commission proposed a Directive in 1976 for harmonization of product
liability law among Member States.
o Directive was finally enacted in 1985. Maintains strict liability for product
defects causing personal injury, or death, or property damage to non-
commercially used property.

3. Force of Precedent in Civil Law Jurisdictions

National Approaches to Precedent

 England has the most binding use of precedents of any legal system. House of Lords
could not reverse its own past decisions until 1966.
 Stare decisis in Common Law is actually a relatively late feature. Also, recent
research has suggested that it derives from Roman Canon law.
 In Latin America, there is a “doctrina legal” where the highest court can set binding
precedent through a series of cases – usually 3 or 5.
 In Germany and Italy, it is provided that certain decisions of the Constitutional Court
shall have the force of law.
 In other civil law systems, a line of decisions by the highest court is highly persuasive
but not formally binding.
 Louisiana Supreme Court distinguished between doctrine of stare decisis and doctrine
of jurisprudence constante. Latter applies adherence, not to a single decision but to a
services of decisions that illustrate the same rule.
 Note the Oberlandesgericht Dusseldorf opinion (p.729), which says that even though
a Turkish Code provision was imported from Switzerland, an expert who knew only
Swiss and not Turkish law is not sufficient.
The Role of Precedent in Practice and Scholarship
 The idea that judges cannot create law and must rely only on the Code is called the
‘Byzantine Doctrine’ by common law scholars.
 A corollary of the Byzantine Doctrine is that since judges may not make law, judicial
precedent has no authority.
 Portalis, one of the architects of the French Civil Code, wrote in 1804 that he
recognized the tension between civil law dogma (Byzantine Doctrine), which said
that precedent has no value, and real judicial decision-making, which relies on the
development of law in practice.
 The “lex-ius” distinction, which implies that there is such a thing as unwritten law,
has gained new strength in part because of Constitutionalism. This weakens the idea
that judges simply apply the Code.
 Because they are still supposed to be merely applying the code, civil law judges must
hide gaps in the law, while common law judges can openly create new law.
 Abandonment of the Byzantine Doctrine in practice justified by:
o Issues of judicial economy (not wanting to reinvent the wheel)
o predictability of law
o equality of treatment
o hierarchy of courts (lower judges don’t like being overruled)
 Civil Law judges still give equal weight to judges and jurists (scholars) – and will
first reach for commentaries when researching a law.
 Civil Law judges don’t distinguish between dictum and holding, don’t give much
weight to a single precedent, and still don’t openly acknowledge making law.
 Because of its strong system of precedent, decision by common law judges are more
‘fact specific.’
 Decisional law tends to be more common in periods of political and social upheaval,
when judges have to fashion decisions without guidance from the legislature.
 As Princess Soraya case shows, German courts will see precedent as stronger if it is
accompanied by the approval of scholars – which is evidence that it adheres to the
general concepts of justice.

Customary Law and Jurisprudence

 There are three levels of intensity of customary law in terms of their relation to
enacted law:
o Secundum legem (following the statute): the interpretive patina formed
around any permanent statute by its practical application, reflect in judicial
decisions.
o Praeter legem (beyond the statute): legally binding rules inspired (but not
compelled) by enacted law, and not incompatible with it.
o Contra legem (against the statute): legally binding rules “repealing” rules of
statutory law.
 This gets to the distinction between ius and lex.
 In France it is generally taught that a custom may supplement, but not abrogate a rule
of written law. But judge-made customary law supplementing the written law is of
great importance in France. French refer to it as jurisprudence.
4. Code Provisions for Sources of Law

Examples from various codes

 German Code requires that when there is no specific provision touching on a matter,
the court will decide the case according to the “principles derived from the spirit of
the legal order.” (i.e., decide based on gesetz and then recht)
 However, German Code does not have express directions to the judges as to what
may or may not be considered proper sources of law.
 Article 1 of the Swiss Civil Code allows, when a situation cannot be settled by
analogy, court to look at potentially helpful ideas developed in other legal systems,
and then creatively fashion a solution is if he were a legislator.
 Spanish legal scholars have always found it difficult to reconcile the doctrina legal
(now jurisprudencia) with the Civil Code’s general theory of sources of law.
 In Spain, the legal norms contained in international treaties may not have direct
application in Spain until they become part of the domestic legal system.

5. Constitutional Influence on Codes

Example: Princess Soraya Case

 Case concerns defamation, which had traditionally been considered a crime rather
than a tort. There are no provisions in the code addressing defamation as a tort.
 During the 1950s, the BGH invoked constitutional provisions concerning dignity of
man and free development of personality to expand the meaning of Civil Code §823
(concerning tort liability with fault).
 Problem was that neither Civil Code nor any auxiliary statute provides for a recovery
of non-pecuniary (i.e., non-economic) damages by a person whose “right to
personality” has been injured.
 Defendant invoked freedom of press provision in Constitution. Said that because of
this provision, the Court should not create penalties against press.
 Court points to Art. 20 of Constitution, which provides that judge is bound by “Gesetz
und Recht” – which implies rejection of a narrow positivistic approach to the law.

Counterexample: Two Trustees in Bankruptcy Case

 In this case, workers had a statutory right to severance pay in case of a corporate
bankruptcy – question was the order in which their claim should be considered
relative to other claims.
 Claimants referred to general constitutional principle of social justice.
 Here the question was of relative rights – i.e., the relative strength of the claims of
various parties – rather than an absolute right like the right of personality.
 Since the Bankruptcy law that orders claims deals with the disposition of relative
rights, it is within the prerogative of the legislature and should not be upset.

General Observations
 German Constitutional Court upholds judge-made rule only because it met all of the
following conditions:
o According to the overwhelming view of German judges, lawyers, and legal
authors, provision contained in an old Code had become unbearable in the
light of social developments and changed attitudes.
o The old Code provision, if literally applied, would come into conflict with
value judgments clearly expressed in the Constitution.
o Over a long period of time it had turned out that legislative reform could not
be expected.
o The judicially imposed reform did not go farther than absolutely necessary.
 POLITICAL, SOCIAL, AND MORAL ELEMENTS IN THE PRINCIPAL CODES

1. Freedom of Contract

General Observations
 There is no notion of “consideration” in the civil law tradition. Limit to contracts is
lack of a ‘positive social function.’ There is some ambiguity as to whether courts
look at the subjective reason for the contract or the objective function of the contract.
 French Code §1108 includes following requirements for a valid contract:
o Competence of parties
o Subject matter allowed
o Licit course
o Cause (public function)
 On the whole, the tendency of the modern codes is to restrict the scope of the parties’
transactional freedom more severely than was thought desirable at the beginning of
the 19th century.
 Under the heading of “lesion” or “usury,” some of the more modern codes provide the
courts with potent weapons for invalidating one-sided bargains concluded by parties
of flagrantly unequal mental or economic strength.
 Swiss Civil Code makes it clear that the principle of freedom of the personality is of a
higher order than the principle of freedom of contract.

Specific Performance
 In contract law, civilians prefer specific performance while common lawyers prefer
damages. Varano says that the preference for specific performance stems from the
influence of canon law.
 Mere unexcused failure to perform at the proper time (i.e., a “breach” in our sense of
the word) ordinarily gives rise only to a claim for performance. An action for
damages, rescission, or restitution will lie only if the obligor is in “default.”

Enforcing Judgments
 Civil law does not have a notion of ‘contempt of court.’
 German code is only one that has provisions for the enforcement of contract remedies
through fines and criminal sanctions.
 French have ‘astreinte’, a judicially created remedy which requires paying penalty for
delays in specific performance.
o Originally, the penalties for the ‘astreinte’ could only be assessed up to the
value of the contract, so defendants could essentially force plaintiffs to accept
damages instead of specific performance.
o Today, judges can require astreinte in excess of damages.
 Under current German law, a fine imposed on a defendant is payable to the State,
while under French law, it is payable to the plaintiff.
 Penalty Clauses
 Pre-1975 French Civil Code said that penalty clauses must be honored, and can only
be modified by the judge in cases where the principal obligation has been partially
performed.
 The 1975 reform allow French judges to set aside or increase penalty clauses in the
interest of equity.
 In Germany, the court of last resort has consistently claimed the power to examine
whether the lower courts, in reducing a penalty or in refusing to do so, have been
guided by “legally correct considerations.”
 German Commercial Code does not give the judge discretion to lower a penalty
clause.
 Swiss Code of Obligations allows court to reduce high penalties at its discretion.
 In Civil Law systems, specific performance and penalty clauses need to be seen as
interacting.
 In contrast with civil law approach, English courts judge the enforceability of penalty
clauses by their relation to reasonably foreseeable losses.
 Almost all system are converging on judicial discretion concerning penalty clauses.

2. Law of Property

Division of Interests in Property

 French Civil Code (and others following it) recognizes an absolute right to ownership
that the state can limit but that is not granted by the state.
 By contrast, the common law allows for long-term control of ownership interests by
an ancestor (a remnant of the aristocratic age when property was first granted by the
king).
 Civil law also does not recognize a division of property interests (e.g., life interest,
easements) but has mechanisms for joint ownership and rights “running with the
land” that accomplish the same function.

Principle of Publicity Related to Land

 Under German Code, any transfer of title of land, or the creation of any right in rem
encumbering the owner’s title, and also for transferring or encumbering such a right
in rem, must be registered in the land register.
 Only disposition, i.e., the creation, transfer, encumberance, and cancellation of
absolute rights in respect of immovable property, require registration and are capable
of it. Contractual rights (rights that are not in rem) cannot and must not be registered.
 Entries into the land register are deemed correct until the transferee knows of their
incorrectness.
 American law typically gives title to the first transferee who records a contract, even
if they are not the first to register. German law, by contrast, gives title to the first
transferee to register, even if they are not the first to record. However, both systems
require good faith on the part of the transferee, so they tend to converge.
 If a land register or notary is incompetent or corrupt, a victim can invoke the State’s
liability for negligent or intentional wrongdoing, or recover from the notary (who
always carries insurance).
  Note that in other jurisdictions, besides Germany, the number of registrable
transactions would be swelled by the inclusion of leases (at least long-term leases).

Principle of Publicity in Transfers Not Related to Land

 In essence, the principle of publicity is that all rights and legal relations which may
harm or trap an innocent purchaser, or otherwise interfere with the reasonable
expectations of persons entering into ordinary every-day transactions, must be made
public in some form.
 For chattels (goods), possession is sufficient publicity – the possessor is assumed to
be the owner.
 In connection with business and commercial activity, most important is Register of
Commerce.
 Note that the oral guarantee of a merchant (under commercial law) is enforceable.

3. General Provisions and Idea of Justice

General Observations
 The limit on attorneys entering into contingency fee contracts is based on their status
as officers of the court, who must retain a degree of judicial independence.

Limits on Civil Rights (especially right to contract)

 Bono mores (good morals)
o Standard of morality in German courts is determined by whether an action is
so grave that persons whose views are just and equitable would consider it
morally objectionable.
 Bono fides (good faith)
 Abus des Droits (abuse of rights)
 Rebus sic stantibus (assumption that current conditions relevant to the performance of
a contract will remain the same)
o Greek Code actually contains a written provision for this. Otherwise, it is
generally applied by the courts without written authority.
o Common-law courts rarely assert such sweeping power to adjust the terms of
a contract to changed circumstances.

Contracts of Adhesion
 German Reichsgericht, Matter of G. v. St. (1921). Ruled that a publicized policy by
Mannheim forwarders was invalid because:
o Lack of free negotiation
o Monopoly power of forwarders
 Suedd. Transp. Vers. A.G. v. W. (1923). Ruled that a shipper may not offer insurance
(for a small extra fee) as an alternative to fulfilling its duty of care.
 E. Gu. V. K.B. (1964). Standardized contract provisions established by Code are “ius
dispositivum” and thus can yield to a contrary agreement of the parties. However,
these dispositive provisions can only be modified for a sufficient reason which throws
into doubt the postulate of justice underlying the rule of dispositive law.
 In 1977, Germany attacked problem of standard contracts through legislation.
 o There is a lengthy catalogue of forbidden clauses, supplemented by a catch-all
that invalidates any terms which in violation of the dictates of good faith put
the other party at an unfair disadvantage.
o Consumer organizations and trade associations may sue to enjoin the use of
standardized contracts which are substantively unlawful.
 Israel established a voluntary system for approval of standardized clauses by a Board
of Restrictive Trade Practices.
 French established Commission des clauses abusives, empowered to issue decrees
prohibiting specified clauses between professionals and consumers.
 European Community adopted in 1993 a directive which requires standardized
contracts to be in good faith and sets out a non-exhaustive list of the terms which may
be regarded as unfair.

Violation of Good Morals

 European Convention on Human Rights can be used as evidence of a violation.
 Under German case law, the violation of a law of another country may be relevant as
an element of immorality.
 Judicial determination of what is contra bonos mores for purposes of the Civil Code
has come to be affected by value judgments inherent in provisions of the Constitution.
o German Constitutional Court, addressing contract law, said the constitutional
principle of private autonomy is violated if the problems of a gross disparity
of power are not noticed at all, or if a solution is attempted using inadequate
means.

Abuse of Rights
 Where an act is done with the sole and deliberate intention of inflicting harm it is
wrongful and cannot be justified by pleading a proprietary right.
 German Civil Code Art. 226. Courts have adopted an objective test by which an
animus vicini nocendi is implied by the circumstances. Tendency to place a strict
interpretation on this provision.
 In France, abus de droit is sometimes the basis for a cause of action and sometimes a
defense.
 Abus de droit is limited in areas where the government has adopted specific
regulations to deal with a problem, such as nuisance among neighbors.
 Note in Duval v. Chedot (1969) that a creditor is allowed to exercise his right to retain
a debtor’s property, even though that retention would prevent the debtor from
complying with tax authorities. It is ruled that the reason for the right of retention is
to pressure the debtor – thus, the use in this regard is normal and not abusive.
 U.S. and U.K. lawyers cannot point to a recognized general concept of abuse of
rights. Therefore, such a lawyer will have to invoke numerous, seemingly
unconnected doctrines in dealing with the vast array of cases which civil lawyers
subsume under such a concept.