In general, the contracts negotiated with the Dutch, Italian, Spanish and Russian distributors would become subjects of the European group of legal systems. More specifically, the principles of the Civil Law group would apply to those contracts since that system is widely spread across Europe. However, YokoaSun would have to consider certain nuances in dealings with Spanish and Russian companies. For instance, in some regions of Spain, local laws are above the national laws, and in Russia, public law could be more important than private regulations.
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The contracts with African distributors would depend on the legal system adopted in a particular country. For example, Civil Law systems are common in Sub-Saharan states, while the Common Law group is popular in the Eastern African States. Regardless of national legal systems, the situation with African distributors would be quite different from the work with European partners since “classic” legal systems are heavily affected by local customs and traditions. Moreover, the cases that fall within the regulation of customs are usually arbitrated by prominent locals rather than judges. This feature of African legal systems could create extra challenges for YokoaSun lawyers and contract managers.
Regarding export to the United Kingdom, YokoaSun must take into account specific characteristics of the English Common Law since the UK decided to leave the European Union. As a result, the EU trade regulations cannot be extrapolated to the UK anymore. In addition to that, YokoaSun should remember that the Common Law applies the rule of the “Precedent” to decision-making. Therefore, the company’s lawyers should study similar legal cases in case of necessity.
The Common Law legal system is also present in the U.S. as a legacy of the time when the United States used to be a British colony. However, there is one important distinction from the commercial point of view. The foreign companies that want to establish business with American partners have a choice between a standard U.C.C. (Uniform Commercial Code) and a commercial agreement issued by each state’s legislation. This system grants an extra degree of flexibility to foreign companies.
If YokoaSun decides to enter the German market through a licensed manufacturer of their electronic equipment, that will make their life easier in many regards. Most importantly, YokoaSun’s partner would likely be selected among the already existing German business entities, and YokoaSun will only provide their intellectual property. As a result, the German partner of YokoaSun would have the necessary knowledge of the German legal system in addition to their expertise in electronics. This experience would be crucial for success since, under the license agreement, the manufacturer usually takes responsibility for conducting all business practices legally and ethically. Therefore, the YokoaSun brand reputation in Germany and possibly in all of Europe would depend on the competence and lawfulness of their selected licensee.
In particular, a licensee in Germany would have to follow national and regional legislation demands strictly. Firstly, YokoaSun would likely have to provide their German licensee with Indonesian components necessary for manufacturing. Therefore, the German partner would be responsible for customs clearance of all those components and parts following German customs law. Secondly, the licensee would have to follow all active regulations in German labor and employment law. The product distribution and payment of all necessary taxes would also become a licensee’s responsibility. In addition to that, Germany has rather strict environmental regulations, and the licensee must follow through with such activities as electrical and electronic waste disposal. Overall, a reliable licensee would help YokoaSun immensely since it would carry out all required dealings within the German legal system.
International trade is somewhat regulated through international treaties, conventions, and agreements. For example, the United Nations Vienna Convention established CISG (Contract on the International Sales of Goods), a standard international sales contract template. However, it is hardly possible to define any “global” strategy in international trade since the companies still have to consider national legal systems. Moreover, local laws and customs might supersede national trade legislation in certain countries and even world regions, such as Africa. This situation creates challenges for the development of trade strategies, even on the national level. Therefore, the notion of some “global” or “universal” strategies for international trade seems unfeasible.
In a broad sense of the term, “European Law” defines legal systems adopted across the territory of Europe. For example, French, German, Spanish, and Russian legal systems based on Civil Law would loosely fit into the definition of “European Law”. The Civil Law stems from the ancient Roman Law, which was codified and modernized in France and Germany. The common feature of legal systems based on European Law is the priority of rules regarding the justice organization, the legal procedure, and the execution of decisions.
In a narrower sense, “European Law” can be understood as the supranational legal framework developed within the European Union with an intent to standardize trade between the EU members. For example, the former Treaty of Rome, renamed the Treaty on Functioning of the EU (TFEU) established the principles of the free movement of goods, services, and workforce between the Member-States. In addition, TFEU served to remove trade barriers between the treaty parties since all of them were submitted to the application of the EU law.
As a legal discipline, comparative law serves several important purposes. First of all, comparative law provides a better knowledge of national legal systems. For example, the French system based on Civil Law includes a significant degree of codification and a detailed written constitution. At the same time, the Common Law system of the UK has no such codification or a written constitution. Effective work in different legal environments would require specific knowledge, which can be obtained in comparative law.
Secondly, the knowledge of comparative law could allow improvements in national legal systems through borrowing and implementation of effective elements. For instance, the principle of arbitration and mediation from the Swedish model of the “Ombudsman” was successfully incorporated into legal systems across the world. The EU fair competition rules were based on the American Antitrust Law. Without the knowledge of comparative law, it would be impossible to reveal effective elements of foreign legal systems and adopt them in different countries or even regions.
Lastly, the comparison of different legal systems is vital for international business. The understanding of national legal systems can make the difference between successful investments and failures. An international business entity founded without proper knowledge of national legal systems would face severe problems and create multiple risks for its founders. Moreover, any attempt at international business expansion would require an understanding of legal obligations imposed by the national and regional laws. Comparative law serves to close existing gaps in knowledge and save funds and the mental health of business owners.
EU and American laws are different since the legal systems of most European states are based on Civil Law, while the U.S. legal system is primarily based on Common Law. The main feature of the Civil Law legal system is the supremacy of rules, while the Common Law system prioritizes precedents from the existing court practice. In addition to that, the EU is a supranational organization that leaves a significant amount of the legislative, executive, and judicial power to the national governments of the Member-States. In the American case, these powers are situated within the U.S. territory since the USA remains a national state. The separation of powers is localized between the President, the Congress, the Federal courts, and states’ governments. Despite a certain degree of decentralization provided by the federal form of government implemented in the USA, the State-Members of the EU still have more control over the policies than the American states.
The notion of the “Scandinavian legal system” corresponds to the legal systems of “Nordic” countries such as Norway, Denmark, Sweden, and Finland, even though Finland is technically located outside the Scandinavian Peninsula. Civil Law generally influences the laws of those countries; however, some legal principles exist which are closer to the Common Law. In addition, the “Nordic” countries are tightly integrated into the EU economy. This case is true even for Norway, which does not belong to EU Member-States, but has strong economic ties with the EU market. In addition to that, Denmark, Norway, Finland, Sweden, and Iceland cooperate within the Nordic Council, which makes the connection between those countries even stronger. Overall, a combination of similar legal systems, cultural ties, and economic relations created a reason for separating the “Scandinavian legal system” into a special category.