Chapter 7: The International Legal Environment: Playing by the Rules
1. Differentiate among Code Law, Common Law, Islamic Law, and socialist legal systems, and explain the implications that each may have on the activities of international marketers.
Common Law ¡V The basis for common law is tradition, past practices and legal precedents set by the courts through interpretations of statutes, legal legislation and past rulings
Code Law ¡V is based on an all-inclusive system of written rules (codes) of law. Under code law, the legal system is generally divided into three separate codes: commercial, civil and criminal.
Implications between the above arise the areas of contracts and Intellectual Property rights. Under common law, ownership is determined by use. Under code law, ownership is established by registration.
Islamic Law ¡V The basis for Islamic law is the interpretation of the Koran. It encompasses religious duties as well as the secular aspect of law regulating human acts. Islamic law defines a complete system that prescribes specific patterns of social and economic behaviour for all individuals.
„h Prohibition against the payment of interest
„h Prohibition against investment in activities that violate the Shari¡ah; such as businesses dealing with gambling, alcohol etc.
To get around the restrictions on Interest businesses often agree to a mutually negotiated margin in sale prices or leasing agreements.
Socialist systems ¡V Countries such as China and Russia are hampered because they did not have commercial legal systems in place and instead had to start from scratch.
International marketers must be concerned with the differences among various legal systems, especially concerning the rights of principals involved in a contract. Further, complicating matters is the fact that there may be differences between the laws of two countries who laws are based on the same legal system.
2. Describe h...