The Strength and Weaknesses of Common Law and Legislation - Essay Example

Business Law Law of any country is a which regulates the conduct of the member of a society. It touches nearly all we do to make us live in the society without harming our fellow beings. In the course of the progress of human society this enforced code of conduct became the basis of law. When these laws fail to meet the requirement of the society the judiciary take resort to certain court decisions and these will become the precedents known as common laws. However, when common law proves to be inadequate to overcome a situation the government machinery of a country has to seek some other modes to protect the interest of the people as well as the government. Legislation is the only solution to face the challenging situation. In fact, Law is de jure and is applied by a country to regulate the relationship between its people, government and business. Oliver Wendell Holmes, Jr., in his great law book, The Common Law (1881) states: "The life of the law has not been logic; it has been experience". This contradicts English jurist Sir Edward Coke's observation that 'logic is the life of the law'. The legal system of Australia is governed by common law developed by case laws and precedents, and included in it are equity law and a little of statute law. Based on Grew (2002), the legal system of Australia has two sources. The first one is the parliament that is legislation, and the other is the judicial courts that are responsible for case laws. Legislations are created by parliament and the courts put forward the law by means of precedents. Here, in this essay, we analyze the strength and weaknesses of common law and legislation along with the role of courts and legislature in regulating the contemporary business practices. Common law has its roots of development in England from 1066. It is an unenacted law written by judges in judgments or case law decisions (Latimar, 2007, p.4). In Australia the judges decide a case based on past decisions taken in a similar case. This method tends to be consistent and authentic as many cases have been decided in the past in a similar way. The doctrine of precedent is based on this concept that when cases are decided based on past decisions, the judgment is consistent. The lower courts are bound to follow the higher courts and this leads to treating the case under similar circumstances in the same way as it was done before. 'The high court's decisions in passed cases, will have the lower courts legally bound' (Barron & Fletcher 2001 p30). When precedents are followed in deciding a case it allows the judges to reduce the time taken in passing a judgment. This is because the law is already applied in similar cases by taking into consideration the facts and the issuing of evidence, which makes the task of a judge easy. The doctrine of precedent is defined as 'The common law principle which binds a judge or a magistrate to follow previous similar decision of higher courts in the same hierarchy; also known as stare decisis' (Vickery & Pendleton 2006), which implies the decision stands. The precedents may be binding and persuasive precedents. It becomes binding 'ratio decidendi' when the closing decree or 'res judicata' is passed by the court on the affected parties, and has a legal consequence established on the central causes for the decision. "Common law relies on precedent. However, precedent is an illogical and inefficient tool for the regal regulation of business. Legislation is much more effective in the regulation of modern business practices". This statement stands good in the modern day judgments. Even though common law is tailor made and easy to follow, it still has its own pitfalls. The major weakness of common law is that, the precedent followed in sensitive cases may not be relevant for the present case. Also it could limit the development of law. As common law depends on past cases and the society is changing rapidly so it is obvious that history may not repeat itself in the same way and under the same circumstances. It becomes very difficult in business to attempt new things to meet the requirement of the modern world. It may also take a long time to formulate a new law to fine-tune with the present situation based on a past case. To illustrate, advancements in technology has dramatically affected our lives, and it becomes a necessity for the business to use some of these advanced technologies. But if something takes place due to technology it becomes hard to find an appropriate past case for reference. As a result, this leads to wait till Parliament changes the Act. There is yet another problem of the application of the common law with reference to the modern era. Sometimes circumstances that pose dangers to society may arise abruptly and there may not be a reference in common law to avert the danger with the same speed. Under such circumstances it becomes a necessity to safeguard using legislative action. However, according to Gibson and Fraser (2007, pp. 61-83) 'past case law decisions by the judges or magistrates in other hierarchies around the nation and other countries, jurisdictions may influence the decision by the judge but will not have any legal effect', and this is persuasive precedent which is also known as 'obiter dicta', on similar cases. The merit of using precedents is that it lays down uniformity of the law, certainty for lawyers and stakeholders, and effectiveness of administration. This in turn brings in less time consumption for formation of new laws and judges are able to take quick decisions established on the facts and proof offered by the plaintiff who has to prove his side against the defendant. The aim of legislation is to formulate new laws by adapting new environment and changing the existing legislation either by countermanding them or creating new ones by previous laws or case laws. Thus there is some strength for legislation. Another reason is that legislation can be altered frequently and this enables the new law to respond to the changing economic situation of the modern society. Apart from this, legislation considers the future when deciding potential problems. For instance, smoking and gambling are grave health and safety issues for hospitality. So it becomes important that a new law which might prohibit smoking in public area be enacted immediately. Therefore, the legislative machinery has to amend the law to accommodate the needs of the ever changing society. On the other hand, to make or alter a new law, the parliament has to pursue a sensible and predetermined procedure. Further, the law or act can be altered only by another Act of Parliament when an act is on the statute book, (Gillies, 2004). Once the bill goes through the house of Parliament, it takes three readings and approval by different levels of house. As a result, legislation can be either flexible or inflexible by taking more time and cost, to set up. Gibson and Fraser stated (2007, p.31) the role of the courts is administration of the law of Australia is under a federal system of government which has six self-governing colonies, known as the Commonwealth of Australia. High court is the highest Australian court. It deals with cases relating to legislative powers of federal parliament, constitutional issues and foreign affairs and is the final court of appeal. Its decisions are binding on all other courts in Australia. Followed by Federal court is the original and appellate jurisdiction. It has progressively taken more and more job from State and Territorial Supreme Courts, (Grills, 2007). State and Territorial supreme Courts also run in Australia and are the lower courts in the state. Each state also has its own court hierarchy. Depending on the seriousness of the cases and the amount of money involved, the case may go at different levels of the court. The more serious cases would be dealt by the higher level of courts. Under common law, the lower courts are bound by the higher courts' decision in the same hierarchy. A higher court protects the wrong decision made by a lower court and corrects it before passing the final verdict. Thus the dispute of a business can be decided by referring on past decisions and would cross different hierarchy courts to solve the problem. Nonetheless, legislation takes times and money to create a law and it can prevent the problem in the future rather than solve it immediately, when business dispute has already occurred. Conclusion: It becomes necessary that common law has to be supplemented by legislation. Legislation in a contemporary technological era is indispensable and useful. The common law like all human creations is defective. In conclusion, the doctrine of precedent is very valuable in case laws that give similar results for the parties in the courts based on similar facts and circumstances of cases. The forces of the doctrine of precedent, and analysis are public, and it drives for fairness and equality under equity law. But the relevance of precedents may not be apt. Therefore legislation is proactive and reigns on disputes that may arise in the future. Where there are disadvantages of case laws, the power of legislation provides better outcome whether it is a civil or criminal case. This is because legislation aims to reinforce the law and deter potential breaches in future. To get a quick decision in resolving disputes, the courts while taking decisions should use binding or persuasive precedents because of the legal costs and time available. If party wants an appeal for a fairer decision, he/she must be able to approach the higher court, or legislations can provide the very support, if the precedent is inadequate. Question two (a) Issues: Dharma, after being employed with the Excelsior Restaurant and carrying out her jobs in a good way; she did not get what she was promised by her employer. This resulted in the breach of contract by Excelsior Restaurant. Conclusion: Dharma, in the first place, was reluctant to sign, but she was compelled by Greg, the manager of the restaurant, to sign the contract based on the terms of the agreement. The contract was a written one and Dharma has signed it. The issue is similar to the 'Van Den Esschert V. Chappell [1960] WAR 114' case. The conditions on the contract were that Dharma's involvement at the restaurant will be advertised on commercial radio and in the Advertiser three times every week; and the warranties were that three pots of Twining Earl Grey tea will be provided to her for each shift; and along with these Dharma will receive a standard salary of, 500 per week and that Dharma will receive an extra 0 per shift if the patrons were impressed with her cooking. But many of these conditions and warranties were breached by the restaurant management. Therefore, the contract is evidently breeched by Excelsior Restaurant and the agreement becomes null and void and Dharma need not continue as per the terms of contract. Actions: Damages for disappointment and distress, and breach of contract- because their not advertising on commercial radio and the advertiser, as promised by them reduced her potential earnings by not selling her cookery book at the restaurant, and their non adherence to the terms of the contract nearly killed the reputation of her career. Dharama can sue the restaurant for breach of contract, or she can ask the employer to fulfil the terms of the contract and move the court to get this executed. (b) Answer: Yes Conclusion: Dharma is still legally bound to the contract for another 6 months since it is a one year contract. Also the contractual promises had been fulfilled by Greg and the Excelsior Restaurant. She must adhere to terms of the contract as it is still valid and enforceable. If she breaches it, equitable remedies can be taken against her by the restaurant. They can move the court for damages against her or for fulfilment of contractual obligations. Remedies: The restaurant can move the court for damages for disappointment and distress against Dharma, because the restaurant has fulfilled their contractual agreement, whereas she has not. The restaurant can move for Injunctions - because it can stop her from neglecting her obligations to the contract, and preventing her from leaving to a competitor till the contract period ends. Question three (a) Issues: The issue in this case is the non performance of the contract. Conclusion: The case is similar to Getreid-import gmbh V. Contimar sa compania INDUSTRIAL, comercial y maritima [1953] 1 WLR 207. (Grew, 2002, p.87). The Angel Sound Repairs Pty Ltd company took the sound system for repair from Buffy, saying that the repair will be complete in two nights and the sound system will be returned to her within the period. But the company did not return the sound system as promised by them. Buffy had already lost her income and her reputation due to this. The sound system was returned only after 21 days. Buffy has got the full rights to sue against Angel Sound Repairs Pty Ltd, the sound repair company. She has made a contract with them that they will repair and return the sound system within 2 nights. Their failure caused Buffy to sustain financial loss for 19 nights. Also she lost the reputation which damaged her business. Additionally, she lost the business of the touring dance party. She can also demand compensation for the above. She can very well sue them for damages amounting to the financial loss occurred to her. But she cannot sue for damages for loss of reputation since she cannot establish it now. Remedies: Buffy can sue for damages for mental tort and financial loss, against Angel Sound Repairs Pty Ltd, as the restaurant has not fulfilled their contractual obligation. (b) Issue: Three days after the wine went into storage; the air conditioning system broke down and was not noticed by the cellar staff. All of Buffy's wine was spoiled. Conclusion: When the wine was send to the cellar, Buffy should have demanded the contractual receipt. But the cellar staff did not provide it to her at that time. Instead, they sent it only by post. If the contractual receipt was given by the cellar person at the time of submitting of the wine, Buffy could have noted the terms and conditions that the cellar would not be responsible for the loss or damage to the wine. So it is suppression of fact to the customer. Sending the contractual receipt by post is negligence on the part of the cellar person and deliberate attempt by her to cheat Buffy. The fact of cheating was made known to Buffy only after her acceptance of the service. If the cheating was let known to her earlier she would not have delivered the wine to the cellar for storage. Buffy can sue the cellar person for cheating the customer, suppressing of fact, and breach of trust, and for damaging the entrusted wine. The cellar hand/person/storage company is liable to pay monetary compensation to Buffy. References: 1. Patrick Parkinson, Tradition and Change in Australian Law (Sydney: LBC Information Services, 2001) at 6. 2. Gibson, A and Fraser D, 2007, "Business Law", 3rd edition, Pearson Education Australia, Sydney, NSW. 3. Cooray, L.J.M, 2008, The Doctrine of Precedent, viewed 25 February 2008, available online. 4. Gibson, A and Fraser D, 2007, "Business Law", 3rd edition, Pearson Education Australia, Sydney, NSW. 5. Robinson, WC, Sarre, R, Carmichael, J, Pembroke, M, Sawon, & Thomson J 2007, Business of Law Student Manual, Le Cordon Bleu International B.V., South Australia. Read More