Concept and Functions of Law

Concept of Law and Functions

• Law consists of enforced rules and regulations
• Governing authorities, such as states or societies, create/enforce laws
• Laws regulate behavior, maintain order, protect individual rights, and ensure justice
• Law offers a structure for settling disputes
• Law governs contracts, property, human rights, and governance

Key Functions of Law

• Laws establish guidelines for acceptable behavior and consequence management
• Helps prevent societal chaos
• Law provides a structured process for resolving conflicts and disputes
• Courts, arbitration, and mediation are used to settle disagreements
• Law protects individual rights, like freedom of speech and privacy
• It protects against discrimination and harm
• Law aims to ensure fairness by treating all individuals equally and providing equal protection
• It seeks to prevent discrimination and promote justice
• Law governs commercial, financial, and economic activities
• It ensures fairness, stability, and trust in the market
• Law addresses public health, education, housing, and social services
• Contributes to societal well-being
• Law defines the structure/function of government and public institutions
• Law outlines how powers are allocated and governments operate
• Criminal law deters criminal behavior and ensures accountability via fines
• Law also enables societal progress and transformation
• Addresses outdated ways, recognize new rights, and adjust to technological advancements

Commercial Procurement

• Commercial procurement involves contracts where businesses get goods, services, or works from suppliers
• Includes private procurement(between companies) and public procurement (by government entities)

Private Procurement (Business-to-Business - B2B)

• The Spanish Commercial Code (Código de Comercio, 1885) gives commercial contract principles
• The Spanish Civil Code (Código Civil, 1889) supplements rules on obligations and contract formation
• Sector-Specific Laws regulate financial services, transport, or construction contracts

Public Procurement (Government Contracting)

• Governed by Spanish Public Sector Contracts Law (LCSP 9/2017)
• EU Directives on Public Procurement (2014/24/EU, 2014/25/EU, 2014/23/EU) establishes transparency, competition, and equal treatment principles
• WTO Government Procurement Agreement (GPA) applies to international procurement in trade agreements.

Principles of Commercial Procurement

• Freedom of Contract allows parties to negotiate terms within legal limits
• Good Faith and Fair Dealing necessitate contract execution in good faith (Art. 1258 CC)
• Transparency and Competition are relevant, especially in public procurement
• Performance and Liability mean breach of contract may lead to damages, penalties, or termination

Common Types of Commercial Procurement Contracts

• Sales Contracts are purchases of goods, regulated under the Commercial Code
• Supply Contracts are regular provision of materials or services
• Service Contracts are agreements for consultancy, maintenance, IT services, etc
• Construction Contracts involve works and infrastructure projects, often under public procurement rules
• Franchise and Distribution Contracts regulate market expansion and commercial networks

Enforcement and Dispute Resolution

• Judicial Remedies use courts to resolve disputes based on contract law
• Administrative Review by specialized bodies oversees contract awards and execution, for public procurement

Sale of Goods Contracts

• Governs the sale and purchase of goods
• CISG regulates international sales
• Spain uses the Commercial Code (Código de Comercio) and Civil Code (Código Civil)

Distribution Agreements

• One party (supplier) provides goods to another (distributor) for resale
• Exclusive distribution means one distributor per region
• Selective distribution means distributors are chosen based on criteria

Agency Contracts

• An agent negotiates or concludes contracts on behalf of a principal
• Spain uses Law 12/1992 on Agency Contracts (Ley del Contrato de Agencia)
• EU Directive 86/653/EEC applies to agency contracts across the EU

Franchise Agreements

• A franchisor lets a franchisee use its brand, know-how, and business model
• Spain uses Retail Trade Regulation Act (Ley de Ordenación del Comercio Minorista, 1996)
• The franchisor must give key information to franchisee

Lease Agreements (Commercial Leases)

• A business rents property (office, retail space, warehouse) from a landlord
• Spain uses Urban Leasing Law (Ley de Arrendamientos Urbanos, LAU 29/1994)

Service Contracts

• A company provides services to another entity (consulting, IT, logistics, etc.)
• Governed by general contract law in the Civil Code

Share Purchase Agreements (SPA) & Asset Purchase Agreements (APA)

• They are used in mergers & acquisitions (M&A) to buy a company’s shares or assets
• Key elements include purchase price, warranties, indemnities, and closing conditions.

Licensing Agreements

• Grants rights to use patents, trademarks, or copyrights
• The Spanish Intellectual Property Law & Patent Law 24/2015 regulates licensing

Economic Significance of Commercial Contracts

• Impact business activity and the economy, driving growth, stability, and efficiency
• Facilitates Trade and Investment with legal certainty
• Reducing Uncertainty by establishing clear rights and obligations
• Encouraging Competition and Growth allowing companies to expand and create jobs
• Regulating Risk Allocation defining responsibilities in case of non-performance
• Enhancing Financing and Credit by giving businesses access to capital
• Influencing Global Markets via international trade and cross-border investments

Competition Law

• LCD (Ley de Competencia Desleal) and LDC (Ley de Derecho de Competencia) operate
• Good faith is a fundamental principle in contractual relations
• Article 57 of the Spanish Commercial Code and Article 1258 of the Civil Code regulate this.
• Fair competition applies to market conduct and competitors' interactions
• Spain follows international standards, like Article 10 bis of the Paris Convention
• The LCD defines unfair competition as conduct contrary to honest commercial practices
• LDC protects market efficiency and is an administrative law allowing government sanction against antitrust violations
• LCD protects businesses individually against unfair actions from competitors
• This enables them to seek civil remedies instead of administrative sanctions

Legal Framework in Spain

• The LCD is the primary law governing unfair competition
• Article 10 bis of the Paris Convention applies to international disputes
• LCD includes a clause prohibiting acts against good faith
• LCD includes a list of unfair competition acts (e.g., misleading advertising)

Unfair Competition Conduct

• Deception induces consumers into error
• Confusion creates market confusion by imitating a competitor’s branding
• Omissions is when key product information is concealed
• Aggressive practices use harassment to manipulate behavior
• Imitation is legal unless it infringes rights, creates confusion, or exploits
• Exploiting a competitor’s reputation is illegal
• Denigration spreads misleading information
• Comparative advertising has verifiable and non-misleading information
• Exploiting a business’s dependency takes advantage of a supplier/franchisee lacking options
• There is unfair termination of commercial relationships without six months’ written notice
• Threatening to break business ties pressures better conditions
• Predatory pricing (dumping) eliminates competitors if intended to harm intentionally
• Discriminatory pricing offers prices without justification
• Misuse of trade secrets includes industrial espionage
• Breaking legal regulations gains an advantage (e.g., avoiding labor laws)
• Inducing breach of contracts breaks contracts

Unfair Consumer Practices

• Misleading promotions and false endorsements can be unfair
• Coercive sales tactics and pressure sales are unfair

Actions Against Unfair Competition

• Declaratory judgment formally declares the act unfair
• Courts order businesses to stop unfair practices via injunctions
• Restitution reverses the effects of the unfair act
• Correction of misleading information is applied
• Damages are provided for harm suffered
• Unjust enrichment claims recover profits
• The statute one year from victim awareness or three years from the end of unfair practice

Illegal Advertising

• Advertising that violates dignity or exploits inexperience is illegal
• Subliminal, false, or misleading advertising is illegal
• Deceptive omission or comparative advertising is also illegal
• CNMC enforces advertising laws
• Autocontrol drives voluntary compliance

Legal Framework of Intellectual Property

• Spain’s Trademark Law (Law 17/2001) aligns with EU Directive 2015/2436
• Protection is granted at national, European, and international levels
• Spanish trademarks are registered with the OEPM
• The EUTM gives protection across all EU states
• Paris Convention (1883) and Madrid Agreement (1891) enable trademark registration

Definition and Functions of Intellectual Property

• A trademark distinguishes a company’s product from its competitors
• The trademark is a word, image, shape, or sound
• The trademark must be distinctive and registrable
• Trademarks indicate origin, ensuring quality
• Trademarks boost reputation and drive sales

Acquiring and Enforcing Intellectual Rights

• Trademarks are granted upon official registration
• Registration involves formal and substantive examination
• Trademarks are classified into 42 categories under the 1957 Nice Agreement
• Trademarks last for 10 years and is indefinitely renewable
• Trademark owners can prohibit third-party use of similar marks
• "Exhaustion of Trademark Rights” allows resale once sold in the EU
• Remedies for trademark infringement include ceasing activity, financial compensation, and destruction

Tradenames

• Tradename is a business entity, that is distinct from a trademark
• It identifies a company’s presence in the market
• Tradenames must be unique, non-deceptive, and consistently used
• The OEPM handles tradename registration
• Trade names are transferred from the business

Internet Domains

• Domain name is a digital trademark
• ICANN oversees registration, with country-specific authorities
• UDRP handles domain name disputes
• Spain’s PNND regulated “.es” domains

Patents

• A patent is an inventor's exclusive right, valid for 20 years with disclosure
• The Spanish Patent Law 24/2015 governs patents
• Munich Convention (1973) enables European patents
• Paris Convention (1883) and Patent Cooperation Treaty (PCT, 1970) facilitate international patent applications
• TRIPS Agreement (WTO, 1994) sets global patent protection standards

Patents Requirements

• Novelty is necessary, it must not be part of the "state of the art”
• Inventiveness is necessary, it must not be an obvious improvement
• It must be usable in industry
• Scientific theories, mathematical methods, algorithms, and biological processes aren't patentable
• Patent owners can block competitors from using, manufacturing, or selling invention
• Exceptions include use for research, the “exhaustion principle”, and prior user rights
• Stop infringement, claim damages, or seize counterfeit goods via Civil actions
• Industrial property infringement is punishable under Article 274 of the Spanish Penal Code
• Compulsory licensing is that third parties may request license to use it after 3-4 years
• Royalties are set by the OEPM

Utility Models

• Utility models are mini patents that protect minor technical improvements to existing products
• They are valid for 10 years

Industrial Property

• It is innovation (patent and know-how) and distinctive signs owned by businesses
• Patents grant temporary exclusive rights
• Trademarks facilitate consumer identification and protect
• Industrial design protects e.g. furniture
• Spanish industrial design law, EU design regulation, and Hague Agreement cover industrial design

Capital Companies

• Public Limited Company (SA) has minimum €60,000 Share capital is min €60000, liability limited and management of directors must take place
• Limited Liability Company (SL) has minimum €3,000 Share capital, liability limited and more restricted than SA
• Individual entrepreneur is typically for retail
• Entrepreneur is for large capital investment
• Limited versus large tax advantage
• Regulations include contract economic and administrators

Society Contracts

• It involves multiple parties involved in labour assets and capital that is for profit
• This differs from civil versus mercantile companies

Steps to Capital Companies

• SL are for small to medium business who transfer shares freely
• Legal personality must be separate
• Incorporation requires public deed. commerical registry and state

Denomination

• Spanish origin must abide by mercantile companies
• Must have physical address that allows legal and taxation
• Soles shareholder can obtain a legal shareholder company ofr liabilities

Incorporations

• Constitutional and article
• Legal recoginition with tax identifcation
• Must abide by agreements such as minimim capital
• Can have irregular status and nullity consequences
• Must have legal processes

SDGs Constitution

• Economic and Innovation factors for Decent Work
• Promote industries for justice and peace
• Reduce corrutption and transperancy

Social COntributions

• The LSC can allocate the assets and services
• Have monetary contributions for euros
• Follow the value that is legal with the debts
• If a shares occurs, it requires an obligation with company transferal