Private Law: Sources and Hierarchy

Sources & Interpretation of Private Law

• Private law is guided by freedom, while public law is guided by command and control.
• The division between private and public law was created by Roman law.
• Common Law does not have a clear division between private and public law.

Hierarchy of Private Law Sources in Civil Law Countries

• Constitution: Top of the hierarchy.
• Civil Codes: Systematically explain all the rules in private law. Enacted as formal force (laws, statutes).
• Commercial Codes: Enacted a few years after the Civil Codes.
• Regulations: Rules issued by states, public authorities, or local authorities.
• Customary law: Body of legal facts with a small role. Its authority is recognized by the law but requires a certain number of individuals following a certain behavior.

Decodification

• From the 1970s onward, special statutes and specific codes started regulating certain things previously regulated only by Civil Codes, weakening Civil Codes.
• Example: consumer codes for the protection of consumers.
• Special laws themselves sometimes become codes (like the consumer codes).

Ways of Interpreting a Written Law in Civil Law Countries

• Literal Rule: Interpreting the letter of the law in its plain, ordinary meaning.
• Logical/Historical Interpretation: Sticking to the original intent/meaning intended by the original lawmakers.
  • Includes looking at the parliament’s preparatory documents explaining the reasoning behind the law.
• Systematic Interpretation of the Law: Interpreting the law in a way that is consistent with the entire legal system.
  • A rule inconsistent with the legal system could be struck down by the parliament.
• Teleological Interpretation of the Law (the "Golden Rule"): Reconstructing the policy underpinning the rule. Can disregard the intent of the original lawmaker.
  • Can be used when there's no other way to interpret the law.
• Member states’ laws must comply with EU law.
• Scholars and case law are highly persuasive but not binding in the same way as precedents in Common Law.

Hierarchy of Private Law Sources in Common Law Countries

• Constitution (unwritten in the UK)
• Precedents (case law): Practically, statutes are a higher source than case law.
  • Became a thing due to the Declaration Theory, according to which judges & courts were declaring the law that already existed
  • Now, it's recognized that judges are creating laws through their judgements
• Statutes
• Regulations

Interpreting a Written Law in Common Law Countries

• Literal Rule: Interpreting the letter of the law in its plain, ordinary meaning.
  • Still very strong in Common Law because statutes were initially exceptions to case law, restricting judges' creative power.
  • Strength is linked to the prohibition of using parliament’s preparatory works to interpret law.
  • Courts in the UK started interpreting using the literal rule in a milder way.
  • Civil Law and Common Law started converging.
• The Reasonability Parameter of the Golden Rule
• The "Mischief Rule": Looking at the purpose of the original lawmaker.
  • From the 1990s, it became possible to use parliament’s preparatory documents for interpreting laws.
• (USA only): Laws must be interpreted in accordance with the constitution.
• Legal scholars: Recently became relevant in the UK; always relevant in the US.

Link Between Private Law & Commercial Codes

• The codification of Commercial Codes was parallel to the codification of Civil Codes.
• Commercial Law: Body of trading principles used by merchants and applied by merchant courts on a transnational level.
• Lex Mercatoria: First body of Commercial Law; used in Europe in the Middle Ages.
• States started regulating Commercial Law, and each state developed its own Commercial Code.

International Law’s Role in Regulating Private Law

• Treaties try to harmonize certain areas of Private Law, mostly Commercial Law.
• Institutions harmonize Commercial Law due to the world’s globalized nature.
• Differences between national Commercial Laws were considered barriers to cross-border trade.
• Institutions:
  • International Chamber of Commerce (ICC): Tried to develop and apply a uniform commercial law in Europe.
    • Main objectives: collect and publish best commercial practices, provide uniform standard contract clauses.
    • Clauses can be interpreted the same way worldwide if included in contracts.
  • The EU: Regulates competition among EU businesses (antitrust regulations) and fundamental freedoms (freedom of movement for people, workers, and capital).