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This chapter reviews the comparative business orientation of legal systems. It underlines the importance of business law in economic prosperity and welfare. There is a historical review of business orientation in relation to the development of bond markets and bills of exchange. The key indicator is chosen for measuring business orientation include compulsory notice of the assignment of receivables and the deprivation of the assets of a bankrupt corporation in relation to joint ventures and flip clauses. This chapter explains that one of the most remarkable changes over the last century has been the acceleration of economic development and prosperity by the growth of business in the world and the reduced importance of agriculture in terms of GDP. It describes how cruel life could be without this prosperity and proposes that the law should seek to foster enterprise and invention.

This chapter reviews what is meant by a trust and contains an international survey of trust recognition in the families of jurisdictions. It criticises the legal objections to the trust in those jurisdictions which do not recognise the trust and then examines the maximisation of trust recognition and risk mitigation. It explains that a trust is a situation where one person has the public title to an asset where the asset belongs to someone else so that the beneficial ownership is immune from the private creditors of the trustee. The recognition of trusts is absent or restricted in many jurisdictions outside the English and American common law jurisdictions. The two main commercial uses of the trust are securities settlement systems and custodianship of investment securities for safe custody and administration. Other important uses include bondholder trustees and the holding of collateral by an agent bank as trustee for a syndicate of lending banks. Additional cases include mutual funds and pension funds. The use of a governing law like English law can improve the recognition of commercial trusts in the courts of a non-trust jurisdiction.

This chapter identifies the families of jurisdictions into eight families, explains how they were formed, and sets out the members of each group, the historical background of the family, and the legal culture and key indicators. It identifies a number of other jurisdictions that might serve as the governing law of international transactions. The main families of jurisdictions are the American common law jurisdictions, the English common law jurisdictions, the Napoleonic jurisdictions, the Roman-Germanic jurisdictions, the mixed civil/common law jurisdictions, Islamic jurisdictions, new or transition jurisdictions, and a small number of unallocated jurisdictions. A table sets out statistics about these jurisdictions, showing the predominant influence of England, France, and Germany, with a number of other influential countries historically, including the United States and the Netherlands.

This chapter discusses the weighting of the main themes and stresses the importance of the value of freedom both in our societies and in their laws. It explains that there is no fixed answer as to the relative importance of the main themes dealt with in the book, such as predictability, insolvency set-off, or insulation of the transaction from the local laws of one of the parties. The importance of each factor depends on the detailed facts and circumstances of each transaction, on such factors as whether the party concerned is a debtor or a creditor, and also on the market practice for the transaction. The law is necessary for survival and the societies in the world reflect many divergent solutions. One result is that there is competition between legal systems. This is as it should be.

This chapter discusses the role of choice of governing law and the main corporate transactions, and compares shares to bonds. It discusses risk mitigation techniques, summarises the key indicators of corporate law around the world, and examines the comparative law of the key indicators of financial assistance to buy own shares and director personal liability. It discusses other key indicators of corporate law, including the veil of incorporation, bankruptcy consolidation, subordination of shareholder loans, maintenance of capital, shareholder equality, minority protections, corporate governance, takeovers, and corporate guarantees. It lists the main corporate transactions and explains why the free choice of governing law has less of a role to play in the main corporate transactions. It explains that the risks are mitigated mainly by the formation of subsidiaries as opposed to a choice of governing law.

This chapter reviews the important characteristics of the judiciary of a jurisdiction, including business orientation, risks involved in the choice of courts, the reasons for a particular choice of courts, and some key indicators of litigation, including US litigation, as well as class actions and discovery of documents. It discusses pre-judgment freezes, the enforcement of foreign judgments, sovereign immunity, and the advantages and disadvantages of arbitration. Parties are generally able to choose the jurisdiction to hear disputes on their contract. A choice of courts to back up the choice of governing law is crucial for a number of reasons, including to benefit from the predictability approach in interpretation of contracts; to coincide the choice of courts with the governing law; to benefit from the commerciality, business orientation, and expertise of the chosen courts; to benefit from their favourable conflict of laws rules of the chosen court; to improve the insulation from foreign laws; and to avoid adverse mandatory rules of the forum.

This chapter surveys the comparative law of exclusion clauses in business contracts internationally and the reasons for their use. As a key indicator, it compares the validity of exclusion clauses in unregulated offering documents such as offering memoranda for syndicated bank credits and offering circulars for international bond issues. It also considers the comparative law on underwriting liability for unregulated prospectuses and for regulated prospectuses. It examines the comparative law for exclusion of liability in relation to the sale of derivatives. It concludes that, as regards arranging bank and underwriter liability, the English courts are sympathetic to exclusion clauses in wholesale markets, as shown by a mass of case law, and that the English attitude to exclusion clauses in general seems more welcoming than in Germany or France.

This chapter reviews freedom of contract as an important value in the law. It discusses the range of free choice of governing law and courts and any limitations on this free choice on a comparative basis. The main indicators used for measuring freedom of contract are prohibitions on clauses restricting the assignment of receivables and bondholder democracies and other collective action by bondholders, with a particular emphasis on a comparison between English and US law. This chapter explains that legal prohibitions on clauses restricting assignments of contract rights involve a direct clash between two potent principles, and also that of the need for marketability of assets as against the fundamental concept of freedom of contract in wholesale markets. The comparison of bondholder voting, which is a financial democracy like shareholder voting and voting on insolvency plans, has to be seen in the light of the role of political democracies.

This chapter reviews the essentials of an express choice of governing law for a contract and the choice of courts, as well as governing law and jurisdiction for non-contractual claims, such as torts. It summarises international long-arm jurisdiction, the European Judgments Regulation 2012 and the Hague Convention on Choice of Court Agreements 2005. It surveys the extent to which the governing law is restricted by other laws, such as regulatory and insolvency law. Other areas of law that may override the governing law in a particular jurisdiction include the local criminal law, corporate law, the procedural law of the courts, international conventions, contract law such as doctrines of good faith, and the law of torts or delict. This chapter also reviews non-contractual liabilities, the use of arbitration, and the potential overriding of jurisdiction and arbitration clauses by insolvency statutes.

This chapter proposes two events which are considered to have had a major impact on the crystallisation of the main features of the main legal systems: first the timing of crystallisation in relation to the arrival of the Industrial Revolution in the jurisdictions concerned; and, secondly, cultural and political trends post-1968. It mentions the impact of Brexit and the role of Roman law. The chapter suggests possible future directions for the law. Three prominent issues are whether the law will continue to expand at its present rate and become even more unmanageable, whether the existing families of law will remain substantially as they are, and whether the dominance of English and New York law in wholesale transactions will continue as a duopoly or whether other contenders will emerge. One can expect that the content of the law of the future will be very unexpected.