Business, political and legal systems: formula sheet

Key formulas

Main sources of law

Legislation | Case law (precedent) | Custom | International law

Learn the four. Check which one the scenario describes.

Common law system

Main feature = judicial precedent + legislation

Judges' decisions bind lower courts. Law develops case by case.

Civil law system

Main feature = comprehensive written codes

Judges apply the code. Precedent is persuasive, not strictly binding.

Religious legal system

Main feature = sacred texts and religious teaching

Authority comes from religious sources, for example Islamic law.

Delegated legislation

Parent Act → power given → rules made by another body

It is law made under authority of a statute, not by the legislature directly.

Criminal standard of proof

Criminal case: prosecution proves guilt beyond reasonable doubt

Higher standard. If real doubt remains, the defendant is not guilty.

Civil standard of proof

Civil case: claimant proves on the balance of probabilities

Lower standard: more likely than not. Burden normally rests on the claimant.

Parties

Criminal: state (prosecution) v defendant | Civil: claimant v defendant

Terms vary by jurisdiction, but the idea is the same.

Outcome

Criminal: punishment (fine, imprisonment) | Civil: remedy (damages, injunction, specific performance)

Civil remedies mainly compensate or restore, not punish.

Public v private

Public law = state and individual | Private law = individual and individual

Criminal law is public law. Contract and tort are private law.

Substantive v procedural

Substantive = what the rights and duties are | Procedural = how they are enforced

Ask: does the rule define a right, or regulate the process?

Binding part of a case

Ratio decidendi = binding; obiter dicta = persuasive only

The ratio is the reasoning necessary for the decision. Other remarks do not bind.

Literal rule

Plain ordinary meaning of the words, even if the result is harsh

Gives certainty. Used first by most courts.

Golden rule

Literal meaning, unless absurd; then modify minimally

Narrow use: to avoid absurdity or repugnance.

Mischief rule

Identify the old law, the defect (mischief), the remedy, then interpret to cure the defect

Looks at the purpose behind the Act.

Handling precedent

Follow, distinguish, overrule, reverse

Distinguish = different material facts. Overrule = higher court rejects an earlier case in a different case. Reverse = appeal court changes the result in the same case.

Control of delegated legislation

Made within enabling Act = valid; outside its powers = ultra vires (void)

Courts can review it. Procedure or scope can be challenged.

Three branches

Legislature = makes law; Executive = applies and enforces law; Judiciary = interprets law and resolves disputes

Use this as your first check on any scenario: ask who is doing the act.

Separation of powers

Power divided among three branches, with checks and balances

The aim is to prevent abuse of power. Separation is rarely total in real systems.

Rule of law features

Law above government + equality before law + certainty + no retrospective punishment + independent courts

Wording varies by source. Learn the ideas, not exact phrases.

Forms of state structure

Unitary = power centralised; Federal = power shared between centre and regions

Do not confuse with parliamentary or presidential, which describe the executive.

Mediation

Neutral helps parties agree; no power to impose a decision

Outcome is binding only if the parties sign a settlement agreement.

Arbitration

Agreement to arbitrate + neutral arbitrator → binding award

Based on the parties' consent, often in a contract clause. Limited appeal rights.

Court decision

Judgment is binding and enforceable by the state

Appeal goes to a higher court in the hierarchy.

Tribunal

Specialist, less formal body for a defined subject area

Appeal to a court is usually on a point of law.

Binding versus non-binding

Binding: court, tribunal, arbitration. Non-binding unless agreed: negotiation, mediation, conciliation

This split answers many objective questions.

Sole trader test

Sole trader = one owner + no separate legal personality + unlimited personal liability

The owner and the business are the same legal person.

Partnership test

Partnership = persons carrying on business together with a view to profit

General partners normally have unlimited personal liability. Check the stated jurisdiction rule on legal personality.

Company test

Company = registration + separate legal personality + (usually) limited liability

Shareholders' loss is normally limited to the amount unpaid on their shares, or to their guarantee if limited by guarantee.

Comparison grid

Personality | Liability | Formality | Control | Privacy

Use these five headings to compare any two entities.

Quick revision

• Sources of law include legislation, case law, custom, international agreements and, in some systems, religious or codified texts.
• Civil law deals with disputes between parties and usually aims at a remedy; criminal law deals with offences against the state and aims at punishment.
• The standard of proof is higher in criminal cases (beyond reasonable doubt) than in civil cases (balance of probabilities).
• Public law governs the state and its relations with individuals; private law governs relations between individuals or organisations.
• Primary legislation is made by the legislature; delegated legislation is made by another body under powers the legislature gives it.
• Ratio decidendi is the legal reason for a decision and can bind; obiter dicta are other remarks and only persuade.
• Distinguishing avoids a precedent on the facts; overruling is a later court in another case ending the earlier rule; reversing happens on appeal in the same case.
• The rule of law means government and citizens are subject to law, with law applied fairly and not arbitrarily.
• Separation of powers divides state functions among the legislature, executive and judiciary.
• Arbitration produces a binding decision by a neutral third party; mediation and conciliation help parties reach their own agreement.
• Sole traders have no separate legal personality; companies do, and this affects liability and ownership.

Common mistakes

• Saying civil law means the law about private disputes Fix: Here 'civil law' names a legal system based on codes. Private disputes are a separate classification of law.
• Saying precedent strictly binds judges in civil law systems Fix: In civil law systems, earlier decisions are persuasive. The code is the main authority.
• Saying a civil case must be proved beyond reasonable doubt. Fix: Link the higher standard to the higher stakes: liberty is at risk only in criminal cases.
• Treating civil law and public law as opposites. Fix: Remember there are two separate splits. Civil v criminal is one. Public v private is another. Criminal law is part of public law.
• Saying obiter dicta is binding. Fix: Only the ratio decidendi binds. Obiter can persuade only.
• Confusing overruling with distinguishing. Fix: Distinguishing keeps the old case valid but says the facts differ. Overruling says the old case was wrongly decided and is done by a higher court in a later case.
• Saying the judiciary makes law in the same way as the legislature. Fix: State the main function: the judiciary interprets and applies law. Treat law-making by courts as a secondary effect of precedent, not the main role.
• Treating the executive as only the head of state. Fix: Remember the executive includes government ministers, departments and agencies that administer and enforce law.
• Saying mediation produces a binding decision. Fix: The mediator only helps. A settlement binds only once the parties agree and sign it.
• Saying arbitration is always the cheaper option. Fix: Say it is often quicker and can be cheaper, but complex arbitration can be costly.

Exam tips

• Match the clue word to the source or system before reading the options.
• Watch for 'main' or 'primary' in the question. It points to the dominant source in that system.
• Do not mix up the civil law system with civil as opposed to criminal law.
• Expect system questions to describe a country's features without naming the system.
• For short written parts, give the feature and its contrast in separate sentences.
• Read the question for the standard of proof first. It often gives the answer in a few words.
• In objective questions, wrong options often swap the standards or the parties. Check each part of an option before choosing.
• Remember that criminal law is part of public law. Questions sometimes test this link.