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Commercial law

1. INTRODUCTION: How do law subjects differ from other subjects 2. TEACHING METHOD: Importance of answering problems and tutorial work 3. TEXTS AND RESOURCES ( AND INTERNET): 4. ASSESSMENT: 5. ANSWERING LEGAL PROBLEMS: identify legal issues state relevant law apply law to the facts


to provide the necessary legal background for students to study commercial law to provide the foundations for undergraduate legal research to ensure that students understand the sources of Australian law to introduce some statutory law (consumer protection) To understand how to answer legal problems

INTRODUCTION: This topic provides an introduction to the legal system by examining the sources of our laws and the impact of common law, precedent, and legislation on the legal system. This knowledge is fundamental in understanding the business environment and being able to complete successfully the later topics in this course.

By the end of this lecture you will be able to:
explain sources of law
define what is meant by law, common law and legislation identify the main approaches to statutory interpretation identify the courts in the legal system and describe their hierarchy explain the doctrine of precedent and how it operates in the court system explain the classification of law and legal proceedings explain the court process and alternative ways of resolving disputes


The question of what is the law receives different responses from different segments of society. Generally, the textbook answer is that it is legislation from Parliament or from bodies to whom the power has been delegated and also decisions from senior courts. Another approach is to view the law as a system that assists society function in a more cohesive fashion, although this system does not always balance moral, cultural and religious beliefs and values. Note the various issues and responses to the question what is law raised in your textbooks.

The law can be classified in many different ways, one helpful method is to use the modern definition of separating law into enacted or Parliament made law and unenacted or judge made law. Another approach is to classify law by examining what specific areas law covers. For example: (i) civil and criminal law (ii) historical division of law into principles of common law and equity. There is also a further division based on geographical limits. For example, England and her ex-colonies have a common law system whereas the other European states have a civil code system. See for example the Roman Civil Code and The Napoleonic Code. Some of these classifications will be discussed further when we examine the sources of Au law.


There are two main sources of law (i) common Law or unenacted Law (ii) legislative, statute or enacted law Common law (in the current context) means judge made law. Legislative, statute or enacted law refers to law made by governments sitting in their legislative capacity.

Alternative Methods of Dispute Resolution (ADR)



Government has three distinct areas of power (i) legislative ( Parlt and president Art 38) (ii) executive( President, PM, cabinet Art 23-24) (iii) the judiciary (Courts Art 93)

The separation of these powers is referred to as the separation of powers doctrine and stems from the Westminster principles of government


Parliament Courts Reception of English LawApplication of English Law Act 1993


Parliament ( one house of Parlt) statutes delegated legislation



Supreme Court ( includes High Court, Court of Appeal and specialty courts - the Court of Appeal is the highest court in Singapore) Court of Appeal hears appeals from High Court
The High Court civil and criminal cases at first instance: -Civil cases where the claim exceeds $S250,000 -Criminal cases- penalty exceeds 10 years jail or death penalty -Appeal cases from subordinate courts Specialist courts: Admiralty Court, Intellectual Property Court Subordinate Courts District Court: civil- up to $S250,000 ( probate $3m) criminal penalties up to 10 years jail or fines. Magistrates Court: crime- 3 years jail or fine, civil $S60,000 Small Claims tribunal claims up to $S10,000 re the sale of goods or services


Delegated legislation is also referred to as subordinate or secondary legislation. Delegated legislation is enacted law made under the authority of an Act of Parliament. This Act is often referred to as an empowering Act. The empowering Act delegates the authority to make regulations, rules and by-laws, government ministers and statutory authorities. Delegated legislation must come within the legislative powers conferred in the empowering Act or the resultant delegated legislation may be declared ultra vires and therefore invalid.



DEFINITION OF COMMON LAW: Laws made by judges in adjudicating disputes, often referred to as case law. Common law includes (1) decisions made by judges where no legislation applies and (2) judges interpretations of particular statutes and regulations. Common law was developed by judges who followed their own decisions and those of fellow judges in similar cases. Common law is found in the decisions of judges of the senior courts. These decisions are found in the law reports The law reports were traditionally compilations of cases from a particular court or group of courts taken over a period of time. The cases are bound into large volumes and usually accessed through law libraries, however law reports are now more readily available through CDs and internet sources. Each case has a citation (or reference) which is used in the citing of the case that supports a legal principle examples are found in your text. Note Ku Yu Sang v v Tay Joo Sing [1993] 2 SLR 938 Howard Smith v Ampol Petroleum Ltd [1974]AC 821 Lloyds Bank v Bundy [1974] 3 ALL ER 757



Equity is a form of common law or judge made law that was developed to overcome some of the shortcomings of the common law. Common law did not provide many remedies and restricted them mainly to monetary compensation. The Courts of Chancery were established in England to administer the principles of equity through the legal system.
Today equity and common law are joined together in the one court system, however the principles of equity are still used today and have a significant impact on business law.



Common Law refers to the legal principles found in the decisions of the courts. It is important in the legal system that similar cases have similar outcomes to promote consistency and justice within the legal system. The doctrine of precedent ensures some consistency of decisions as the concept of precedent involves courts following previous decisions of other courts. Two forms of precedent exist: Binding precedent (traditionally referred to as stare decisis): A decision from a more senior court in the same hierarchy of courts binds judges in lower courts to follow that decision. The facts of the cases must be substantially similar. Persuasive precedent: Decisions from courts in other jurisdictions or lower courts in the same hierarchy which need not be followed by other courts but can be used as a guide when deciding similar fact cases. Persuasive precedent may also be the obiter dicta (see next slide) or merely observations of the court which were not the basis of the courts decision



In cases of binding precedent, not all of the judgment is binding, the only binding aspect of the case is the ratio decidendi or legal reason for the decision. A judge deciding a case may make other statements of law relating to the case and comment on the legal arguments presented by the parties, however these statements may only be obiter dicta and are not the judges legal reason for the decision. Determining the ratio and the obiter can be a difficult task, however It is important that courts relying on precedent identify the correct ratio decidendi so as to avoid a party appealing against the decision on the basis of an incorrect interpretation of the precedents. Precedents only operate where there are similar circumstances between the precedent and a current case, sometimes there may be small but significant differences between the cases so in these circumstances the judges may distinguish on the facts.


Precedent and the Court Hierarchy

The operation of precedent relies on a hierarchy of courts. The key to binding precedent is that decisions of senior courts are followed at a later time by courts lower in the same hierarchy.


Before leaving this introductory topic some discussion is needed of the words criminal and civil . The legal terminology as between criminal and civil differs so a clear understanding is needed of the correct language. In criminal matters the following words are important : accused, defendant, prosecuting, prosecutor, penalty, conviction, beyond reasonable doubt. Criminal cases are referred to in the following way: R v Smith or Public Prosecutor v Smith or similar usually indictable criminal offences (Ror PP) refers to the crown as prosecutor and Smith is the accused.) Smith v R or PP - indictable criminal matters on appeal In civil cases the following words are important: Plaintiff, applicant, defendant, sue, remedy, damages, appellant, respondent, on the balance of probabilities. Civil cases are referred to in the following way: Smith v Brown (Smith is the plaintiff and Brown the defendant).