Sales Convention and UNIDROIT Principles of International Commercial Contracts are quite prominent.
For the understanding of the international business the legal system of a country is essential, as the business practices of a certain county are being regulated by its laws. These business regulations set out the ways in which the business transactions are to be carried out and also define the liabilities and privileges to the parties involved in the transaction (contract).
There are broadly four basic legal systems that are being practiced around the world. Firstly it is the Islamic Law, secondly the Common Law, thirdly the Civil or Coded Law, and lastly the Marxist Legal System. They are discussed as follows:
The Islamic law is developed from the interpretation of the Holy Book Quran Majeed and the Hadith i.e. practices of the Prophet Mohammad P.B.U.P. The philosophy of law in Islamic community is greatly different from the one that is practices in the Western Countries.
One the most important aspect of the Islamic law is the undesirability of payment or receipt of interest. This prohibition of interest had also largely influenced the business and banking practices, though, the sanctity of contracts, risk sharing, individual's rights and duties, and property rights are welcomed. Moreover, investments in casinos, gambling and alcohol are strictly prohibited.
Due to the restrictions discussed above, ...
Instead of money borrowing, businesses have evolved to rely on leasing arrangements for the acquisition of fixed assets. In case of banks largely in Iran and also Pakistan fixed service charges are being charged rather than the interest charge, while the depositors on the other hand are being provided with shares rather than interest payments. (Aswathappa, 2003)
2. Socialist Law
This system of law has developed from the Marxist socialist system and is being practiced in the former communist countries in some or the other forms. A crucial is being played by ideology. In contrast to the civil law code those are being incorporated by governments of different point of views, the socialist codes are meant for the societal and personal transformation. This system is not a decided set of rules, but actually intends to attain a Communist society.
China and Russia are the two countries which come to ones thought when talking of Communism. As there is no set of rules, both of the countries have adopted dissimilar paths for their respective economic and political development.
3. Common Law
The fundamental principles of the Common law come from the English law. The common law has evolved over the years from the collective opinion of the judges and from decisions given in individual cases. A majority of commercial law such as contracts, agency and torts are construed from the principles that emerged from individual quarrels that were resolved in antagonist procedure.
One of the key aspects of the common law is this that it is being maintained that similar decisions should be given out for similar cases. Due to this reliance on the decisions of the earlier cases enables the businessmen to shape