V. Legal Principles and Internationalization Flashcards
What are the Legal Principles in Private Law
- Pacta sunt servanda
- Clausula rebus sic stantibus
- Private autonomy
- Good faith
Pacta sunt servanda
Principle of binding contracts
* E.g. §§ 861 ff ABGB, § 869 ABGB, Art 26 Vienna Convention of Treaties
Clausula rebus sic stantibus:
- A contract is legally binding as long as the conditions governing its conclusion have not
fundamentally changed - In modern law in particular: impossibility, economic impossibility, disruption of the basis of
the transaction
Party Autonomy:
- Right to conclude private legal relationships according to one‘s own individual interests
- The individual is entitled to create, change or cancel rights and obligations
- Includes freedom of contract, freedom of ownership, freedom to marry, freedom of testation
Good Faith:
General presumption that the parties to a contract will deal with each
other honestly and fairly
* E.g. Art 26 Vienna Convention of Treaties
Why do we need private international law?
The modern legal world is characterized by the parallel existence of multiple, variously calibrated
legal systems
* Problem: which law is applicale on a cross-border contract and how are breaches handled?
- Private International Law
Terminology:
No international consensus regarding the precise meaning of the term „private international law“
* For Austria/Germany: private international law comprises (only) those rules that determine, in cases
with connections to various countries, the applicable law
Sources of Private International Law:
- Important European Regulations:
◦ „ROME I Regulation“ – Regulation No 593/2008
◦ „ROME II Regulation“– Regulation No 864/2007
◦ „ROME III Regulation“– Regulation No 1259/2010 - National Law
◦ E.g. for Austria: IPRG
- Introduction to Comparative Law
The Plurality of Law:
Civil law
* Common law
* Mixed systems
* Religious laws
* Loi uniforme?
civil law
-many codifications
-precedent not legally binding
-stron influence of scholars
common law
judge made law
-few codifications
–binding precedent
religious law
-law as will of god
-inspires state law
-role of clerics
mixed systems
-combine features of several traditions
- Economic Analysis of Law
Homo Oeconomicus: A rational individual in economic theory, making decisions to maximize personal utility.
Information Asymmetries: Situations where one party has more or better information than another, leading to imbalanced decision-making.
Cheapest Cost Avoider: The party who can most efficiently prevent or minimize a potential cost or harm, often expected to take action to avoid risks.
- Economic Analysis of Law
Cost-benefit analysis and cheapest cost avoider theories:
- Pareto-optimum
◦ No individual can be better off without another individual being worse off at the same time - Kaldor-Hicks Theory
◦ The advantages to the beneficiaries exceed the losses of the disadvantaged, and the
disadvantages can be compensated by the advantages
Cost-benefit analysis and cheapest cost avoider theories:
- Coase theory
◦ Resources will also be channelled through private transactions wherever they can be used most
efficiently
Who is the cheapest cost avoider? – Wildlife Fence Case:
Facts:
A motorcyclist collided with a fallow deer on a main road and sued the local authority for not having
put up a wildlife fence on the main road.
Economic Analysis of Law – Cheapest Cost Avoider
The “cheapest cost avoider” is the party who can most efficiently prevent or minimize potential harm. In legal contexts, this concept is used to determine who should bear the cost of preventing damages.
Wildlife Fence Case – Facts
A motorcyclist collided with a fallow deer on a main road and sued the local authority for failing to install a wildlife fence. The case discusses the balance between the cost of constructing the fence and the potential damages from animal collisions.
Wildlife Fence Case – Legal Outcome
The complaint was dismissed because the deer was wild and not under the control of the state. The court ruled that the costs of installing wildlife fences on all possible routes were too high and that road users had been warned of the risk by a sign.
conomic Analysis of Law – Cheapest Cost Avoider (Analysis)
The case involved a discussion on whether the state or the road user was the “cheapest cost avoider.” If the cost of building a fence was lower than the damage from animal collisions, the state would be required to install such protection.
