Foundations of Business Law

1. Agency agreement between Seller/Exporter and Agent > payment commission from Seller to Agent

2. Agent exchanges offer/acceptance with Buyer/Importer

3. Effect: Sales agreement with ref. to Agent between Seller/Exporter and Buyer/Importer

4. Sales Agreement from Buyer/Importer to Consumer (Buyer)

1. Distribution Agreement + Framework between Seller/Exporter and Buyer/Importer/Distributor

2. Seller/Exporter grants sole trading right to Distributor/Buyer an delivers Purchase order

3. Distributor deliveres Products to Shops (Sales Agreement)

4. Shops conclude Sales agreement with Consumer

• Subsidiary is incorporated under the local law
• Independent and separate legal entity
• Controlled by the parent company

• Relationship is and agency or distribution agreement

• establishment (own shares)
• acquirement (buy existing company)

• Subdivision of the parent company
• Not independent and no separate legal entity

• no contract required > after establishment the parent company is directly liable

• Two or more companies
• Joint organization
• Executing joint business undertaking

• Contractual joint venture: joint liability
• Equity venture: company

1. Contractual Agreement (simple partnership) between Company 1 + Company 2

2. Sales Agreement between Purchaser and both Companies

1. Contractual agreement (simple partnership) betweeen company

2. Each company posseses 50% of a new company

3. Purchaser concludes Sales Agreement with new company (claim for damage against new company aswell)

1. McDonald's (Franchisor) concludes Franchising Agreement with Franchisee

2. Franchisee concludes Sales Agreement with Customer

(McDonalds, Subway, Migrolino etc.)

1. Licensor (patent owner) grants rights to use invention through license agreement to Licensee

2. Licensee concludes Sales Agreement with Customer

General Rules:

• Owner has to bear the risk of accidental destruction or damage (“The risk lies where it falls”)
• Exception based on statutory provisions, jurisdiction or contract: liability of the injuring party

Function of Tort Law:

• Compensation of damage
• Preventive function
• Punitive function (only in common law countries)
• Enable dangerous but useful conduct (e.g. operation of railways)

- Damage

- Causation (In fact, legal causation)

- Unlawful act

- Fault

-Injuring party must put the injured party in the position it would have been without the tort  (without compensation for personal suffering)

- Pecuniary

• Costs for medical treatment
• Expenses for repair
• Loss of earnings

- Punitive

• Only in case of intent or gross negligence
• Not in Civil Law countries

In Fact:

• Injuring party’s breach of duty must cause the damage/injury; factual matter

Legal:

• The injury must be a legal or proximate consequence of the breach of duty/foreseeability
• Is it fair to hold the defendant accountable for the injury?

• Breach of Duty > other event > other event > Accident

  Question: is there a connection between the accident and the breach of duty?

- "Any deviation from prudence or duty resulting from inattention, incapacity, perversity, bad faith, or mismanagement”

> Any wrong doing commitet out of negligence (Vernachlässigung) or intent

- Negligence: Failure to exercise the standard of care that a reasonable person would have been able to

> gross negligence: failure to exercise basic and simple precautions

- Contributory negligence:

• Plaintiff failed to take reasonable care for his safety or property
• Both plaintiff and defendant are negligent > damage proportionally reduced

- Voluntary assumption of Risk:

• Plaintiff assumes risks linked to a certain activity such as football > liability excluded

- Self defense

-Consent of the plaintiff

- Liability wihtout fault: "wrongdoer" liable without fault

- Strict liability for dangerous activity: operator of nuclear plant, property owners etc.

- Strict liability with reversal of evidence: liable person may provide evidence that he acted diligently (fleissig, sorgefältig)

-Strict liability without proof of care/diligence: Exception: liability without possibility of such evidence

- liability is based on the individual fault of the injuring party

• someone may be held responsible for the injuries of a third party, such as an employee > close relationship
• Precondition is that the employee committed the injury in the course of the work for his employer
• a form of strict liability
• Swiss law: employer may proof that he has chosen, instructed, supervised the employee with due care

• Proof of negligence of the manufacturer
• Liability based on contract v. liability based on tort

important for:

• Any company manufacturing products
• High liability exposure
• Implementation of processes to avoid production of defective products/product monitoring

1. Sales agreement between Manufacturer and Importer

2. Sales agreement between Importer and Seller

3. Sales agreement between Seller and Customer

4. e.g. Product Defect > Customer has a claim based on warranty against Importer and Manufacturer (not Seller)

- payment in case of claims

- Injured party may claim damages based on contract or tort

• Waiver of liability in contracts

• Disadvantage if claim based on tort

Relationship between private persons

• Family law
• Law of succession
• Law of property
• Law of contracts
• Commercial law
• Law of cooperation
• Tort Law
• Trust Law

Acts and behaviour of the state

• Constitutional law (rules over the organization of the state including fundamental rights)
• Criminal Law (prohibiting, punishing, prosecuting certain offensive behaviour)
• International Law (relation between states themselves

Constitutional Law:

• How the government works in election
• In parliamentary procedure
• And the division of power between different arms of government
• Human right values
• Democratic core principles

International Law:

• Relation between nation states

Criminal Law:

• Guilty mind -> guilty act
• Guilty act = offense
• Guilty act can be committed if you are insane or under drugs
  • Punishments: imprisonment, fines, community service

- Civil law (CH+most of Europe):

• Made by the parliament and the government
• Judges merely interpret the laws in the individual cases

- Common law (USA+UK)

• Stare decisis or precedent were the major innovation
• Judged make the law – what is just and fair
• Judges must decide their cases similar on how other courts have done it
  • Analyse old cases
• Precedent = statement by the judge in deciding a case

• to attain a deeper knowledge of the legal systems
• to perfect the legal systems
• possibly, to contribute to a unification of legal systems, of a smaller or larger scale (cf. for instance, the United Nations treaty on the international sale of goods)

• Independent courts
• Representative parliament
• The military
• Police
• The bureaucratic organisation
• Civil society itself

• If someone has the total power, this person will abuse the power
• Because of that they advocated the separation of power (Gewaltentrennung)

- The judiciary (court system) has to apply the law and make sure that the legislative and the executive of the state act according to the law

- District court, first instance court

• Representative government (Bundeshaus, Kremlin, etc.) =means that the people vote for political decision makers to pass the laws of the country
• Most parliament are bi-cameral – two chambers

- Representatives of State (Bundesräte) usually elected by parliament

- States where security/excecutive is ordered by military and police (Afghanistan, Somalia, etc.)

• Freedom of Speech
• Freedom of Association
• Liberty of Press

• natural law is a general rule, found out by reason, by which a man is forbidden to do that which is destructive of his life
• This theory asserts that there are laws that are immanent in nature
• Everyone recognizes what is just and fair
• People often argue with the natural law against oppressive government
  • Mahatma Gandhi British colonial rulers

Thomas Hobbs:

• a natural law practitioner, he set up 9 laws of nature

• Laws are rules made, whether deliberately or unintentionally, by human beings
• There is no connection between the validity conditions of law and ethics or morality. A law can be immoral and still be valid and enforced

• A natural law jurisprudence would say that this law is legally deficient
• An unjust law is no law in the eyes of a naturalist and so doesn’t need to be obeyed

- Administrative rulings

- precedents which address the legal right of, and restrictions on, working people and their organizations

- mediates aspects of the relationship between trade unions, employers and employees

- someone working and living outside their country of origin-->Cross-borders commuter and business trips are not foreign employee

- if a business trip doesn’t go longer then 8 day in a period of 90 days, no permit is required

- relocation= temporary transfer of employees to another job in same organization (relocation agreement = fixed terms and conditions)

- Agreement on the Free Movement of Persons – in force since 1 June 2002

- Work permits are issued by the respective cantonal office of industry, trade, and labour; application requires the respective form in Germany, French or Italian

- the work permits are only valid in the canton of origin--> New one if someone moves to and another canton

Agreement on the Free Movement of Persons

- For EU/EFTA citizens:

• Free entry
• Residence and work

- For non-EU/EFTA citizens

• Only skilled labour needed by Switzerland is admitted from third states
• A work permits is not gained with an offer of employment – you also have to prove that no Swiss or EU/EFTA citizens could be found to occupy the vacant position
• the number of permits issued is limited

Short-term permit (L-Permit)

·       EU/ EFTA citizens:

• 12 months – limited employment relationship of less than one year
• Job seekers also receive a L permit after 3 months
• The permit may be extended after a maximum of one year without interruption

·       Non-EU/EFTA:

• Permit allows a stay lasting one year
• Extended up to a maximum duration of 24 months

 Initial residence permit (B-Permit)

·       EU/ EFTA:

• Granted to persons with an unlimited employment relationship or lasting at least 12 months
• Will automatically extend up to five years without any formalities
• If the person is unemployed for longer than 12 months the extension is limited to one year

·       Non-EU/ EFTA:

• Residence permit does not exceed one year the first time
• Work permit will only be granted within the limits of the maximum numbers set each year
• Mostly renewed in an annual basis

1.1.3      Permanent residence permit (C-Permit)

·       EU/EFTA:

• Nationals from the 15 EU countries and EFTA obtain this permit, of indefinite length, after a regular and uninterrupted stay of five years in Switzerland.

·       Non-EU/EFTA:

• After 10 years of regular and uninterrupted stay

• Students, retirees and affluent people
• Allowance of the family to accompany: Dependent family members of B-Permit holders (and L-Permit holders in the case of EU/EFTA nationals) are generally granted the same permit for the same duration as the principal permit holder