Editing Common law (section)

=== Common law as a foundation for commercial economies ===
{{Further|Intracorporate Conspiracy Doctrine}}
The reliance on judicial opinion is a strength of common law systems, and is a significant contributor to the robust commercial systems in the United Kingdom and United States. Because there is reasonably precise guidance on almost every issue, parties (especially commercial parties) can predict whether a proposed course of action is likely to be lawful or unlawful, and have some assurance of consistency.<ref name="LawGovPol">{{cite web| url = https://lawgovpol.com/common-law-advantages-disadvantages| title = LawGovPol, ''Common law: advantages and disadvantages''| access-date = 28 January 2021| archive-date = 21 July 2024| archive-url = https://web.archive.org/web/20240721194550/https://lawgovpol.com/common-law-advantages-disadvantages| url-status = dead}}</ref> As [[Justice Brandeis]] famously expressed it, "in most matters it is more important that the applicable rule of law be settled than that it be settled right."<ref>''Burnet v. Coronado Oil & Gas Co.'', 285 U.S. 393, 406 (1932) (Brandeis, J., dissenting).</ref> This ability to predict gives more freedom to come close to the boundaries of the law.<ref>See, e.g., [[Yeo Tiong Min]], "[http://www.singaporelaw.sg/content/SomeDifferences.html A Note on Some Differences in English Law, New York Law, and Singapore Law] {{Webarchive|url=https://web.archive.org/web/20070502093747/http://www.singaporelaw.sg/content/SomeDifferences.html |date=2007-05-02 }}" (2006).</ref> For example, many commercial contracts are more economically efficient, and create greater wealth, because the parties know ahead of time that the proposed arrangement, though perhaps close to the line, is almost certainly legal. Newspapers, taxpayer-funded entities with some religious affiliation, and political parties can obtain fairly clear guidance on the boundaries within which their [[Freedom of speech|freedom of expression]] rights apply.

In contrast, in jurisdictions with very weak respect for precedent,<ref>For example, the [[United States Patent and Trademark Office|U.S. Patent Office]] issues very few of its decisions in precedential form. Kate Gaudry & Thomas Franklin, "Only one in 20,631 ''ex parte'' appeals designated precedential by PTAB", IPWatchdog (27 September 2015). Various lower tribunals in the Patent Office give very weak respect to earlier superior decisions.</ref> fine [[Question of law|questions of law]] are redetermined anew each time they arise, making consistency and prediction more difficult, and procedures far more protracted than necessary because parties cannot rely on written statements of law as reliable guides.<ref name=LawGovPol /> In jurisdictions that do not have a strong allegiance to a large body of precedent, parties have less ''a priori'' guidance (unless the written law is very clear and kept updated) and must often leave a bigger "safety margin" of unexploited opportunities, and final determinations are reached only after far larger expenditures on legal fees by the parties.

This is why<ref name="EisenbergMillerNewYork" /> the law of the State of New York is frequently chosen in commercial contracts, even when neither entity has extensive contacts with New York—and remarkably often even when neither party has contacts with the United States.<ref name="EisenbergMillerNewYork">Theodore Eisenberg & Geoffrey P. Miller (2008). [http://lsr.nellco.org/nyu_lewp/124 ''The Flight to New York: An Empirical Study of Choice of Law and Choice of Forum Clauses in {{Sic|hide=y|Publicly|-}}Held Companies' Contracts'']. New York University Law and Economics Working Papers. Paper 124, {{Webarchive|url=https://web.archive.org/web/20110401145941/http://lsr.nellco.org/nyu_lewp/124/ |date=1 April 2011 }} (based on a survey of 2882 contracts, "New York law plays a role for major corporate contracts similar to the role Delaware law plays in the limited setting of corporate governance disputes. ... New York's dominance is striking. It is the choice of law in approximately 46 percent of contracts", and if merger contracts excluded, over half).</ref> Commercial contracts almost always include a "choice of law clause" to reduce uncertainty. Somewhat surprisingly, contracts throughout the world (for example, contracts involving parties in Japan, France and Germany, and from most of the other states of the United States) often choose the law of New York, even where the relationship of the parties and transaction to New York is quite attenuated. Because of its history as the United States' commercial center, New York common law has a depth and predictability not (yet) available in any other jurisdictions of the United States. Similarly, American corporations are often formed under Delaware [[Corporations law|corporate law]], and American contracts relating to corporate law issues ([[Mergers and acquisitions|merger and acquisitions]] of companies, rights of shareholders, and so on) include a Delaware [[choice of law]] clause, because of the deep body of law in Delaware on these issues.<ref>Eisenberg & Miller at 19–20 (Delaware is chosen in about 15% of contracts, "Delaware dominates for one type of contract—[merger] trust agreements. ... The dominance of Delaware for this specialized type of contract is apparently due to the advantages and flexibility which Delaware's business trust statute.")</ref> On the other hand, some other jurisdictions have sufficiently developed bodies of law so that parties have no real motivation to choose the law of a foreign jurisdiction (for example, England and Wales, and the state of California), but not yet so fully developed that parties with no relationship to the jurisdiction choose that law.<ref>Eisenberg & Miller at 19, only about 5% of commercial contracts designate California choice of law, where nearly 50% designate New York.</ref> Outside the United States, parties that are in different jurisdictions from each other often choose the law of England and Wales, particularly when the parties are each in former British colonies and members of the Commonwealth. The common theme in all cases is that commercial parties seek predictability and simplicity in their contractual relations, and frequently choose the law of a common law jurisdiction with a well-developed body of common law to achieve that result.

Likewise, for litigation of commercial disputes arising out of unpredictable torts (as opposed to the prospective choice of law clauses in contracts discussed in the previous paragraph), certain jurisdictions attract an unusually high fraction of cases, because of the predictability afforded by the depth of decided cases. For example, London is considered the pre-eminent centre for litigation of [[Admiralty law|admiralty]] cases.<ref>{{cite news| url=https://www.independent.co.uk/news/uk/home-news/london-becomes-litigation-capital-of-the-world-1031231.html | location=London | work=The Independent | first=Richard | last=Osley | title=London becomes litigation capital of the world | date=23 November 2008}} London is also forum for many defamation cases, because UK law is more plaintiff-friendly—in the United States, the First Amendment protection for freedom of the press allows for statements concerning public figures of questionable veracity, where in the UK, those same statements support a judgment for libel. This relative weakness of protection for freedom of speech led the United States to limit enforcement of foreign (in particular, English) defamation judgements in the [[SPEECH Act]] of 2010, thus making England and Wales a less attractive forum for such cases.</ref>

This is not to say that common law is better in every situation. For example, civil law can be clearer than case law when the legislature has had the foresight and diligence to address the precise set of facts applicable to a particular situation. For that reason, civil law statutes tend to be somewhat more detailed than statutes written by common law legislatures—but, conversely, that tends to make the statute more difficult to read.