Why common law matters to a first-time founder
Court decisions can affect how contracts, duties and remedies are understood even when legislation does not spell out every point. Which decisions bind a court depends on the jurisdiction and court hierarchy. Founders should not assume that a rule from England, the United States or Australia applies elsewhere.
Examples of common law
A supplier contract does not state every consequence of a serious breach. In a common-law jurisdiction, a court may apply principles developed in earlier cases alongside the written contract and legislation. A similar dispute in another country may follow a code or different precedent and reach another result.
Common misunderstanding
Common law is not law without statutes. Common-law systems have extensive written legislation, and legislation can change or replace judge-made rules. The term can also refer to a specific body of judge-made law rather than an entire legal system, so its meaning depends on context.
When to use it
Use the term when explaining the source of a legal rule or comparing legal systems, and always name the jurisdiction. For an actual contract, employment or liability decision, use qualified local advice. A general internet summary of another country’s common law is not a reliable answer.