Common Law

Essay by kittyyangCollege, UndergraduateA+, March 2012

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Business Law

26th Intake/Semester 5/F

Lecturer: Mr Raymond Fong

Date of Submission: 24th April 2010


Table of Contents





Three Major Aspects


Case Application


4.1 Applicable Law


4.2 Applications of facts to law


4.3 Conclusion






Common law system is originated in England in middle ages and laws are made by the judges based on the decisions made on the cases. Thus, common law is also known as case law. Decisions on past cases by superior courts are binding and authoritative for future cases handled by lower courts. Under common law, there is contract law which facilitates the transactions made between different parties especially businesses. When there is breach of contracts, remedies are required to solve the problems that are likely to happen. One of the major remedies is common law damages. The very first type of damages could have been Weregeld paid by killer of Saxons for homicides.

However, as time passes, more types of damages are formed. In business world, damages are handled based on case laws and originated from different cases just as how common laws are formed. New rules and limitations are created from various cases with different scenarios and facts. For instance, Hadley v Baxendale (1854) set out the rules on the remoteness that determine which losses are claimable for the damages from the breach of contracts. Another example would be Dunlop Pneumatic Tyres Ltd v New garage and Motor Co. (1915) case that established guidelines to differentiate between liquidated damages and penalties.


Damages is the main remedy when either one party breach the contract causing the other party to deal with the losses. Common law damages is to compensate the innocent party with the amount of money that would put him/her...