Common Law

Posted in Finance, Accounting and Economics Terms, Total Reads: 384
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Definition: Common Law

It is also known as case law or precedent. It is the law which is followed when the outcome of a case cannot be decided on the basis of the existing laws. The judges form this law through the decision of the courts.


These are also known as Anglo-American laws which was originated in UK. These laws base their decision on prior judicial announcements rather than on civil legislations. These laws are based on broad principles unlike civil laws. In civil laws, a defendant entering the trial is presumed guilty but in common law, he is presumed innocent until proven.


Sometimes due to social changes, inventions and discoveries, situations occur when it becomes necessary for court to look outside the case and look for previously undetermined legal issues and check for their decisions. If similar dispute or issue has been resolved in past the court uses the same analogy here. Else it formulates a law by creating precedents. Then the new decision becomes a precedent for any such future issues.


This is practiced primarily in the legal system if United Kingdom and federal law of united stated. This is also practiced by every country that was colonised by England or The United Kingdom.


For example: One such case where common law was used was: 2 people who have been living together for 10 years or more but have not been legally married were given a legal right to share their assets as per the common law of marriage. This was done because according to the court the couple have lived so long together that they are essentially considered married even though they are not legally. Hence, if they wish to get separated, they need to split their assets as well just like legally married couple ought to do.

 

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