2010-11 academic year

Introduction to Business Law (21119)

Degree/study: degree in International Business Economics
Year: 1st
Term: 2nd and 3rd
Number of ECTS credits: 8 credits
Hours of studi dedication: 200 hours
Teaching language or languages: English
Teaching Staff: Pablo Salvador Coderch, Fernando Gómez Pomar, Mireia Artigot i Golobardes

1. Presentation of the subject

The course Introduction to Business Law is fundamental in the curricula of International Business Economics. This is a mandatory course. Following Ward Farnsworth´s approach as it is developed in his book "The Legal Analyst. A toolkit for thinking About the Law (Chicago University Press, 2007), the goal of this course is offering a guide to tool for thinking about the law. Economic, game theory, psychology, jurisprudence, history, and other disciplines will be used to provide an overview of the importance of legal rules applicable to businesses so that when completing this course, students will be able to identify legal issues an their impact on businesses while at the same time, getting familiar with the solutions legal systems provide in order to solve legal problems arising from the participation of businesses in market transactions. 

Hence, this course is of crucial importance for this degree given that it provides the opportunity to become familiar with the different legal disciplines affecting the regulatory business context. The course will benefit all students given that it will enable them to develop a command of legal language and concepts that are encountered in the everyday business world. 

Introduction to business is structured in two different parts that correspond to the two trimesters that this course lasts. The first part of this course intends to study legal issues that are relevant and have an impact on business decisions. The second part of this course aims at providing an overview of basic issues in business law, focusing on Spanish legal rules and their influence on business matters. 

As we will see, business legal issues are real world daily matters so that it will therefore be crucial that you follow up on what is going on in the business world around you by regularly reading newspapers and magazines that regularly deal with economic and legal issues like Financial Times, the Wall Street Journal, The Economist, Business Week, Expansión, Cinco Días, or La Vanguardia, el País, as well as their weekend especial sections in economics. 

• Position of the course in the curricula project  

Introduction to Business is a mandatory subject of the second and third trimesters of the first year of the B.A. in International Business Economics. This course is worth 9 credits ECTS. 

• Course Organization  

The course duration is 20 weeks. All students will meet weekly with the professor for a lecture of an hour and a half.

Further, every second week, starting week 2, there will be a two hour practice session with the T.A. of this course. There will be a total of 10 practice sessions, 5 during the second trimester and 5 during the third. These practice sessions will be used to deepen discussion of the readings done and the topics studied as well as to relate the acquired knowledge with everyday legal issues regarding business matters.

2. Competences to be attained

This course aims at providing students with analytical and discussion skills that will be useful for their studies in International Business Economics and for their prospect professional career. The skills that this course intends to develop are general and specific and are reflected in the next chart. 

All skills will be evaluated through the biweekly continuous valuation assignments as well as with the different exams of this class - both at the end of the second trimester and at the end of the third trimester.  

General Skills

Specific Skills

  

Instrumental

1. Analytical abilities (of legal issues and the alternative solutions the legal system provides).

2. Legal reasoning through simple legal cases.

3. Ability to search information independently (on legal issues regarding business in specified data bases, the media, etc.   

Interpersonal 

4. Social skills to interact in groups during the practice sessions (active participation in discussion giving your opinion, listening to the other classmate, reflecting the work done in the class reading, etc.). 

Systemic 

5. Understand and analyze the legal issues appearing in the press or other media. 

6. Skills to carry on individual learning (reading and understanding course materials and information search).

 

 

1. Identify legal problems business face.

2. Ability to understand and apply simple legal solutions.

3. Ability to relate the analysis of legal issues with the goals and instruments of legal systems.

 

 

3. Contents

FIRST TRIMESTER OF THIS CLASS 

Reading: Ward Farnsworth, The Legal Analyst. A Toolkit for Thinking About the Law, Chicago University Press, Chicago, 2007  

PART I - INCENTIVES  

  1. Ex Ante And Ex Post
  2. The Idea Of Efficiency
  3. Thinking At The Margin
  4. The Single Owner
  5. The Last Cost Avoider
  6. Administrative Cost
  7. Rents
  8. The Coase Theorem  

PART II - TRUST, COOPERATION, AND OTHER PROBLEMS FOR MULTIPLE PLAYERS  

  1. Agency
  2. The Prisoner's Dilemma
  3. Public Goods
  4. The Stag Hunt
  5. Chicken
  6. Cascades
  7. Voting Paradoxes
  8. Suppressed Markets  

PART III - JURISPRUDENCE  

  1. Rules And Standards   

  

PRACTICE SESSIONS OF THE FIRST TRIMESTER   

PART IV - INSTITUTIONS OF LEGAL SYSTEMS   

CHAPTER 1 - THE ACTORS OF THE SPANISH LEGAL SYSTEM   

1.1  Parliaments and their legislative output. Legislative hierarchy in the constitution.

1.2  The judiciary: Basic structure; functions; processes.

1.3  Public administrations: types, structures, normative and regulatory functions, application and execution of legal rules; their special position as subjects in the legal system.

1.4  Institutions of formalization and legal certainty: notaries and public registries.

1.5  The state and Autonomous Communities.  

  

Chapter 2 - ESSENTIAL ELEMENTS OF THE LEGAL SYSTEM

2.1  Legal Rules and Mechanisms for their Production and Application.

2.2  The Two Legal Systems: Civil Law And Common Law

  

Chapter 3 - THE EUROPEAN UNION LAW: THE EUROPEAN COMMUNITY AND THE MEMBER STATES.

3.1  Structure

3.2  Bodies

3.3  Power structure

3.4  Sources of Community law.


SECOND TRIMESTER OF THIS CLASS 

PART 2 - BASIC INSTITUTIONS OF BUSINESS LAW IN SPAIN:

CONTRACTS, PROPERTY, CORPORATIONS, AND BANKRUPTCY

 

CHAPTER 1 - INTRODUCTION TO SPANISH CONTRACT LAW   

Reading:   Teresa Rodriguez de las Heras Bellall, Introduction to Spanish Private Law, Routledge (2009); Chapter 6, Relationships and Private Law. Transactions and Contracts, pages 235-267

Class Materials, Fernando Gómez Pomar, Basic Rules of Contract Law: A Law and Economics Perspective

1.1  Contracts as instruments to encourage economic cooperation and business activity 

1.2  Basic institutions of Spanish contract law: contract formation; performance and breach 

Supplementary reading: Fernando Gómez Pomar, El incumplimiento contractual en Derecho español, www.indret.com (2007)

1.3  Warranties in consumer sales. 

Directive 99/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees 

Fernando Gómez Pomar, "Economic Analysis of the Directive", in Stefan Grundmann and Cesare Masssimo Bianca (eds.), EU Sales Directive Commentary (2002), pages 53-78  

  

CHAPTER 2 - MARKET REGULATION 

2.1 Consumer protection Law and regulation of advertisement 

European Commission Proposal of 8 October 2008 for a Directive of the European Parliament and of the Council on consumer rights 

Teresa Rodriguez de las Heras Bellall, Introduction to Spanish Private Law, Routledge (2009); Chapter 4, Business, Market and the Law pages 161-177 

Fernando Gómez Pomar, The Unfair Commercial Practices Directive: A Law and Economics Perspective, www.indret.com (2005)

2.2  Labor market regulation 

Botero, J, S Djankov, R La Porta, F Lopez-de-Silanes, and A Shleifer, "The Regulation of Labor", Quarterly Journal of Economics (2004).

2.3  Antitrust regulation 

Francesco Parisi, Paul Stephan and Ben Depoorter, The Law and Economics of the European Union (Lexis Publishing, 2003), pages 715-726, 735-739, 752-754, 771-774, 779-787   

  

CHAPTER 3 - PROPERTY LAW: CHATTELS AND REAL ESTATE. REAL ESTATE MARKET INSTITUTIONS. INTELLECTUAL PROPERTY

3.1  Tangible property

3.1.1 Property and other limited rights. Rights of guarantee. 

Reading:   Teresa Rodriguez de las Heras Bellall, Introduction to Spanish Private Law, Routledge (2009); Chapter 5, Good and Private Law, pages 178-212

3.1.2 Land registry 

Reading: Pedro del Pozo, "Land register", in Sjef Van Erp and Antoni Vaquer, Introduction to Spanish Patrimonial Law (2006), pages 329-339

3.2 Intellectual property  

Fernando Gómez Pomar slides on European Intellectual Property Law. 

 

CHAPTER 4 - CORPORATIONS AND THE LEGAL FORM OF BUSINESSES

4.1 Introduction. The purpose of corporate law  

Reading: Reinier Kraakman, John Armour, Paul Davies, Luca Enriques, Henry B. Hansmann, Gerard Hertig, Klaus J. Hopt, Hideki Kanda, Edward B. Rock, The Anatomy Of Corporate Law: A Comparative And Functional Approach (2009), Chapter 1, What is corporate Law ?, pages 1-34.

4.2  Main types of business structures in Spanish Law  

Reading:   Teresa Rodriguez de las Heras Bellall, Introduction to Spanish Private Law, Routledge (2009); Chapter 3, Organizations and Private Law: Communities, Companies and Groups, pages 72 -124.

4.2.1    Non-limited liability business structures.

4.2.2    Corporations: creation, structure and legal regime

4.2.3    Limited liability companies: specificities.

4.2.4    Others.

4.2.5    Large corporations and agency problems: issues of corporate governance. 

Reading: Luca Enriques and Paolo Volpin, Corporate Governance Reforms in Continental Europe, Journal of Economic Perspectives, Vol. 21, Num. 1 (2007)

 

CHAPTER 5 - INSOLVENCY AND BANKRUPTCY LAW   

Reading: Fernando Gómez Pomar, Marco Celentani Miguel García-Posada, Spanish corporate bankruptcy puzzle, working Paper (2009)

4. Assessment

Course evaluation will be based on the following criteria: 

Each trimester of the course -second and third- will have the same weight in the final grade. Hence, each trimester is worth 50% of the total grade. 

Both parts of this course will be jointly evaluated so that you will only have one grade for the WHOLE course. 

- Exam grades (both trimesters) : 70%

• Each trimester will have a final exam. In order to pass this class, you need to have a minimum grade of 5 on average of both trimesters.

• In order to be able to take the average grade between both trimesters you need to score at least 3.5 points as the lowest grade of one of the trimesters. If the average between both grades is above 5 so that you can compensate the 3.5 points, you will pass this course.

- Practice sessions (both trimesters): 30% 

• The teacher assistant of the practice sessions will grade some of the essays you hand in during both trimesters of the class.  The average of these grades will be the grade of the practice sessions. 

In order to be able to have the average between the practice sessions and the exams, it will be necessary to have a minimum grade of 5 of the average of the exams. Any grade below 5 will not allow for taking the average with the practice sessions. 

The minimum required grade to pass this course will be a final grade of 5 points out of 10. 

The September exam will be a unique exam for both parts and a single grade. The grades of the practice sessions will be taken into account for the September exam.

5. Methodology

This class combines classroom activities as well as readings and writing students will have to perform outside of the classroom.  

Introduction to business is a 20 week course structured in two differentiated parts, each of which will last 10 weeks and will weight equally in the evaluation of the course. 

The methodology of each kind of lectures will follow the same structure: 

a.    For the theory lectures: 

Each week students will have a two hour lecture given by the professor of the course.

b.   For the practice sessions 

During the 20 weeks there will be 10 practice sessions - 5 in each part - to further work the issues arising from the class materials and to apply them to the daily business realities. 

The 10 practice sessions will be conducted by the Teacher Assistant of this class.  

A week before the practice session you will have the assignment available to work on it and hand it in the week before the practice session so that there will be enough time to grade them and return them to you during the practice session.

c.    Work load :  

Credits ECTS: 8 

Total hours of study of each student: 200 hours (25 hours per credit ECTS). 

Distribution of work load for each student:

1. Lecture hours:  60

40 hours of theoretical lectures
20 hours of practice sessions

2. Hours of supervised work: 20 hours (TA office weekly hours)

Attendance non compulsory

3. Hours of student work: 120 hours to prepare the readings and the course cases and of individual study

7. Planning of activities

PART I - INTRODUCTION TO THE LEGAL SYSTEM 

WEEKS

LECTURES

PRACTICE

Week 1

Lecture 1 and Lecture 2:

  1. Ex Ante And Ex Post
  2. The Idea Of Efficiency

 

Week 2

Lecture 3 and Lecture 4

  1. Thinking At The Margin
  2. The Single Owner

PRACTICE SESSION 1  

ESSENTIAL ELEMENTS OF THE POLITICAL AND LEGAL SYSTEMS

Week 3

Lecture 5 and Lecture 6

  1. The Last Cost Avoider
  2. Administrative Cost

  

Week 4

Lecture 7 and Lecture 8

  1. Rents
  2. The Coase Theorem

PRACTICE SESSION 2  

THE ACTORS OF THE SPANISH LEGAL AND JUDICIAL SYSTEM

Week 5

Lecture 9 and Lecture 10

  1. Agency
  2. The Prisoner's Dilemma

  

Week 6

Lecture 11

  1. Public Goods

PRACTICE SESSION 3

THE EUROPEAN UNION LAW: THE EUROPEAN COMMUNITY AND THE MEMBER STATES.

Week 7

Lecture 12 and Lecture 13

  1. The Stag Hunt
  2. Chicken

 

Week 8

Lecture 14   

  1. Cascades

PRACTICE SESSION 4  

QUESTIONS TO BE HANDED IN

Week 9

Lecture 15 and Lecture 16

  1. Voting Paradoxes
  2. Suppressed Markets

  

Week 10

Lecture 17   

  1. Rules And Standards 

PRACTICE SESSION 5

PRACTICE QUESTIONS ABOUT THE MATERIAL COVERED DURING THE TRIMESTER   

QUESTIONS TO BE HANDED IN

EXAM PERIOD

 

PART 2 - BASIC INSTITUTIONS OF BUSINESS LAW: CONTRACTS, PROPERTY AND CORPORATIONS 

WEEKS

LECTURES

PRACTICE

Week 11

Lecture 1: CHAPTER 1 - Introduction to contracts. 1.1 Contracts as instruments to encourage economic cooperation and business activity.    

Lecture 2: CHAPTER 1 - Introduction to contracts. 1.2 Basic institutions of contract law

 

Week 12

Lecture 3:  CHAPTER 1 - Introduction to contracts. 1.3 Warranties in consumer sales  

Lecture 4: CHAPTER 2 - Market regulation. 2.1 Consumer protection Law and regulation of advertisement (I)

PRACTICE SESSION 1

Contract law  

Week 13

EASTER HOLIDAYS

Week 14

Lecture 5: CHAPTER 2 - Market regulation. 2.1 Consumer protection Law and regulation of advertisement (I)  

Lecture 6: CHAPTER 2 - Market regulation. 2.2 Labor market regulation.

 

Week 15

Lecture 7: CHAPTER 2 - Market regulation. 2.3 Antitrust regulation.  

Lecture 8: CHAPTER 3 - Property Law On Chattels and Real Estate. Real Estate Market Institutions. Intellectual Property. 3.1 Tangible property (I)

PRACTICE SESSION 2

Contract law  - Antitrust

Week 16

Lecture 9: CHAPTER 3 - Property Law On Chattels and Real Estate. Real Estate Market Institutions. Intellectual Property. 3.1 Tangible property (II)  

Lecture 10: CHAPTER 3 - Property Law On Chattels and Real Estate. Real Estate Market Institutions. Intellectual Property. 3.2 Intellectual property (I)

 

Week 17

Lecture 11:  CHAPTER 3 - Property Law On Chattels and Real Estate. Real Estate Market Institutions. Intellectual Property. 3.2 Intellectual property (II)

PRACTICE SESSION 3

Property Law - Mortgage

Week 18

Lecture 12: CHAPTER 4 - Corporations and the legal form of business. 4.1 Introduction. The purpose of corporate law   

Lecture 13: CHAPTER 4 - Corporations and the legal form of business. 4.2 Main types of Business structures (I)

 

Week 19

Lecture 14: CHAPTER 4 - Corporations and the legal form of business. 4.2 Main types of Business structures (II)

PRACTICE SESSION 4

Corporations

Week 20

Lecture 15:  CHAPTER 4 - Corporations and the legal form of business. 4.2 Main types of Business structures (III)  

Lecture 16:  CHAPTER 4 - Corporations and the legal form of business. 4.2 Main types of Business structures (IV)

 

Week 21

Lecture 17: CHAPTER 5 - Insolvency and bankruptcy law.

PRACTICE SESSION 5

Corporations or insolvency

EXAM PERIOD THIRD TRIMESTER

FINAL EXAM FOR  INTRODUCTION TO BUSINESS