Civil Law: Contracts, Torts, Property, and IP

Posted on Feb 7, 2025 in Law

Civil Law

Civil law is a branch of law that deals with disputes between individuals, organizations, or both, typically involving private rights and obligations rather than criminal offenses. The goal of civil law is to resolve conflicts and provide remedies, such as compensation, rather than to punish wrongdoing.

Types of Civil Law

Contract Law (derecho de contratos): Governs agreements between parties.
Tort Law (derecho de daños y perjuicios): Covers civil wrongs such as negligence.
Property Law (derecho de propiedad): Deals with ownership and rights over property.
Family Law (derecho de familia): Concerns marriage, divorce, and custody.
Succession Law (derecho de sucesiones): Governs wills and inheritance.

The balance of probabilities is the standard of proof used in civil cases. It means that a party must prove that their claim is more likely than not to be true (i.e., over 50% probability). This is a lower standard than “beyond a reasonable doubt,” which is used in criminal trials.

Intellectual Property

Copyright: Protects original creative works, such as books, music, and films. It does not apply to functional objects. Duration: life of the author + 70 years.
Design: Protects the visual appearance or aesthetic of an object, such as shapes or patterns. Duration: Typically 5 years, renewable for 25 years.
Patent: Protects inventions or technical innovations, such as a new process or product. Duration: Usually 20 years from the filing date.
Trademark: Protects brand identifiers, such as logos, names, or slogans, that distinguish goods or services. Duration: Renewable every 10 years indefinitely.

Parts of a Contract

Offer: A clear proposal by one party to another.
Acceptance: Agreement to the offer without modifications.
Consideration: Something of value exchanged by the parties (e.g., money, services).
Intention to create legal relations: Both parties must intend to be legally bound.
Legal capacity: Both parties must have the ability to enter a contract (e.g., not being minors or mentally incapacitated).

Key Contract Clauses

Parties Clause: Identifies the parties entering the contract (e.g., Company A and Individual B).
Scope of Work/Services Clause: Clearly defines the obligations and responsibilities of each party.
Payment Terms Clause: Specifies the amount, currency, and schedule of payments.
Duration and Termination Clause: Outlines the start and end dates and the conditions under which the contract can be terminated.
Confidentiality Clause: Ensures sensitive information remains protected and not disclosed to third parties.
Intellectual Property Clause: Defines whether the rights belong to the creator or are transferred to the other party (usually the one paying for the work).
Force Majeure Clause: Defines circumstances where performance is excused due to unforeseen events (e.g., natural disasters).
Dispute Resolution Clause: Specifies how disputes will be resolved (arbitration, mediation, or litigation).
Indemnity Clause: One party agrees to compensate the other for specific losses or damages.
Governing Law Clause: Identifies the legal jurisdiction and laws applicable to the contract.
Boilerplate Clauses: Standard clauses such as Severability, Entire Agreement, and Waiver Clauses.

Termination Clause Example

Either party may terminate this agreement with 30 days’ written notice to the other party.
In the event of a material breach of this agreement by either party, the non-breaching party may terminate the agreement immediately upon written notice.
Splash may terminate this agreement immediately if Michelle O’Connor engages in conduct that harms the company’s brand or reputation.
Upon termination, Michelle O’Connor will cease representing Splash, return any provided materials, and all pending payments will be settled within 14 days.

Joint Venture

Advantages:

Shared risks reduce the financial impact on each partner.
Combines expertise, technology, and resources from multiple parties.
Facilitates market entry with the help of a local partner.
Temporary and flexible, focused on specific objectives.
Encourages knowledge sharing, improving long-term operations.

Disadvantages:

Potential conflicts due to differing goals or management styles.
Profits must be shared, reducing financial benefits.
Limited control over decisions compared to independent operations.
Short-term focus may limit strategic long-term benefits.
Legal and operational complexities in setting up the agreement.

Company Merger

Advantages:

Economies of scale reduce costs and increase efficiency.
Access to new markets and customer bases.
Combined resources create a stronger competitive position.
Eliminates competition, increasing market share.
Greater financial and operational stability in the long term.

Disadvantages:

Cultural clashes can cause integration difficulties.
Job redundancies often lead to layoffs and morale issues.
Combining systems, teams, and operations is complex and time-consuming.
High financial and administrative costs.
Risk of failure if the merger is poorly managed.

Business Structures

Sole Trader
Advantages: Easy and inexpensive to set up and manage; Full control over decision-making and profits; Minimal regulatory requirements; Direct taxation as personal income.
Disadvantages: Unlimited liability: personal assets are at risk; Limited ability to raise capital; Sole responsibility for business risks and decisions; Lack of continuity after the owner’s death.

Partnership
Advantages: Shared responsibility and workload among partners; Combined skills, expertise, and capital; Relatively simple to establish; Direct taxation as personal income for partners.
Disadvantages: Joint and several liability in general partnerships (partners are personally liable for debts); Disputes between partners can disrupt the business; Profit sharing reduces individual earnings; Limited continuity if a partner leaves or dies.

Limited Liability Partnership
Advantages: Limited liability for partners, protecting personal assets; Flexibility in management and internal structure; Partners can directly share profits without corporate taxation.
Disadvantages: More complex and expensive to set up than a general partnership; Limited in some jurisdictions to specific professional services; Partners may still face liability for personal wrongdoing.

Private Limited Company (Ltd)
Advantages: Limited liability for shareholders; Easier to raise capital through private investment; Perpetual succession ensures business continuity; Better credibility and reputation than sole traders or partnerships.
Disadvantages: More regulatory requirements and administrative burdens; Shares cannot be publicly traded; Higher setup and compliance costs than partnerships or sole traders.

Public Limited Company
Advantages: Ability to raise substantial capital by offering shares to the public; Limited liability for shareholders; Enhanced credibility and transparency due to public reporting requirements; Continuity independent of shareholders’ changes.
Disadvantages: Strict regulations and high costs of compliance; Public disclosure of financial and operational information; Risk of hostile takeovers due to publicly traded shares; Higher operational costs.

Cooperative
Advantages: Democratic management: each member has an equal vote; Focus on member welfare rather than profits; Shared resources and benefits among members; Limited liability for members.
Disadvantages: Difficulty in raising capital due to lack of profit-driven investment; Slower decision-making due to democratic processes; Members may prioritize individual interests over collective goals.

Branch Office
Advantages: Expands a company’s market presence without creating a separate legal entity; Allows direct oversight of operations in a new location; Utilizes the parent company’s reputation and resources.
Disadvantages: The parent company remains fully liable for branch activities; Local compliance requirements can be costly and complex; Limited autonomy for local operations; Cultural and operational differences may create challenges.