2The Law, Legal System and Basics of Contract Law
This chapter will be trite for any legal student or practitioner, however, we hope invaluable for those approaching this text without formal legal training or experience. In order to fully appreciate and ensure legal data helps to ultimately unlock business value, one needs to understand the context of the law, the legal system and – of particular relevance in respect of the banking and finance industry – the basics of contract law (given that financial instruments are at heart, simply a series of contractual obligations).
This chapter starts with a discussion of the differences between civil and common law systems concerning choice of governing law, before explaining the different requisite elements of valid and enforceable legal contracts, followed by a discussion of how contract law sits alongside other relevant areas of law.
Chapter 3 will provide details of financial instruments themselves, before considering the fundamentals of ‘data’ in Chapter 4.
Legal Systems and Traditions
We will begin by outlining some of the most major legal traditions before delving into the legal systems most commonly used in the world of international finance, namely English and New York law. The term ‘legal system’ refers to the content or body of the law generally, along with the means by which it is enacted and adjudicated. A ‘legal tradition’, on the other hand, is a less specific term, referring to the general similarities shared between ...