Sources of Law

When studying Business Law, you will be drawing on two sources of law, statute law and common law.  Parliaments (Commonwealth and State) create statute law and judges decide common law when they hear cases.

Judge-made law, common law or case law (all these expressions have the same meaning) is where judges make decisions on disputes brought before them in the courts.  They apply the principles of law which have been developed in past cases to the case which they are currently presiding over.	All Australian courts operate on the adversarial system where the judge acts as the umpire.
Legal rules or principles are developed from the judges' decisions.
Parliamentary law is made through Acts of Parliament and is also known as legislation or statute law.  It is replacing common law (made by judges) because it overrules any conflicting common law.	Judges are now interpreting the law more, rather than making it because disputes more and more involve statute law.   Important Terms Ratio decidendi, is the most important part of the judge's decision it is binding it becomes the law it is the central legal reasoning used to decide the case Obiter dicta are comments made by the judge during the process of making the decision they are comments made 'by the way', often about related legal issues, rather than the central legal issue (which forms the ratio decidendi) they are not binding, but are often used in subsequent cases to assist the judge in reaching a decision. They can persuade, rather than bind, a judge   When coming to a decision, a judge looks to decisions given in other similar disputes/cases and applies the legal principles which underpin those decisions.  This is called following precedent.   Remember The plaintiff initiates legal action. The defendant has the action brought against them. The appellant appeals against a judge's decision The respondent has the appeal brought against them   Next page ...   © 1999 Butterworths Australia.  Adapted from Chapter 1, How To Study Business Law, Crosling and Murphy. © 2006 Victoria University, Helen Murphy and Brendon Stewart. If you have any problems or questions regarding the Business Law Online site, please contact Helen.Murphy@vu.edu.au, or Brendon.Stewart@vu.edu.au
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