Legal Systems – 7 systems of law that govern the world

There are many different types of legal system relating to business that exist in India. Every entrepreneur and businessman running small or large business must know about these. They are:
Islamic Law
It is derived from the interpretation of Kuran and the teachings of Prophet Mohammad. The people following this law submit to the will of God. Among unique aspects of Islamic law is the prohibition of paying or receiving interests.
Socialist Law
This law evolves from Marxist socialist system and continues to influence regulations in former communist countries particularly those from Soviet Union.
Common Law
This law is based on tradition (refers to a country’s legal history), precedent (refers to the cases that have come before the courts in the past), customs (refers to the ways in which laws are applied in specific situations). Common law originated from England and is followed in US, Canada, Australia. Ina common law country, contracts tend to be detailed with all contingencies spelled out.
Civil/Code Law
It is based on a systematic and extensive codification of laws. It is derived from the Roman law under code law. The legal system is generally divided into three separate codes i.e. commercial, civil and criminal.
In a civil law country, contracts tend to be shorter and less specific because many of the issues of the contract are covered or included in the civil code. It is followed in Japan, Germany, France.
Theocratic Law
It relies on religious and spiritual principles to define the legal environment. This system is based on religious doctrines, percepts and beliefs. E.g.: Islamic law is based on a variety of sources:
-The Kuran i.e. the sacred text of Islam
-Decisions and sayings of Prophet Mohammad
-The writings of Islamic scholars
Customary Law
This system is anchored in the wisdom of daily experience or for those who are more intellectually inclined towards certain traditions or philosophies.
Mixed System
Mixed legal system emerges when a nation’s system engages two or more different type of legal systems.

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