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What is 'Law'? What is Legal Reasoning? What is Problem Solving? And How Does a Course in Hong Kong Business Law Contribute to Business School and General Education?

Posted: 10 Nov 2003  

Orlan Lee

University of Cambridge - Clare Hall


I. The description for the course from which this textbook arose defined the purposes of the course as "preparing the student to solve a legal problem". It will shortly become clear, however, that the book does not distinguish between the techniques necessary for solving legal problems and business, social, or ethical problems. Every effort is made to simplify the principles of law outlined here to the bare minimum necessary to understand the various business law subjects discussed. It is taken for granted, that the reader will refer to one of the standard textbooks of Hong Kong Business Law for a more systematic understanding of the concepts, or for an opinion as to the current state of the law in Hong Kong. The purpose of this particular book is rather for teaching the principles of legal reasoning and problem solving that may be generally useful and applicable to the student, not only as an introduction to legal studies, but also in any other business, or social science discipline. It may appear deceptively simple to treat the outlines of legal principles supplied here as just so much information to memorize, and apply. However, it will soon become apparent from the discussions and cases that follow, that something more than that is involved in the body and traditions of "the law" - which this little book makes every effort to assist the reader to distinguish from the various individual "laws" that make up the statute books or are applied by the courts. "I know what you want!" one second year student wag came to my office to tell me last year. "You are interested in the ratio decidendi!" He meant the reasoning underlying judicial decisions. He was right! But, how do we explore judicial reasoning in a business law course?

Q. "How did you prepare for the final exam?" I asked my research assistant last year after he had finished his business law course. A. "With your PowerPoint lecture notes," he replied. Q. "What about the textbook?" I asked. A. "I did not like the textbook," he said "It was not useful for this kind of exam. I used the HKSA [Hong Kong Society of Accountants] outlines." Q. "Were the HKSA outlines useful for the exam?" A. "No." Q. "How did you use the PowerPoint notes, then?" A. "Some students memorized them. And some learned the different reasoning in similar cases. . . .I couldn't memorize them." He volunteered sheepishly, "So I learned the different reasoning in similar cases."

No one has ever given me a better indication that something must be working in a course. There are only two questions I would add to assess the validity of this assumption. Namely: "Did you learn anything from this approach?" And, "Would you have learned it anyway, without the course?"

II. The introductory chapters of this book describe the historical and theoretical background and traditions whereby "the law", rests upon the aspiration to find and apply what is "right". "Law" in this sense, therefore, includes, and is modified by principles, which, in the English common law tradition, we refer to as "equity". Equity, in its origins, aspired to temper the customary rules of the English common law with the balance of "fairness," or "natural justice". Together, they make up a tradition that its champions argued was justified, above all, because it attempted to apply solutions that were "reasonable". Students of the other, European legal systems may have it a little easier to begin with, to distinguish the various usages of the word "law". They have two different words for each of these two separate meanings: the continental European, or the "civil law" systems, distinguish between "jus" and "lex" (in Latin, the language of the Roman law, the historical ancestor of the European civil law systems), between "le droit" and "la loi" in French, "das Recht" and "das Gesetz" in German, etc., all of which are translated by the word "law", in one of its two variant meanings, in English. The first of these terms, and the more general one: that is, "jus", "le droit", "das Recht", etc., refer to "law" in the broader sense which encompasses "law" in the sense of what aspires to be "right". Here, "law" embodies not simply customary rules of law or codified statutory law alone, but all of "law" as a whole: statutes, customary rules, and principles of equity, and whatever "unwritten rules" are deemed to apply-not as individual rules alone, but as all rules apply, modify each other, and govern how each will apply in the complex of the whole. The second of the two terms, that is: "lex", "la loi", "das Gesetz", etc., is also translated by the word "law". But these terms refer to the "law", that is to particular rules of law, whether customary rules, or pieces of legislation, or statutes In the first sense, "law" aspires to be something more that what is simply made by man or passed by the legislature and signed into law by the sovereign or the head of state. There are some who believe that the "rightness" of the law derives from simply imitating some pre-existing "natural law". But the theory that underlies codification (in the civil law system, and to some extent in the common law countries) presupposes the ability of the "science of law" to assemble and incorporate into the codes of law all of those principles that the English-speaking lawyers refer to when they speak of pursuing what is "fair, just, and reasonabl.

III. The Chinese-speaking student encounters a problem similar to the one facing the English-speaking student, but a little different. There are words in Chinese, particularly in ancient Chinese philosophy, for concepts like "natural justice", "yi" (?), and "good custom", "li" (?). And, there are assumptions in Chinese traditional philosophy, or in what is, nowadays, sometimes referred to as Asian values, that the good society is one in which these concepts or values are adhered to. The ancient philosophy taught that society was at its best when men of character embodied these principles in their lives as a model for others. But Confucian philosophy, particularly, rejected the idea that men were made good by laws, and, therefore, conspicuously separated concepts of law from ethical teaching. "Fa lu " ( ? ? ) are the characters used to translate the word "law" into Chinese. "Fa " ( ? ) is a term used by the ancient Chinese philosopher Han Fei-tzu, the founder of the "fa chia" ( ? ? ) a school of thought we refer to in English as the "legalist school". The ancient word "fa" ( ? ) is comparable to the English terms "enactment", "statutory law", and perhaps even "legal method", or "legal system". "Lu " ( ? ) appears to have been a term from the world of music, where it referred to "invariable rule", or "regulation". Since the T'ang Dynasty, it has been used to refer to "statutes" or "codes of laws". Neither one of these terms, either separately, or together, is an accurate translation for the English word "law" used in its broadest sense, that is, not as a word to refer to "statutory laws", but rather when we speak of the "ideals and system of law" or the ideal of the "rule of law". To this day, there are appeals in Chinese society for leadership by example to maintain high ideals in society. Chinese leaders are, therefore, intensely concerned with preserving the honor and respect with which they, or their government, are perceived. Regard for the letter of the law or rule of law may often suffer by comparison. However appropriate that philosophy may be for Chinese society, linguistic separation of the concepts of "good custom" and "natural justice" from "law", makes it very difficult to convey an understanding of the role of "law" in Western legal theory, where the two concepts are historically intimately associated. There is no presumption that laws make men good in Western legal philosophy, either. However, it is fundamental that "justice, equity, and good conscience" are vital to make good law. And, in the long term, Western political and legal science is based on esteem for the "guaranties of law" and the "security of law". When we realize that this is what the study of "law" is all about, it necessarily has great implications, not only for the study of a subject like business law, but also for our understanding of the role of law in society as a whole.

IV. We come now to the mechanism of how the "course" proposed in this book is conducted. The book is not a summary of the law in the business law area, as indicated above. It is a collection of "outlines, cases, and materials". What the "outlines" are is simple enough, they are bare statements of the structure of the various areas of business law. The "materials" are essentially, as the table of contents tells us: "lectures", which open the discussion of the fields of law described in the "outlines", and put them in context. The "cases", as has been pointed out, are illustrative of various key points and issues of law-that vary or integrate the points of law discussed in the "outlines" and the "lectures". The book adopts the "case method approach". "Case method" assumes that a particular "case", or situation, incorporates a kind of problem that we may discover, again, in other circumstances. If that is true, once we have solved a particular kind of "case", we will have a model for solving the same type of "case" if it arises again. On the other hand, if, the next time around, we encounter a different variation of a similar situation, we can solve for the principles that apply in those particular varied circumstances. But most important of all, is to establish how we analyze a "case", and whether that tells us anything at all. The form of analysis applied here begins with establishing: (1) What the "facts of the case" are. We are urged to lay out these "facts" in sequence. And when we have them all, we should come to a statement of: (2) "The nature of the problem before us. In other words, the final "fact" of our "case analysis" is a statement of "who is suing whom for what." The "facts" of the lawsuit are also analysable into: (3) "The legal issues", that is, the various elements of general principles of law. On the basis of the "outlines" and one of the business law textbooks recommended, we learn a set of principles that apply in any given area of business law. Once we establish "the nature of the problem", we know which area of business law we are in. And then we can apply the principles of that area of law as they lead to the final step: (4) "What is a defensible approach to finding a reasonable solution to the problem?" We may find that there is more than one solution. Different courts may have come to different conclusions. Sometimes a judge may dissent from the holding of his own court. At times, such a dissent may ultimately prove more persuasive than the whole court's decision. We have to determine whether there is a precedent, that is, a holding of a court, that is binding on us. Whether there is a solution that suggests itself to us. Or whether there may be any final solution at all. In the latter case, we may have to advise our clients, or our employers, that we cannot predict exactly how a court may come down in such an instance. However, on the basis of the facts, and the issues, and the equitable considerations that arise, one or another solution is possible. And, perhaps, we may be able to advise whether litigation is a suitable recourse under the circumstances. It is always best to try to anticipate these circumstances: that is, to work out possible future developments in advance. For, it is far preferable to seek legal counsel in advance, in order to attempt to avoid future complications, than to have to obtain counsel after the fact to extricate ourselves from the legal problems that can arise. But do not think that that is all that this discussion was about: -the solution of a legal problem; -or the determination of the variety of issues that may arise in solving a legal problem. Where was the course leading us? It was not simply to the solution of particular legal problems in business law. What we have here is an author who believes that, not only legal problems can be solved by this method, he believes that all society?s problems can be understood, if not solved, by this method-legal problems, business problems, social problems-and ethical problems as well. It is not so much the law that you learn here, although I have to say that it is not a bad way to learn the basic concepts of business law and the peculiarities of that field in Hong Kong. It is not so much a statement of the benefits of the "case method approach", although the book puts great store in it. There are other more elaborate and analytical studies of case method. It is not even the conclusions of the "lectures", which are decisive here. The notes point out that these are also part of the body of scholarship and opinion of the field.

V. So where are we going on this circuitous journey? When all is said and done, we are back to the initial point of departure again, and that it is the "course" itself that is crucial here. We have been brought full circle to the proposition that "taking the course", itself, is a good thing. What we have left, in other words, is a style of teaching, a "course" in an old fashioned sense, to lead us on an excursion into "business education", and "general education". This author is, after all, neither an indoctrinated "scientist" nor an unrelenting legal practitioner. In the final analysis, this is a kind of liberal arts, business law course. What we have is the work of an author trained in law who leads us through the problem setting and problem solving of his field, for the value it may serve in mastering the concepts of business law-but beyond that to the solving of business problems in general, and, moreover, to the conviction that problems and situations are analysable, and that what we as social ethical human beings are engaged in is the "general education" of the social human individual to greater realization of what the nature of his social ethical condition is. And that is what is at the heart of what "law" is. And that is also what is at the heart of what business education and general education is.

Suggested Citation

Lee, Orlan, What is 'Law'? What is Legal Reasoning? What is Problem Solving? And How Does a Course in Hong Kong Business Law Contribute to Business School and General Education?. Orlan Lee, HONG KONG BUSINESS LAW IN A NUTSHELL: CASES & MATERIALS ON LAW & BUSINESS PRACTICE, New York, Juris Publishing, 1997. Available at SSRN:

Orlan Lee (Contact Author)

University of Cambridge - Clare Hall ( email )

Herschel Road
Cambridge, CB3 9AL
United Kingdom

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