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What is Common Law?

Welcome to the Investors Trading Academy talking glossary of financial terms and events.

Our word of the day is “Common Law” The law of the land which comes from neither

the statute books nor the constitution but from court law reports. Originally that body

of law which was common to all parts of England not customary or local law and developed over

centuries from the English courts to be adopted and further developed in countries using that

system. As compared to democratically maintained law, common law is judge maintained and modified

law and is valid unless it conflicts with statute law.

Common law also known as case law or precedent is law developed by judges, courts, and similar

tribunals, stated in decisions that nominally decide individual cases but that in addition

have precedential effect on future cases. The common-law system prevails in England,

the United States, and other countries colonized by England. It is distinct from the civil-law

system, which predominates in Europe and in areas colonized by France and Spain. The common-law

system is used in all the states of the United States except Louisiana, where French Civil

Law combined with English Criminal Law to form a hybrid system. The common-law system

is also used in Canada, except in the Province of Quebec, where the French civil-law system

prevails.