Civil law and business judgment rule

Abstract

The author analyzes the relationship between traditional civil law notions of care of prudent business person and care of prudent expert, good faith and fairness and a new business judgment rule concept of company law. Although legal tradition standardizes the meanings of these civil law notions, important for legal certainty, the author suggests that all attempts at their substitution or fitting into the concept of business judgment rule, originating from the legal culture of common law, have basically failed. The reasons are manifold: first, differences in legal traditions; second, the routine of courts and business of following the usual principles of legal thinking and practice; third, legal transplants were not made by replacing one concept with another rather by fitting one into another and combining their rules which has proved wrong. The author concludes, after the analysis of all constitutive elements of the new concept of company law - the business judgment rule, that the civil law notion of care of prudent business person or care of prudent expert remain the backbone of this new concept and that all other elements thereof may, through careful analysis be reduced to these notions. In itself, it ruins the credibility of the concept of business judgment rule and supports the authority of traditional due care notion of civil law.