JANUARY 1, 2026
BUSINESS LAW II
SUMMARY
KOEN HANEGREEFS
VUB
,Table of Contents
Chapter 1 — What is Business Law? ............................................................................. 7
Key Definitions (Important).................................................................................................... 7
Origin & Evolving Nature of Law (Important) ........................................................................... 8
Morality & Culture Shaping the Law (Important)...................................................................... 8
Sources of Law (Neutral) ....................................................................................................... 9
Common Law vs Civil Law Systems (Important) .................................................................... 10
Stare Decisis (Important) .................................................................................................... 10
Conflict of Laws / Private International Law (Important)........................................................ 11
Yahoo! v. La Ligue — Case Study (Important) ........................................................................ 11
Free Speech vs Hate Speech: US vs EU/Germany (Important) ............................................... 12
International Law in Daily Life (Neutral)................................................................................ 14
Schools of Jurisprudence (Less important) ........................................................................... 14
Chapter 4 — Introduction to Contracts ....................................................................... 15
Definition of Contract (Important) ........................................................................................ 15
Legal Definition (from slides).................................................................................................................................... 15
Four Essential Elements .......................................................................................................................................... 15
Benefits of Contracts to Society ............................................................................................................................... 15
Nature, Classification & Formation (Important) .................................................................... 15
A. By Formation: Express vs. Implied ........................................................................................................................ 15
B. By Performance: Bilateral vs. Unilateral ................................................................................................................ 16
C. By Stage of Performance: Executed vs. Executory ................................................................................................. 16
D. By Enforceability: Valid / Void / Voidable / Unenforceable...................................................................................... 16
E. Contract Classification Matrix (5 Axes).................................................................................................................. 16
Formation: The Offer (Important) ......................................................................................... 17
Three Requirements of a Valid Offer ......................................................................................................................... 17
Advertisements: Offer or Invitation to Treat? ............................................................................................................. 17
Country Comparison Table — Advertisements as Offers ........................................................................................... 17
Key Case: Carlill v. Carbolic Smoke Ball Co. (1893) ................................................................................................... 18
Termination of an Offer ............................................................................................................................................ 18
Formation: Acceptance (Important) ..................................................................................... 18
Requirements of Valid Acceptance .......................................................................................................................... 18
When Does Acceptance Take Effect? ....................................................................................................................... 19
Silence as Acceptance ............................................................................................................................................ 19
Commercial vs. Social Presumption ......................................................................................................................... 19
Consideration (Important) ................................................................................................... 19
Common Law: Consideration .................................................................................................................................. 19
Civil Law: Causa (Cause) ......................................................................................................................................... 20
Adequacy vs. Sufficiency of Consideration ............................................................................................................... 20
Promises that Lack Consideration ............................................................................................................................ 20
Common Law vs. Civil Law — Contract Systems (Important) ................................................. 21
Option Contract Exception (Neutral) .................................................................................... 22
Definition & Key Features ......................................................................................................................................... 22
Koen Hanegreefs 1
, Four Exceptions to Free Revocability of Offers .......................................................................................................... 22
Chapters 5–6 — Reality, Capacity & Legality of Contracts ............................................ 23
Proof of Contract Existence (Neutral) ................................................................................... 23
Meeting of the Minds (Mutual Assent) (Important) ................................................................. 23
Objective vs. Subjective Theory ................................................................................................................................ 23
Six Reasons Mutual Assent May Be Lacking — Overview (Important) ..................................... 23
Defect 1: Mistake (Important) .............................................................................................. 24
Mutual (Bilateral) Mistake ........................................................................................................................................ 24
Unilateral Mistake ................................................................................................................................................... 24
Mistake in Value ...................................................................................................................................................... 24
Defect 2: Fraud (Fraudulent Misrepresentation) (Important) ................................................. 25
Five Elements — All Must Be Present ........................................................................................................................ 25
Remedy .................................................................................................................................................................. 25
Defect 3: Innocent (Nonfraudulent) Misrepresentation (Important) ....................................... 25
Defect 4: Duress (Important) ............................................................................................... 25
Five Categories of Improper Threats ......................................................................................................................... 25
Defect 5: Undue Influence (Important) ................................................................................. 25
Four Confidential Relationships ............................................................................................................................... 26
Signs of Overpersuasion (Cumulative Factors) .......................................................................................................... 26
Defect 6: Unconscionability (Important)............................................................................... 26
Adhesion Contracts ................................................................................................................................................. 26
Types of Unconscionability ...................................................................................................................................... 26
Chapter 6: Capacity of Parties (Important) ........................................................................... 27
Three Categories of Persons Who May Lack Capacity ................................................................................................ 27
Capacity Tiers — Summary Table ............................................................................................................................. 27
Capacity: Minors in Detail (Important).................................................................................. 27
Capacity: Intoxicated Persons in Detail (Important) .............................................................. 28
Why Intoxicated Persons Receive LESS Protection Than Minors ................................................................................. 28
Capacity: Mentally Incapacitated Persons in Detail (Important) ............................................ 28
Chapter 6: Legality of Contract (Important) .......................................................................... 28
Three-Part Legality Check (from slides)..................................................................................................................... 28
Effect of Illegal Agreements ..................................................................................................................................... 28
Examples of Illegal Agreements................................................................................................................................ 29
Exceptions — When a Court May Grant Relief ........................................................................................................... 29
Case Study: The Engagement Ring — Sam & Em (Important).................................................. 29
Facts ...................................................................................................................................................................... 29
Core Legal Question ................................................................................................................................................ 29
Arguments — Team Sam (return the ring) .................................................................................................................. 29
Arguments — Team Em (keep the ring) ..................................................................................................................... 30
Jurisdictional Split & Outcome ................................................................................................................................. 30
Practical Application Problems (Neutral) ............................................................................. 30
Chapter 5 Problems................................................................................................................................................. 30
Chapter 6 Problems................................................................................................................................................. 30
Chapter 8 — Discharge, Damages & Force Majeure ..................................................... 31
Discharge of Contract — Methods (Important)...................................................................... 31
Koen Hanegreefs 2
, 1. Performance ....................................................................................................................................................... 31
2. Agreement........................................................................................................................................................... 31
3. Operation of Law (Frustration / Impossibility) ........................................................................................................ 31
4. Breach ................................................................................................................................................................ 31
5. Methods of Discharge — Summary Table .............................................................................................................. 32
Types of Breach (Important) ................................................................................................ 32
Material Breach ....................................................................................................................................................... 32
Minor (Partial) Breach .............................................................................................................................................. 32
Anticipatory Breach — Common Law ....................................................................................................................... 32
Nachfrist Notice — Civil Law / PECL ......................................................................................................................... 32
Three Key Elements to Bring a Contract Case in Court (Important) ........................................ 32
Damages — Types and Taxonomy (Important) ...................................................................... 33
Equitable Remedies ................................................................................................................................................ 33
Mitigation of Damages ............................................................................................................................................. 34
Hadley v. Baxendale (1854) — Landmark Case (Important) .................................................... 34
Direct vs Indirect Damages — Summary Table .......................................................................................................... 34
Case Study — Lone Star Liquors (Important)......................................................................... 35
Doctrine of Frustration / Impossibility vs. Force Majeure (Important) .................................... 35
Doctrine of Impossibility / Frustration (Common Law) ............................................................................................... 35
Force Majeure (FM) — Contractual Clause................................................................................................................ 35
ICC Force Majeure — Four Criteria (Most National Laws)........................................................................................... 36
Duty to Mitigate under Force Majeure ....................................................................................................................... 36
Civil Law Positions................................................................................................................................................... 36
COVID-19 and Force Majeure — Business Lesson ..................................................................................................... 37
Frustration vs. Force Majeure — Comparison Table .................................................................................................. 37
Statutory Limits & Liquidated Damages Rules (Less important) ............................................. 37
Chapter 13 — Secured Transactions, Bankruptcy & Compliance ................................. 38
PART 1 — Secured Transactions & Bankruptcy ..................................................................... 38
Unsecured vs. Secured Transactions (Important) ................................................................. 38
The Insolvency Test ('Bankruptcy Test’) (Important) .............................................................. 39
Bankruptcy vs. Reorganization (Important)........................................................................... 39
US Bankruptcy Chapters — Overview ....................................................................................................................... 40
Civil-Law Equivalents .............................................................................................................................................. 40
Creditor Rights ........................................................................................................................................................ 40
Debtor Protections .................................................................................................................................................. 40
How Bankruptcy Begins — Petition, Dividing Line & Timeline (Important) ............................... 41
Voluntary vs. Involuntary Petition ............................................................................................................................. 41
The Bankruptcy 'Dividing Line' .................................................................................................................................. 41
Procedural Timeline (Post-Petition) .......................................................................................................................... 41
The 'Preference Period' / 'Stink Period' ...................................................................................................................... 42
Top 10 Corporate Bankruptcies in History (context) (Less important) ......................................................................... 42
The Trustee's Role in Bankruptcy (Important) ....................................................................... 42
Core Duties of the Trustee ....................................................................................................................................... 42
Ch. 7 Distribution Order (Statutory Priority) ............................................................................................................... 43
Pledge vs. Secured Transaction (Important) ......................................................................... 44
Attachment of a Security Interest (Important) ...................................................................... 44
Three Requirements for Attachment (UCC §9-203) .................................................................................................... 44
Koen Hanegreefs 3
, What Attachment Achieves ...................................................................................................................................... 44
After-Acquired Property Clauses .............................................................................................................................. 45
Perfection of a Security Interest (Important)......................................................................... 45
Four Methods of Perfection ...................................................................................................................................... 45
Financing Statement — Key Requirements ............................................................................................................... 46
Filing Issues to Watch .............................................................................................................................................. 46
Purchase-Money Security Interest (PMSI) ................................................................................................................. 46
Priority of Creditors (Important) ........................................................................................... 46
First Four Rows — Opposing Creditors (Table p.284) ................................................................................................. 47
Key Exceptions to 'First to Perfect' ............................................................................................................................ 47
The 'Problem with Proceeds’ (Important) ............................................................................. 47
Classic Problem Scenarios (Textbook p.608 / PblmProceeds.jpg) .............................................................................. 47
UCC §9-315 Solution ............................................................................................................................................... 47
Practical Steps Creditors Take ................................................................................................................................. 48
Bailment vs. Lease vs. Sale vs. Security Interest (Important) ................................................. 48
Opposing Creditors Hypothetical (Drill) (Neutral) ................................................................. 49
PART 2 — Guest Lecture: Corporate Compliance .................................................................. 49
What, Why, and How of Compliance (Important) .................................................................. 49
WHAT — Core Roles and Responsibilities of the Compliance Function ...................................................................... 49
WHY — The Licence to Operate ................................................................................................................................ 49
HOW — Key Compliance Artifacts and Policies ......................................................................................................... 50
The Six Keys to Compliance (HBL, July/August 2016) (Important) ........................................... 51
Individual Conduct Rules (ICRs) & Senior Manager Conduct Rules (SMCR) (Important) .......... 52
Key Compliance Areas (Important) ...................................................................................... 52
The Chief Compliance Officer (CCO) — Role and Responsibilities (Important) ....................... 53
Case Studies — Barclays (Guest Lecture) (Important) ........................................................... 53
Case 1 — Staley Whistleblowing (2018): FCA Fine £642,430 ...................................................................................... 53
Case 2 — Staley / Epstein Disclosure (2019): Further Conduct Breaches ................................................................... 53
Case 3 — LIBOR/EURIBOR Manipulation (FSA Fine: £59.5 million — largest ever at time) ............................................ 53
Case 4 — Financial Crime / AML Failures (FCA Fine: £42 million, 2025) ...................................................................... 54
Concluding Remarks (Woodward) ............................................................................................................................ 54
Additional Compliance Detail from Slides (Important) .......................................................... 54
Compliance Artifacts — Specific Documents at GFO-X (Important) ........................................................................... 54
Individual Conduct Rules (ICR1-5) & Senior Conduct Rules (SC1-4) — Full Table (Important) ...................................... 55
LIBOR/EURIBOR — Panel Mechanics (Neutral) ......................................................................................................... 55
Mark Woodward — Speaker Background (Less important) ......................................................................................... 55
Chapter 20 — Property Law ........................................................................................ 56
Legal Definition of Property (Important) ............................................................................... 56
EU Foundation — Article 17 Charter of Fundamental Rights ...................................................................................... 56
Real Property vs Personal Property ........................................................................................................................... 56
Tangible vs Intangible Personal Property ................................................................................................................... 56
Fixtures ................................................................................................................................................................... 56
Bundle of Rights (Theory of Property) (Important) ................................................................. 57
Civil Law Tripartite Division vs Common Law Summary ............................................................................................. 57
Full Bundle vs Less-Than-Full Bundle — Examples .................................................................................................... 57
Eight Rights Associated with Land Ownership (Important) .................................................... 58
Koen Hanegreefs 4
, Three Elements of a Gift (Important) .................................................................................... 58
The Three Required Elements ................................................................................................................................... 58
Three Types of Gifts ................................................................................................................................................. 59
Easements (Important) ....................................................................................................... 59
Easement Types — Classification ............................................................................................................................ 59
Termination of Easements ....................................................................................................................................... 59
Eminent Domain (Important) ............................................................................................... 60
Regulatory Takings .................................................................................................................................................. 60
Adverse Possession ('Squatter's Rights’) (Important) ............................................................ 61
OCEAN Elements (Mnemonic) ................................................................................................................................. 61
Why Adverse Possession Is Important to Property Law .............................................................................................. 61
How Property Rights Are Created (Important) ....................................................................... 61
Ownership vs Possession (Important) .................................................................................. 62
Bailment vs Lease vs Sale vs Gift (Important) ....................................................................... 62
Four Requirements for a Bailment ............................................................................................................................ 63
Bailee's Duty of Care ............................................................................................................................................... 63
Concurrent Ownership Forms (Neutral) ............................................................................... 63
Case Study: Huguette Clark — Gifts & Will Contest (Important) ............................................ 64
Chapter 23 — Environmental, Climate & Energy Law ................................................... 68
Foundational Concepts (Important) ..................................................................................... 68
Scope of Climate Law and Energy Law ...................................................................................................................... 68
Core Principles of International Environmental Law .................................................................................................. 68
Sources of Environmental & Climate Law ................................................................................................................. 68
International Climate Framework (Important) ...................................................................... 68
The Regulatory Pyramid (Nyberget) ........................................................................................................................... 68
International Framework Timeline ............................................................................................................................ 69
UNFCCC (1992) ...................................................................................................................................................... 69
Kyoto Protocol (1997) .............................................................................................................................................. 70
Paris Agreement (2015) -- Key Provisions .................................................................................................................. 70
COP28 UAE Consensus (Dubai, December 2023) ..................................................................................................... 70
EU Climate Architecture (Important) .................................................................................... 71
Why EU Law Differs from International Law............................................................................................................... 71
EU Collective Emission Reduction Goals (vs. 1990 levels) ......................................................................................... 71
European Climate Law -- Regulation (EU) 2021/1119................................................................................................. 71
The Three Pillars of EU Climate Sectors .................................................................................................................... 71
EU Emissions Trading System (ETS) -- Directive (EU) 2023/959................................................................................... 72
Fit for 55 Package .................................................................................................................................................... 72
Carbon Border Adjustment Mechanism (CBAM) ........................................................................................................ 73
Governance Regulation -- Regulation (EU) 2018/1999 ............................................................................................... 73
EU Energy Law -- Key Instruments (Important) ...................................................................... 73
Net-Zero Industry Act (NZIA) -- Regulation (EU) 2024/1735......................................................................................... 74
GUEST LECTURE: Carbon Capture & Storage (CCS) -- Jørgen Nyberget, IOM Law Oslo
(Important) ......................................................................................................................... 74
The CCTS Supply Chain ........................................................................................................................................... 74
CCS Directive -- Directive 2009/31/EC (Key Articles) ................................................................................................. 74
Known Gaps in the CCS Directive (Frattini et al. 2024) ............................................................................................... 75
How the CCS Directive and ETS Work Together ......................................................................................................... 75
CCS Regulatory Landscape -- Full Table ................................................................................................................... 75
Koen Hanegreefs 5
, Cross-Border CO2 Transport -- The London Protocol Problem ................................................................................... 76
Open Legal Questions on CCS (Nyberget) ................................................................................................................. 76
EU vs US Approaches to Climate Regulation (Neutral) .......................................................... 77
Business Implications (Important) ....................................................................................... 77
Compliance Obligations .......................................................................................................................................... 77
CSRD and CSDDD -- Comparison Table ................................................................................................................... 77
Climate Litigation Risk ............................................................................................................................................. 78
Stranded Assets and Transition Risk ......................................................................................................................... 78
The 'Omnibus' Tension (Nyberget Case Study) .......................................................................................................... 78
Major Climate Litigation Cases (Important) .......................................................................... 79
Historical Background (Less important) ............................................................................... 79
Additional Detail from Slides & Obligatory Readings (Important) ........................................... 80
Effort Sharing Regulation (ESR) — specifics (Important)............................................................................................. 80
LULUCF Regulation — specifics (Important) ............................................................................................................. 81
CCS Regulatory Landscape — additional instruments (Important) ............................................................................. 81
CCS Directive — Three Liability Types & Financial Mechanisms (Important) ............................................................... 81
Procedural vs. Substantive Climate Governance (Oberthür 2024) (Important) ............................................................ 82
Access to Justice (A2J) in EU Climate Governance (Important) ................................................................................... 82
Member-State Climate Neutrality Targets — implementation gap (Neutral) ................................................................ 82
ETS — Market Stability Reserve & Phase 4 specifics (Neutral) .................................................................................... 82
Energy Law — Scope refinements (Neutral) .............................................................................................................. 82
Additional Q&A from new content (Important)........................................................................................................... 83
Koen Hanegreefs 6
,Chapter 1 — What is Business Law?
Origins & Nature of Law • Legal Traditions • Free Speech vs Hate Speech
Key Definitions (Important)
Term Definition
Law A body of rules enforceable by government that
regulates conduct in society; produces 'stability and
predictability' in personal and business dealings.
Business Law The subset of law governing commercial transactions,
business relationships, and the legal environment in
which firms operate — especially internationally.
Common Law Legal system built on accumulated judicial decisions
(precedent) rather than comprehensive codes; courts
develop law case-by-case. Originates from Anglo-
Saxon England (post-1066).
Civil Law Legal system based on a comprehensive, systematized
written code (Roman-Germanic origin; Justinian Code
533 AD, Napoleonic Code 1804). Judges apply the
code; do not create law.
Stare Decisis Latin: 'stand by the decision.' Doctrine requiring courts
to follow prior decisions (precedents); lower courts
bound by rulings of the highest court in their
jurisdiction.
Conflict of Laws (= Private International Law) A set of procedural rules
that determine which legal system, and which
jurisdiction's law applies to a dispute involving a foreign
element.
Hate Speech (US) Speech 'carrying no meaning other than expression of
hatred for some group, likely to provoke violence'
(Black's Law). Must be likely to cause violence or harm
before it can be deemed criminal.
Hate Speech (EU) Public incitement to violence or hatred based on race,
colour, religion, descent, or national/ethnic origin. No
universally agreed definition — EU Think Tank (2025).
Fully Protected Speech Speech that under the US 1st Amendment cannot be
prohibited or regulated by the government; the default
rule.
Fighting Words (Chaplinsky v. New Hampshire, 1942) Insults
addressed directly to a person so offensive as to
provoke immediate violent reaction — not
constitutionally protected in the US.
VLOP Very Large Online Platform — DSA designation for
platforms with >45M monthly active EU users; subject
to highest content-moderation obligations under the
Digital Services Act (2022).
NetzDG Germany's Network Enforcement Act (2017): platforms
with >2M German users must remove clearly illegal
content within 24 hours or face fines up to €50M.
Koen Hanegreefs 7
,Origin & Evolving Nature of Law (Important)
The law is not static. It reflects the values and beliefs of society (or its ruling group) at a given moment in history.
Businesspersons operating internationally must therefore ask not only 'what is the current law?' but also 'where is society
heading?' — because law may lag social change.
Historical Timeline
Era / Source Significance
Nomadic tribal customs Earliest form of social regulation — oral norms
enforced by community pressure
Code of Hammurabi (c. 1754 BC) Ancient Babylonian — lex talionis ('eye for an eye'); one
of the first written legal codes
Greek concepts of Democracy Introduced the idea of citizen participation in
lawmaking
Roman Code / Justinian Code (533 AD) Systematic written codification; foundation of the Civil
Law tradition
Early Common Law courts (1066) Post-Norman Conquest England — law developed
judge-by-judge on a case-by-case basis
Napoleonic Code (1804) Rationalized, systematized Civil Law; influenced
France, Belgium, Netherlands, Latin America
Modern statutes & case law (today) Combination of legislative action, regulatory rules, and
ongoing judicial development
Exam tip: Be ready to link this timeline to the Civil Law vs Common Law split: the Justinian Code (533 AD) anchors Civil Law;
the Norman Conquest (1066) anchors Common Law.
Morality & Culture Shaping the Law (Important)
Law has a 'close relationship between morality and any rule that society will enforce' (slides). In the international business
context this is especially critical: what is legal in one jurisdiction may be criminal in another — creating direct Conflict of
Laws situations.
Key Implications for Business
• The law can be 'behind the times' — businesses must track current societal attitudes, not only current statutes.
• Noteworthy trends in society can foreshadow coming legislative or judicial changes.
• What is legal in the US (e.g., Nazi memorabilia auction) may be criminal in France/Germany — the Yahoo! case is
the textbook illustration.
• A law not grounded in broadly shared moral values is harder to enforce — citizens lose respect for government
when laws are routinely disregarded.
• The Nazi Germany hypothetical (textbook): if law requires an immoral action, the individual faces a hard personal
choice — illustrating that legality ≠ morality.
• International managers must ask: 'What is the current legal AND moral environment where I am doing business?'
Koen Hanegreefs 8
, Business Context: Hyundai Georgia Case Study
Hyundai Motor North America built a $5.5 billion EV assembly plant near Savannah, Georgia — the largest single economic
development project in Georgia's history, employing 8,000+ workers. As incoming CEO, the key legal questions are: Which
areas of Georgia law shaped the site-selection decision? Which areas of law must Hyundai monitor ongoing?
• Labor law — minimum wage, collective bargaining rules, right-to-work status of Georgia
• Environmental law — EPA and Georgia EPD permits for an EV battery factory
• Zoning and land-use law — approval for industrial facility near Savannah
• Tax incentives and state subsidies — Georgia's business-friendly tax environment
• Immigration law — visa and work-permit requirements for South Korean expatriate staff
• Product liability law — applicable to vehicle manufacturing and defect claims
• International trade law — tariffs on imported components from South Korea
Key lesson: Many different laws can affect a single business decision. The degree of legal predictability in a jurisdiction is
itself a decisive factor in location decisions.
Sources of Law (Neutral)
US Sources (Hierarchical)
1. US Constitution — supreme law; limits government power; Bill of Rights (first 10 amendments) includes 1st
Amendment free speech.
2. Federal & State Statutes — passed by Congress or state legislatures (e.g., Civil Rights Act, Sherman
Antitrust Act).
3. Executive Orders & Treaties — presidential orders; international agreements ratified by Senate; treaties are
binding federal law.
4. Regulations / Administrative Rules — issued by agencies (SEC, FTC, EPA); govern specific fields.
5. Case Law — appellate court opinions; in common law = binding precedent via Stare Decisis.
6. Customs & General Practice — especially relevant in international law (customary international law).
International Law Sources (Slides)
• International conventions & treaties (e.g., UN Charter, WTO Agreements, Geneva Conventions)
• Customs and general practice recognized as law
• Widely accepted general principles of law
• All other sources used in national law: judicial decisions, scholarly writings
International Law: Three Primary Relationships (Slides)
• Relationship between two nations (state-to-state)
• Relationship between a nation and an individual
• Relationship between persons/entities from different countries
Koen Hanegreefs 9
BUSINESS LAW II
SUMMARY
KOEN HANEGREEFS
VUB
,Table of Contents
Chapter 1 — What is Business Law? ............................................................................. 7
Key Definitions (Important).................................................................................................... 7
Origin & Evolving Nature of Law (Important) ........................................................................... 8
Morality & Culture Shaping the Law (Important)...................................................................... 8
Sources of Law (Neutral) ....................................................................................................... 9
Common Law vs Civil Law Systems (Important) .................................................................... 10
Stare Decisis (Important) .................................................................................................... 10
Conflict of Laws / Private International Law (Important)........................................................ 11
Yahoo! v. La Ligue — Case Study (Important) ........................................................................ 11
Free Speech vs Hate Speech: US vs EU/Germany (Important) ............................................... 12
International Law in Daily Life (Neutral)................................................................................ 14
Schools of Jurisprudence (Less important) ........................................................................... 14
Chapter 4 — Introduction to Contracts ....................................................................... 15
Definition of Contract (Important) ........................................................................................ 15
Legal Definition (from slides).................................................................................................................................... 15
Four Essential Elements .......................................................................................................................................... 15
Benefits of Contracts to Society ............................................................................................................................... 15
Nature, Classification & Formation (Important) .................................................................... 15
A. By Formation: Express vs. Implied ........................................................................................................................ 15
B. By Performance: Bilateral vs. Unilateral ................................................................................................................ 16
C. By Stage of Performance: Executed vs. Executory ................................................................................................. 16
D. By Enforceability: Valid / Void / Voidable / Unenforceable...................................................................................... 16
E. Contract Classification Matrix (5 Axes).................................................................................................................. 16
Formation: The Offer (Important) ......................................................................................... 17
Three Requirements of a Valid Offer ......................................................................................................................... 17
Advertisements: Offer or Invitation to Treat? ............................................................................................................. 17
Country Comparison Table — Advertisements as Offers ........................................................................................... 17
Key Case: Carlill v. Carbolic Smoke Ball Co. (1893) ................................................................................................... 18
Termination of an Offer ............................................................................................................................................ 18
Formation: Acceptance (Important) ..................................................................................... 18
Requirements of Valid Acceptance .......................................................................................................................... 18
When Does Acceptance Take Effect? ....................................................................................................................... 19
Silence as Acceptance ............................................................................................................................................ 19
Commercial vs. Social Presumption ......................................................................................................................... 19
Consideration (Important) ................................................................................................... 19
Common Law: Consideration .................................................................................................................................. 19
Civil Law: Causa (Cause) ......................................................................................................................................... 20
Adequacy vs. Sufficiency of Consideration ............................................................................................................... 20
Promises that Lack Consideration ............................................................................................................................ 20
Common Law vs. Civil Law — Contract Systems (Important) ................................................. 21
Option Contract Exception (Neutral) .................................................................................... 22
Definition & Key Features ......................................................................................................................................... 22
Koen Hanegreefs 1
, Four Exceptions to Free Revocability of Offers .......................................................................................................... 22
Chapters 5–6 — Reality, Capacity & Legality of Contracts ............................................ 23
Proof of Contract Existence (Neutral) ................................................................................... 23
Meeting of the Minds (Mutual Assent) (Important) ................................................................. 23
Objective vs. Subjective Theory ................................................................................................................................ 23
Six Reasons Mutual Assent May Be Lacking — Overview (Important) ..................................... 23
Defect 1: Mistake (Important) .............................................................................................. 24
Mutual (Bilateral) Mistake ........................................................................................................................................ 24
Unilateral Mistake ................................................................................................................................................... 24
Mistake in Value ...................................................................................................................................................... 24
Defect 2: Fraud (Fraudulent Misrepresentation) (Important) ................................................. 25
Five Elements — All Must Be Present ........................................................................................................................ 25
Remedy .................................................................................................................................................................. 25
Defect 3: Innocent (Nonfraudulent) Misrepresentation (Important) ....................................... 25
Defect 4: Duress (Important) ............................................................................................... 25
Five Categories of Improper Threats ......................................................................................................................... 25
Defect 5: Undue Influence (Important) ................................................................................. 25
Four Confidential Relationships ............................................................................................................................... 26
Signs of Overpersuasion (Cumulative Factors) .......................................................................................................... 26
Defect 6: Unconscionability (Important)............................................................................... 26
Adhesion Contracts ................................................................................................................................................. 26
Types of Unconscionability ...................................................................................................................................... 26
Chapter 6: Capacity of Parties (Important) ........................................................................... 27
Three Categories of Persons Who May Lack Capacity ................................................................................................ 27
Capacity Tiers — Summary Table ............................................................................................................................. 27
Capacity: Minors in Detail (Important).................................................................................. 27
Capacity: Intoxicated Persons in Detail (Important) .............................................................. 28
Why Intoxicated Persons Receive LESS Protection Than Minors ................................................................................. 28
Capacity: Mentally Incapacitated Persons in Detail (Important) ............................................ 28
Chapter 6: Legality of Contract (Important) .......................................................................... 28
Three-Part Legality Check (from slides)..................................................................................................................... 28
Effect of Illegal Agreements ..................................................................................................................................... 28
Examples of Illegal Agreements................................................................................................................................ 29
Exceptions — When a Court May Grant Relief ........................................................................................................... 29
Case Study: The Engagement Ring — Sam & Em (Important).................................................. 29
Facts ...................................................................................................................................................................... 29
Core Legal Question ................................................................................................................................................ 29
Arguments — Team Sam (return the ring) .................................................................................................................. 29
Arguments — Team Em (keep the ring) ..................................................................................................................... 30
Jurisdictional Split & Outcome ................................................................................................................................. 30
Practical Application Problems (Neutral) ............................................................................. 30
Chapter 5 Problems................................................................................................................................................. 30
Chapter 6 Problems................................................................................................................................................. 30
Chapter 8 — Discharge, Damages & Force Majeure ..................................................... 31
Discharge of Contract — Methods (Important)...................................................................... 31
Koen Hanegreefs 2
, 1. Performance ....................................................................................................................................................... 31
2. Agreement........................................................................................................................................................... 31
3. Operation of Law (Frustration / Impossibility) ........................................................................................................ 31
4. Breach ................................................................................................................................................................ 31
5. Methods of Discharge — Summary Table .............................................................................................................. 32
Types of Breach (Important) ................................................................................................ 32
Material Breach ....................................................................................................................................................... 32
Minor (Partial) Breach .............................................................................................................................................. 32
Anticipatory Breach — Common Law ....................................................................................................................... 32
Nachfrist Notice — Civil Law / PECL ......................................................................................................................... 32
Three Key Elements to Bring a Contract Case in Court (Important) ........................................ 32
Damages — Types and Taxonomy (Important) ...................................................................... 33
Equitable Remedies ................................................................................................................................................ 33
Mitigation of Damages ............................................................................................................................................. 34
Hadley v. Baxendale (1854) — Landmark Case (Important) .................................................... 34
Direct vs Indirect Damages — Summary Table .......................................................................................................... 34
Case Study — Lone Star Liquors (Important)......................................................................... 35
Doctrine of Frustration / Impossibility vs. Force Majeure (Important) .................................... 35
Doctrine of Impossibility / Frustration (Common Law) ............................................................................................... 35
Force Majeure (FM) — Contractual Clause................................................................................................................ 35
ICC Force Majeure — Four Criteria (Most National Laws)........................................................................................... 36
Duty to Mitigate under Force Majeure ....................................................................................................................... 36
Civil Law Positions................................................................................................................................................... 36
COVID-19 and Force Majeure — Business Lesson ..................................................................................................... 37
Frustration vs. Force Majeure — Comparison Table .................................................................................................. 37
Statutory Limits & Liquidated Damages Rules (Less important) ............................................. 37
Chapter 13 — Secured Transactions, Bankruptcy & Compliance ................................. 38
PART 1 — Secured Transactions & Bankruptcy ..................................................................... 38
Unsecured vs. Secured Transactions (Important) ................................................................. 38
The Insolvency Test ('Bankruptcy Test’) (Important) .............................................................. 39
Bankruptcy vs. Reorganization (Important)........................................................................... 39
US Bankruptcy Chapters — Overview ....................................................................................................................... 40
Civil-Law Equivalents .............................................................................................................................................. 40
Creditor Rights ........................................................................................................................................................ 40
Debtor Protections .................................................................................................................................................. 40
How Bankruptcy Begins — Petition, Dividing Line & Timeline (Important) ............................... 41
Voluntary vs. Involuntary Petition ............................................................................................................................. 41
The Bankruptcy 'Dividing Line' .................................................................................................................................. 41
Procedural Timeline (Post-Petition) .......................................................................................................................... 41
The 'Preference Period' / 'Stink Period' ...................................................................................................................... 42
Top 10 Corporate Bankruptcies in History (context) (Less important) ......................................................................... 42
The Trustee's Role in Bankruptcy (Important) ....................................................................... 42
Core Duties of the Trustee ....................................................................................................................................... 42
Ch. 7 Distribution Order (Statutory Priority) ............................................................................................................... 43
Pledge vs. Secured Transaction (Important) ......................................................................... 44
Attachment of a Security Interest (Important) ...................................................................... 44
Three Requirements for Attachment (UCC §9-203) .................................................................................................... 44
Koen Hanegreefs 3
, What Attachment Achieves ...................................................................................................................................... 44
After-Acquired Property Clauses .............................................................................................................................. 45
Perfection of a Security Interest (Important)......................................................................... 45
Four Methods of Perfection ...................................................................................................................................... 45
Financing Statement — Key Requirements ............................................................................................................... 46
Filing Issues to Watch .............................................................................................................................................. 46
Purchase-Money Security Interest (PMSI) ................................................................................................................. 46
Priority of Creditors (Important) ........................................................................................... 46
First Four Rows — Opposing Creditors (Table p.284) ................................................................................................. 47
Key Exceptions to 'First to Perfect' ............................................................................................................................ 47
The 'Problem with Proceeds’ (Important) ............................................................................. 47
Classic Problem Scenarios (Textbook p.608 / PblmProceeds.jpg) .............................................................................. 47
UCC §9-315 Solution ............................................................................................................................................... 47
Practical Steps Creditors Take ................................................................................................................................. 48
Bailment vs. Lease vs. Sale vs. Security Interest (Important) ................................................. 48
Opposing Creditors Hypothetical (Drill) (Neutral) ................................................................. 49
PART 2 — Guest Lecture: Corporate Compliance .................................................................. 49
What, Why, and How of Compliance (Important) .................................................................. 49
WHAT — Core Roles and Responsibilities of the Compliance Function ...................................................................... 49
WHY — The Licence to Operate ................................................................................................................................ 49
HOW — Key Compliance Artifacts and Policies ......................................................................................................... 50
The Six Keys to Compliance (HBL, July/August 2016) (Important) ........................................... 51
Individual Conduct Rules (ICRs) & Senior Manager Conduct Rules (SMCR) (Important) .......... 52
Key Compliance Areas (Important) ...................................................................................... 52
The Chief Compliance Officer (CCO) — Role and Responsibilities (Important) ....................... 53
Case Studies — Barclays (Guest Lecture) (Important) ........................................................... 53
Case 1 — Staley Whistleblowing (2018): FCA Fine £642,430 ...................................................................................... 53
Case 2 — Staley / Epstein Disclosure (2019): Further Conduct Breaches ................................................................... 53
Case 3 — LIBOR/EURIBOR Manipulation (FSA Fine: £59.5 million — largest ever at time) ............................................ 53
Case 4 — Financial Crime / AML Failures (FCA Fine: £42 million, 2025) ...................................................................... 54
Concluding Remarks (Woodward) ............................................................................................................................ 54
Additional Compliance Detail from Slides (Important) .......................................................... 54
Compliance Artifacts — Specific Documents at GFO-X (Important) ........................................................................... 54
Individual Conduct Rules (ICR1-5) & Senior Conduct Rules (SC1-4) — Full Table (Important) ...................................... 55
LIBOR/EURIBOR — Panel Mechanics (Neutral) ......................................................................................................... 55
Mark Woodward — Speaker Background (Less important) ......................................................................................... 55
Chapter 20 — Property Law ........................................................................................ 56
Legal Definition of Property (Important) ............................................................................... 56
EU Foundation — Article 17 Charter of Fundamental Rights ...................................................................................... 56
Real Property vs Personal Property ........................................................................................................................... 56
Tangible vs Intangible Personal Property ................................................................................................................... 56
Fixtures ................................................................................................................................................................... 56
Bundle of Rights (Theory of Property) (Important) ................................................................. 57
Civil Law Tripartite Division vs Common Law Summary ............................................................................................. 57
Full Bundle vs Less-Than-Full Bundle — Examples .................................................................................................... 57
Eight Rights Associated with Land Ownership (Important) .................................................... 58
Koen Hanegreefs 4
, Three Elements of a Gift (Important) .................................................................................... 58
The Three Required Elements ................................................................................................................................... 58
Three Types of Gifts ................................................................................................................................................. 59
Easements (Important) ....................................................................................................... 59
Easement Types — Classification ............................................................................................................................ 59
Termination of Easements ....................................................................................................................................... 59
Eminent Domain (Important) ............................................................................................... 60
Regulatory Takings .................................................................................................................................................. 60
Adverse Possession ('Squatter's Rights’) (Important) ............................................................ 61
OCEAN Elements (Mnemonic) ................................................................................................................................. 61
Why Adverse Possession Is Important to Property Law .............................................................................................. 61
How Property Rights Are Created (Important) ....................................................................... 61
Ownership vs Possession (Important) .................................................................................. 62
Bailment vs Lease vs Sale vs Gift (Important) ....................................................................... 62
Four Requirements for a Bailment ............................................................................................................................ 63
Bailee's Duty of Care ............................................................................................................................................... 63
Concurrent Ownership Forms (Neutral) ............................................................................... 63
Case Study: Huguette Clark — Gifts & Will Contest (Important) ............................................ 64
Chapter 23 — Environmental, Climate & Energy Law ................................................... 68
Foundational Concepts (Important) ..................................................................................... 68
Scope of Climate Law and Energy Law ...................................................................................................................... 68
Core Principles of International Environmental Law .................................................................................................. 68
Sources of Environmental & Climate Law ................................................................................................................. 68
International Climate Framework (Important) ...................................................................... 68
The Regulatory Pyramid (Nyberget) ........................................................................................................................... 68
International Framework Timeline ............................................................................................................................ 69
UNFCCC (1992) ...................................................................................................................................................... 69
Kyoto Protocol (1997) .............................................................................................................................................. 70
Paris Agreement (2015) -- Key Provisions .................................................................................................................. 70
COP28 UAE Consensus (Dubai, December 2023) ..................................................................................................... 70
EU Climate Architecture (Important) .................................................................................... 71
Why EU Law Differs from International Law............................................................................................................... 71
EU Collective Emission Reduction Goals (vs. 1990 levels) ......................................................................................... 71
European Climate Law -- Regulation (EU) 2021/1119................................................................................................. 71
The Three Pillars of EU Climate Sectors .................................................................................................................... 71
EU Emissions Trading System (ETS) -- Directive (EU) 2023/959................................................................................... 72
Fit for 55 Package .................................................................................................................................................... 72
Carbon Border Adjustment Mechanism (CBAM) ........................................................................................................ 73
Governance Regulation -- Regulation (EU) 2018/1999 ............................................................................................... 73
EU Energy Law -- Key Instruments (Important) ...................................................................... 73
Net-Zero Industry Act (NZIA) -- Regulation (EU) 2024/1735......................................................................................... 74
GUEST LECTURE: Carbon Capture & Storage (CCS) -- Jørgen Nyberget, IOM Law Oslo
(Important) ......................................................................................................................... 74
The CCTS Supply Chain ........................................................................................................................................... 74
CCS Directive -- Directive 2009/31/EC (Key Articles) ................................................................................................. 74
Known Gaps in the CCS Directive (Frattini et al. 2024) ............................................................................................... 75
How the CCS Directive and ETS Work Together ......................................................................................................... 75
CCS Regulatory Landscape -- Full Table ................................................................................................................... 75
Koen Hanegreefs 5
, Cross-Border CO2 Transport -- The London Protocol Problem ................................................................................... 76
Open Legal Questions on CCS (Nyberget) ................................................................................................................. 76
EU vs US Approaches to Climate Regulation (Neutral) .......................................................... 77
Business Implications (Important) ....................................................................................... 77
Compliance Obligations .......................................................................................................................................... 77
CSRD and CSDDD -- Comparison Table ................................................................................................................... 77
Climate Litigation Risk ............................................................................................................................................. 78
Stranded Assets and Transition Risk ......................................................................................................................... 78
The 'Omnibus' Tension (Nyberget Case Study) .......................................................................................................... 78
Major Climate Litigation Cases (Important) .......................................................................... 79
Historical Background (Less important) ............................................................................... 79
Additional Detail from Slides & Obligatory Readings (Important) ........................................... 80
Effort Sharing Regulation (ESR) — specifics (Important)............................................................................................. 80
LULUCF Regulation — specifics (Important) ............................................................................................................. 81
CCS Regulatory Landscape — additional instruments (Important) ............................................................................. 81
CCS Directive — Three Liability Types & Financial Mechanisms (Important) ............................................................... 81
Procedural vs. Substantive Climate Governance (Oberthür 2024) (Important) ............................................................ 82
Access to Justice (A2J) in EU Climate Governance (Important) ................................................................................... 82
Member-State Climate Neutrality Targets — implementation gap (Neutral) ................................................................ 82
ETS — Market Stability Reserve & Phase 4 specifics (Neutral) .................................................................................... 82
Energy Law — Scope refinements (Neutral) .............................................................................................................. 82
Additional Q&A from new content (Important)........................................................................................................... 83
Koen Hanegreefs 6
,Chapter 1 — What is Business Law?
Origins & Nature of Law • Legal Traditions • Free Speech vs Hate Speech
Key Definitions (Important)
Term Definition
Law A body of rules enforceable by government that
regulates conduct in society; produces 'stability and
predictability' in personal and business dealings.
Business Law The subset of law governing commercial transactions,
business relationships, and the legal environment in
which firms operate — especially internationally.
Common Law Legal system built on accumulated judicial decisions
(precedent) rather than comprehensive codes; courts
develop law case-by-case. Originates from Anglo-
Saxon England (post-1066).
Civil Law Legal system based on a comprehensive, systematized
written code (Roman-Germanic origin; Justinian Code
533 AD, Napoleonic Code 1804). Judges apply the
code; do not create law.
Stare Decisis Latin: 'stand by the decision.' Doctrine requiring courts
to follow prior decisions (precedents); lower courts
bound by rulings of the highest court in their
jurisdiction.
Conflict of Laws (= Private International Law) A set of procedural rules
that determine which legal system, and which
jurisdiction's law applies to a dispute involving a foreign
element.
Hate Speech (US) Speech 'carrying no meaning other than expression of
hatred for some group, likely to provoke violence'
(Black's Law). Must be likely to cause violence or harm
before it can be deemed criminal.
Hate Speech (EU) Public incitement to violence or hatred based on race,
colour, religion, descent, or national/ethnic origin. No
universally agreed definition — EU Think Tank (2025).
Fully Protected Speech Speech that under the US 1st Amendment cannot be
prohibited or regulated by the government; the default
rule.
Fighting Words (Chaplinsky v. New Hampshire, 1942) Insults
addressed directly to a person so offensive as to
provoke immediate violent reaction — not
constitutionally protected in the US.
VLOP Very Large Online Platform — DSA designation for
platforms with >45M monthly active EU users; subject
to highest content-moderation obligations under the
Digital Services Act (2022).
NetzDG Germany's Network Enforcement Act (2017): platforms
with >2M German users must remove clearly illegal
content within 24 hours or face fines up to €50M.
Koen Hanegreefs 7
,Origin & Evolving Nature of Law (Important)
The law is not static. It reflects the values and beliefs of society (or its ruling group) at a given moment in history.
Businesspersons operating internationally must therefore ask not only 'what is the current law?' but also 'where is society
heading?' — because law may lag social change.
Historical Timeline
Era / Source Significance
Nomadic tribal customs Earliest form of social regulation — oral norms
enforced by community pressure
Code of Hammurabi (c. 1754 BC) Ancient Babylonian — lex talionis ('eye for an eye'); one
of the first written legal codes
Greek concepts of Democracy Introduced the idea of citizen participation in
lawmaking
Roman Code / Justinian Code (533 AD) Systematic written codification; foundation of the Civil
Law tradition
Early Common Law courts (1066) Post-Norman Conquest England — law developed
judge-by-judge on a case-by-case basis
Napoleonic Code (1804) Rationalized, systematized Civil Law; influenced
France, Belgium, Netherlands, Latin America
Modern statutes & case law (today) Combination of legislative action, regulatory rules, and
ongoing judicial development
Exam tip: Be ready to link this timeline to the Civil Law vs Common Law split: the Justinian Code (533 AD) anchors Civil Law;
the Norman Conquest (1066) anchors Common Law.
Morality & Culture Shaping the Law (Important)
Law has a 'close relationship between morality and any rule that society will enforce' (slides). In the international business
context this is especially critical: what is legal in one jurisdiction may be criminal in another — creating direct Conflict of
Laws situations.
Key Implications for Business
• The law can be 'behind the times' — businesses must track current societal attitudes, not only current statutes.
• Noteworthy trends in society can foreshadow coming legislative or judicial changes.
• What is legal in the US (e.g., Nazi memorabilia auction) may be criminal in France/Germany — the Yahoo! case is
the textbook illustration.
• A law not grounded in broadly shared moral values is harder to enforce — citizens lose respect for government
when laws are routinely disregarded.
• The Nazi Germany hypothetical (textbook): if law requires an immoral action, the individual faces a hard personal
choice — illustrating that legality ≠ morality.
• International managers must ask: 'What is the current legal AND moral environment where I am doing business?'
Koen Hanegreefs 8
, Business Context: Hyundai Georgia Case Study
Hyundai Motor North America built a $5.5 billion EV assembly plant near Savannah, Georgia — the largest single economic
development project in Georgia's history, employing 8,000+ workers. As incoming CEO, the key legal questions are: Which
areas of Georgia law shaped the site-selection decision? Which areas of law must Hyundai monitor ongoing?
• Labor law — minimum wage, collective bargaining rules, right-to-work status of Georgia
• Environmental law — EPA and Georgia EPD permits for an EV battery factory
• Zoning and land-use law — approval for industrial facility near Savannah
• Tax incentives and state subsidies — Georgia's business-friendly tax environment
• Immigration law — visa and work-permit requirements for South Korean expatriate staff
• Product liability law — applicable to vehicle manufacturing and defect claims
• International trade law — tariffs on imported components from South Korea
Key lesson: Many different laws can affect a single business decision. The degree of legal predictability in a jurisdiction is
itself a decisive factor in location decisions.
Sources of Law (Neutral)
US Sources (Hierarchical)
1. US Constitution — supreme law; limits government power; Bill of Rights (first 10 amendments) includes 1st
Amendment free speech.
2. Federal & State Statutes — passed by Congress or state legislatures (e.g., Civil Rights Act, Sherman
Antitrust Act).
3. Executive Orders & Treaties — presidential orders; international agreements ratified by Senate; treaties are
binding federal law.
4. Regulations / Administrative Rules — issued by agencies (SEC, FTC, EPA); govern specific fields.
5. Case Law — appellate court opinions; in common law = binding precedent via Stare Decisis.
6. Customs & General Practice — especially relevant in international law (customary international law).
International Law Sources (Slides)
• International conventions & treaties (e.g., UN Charter, WTO Agreements, Geneva Conventions)
• Customs and general practice recognized as law
• Widely accepted general principles of law
• All other sources used in national law: judicial decisions, scholarly writings
International Law: Three Primary Relationships (Slides)
• Relationship between two nations (state-to-state)
• Relationship between a nation and an individual
• Relationship between persons/entities from different countries
Koen Hanegreefs 9
