law – understand-culture

caveat emptor

caveat: may he/she beware. emptor: buyer. caveat emptor is Latin for “Let the buyer beware”. Generally, caveat emptor is the contract law principle that controls the sale of real property after the date of closing, but may also apply to sales of other goods.

The phrase caveat emptor and its use as a disclaimer of warranties arises from the fact that buyers typically have less information than the seller about the good or service they are purchasing. This quality of the situation is known as information asymmetry. Defects in the good or service may be hidden from the buyer, and only known to the seller.

caveat emptor is a short form of Caveat emptor, quia ignorare non debuit quod jus alienum emit: “Let a purchaser beware, for he ought not to be ignorant of the nature of the property which he is buying from another party.”

A common way that information asymmetry between seller and buyer has been addressed is through a legally binding warranty, such as a guarantee of satisfaction.

A Latin term

Litigation

Given their litigation-heavy culture, it may seem ironic that Americans are so quick to say yes to an agreement. After all, saying yes and then not following through should make it easier for the one party to file a lawsuit.

However, the reality is the opposite. By having a culturally soft yes Americans make it more difficult for others to successfully sue them. In the U.S. it takes far more than a simple yes to indicate an oral agreement, which offers Americans protection from legal claims.

Gianni vs. Russell Supreme Court of Pennsylvania 1924 – Gianni, who owned a small store, claimed that his landlord told him that he could have the exclusive right to sell drinks in the building.

The landlord then rented another space in the building to a company that sold drinks, and Gianni attempted to sue. However, because Gianni had entered into a written lease, and there was no mention of this right in the lease, the oral contract was said to be nonexistent.

Power Entertainment Inc. v. National Football League Properties, Inc., United States Court of Appeals, 5th Circuit, 1998 – the plaintiff and defendant orally agreed that Power Entertainment would take over a licensing agreement between the NFL Properties and another company in exchange for Power Entertainment assuming the $800,000 debt between the two original companies. However, after the debt was paid, NFL Properties did not transfer the license, and the oral contract was found to be invalid.

Additionally, oral agreements in the US are sometimes called handshake deals. Although an actual handshake isn’t necessary to make the agreement binding, this still shows that it takes more than a ‘yes’ to enter into an agreement.

obligation to inform

The Germans have a legal term called Auskunftspflicht. Auskunft means information. Pflicht means obligation. Auskunftspflicht: the obligation to inform. When Germans persuade, convince, present, sell, the consciously Germans present the full picture: what works and what doesn’t work. Anything less is unprofessional, dishonest, and most certainly not persuasive.

caveat emptor

The Americans have a Latin term caveat emptor. It means “Let the buyer beware.” When persuading, presenting, convincing, selling Americans present the positive picture: what works. Americans do not feel obligated to present or to reveal what doesn’t work, what is negative. In the U.S. business culture the audience is obligated to expose what doesn’t work by asking critical questions. Persuasive is selling what works, and not what doesn’t work.

Legal Case Method

The case method utilized in business schools is also used in American law schools. It relies on the principle that the most effective way to learn American law is to scrutinize judicial opinions which have become the law.

Law school cases allow students to discern a legal rule, prompting students to test their knowledge in simulated situations. This sensitivity towards facts and reliance on previous judicial rulings is deeply imbedded in the legal system in the United States.

Wrongful termination

The Human Resources departments in American companies – especially large ones – have become very careful in how they handle employee performance appraisals. Not only because they strive to develop their talent, but also in order to avoid lawsuits. Even well-designed appraisals can lead to a lawsuit if they are poorly implemented or applied in an inconsistent manner.

Because U.S. labor courts continue to make exceptions to the once solid At-Will doctrine, employers face greater requirements to prove legitimate business reasons for many personnel actions.

At-Will employment is a term used in American labor law for contractual relationships in which an employee can be dismissed by an employer for any reason and without warning.The rule is justified by its proponents on the basis that an employee may be similarly entitled to leave his or her job without reason or warning.

At-Will employment gradually became the default rule under the common law of the employment contract in most states during the late 19th century. Over the 20th century many states modified the rule by adding an increasing number of exceptions, or by changing the default expectations in the employment contract altogether.

“Whistleblowing”

Even if an American loses a conflict within a company, after having escalated it once or twice, if he/she strongly believes to be in the right, it is not uncommon for that American to seek an even higher authority – the public at large. When that happens, the person who exposes the conflict is called a “whistleblower.”

Edward Snowden was working for the NSA when he publicly accused them of spying. Snowden said that the reason why he decided to make his accusations public was that he “can’t in good conscience allow the U.S. government to destroy privacy, internet freedom and basic liberties for people around the world with this massive surveillance machine they’re secretly building.”

In 2014, former State Department official John Tye wrote an editorial in The Washington Post in which he discussed his concerns about his department.

Thomas Drake was an executive in the NSA (National Security Agency) when he began to disagree with the agency’s policies. After several attempts to address his concerns internally, Drake decided to make his complaints public and turned to reporter Siobhan Gorman in 2006.

Litigious

Litigious: To be litigious means to argue, to contend, to take your dispute to the courts. American society has become very litigious. With a population of roughly 310 million people, the U.S. has 1.2 million attorneys, 200 law schools, graduating approximately 45,000 lawyers each and every year. The court of law is where conflict is resolved.

How conflict is resolved is foundational to any society. It is a system for balancing out conflicting interest. Conflict resolution is so central to our daily lives, in so many or our interactions, that we are continuously fascinated by how they play out.

This fascination is the reason why many movies and television shows are based on the law and legal proceedings. Among the most popular in the U.S. were: L.A. Law (1986-94), the classic Perry Mason (1957-66), The Defenders (1961-65), Law & Order (1990-2010).

The popularity of these shows has led to the reality court room shows, a combination of reality television and the workings of the American legal system. The best known are Judge Judy, The People‘s Court and Divorce Court.

Due Process

In the U.S. Constitution only one command is stated twice: in the 5th and 14th Amendments: „… or be deprived of life, liberty, or property, without due process of law ….“

This is known as the Due Process Clause, which guarantees that all levels of government in the U.S. must operate within the law and provide fair procedures.

The right of due process is deeply embedded in American thinking, and therefore in the thinking of Americans at the workplace. It is the promise, the guaranty, that a conflict will not be resolved without a process which is fair, transparent, and protects the rights of those involved in the conflict.

It is a question of fairness, of how Americans define what is just. Due Process. It’s what an American employee expects from their next-level management when that manager aims to resolve a conflict within the team.