Comparative principles of security interests : secured debt and charged property
1. The study starts with a distinction of three dimensions of comparative law, an
analytical, an empirical and a normative dimension. This distinction lays the
foundation for the rest of the study.
2. It then introduces the principles method of comparative law. Comparative legal
principles, it is held, have to comply with four criteria: they have to be functional,
positive, general and potentially universal. The intention behind introducing the
concept of comparative legal principles is to improve the practicability of
comparative law. It is also intended to avoid the "universalistic fallacy" which is
often found in comparative law. Examples for the universalistic fallacy are
identified with Rabel's "general principles", Esser's "universal principles" or
Schlesinger's "common core". Contrary to these concepts legal principles are
understood in this study as mere analytical tools.
3. The next tool for the ensuing comparison of this study is identified in normative
criteria. It is shown that the analytical principles can be evaluated on the basis of the
micro- and macroeconomic functions of security. As the most important function
the risk-reducing function of security is identified. Other microeconomic functions
of security are the function to provide information about the debtor and the
prevention of risk shifting. In addition, the study points out the macroeconomic
importance of security (which supports lending and investment in an economy and
assists in the efficient allocation of resources in an economy).
4. On the basis of the principles method of comparative law and the normative
principles a number of functional principles of security law are described which
show the understanding of secured debt and charged property in several legal
systems. The study describes legal concepts which are developed from specific legal
issues and which are evaluated on the basis of normative criteria. The present study
demonstrates that the principles method can lead to specific, practical results.