Appendix CASE ONE - Collection Point® | The Total Digital Asset ...

170 Legal History in the Making
by the favourable economic situation. But the really big boom in industrial
settlements using limited liability companies did not occur until the 1870s. For
a very long time the terminology and concept of liability was dominated by
more or less indistinct definitions. Joint and several obligation was identified
with personal obligation, and pro rata with limited obligation. The modern
distinction between personal versus limited obligation in the sense of which
part of one's property is affected (one's property as a whole or only one's
shares) and the corresponding distinction between in solidum and pro rata in
the sense of for which proportion of the debt of the association each member
is bound, seems to have been unknown to both legal theorists and practical
men in the mid nineteenth century. Also in the years to come during the
second half of the nineteenth century there was still much uncertainty in
practical business life as to the difference between a pro rata clause and a
limited clause. The 1889 Firms Act for the first time seems to have clarified
this problem in some measure.
The nineteenth century was dominated politically and economically by the
liberal principle of 'laissez faire' and legally by the principles of freedom of
contract and freedom of competition. The new demands for freedom which
were included in the Constitution of 1849 in the chapter on civil rights
also covered the right of creating companies and corporations. Denmark
responded readily to this demand. No strict rules on joint stock companies
were laid down until 1917. Business life was in practice left very free to make
its own conditions. The same picture of legal development can be seen in
relation to much of the new business legislation. Statute law on patents and
trademarks appeared late in the nineteenth century together with the law on
regulation of unfair competition, in a period when influence from foreign law
was increasing together with growing international contact in the course of
trade. A specific maritime and commercial court was instituted in 1861. It
was to deal only with merchants, others engaged in commerce, enterprises and
maritime matters. A modern Bankruptcy Act was passed in 1872, in the same
period as the real industrial boom in Denmark began. The period between
1840 and 1870 had seen quite a number of companies which were unable to
survive and had gone bankrupt.
With freedom of trade came freedom for craftsmen and industrial workers.
The new class of free workers gained the freedom to sell their capacity to work
in an open labour market. But the new conditions for workers relying on wages
resulted in social weakness and vulnerability to sudden economic catastrophe.
A short period of unemployment might lead to poverty and starvation. The
new free labourers were forced to create their own associations, the trade
unions. The development of trade unions started in the 1860s in Denmark
and by around 1900 the whole labour market system was fully organized,
with collective bargaining between employers' federations and the federations
of the labour force.
The principle of freedom of association has thus led to two sorts of