As anyone even noddingly familiar with law-and-economics can attest, the name of Ronald Coase has become associated with the vision of a world that is free of transaction costs. Such an association derives largely from Coase's classic article, “The Problem of Social Cost”. However, as should be recognised by anyone who peruses that article, its author's chief concern lies in taking account sustainedly of the presence and implications of transaction costs.

If students of company law know just one case, that case will be Salomon v. A. Salomon & Co. Ltd. which firmly established the English law principle that a company is a legal person entirely separate and distinct from the members ofthat company. It is trite law that a rather hefty veil is drawn between these two that can be lifted only in a limited number of circumstances that seem to fluctuate according to current judicial thinking. However, it “is well established that the courts will not allow the corporate form to be used for the purposes of fraud or as a device to evade a contractual or other legal obligation”, a principle which is referred to hereafter as the “fraud exception” to the Salomon principle.

I must begin with a few words about my predecessor in the Rouse Ball chair, Sir David Williams. David Williams has had a career of outstanding service to legal studies, to universities, in particular Cambridge, and to the wider public. After completing his studies, he became one of the formidable group at the University of Nottingham's Law Faculty. He went on to Oxford—he has told me that he went there as a missionary—and during his time there produced his pathbreaking books on official secrets and public order, Not in the Public Interest and Keeping the Peace. He was, it must be said, not the only Cambridge public lawyer-missionary in Oxford. Sir William Wade was also there. By 1967 it appears that two missionaries were no longer required, and David Williams returned to Cambridge. In 1982 he succeeded Wade—by now also back in Cambridge—as Rouse Ball Professor. He has been an important presence in the world of administrative law and his contribution to environmental issues has been enormous. We are delighted that now he has laid down the burdens of office as Vice-Chancellor he has returned to the Faculty— albeit to a different chair.

“All statutes contrary to the common law … are to be interpreted strictly and have to be accepted in the most exact manner as they stand, and speak”. “Statutes which repeal the [common] law, have to be interpreted most strictly, and cannot be extended to cases which are not expressed in them.” “Statutes … generally consist more in ‘thus I want and thus I command’ than in a regulation according to reason”; “they fade like the moon's shadows, and like the moon they wax and wane at the legislators' whim”. It may be thought that these four sentences refer to the approach traditionally adopted in England to the interpretation of statutes. But they do not. They encapsulate the attitude adopted by the learned lawyers of the older ius commune, particularly in 13th and 14th century Italy, and in 16th century Germany. An English colleague has suggested that “civilian lawyers regard our case law with admiration and our statute book with despair”.

The idea of a permanent international criminal court has been on the international agenda for much of this century. After World War I unsuccessful attempts were made to bring the German Emperor to trial before an international tribunal and, later, to try Turks responsible for the genocide of Armenians before a tribunal to be designated by the Allied Powers. In 1937, following the assassination in 1934 of King Alexander of Yugoslavia by Croatian nationalists in Marseilles, treaties were drafted to outlaw international terrorism and to provide for the trial of terrorists before an international tribunal, but states lost interest in this venture as war approached and no state ratified the treaty for an international criminal court and only one (India) ratified the treaty outlawing international terrorism. The establishment of the Nuremberg and Tokyo international military tribunals to try the principal leaders of the Nazi and Japanese regimes after World War II as a natural culmination of the pre-war debate over an international criminal court and set the scene for renewed attempts to create a permanent international criminal court.

In certain circumstances the fact that an agreement is made under pressure is sufficient reason to invalidate what would otherwise be a good contract. The rules providing for invalidation in such cases are found in the textbooks under the headings of duress and, to a less extent, undue influence and unconscionability. That the existence of pressure sometimes is and should be sufficient to invalidate a contract is not controversial. Few would argue that a contract entered at gunpoint ought to be enforced and the law is clear that such agreements are not enforceable. What is less clear are the principle(s) that underlie such decisions and the proper scope or reach of those principles. These questions are important for both the theory and practice of contract law. Theoretically, because any adequate account of contract law—a doctrine that in the orthodox understanding holds out the ideal of freedom as a core value—must explain that part of the lawin which individual freedom is most directly at issue. Practically, because the recognition in English courts over the last twenty-five years that the defence of duress may be invoked in situations other than threats to a person or even threats to a person's goods (in short, the acceptance of “economic duress”), together with the recent near-elimination of the rule that a promise to perform an existing duty is not good consideration, has meant that courts are regularly required to consider how far the scope of duress should extend.

The Daily Cause Lists at the Royal Courts of Justice disclose that from time to time foreign sovereign States appear as parties to civil litigation in the courts of England and Wales, mostly as plaintiffs but also, in cases often better known because of the issues of immunity to which they give rise, as defendants. In his judgment in the House of Lords in Arab Monetary Fund v. Hashim (No. 3), Lord Templeman, eferring to the case concerning the financial collapse of the International Tin Council decided the previous year by the same tribunal,1 observed:2 “The Tin Council case reaffirmed that the English courts can only identify and allow actions by individuals, sovereign states and corporate bodies.”