Lex mercatoria

Lex mercatoria(fromLatinfor "merchant law" ), often referred to as "the Law Merchant" in English, is the body ofcommercial lawused by merchants throughout Europeduring themedievalperiod. It evolved similar to Englishcommon lawas a system of custom and best practice, which was enforced through a system of merchant courts along the main trade routes. It developed into an integrated body of law that was voluntarily produced, adjudicated and enforced on a voluntary basis,alleviating the friction stemming from the diverse backgrounds and local traditions of the participants. Due to the international background local state law was not always applicable and the merchant law provided a leveled framework to conduct transactions reducing the preliminary of a trusted second party.It emphasized contractual freedom and inalienability of property, while shunninglegal technicalitiesand deciding casesex aequo et bono.Withlex mercatoriaprofessional merchants revitalized the almost nonexistent commercial activities in Europe, which had plummeted after the fall of the Roman Empire.

In the last yearsnew theories had changed the understanding of this medieval treatise considering it as proposal for legal reform or a document used for instructional purposes.These theories consider that the treatise cannot be described as a body of laws applicable in its time, but the desire of a legal scholar to improve and facilitate the litigation between merchants. The textis composed by 21 sections and an annex. The sections described procedural matters such as the presence of witnesses and the relation between this body of law and common law. It has been considered as a false statement to define this as a system exclusively based in custom, when there are structures and elements from the existent legal system, such as Ordinances and even concepts proper of the Romano-canonical procedure.Other scholars have characterized the law merchant as a myth and a seventeenth-century construct.

Common law development

See also:United Kingdom commercial law

We find reference to the law merchant as early as 13 Edw. 4 (1473/4): "'the king has jurisdiction over them [merchants] to put them to stand (estoyer) to right, etc., but this will be 'according to the laws of nature' (secundum legem naturae) which is called by some 'law merchant', which is universal law for everyone (tout le monde)."

English courts applied merchant customs only if they were "certain" in nature, "consistent with law" and "in existence sincetime immemorial".English judges also required that merchant customs be proven before the court. But even as early as 1608, Chief JusticeEdward Cokedescribedlex mercatoriaas "a part of the common law", andWilliam Blackstonewould later concur.The tradition continued especially underLord Mansfield,who is said to be the father of English commercial law. Precepts of thelex mercatoriawere also kept alive throughequityand theadmiraltycourts in maritime affairs. In the US, traditions of thelex mercatoriaprevailed in the general principles and doctrines ofcommercial jurisprudence.

Lord Mansfield was a champion of fusinglex mercatoriawith thecommon law.

Sir John Holt(Chief Justice 1689 to 1710) andLord Mansfield(Chief Justice, 1756 to 1788) were the leading proponents of incorporating thelex mercatoriainto the common law. Holt did not complete the task, possibly out of his own conservatism (seeClerke v Martin) and it was Lord Mansfield that became known as the 'founder of the commercial law of this country "(Great Britain).Whilst sitting inGuildhall,Lord Mansfield created,

a body of substantive commercial law, logical, just, modern in character and at the same time in harmony with the principles of the common law. It was due to Lord Mansfield's genius that the harmonisation of commercial custom and the common law was carried out with an almost complete understanding of the requirements of the commercial community, and the fundamental principles of the old law and that that marriage of idea proved acceptable to both merchants and lawyers.

• Statute of Merchants 1285(11 Edw I and 13 Edw I) aka "Statute of Acton Burnell"

International Commercial Law and Arbitration

Lex mercatoriaprecepts have been reaffirmed in new international mercantile law.The new commercial law is grounded on commercial practice directed at market efficiency and privacy.Dispute resolution has also evolved, and functional methods like international commercial arbitration is now available. These developments have also attracted the interest of empirical sociology of law.

Present and future commercial law

Lex mercatoriais sometimes used in international disputes between commercial entities. Most often those disputes are decided by arbitrators which sometimes are allowed (explicitly of implied) to applylex mercatoriaprinciples.

See also

• International commercial terms
• Law of the sea
• UNIDROIT
• UNCITRAL
• Statute of the Staple(27 Edw III, stat 2, c 20)

Bibliography

• JH Baker. "The Law Merchant and the Common Law",Cambridge Law Journal38, no. 295 (1979).
• Mary Elizabeth Basile et al.Lex Mercatoria and Legal Pluralism: A Late Thirteenth Century Treatise and Its Afterlife.Cambridge, MA: Ames Foundation, 1998.
• Wyndham Beawes.Lex Mercatoria: Or, A Complete Code of Commercial Law,F. C. and J. (Rivington, 1813)
• Bruce L. Benson. "The Spontaneous Evolution of Commercial Law",Southern Economic Journal55, no. 3 (1989): 644–661.
• Bruce L. Benson(2008)."Law Merchant".InHamowy, Ronald(ed.).The Encyclopedia of Libertarianism.Thousand Oaks, CA:Sage;Cato Institute.pp. 286–287.doi:10.4135/9781412965811.n172.ISBN978-1412965804.
• Lisa Bernstein & Francesco Parisi, eds.Customary law and economics.Cheltenham (UK)–Northampton, MA: Edward Elgar Publishing Limited, 2014.
• Daniel R. Coquillette. “Legal Ideology and Incorporation II: Sir Thomas Ridley, Charles Molloy, and the Literary Battle for the Law Merchant, 1607–1676”,Boston University Law Review61 (1981): 315–371.
• C Gross & H Hall, eds., Selden Society,Select Cases on the Law Merchant(1908–32)
• WH Hamilton, 'The Ancient Maxim Caveat Emptor' (1931) 50 Yale Law Journal 133, who shows thatcaveat emptornever had any place in Roman law, or civil law, orlex mercatoriaand was probably a mistake when implemented into the common law.
• G Malynes,Consuetudo vel lex mercatoria(London, 1622)
• Paul Milgrom, Douglass North, & Barry Weingast. “The Role of Institutions in the Revival of Trade: The Medieval Law Merchant”,Economics and Politics2, no. 1 (1990): 1–23.
• W Mitchell,The Early History of the Law Merchant(Cambridge, 1904)
• Theodore Plucknett.A Concise History of the Common Law,5th edn. Getzville, NY: William S. Hein & Company, 2001.
• JS Rogers,The Early History of the Law of Bills and Notes(1995) chapter 1
• John William Smith,Mercantile Law(ed. Hart and Simey, 1905).
• Leon E. Trakman.The Law Merchant: The Evolution of Commercial Law.Littleton, Colo.: F.B. Rothman, 1983.

External links

• The Lex Mercatoria on-line
• The 'Law Merchant' and the Fair Court of St. Ives, 1270–1324 by Stephen Edward Sachs
• Boudreaux on Law and LegislationPodcast on law vs. legislation, including modern applications oflex mercatoriaand economic theory. EconTalk atEconlib
• Trans-Lex, a research and codification platform for transnational law /lex mercatoria
• Gesa Baron:Do the UNIDROIT Principles of International Commercial Contracts form a new lex mercatoria?Archived13 April 2018 at theWayback Machine
• Bernard Audit:The Vienna Sales Convention and the Lex MercatoriaArchived12 March 2018 at theWayback Machine
• CISG(text)
• History and current implications of Lex mercatoria