commercial law(redirected from Business law)
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commercial law,the laws that govern business transactions, except those relating to the maritime transportation of goods (see maritime lawmaritime law,
system of law concerning navigation and overseas commerce. Because ships sail from nation to nation over seas no nation owns, nations need to seek agreement over customs related to shipping.
..... Click the link for more information. ). Commercial law developed as a distinct body of jurisprudence with the beginning of large-scale trade.
Development of Commercial Law
Formal documents and other evidences of regularized trade practices were known in Egypt and Babylonia. In many parts of the ancient world foreign merchants, through treaty arrangements or other agreements, were allowed to regulate their affairs and adjudicate their own disputes without interference from local authorities. They tended to settle in special sections of commercial cities where they might follow their own religions, laws, and customs. Roman lawRoman law,
the legal system of Rome from the supposed founding of the city in 753 B.C. to the fall of the Byzantine Empire in A.D. 1453; it was later adopted as the basis of modern civil law.
..... Click the link for more information. incorporated features of the already developed commercial law, which, however, was no longer handled separately in special courts but was treated simply as part of the whole legal system.
The barbarian invasions of Europe caused such social disruption that it was not until late in the Middle Ages that long-range commerce again became possible in Europe and merchants were once more able to determine the rules and regulations under which they could safely operate. In the cities of N Italy and S France the merchant class frequently dominated the state and could enact the needed rules as legislation. In other parts of Europe associations of merchants bought protection from powerful lords or kings who granted them safe conduct and permitted them to conduct fairs and to establish regulations and methods of enforcement (see Hanseatic LeagueHanseatic League
, mercantile league of medieval German towns. It was amorphous in character; its origin cannot be dated exactly. Originally a Hansa was a company of merchants trading with foreign lands.
..... Click the link for more information. ). Both classes of merchants established special courts where summary judgment was granted with little regard for the technicalities of procedure and doctrine in the regular courts, and without the necessity for lawyers.
The term "law merchant" was applied to the substantive principles that eventually emerged from this quasi-judicial activity. The law merchant developed later in England than in continental Europe, and it was not fully established there until the mid-16th cent., when English trade with the New World began to assume importance. In England the law was administered by special courts having jurisdiction only over those engaged in trade; these were the courts of piepoudre [Fr., pied poudré=dusty foot, an allusion to the dusty shoes of merchant judges who perhaps had been trudging the roads].
The royal courts in early days refused to hear merchants' suits, but in the 17th cent. they reversed this position and obtained exclusive jurisdiction. At first, however, the litigants were required to present proof of the law merchant in each case. In the 18th cent. Lord Chief Justice Mansfield made the law merchant a part of the common lawcommon law,
system of law that prevails in England and in countries colonized by England. The name is derived from the medieval theory that the law administered by the king's courts represented the common custom of the realm, as opposed to the custom of local jurisdiction that
..... Click the link for more information. and abolished the requirement of special proof. The United States adopted the principles prevailing in England in the late 18th cent.
Modern Commercial Law
In commercial countries of both the civil and common law systems there has been a considerable increase in the extensive use of commercial arbitration that is in many ways comparable to the former private courts of merchants. The American states have almost identical commercial statutes that considerably facilitate the flow of trade throughout the nation. In 1970, the Uniform Sales Act was superseded by the Uniform Commercial Code, amended in 1972 and 1977, which has been adopted by all the states, although it does not apply in certain sections of Louisiana. On the continent of Europe commercial law remains a separate subject matter with its special courts. Within the European UnionEuropean Union
(EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the
European Community (EC), an economic and political confederation of European nations, and other organizations (with the same member
..... Click the link for more information. , the European Parliament and the legislatures of member nations are working to unify their various commercial codes.
See R. C. Hoeber, Contemporary Business Law (1982); D. Whitman and C. D. Stoltenberg, Commercial Law (1985); R. N. Corley, Principles of Business Law (1986).
(also business law, mercantile law), an independent body of law in a number of bourgeois countries regulating, along with civil law, commercial and private affairs. In countries with special commercial codes (France, the Federal Republic of Germany, Japan), there is a distinction between commercial law and civil law.
Commercial law arose in the Middle Ages along with the development of international trade in the Mediterranean area and was referred to as the law merchant (lex mercatorid). It took shape as a body of customary rules and principles relating to merchants and mercantile transactions and was fixed in city statutes or statutes of merchant guilds. Among the early collections of these rules and principles were the Ragusa Statutes and the Rhodian Sea Law. In certain countries, such as Germany, the codification of commercial legislation preceded that of civil legislation.
In countries where it forms a separate body of jurisprudence, commercial law regulates the activities of business associations and sets forth procedures for the registration of business associations and the keeping of such records as journals. It also deals with questions of agency, the circulation of securities (checks, notes, stock certificates), and procedures governing commercial transactions and the dissolution of business associations, in particular, declarations of bankruptcy.
As capitalism has developed, the rules of civil and commercial law have in practice come to be applied to the same relations; as a result, the two branches have been unified in a number of countries (Sweden, Italy) in a single legislative act—a civil code or a code of obligations. In the United States, the development of the rules regulating capitalist business dealings took a different direction. There, a federal civil code does not exist. On the initiative of interested business circles, the Uniform Commercial Code was drawn up and approved by the National Conference of Commissioners on Uniform State Laws, the American Law Institute, and the American Bar Association. Published in 1957, this unofficial code has served as the basis for the official codification of commercial legislation in all states except Louisiana.