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commercial law

commercial law, the laws that govern business transactions, except those relating to the maritime transportation of goods (see maritime law). 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 law 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 League). 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 law 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 Union, the European Parliament and the legislatures of member nations are working to unify their various commercial codes.

Bibliography

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).

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Commercial Law

COMMERCIAL LAW

A broad concept that describes thesubstantive lawthat governs transactions between business entities, with the exception of maritime transportation of goods (regulated byadmiralty and maritime law). Commercial law includes all aspects of business, including advertising and marketing, collections andbankruptcy, banking, contracts, negotiable instruments, secured transactions, and trade in general. It covers both domestic and foreign trade; it also regulates trade between states.

The term commercial law describes a wide body of laws that govern business transactions. The uniform commercial code (UCC), which has been adopted in part by every state in the United States, is the primary authority that governs commercial transactions. The UCC is divided into nine articles, covering a broad spectrum of issues that arise in commercial transactions. These articles govern the following: sales of goods, leases of goods, negotiable instruments, bank deposits, fund transfers, letters of credit, bulk sales, warehouse receipts, bills of lading, investment securities, and secured transactions.

A number of other laws also govern business transactions. For instance, although Article 4 of the UCC governs bank deposits, federal law in the form of statutes and regulations prescribe requirements for banks and banking in general. Likewise, federal law governs such issues related to commercial law as bankruptcy and debt collection. Many of the federal laws related to commercial transactions are codified in title 15 of the U.S. Code.

Although the UCC controls most aspects of domestic commercial law, the common law of contracts, as well as other state laws, still applies to some types of transactions that arise in business, such as contracts for services. international law is likewise an important component of this area. For instance, the United Nations Convention on Contracts for the International Sale of Goods has been ratified by approximately 62 nations, representing two-thirds of the world's trade.

Though the business world undergoes constant change, commercial laws generally have remained static. The commissioners on uniform laws, in conjunction with the American Law Institute and other organizations, periodically revises the articles of the UCC. However, the revision process of the UCC is typically slow and deliberate. Recent revisions to Article 2 (governing the sale of goods) and Article 9 (governing secured transactions) took several years to complete. Thus, not only is commercial law substantially uniform throughout the United States, but also those who conduct business can proceed with commercial transactions with some degree of certainty as to the law that governs those transactions.

cross-references

Banks and Banking; Check; Contracts; Mercantile; Merchantable; North American Free Trade Agreement; Promissory Note; Sales Law; Uniform Commercial Code; Warranty.

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"Commercial Law." West's Encyclopedia of American Law. . Encyclopedia.com. 23 Sep. 2017 <http://www.encyclopedia.com>.

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"Commercial Law." West's Encyclopedia of American Law. . Retrieved September 23, 2017 from Encyclopedia.com: http://www.encyclopedia.com/law/encyclopedias-almanacs-transcripts-and-maps/commercial-law