About law merchant
It consists of the regulations of the rights, legal relations and behavior of persons and companies engaged in commerce, including aspects such as land and sea transport, merchant marine; the different life and accident insurance, letters of exchange, bank checks and associations. It consists of drafting laws to regulate company contracts, contracting practices, and the manufacture and sale of consumer goods.
Law merchant characteristics
- It is a right created to regulate the relationship and conflicts that may arise between entrepreneurs.
- It is part of the private law that regulates the relationship between individuals regardless of the actions of public authorities.
- It is based on merchants’ tradition.
- It is a type of law that needs to be continuously updated.
- It has internationalization.
- The rules governing these interactions of trade relations also need to be updated and regulated.
- In the absence of a rule governing a particular action, it should be governed by civil law.
Legal nature
Its legal nature is to function as a public right that deals with the relationships that may arise between traders, tracking people who are mercantile in nature and traders, who are natural persons at the same time.
Background and history of law merchant
Law merchant, was born along with commercial law during the Middle Ages, in the Greek and Roman civilization as a set of rules and principles that were related to merchants and mercantile transactions which had been adopted by merchants themselves in order to achieve regulate their commercial relations. Thus, law merchant developed in the early eleventh century as a measure to protect foreign traders who were not under the jurisdiction and protection of local law.
Foreign traders were often subject to confiscations and other types of harassment, so a type of law was needed by which traders themselves could negotiate contracts, associations, trademarks, and various aspects of buying and selling. The law merchant gradually expanded as merchants moved from place to place. Courts established by traders themselves at trade fairs or in cities administered a uniform law in Europe, regardless of differences in national laws and languages. It was mainly based on Roman law, although there were some Germanic influences; and this formed the basis for modern commercial law.
General principles
Some general principles of law merchant are as follows:
- Profit is honest when it does not harm another.
- Deposit is what was given to someone to keep.
- Commissioning is nothing more than depositing.
- The thing deposited remains deposited in the depositor’s property.
- The deposit does not transfer ownership or possession or use, it is simple custody.
- In the deposit, compensation does not take place.
- The depositary must take care of the deposit as well as of his own things.
- For the mutual, the same thing is not returned, but another, but of the same gender.
- There can be no loan if there is no money
Sources
Law merchant is governed by three sources:
- The Law or Code of Commerce
- The different uses of Commerce
- Civil Law
Importance of law merchant
It is important because it regulates entrepreneurs and business owners and the acts they perform to achieve development in their economic activities. It also regulates private activities and relations between entrepreneurs and their clients. It is the right of a person, the merchant and the acts he performs through his company emphasizing the market.
Examples
The following are examples of law merchant:
- Regulation of the rights and duties of employers, as well as the duties and rules applicable to companies or social entrepreneurs.
- Mercantile contracts with purchase and sale, commissions and mercantile loans.
- Financial market law involving banking, insurance and investment entities.
- Competition law.
- Patent and utility model law.
- Bills of exchange, promissory notes and checks.
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