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Rules and guidelines of trade From Wikipedia, the free encyclopedia
Commercial law (or business law),[1] which is also known by other names such as mercantile law or trade law depending on jurisdiction; is the body of law that applies to the rights, relations, and conduct of persons and organizations engaged in commercial and business activities.[2][3][4] It is often considered to be a branch of civil law and deals with issues of both private law and public law.
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Commercial law includes within its compass such titles as principal and agent; carriage by land and sea; merchant shipping; guarantee; marine, fire, life, and accident insurance; bills of exchange, negotiable instruments, contracts and partnership.[5] Many of these categories fall within Financial law, an aspect of Commercial law pertaining specifically to financing and the financial markets. It can also be understood to regulate corporate contracts, hiring practices, and the manufacture and sales of consumer goods. Many countries have adopted civil codes that contain comprehensive statements of their commercial law.
In the United States, commercial law is the province of both the United States Congress, under its power to regulate interstate commerce, and the states, under their police power. Efforts have been made to create a unified body of commercial law in the United States; the most successful of these attempts has resulted in the general adoption of the Uniform Commercial Code, which has been adopted in all 50 states (with some modification by state legislatures), the District of Columbia, and the U.S. territories.
Various regulatory schemes control how commerce is conducted, particularly vis-a-vis employees and customers. Privacy laws, safety laws (e.g., the Occupational Safety and Health Act in the United States), and food and drug laws are some examples.
Commercial law covers the following legal areas :
This broad area of law covers many topics, from forming new companies, drafting business contracts, employment processes, corporate mergers, consumer rights to commercial litigation. It also provides a comprehensive legal framework that supports the operations of businesses regardless of their size. It ensures that businesses or other entities that engage in commerce adhere to set rules and guidelines, creating a fair and competitive commercial environment while providing legal remedies to resolve disputes.[6]
The history of commercial practices traces back to early civilizations where commerce was crucial for society, and regulation was necessary to facilitate and secure transactions. Commercial law, sometimes referred to as mercantile law, evolved organically through the collective practices of merchants, known as the "lex mercatoria" or law of merchants during the Middle Ages. The development of these rules was largely a response to the needs of the international trade community, which needed standardized rules to facilitate business across different regions and legal systems. The lex mercatoria laid the foundation for modern commercial law and was characterized by its flexibility, simplicity, and ability to adapt to changing trade practices.[7]
In the early modern period, commercial law continued to evolve through a combination of local customs and emerging legal frameworks that supported the growth of international trade. Notably, many elements of commercial law developed independently of formal state control, instead arising from community enforcement mechanisms among traders themselves. This allowed commercial law to remain responsive to the changing needs of the market, and it often functioned outside the bounds of national legal systems, providing a framework that was more consistent for cross-border commerce.[8] The codification of commercial law during the 19th century was a significant turning point, as various regions began to formalize commercial regulations into comprehensive codes. The adoption of legal codes allowed for greater uniformity and reliability in the commercial sector, reducing uncertainties and disputes. A key feature of modern commercial law is its reliance on general principles such as the freedom of contract, which remains a central tenet in commercial relationships.[9]
International commercial law today is shaped by multiple sources, including national laws, international conventions, and principles such as those derived from the United Nations Convention on Contracts for the International Sale of Goods (CISG). The lex mercatoria concept still exists in the form of general principles and trade usages that govern cross-border contracts when specific national laws are not applied. This body of rules, which draws from both historical and contemporary sources, provides the legal infrastructure needed for complex global trade.[10]
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