Jun 1, 1982
Spontaneous Order & the Law Merchant
“The merchants’ self-regulation through voluntary contract and evolved business practices should take precedence over government or legal regulation.”
“The Evolution of the Law Merchant: Our Commercial Heritage.” Journal of Maritime Law and Commerce 12 (October 1980): 1–24; 12 (January 1981): 153–182.
International commerce has spontaneously evolved an admirable body of Law Merchant to self-regulate the merchant community by voluntary consensus, good faith, and approved custom. Trakman offers the following considerations in the analysis of Law Merchant, which he surveys from ancient and medieval times down to the modern era: (1) A merchant regime has developed which is capable of regulating international relations; (2) Within this international regime merchants have acquired their own ability to govern their affairs on the basis of good faith and reciprocity. (3) The interests of this international regime are best served by the development of a supplementary legal order which reinforces rather than displaces the self-regulating capacity of merchants. Thus obligations assumed by international merchants in their contracts should be binding upon them in law because they have so agreed and because law should enforce their agreements. Trakman’s thesis is that “through custom and usage, the international community of merchants has devised a sophisticated body of institutions which, today as yesterday, should be recognized in law in the interests of efficacious dealings across national boundaries.
Nations and merchants depend upon a coherent body of trade law to allow commerce to flow freely. We need to study the illuminating history of medieval Law Merchant to grasp the utility in maintaining a system of justice based upon the actual usages of merchants engaged in international commerce. Great advantages accrue to applying a low-cost and speedy adjudicative process to business ventures across international boundaries. Political and economic rivalry makes uniform international trade law indispensable. The merchants’ self-regulation through voluntary contract and evolved business practices should take precedence over government or legal regulation. Historically, contract—the agreement of the parties involved in trade—has been the guiding and unifying force in the “law” of international trade, the Law Merchant.