Commerce Legal Definition: Everything You Need to Know
Commerce legal definition is the exchange of goods and services between individuals or entities, usually on a large scale.3 min read
Commerce legal definition is the exchange of goods and services between individuals or entities, usually on a large scale. Commerce also encompasses the activities used to facilitate the trade, including transportation and communication. Commercial laws help to spell out the rights and responsibilities of the parties involved in commerce and may also help to settle disputes between the transacting particle. Commercial law extends to a number of areas including transportation, banking, and insurance.
Forms of Commerce in the United States
Under U.S. Federal law, commerce encompasses all activities of a commercial or business nature between U.S. citizens. Commerce is not limited to trade but also involves the communication and travel that goes into facilitating trade.
- Domestic commerce is trade that happens between entities in the same state. This type of commerce is regulated by the state where the trade occurs.
- Interstate commerce is the type of trade that is conducted between entities in different U.S. states. Interstate commerce is regulated by the federal government.
- Extraterritorial commerce is the type of trade between U.S. entities and entities in other countries. Extraterritorial commerce is regulated by the federal government, although some states have attempted to sign trade agreements directly with foreign governments.
Commerce in the U.S. has the following characteristics:
- It is usually carried out by large organizations.
- Most commerce is carried out between nations.
U.S Commercial Laws
In the US, most commercial activities are regulated by the federal government. For many years, commerce between states in the United States was regulated by the Interstate Commerce Commission (I.C.C). The commission was established by an Act of Congress in 1887. In 1995, the Interstate Commerce Commission was replaced by the National Surface Transportation Board.
The major regulations on trade are outlined in Article 1 of the US Constitution. The Commerce Clause in Article 1, Section 8 of the U.S. Constitution says that Congress can regulate commerce:
- With foreign nations
- Within the U.S. states
- With the Indian tribes
The Commerce Clause gives Congress authority to control and regulate as well as the responsibility to prohibit state regulations that would interfere with the trade. In addition to the commerce clause, attempts have been made to unify the commercial laws across all U.S. states. The Uniform Commercial Code has been adopted by all the 50 states.
Commerce within a U.S. state is regulated by a local authority appointed by the state government. Commercial laws vary wildly from state to state. A business lawyer in your state can help you to navigate the laws that apply to your business.
Circumstances Under Which the U.S. Federal Government Can Regulate Commerce Within a State
The extent of Congress' power over the rights of state authorities to regulate trade in their jurisdictions is a hotly debated topic. While the U.S. Constitution gives state governments the responsibility to regulate trade within the state boundaries, in court cases brought to the U.S supreme court, the court generally allows the U.S. federal government to overrule the state government under the following circumstances:
- When the policies of the state government may impact the movement of goods and services between states. This is the community done when it states institutes barriers to trade between states.
- When a state government's policies discriminate against an individual or group of people.
Commercial Law Areas
Commercial law is complex and usually overlaps with other legal areas. Commercial law can be found in the following legal areas:
- Principal and agent relationships
- Courage by land and sea
- Merchant shipping
- Marine operations
- Bills of exchange and Partnerships
Commerce and Trademarks
Manufacturers, traders, and distributors of goods and services can benefit from protecting their intellectual property. In the U.S, the United States Patent and Trademark Office registers trademarks and patents for entities in the US. The U.S is also a signatory to a number of international treaties that protect the intellectual property of member states. U.S. trade laws protect trademarks of U.S. companies that are involved in the export of goods and services. Trademarked names and symbols of U.S exporters can be protected by law if:
- The goods or their containers have a trademark of the exporter.
- The mark can be shown on the documents accompanying the goods if including the mark on the goods is not practical.
- Service exporters can make their trademarks known sale documents or advertising.
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