Define Mercantile Law: Everything You Need to Know
To define mercantile law, you will need to go back to the early days of commerce and merchants.3 min read
2. Scope of Mercantile Law
3. Main Sources of Mercantile Law
To define mercantile law, you will need to go back to the early days of commerce and merchants. This type of law refers to commercial laws concerning the buying, selling, and trading of goods, although it is not used as commonly today.
Definition of Mercantile Law
Mercantile laws relate to commerce, merchants, and commercial or business interactions between individuals and parties. The word “mercantile” means of or pertaining to the business of merchants, i.e., to the commerce, trade, or business of selling and buying merchandise, acting on or conducting business principles, trading, and other commercial principles. In history, the idea of mercantile law referred more to the international laws that applied to commercial interactions. This term was similar to law merchant, but it wasn't as generic as the overall business involving merchants.
In "Ballentine's Law Dictionary," "mercantile law" has a definition as "law merchant," but a mercantile establishment is any location where merchandise, wares, and goods are available for sale or purchase. The term "mercantile law" is rarely used in today's legal jargon, although you will hear people use the word “commercial” with a similar meaning. For example, a commercial agent is the same as a mercantile agent.
Mercantile law includes the branches of law relating to commerce, industry, and trade. It's an important branch of civil law that is also known as commercial law.
Scope of Mercantile Law
Mercantile law relates to the obligations and rights of individuals, partners or other parties, such as joint stock companies, involved in commercial transactions. This area of law deals with a large variety of case types. It can include laws related to:
- Carriage of goods
- Negotiable instruments
- The sale of goods
- Other related topics
It is important for those who work in the field of commerce to understand mercantile law. By understanding the laws and regulations, you can avoid conflicts with those with whom you are doing business, in any capacity.
Main Sources of Mercantile Law
Mercantile law in India is similar to the mercantile law that exists in England. Before various regulations were enacted to outline and define mercantile laws, each party's personal laws applied to mercantile transactions.
If a Hindu person was doing business, the transaction would be governed by the Hindu Law, while a Muslim person would be governed by the Mohammedan Law. If those involved in a transaction were neither Muslim nor Hindu, legal requirements would enforce the principles under English laws. If the Mohammedan or Hindu Laws didn't set forth any terms that would relate to a specific business transaction, the English law would apply in this case as well.
One of the earliest efforts to establish mercantile law occurred in India in 1872, when the Indian Contract Act was passed. The laws in England served as the most important source for mercantile law in India. Many of those laws are incorporated in the Indian Contract Act through judicial decisions and statutes.
Today, some of the main sources used to enact the Indian Mercantile Law are:
- Customs and usage
- English mercantile law
- Judicial decisions
- Statute law
Following the passing of the Indian Contract Act, many other countries have enacted their own rules, statutes, and regulations regarding mercantile law. Some examples of mercantile laws passed by other countries include:
- The Companies Act (1955)
- The Sale of Goods Act (1930)
- The Partnership Act (1932)
Many of the terms in the English laws come from:
- Common law
- The lex mercatoria, or body of laws established by merchants in medieval Europe
- Case law
- Statute law
"Common law" refers to laws made by judges based upon practices and customs that have been passed through the generations. The courts in England have established and developed these laws over many centuries, making them some of the oldest unwritten laws in the world.
Equity is another example of a type of law that is unwritten. These laws are based on judicial concepts from judges who made decisions that later became precedents for similar situations. The concept of equity supplements common law and covers any deficiencies that exist. When common laws are considered to be oppressive and harsh, equity laws can offer some flexibility and fairness.
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