Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Lex Mercatoria

  • Bruce L. BensonEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_298

Abstract

Lex Mercatoria, or the Law Merchant, generally refers to the customary rules and procedures developed within merchant communities to support trade in medieval Europe, without the assistance of government, although this system has had many names through its evolution. This system began to develop sometime in the early Middle Ages, but became widely recognized as commerce expanded in the eleventh and twelfth centuries. Lex mercatoria lowered transactions costs, and provided incentives to live up to promises, thereby allowing for widespread use of contracting and credit as commerce expanded. The customary law system developed behavioral rules based on customs, practice and usage within the network of merchant communities, but processes to encourage recognition, provide adjudication and generate changes in the rules. The primary impetus for recognition of the law merchant within the commercial sector were the positive incentives associated with maintaining reputations and repeated dealings, along with the potential of reputation sanctions (e.g., spontaneous ostracism) for misbehavior. Arbitration was probably the primary dispute resolution process, although merchants used other courts (particularly fair courts sometimes referred to as piepowder courts, market courts, urban courts and ecclesiastical courts) when they were willing to base decisions on the law merchant. Change was generally initiated through bargaining and contracting, followed by emulation so that new rules spread. Various general principles of the law merchant became increasingly universal over time, although the system remained polycentric in many ways. One reason for polycentric characteristics is that authoritarian legal systems (e.g., royal law, urban law) strove to gain control over commerce and its regulation by imposing additional laws on merchants that often conflicted with the law merchant, forcing changes in merchant practice and usage. The success of such efforts varied over time and space.

This is a preview of subscription content, log in to check access.

References

  1. Benson BL (1989) The spontaneous evolution of commercial law. South Econ J 55:644–661CrossRefGoogle Scholar
  2. Benson BL (1995) An exploration of the impact of modern arbitration statutes on the development of arbitration in the United States. J Law Econ Org 11:479–501Google Scholar
  3. Benson BL (1999) To arbitrate or to litigate: that is the question. Eur J Law Econ 8:91–151CrossRefGoogle Scholar
  4. Benson BL (2011) The law merchant story: how romantic is it? In: Calliess G, Zumbansen P (eds) Law, economics and evolutionary theory. Edward Elgar, London, pp 68–87Google Scholar
  5. Benson BL (2014a) Customary commercial law, credibility, contracting, and credit in the High Middle Ages. In: Boettke P, Zywicki T (eds) Austrian law and economics. Edward Elgar, London, forthcomingGoogle Scholar
  6. Benson BL (2014b) Yes Virginia, there is a law merchant. Working Paper, Department of Economics, Florida State UniversityGoogle Scholar
  7. Berman H (1983) Law and revolution: the formation of Western legal tradition. Harvard University Press, Cambridge, MAGoogle Scholar
  8. Bewes W (1923) The romance of the law merchant: being an introduction to the study of international and commercial law with some account of the commerce and fairs of the middle ages. Sweet & Maxwell, LondonGoogle Scholar
  9. Bickley F (ed) (1900) The Little red book of Bristol, c. 1280. Bristol: W Crofton HemmonsGoogle Scholar
  10. Coquillette D (1987) Ideology and incorporation III: reason regulated – the post-restoration English civilians, 1653–1735. Boston Univ Law Rev 67:289–361Google Scholar
  11. Epstein R (2004) Reflections on the historical origins and economic structure of the law merchant. Univ Chic J Int Law 5:1–20Google Scholar
  12. Face R (1958) Techniques of business in the trade between the fairs of Champagne and the south of Europe in the twelfth and thirteenth centuries. Econ Hist Rev 10:427–438CrossRefGoogle Scholar
  13. Face R (1959) The Vectuarii in the overland commerce between Champagne and southern Europe. Econ Hist Rev 12:239–246CrossRefGoogle Scholar
  14. Greif A (2006) Institutions and the path to the modern economy: lessons from medieval trade. Cambridge University Press, New YorkCrossRefGoogle Scholar
  15. Holdsworth W (1903) A history of English law, vol 1. Methuen & Co, LondonGoogle Scholar
  16. Kadens E (2004) Order within law, variety within custom: the character of the medieval merchant law. Univ Chic J Int Law 5:39–65Google Scholar
  17. Kadens E (2012) The myth of the customary law merchant. Texas Law Rev 90:1153–1206Google Scholar
  18. Malynes G (1622 [1686]) Consuetudo, vel, lex mercatoria or, The ancient law-merchant, in three parts, according to the essentials of traffick: necessary for statesmen, judges, magistrates, temporal and civil lawyers, mint-men, merchants, mariners, and all others negotiating in any parts of the world. Printed for T. Basset, R. Chiswell, M. Horne, and E. Smith, London: IslipGoogle Scholar
  19. Marius J (1651 [1790]) Advice Concerning Bills of Exchange wherein is set forth the nature of exchange of monies, the several kinds of exchange in different countries, divers cases propounded and resolved, objections answered, &c.: with two exact tables of old and new style. Re-printed by D. Humphreys, Front-Street, near the drawbridge, Philadelphia London: AnnoGoogle Scholar
  20. Michaels R (2012) Legal medievalism in lex mercatoria scholarship. Texas Law Rev 90:259–268Google Scholar
  21. Milgrom P, North D, Weingast B (1990) The role of institutions in the revival of trade: the law merchant, private judges, and the Champagne fairs. Econ Polit 2:1–23CrossRefGoogle Scholar
  22. Mitchell W (1904) Essays on the early history of the law merchant. Burt Franklin, New YorkGoogle Scholar
  23. Sachs S (2006) From St. Ives to cyberspace: the modern distortions of the medieval law merchant. Am Univ Int Law Rev 21:685–812Google Scholar
  24. Stracca B (1553) De mercatura seu mercatore tractatus. No printer listed, VeniceGoogle Scholar
  25. Teeter R (1962) England’s earliest treatise on the law merchant: the essay on lex mercatoria from The Little Red Book of Bristol (Circa 1280 AD). Am J Leg Hist 6:172–210Google Scholar
  26. The Little Red Book of Bristol (1998) Lex mercatoria. In: Basile M (ed) Lex mercatoria and legal pluralism: a late thirteenth century treatise and its afterlife. Ames Foundation, Cambridge, UKGoogle Scholar
  27. Trakman L (1983) The law merchant: the evolution of commercial law. Fred B. Rothman and Co, LittletonGoogle Scholar
  28. Volckart O, Mangels A (1999) Are the roots of the modern lex mercatoria really medieval? South Econ J 65:427–450CrossRefGoogle Scholar
  29. Zouche R (1663) The jurisdiction of the Admiralty of England asserted against Sr. Edward Coke’s Articuli admiralitatis, in XXII chapter of his jurisdiction of courts. Printed for Francis Tyton and Thomas Dring, LondonGoogle Scholar

Further Reading

  1. Migne JP (1850 [1936]) Patrologiae cursus completus, vol LXXX. Garnier Freres, Paris. http://pld.chadwyck.com.proxy.lib.fsu.edu/

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of EconomicsFlorida State UniversityTallahasseeUSA