Lex Mercatoria History

Daniel Lackey

Professor Popejoy

BLAW 3721

4 April 2014

The Early History of Lex Mercatoria

Laws that affected trade between merchants were lacking in strength during the medieval ages. According to The Spontaneous Evolution of Commercial Law, authored by Bruce Benson, a professor of Economics at Florida State University, Lex Mercatoria is a body of rules that emerged during medieval Europe. The fall of the Roman Empire led to a significant decline in Europe’s commercial activities. However, in the eleventh century expansion occurred in the agricultural sector of Europe. This expansion was caused by increased agricultural productivity. Workers were able to produce an adequate amount of food and clothing for the population with less labor. One result of this increase in productivity was an increase in trade. Another result was urbanization of Europe’s population. These results led to a dramatic increase in the number of professional merchants (Benson 646). Unfortunately, merchants in the eleventh century faced many challenges. The distance to other cities was a huge barrier to consistent trade. The distance between cities also made relationship building much more difficult. Merchants did not have a central language. They spoke several different languages because of their various cultural backgrounds. A multitude of middlemen could be used for one transaction between merchants. The cultural diversity also caused misunderstandings and hostility (Benson 646). The need for clear facilitation of trade between merchants from various countries. This need led to the creation of Lex Mercatoria.

Lex Mercatoria is Latin for the Law Merchant. Much of the Law Merchant originated from the Roman commercial law. However, the Roman commercial la...

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...ificantly impacted the evolution of commercial law. The rapid expansion of European economies in the eleventh century exponentially increased the merchant class. The increased number of merchants subsequently led to an increased number of disputes when trading on an international basis. Local governments refused to fulfill the dire need of merchants, thus Law Merchant was created. Rules were established for trading between merchants which would address the previous issues involving hostility, cultural differences, and different trading customs. Courts were formed to settle disputes between the merchants. These courts formed swift and fair judgments through the help of local experts in commerce. However, the government eventually absorbed these courts by copying the Law Merchant’s rules and the Law Merchant faded away until its reappearance several centuries later.