The contemporary law merchant

Unwritten trade usages—widely believed to be a foundational mechanism of commercial coordination—have little empirical support in either historical or contemporary merchant contexts. Evidence from surveys in modern grain and feed markets reveals that while actors profess belief in usages, they cannot specify their content or agree on their interpretation. Disagreements persist over basic practices such as pricing non-conforming goods or defining common contractual terms. Courts, often presumed to verify these usages through expert testimony and objective evidence, in fact rely primarily on vague and self-serving assertions by litigants. A comprehensive analysis of U.S. court cases from 1970 to 2007 confirms the near-total absence of rigorous proof for trade usages. Despite this, legal theorists continue to assert their prevalence, relying on a presumed empirical truth rather than engaging with actual data. Even if such usages did exist, their judicial enforcement may undermine the flexibility and informal adjustments essential to commercial practice. Legal codification of informal norms risks converting contextual, extralegal understandings into rigid legal rules, increasing costs and reducing contractual adaptability. This critique calls into question not only the normative value of incorporating trade usages into law but also the entire mythology surrounding the so-called law merchant. Rather than clinging to outdated constructs, scholarship should shift focus to the real institutional and network-based mechanisms that sustain trade—past and present.

[https://www.learnioe.org/video/the-contemporary-law-merchant](See more...)