Do Codification and Private International Law Leave Room for a New Law Merchant

Imagine that merchants from two different countries-let us say the United States and France-enter into a contract. What law governs their transnational business transaction? One possibility is the law of some country-for instance, the law of the country of which one of the merchants is a citizen, or perhaps the law of a third country that both merchants have selected. Alternatively, their contract could be governed by a distinctive body of international business law that is not tied to any single nation-state. Such a body of law has been variously dubbed the "new law merchant" and "modern lex mercatoria" by many of its contemporary proponents.1 Though a rose by any other name may still be a rose, the moniker lex mercatoria has proven to be of particular significance within the scholarly community. One group of scholars has claimed that a distinctive body of merchant law known as lex mercatoria dates back to the middle ages, if not to Roman times.2 This distinguished historical pedigree has been used to bolster the case for the new law merchant.3 Others have challenged the linkage between the new law merchant and the lex mercatona of old by arguing that there is no historical evidence that there ever was a law merchant.4 If true, this would mean that there is no precedent with which the new law merchant can ally itself. Professor Fassberg's intriguing and excellent paper contests the connection between the new law merchant and historical lex mercatoria in a novel, jurisprudential manner.5 She makes the elegant point that the method of advancing the new law merchant that is advocated by some of its most important contemporary proponents-codification of the modern lex mercatoria-is inconsistent with these proponents' conception of the historical lex mercatoria. Specifically, whereas the historical lex mercatoria is claimed to have been a spontaneous creation of the merchants themselves that reflected merchant needs and norms, codification is a product of non-merchants (mostly lawyers) that primarily utilizes established legal techniques for identifying lex mercatoria's content.6 Moreover, whereas the historical lex mercatoria typically is described as having been independent of national legal systems, the substantive content of the proposed code of lex mercatoria comprises traditional legal principles that are found in national legal systems.7 Professor Fassberg's argument is a fatal blow against the attempt to ground the new law merchant on the precedent of a historical lex mercatoria characterized as a body of spontaneous, merchant-created norms and practices that stands apart from national legal systems. One must be careful, however, not to misread Professor Fassberg's paper as standing for the proposition that codification is per se incompatible with all plausible conceptions of what constituted the essential core of the historical lex mercatoria. Indeed, a casual examination of the lex mercatoria literature discloses three distinct goals that lex mercatoria has been said to advance, only one of which is undermined by Professor Fassberg's jurisprudential argument. Let us begin by identifying three different conceptions of what constituted the historical lex mercatoria. First, lex mercatoria has been hailed as having comprised novel business solutions that addressed challenges unique to international merchants that traditional law was unable to resolve.8 Second, lex mercatoria has been said to refer not to substantive law, but to the streamlined dispute resolution processes that were required by itinerant merchants who stayed only briefly in any single location.9 Third, it has been said that lex mercatoria was the solution to the choice-of-law difficulty that otherwise would have arisen when parties from multiple jurisdictions transacted. On this view, lex mercatoria was a body of law distinct from any single national legal system that governed such multi-jurisdiction transactions.10 Now consider the relationship each of these conceptions of lex mercatoria bears to the related claims that lex mercatoria was a spontaneous creation of merchants that stood apart from national legal systems. …