Order within Law, Variety within Custom: The Character of the Medieval Merchant Law

The concept of the law merchant as the embodiment of merchant customs and practices has a long history. With one nuance or another the phrase has existed since the Middle Ages, and it continues to be part of the vocabulary of modern commercial law. Article 1 of the Uniform Commercial Code permits courts to incorporate law merchant into their decisionmaking.1 Even more explicitly, those advocating the primacy of trading norms in the adjudication of transnational commercial disputes speak of the creation of a new lex mercatona, wistfully tipping their hats to a perceived medieval idyll.2 Yet with all this talk, it is not entirely clear what this concept, law merchant, means-not in modern commercial law, as Lisa Bernstein and Richard Craswell have demonstrated, and not in the historical sense either.3 For, as legal historians have recently noted, the sources belie much of the traditional understanding of the law merchant on which contemporary jurists rely. This essay reexamines the medieval law merchant and argues that it was a significantly more complex legal phenomenon than previously assumed and that it bears many resemblances to modern commercial law. Before putting forth a new analysis, it is useful to review the traditional, and still generally accepted, theory of the medieval law merchant.4 The following overview relies on the chapter Harold Berman dedicated to the law merchant in his popular work, LMW and Revolution.5 Berman adhered closely to the standard history, and the accessibility of his work to non-specialists makes it a valuable starting point. He characterized mercantile law as a coherent, European-wide body of general commercial law, driven by merchants, and more or less universally accepted and formalized into well-known and well-established customs during the period from 1050 to 1150.6 In passing Berman acknowledged some role for urban governments and princes in furthering merchant law, but he assumed that the public authorities only entered the arena after the merchants had largely formulated and generalized their customs. In general, he saw the law merchant as spontaneously created in the thick of commerce and then self-regulating through the mechanism of merchant courts staffed by non-professional merchant judges.7 Berman, critically, portrayed the law merchant as a single, unitary system, which he believed was composed of certain well-defined "rights and obligations . . . consciously interpreted as constituent parts of a whole body of law, the lex mercatoria."8 The evidence strongly suggests that Berman's classic account is at least partly inaccurate in almost every respect. The law merchant was not a systematic law; it was not standardized across Europe; it was not synonymous with commercial law; it was not merely a creation of merchants without vital input from governments and princes. Even Berman's periodization is suspect. While we have evidence of a merchant procedure prior to the twelfth century, it is only after 1100 that documents seem to refer to a substantive merchant law. Furthermore, Berman attributed great importance to the role of fairs in creating merchant law, but the most significant of these fairs, those of Champagne, did not become international centers until after 1150.10 The invention of monetary instruments, upon the use of which so much of the standard story of the law merchant depends, also did not occur until the late twelfth to early thirteenth centuries,11 and full negotiability, which Berman assigns to the twelfth century, likely did not emerge until the fifteenth century.12 Finally, as will be discussed below, the creation of commercial courts appears to have been a development of the end of the twelfth or beginning of the thirteenth centuries. The effect of these inaccuracies is twofold. First, they cause scholars of modern commercial law to envision the historical law merchant as a more distant evolutionary stage from present practice than it perhaps truly was. …