Legal Definitions - law merchant

Definition: Law merchant is a system of customary law that was developed in Europe during the Middle Ages. It regulated the dealings of mariners and merchants in all the commercial countries of the world until the 17th century. Many of the law merchant's principles came to be incorporated into the common law, which in turn formed the basis of the Uniform Commercial Code. It is also known as commercial law or lex mercatoria.

Example: One example of law merchant is the principle of good faith and fair dealing. This principle requires that parties to a contract act honestly and fairly towards each other. For example, if a merchant sells goods to another merchant, they must provide accurate information about the goods and not misrepresent them in any way.

Explanation: The example illustrates how the principle of good faith and fair dealing is an important part of law merchant. It ensures that merchants act honestly and fairly towards each other in their business dealings. This helps to build trust and confidence in the marketplace, which is essential for the smooth functioning of commerce.