Lex Mercatoria - Common Law Development

Common Law Development

English courts applied merchant customs only if they were “certain” in nature, “consistent with law” and “in existence since time immemorial.” English judges also required that merchant customs were proven before the court. But even as early as 1608, Chief Justice Edward Coke said: “the lex mercatoria is part of this realm.” The tradition continued especially under Lord Mansfield, who is said to be the father of English commercial law. Precepts of the lex mercatoria were also kept alive through equity and the admiralty courts in maritime affairs. In the US, traditions of the lex mercatoria prevailed in the general principles and doctrines of commercial jurisprudence.

The history of the lex mercatoria in England is divided into three stages: the first prior to the time of Coke, when it was a special kind of law – as distinct from the common law – administered in special courts for a special class of the community (i.e. the mercantile); the second stage was one of transition, the lex mercatoria being administered in the common law courts, but as a body of customs, to be proved as a fact in each individual case of doubt; the third stage, which has continued to the present day, dates from the presidency over the king's bench of Lord Mansfield (q.v.), under whom it was moulded into the mercantile law of to-day. To the lex mercatoria modern English law owes the fundamental principles in the law of partnership, negotiable instruments and trade marks.

Sir John Holt (Chief Justice 1689 to 1710) and Lord Mansfield (Chief Justice, 1756 to 1788) were the leading proponents of incorporating the lex mercatoria into the common law. Holt CJ did not complete the task, possibly out of his own conservatism (see Clerke v Martin) and it was Lord Mansfield that became known as the 'founder of the commercial law of this country" (Great Britain). Whilst sitting in Guildhall, Lord Mansfield created,

"a body of substantive commercial law, logical, just, modern in character and at the same time in harmony with the principles of the common law. It was due to Lord Mansfield's genius that the harmonisation of commercial custom and the common law was carried out with an almost complete understanding of the requirements of the commercial community, and the fundamental principles of the old law and that that marriage of idea proved acceptable to both merchants and lawyers."

• Statute of Merchants 1285 (11 Edw I and 13 Edw I) aka "Statute of Acton Burnell"