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What is Commercial Law?

Mona D. Rigdon
Mona D. Rigdon

Commercial law is the body of law that governs the broad and sometimes vague areas of business, consumer transaction, and commerce. The application of commercial law has developed a specific set of laws that apply to commercial activities, pursuits, and transactions. This arm of civil law deals with issues both simple and complex that often relate to questions of both public and private sector laws. Commercial law governs sale and distribution of goods, and proper procedure for payment of transactions.

Many nations operate under civil codes that are made of detailed statements regarding commercial law. In the United States (US), commercial law is regulated by Congress under the power granted to it to regulate interstate commerce, and by state governments under jurisdiction of police power. The commercial laws in the US were adopted from 17th century principles of the law merchant and were first incorporated into common law. The US federal government has attempted to have some form of unified commercial law in passing the Uniform Commercial Code (UCC).

International commercial law would govern imports and exports.
International commercial law would govern imports and exports.

Domestically, commercial laws are of interest to consumers, as the laws are usually applied to regulate consumer law. In the US, the consumer credit industry is regulated under the commercial arm of statutory law. Credit is what allows a consumer to finance a purchase over time instead of paying the entire cost at the time of the transaction. Credit cards are a common form of consumer credit used by consumers in most parts of the world. Individuals, businesses, and banks also provide this financing through mortgages and various loans.

In 11 states of the US and Guam, the Uniform Consumer Credit Code (UCCC) has been passed to protect consumers attempting to obtain credit to finance various transactions, ensure availability of credit to consumers, and govern fair practice of the credit industry. Federally, the Consumer Credit Protection Act was passed to regulate the consumer credit industry. It goes further to protect against discrimination in granting credit to consumers and to govern the fair practice of collections.

Internationally, trade has grown tremendously, leading to a surge in the importance of international commercial laws. The need for united or harmonized commercial international law codes has become obvious as revealed by the jointly sponsored international survey of attorneys conducted by Lexis Nexis and the International Bar Association. It revealed that though legal practice is still mainly domestic, there is a convergence of laws in the areas of trade and investment. Surveyed attorneys from eight nations agreed that some standardization on an international level of trade and investment law would be of great benefit to international trade.

The European Union (EU) has made this harmonization of private law essential in its goal of development of its own internal market. The EU requires all states entering the union to sign contracts and adopt certain rules, regulations, and statutes that encourage the harmonization of international commercial laws before final acceptance. Another way this concept is explored is through the ratification or adoption of treaties governing commercial law. The most recognized treaty in this arena is the United Nations (UN) Convention on Contracts for the International Sale of Goods (CISG). There are many other tools used to regulate and harmonize commercial law domestically and internationally, and with the continued increase in international trade, development of new methods of harmonization may prove integral.

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Discussion Comments


@Cupcake15 - I realize that consumer protection is important but I think that some of these laws might cross the line and regulate the business a little too much.

I think that the credit card payoff information on minimum payments does make you realize that you have to pay more than the minimum. However, I don’t like the idea of having a restaurant list the calories on the menu because there are times when you want to indulge a little and the nutritional information staring you in the face does act like a damper. I personally think that they went a little far on this law.


@Sunshine31 - I agree with you. I know that another business law that was passed in New York City was fought against by the restaurant industry.

According to this law, restaurants had to disclose the nutritional content of all of their meals in addition to the number of calories each item on the menu had.

This was an enormous financial burden that the businesses had to face, but what was worse was the public relations problems that this law represented because they felt if people knew how fattening the food was they may not eat the food that was served which would adversely affect their business.

I have to say that I went to a restaurant in New York recently, and when I saw the number of calories on most of the entrées, I couldn’t believe it. The entrée with the lowest amount of calories was a salad that was about 800 calories.

I definitely ate less because of the guilt factor so maybe the restaurants had a point.


I wanted to add that I think that the fact that the credit card statements now tell you how long it will take for you to pay off your bill if you only pay the minimum is a great step in letting people realize that debt adds up.

I know that it was met with some resistance from the credit card companies but it is important for the general public to realize that they will never pay off their debt as long as they continue to pay the minimum and the only ones that benefit from this scenario are the credit card companies.

This business law made a lot of sense.

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    • International commercial law would govern imports and exports.
      By: corepics
      International commercial law would govern imports and exports.