It is important to think about the substance of business law or the area of the legal world it covers before trying to describe it. To start, we may point out that commercial law is categorized as private law since it deals with legal interactions between persons.

However, it may be difficult to discern between civil and commercial concerns, especially because certain legal entities and transactions, such society, deposit, and purchase, are covered by both codes. This implies that it is impossible to discern between civil and commercial concerns using the provisions of each law. We must first look at the historical evolution of commercial law to identify which areas of legal reality it now regulates in order to draw this difference.

The character of business law

What exactly does business law entail? Commercial law doesn’t have a clear legal definition, hence other definitions have been put forward by authors who have written on the topic. Some of them are as follows:

Commercial law is a phrase that is difficult to define exactly, but it is used to refer to all areas of English law that are involved with commerce, trade, and business, as HW Disney highlighted in his book, the Elements of Commercial Law (1931).

Meaning and nature of commercial law

According to HC Gutteridge’s assertion in the book Contract and Commercial Law, the purpose of commerce is to transact in products, and if we follow this standard, commercial law may be characterized as the specific rules that apply to contracts for the sale of goods.

All of these many definitions of commercial law share the mercantile aspect of the topic. Commercial law is another name for the law of commerce. It is focused on business dealings, or transactions when both parties interact with one another in order to do business.

Business law covers a wide range of diversified commercial activities. It is not feasible nor desirable to provide a full list of the contents of the topic. The goal of the practical and current field of commercial law is to simplify the business processes of the corporate community. Business law’s substance may change as those practices do, usually to suit new technology. Limiting the subject’s scope rigidly will only hinder this process.

The evolution of commercial law across time

Middle ages

The lex mercatoria of the Middle Ages is where modern commercial law finds its roots (merchant law). At that time, traders would travel around Europe with their goods to marketplaces and fairs. Their disputes would be resolved by specialized local courts, such as the fair and borough courts and the staple courts, where the judge and jury would be actual business owners. Fast decision-making, lenient evidentiary and procedural norms, and principles of fairness and good faith would all be upheld by these merchant courts. There was also an openness to acknowledge new mercantile techniques. During this time, the bill of exchange, charter party, bill of lading, assignability and negotiability, stoppage in transit acceptance, and general average were developed, along with other key elements of modern commercial law.

The era of common law

In the fifteenth and sixteenth centuries, the Court of Admiralty took over the majority of the activity of the merchant courts while continuing to uphold the lex mercatoria. Common law courts, however, took over the Naval Court’s business expertise in the seventeenth century. The bulk of the nation’s commercial disputes was handled by the common law courts at that point since the merchant courts had ceased to function. Common law courts adopted certain of the lex mercatoria’s rules in order to protect that company. Before the late seventeenth and early eighteenth centuries, the lex mercatoria had not yet been completely assimilated into common law.

The rising consumerism

The creation of the welfare state after World War II marked the beginning of the next significant period of change. During this period, there was a transition away from the laissez-faire economics and Victorian concepts of freedom and contract sanctity and toward concepts of social responsibility and the defense of the economically weaker against the economically powerful.

At the beginning of the twentieth century, commercial law reverted to its previous subjective interpretation. It was once again seen as a legislation that limited some people’s freedom of action. In the Middle Ages, we used to refer to merchants, but in the 20th century, the terms enterprise and entrepreneur progressively replaced the word merchant.

Sources of business law


The basis of business law is contract law. In the realm of commerce, goods and services are offered in accordance with the terms of contracts established between businesspeople. In rare situations, the parties may have separately negotiated each clause of the contract. There would, however, have been little to no discussion on the precise terms of the agreement in many situations, except from the clauses pertaining to subject matter and pricing. In such cases, rather than spending the time and money discussing each clause individually, the parties choose to use standard form contracts to implement their agreement.

As long as the standard form contract is established between businesspeople and not between a regular person and a corporation supplier of goods and services, the courts are unlikely to tamper with the ideas of contract freedom and sanctity. This is particularly true of standard form contracts created by trade associations and approved by their members, such as charter parties, insurance policies, and contracts for the sale of commodities on the open market.


In the area of commercial law, business customs have long been a fruitful source of legislation. A usage is the accepted practice of a certain trade or profession, while a custom is a rule that has become legislation in a particular place. In reality, courts routinely conflate the two categories of use and custom, ignoring their technical differences. A court may accept evidence of a trade custom or practice to imply a term into a commercial contract. For these reasons, the custom or usage must be one that the court will recognize since only then will it become a legally obligatory requirement.

Common law

Common law may be utilized to regulate business matters where a specialized commercial legislation lacks an applicable custom or norm. Common law is based on earlier court rulings. In other words, there are no rigid guidelines that govern common law decisions. In addition, rulings may vary from one court to another or from one state to another.

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