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What is Mercantile Law?
Mary McMahon
Mary McMahon
Mercantile law, also known as commercial law, is the area of the law that pertains to commercial transactions. Various forms of this type of law have been around for centuries in response to the need to regulate merchants and establish rules that create protections for both customers and merchants. In the United States, the Uniform Commercial Code (UCC) is one of its key aspects. Like other uniform codes, the UCC is designed as a general framework that can easily be adopted by individual legislatures to standardize the law.
A number of things can go wrong with a commercial transaction, ranging from failure to pay to loss of a shipment as a result of a storm that downs a boat. Mercantile law provides specific guidelines for a variety of situations that can arise while doing business, establishing precedents for legal liability, laying out the responsibilities and rights of people involved in commercial transactions, and establishing a regulatory framework that allows the government to supervise commercial transactions and step in when necessary.
This area of the law also pertains to the routine transactions that occur every day between merchants large and small and their customers. It regulates contracts for commercial transactions, procedures which must be followed, confidentiality, and other terms that may come up in the course of doing business. These laws are designed to ensure that transactions are standardized, that rights of all parties are protected, and that merchants abide by basic standards of behavior.
Commercial law is periodically revised and updated. Nations make changes to the law in response to a changing business climate, newly emerging standards and practices, and changes in social and cultural norms. When changes to mercantile law are put through by legislatures or established in case law as a result of cases heard in court, merchants are usually given a time window in which to comply and special exceptions may be made if compliance would pose a hardship to a given merchant.
Criminal charges for violations of mercantile law vary, depending on the nature and the extent of a crime. Someone who fails to protect credit card numbers and exposes thousands of customers to fraud, for example, is going to be prosecuted more aggressively than a single merchant who reneges on a small payment to a distributor. There are also civil mechanisms in place which allow people to obtain legal remedies through lawsuits.
Mary McMahon
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a MyLawQuestions researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.
Learn more...
Mary McMahon
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a MyLawQuestions researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.
Learn more...AS FEATURED ON:
AS FEATURED ON:
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![Attorney reviewing business transactions with business owner.]()
By: AntonioDiazAttorney reviewing business transactions with business owner. -
![A company that doesn't protect customers' credit card information violates mercantile law.]()
By: NatUlrichA company that doesn't protect customers' credit card information violates mercantile law. -
![Law books.]()
By: zimmytwsLaw books.
Discussion Comments
@ZsaZsa56 - I don't think there is a direct link between the two but the Department of Weights and Measures (DWM) does have a role to play in Mercantile Law. If a business or organization is found to be using faulty measures, this is a violation of mercantile law. This is the proverbial thumb on the scale. DWM is responsible for maintaining the standards upon which all measures are based so their input would likely be a factor when determining if a business was using bad numbers.
Is the Department of Weights and Measure related to Mercantile Law? I was always kind of fascinated by this little office of the government. Their job seems so mundane but so important. What if, under some strange circumstances, we no longer knew how much a pound weighed or how long an inch was. It is possible that we could compound our mistake until 10 years down the road a pound weighs more than anyone can pick up and an inch is a microscopic distance.
@nony - Perhaps you can clear this up for me. I am confused about how a Health Care mandate would work with private vs public sources of insurance. I understand how forcing people to buy insurance on the private market is legally iffy. This is kind of like telling people that they have to buy an American made car.
But if there was a government run insurance program, the so called "public option", would this be subject to the same legal confusion. I am asking because it seems like in many other areas the government requires citizens to pay for services that they may not want or use. We pay for roads we never drive on, public schools our children never attend and wars we do not support. It seems to me that the GOV has a long history of requiring people to pay for things they may not want as a way of promoting the public good. Do you have any thoughts on this?
@allenJo - The premise behind universal healthcare legislation is that the government can in effect order people to buy health insurance. These purchases would fund the efforts to provide universal healthcare-at least that’s the argument.
People who oppose universal healthcare state the individual mandate, as it’s called, is unconstitutional because the government cannot force people to buy anything.
Those who support the law point to the commerce clause, although a very creative interpretation of it. According to these people, since Congress can regulate commerce, they can regulate the commerce related to health insurance.
In this case, such “regulation” means telling you that you have to buy health insurance-that’s the creative part of their interpretation.
@nony - I understand then that according to the law merchant activity can be regulated. That’s fair enough, I understand that.
Why, then, is the commerce clause being brought up in debates about universal healthcare legislation?
@allenJo - Yes, the commerce clause gives Congress the power to regulate interstate commerce, so this would be considered mercantile law by definition. It also mentions that Congress can regulate trade with other nations in addition to commerce within the United States.
I hear about things like the commerce clause in Constitution law. Would this be related to mercantile law and if so, how?
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