Business and Law

Abstract:     
This paper, for the Oxford Handbook of Business and Government, addresses the mechanisms through which business shapes law. There are two main ways in which business does so. First, business has advantages before the different public institutions that make and apply law, be they legislatures, administrative bureaucracies or courts. Second, business creates its own private legal systems, including what is traditionally referred to as lex mercatoria (or private merchant law), and private institutions to enforce it (such as arbitral bodies). These two sources of law, publicly-made and privately-made law, interact dynamically. The reciprocal interaction of public and private legal systems constitutes the legal field in which economic activity takes place.

Part I of the paper addresses business’ role in shaping law through public institutions. Part II addresses business’ creation of private legal rules and institutions. Part III examines how public and private legal systems interact, and, in particular, how private business-made law and business practice affect publicly-made law over time. Although Parts I-III focus on the relationship of law and business in the United States, the chapter’s aim is to provide a general framework for analysis which builds from existing theoretical and empirical work in discrete areas. Part IV addresses the interaction of business and law in comparative and global context. It shows how, on the one hand, much of international business law has developed in response to business demands and practices, in the process affecting national law. On the other hand, it explains why national law and legal practice nonetheless retain significant variation in reflection of local interests, institutional structures, and business and legal cultures.

Number of Pages in PDF File: 36

Keywords: law, business, law and society, comparative law, private legal systems, administrative law

Accepted Paper Series