Modernization of Commercial Law: International Uniformity and Economic Development
32 Pages Posted: 25 Mar 2009
Date Written: March 1, 2009
The universality of certain commercial legal institutions is not the product of chance or of cultural imperialism. Commercial law institutions that are being used uniformly throughout the trading world earn their universality by reflecting best commercial practices. These are the practices that have proven their cost effectiveness and fairness regardless of the marketplace in which they were first used. Commercial legal institutions have also proven to be an indispensable legal tool for significant and lasting economic development. Yet, by institutions I mean not only the concepts, rules and principles of interpretation that inspire the "written" or "positive" commercial law of a given country or jurisdiction, but also the attitudes that shape the "unwritten" or "living" law or the law as it is actually observed or practiced. As it turns out, the living law is, often as not, the one that determines why a legal institution that succeeds in one country or region fails or is less successful in another.
This article examines why a key contemporary commercial legal institution, the law of secured lending based on personal property collateral, is likely to succeed in Guatemala and Honduras (as it has in Canada and the United States, among others). It will also show why these laws will not succeed in Mexico and Peru, unless they are re-drafted and their underlying attitudes and practices are changed.
Keywords: commercial law, commercial practices, secured lending, personal property collateral
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