Who Does What in Commercial Law? The Case for a Multi-Level & Multi-Actor Approach to Regulating Commercial Transactions

Abstract

Commercial law constitutes the backbone of economic activity and as such it has been coined the ‘engine for trade’. In this contribution, we develop an approach to the desirable regulation of commercial transactions in the sense of trade in goods and services. In doing so, we will address two main questions. Firstly, what are the normative criteria to decide upon the appropriate design of commercial contract law? Secondly, in light of these criteria, we seek to develop an answer to the questions of who should set the rules in commercial law, or, in other words, which regulatory actors, i.e. private or public actors, and where should these rules be set, or, in other words, at what regulatory level, i.e. local, national, regional or global.

First, we sketch the current regulatory landscape in commercial law – including the historical context – and analyse it with a view to who regulates and at what level regulation exists. Subsequently, we posit that commercial contract law should primarily facilitate the exercise of party autonomy and enforce agreements voluntarily entered into by private actors. Admittedly, further regulation is needed when either the actions of private actors jeopardize the exercise of party autonomy, or the exercise of party autonomy could have negative effects on the market or on society. To illustrate our argument, we present three cases studies analysing the appropriate role of private and public actors at different regulatory levels from three different perspectives: (i) the law relating to bills of exchange from a historical perspective; (ii) the core of commercial exchange – the contract of sale; (iii) the regulation of commercial transactions to prevent a negative impact on fundamental societal interests.

In our conclusion we highlight that the distribution of competences in European Private Law remains incomplete if the broader global regulatory perspective on private relations as well as the specific locally shaped practices of sectors and trades are not taken into consideration. Moreover, we emphasize the need to take into account as ‘competences’ not only national, European or global politics, but also the productive potential of the private sphere to develop effective self-regulation.

Keywords: commercial law, regulatory actors, regulatory level, party autonomy, societal interests, history of bills of exchange, contract of sale, corporate social responsibility, distribution of competences

JEL Classification: K00, K12, K20, K40