Legal Regime for International Sales Today Essay

Legal Regime for International Sales Today - Essay Example buyer and seller, employer and employee. First and foremost, trade and commerce had to be expanded between European countries as the local industries developed a pressing demand for materials to fuel and feed such industries. The new lavish lifestyles that exuded from the new-found affluence; the race to colonise new, distant lands; the need to protect affluent kingdoms from belligerent, covetous, hostile states demanded the need to engage in frenzied commerce and trade not only with fellow European countries but also the 'New World' which beckoned with 'exotic' commodities such as coffee, tea, tobacco, chocolate, sugar cane, potatoes, spices, gold, silver and other metals. The demand for cheap labour created the new commerce of buying and selling of African slaves. With Antwerp and Amsterdam such as the East India Company, the Hudson Bay Company and the South Sea Company, international commerce had become an economic activity which needed regulation and protection. The economic doctrine of Mercantilism ruled international trading and commercial law had to be designed to govern these international merchants. These customary, regulating rules were unified into one set of rules called the law merchant which is also referred to as the lex mercatoria or jus fort or jus forense (Schmitthoff 1968, p. 105). The law merchant or lex mercatoria is a "body of principles and regulations applied to commercial transactions and deriving from the established customs of merchants and traders rather than the jurisprudence of a particular nation or state" (Law Encyclopedia). It is also the system of rules and customs and usages adopted by such traders for the resolution of their controversies. It is codified in the UCC or Uniform Commercial Code which is a body of law, adopted by the states to govern their mercantile transactions. Because of the growing incidence of international disputes between transacting countries, such disputes were resolved through international commercial arbitration which were governed by lex mercatoria. The parties signed a contract clause in which they agreed to the provisions of lex mercatoria, which provided that an arbitrator applied the customs and usages of international trade as well as "the rules of law which are common to all or most of the states engaged in international trade or to those states which are connected with the dispute" (Lando 1985, p. 747).