The State's Private Law and the Economy—Commercial Law as an Amalgam of Public and Private Rule-Making

Abstract

The law of business relations has been created and applied outside state or seignorial courts for centuries before the growing territorial states started to incorporate this body of law into their own state law from the seventeenth century onwards. But even the commercial codes of the nineteenth century left the door open for private regulation. After an outline of this development the article argues that private regulation and state law are difficult to separate in the field of business relations. Instead, one can ascertain a wide range of different forms of mixed private /public regulation. This range extends from spontaneous custom through privately generated custom, state-avoiding custom, state-supported custom all the way to dispositive law, property rights law, market protection law and market failure compensation law. While state legislation by necessity is required for the latter forms, private regulation has a comparative advantage in many other areas. While the author renounces the assumption of an overall theoretical foundation, he tries to identify factors which favor the emergence of private rule-making, in particular the transnational character of legal relations, the speed or specific expertise required for decision-making and the impact of corporatism.

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