COMMERCIAL TRANSACTION

in law, the core of the legal rules governing business dealings. The most common types of commercial transactions, involving such specialized areas of the law and legal instruments as sale of goods and documents of title, are discussed below. Despite variations of detail, all commercial transactions have one thing in common: they serve to transmit economic values such as materials, products, and services from those who want to exchange them for another value, usually money, to those who need them and are willing to pay a countervalue. It is the purpose of the relevant legal rules to regulate this exchange of values, to spell out the rights and obligations of each party, and to offer remedies if one of the parties breaches its obligations or cannot perform them for some reason. The law of commercial transactions thus covers a wide range of business activities. It does not, however, govern such essentially noncommercial relationships as those involved in succession and family law. Historically, land was of such prime importance that it was not subject to frequent disposition and therefore was also excluded from the category of commercial transactions. In some countries the term commercial transactions is merely descriptive. In Anglo-American law especially, it is merely a collective name for those rules that relate to business dealings. The term itself has no legal consequences. It serves only as a convenient and illustrative shelter under which certain legal rules may be assembled. Many countries, however, have established a technical concept of commercial transactions with precise definitions and important legal consequences. This is most often the case in the civil-law countries. In these countries the term commercial transactions thus has more than a merely descriptive function. It designates in part those rules that are peculiar to commercial transactions. In France, for example, bankruptcy is open only to individuals who are merchants and to business organizations, and there are special rules applying to commercial cases. In Germany, similarly, the general rules on consumer sales are in part superseded by special rules on commercial sales. A commercial transaction thus results in a number of specific legal consequences that differ from those of ordinary consumer transactions. Such a special commercial regime exists usually because it is thought that the ordinary citizen should not be exposed to the rigours of commercial rules that presuppose a knowledgeable, versatile individual who does not need as much protection against the legal risks and consequences of his dealings. In those countries in which specific legal consequences attach to commercial transactions, it is necessary to develop a precise definition of what constitutes a commercial transaction. Although such definitions are more or less closely related, they are peculiar to each individual country. The majority of them, found generally at the beginning of a special commercial code, combine two elements: definitions of a merchant and of a commercial transaction. In certain countriesGermany, for examplethe emphasis is on the definition of the merchant; in others, such as France, the emphasis is on that of the commercial transaction (acte de commerce). This latter criterion, the so-called objective test, was adopted in the 19th century for ideological reasons, the French wanting to avoid any repetition of the pre-Revolutionary differentiation of legal rules according to the social condition of persons. However, whatever the test, the results are quite similar, because the gist of the various definitions is that a transaction is commercial if it is concluded by a merchant in the exercise of his profession. It should be mentioned that Socialist countries do not recognize the concept of commercial transactions. This is because such a concept is somewhat suggestive of a capitalistic form of economy. The implication would be the more invidious since the state, directly or through the various forms of state enterprises, is practically the only trader in Socialist countries. Socialist countries have developed a mixed system, combining more or less obligatory state planning with the autonomous fixing of the remaining terms of their exchanges. The breach of these so-called economic contracts may entail the payment of damages to the other contracting state enterprise, thus drawing the attention of the state bank to violations of plan and contract discipline. These special rules for dealings between state enterprises within each country and also for enterprises from different Socialist countries are called economic laws. Additional reading Historical treatments of the law of commercial transactions are provided by Wyndham Anstis Bewes, The Romance of the Law Merchant: Being an Introduction to the Study of International and Commercial Law, with Some Account of the Commerce and Fairs of the Middle Ages (1923, reprinted 1986); W. Mitchell, An Essay on the Early History of the Law Merchant (1904, reprinted 1969); and Frederick Rockwell Sanborn, Origins of the Early English Maritime and Commercial Law (1930). Additional resources include Frederick Wallach, Introduction to European Commercial Law (1953); George Kohlick (ed.), Digest of Commercial Laws of the World, rev. ed., 6 loose-leaf vol. (1975 ); Clive M. Schmitthoff, Schmitthoff's Export Trade: The Law and Practice of International Trade, 7th ed. (1980); Yvon Loussouarn and Jean-Denis Bredin, Droit du commerce international (1969); Gunnar Lagergren, Delivery of the Goods and Transfer of Property and Risk in the Law on Sale (1954); John O. Honnold, Uniform Law for International Sales Under the 1980 United Nations Convention (1980); Hessel E. Yntema, The Law of Negotiable Instruments (Bills of Exchange) in the Americas: An Analytical Statutory Concordance, rev. by Rodolfo Batiza, 2 vol. (1969); Thomas G. Carver, Carver's Carriage by Sea, 13th ed. by Raoul Colinvaux, 2 vol. (1982); Arnold W. Knauth, American Law of Ocean Bills of Lading, 4th ed. rev. and enlarged (1953); H.C. Gutteridge and Maurice Megrah, The Law of Bankers' Commercial Credits, 7th ed. (1984); A.G. Davis, The Law Relating to Commercial Letters of Credit, 3rd ed. (1963); and E.P. Ellinger, Documentary Letters of Credit (1970). Ulrich M. Drobnig