4 EJCCL 1 (2012)

handle is hein.journals/ejccl4 and id is 1 raw text is: 

Mary Sabina Peters and Manu Kumar


Are the Principles of European Contract

Law an Autonomous Lex Mercatoria, or are

They Part of Universal Lex Mercatoria?

1.    Introduction
The ancient mercantile community was the generator
of commercial law, and the same community has
continued to develop present day mercantile law.
Development of one uniform and universal mercantile
law is possible through the contractual practices of the
mercantile community, through the common under-
standing and customs on which they are based, and
through regulations from self-governing trade associa-
tions and the decisions from arbitration tribunals to
which their disputes are submitted.' The universality of
international commercial law can be identified from a
variety of reasons throughout the world.
These contractual practices, understandings and
customs, regulations and decisions constitute a body
of customary law which is the foundation on which
national and international commercial legislation has
been and continues to be built.

Based on historic development and the present day
definition, lex mercatoria can be characterised as
transnational. In the absence of a 'world legislator',
international trade has developed very functional and
sophisticated rules based on practice and persuasive
value.2 Renaissance of the lex mercatoria and its arising
power in the 20th century is modern commercial
life's answer on the needs of international business
transactions.3 With reliance on lex mercatoria clauses,
contracting parties have the chance to overcome
language barriers and all kinds of biases, and can draw
from solid experience in their special field of business.
A large part of world trade is transacted on the basis of
standard contract conditions issued by trade associa-
tions. Foreign trade contracts usually provide for
submission of any dispute to arbitration, often under
rules of a trade association or of the International
Chamber of Commerce (ICC). International conven-
tions and the international treaties (UNCITRAL,
which has made Model Laws and Legal Guides for
numerous types of contract) represent a process of
unification and codification of the law of international
commercial transactions - a new lex mercatoria.
This approach is most clearly represented with the
Uniform Law on International Sales (Hague Conven-
tion 1964), the 1980 United Nations Convention on
Contract for the International Sale of Goods (Vienna
Sales Convention), the Uniform Customs and Practice
for Documentary Credits (UCP 600, ICC l.r. 2006),
the Incoterms (ICC, l.r. 2000), the UN Convention on
the Recognition and Enforcement of Foreign Arbitral

European Journal of Commercial Contract Law 2012-1

Awards (New York Convention 1958) and other
significant codification.

Despite wide and strong differences among national le-
gal systems and between separate legal areas (common
law and civil law), merchants and enterprises from all
countries have developed a high degree of uniformity
in their commercial contract practices. These contract
practices and international business transactions are
generally protected by the contract law of each country
as well as by international conventions and private
international law. There are many devices related to
allocation risks in the export and import of goods
that are generally understood by trading enterprises
throughout the world. International trade terms
relating to allocation of risks of loss or damage to
goods (Incoterms), clauses in bills of lading, in marine
insurance policies and certificates, clauses in letters of
credit, arbitration clauses, etc., are commonly accepted
in modern merchant communities and governed by
similar legal rules in almost all countries.' Internation-
ally, universality and uniformity are the primary
features of international contract practice, and such
general similarities of practice and contract law are due
in part to common commercial needs shared by all who
participate in international business transactions.
Compared with domestic trade, foreign trade usually
requires the carriage of goods over relatively long
distances, often by sea, and involves a number of
parties located in different countries. Foreign trade
transactions are also often large-scale transactions
and raise the possibility of a suit in a foreign court or

   Mary Sabina Peters is at the faculty of Law at University of
   Petroleum and Energy Studies, Dehradhun (India), specialising
   in the field of oil and gas laws. Manu Kumar is at the faculty of
   Research Methodology at Amity University, Noida (India).

1. A. Boggianno, International Standard Contracts - The Price
   of Fairness, Dordrecht/Boston: Kluwer Academic Publishers
2. Ibid.
3. L. Barnard, 'Choice of Law in International Contracts -The
   Objective Proper Law Reconsidered', New Zealand Business
   Law Quarterly 1996-2, pp. 27, 30.
4. See P. Mazzacano, 'The Lex Mercantoria As Autonomous
   Law', CLPE Research Paper 29/2008, Vol. 04 No. 06 (2008);
   Uniform Customs and Practice for Documentary Credits
   (UCP), which are legislated by International Chamber of
   Commerce (Paris) - last revision 2006.
5. See R.M. Goode, 'Usage and Its Reception in Transnational
   Commercial Law', Intl & Comp. L.Q. (46) 1997, p. 1.

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