Kadens on "The Myth of the Customary Law Merchant"

Emily Kadens, University of Texas at Austin School of Law, who guest blogged here in February 2009, has posted The Myth of the Customary Law Merchant, which will also appear in the Texas Law Review 90 (2012).  Here is the abstract:

Legal scholars from many disciplines - including law and economics, commercial law, and cyber law - have for decades clung to the story of the so-called law merchant as unassailable proof that private ordering can work. According to this story, medieval merchants created a perfect private legal system out of commercial customs. As this customary law was uniformly and universally adopted across Europe, it facilitated international trade. The law merchant myth is false on many levels, but this Article takes aim at two of its fundamental principles: that uniform and universal customary merchant law could have existed and that merchants needed it to exist. The Article argues that the most widespread aspects of commercial law arose from contract and statute rather than custom. What custom the merchants applied often did not become uniform and universal because custom usually could not be transplanted and remain the same from place to place. Yet, the use of local custom did not hamper international trade because intermediaries such as brokers ensured that medieval merchants had no need for a transnational law.