Mercantile Law is a repository of all the Laws included in a company to handle or look after its commercial activities. It is a generalized term for the entire legal body. All the other acts like the company act, limitations act, Indian contract act, etc. are subsidiaries of the Mercantile Law. And the acts are known as Mercantile Law acts.
It deals with all the commercial transactions of the trader, whether it is an individual or an organization or maybe a joint venture. The commercial transactions include the agreements between both parties, operational activities, the delegation of work, financial transactions, memorandum of associations, etc. So let us understand the meaning of Mercantile Law and its sources, scope.
Mercantile law is a combination of various laws and principles of individuals having legal knowledge to resolve various issues in the company. But in 1872, all these laws are joined and termed as mercantile law and from then to regulate various issues of your company several acts are formed respectively such as the Indian contract act, the company act, the limitations act, etc. from the definition of mercantile law it is clear that it has a very wide scope.
Mercantile Law, also known as Commercial Law, governs the commercial activities of the economy. It is a broad term that encompasses all of the Laws in India that govern commercial transactions. Such a transaction necessitates a valid agreement between the contract's parties. It can be explicitly stated or implicitly stated.
It is concerned with traders' rights and obligations arising from commercial transactions. The trader can be an individual, a partnership, or a corporation. The Mercantile Law of India encompasses all Indian Acts that govern trade or commerce. For example, the Indian Contract Act of 1872, the Sale of Goods Act of 1930, the Companies Act of 2013, and so on.
Principal Sources of Mercantile Law
Law Merchant: The main source of Mercantile Law is the Law merchant. It refers to the customs and rules that govern traders' and businessmen's dealings and transactions with one another.
Statute Law: Legislation creates Law, which is referred to as statute Law. A statute is a written formal act of the legislature. It has also evolved into a significant source of Mercantile Law.
The Principle of Equity: The principle of equity refers to a set of rules that are not based on customs or statutory Law. As a result, equity rules were formed based on the basis of conscience dictates decided in chancery courts.
Common Law: Common Law is a set of rules defined by customs, judicial decisions, and old scholarly works on the subject. It is an unwritten English Law that applies to everyone in the country. In this context, common law refers to legal principles developed by judges through case decisions.
Principal Sources of Mercantile Law
The Indian Mercantile Law has various sources similar to that of English Mercantile Law. Some of the principal sources of Mercantile Law are-
English Mercantile Law
English Mercantile Law is an unwritten, generalized Law of England to deal with customs and judicial activities which has equity Law, merchant Law, common law, and statute Law as its sources.
As India was under the control of the British for a longer time, the Indian Mercantile Law is derived from the English Mercantile Law meaning. All the concepts, formats can be taken from it English Law. Even in recent times also if any issues are unsolved, our judicial heads will take help from the English Mercantile Law.
Enacted Acts by Indian Legislature
Some of the acts involved in the Mercantile Law are enacted by the Indian legislature. These acts are listed below-
The Carriers Act(1865)
Indian Contract Act(1872),
Negotiable Instruments Act(1881)
The Presidency Town Insolvency Acts(1909) and
Provincial Insolvency Act (1920)
Sale of Goods Act(1930),
Indian Partnership Act(1932)
The Insurance Act(1938)
The Arbitration and Conciliation Act(1996)
Judicial decision refers to the decisions made by individuals having judicial powers. It means that judges available in the courts will form certain rules and ask their subordinates to follow. And it is fixed and constant for all the cases. The Indian government has given authority in such a way that if the high court makes a judgment, it should be obeyed to all its subsidiary courts whether they are favorable or against.
Similarly, if the judgment has been given by the Supreme Court, it should be followed by all the courts of India except itself because it is the highest state of the Indian judicial body. The judgment will be common and will be in a written format which sets as a prerequisite for various cases in the future. The limitation is as the case may vary from one to another, the organization may vary from one to another; the judgment will be constant.
Customs and Trade Usage
It is a significant source of Mercantile Law. The Indian legal bodies give high priority to customs and trade. The codified Law also supports it. It provided all the powers required for the customs department, and section 1 of the Indian contract act is the best example to understand the importance of customs and trade usage as a major source of Mercantile Law.
"Nothing herein contained shall affect any usage or ……….inconsistent with the Act." it is completely bound by the customs, and it is not against the public policy. So the legal body considered it and registered it as a legal obligation.
Similarly, we can understand all the principal sources of Mercantile Law only with the Mercantile Law examples.
(Image will be Uploaded Soon)
Hence, by observing the meaning of Mercantile, we came to know easily that the scope of Mercantile is very wide, and each source of Mercantile Law plays a predominant role. As it deals with all commercial activities of your company or an individual, it is good to have sound knowledge of all other acts which are included in the Mercantile Law.