Foundations of Commercial Law: Definitions and Legal Sources

Fundamental Concepts in Commercial Law

Trade and Market Definitions

Trade: It means the activity of natural persons or legal entities aimed at mediation and the exchange of goods and services for profit.

Market: The social organization in which trade is conducted through the mediation and the exchange of goods and services.

Commercial Law and the Code of Commerce

Commercial Law: The set of rules, customs, and principles governing relations among individuals, their rights, and obligations in connection with commercial activity and the conduct of acts of commerce.

Code of Commerce: This body of law regulates two legal aspects:

1. The obligations of merchants in their business operations.
2. Acts of trade, which may be held by merchants and non-merchants alike.

Essential Characteristics of Commercial Law

Commercial Law is defined by several key attributes:

• Speed: Determined by the necessity of the swift movement of business operations and transactions.
• Security: Determined by legal provisions designed to mitigate and prevent possible risks to the parties in commercial transactions, thus imposing rules to ensure greater fairness in business.
• Credit Focus: Commercial activity thrives on the credit provided by banks and between merchants as part of their business operations.

This focus on credit introduces Commercial Risks: The expectation of safety performance of the obligations based on the borrower's creditworthiness.

State Intervention in Commercial Activity

The State plays a crucial role by regulating and participating in trade. It must act as an arbitrator, regulating dispute resolution in commercial matters. Through the State's legislative role, commercial laws are sanctioned and promulgated that regulate business activities and serve as a source of commercial law.

For instance, the Constitution of the Republic of Venezuela guarantees free enterprise, but subject to the restrictions and limitations established by law. Furthermore, through the State's judicial function, it settles disputes between parties involved in trade and the market.

Sources of Commercial Law

The legal framework for commercial activity draws upon several primary sources:

1. Code of Commerce: The set of legal rules governing the obligations of merchants in their commercial operations and commercial transactions, even when executed by non-merchants.
2. Special Commercial Laws: These are specific trade laws, separate from the Commercial Code, which have priority application to the commercial activities of merchants and commercial acts performed by people in general. These are applied preferably over general laws, such as the Commercial Code.
3. Civil Code: Regulates all matters relating to obligations and contracts, which have fundamental legal value when applying the Commercial Code.
4. Custom (Usage): As a source of law, custom is known as equal treatment in legal and social practice. It is the repeated conduct maintained for a considerable time in a uniform and socially accepted manner, which regulates commercial activity and certain specific commercial acts in the silence of the law.