Legal Definition and Regulation of Commercial Transactions

Commercial Transactions: Legal Foundations

Defining a Commercial Transaction

The definition of a commercial transaction is founded upon a special Commercial Code and typically combines two core elements:

1. Definition of a merchant
2. Definition of a commercial transaction

Commercial Transaction Definition: Germany and France

In certain countries—Germany, for example—the emphasis is placed on the definition of the merchant; in others, such as France, the emphasis is on that of the commercial transaction. This latter criterion, the so-called objective test, was adopted in the 19th century for ideological reasons, as the French wanted 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: a transaction is commercial if it is concluded by a merchant in the exercise of their profession.

Common Characteristics of Commercial Transactions

All commercial transactions share one fundamental characteristic:

• 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 counter value.

Regulation of Commercial Transactions in Civil Law Countries

1. France:
   1. Bankruptcy is open only to individuals who are merchants and to business organizations, and there are special rules applying to commercial cases.
2. Germany:
   1. The general rules on consumer sales are in part superseded by special rules on commercial sales.
   2. 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 usually exists because it is thought that the ordinary citizen should not be exposed to the rigors of commercial rules that presuppose a knowledgeable, versatile individual who does not need as much protection against the legal risks and consequences of their dealings.
3. Mexico:
   1. Commercial transactions are developed voluntarily and with the intention to produce rights and duties. They are the core of Mexican commercial law, serving the purpose of producing, negotiating, and exchanging commercial goods and services to satisfy a necessity.
   2. These transactions are listed in Article 75 of the Commercial Code. If one party, among all related parties, engages in a commercial activity, these acts will be commercial as to all such other parties involved. These are called Mixed transactions or unilateral commercial transactions.