Commercial Law and the Theory of Management-Based Commercial Law

Abstract

Legal practitioners often write about legal things that are useful for their clients or employers, i.e., firms. However, they apply no theory of commercial law. Law professors tend to apply theories, but they have been unable to design a theory of commercial law. As a result, their work is less useful for firms than it could be, and legal science has failed to serve the information needs of firms properly. This article gives an overview of present research approaches in commercial law and discusses the reasons for the absence of a general theory of commercial law. The main purpose of this article is to increase the usefulness of commercial law research for firms by proposing a theory of management-based commercial law (MBCL). MBCL tries to explain the legal practices of firms as rational users of law. According to MBCL, firms share the same generic legal objectives and use the same generic legal tools and practices to reach them. One can also identify particular branches of management-based commercial law on the basis of the commercial context of firms. As such legal objectives and commercial contexts are determined functionally, the management-based research method is related to the functional method used in comparative law.

Keywords: commercial law, convergence of laws, theory of the firm, comparative law, functional method, lex mercatoria, legal risk, corporate governance, law of corporate finance

JEL Classification: K00, K20, K22, L21