Analytical Jurisprudence and the Concept of Commercial Law
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Analytical Jurisprudence and the Concept of Commercial Law John Linarelli* Commercial lawyers working across borders know that globalization has changed commercial law. To think of commercial law as only the law of states is to have an inadequate understanding of the norms governing commercial transactions. Some have argued for a transnational conception of commercial law, but their grounds of justification have been unpersuasive, often grounded on claims about the common content among national legal systems. Legal positivism is a rich literature on the concept of a legal system and the validity conditions for rules in legal systems, but it has not been used to understand legal order outside or beyond the state. This article aims to use legal positivism to conceptualize a transnational commercial law order. Prevailing positivist accounts at least implicitly condition legal order on state sovereignty. This article offers a cosmopolitan conception of legal positivism, in which the state is no longer an enabling condition for law. The cosmopolitan conception provides the means by which to adequately describe a transnational commercial law order. There are limits to the conceptual analysis this article provides, one of which is that it does not purport to evaluate the justice or morality of transnational legal order. But the cosmopolitan conception of legal positivism elucidated in this article stands on its own as a way of * Associate Dean for Academic Affairs and Professor of Law, University of La Verne College of Law. I owe a debt of gratitude to Professor Jan Dalhuisen, King’s College University of London, for his encouragement throughout the years as I struggle to work out my own understanding of commercial law in ways that might be considered unusual by some. Jan and I do not agree on everything but we do agree on the important things. Thanks Jan. I presented this article at a Northeastern University School of Law colloquium on October 23, 2008 while a visiting professor at Northeastern for academic year 2008-09. I thank the colloquium participants who asked many good and tough questions, all of which helped me improve the article. In particular I thank James Hackney, the discussant in the Colloquium, for his excellent comments. I also want to thank H. Randall Rubin, former Interim Dean at La Verne, for a summer research stipend in support of the preparation of this work. Finally, a special thanks to Sofia Ahmed, my research assistant at La Verne, for her excellent work. All errors are mine. 119 120 PENN STATE LAW REVIEW [Vol. 114:1 understanding a number of transnational legal orders other than commercial law. The attractiveness of the account is that it describes law as a human social practice even when it is not solely the product of the state, so that we do not have to rely on natural law theories to understand legal rules that states do not maintain. [T]he dense thicket of rules that sustain our life together . includes some of the most mundane things imaginable: postal and telephone conventions, airline safety and navigation standards, the law of international trade, the practices that define the convertibility of currencies, transnational banking arrangements, weights and measures, time zones, international quarantine arrangements, and so on. Philosophers and political theorists are not much interested in these unexciting issues. We have nothing to say on currency rates, bills of sale, the maintenance of sea lanes, cell-phone standards, or the Warsaw Convention governing the liability of airlines to their passengers. We don’t like commerce (because we are largely ignorant of it), and we would prefer not to have to write about it. Jeremy Waldron1 There is no real jurisprudence of commercial law. We are presently prisoners of the conception that commercial law embodies the law merchant and that the Uniform Commercial Code merely furnishes businessmen with a clear statement of their rules. Hal Scott2 1. Jeremy Waldron, Cosmopolitan Norms, in SEYLA BENHABIB, ANOTHER COSMOPOLITANISM 83 (2006). 2. Hal S. Scott, The Risk Fixers, 91 HARV. L. REV. 737 (1978). 2009] ANALYTICAL JURISPRUDENCE 121 Table of Contents INTRODUCTION ..................................................................................... 121 I. THE SO WHAT QUESTION .......................................................... 131 II. COMMERCIAL LAW SOURCES AND COMPETING CLAIMS ABOUT THE LAW MERCHANT .................................................... 137 A. Domestic Commercial Legislation...................................... 141 B. Municipal Court Decisions Interpreting Domestic Commercial Legislation...................................................... 144 C. Domestic Common Law...................................................... 146 D. International Conventions .................................................. 148 E. Judicial Interpretations of Conventions ............................. 153 F. Law Merchant..................................................................... 157 1. Competing Definitions.................................................. 157 2. Legislated Law Merchant ............................................. 165 3. Interpretations of Legislated Law Merchant by Judges and Arbitrators .................................................. 177 4. Evolved Law Merchant and General Principles ........... 182 III. THE CONCEPT OF COMMERCIAL LAW ....................................... 184 A. The Political Conception of Positivism and National Commercial Law................................................................. 186 1. The Political Conception of Legal Positivism .............. 187 2. The Concept of Commercial Law in the Political Conception.................................................................... 190 B. Cosmopolitan Legal Positivism and Transnational Commercial Law................................................................. 195 1. The Cosmopolitan Conception of Legal Positivism ..... 195 2. The Concept of Commercial Law in the Cosmopolitan Conception............................................. 201 3. Objections ..................................................................... 211 a. The Limited Domain Objection.............................. 211 b. The Unity Objection............................................... 213 CONCLUSION......................................................................................... 213 INTRODUCTION H.L.A. Hart spent his career rethinking legal positivism around a set of claims understandable to analytical philosophers, dealing with substantial questions on the relationship between law and morality, and examining the deep structure of tort and criminal law, as well as serving, towards the end of his career, as Principal of Oxford’s Brasenose 122 PENN STATE LAW REVIEW [Vol. 114:1 College.3 Never did he concern himself with a subject as mundane as commercial law. Many view Hart as the greatest legal philosopher of the twentieth century in the analytical tradition.4 To borrow without any suggestion of precision from the philosophy of science literature, Hart’s contribution could be described in Thomas Kuhn’s terminology as a paradigm shift in the way philosophy of law is done.5 He made the first move in analytical legal philosophy from law’s authority coming from the force of the state, accounts of his predecessors Bentham and Austin,6 to a theory based on rules and social acceptance of legal obligation. His account is more suitable to understanding the relationship of citizens in contemporary democracies to their legal systems. Though their aims and accounts differed substantially, Hart’s approach is as paradigmatic in the twentieth century as Rousseau’s was in the eighteenth. Hart’s concept of law is reminiscent of Rousseau’s discrediting of force as a source of political morality, that “might does not make right.”7 To put Hart in more contemporary terms, claiming that force is the source of authority for a legal system is to fail to understand the distinction between authority and force, between standing to claim and power to dictate. To Hart, being obliged to obey the command of a terrorist holding a gun to one’s head differs from having an obligation to obey the law.8 3. See NICOLA LACEY, A LIFE OF H.L.A. HART: THE NIGHTMARE AND THE NOBLE DREAM 2 (2004). 4. For example, Brian Leiter, characterizing Hart as “the giant of 20th century jurisprudence,” explains that Hart brought jurisprudence “into the mainstream of English- speaking philosophy.” BRIAN LEITER, NATURALIZING JURISPRUDENCE: ESSAYS ON AMERICAN LEGAL REALISM AND NATURALISM IN LEGAL PHILOSOPHY 2 (2007). 5. See, e.g., THOMAS S. KUHN, THE STRUCTURE OF SCIENTIFIC REVOLUTIONS (2nd ed. 1962). 6. See JEREMY BENTHAM, OF LAWS IN GENERAL (H.L.A. Hart ed., Athlone Press 1970); JOHN AUSTIN, THE PROVINCE OF JURISPRUDENCE DETERMINED (1998). 7. Rousseau said in the Social Contract: The strongest is never strong enough to be the master forever unless he transforms his force into right and his obedience into duty. This leads to the right of the strongest, a right that is apparently taken ironically and in principle really established. But won’t anyone ever explain this word to us? Force is a physical power. I do not see what morality can result from its effects. Yielding to force is an act of necessity, not of will. At most, it is an act of prudence. It what sense could it be a duty? . Let us agree that might does not make right, and that one is only obligated to obey legitimate powers. JEAN-JACQUES ROUSSEAU, ON THE SOCIAL CONTRACT