American University International Law Review Volume 21 | Issue 5 Article 1 2005 From St. Ives to Cyberspace: The oM dern Distortion of the Medieval 'Law Merchant' Stephen E. Sachs Follow this and additional works at: http://digitalcommons.wcl.american.edu/auilr Part of the Commercial Law Commons, International Law Commons, and the Internet Law Commons Recommended Citation Sachs, Stephen E. "From St. Ives to Cyberspace: The odeM rn Distortion of the Medieval 'Law Merchant.'" American University International Law Review 21, no.5 (2006): 685-812. This Article is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ American University Washington College of Law. It has been accepted for inclusion in American University International Law Review by an authorized administrator of Digital Commons @ American University Washington College of Law. For more information, please contact [email protected]. FROM ST. IVES TO CYBERSPACE: THE MODERN DISTORTION OF THE MEDIEVAL 'LAW MERCHANT' STEPHEN E. SACHS* Modern advocates of corporate self-regulation have drawn unlikely inspirationfrom the Middle Ages. On the traditionalview of history, medieval merchants who wanderedfrom fair to fair were not governed by domestic laws, but by their own lex mercatoria, or "law merchant." This law, which uniformly regulated commerce across Europe, was supposedlyproduced by an autonomous merchant class, interpreted in private courts, and enforced through private sanctions rather than state coercion. Contemporary writers have treated global corporationsas descendants of these itinerant traders, urging them to replace conflicting nationallaws with a transnationallaw of their own creation. The standardhistory has been accepted by legal scholars across the ideological spectrum, by economists and political scientists, and by those drafting new regimes to govern Internet commerce. This Article argues that the traditional view is deeply flawed. Returning to the original sources-especially the court rolls of the fair of St. Ives, the most extensive surviving records of the period-it demonstrates that merchants in medieval England were substantially "© 2006 Stephen E. Sachs. Yale Law School, J.D. expected 2007; University of Oxford, B.A. (Hons) 2004; Harvard University, A.B. 2002. This Article is a revised and expanded version of Stephen Edward Sachs, The 'Law Merchant' and the Fair Court of St. Ives, 1270-1324 (Mar. 21, 2002) (unpublished A.B. thesis, Harvard University) (on file with the Harvard University Library), available at http://www.stevesachs.com/thesis.pdf. I am grateful to Thomas N. Bisson, Paul Brand, Richard Brooks, Josh Chafetz, Charles Donahue, Vasugi Ganeshananthan, Samantha Kahn Herrick, John H. Langbein, John Maddicott, Amanda Schwoerke, and Gregory Smith for advice and comments on earlier drafts, and to Merton College, Oxford, for financial support. All errors, of course, remain my own. 685 686 AM. U INT'L L. REv. [21:685 subject to local control. Commercial customs and substantive laws varied significantly across towns and fairs, and did not constitute a coherent legal order. The traditional interpretation has been retained, not for its accuracy, but for ideologicalreasons andfor its long and self-reinforcingpedigree. This Article takes no position on the merits of shielding multinational actors from domestic law; it merely denies that the Middle Ages provide a model for such policies. IN TR O DU CTION ........................................................................... 687 I. MERCHANT AUTONOMY AND MERCANTILE COURTS .. 696 A. "VOLUNTARILY ENFORCED". ........................................... 698 1. Enforcement by the Abbot ........................................... 698 2. Enforcement by the Merchants ................................... 706 B. "VOLUNTARILY ADJUDICATED". ....................................... 712 1. The Influence of the Merchants................................... 714 2. The Influence of the Abbot .......................................... 720 C. "VOLUNTARILY PRODUCED". ............................................ 728 1. Alternative Sources of Legal Principles ..................... 730 2. The Law of Local Courts............................................. 739 3. The Status of Merchants .............................................. 747 D. CONCLUSIONS ..................................... 751 II. "LAW UNIVERSAL THROUGHOUT THE WORLD". .......... 753 A. "THE LAW MERCHANT" AT ST. IVES ................................. 755 1. Within the St. Ives Court ............................................. 755 2. St. Ives and Other Courts............................................ 762 B. MERCANTILE LAW BEYOND ST. IVES ................................ 768 1. Lex M ercatoria ............................................................ 768 2. Cities and Towns ......................................................... 775 C. THE COUNTER-ARGUMENT: ROYAL RECOGNITION ........... 780 D . C ON CLUSION S .................................................................... 787 III. MERCHANT LAW AND POLITICS ...................................... 794 A. THE CIVILIANS AND THE MERCHANT COURTS ................... 795 B. THE ROMANCE OF THE LAW MERCHANT ........................... 800 C. REINTERPRETATION AND RENEWAL ................................... 803 D . C ONCLUSIONS .................................................................... 806 IV. EPILOGUE: LEXMERCATORIA AND LEX CY B ER SPA CE ..................................................................... 807 2006] FROM ST. IVES TO CYBERSPACE 687 INTRODUCTION On May 10, 1270, the wine merchant Gerard of Cologne appeared before the fair court of St. Ives to retrieve his property. A small vill in the county of Huntingdonshire, England, St. Ives was the site of an annual fair every Easter, and a special court had been established within the fair to hear disputes. Three containers of Gerard's Rhenish wine had allegedly been seized as collateral in another controversy, and he was ready to swear an oath to establish his ownership and get them back. Unfortunately, the records note, he did not come "sufficiently equipped"-and then a curious phrase-"according to law merchant."' Gerard was told to return with five oath-helpers, who would also swear oaths to guarantee the truth of his claim. 2 No further proceedings in the case are recorded, and Gerard of Cologne-who probably never did retrieve his wine-might seem to have had little relevance for the future development of commercial law. Yet 730 years later, echoes of Gerard's failure were heard in the report of an American Bar Association panel on "Achieving Legal and Business Order in Cyberspace." In July 2000, the ABA panel suggested that courts should turn to "a 'law merchant' for the Internet" in enforcing mandatory, non-binding arbitration clauses, as well as in regulating the activities of automated software robots.3 One might well wonder how this unusual term, the "law merchant," could possibly have retained a consistent meaning across more than seven centuries. How could any institution that required oath-helpers of Gerard of Cologne also provide a model for the transnational regulation of Internet 'bots'? 1. 1 SELECT CASES CONCERNING THE LAW MERCHANT 5 (Charles Gross ed. & trans., Selden Society 23, 1908) [hereinafter I SCLM]. The translation here offered by Gross is likely to be in error; the original text reads "secundum legem mercatorum," rather than the more common phrase "secundum legem mercatoriam," for which the translation may be more appropriate. See infra text accompanying note 258. 2. 1 SCLM, supra note 1, at 5; cf infra text accompanying note 88 (describing compurgation). 3. American Bar Association Global Cyberspace Jurisdiction Project, Achieving Legal and Business Order in Cyberspace: A Report on Global Jurisdiction Issues Created by the Internet, 55 Bus. LAW. 1801, 1822, 1933 (2000). 688 AM. U. INT'L L. REv. [21:685 For hundreds of years, however, historians have sought from the Middle Ages evidence of an independent, exclusively mercantile legal system as a solution to contemporary problems of foreign trade. Since the early seventeenth century, the prevailing view has been that fair courts like that of St. Ives enforced a body of law known as "the law merchant." This law differed from the municipal laws of existing jurisdictions in that it was created autonomously by merchants and expressed their customs, reflecting unwritten usages rather than the written command of a sovereign legislator. At the same time, the law merchant was not the product of a single merchant guild or even a single country, but was rather universal, the creature of the transnational merchant community, establishing substantive principles and convenient procedures to govern commerce across political borders. The law merchant thus represented a new legal order, free from the oppressive control of local laws and local lords. In the words of Levin Goldschmidt, a nineteenth-century German lawyer and historian, "'out of his own needs and his own views' the merchant of the Middle Ages created the Law Merchant."4 This "Romantic" vision of a universal law merchant-produced, interpreted, and enforced by a legally autonomous merchant class- is still accepted in various forms by most studies of English commercial law.' It has been adopted by legal scholars across the 4. WILLIAM MITCHELL, AN ESSAY ON THE EARLY HISTORY OF THE LAW MERCHANT 161 (1904) (quoting Goldschmidt), cited in LEON E. TRAKMAN,