e-Commerce Communities Employ Medieval Justice

e-Commence merchants are required to transact business despite the lack of inter-jurisdiction commerce regulations; like their medieval predecessors, they cannot generally afford the time or cost of using local justice systems and, as such, they resort to communal self-help remedies.

Look at it this way: When e-commerce merchants deal with customers, they employ a commonly accepted set of protocols that supersede local commercial customs and substantive local laws. But the use of such protocols does not shield the merchants from domestic law. e-Commerce business professionals can be subject ' or made subject to ' local jurisdictions. If a vendor has customers in a jurisdiction that may be deprived of liberty, goods in a jurisdiction that may be seized or a storefront in a jurisdiction that might be forcibly closed, then a local government might impose its law.

For common transactions, however, e-commerce merchants depend on voluntary compliance. Such compliance is relatively easy to enforce. The Internet is highly structured with respect to the display of goods, payment and delivery. The identity of a customer is discernible through his or her Internet protocol ('IP') address, just as the face of the customer was easily identified in medieval times.

Consider, too, the following similarities between medieval and Internet merchants.

Medieval merchants:

• Displayed their goods prior to sale;
• Conducted their business at the front of their tents, as opposed to behind their tents;
• Publicly acknowledged that goods were paid for; and
• Delivered the goods at the time of payment.

e-Commerce vendors:

• Describe their goods on the Internet prior to sales;
• Conduct their business using Internet protocols, as opposed to private networks;
• Secure electronic payment; and
• Deliver goods after receiving payment.

Brevity in Locality

Medieval merchant law represented a dispute-resolution process free of the oppressive control of local laws, which satisfied the merchant's needs. Such a legal process satisfies the needs of e-commerce professionals, too. Merchant law is applicable to e-commerce, for instance, because its broad principles are widely shared across time and place. In particular, the three most applicable principles are that:

1. Justice should be swift and fair;
2. Mercantile customs should be respected; and
3. The place of sale should not result in special costs.

Merchant law, in short, is the convergence of best practices and communal self-help. It is a substitute for merchants taking the law into their own hands. In fact, merchant courts were established to hear cases arising from transactions associated with medieval fairs, many of which would naturally be commercial in nature. Merchant law is simply the 'law of the market.' It is similar to common law in matters such as:

• Prosecutions;
• Defenses;
• Defaults;
• Delays;
• Judgments; and
• Executions of judgments.

The Nitty-Gritty

Foundationally, merchant law differs from the common law in three general ways.

1. It delivers a judgment more quickly;
2. Merchant law promoted fair play; and
3. Results were based on experience rather than on precedent.

Let's take a look at some general principles that are part of merchant law.

It's Fast

Merchant law should move quickly. Records from merchant courts show that most matters are resolved the day they are brought. Defendants who fail to appear are declared in default and the plaintiffs are entitled to seize those goods that had been attached to secure the defendants' appearance.

It's Fair

The substantive principles on which merchant law operates seem in large measure to be general principles of fair play. Three principles applicable to e-commerce are:

1. Promises ought to be kept;
2. Debts ought to be paid; and
3. Trespasses ought to be punished.

It's Clear-cut

Outcomes of the application of merchant law are a result of expedience, not of the preoccupied, labored examination of statute and precedent. When a certain matter is considered, the consideration is about only the determination of the facts, and not about the principles that justified the action.

Once merchant law is applied to a matter, the implementation of the results is tantamount to remedies. For example, an aggrieved party might be allowed to keep a deposit, seize a good or organize a boycott. When used without challenge, self-help does not depend on formal invocation of the judicial system and, thus, provides the rapid resolution that Internet and e-commerce legal difficulties sometimes require.

What Goes Around Is Here Now

Today, some e-commerce sites, such as eBay, act as the successor of medieval fairs. e-Commerce sites, like fairs of yore, have codes of conduct and people who enforce such codes. Also like medieval fairs, e-commerce sites might use their ultimate sanction to prevent future code violations ' preventing past violators from future participation. That's a stinging ' and quite effective ' punishment.

The term self-help refers to private actions taken by people involved in a transaction to prevent or resolve disputes without assistance from a court, a governmental official or a disinterested third party. Merchant law, then, is a type of self-help. It differs from most self-help in that it is sanctioned by a group. In medieval times, the group typically included fellow merchants. Today, the group usually includes online marketplace associations.

The situations in which self-help may be invoked are varied. For example, online orders might be suspended by the Web site operator when a site user fails to pay fees. Advertisements that violate the marketplace's terms-of-use agreement might also be suspended.

Other examples of Internet-related self-help include the withdrawal of previously deposited software source code with the user or a third party to be used in the event that the code owner breaches a license contract (usually due to bankruptcy). Similarly, Web site producers and Internet network-management firms are increasingly required to secure surety bonds to be paid in the event of a certified breach.

A party also might be required to deposit software that will ensure a merchant's ability to continue to use a Web site effectively in the event of the operator's inability to perform. In addition, surety bonds, in the form of performance or payment bonds, are common devices in the construction industry that are being used in the Internet-software and network-management service industries.

Fast Doesn't Mean Frivolous

Medieval parties to a dispute rarely needed the aid of the local sovereign to enforce a merchant court's decision, and online marketplace-dispute resolutions similarly operate without the benefit of state enforcement of contracts.

Merchant courts have traditionally been conceived as highly informal affairs. When a fair-related dispute would arise, it would be resolved by four or five of the merchants applying generally recognized principles and customs. As e-commerce difficulties are brought to the attention of online marketplace associations, those difficulties are similarly dispatched.

As medieval traders who refused to comply with a decision risked their reputation and exclusion from trading, e-merchants face similar risks. e-Commence sites with posting boards associated with e-commerce communities use the threat of ostracism by the e-community as a means of enforcing a decision. It's just like being kicked out of the fair and into the mud pit outside the town walls. Who would want that? It's positively medieval, but apparently quite effective.

It's an apparent contradiction, or maybe an irony, but it's a fact that e-commerce merchants, like their medieval predecessors, often use their own lex mercatoria, or merchant law, in lieu of traditional law.

Online marketplace managers, like those who managed medieval fairs, regularly require participants to change their behavior or face banishment. Medieval merchants resolved difficulties in accord with notions of fair dealing rather than invoking a specific body of substantive principles. As an anachronistic consequently, e-commerce participants might find that the substantive law
of merchants is applicable to e-commerce, and e-commerce counsel may, in some instances, want to recommend that clients take this tack.

A Little Bit of Then, Now

e-Commence merchants are required to transact business despite the lack of inter-jurisdiction commerce regulations; like their medieval predecessors, they cannot generally afford the time or cost of using local justice systems and, as such, they resort to communal self-help remedies.

Look at it this way: When e-commerce merchants deal with customers, they employ a commonly accepted set of protocols that supersede local commercial customs and substantive local laws. But the use of such protocols does not shield the merchants from domestic law. e-Commerce business professionals can be subject ' or made subject to ' local jurisdictions. If a vendor has customers in a jurisdiction that may be deprived of liberty, goods in a jurisdiction that may be seized or a storefront in a jurisdiction that might be forcibly closed, then a local government might impose its law.

For common transactions, however, e-commerce merchants depend on voluntary compliance. Such compliance is relatively easy to enforce. The Internet is highly structured with respect to the display of goods, payment and delivery. The identity of a customer is discernible through his or her Internet protocol ('IP') address, just as the face of the customer was easily identified in medieval times.

Consider, too, the following similarities between medieval and Internet merchants.

Medieval merchants:

• Displayed their goods prior to sale;
• Conducted their business at the front of their tents, as opposed to behind their tents;
• Publicly acknowledged that goods were paid for; and
• Delivered the goods at the time of payment.

e-Commerce vendors:

• Describe their goods on the Internet prior to sales;
• Conduct their business using Internet protocols, as opposed to private networks;
• Secure electronic payment; and
• Deliver goods after receiving payment.

Brevity in Locality

Medieval merchant law represented a dispute-resolution process free of the oppressive control of local laws, which satisfied the merchant's needs. Such a legal process satisfies the needs of e-commerce professionals, too. Merchant law is applicable to e-commerce, for instance, because its broad principles are widely shared across time and place. In particular, the three most applicable principles are that:

1. Justice should be swift and fair;
2. Mercantile customs should be respected; and
3. The place of sale should not result in special costs.

Merchant law, in short, is the convergence of best practices and communal self-help. It is a substitute for merchants taking the law into their own hands. In fact, merchant courts were established to hear cases arising from transactions associated with medieval fairs, many of which would naturally be commercial in nature. Merchant law is simply the 'law of the market.' It is similar to common law in matters such as:

• Prosecutions;
• Defenses;
• Defaults;
• Delays;
• Judgments; and
• Executions of judgments.

The Nitty-Gritty

Foundationally, merchant law differs from the common law in three general ways.

1. It delivers a judgment more quickly;
2. Merchant law promoted fair play; and
3. Results were based on experience rather than on precedent.

Let's take a look at some general principles that are part of merchant law.

It's Fast

Merchant law should move quickly. Records from merchant courts show that most matters are resolved the day they are brought. Defendants who fail to appear are declared in default and the plaintiffs are entitled to seize those goods that had been attached to secure the defendants' appearance.

It's Fair

The substantive principles on which merchant law operates seem in large measure to be general principles of fair play. Three principles applicable to e-commerce are:

1. Promises ought to be kept;
2. Debts ought to be paid; and
3. Trespasses ought to be punished.

It's Clear-cut

Outcomes of the application of merchant law are a result of expedience, not of the preoccupied, labored examination of statute and precedent. When a certain matter is considered, the consideration is about only the determination of the facts, and not about the principles that justified the action.

Once merchant law is applied to a matter, the implementation of the results is tantamount to remedies. For example, an aggrieved party might be allowed to keep a deposit, seize a good or organize a boycott. When used without challenge, self-help does not depend on formal invocation of the judicial system and, thus, provides the rapid resolution that Internet and e-commerce legal difficulties sometimes require.

What Goes Around Is Here Now

Today, some e-commerce sites, such as eBay, act as the successor of medieval fairs. e-Commerce sites, like fairs of yore, have codes of conduct and people who enforce such codes. Also like medieval fairs, e-commerce sites might use their ultimate sanction to prevent future code violations ' preventing past violators from future participation. That's a stinging ' and quite effective ' punishment.

The term self-help refers to private actions taken by people involved in a transaction to prevent or resolve disputes without assistance from a court, a governmental official or a disinterested third party. Merchant law, then, is a type of self-help. It differs from most self-help in that it is sanctioned by a group. In medieval times, the group typically included fellow merchants. Today, the group usually includes online marketplace associations.

The situations in which self-help may be invoked are varied. For example, online orders might be suspended by the Web site operator when a site user fails to pay fees. Advertisements that violate the marketplace's terms-of-use agreement might also be suspended.

Other examples of Internet-related self-help include the withdrawal of previously deposited software source code with the user or a third party to be used in the event that the code owner breaches a license contract (usually due to bankruptcy). Similarly, Web site producers and Internet network-management firms are increasingly required to secure surety bonds to be paid in the event of a certified breach.

A party also might be required to deposit software that will ensure a merchant's ability to continue to use a Web site effectively in the event of the operator's inability to perform. In addition, surety bonds, in the form of performance or payment bonds, are common devices in the construction industry that are being used in the Internet-software and network-management service industries.

Fast Doesn't Mean Frivolous

Medieval parties to a dispute rarely needed the aid of the local sovereign to enforce a merchant court's decision, and online marketplace-dispute resolutions similarly operate without the benefit of state enforcement of contracts.

Merchant courts have traditionally been conceived as highly informal affairs. When a fair-related dispute would arise, it would be resolved by four or five of the merchants applying generally recognized principles and customs. As e-commerce difficulties are brought to the attention of online marketplace associations, those difficulties are similarly dispatched.

As medieval traders who refused to comply with a decision risked their reputation and exclusion from trading, e-merchants face similar risks. e-Commence sites with posting boards associated with e-commerce communities use the threat of ostracism by the e-community as a means of enforcing a decision. It's just like being kicked out of the fair and into the mud pit outside the town walls. Who would want that? It's positively medieval, but apparently quite effective.