Commercial Law: Definition and Scope

Definition of Commercial Law

• Commercial law is a branch of private law regulating relationships between individuals

• It sets legal rules for commercial transactions, whether between traders or with a non-trader

• The dispute's subject must be a business matter to apply commercial law

• Commercial law is a set of rules governing transactions by traders in their business practices

Scope of Commercial Law Application

• The Trade Law on May 17, 1999, outlines the scope in Article 1 of Part One

• The provisions apply to trading activities and natural or juridical persons with trader status

• Commercial Law applies to businesses acquiring a commercial character

• Issued by a Trader and aiming for profit, it also applies to those gaining trader capacity legally, be they individuals or companies

• A trader is defined as someone professionally conducting commercial activities for their own account

• Also, firms assuming forms prescribed in company laws are traders, regardless of their purpose

• Activities described as commercial but outside commercial law include professions and simple crafts

• Agricultural work and real property dealings are also excluded unless they reach a professional level

• Some activities fall under commercial law regardless of the person's trader status

• Examples include dealing in commercial papers like drafts, checks, and promissory notes

Properties of Commercial Law

• Commercial law is characterized by speed, trust, and credit

Speed Factor

• Time is a factor for the trader
• A direct relationship exists between transaction speed and profit increase
• An inverse relationship exists between transaction speed and losses

Trust and Credit

• Business relies on mutual trust among traders to obtain credit
• Credit can be loans or deferred purchase of goods

Sources of Commercial Law

Contractors Agreement

• It is the primary source

• Judges resolve disputes based on contract stipulations first

• Judgments are issued based on explicit or implied contractual provisions

• Agreements must align with public order and morals in Egypt

• Rules that violate basic societal foundations are impermissible, even for traders

Commercial Legislation

• This means the new Commercial Law No. 17 of 1999

• It replaced the 1883 law, excluding provisions about personal companies

• The new law compiles rules for commercial activity/traders and uses international agreements

Commercial Custom and Commercial Usages

• Custom involves a group habitually following behavior believing it obligatory

• Commercial custom involves traders following rules believing they are obligated until rules become settled and respected

• Commercial customs consist of material and moral elements

• Material aspect: traders follow rules

• Moral aspect: traders believe in the rules' obligatory nature

• Commercial usages are rules traders follow without considering them obligatory

• Key distinction: Commercial custom has both material and moral element

• Commercial usages only has a material element

• Legislatures consider customs and usages vital, if they do not violate public order and Egyptian morals

Civil Law

• Civil law applies to all transactions, including commercial ones, as the general law

• Civil law is a reserve source

• Civil law applies to commercial acts only, when specific commercial law is absent and only if there is no prior contractor's agreement present and when no rules of commercial custom can be found

• Commercial law always takes precedence over civil law

• The commercial text, as the special law, is prioritised

Explore commercial law, a branch regulating business relationships and transactions. Understand its scope, as defined by the Trade Law of 1999, focusing on trading activities and trader status. Learn about its application to businesses aiming for profit.