Lex mercatoria (from the
Latin for "merchant law"), often referred to as "the Law Merchant" in English, is the body of
commercial law used by merchants throughout Europe during the
medieval period. It evolved similar to English
common law as a system of custom and best practice, which was enforced through a system of merchant courts along the main trade routes. It functioned as the international law of commerce. It emphasised contractual freedom and alienability of property, while shunning
legal technicalities and deciding cases
ex aequo et bono. A distinct feature was the reliance by merchants on a legal system developed and administered by them. States or local authorities seldom interfered, and did not interfere a lot in internal domestic trade. Under
lex mercatoria trade flourished and states took in large amounts of taxation.