Definition of Commercial Law, History, Role and Sources of Law

Definition of commercial law – In trading activities a seller and a buyer make a transaction on a traded goods or service and the price has been mutually agreed upon. Both parties must equally benefit from what they sell or buy.

A trader generally wants big profits with small capital and vice versa a buyer wants good quality for the goods or services he has purchased.

In trading activities, high honesty is also upheld so that no party feels disadvantaged. For this reason, the role of the function of commercial law to regulate every transaction made has been regulated by law. And, the rules contained in the trade law must be mutually agreed upon by the parties carrying out official trading activities.

However, even though many have carried out trading activities, many still do not know what trade law is, which contains various guidelines governing trading activities. Therefore, in this discussion, we have summarized various information related to trade law that can add to the knowledge of all Readers.

Furthermore, we have presented a discussion of commercial law and can be listened to below!

Trade Definition

Before knowing more about trade law, it’s a good idea to understand the definition of trade itself first.

Business, or commerce in general, is the work of buying goods in one place or time and selling them in another place or later for a profit.

Trade in modern times is the provision of intermediaries for producers and consumers to buy and sell goods, facilitating and promoting that buying and selling.

Providing intermediaries for producers and consumers involves a variety of tasks such as:

  • Brokerage activities as brokers, commission agents, traveling salesmen, etc
  • Formation of an economic entity such as a joint stock company, corporation, joint stock corporation, etc. to promote business
  • Transportation for commercial traffic, whether by land, sea or air

Definition of Commercial Law

The definition of commercial law is the science that regulates the relationship between one party and another in trade affairs. Another definition is that commercial law is a set of norms that arise specifically in the conduct of business or the operation of a company.

Commercial law is included in the category of civil law, especially contract law. This is because commercial law is related to the activities of people in business matters. Therefore, commercial law is not part of substantive law.

Commercial law then also applies to the rights and obligations between the parties in trade affairs. The Labor Law regulates this. Therefore, commercial law is placed on contract law. Contract law is the law governing contracts for business relationships specifically.

Definition of Commercial Law According to Experts

After knowing the meaning of commercial law in general, it turns out that there are many other views that define commercial law. This difference of opinion is a natural thing, because different minds certainly have different opinions. Are you curious? What do business law experts think? We will see one by one below.

1. Ahmad Ichsan

According to Achmad Ichsan, commercial law is law that regulates trade and commerce. From addressing emerging issues to managing issues related to human behavior in business and commerce.

2. Topic

In contrast to the subject which defines commercial law as rules governing certain (private) relations between the public and legal entities.

3. Purwosutjipto

In contrast to Purwosutjipto which interprets commercial law as a bond loan embodied in the commercial sector.

4. Sunaryati Hartono

In simpler terms, Sunaryati Hartono defines commercial law as the economic law of all decisions governing economic activity issues.

5. Munir Fuady

Commercial law refers to all rules covering business procedures both in the industrial and financial fields, which are still related to the exchange of goods and productive activities.

According to some experts, this is the purpose of commercial law. There is no national trade law in Indonesia. Until now, the trade law used still uses the trade law adopted by the Dutch East Indies government.

So what is the trade law inherited from the Dutch East Indies? Namely the Book of Commercial Law (Wetboek van Koophandel). However, we (Indonesia) already have trade law that regulates copyright or collaboration issues regulated by national law.

From this it can be concluded that the concept of commercial law is a set of standards governing the behavior of people who do business for profit. In addition, it can be said that commercial law regulates legal relations between persons and legal entities on the basis of norms derived from codified regulations, namely civil and criminal law, and also not codified, namely. special regulations. or the laws governing business dealings.

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History of Commercial Law

The development of commercial law in the world occurred between 1000 and 1500 in medieval Europe. At that time, cities that functioned as trading centers emerged, such as Genoa, Venice, Marseille, Florence, and Barcelona. Even though Roman law (Corpus Iuris Civilis) was regulated, many business problems could not be solved.

Therefore, trade law was formed (Koopman’s Law). Commercial law at that time was still regional. The codification of trade law was first written in France under the name Ordonnance de Commerce during the reign of King Louis XIV in 1673. The law covered everything related to the business world, from merchants, banks, commercial entities, securities to bankruptcy.

In 1681 another codification of commercial law was born under the name Ordonance de la Marine. This coding covers all aspects of trade and shipping, for example in maritime trade.

These two laws then became the reference for the birth of the Code of Commerce, a new trade law that came into force in France in 1807. The Trade Code deals with various legal regulations that appeared in the field of commerce since the Middle Ages.

The Code of Commerce later became the precursor to commercial law in the Netherlands and Indonesia. As a former French colony, the Netherlands implemented Wetboek van Koophandel, which was adjusted to the Trade Act. Although Wetboek van Koophandel was published in 1847, it was only put into effect on May 1, 1848.

Then the Dutch colonized Indonesia and participated in the development of trade law in Indonesia. Finally, the Commercial Law Code (KUHD) emerged, which was adapted from Wetboek van Koophandel, which later became one of the sources of commercial law in Indonesia.

In the history of Roman law, relations between citizens were governed by the corpus juris civilis, namely the legislative work initiated by Emperor Justinian. attitude This law regulates civil relations between citizens.

At the same time, the movement of the population, especially traders from one place to another, was very fast, giving rise to commercial cities on the European continent. The provisions of the corpus juris civilis are no longer sufficient to regulate trade relations between indigenous peoples and migrants. Therefore, the relationship between traders is regulated based on freedom of contract and decisions of commercial courts or jurisprudence. Entrepreneurs and residents use this as a general law in their transactions.

At the beginning of the 19th century, France began to codify both in the field of law. Civil Law (Civil Code) and Commercial Law (Code of Commerce). If we take a closer look at the two codifications, it seems that the codification carried out by the French was not much different from the customs prevailing among traders, but they followed existing customs as law. Therefore, when Louis XIV came to power in France, he asked his associates to systematize the provisions of commercial law.

The results displayed by an Act are as follows:

  • General Commercial Order (Ordonnance De Commerce) of 1673.
  • Maritime Trade Regulations (Ordonnance De la Marina) of 1681.
  • The trade code (Code de Commerce) was created after the French Revolution in 1789.

The French codification of civil law (Code Civil) and commercial law (Code de Commerce) is not much different from the Dutch codification, namely civil law (Burgerlijk Wetboek) and commercial law (Wetboek van Koophandel). When the Dutch colonized Indonesia, their colony was based on the principle of harmony with French legal provisions, namely criminal law and civil law.

Amendments to Chapter I of the Criminal Code, where the terms of commercial law remain different find the term inappropriate. This statement was based on the Wet Law (Dutch Law) dated 2 July 1934, which revoked the entire Chapter I of the Criminal Code which contained Articles 2 to 5 concerning “traders and commercial activities” and replaced it with the term “company”. ‘, the term “company law” is more appropriate.

Some of the difficulties caused by the formatting of this law are other examples, namely:

  • Sales of fixed goods that often occur in society are not included in sales in the meaning of the Criminal Code.
  • It is very difficult to determine whether an act is a commercial act according to the Criminal Code or not, and whether a person is a trader or not.
  • When this occurs, it is not in the contract for either party that the activity is unlawful, for example a private person buying a bicycle at a bicycle shop.
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It was this difficulty that brought the regulator as much as possible the elimination of legal differences between the merchant classes. In 1934, for example, there was an amendment to the Commercial Law Code in the Netherlands which became effective with the Wet date of July 2, 1934 (Stb. 1934 No. 347), but other than this law there was no official explanation regarding the term “business activities and corporation”.

In addition, changes in the Netherlands based on the principle of compatibility (see Article 75 RR), also made changes to Stb 1938 in Indonesia Number 276.

Sources of Commercial Law

Indonesian trade law is not made just like that, but based on sources. There are three types of referenced sources of commercial law: codified statutes, non-codified statutes, and common law.

In the codification of written law, the reference is criminal law, which consists of 2 books and 23 chapters. The Criminal Code has 10 chapters on business in general and 13 chapters on rights and obligations. Another source besides the Criminal Code is the Civil Code (KUHPerdata) or also known as Burgerlijk Wetboek (BW). One of the chapters in BW discusses involvement.

Written law, which is not codified, refers to 4 statutes. The four laws are Limited Liability Company Law No. 40 of 2007, Capital Market Law no. 8 of 1997, Commodity Futures Trading Law No. 32 of 1997 and Law no. 8 of 1997 concerning Company Documents. Common sources of law are article 1339 KUH and article 1347 KUH.

The Purpose and Role of the Commercial Law Function

Commercial law functions to regulate and protect companies against various risks that may occur later.

Some of the purposes of legal trade law are listed below that you should know:

  • Ensuring the effective and smooth functioning of market security mechanisms.
  • Protection for various businesses, especially small and medium enterprises (SMEs).
  • Help improve the financial and banking system.
  • Provide protection to economic actors or business actors.
  • Safe and fair trade implementation for all traders.

As you know, laws are made to create a safe life,

systematic and calm, like commercial law. Below are some of the roles of the commercial law function:

  • Become a useful source of information for business people.
  • Traders learn more about their rights and obligations during business trading activities so that their business does not deviate from the rules and regulations written in the law.
  • Entrepreneurs better understand their rights and obligations in a business enterprise.
  • An understanding of attitudes and business behavior or transactions that are fair, honest, rational, healthy, dynamic and precisely because they already have legal certainty.

Commercial Law Subject

Defenders of legal rights and obligations that are the rights of people from birth to death, and legal people who are deliberately created as legal subjects by law. The second definition explains that a legal entity is any person who has rights and obligations in such a way as to have legal power (Rechtsbevoegheid).

The legal subjects of commercial law are:

1. Person/Individual

What is meant by a person as a legal subject is that as a person (natuurlijke person) as a legal subject he has rights and can exercise his rights which he guarantees are the applicable law. The enjoyment of civil rights does not depend on state law (Article 1 of the Criminal Code). A child in a woman’s womb is considered born when the child’s interests are urgently needed, and if a child dies at birth, it is considered as having never existed (Article 2 of the Civil Code).

2. Legal entity

A legal entity is a group of people or legal entities, a collection of legal entities, such as limited liability companies, cooperatives with legal status No. 25 of 1992 and others.

In commercial law, the legal subject is the company. Another term for a business association is a corporation, both individuals and legal entities. There are 8 types of business entities, namely:

  • Business Entity/Trading Company 
  • firm
  • Limited Partnership 
  • Limited liability company
  • cooperative
  • company
  • A public company
  • parent company/group


This is a brief discussion of what trade law is. Not only knowing what commercial law is, but also discussing the history of commercial law, sources of commercial law, and the subject of commercial law itself as well as its purposes and functions.

Knowing what trade law is provides knowledge to every business actor to understand the various guidelines and instructions that have been regulated by the government regarding trade so that every trading activity continues to run well and benefit both parties, sellers and buyers.