The young republican government of China after 1911 revolution took over the unfinished task of legal reform，under the circumstance that the rise of mercantilism in the late 19th century China brought merchants more leverage on forming association, mediating commercial disputes and even codifying commercial law. Lack of related codified law and general guidance for applying law, customary rules and legal principles was still a common excuse in the commercial disputes in the early republican period, especially when merchants favoured their own customary rules. However, this emphasis on the applicability of customary rules by Chinese merchants was usually carefully framed with new legal language and knowledge. Using the archive of Shanghai Native Bank Association, this paper will show how Chinese merchants running native banks in the 1920s Shanghai tried to seek clarification of the applicability of customary rules and strengthen the influence of rules made by their own association through different kinds of dispute resolution. This paper tries to argue that, with the social trend of legal modernization, stressing the importance of customary rules and showing respect to law were inseparable for merchants to justify themselves and call for support in the disputes, and this was also a tactic for the merchants to participate in the establishment of business order in a broader sphere.