There are two theories regarding transformation of custom into law. They are:
According to the theory the growth of law does not depend upon the arbitrary will of any individual and upon any accident. It grows as a result of the intelligence of the people. Custom is derived from the common consciousness of the people that springs from inner sense right. Law has its existence in the general will of the people; Savigny gave it the name of Volkgeist.
According to Austin custom is a source of law and not law itself. A custom becomes law when it is embodied in an act of legislature or its existence is recognized by the decision of the courts.
Only those customs are binding or valid which satisfy the judicial act. A custom is law only because the sovereign allows it to be so. Gray considers customs and morality as sources of law. According to Holland customs are not laws unless they are adopted into laws by state recognition.