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Less than a week to respond to Commission Green Paper on a new European contract law

 

Last year, the European Commission requested that an expert group produce "a user-friendly and legally certain set of rules, which could serve as a future instrument in European Contract Law" by May 2011.  Simultaneously the Commission is asking European citizens whether they want it via a Green Paper.  The Commission is seeking views by 31 January 2011 (ie before the expert group have said what the law might be).  There are a variety of proposals as to how "it" might happen: ranging from the publication of the expert group's findings to a wholesale replacement of all civil law with a new European civil code. The Commission favours establishing an "optional" new pan-European contract law (in addition to the current 27 member states' laws of contract). 

Different member states are likely to have different views on which of the proposals best suits their national and international interest.  Whatever your political views we believe there are a number of very practical matters that it would be in everyone's interest to take into account. 

  • Businesses' views matter.  We would like to see the business and economic perspective factored in to the Commission's findings.
  • Has a need for the current proposal been clearly demonstrated?  The stated justification for the proposal is that fewer consumers in the EU buy online from another member state than from national sellers.  But there are many reasons why consumers may buy online from their country rather than another. These may include: trust, familiarity, language, currency, shipping costs and the like.  Has a clear need for legislation been demonstrated?  There maybe more proportionate ways of addressing the concerns of consumers and small and medium sized enterprises.
  • Is the Commission's "option" truly optional?  The "optional" measure may be optional in the sense that it would be up to the parties to choose to have their contract governed by European contract law.  It may not be not optional in the sense that every member state would have to enforce European contract law if chosen.  Parties may not always have the strength of bargaining position (eg with Government contracts).  Equally European contract law may end up as the choice where the parties can not agree. 
  • Increased uncertainty.  National legal systems have been tested over many years allowing parties to evaluate their strengths and weaknesses.  This allows the pricing of risk.  This may take some time with a new untested law. 
  • A tension between common and civil law?  There is a concern about the creation of a new law which mixes concepts from both civil and common law traditions. Many from a common law background are troubled, for example, about importing more fluid notions where parties favour autonomy and certainty. Examples of these areas include: general duties (of good faith, fair dealing or to cooperate), making pre-contractual negotiations binding, the need for "consideration" or "cause" and whether the meaning of a contractual term should be determined subjectively, contextually or objectively.
  • The cost? There will be a cost involved in re-educating every lawyer, business and consumer in the EU (not to mention every judge). 

Click here for an article discussing the issues in more detail. 

 

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