Art. 67: Contract Interpretation and the Role of ‘Trade Usage’ in a Common European Sales Law

Abstract

Article 67 of the initial proposal for a Common European Sales Law (CESL) stipulates that usage and practices are binding on traders. It follows that, if such customs can be referred to in the interpretation of contracts, they create flexibility in the understanding of contractual agreements and therefore introduce a factor of uncertainty in commercial dealings. One may wonder whether a flexible rule like this is appropriate for the context in which the CESL, according to this initial proposal, is meant to operate – B2B contracts in which at least one of the parties is a small or medium-sized enterprise (SME). A particular concern for the European market, in which many businesses are SMEs, is that local usage is likely to be unknown or even unknowable to one or both of the parties. If a similar rule were to be included in the digital single market package its appeal as an alternative contract regime therefore may be diminished.