European Contract Law: Sublease

Abstract

The model rules on sublease set out in the Draft Common Frame of Reference for a European Private Law (DCFR) are analysed and compared to the existing legal norms provided in the laws of various European countries, including Croatia. Noting that in several European jurisdictions there are at least two contractual types that correspond to what is referred to as “lease of goods” in the DCFR, the author identifies the common features and explores the differences regarding the substance of sublease in diverse types of lease contracts (e.g. “najam”, “zakup” and “leasing” in Croatian law, “Miete” and “Pacht” in German law). The limitation of the scope of application of DCFR model rules on the assets other than immovables is perceived as a probable obstacle to a broader implementation of the DCFR, taking into consideration that majority of the lease contracts refer to immovable property such as land, apartment and business premises. This article examines in particular how the national rules differ regarding the lessee's right to sublease without lessor's consent, the lessor's right to extraordinary termination of the lease if the lessee subleases without lessor's consent, the lessee's right to extraordinary termination of the lease if consent to sublease is withheld without sufficiently good reason, and the lessee's liability for the performance of the contract of lease. Although DCFR does not deal with the expiration of sublease at the termination of the lease nor with the lessor's right to direct action against sub-lessee, it is observed that in some countries these subjects are explicitly regulated. Finally, bearing in mind that one of the objectives of DCFR is to create a toolbox for the drafters of EU law rules, the author tries to answer whether the rules relating to the contract of sublease as defined in the DCFR may serve as specific guidelines to EU legislators.