SMEs in European Contract Law: A Rawlsian Perspective

Abstract

In this article the position of SMEs in European contract law is discussed from a Rawlsian perspective. In current European Union contract law, SMEs are typically excluded from weaker party protection. The question is, however, if such a categorical exclusion is fair. The author uses the political philosophy of John Rawls – justice as fairness – to normatively answer this question. First it is argued that contract law falls within what Rawls calls the basic structure of society, as the principles of justice only apply to this basic structure. Secondly, the current European rules on the protection of weaker parties against unfair terms and the arguments to justify these rules are discussed. Thirdly, the abstract principles of the first part are applied the positive rules and policy arguments of the second part. The author concludes that the current distinction in European contract law between consumers and SMEs is at odds with Rawls’ difference principle and that, from a Rawlsian perspective, protection against unfair terms should also be extended to SMEs.