The European Union Development of European Property Law

Common Frame of Reference (CFR), the EU Consumer ACQUIS and European Property Law

Contents: Introduction, Fabrizio Cafaggi and Hans Micklitz 1. Towards a European Private Law? The Common Frame of Reference in the Conflict Between EC Law and National Laws, Alessandro Somma 2. The Interpretation of Good Faith and According to Human Rights, Fundamental Freedoms and Constitutional Laws in the Common Frame of Reference, Giuseppe Vettori 3. The Role of Competition in the European Codification Process, Stefan Grundmann 4. The Public/Private Divide in European Law, Norbert Reich 5. The Draft-Common Frame of Reference: How to Improve it?, Jan M. Smits 6. The Empirical Missing Links in the Draft Common Frame of Reference, Fernando Gomez 7. A Spontaneous Order for Europe? Why Hayek's Libertarianism is not the Right Way Forward for European Private Law, Martin W. Hesselink 8. The Authority of the Academic 'Draft Common Frame of Reference', Nils Jansen Munster 9. Legal Innovation in European Contract Law: Within and beyond the Draft Common Frame of Reference, Florian Moslein 10. Fitting the Frame: An Optional Instrument, Party Choice and Mandatory/Default Rules, Horatia Muir Watt and Ruth Sefton-Green

This chapter will consider the potential impact of proposals for the future harmonisation of European private law. From the 1980s, there has been growing support for the possibility of harmonisation of private law at a European level. Although initially primarily academic initiatives, from 1989 support has also been received from the European Parliament and Commission. Recent years have seen three major publications of European tort law principles: the Principles of European Tort Law (PETL) (2005), Principles on Non-Contractual Liability Arising out of Damage Caused to Another (the SGECC principles) (2006), and the Draft Common Frame of Reference (DCFR) (2009). These projects go beyond a summary of existing law, but seek to establish a set of principles for future European private law. In the words of one of the project groups: The aim of the Study Group is to produce a set of codified principles for the core areas of European private law (patrimonial law). Although the foundation for our work is detailed comparative law research, the principles which we are fashioning will represent more than a mere restatement of the existing law in the various EU jurisdictions from the standpoint of the predominant trends among the diverse legal regimes. Instead the Study Group seeks to formulate principles which constitute the most suitable private law rules for Europe-wide application. The most significant proposal to date is that of the DCFR. In October 2009, the Study Group on a European Civil Code (SGECC) and the Research Group on EC Private Law (‘Acquis Group’) published a six-volume work entitled Principles, definitions and model rules of European private law: draft Common Frame of Reference.

Systemic and Topical Mapping of the Relationship of the Draft Common Frame of Reference and Arbitration

Service Contracts in European Private Law and Croatian Law

The aim of this piece is to draw the attention of the debate on principles in European private law to an institutional question. As the question of who detects these principles is crucial to understand the values and intentions behind the provisions on principles, I turn to the significance of the authority question of who detects principles of European Private law with regard to the two players ECJ and the academic circle ‘Joint Network on European law'. After analysing the role of these players I will ask whether private law principles (which are principles derived from the analysis of contractual relationships by academics) or principles of civil law (derived from conflict solution by judges) govern the principles debate in European Private law. I will argue for a pluralistic understanding of European Private law, where neither academia nor the ECJ enjoy a monopoly on the detection of principles in European Private law. Instead, they form a symbiotic relationship in several respects. Understood in this way, the DCFR's role as a toolbox for the legislator is supplemented with its maybe even stronger significance as a toolbox for judges.

The article examines how the rules on formation of contract and on mistake, contained in the various transnational model rules that have been published over the past two decades, have taken shape. The approach adopted here is based on an analysis of the “textual stratification” of European private law. The relevant instruments (Convention on Contracts for the International Sale of Goods, Principles of European Contract Law, UNIDROIT Principles of International Commercial Contracts, Draft Common Frame of Reference, Principes contractuels communs) are analysed and compared in their historical sequence. To what extent and why have the texts been transformed in the process? The article demonstrates that there is a very considerable common ground reflecting the state of art of comparative research in these fields over the past hundred years. It also highlights issues on which consensus must still be reached, and it suggests patterns towards reaching such consensus. It is argued that the Principles of European Contract Law, rather than the Draft Common Frame of Reference, should provide the point of departure for a comparative “textual stratification” analysis. The scene for the article is set by a critical examination of the concept of contract and legal act, as used in the Draft Common Frame of Reference.

Judicial Control of Standard Terms and European Private Law – A Law & Economics Perspective on the Draft Common Frame of Reference for a European Private Law

Introduction In December 2007, as the signatories’ ink was still drying on the Lisbon Treaty, the Draft Common Frame of Reference of European Contract Law (DCFR) was presented to the European Commission. As is examined in more detail in the following, the DCFR is the latest instrument to emerge in the EU's programme of contract law and embodies the more radical direction along which this policy area is being driven. Yet, despite the practical and conceptual significance of this document, the public debate associated with its elaboration has been remarkably muted. Such subdued public discourse can be contrasted with the political fanfare and extensive media coverage that accompanied the signing and eventual ratification of the Lisbon Treaty. Of course, it is far easier to capture the public imagination with politically visible events such as treaty reform. Moreover, the road to the Lisbon Treaty had been a particularly rocky one, the final document salvaging the EU from its constitutional discomfort following the rejection of the Constitutional Treaty. All this was to ensure that the Lisbon process remained in the public glare. European private law and the elaboration of the DCFR, in contrast, appear to be matters of far more mundane and technical concern – of interest only to scholars in the field. Yet, one should not dismiss the construction of a European contract law as a technical project of little constitutional or political significance. As the Study Group on Social Justice reminds, the technical character often attributed to private law matters, ‘should not lead to the misapprehension that the issues posed by the construction of a European law of contract are merely technocratic, to be solved in pragmatic ways by experts’. For some time now it has been accepted that even the more ‘technical’ rules of contract law have political stakes, the nature of the rule depending on a range of ideological choices. And in this respect, we are reminded of the conceptual bridges between constitutional and private law worlds. In much the same way as a constitution, contract law can contribute to the definition of a constitutional order and capture a polity's basic rules governing social justice of the (market) order.

Legal principles play an important role in any system of law. Following the European Court of Justice, the treaties of the European Union have embraced the concept of “principles of law”, mainly as a means to guarantee individual and human rights in public and constitutional law. More recently, however, the ECJ has come to recognize as “general principles” private law and contract law norms and values. Furthermore, the notion of “principles” has played a key role in impressive unification projects which aimed to promote harmonization of national contract laws in Europe, such as the PECL (“Principles of European Contract Law”) and the DCFR (Draft Common Frame of Reference). The proposed Common European Sales Law (CESL) also opens with a separate chapter dedicated to “General Principles” of contract law. The article invites the reader to think more carefully and critically about the role played by alleged “principles” in the law generally, and in the evolving European law of contract in particular. Part II points out the instability and vagueness of the concept of a legal “principle”. Part III presents an original theoretical model which aims to reduce the inherent vagueness surrounding the concept and the distinction between legal rules and legal principles. The model suggests that while principles do often differ from rules in other respects as well (e.g., in their substantive content or analytical structure), these common distinctions fail to capture the most essential difference between principles and rules, which lies in their sharply distinct political function. Part IV applies this general thesis to the multi-level constitutional architecture of European law, coming to the conclusion that the principles of European private law are those common core norms which are shared by the laws of most Member States (ius commune Europaeum). Part V applies and illustrates this claim on the various instruments by which the Union has attempted to promoted the unification of contract law around Europe. Part VI concludes by claiming that the European principles, including that of subsidiarity, are best understood as a balancing device by which the Union adjusts the level of regulation between legislature and courts on the one hand, and between the supranational and national powers on the other.

This chapter explores the origin and the ambitions of the CESL and its rules on contents and effects of contracts. Firstly, the chapter evidences how the CESL relies on previous models such as the Vienna Convention on the International Sale of Goods (CISG), the Principles of European Contract Law (PECL), the Unidroit Principles of International Commercial Contracts (UPICC), the Draft Common Frame of Reference (DCFR), and some EU directives in the field of contract law. The chapter thereby demonstrates that the CESL rules on contents and effects of contracts are not innovative, since almost all of them originate from the PECL (with the exception of two rules, of which one takes pattern from the DCFR and the other follows the model of the EU Consumer Rights Directive). Secondly, this chapter discusses whether the ambition of the CESL really consists in improving the functioning of the internal market, as the choice of art 114 TFEU as a legal basis might suggest. The chapter criticizes the latter choice and submits that invoking art 114 TFEU for such an instrument is hardly compatible with the case law of the ECJ. Arguably, the most important ambition of the CESL is not its internal market functionality but a different one: The CESL substantially contains model rules of general contract law, suitable for all contracts, not just for sales of goods or digital content. Therefore, the CESL rules are important for the future of private law in Europe.

The Common Frame of References for European Private Law - Policy Choices and Codification Problems

The work endeavors to blaze a trail to the uncharted relationship of the most meaningful recent product in the area of European private and commercial law – the Draft Common Frame of Reference (DCFR) – and international commercial arbitration. The focus is on three areas of private and commercial law – i.e., sales, franchise and secured transactions (collateral) law (systemic mapping) – and on the specific issues of culpa in contrahendo (liability for breaking the negotiations), remedies for breach of contracts and force majeure (topical mapping). The main findings of the paper are the following:First, as arbitration of sales disputes has become quite normal by now, the DCFR – especially the six-volumes of Comments thereto (Oxford University Press publication) – could turn into a valuable tool of orientation for laws of Europe. Secondly, Europe could learn from the rich experiences of the United States as far as the arbitration of franchise and financial contracts (including disputes related to self-help repossession) is concerned. This is of importance because the DCFR is recommending introduction of business format franchise as a nominated contract and out-of-court enforcement (self-help) as important building block of a new secured transactions law for Europe; both essentially stemming from the United States.Thirdly, primarily due to the backpedaling of the European Union, however, the advancement of the DCFR as a tool for arbitrators is doomed to be very slow. One of the problems is that, save some isolated efforts, nobody is really working on spreading the information on the DCFR, in particular in arbitral circles. Fourthly, the DCFR (esp. the Comments) might prove to be, however, a valuable tool for comparatively oriented scholars and for teaching European private and commercial law. Last but not least, perhaps the most important contribution of the DCFR are enshrined in Book IX and X, the two clearly most forward-looking parts of this soft law instrument. Inherent in these are two important recommendation for Europe: while the message of Book IX is that Europe should embrace the unitary model of secured transactions law originating in Article 9 of the Uniform Commercial Code, Book X stresses the need of the introduction of the concept of ‘trust.’

The drafters of Book VIII Draft Common Frame of Reference (DCFR) have devoted an impressive amount of time and energy in collecting and publishing comparative data with regard to the existing property law within all Member States of the European Union, and in particular with regard to the subject matter of that Book: acquisition and loss of ownership of movables. This in itself suggests that comparative research played an important role in the drafting process, and this impression is enhanced by the abundance of comparative references and notes in the official Comments to Book VIII. However, the fact that the drafters made an extensive study of the relevant property law of every European legal system does not imply per se that the outcome of their comparative research was taken as guiding in the establishment of the DCFR rules. In order to gain a better insight into the character of the rules of Book VIII, this contribution seeks to answer the question whether comparative arguments really weighed heavily in the drafting of Book VIII: is the ‘comparative activism’ of its drafters a manifestation of a determination that common or even majority solutions should be the basis of the model rules to be proposed, or did the drafters feel free to propose novel rules even if these were contrary to what applies in most European countries, according to the comparative data they collected and presented themselves? To find out to what extent the choices of the drafters were influenced, if not determined, by their comparative research, it would be helpful to know what comparative methodology they followed. On this, we are told by them that the functional approach of Zweigert and Kotz can hardly be used in property law, for lack of functionally similar solutions, but as a comparative introduction to Book VIII is lacking, the question what other method could take its place is not answered. Therefore, another course of action was needed in order to be able to answer the above mentioned question. This course was found by first of all collecting the scattered general remarks by the principal drafters of Book VIII on the role of their comparative research, and by secondly analyzing what kind of comparative arguments the drafters actually included in the Comments to the provisions of that Book. The results of this approach are as follows.The principal drafters’ various publications on the work of the Working group responsible for the drafting of Book VIII DCFR seem to indicate that they gradually began to attach less importance to comparative arguments as the project progressed. Initially (in 2007), it was argued that the information in the National reports was 'vital to our project' and 'the most important basis for our work'. One year on, the Reports were indicated as 'a basis for the working group’s own comparative research.' Finally, in 2011, the drafters called the comparative survey 'a main source of inspiration.' It may be that this change of tone is a reflection of a development in the way the drafters perceived the role of other arguments, in particular those based on policy decisions; such a development could well have been the result of the debates on the proposals of the Working group with the members of the Study group. But whatever the cause, a confirmation of the fact that such a development indeed occurred can be found in the Introduction to the final publication, in 2011, of the texts of and Comments and Notes to the provisions of Book VIII. Referring to the 'remarkable differences to be found in European property law regimes' it is stated that 'most articles were drafted according to policy decisions.' The impression is inescapable that comparative arguments gradually had to give way to policy arguments, or at least that the drafters wanted or felt compelled to give this impression.However, none of this is reflected in the Comments to the 29 Articles of the first three Chapters of Book VIII. The drafters indicated in a very large number of instances to have followed common or majority solutions. An explicit rejection of a majority solution occurred in only two instances of little importance. Only when common or majority solutions were absent, the drafters seem to have been more inclined to create novel solutions than to look for leads in the available comparative data. In the handful of instances where the drafters adopted a minority solution, this concerned rules on topics where the European legal systems are strongly divergent (notably good faith acquisition). We must conclude from the Comments that, even if the principal drafters themselves gradually began to convey a different impression, comparative arguments played an important, often even decisive role in the drafting of the rules of Book VIII. If so, these rules are even more firmly rooted in current European property law than is often assumed.

In 2005 a French working group published an Avant-projet de réforme du droit des obligations et de la prescription (“Avant-projet Catala”).1 At the end of 2007 a Draft Common Frame of Reference (“DCFR”) was submitted to the European Commission by the Study Group on a European Civil Code and the Research Group on EC Private Law (Acquis Group).2 How much ink should we spill over such academic proposals for legislative reform, especially if there are misgivings as to substance, content and legitimacy and doubts as to the prospects for implementation? In an attempt to learn from these projects this paper aims to evaluate and reflect on the position of legal scholars on the political legal scene, and to compare the content of some selected provisions. The overall objective is to investigate how the Avant-projet Catala, a proposal to reform the French Civil Code, and the DCFR, a proposal which looks very much like a European Civil Code, fit together: do these projects have different goals or are they in competition with one another? More particularly, this paper investigates whether these French3 and European initiatives are conducive to creating a more European private law or, on the contrary, whether they reinforce legal nationalism.