The Legal Basis for an Optional Instrument on European Contract Law

Abstract

In its Action Plan on European contract law of 2003, the European Commission announced that it would examine whether problems in the European contract law area may require nonsector- specific solutions such as an optional instrument. The present study discusses the existence of a legal basis for such an optional instrument. The European Community only has the power to take any measures, including an optional instrument relating to contract law, insofar as a power is attributed to it by the founding Treaties. The EC Treaty does not provide a specific competence to create private law instruments nor does it provide any general competence to harmonize private law. Therefore, recourse is sought to the functional competences laid down in the Treaty. The potentially relevant competences include the ones following from Articles 61-67, 94, 95, and 308 of the EC Treaty. Considering the relevant EC Treaty provisions and ECJ case law concerning legal bases, the study suggests that Article 308 EC seems to be the most likely provision to provide a legal base for enacting one or more optional instruments concerning European contract law. However, even Article 308 EC cannot serve as a legal basis for enacting the entire CFR; any optional instrument will have to be limited to rules on the subjects that are particularly relevant to the internal market.