European Contract Law Research Articles

‘The Common Frame of Reference and the Future of European Contract Law’ – Society of European Contract Law (SECOLA) Conference, 1 and 2 June 2007, Amsterdam

‘The Common Frame of Reference and the Future of European Contract Law’ – Society of European Contract Law (SECOLA) Conference, 1 and 2 June 2007, Amsterdam

Deformalisation of Assignment Law and the Position of the Debtor in European Property Law

Abstract: In the last two decades, several European countries have altered the general provisions on assignment or introduced new forms of assignment, in order to facilitate emerging financial instruments that involve the transfer of claims, especially securitisation. This is brought about by deformalisation, i.e. the abolition of formal requirements for the validity of assignment or the introduction of a new form of assignment with fewer formalities. The deformalisation relates inter alia to the requirement of notification of the debtor of the claim. In order to assess whether the interests of the debtor were harmed by this deformalisation, the position of the debtor between assignment and notification is described, analysed and compared for several European countries (France, England and Wales, the Netherlands, Belgium, Norway, Italy, Spain, Germany, Switzerland) as well as for the United Nations Convention on the Assignment of Receivables in International Trade of 2001, the third part of the Principles on European Contract Law of 2003 and the UNIDROIT Principles of International Commercial Contracts of 2004. It is concluded that the deformalisation movement was not in itself detrimental to the position of the debtor: the only exception is the situation in the handful of legal systems in which payment by the debtor to the assignee does not lead to his discharge when he was not instructed to do so, notwithstanding the fact that he had gained knowledge of the assignment by means other than notification. Résumé: Durant les deux dernières décennies, plusieurs pays européens ont modifié leurs dispositions générales sur la cession ou ont introduit des nouvelles formes de cession de créance afin de faciliter les instruments financiers émergents qui impliquent le transfert de créances et spécialement leur titrisation. Ceci a conduit à une déformalisation, par exemple, par l’abolition des exigences de formes pour la validité des cessions ou l’introduction d’une nouvelle forme de cession avec des formalités réduites. La déformalisation se rapporte entre autres à l’obligation de notification au débiteur de la créance. Afin de déterminer si cette déformalisation nuit aux intérêts du débiteur, sa situation entre cession et notification est décrite, analysée et comparée pour plusieurs pays européen (France, l’Angleterre et le Pays de Galles, les Pays-Bas, Belgique, Norvège, Italie, Espagne, Allemagne, Suisse), de même que pour la Convention des Nations Unies sur la cession de créances dans le commerce international de 2001, la troisième partie les Principes du Droit Européen des Contrats de 2003 et les Principes d’UNIDROIT relatifs aux contrats du commerce international de 2004. L’auteur conclut que le mouvement de déformalisation n’est pas en luimême dommageable quant à la situation du débiteur; la seule exception étant celle d’une poignée de juridictions dans lesquelles le paiement par le débiteur au cessionnaire n’entraíne pas sa décharge quand il n’avait pas reçu l’instruction de le faire ainsi, nonobstant le fait qu’il soit au courant de la cession par d’autres moyens que la notification. Zusammenfassung: In den letzten beiden Jahrzehnten haben zahlreiche europäische Staaten die allgemeinen Bestimmungen im Hinblick auf die Abtretung verändert oder aber eine neue Formen der A

Hardship in German Codified Private Law – In Comparative Perspective to English, French and International Contract Law

Abstract: This article analyzes the German, English and French law if and how contracts can be terminated or amended in response to unforeseen events. In addition, it describes the solutions in the UN Convention on Contracts for the International Sale of Goods (CISG), the Principles of European Contract Law (PECL) and the UNIDROIT Principles on International Commercial Contracts. The starting point of this article is German law with its doctrine of Störung der Geschäftsgrundlage established by the courts in the 1920’s and recently codified in § 313 BGB. The new provision requires a fundamental change in circumstances upon which a contract was based and that it is unreasonable to hold the party bound to its (unchanged) duty. The article then stresses some parallels to the English frustration law, though English Courts have no power to revise the contract, whereas this is the primary remedy in German law. Taking French law into account, which still rejects the concept of imprévision, English law is thus placed between the Germanic and Romanic legal solutions. French law only knows force majeure which officially results in tout ou rien, though there is some trend towards accepting an obligation de renégociation. While article 79 (1) CISG is not dealing with the change of fundamental circumstances or the adjustment of contracts, article 6:111 PECL and articles 6.2.1 to 6.2.3 UNIDROIT Principles provide for this. The fact that they do not just allow for a termination of the contract, but also its juridical adaptation to restore the equilibrium is a trend that should be welcomed from the perspective of European and international contract law. Résumé: Cet article analyse au niveau des droits allemand, anglais et français la question de la résiliation ou de la modification des contrats suite à des évènements imprévus. De plus, il décrit les solutions de la Convention des Nations Unies sur les Contrats de Vente Internationale de Marchandises (CVIM), des Principes de droit européen des contrats (PECL) et des Principes UNIDROIT relatifs aux contrats du commerce international. Le point de départ de cet article est le droit allemand et sa doctrine de Störung der Geschäftsgrundlage [see above]. instauré par les tribunaux dans les années 1920 et codifié récemment par le § 313 BGB. Cette nouvelle disposition requiert deux conditions: un changement important des circonstances à la base du contrat et qu’il ne soit pas équitable d’exiger l’exécution par la partie de son obligation contractuelle (non modifiée). Des parallèles sont ensuite tracés avec le droit anglais de l’impossibilité d’exécution, et ce bien que les tribunaux anglais n’aient pas le pouvoir de modifier le contrat alors que c’est le recours principal du droit allemand. Au vu du droit français, qui rejette encore le concept d’imprévision, le droit anglais est donc situé entre les solutions germaniques et romanes. Le droit français connaît uniquement la force majeure qui se solde officiellement par tout ou rien, bien qu’il existe une certaine tendance vers l’acceptation d’une obligation de renégociation. Alors que l’article 79 (1) CVIM ne concerne par le changement des circonstances à la base du contrat ou la modification des contrats, l’article 6:111 PECL et les articles 6.2.1 à 6&peri

The Harmonisation of European Contract Law: Implications for European Private Laws, Business and Legal Practice ? Edited by Stefan Vogenauer and Stephen Weatherill

The Harmonisation of European Contract Law: Implications for European Private Laws, Business and Legal Practice ? Edited by Stefan Vogenauer and Stephen Weatherill

European Contract Law: A Matter of Consumer Protection, Citizenship, or Justice?

Abstract: In its ‘First Annual Progress Report on European Contract Law and the Acquis Review’, the European Commission recently announced that, within the Common Frame of Reference process, it will prioritize the revision of the consumer acquis. This ‘reprioritization’ has a number of practical consequences. However, the more fundamental question is what the effect of a renewed focus on consumer protection will be on the character of European contract law, and on the way in which the Union addresses and views the people living in Europe. This question will become all the more important if the Commission is going to attempt, as it seems to envisage, some comprehensive and exclusive European legislation with regard to contracts with consumers (all or certain important ones, notably sales). Obvious alternatives to the consumer protection approach to the Europeanization of contract law include the perspectives of European citizenship and of justice. Does it matter whether European contract law is developed as a matter of consumer protection, citizenship or justice? Or, to put it differently, does it make a difference for a contracting party whether she is treated as a consumer, a citizen or a person? This paper argues that it does. It presents the European policies with regard to consumer protection, European citizenship and the Area of justice, and discusses the kind of contract law that each of these approaches leads to and the kind of society they contribute towards. Both the citizenship and, in particular, the consumer protection approach are rejected as an exclusive approach to contract law because they are reductive. They fail to take into account important aspects of human life which would be included in an approach to contract law from the perspective of justice. The conclusion is that European contract law should become a matter of justice. As a consequence, the European Union will need to provide a legal basis for treating contract law as a matter of civil justice. Moreover, the Union will have to articulate a common European conception of justice in contract law. Résumé: Dans son premier rapport annuel sur l’état d’avancement du droit européen des contrats et de la révision de l’acquis, la Commission européenne a annoncé qu’elle donnerait, dans le processus d’un cadre commun de références, la priorité à la révision de l’acquis en matière de protection des consommateurs. Cette priorité renouvelée a un certain nombre de conséquences pratiques. La question fondamentale est cependant celle de l’effet d’une nouvelle accentuation sur la protection des consommateurs, sur les caractéristiques du droit européen des contracts et sur la manière dont l’Union perçoit les personnes vivant en Europe et s’adresse à eux. Cette question deviendra de plus en plus importante si la Commission s’apprête à mettre en oeuvre, comme cela semble envisageable, une législation européenne complète et exclusive relative aux contrats de consommateurs (ou certains contrats importants, comme par exemple les contrats de vente). Des alternatives évidentes à la protection des consommateurs comme manière d’aborder la question de l’européanisation du droit des contrat incorporent des perspectives de citoyenneté européenne et de justice. Est-ce important que le droit européen des contrats soit developpé comme une question de protection des consommateurs, ou co

Book Review: The Harmonisation of European Contract Law: Implications for European Private Laws, Businesses and Legal Practice, by Stefan Vogenauer and Stephen Weatherill. (Oxford: Hart Publish

Book Review: <i>The Harmonisation of European Contract Law: Implications for European Private Laws, Businesses and Legal Practice</i>, by Stefan Vogenauer and Stephen Weatherill. (Oxford: Hart Publish

An Optional Instrument and Social Dumping

In the European Commission's documents on the future of a European contract law freedom of contract is the leading principle of both a CFR and an optional instrument. In this paper, it is argued that an optional instrument as proposed by the European Commission will result in social dumping. However, this can be prevented, if the leading principle of an optional instrument will be a balance between freedom of contract and social justice or fairness. If not, it will be relevant to assess to what extent more stringent national mandatory rules can still be applied if parties have selected an optional instrument to govern their contract. In order to do so, first it is considered whether the optional instrument may be regarded as harmonization, if so, what type of harmonization it fits best. Finally the technique by which an optional instrument may be rendered applicable will be discussed.

Deformalisation of Assignment Law and the Position of the Debtor in European Property Law

In the last two decades, several European countries have altered the general provisions on assignment or introduced new forms of assignment, in order to facilitate emerging financial instruments that involve the transfer of claims, especially securitisation. This is brought about by deformalisation, i.e. the abolition of formal requirements for the validity of assignment or the introduction of a new form of assignment with less formalities. The deformalisation relates inter alia to the requirement of notification of the debtor of the claim. In order to assess whether the interests of the debtor were harmed by this deformalisation, the position of the debtor between assignment and notification is described, analysed and compared for several European countries (France, England & Wales, the Netherlands, Belgium, Norway, Italy, Spain, Germany, Switzerland) as well as for the United Nations Convention on the Assignment of Receivables in International Trade of 2001, the third part of the Principles on European Contract Law of 2003 and the Unidroit Principles of International Commercial Contracts of 2004. It is concluded that the deformalisation movement was not in itself detrimental to the position of the debtor: the only exception is the situation in the handful of legal systems in which payment by the debtor to the assignee does not lead to his discharge when he was not instructed to do so, notwithstanding the fact that he had gained knowledge of the assignment by means other than notification.

The Influence of European Consumer Law on General Contract Law and the Need for Spontaneous Harmonisation: On the Disturbance and Reconstruction of the Coherence of National Contract Law and Consumer Law Under the Influence of European Law

In the discussions on European contract law, the important position of European consumer law is broadly acknowledged. Even though there are exceptions, undoubtedly the core of European (Union) contract law primarily consists of directives in the area of consumer law. In many legal systems, these directives have extensively influenced the very heart of contract law, especially in the area of unfair contract terms and consumer sales. As a result, areas of 'Europeanised' contract law have emerged within national contract law. This process endangers the much-desired coherence of national contract law, as European (consumer) contract law in the cases governed by a directive requires a 'European' interpretation of sometimes well-known concepts in contract law, whereas in other cases the traditional 'national' interpretation is maintained. In this paper it is argued that striving for coherence requires legislators and courts to consider the 'spontaneous harmonisation' of European contract law as a means to protect the coherence of the national legal system.

The Relevance of the European Consumer Protection Law for the Development of the European Contract Law

This paper deals with the interaction of consumer law and contract law in the European Union. Over the last two decades the European legislature has adopted many legislative measures in the field of consumer protection that were designed to strengthen the single market and to avoid distortion of competition. Thus the European legislature tried to approximate or harmonise consumer protection standards within the European Community and consequently created a new layer of supranational contract law which now coexists with the traditional national contract law regimes. The paper assesses the various types of contract law on the international, supranational and national levels and discusses the problems arising from the fact that the contract law in the European Community is so diverse. Directive 2005/29/EC on Unfair Business-to-Consumer Commercial Practices is discussed as a very prominent recent product of European Community consumer legislation. The paper points out how the development of European consumer law serves as a catalyst for the further development of a genuine European contract law.

Self-Regulation in European Contract Law

This paper addresses self-regulation as a complementary means to harmonize and regulate European Contract Law. In the context of the paper SR is conceived as a complementary device to legislation and as a monitoring device to verify ECL implementation. Within self-regulation different players and forms of rule-making are examined. In relation to players different private organizations are considered: independent organizations and self-interested organizations, which will be further differentiated according to the nature of the represented interests. In relation to the institutional environment a distinction is assumed between market and private non market rule-making. In the market environment private organizations provide rules, including standard contract forms for a price or more generally for remuneration, in the non market environment private organizations provide contract rules for free. The main aims of the paper are (1) to demonstrate the necessity to consider self-regulation (hereinafter SR) as a significant component of the debate concerning the definition of Common Frame of References (hereinafter CFR), (2) to identify the role and the limits of self-regulation in the formation of European Contract Law particularly associated with competition law and fairness, and (3) to show the strong correlation between the governance of self-regulatory bodies and the substance of European Contract Law (hereinafter ECL).

Rezension zu Jan Smits: The need for a European contract law

Rezension zu Jan Smits: The need for a European contract law

After the unfair Contract Terms Directive; Recent European Directives and English Law

This paper examines the implementation into English law of three recent EC Directives; the Consumer Sales Directive, the Electronic Commerce Directive and the Unfair Commercial Practices Directive – transposition of the latter currently at a consultative stage. Although English law copes remarkably well in accommodating alien concepts and rules within its doctrinal framework, nevertheless, these Directives have generated some significant conceptual and substantive adjustments in English contract law. The recently enacted Unfair Commercial Practices Directive adds a new dimension to the impact of EC legislative activity in the area of private law. Furthermore, the ensuing regulatory complexity and incoherence arising from UK implementation obligations is a cause for concern. Particularly in the light of the EC's current project on European Contract Law.

Culture and Contract Laws

In the article it is argued that the wish to preserve the cultural values of national law should not prevent the EU from preparing a Code or an Optional Instrument. The no-code countries on the British Isles and in Scandinavia are the most ardent opponents to the idea of unifying European Contract Law by way of a code on Contracts. In both these regions however the absence of a code causes problems. In England a prominent writer has found that the major weakness of the judge-made law is its immense diffusion and the consequent difficulty of access to it and the Nordic countries face the same problem. Looking at the issues where the rules are different the explanation is one of tradition

International Contracts between Common Law and Civil Law: Is Non-state Law to Be Preferred? The Difficulty of Interpreting Legal Standards Such as Good Faith

Most commercial contracts are nowadays written on the basis of English or American contract models, irrespective of whether the legal relationship that the contracts regulate is governed by a law belonging to a Common Law system or not. These contract models are drafted on the basis of the requirements and structure of the respective Common Law system in which they were originally meant to operate. These models may therefore be in part ineffective or parts thereof may redundant, if the governing law belongs to a Civilian system. To overcome this tension between Common and Civil Law, it is sometimes recommended to subject international contracts to non-state sources of law (also referred to as transnational law, lex mercatoria, soft law). This article analyses the tension between the Common and the Civil Law of contracts, and to what extent non-state sources may represent a satisfactory solution to such tension. This is made by analyzing the role that good faith and fair dealing play in contracts according to the respective systems: English law as an illustration of Common Law systems, Norwegian, German and Italian law as illustrations of Civil Law Systems, the UNIDROIT Principles of International Commercial Contracts and the Principles of European Contract Law as illustration of non-state sources.

Book Review: An Original Way of Carrying Out Comparative Legal Research?, Mistake, Fraud and Duties to Inform in European Contract Law

Book Review: An Original Way of Carrying Out Comparative Legal Research?, Mistake, Fraud and Duties to Inform in European Contract Law

Towards a European Code Napoléon/ABGB/BGB? Recent EC Activities for a European Contract Law

Abstract: Contract law issues on European or international level have been studied for several decades in academic circles. Contract law issues and other questions affecting European private law have already been regulated in the past on EC level, especially in the framework of several consumer protection directives. The European Contract Law project initiated by the European Commission received new impetus with the Commission's Green Paper of 2004. Emphasis is laid on developing a ‘common frame of reference’ (CFR) which shall be ready by 2009. A so‐called ‘optional instrument’ and standard terms of contract are also looked at. The article explains the reasons behind these activities, describes the work currently under way, and points to a series of open questions of a legal or political nature.

Agency in the Principles of European Contract Law and the UNIDROIT Principles of International Commercial Contracts (2004)

This article considers the treatment of agency in two international soft law instruments, namely the Principles of European Contract Law and the Unidroit Principles of International Commercial Contracts (2004), against the background of English law. Soft law instruments in the field of private law are of interest in two respects. First, their drafters are not constrained by established concepts or rules of any given domestic system. They are inhibited neither in the scope of their enquiry by the accident of which issues are presented in litigation for resolution nor in the approaches they can adopt by any doctrine of precedent. Consequently, such instruments provide an illuminating comparison for existing domestic law and suggestions for the resolution of questions as yet not addressed. Secondly, such instruments may be adopted by contracting parties as the applicable legal regime in arbitral proceedings, either explicitly or indirectly as evidencing a more loosely described governing regime, such as principles of transnational commercial law. In addition, the Principles of European Contract Law represent a possible blueprint for any future, perhaps mandatory, harmonisation of contract law across the European Union.

Polish Tenancy Law and the Principles of European Contract Law

This report provides an introduction to the Polish law of tenancy and a brief analysis of the changes this field of law has experienced in recent years. The last decade has witnessed comprehensive law reform in Poland, particularly in the ambit of civil law and civil procedure, primarily to enhance consumer protection. In addition to difficulties arising from an overhaul of the judicial system and transformations wrought by the re-privatisation process, a general lack of clarity further remains with regard to the ownership of private property and to the doctrine of restitution. As a result, the application of the law in this field has been in a something of a general flux. The report offers a comprehensive overview of the historical background of civil law developments in Poland together with the particularities of the system as it functioned under the Communist rule, moving later to recount the recent law reforms and constitutional influences as exhibited since the adoption of 1997 Constitution. It addresses in more detail the basic structure and content of the current tenancy law together with the legal concepts of the lease contract and other forms of lawful possession of premises for housing purposes. Later on social regulations affecting private tenancy contracts are analysed. Then a summary account on 'tenancy law in action' is provided. It comprises economic considerations that influence the application of law in the field. Then it moves on to discuss the role of association of tenants and consumers and the alternative dispute resolution. In conclusion it provides account of the practice of tenancy law in Polish courts and the effectiveness of access to justice of the interested parties. The final part of the report consists of analysis of a set of hypothetical cases concerning conclusion of the tenancy contract (including the choice of tenant and formal requirements of the contract). This is followed by analysis of the issues of the duration and termination of the contract, rent and rent increase. Obligations of the parties in the performance of the contract and standard terms are part of a separate set of cases. The case studies are concluded by analysing the issues of the breach of contract and relationship between the Tenant and Third Persons.

Liberal, social and "ethical" justice in European contract law

Liberal, social and "ethical" justice in European contract law