General Contract Law in the
EU
Background
• Major legal systems in the EU
– The German Legal system
• The German civil code, BGB
– The French legal system
• The French civil code, Cc
– The English legal system
– The Scandinavian legal systems
Contract law and barriers to trade
- A case for negative harmonization?
• Can contract law rules form barriers to trade?
• Art. 34 and 36: quantitative restrictions on trade
• Dassonville:
– ”Directly of indirectly, potentially or actually”
• Keck:
– Sales arrangements (art. 34 does not apply)
– Product related requirements (art. 34 does apply)
• Liability rules?
• Conformity rules?
• Cassis de Dijon:
– Legitimate restrictions
• Public health
• Fairness of commercial transactions
• Defence of the consumer
The proces of positive
harmonization
• Starting point: The commission 1985: ”If
trade barriers are legitimate, they should
at least be uniform”
• The result is ”reregulation” (positive
harmonization) in the field of private law
Different tools
• Directives
– Mainly consumer law – examples:
•
•
•
•
•
•
Unfair contract terms directive
Consumer guarantees directive
Package travel directive
Doorstep selling directive
Timeshare directive
Distance marketing of financial services
– Effect on general contract law?
– The concept of spontaneous harmonization
• PECL (Principles of European Contract Law)
– What is PECL?
– Structure:
•
•
•
•
•
•
•
•
•
Chapter 1: General provisions
Chapter 2: Formation of contracts
Chapter 3: Agents
Chapter 4: Validity
Chapter 5: Interpretation
Chapter 6: Contents and effects
Chapter 7: Performance
Chapter 8: Non-performance and remedies in general
Chapter 9: Particular remedies for non-performance
• Treaties (examples):
– The CISG
– The CMR-convention
– The COTIF/CIM convention
Status and future prospects
• Status
– Harmonization is a proces in progress
– Some problems
• Harmonization at the supranational level creates disharmony
at the national level
• Paraox: sometimes consumer protection directives may lead
to a restriction of consumer protection at the national level
• Future prospects
– A European Civil Code (?)
• The Draft Common Frame of Reference (DCFR)
(Consultation period)
– Directive on Consumer Rights, adopted June 23,
2011
Freedom of contract
• Basic principle
• Does it follow from the Treaty?
– ”The fundamental freedoms (eg. free movement of goods, art 28
ff.) are designed to extend party autonomy across boarders” but:
– The Treaty now also recognizes other values such as consumer
protection
– Many directives reflect this fact
• ECJ case law?
– Cassis de Dijon supports ”the information model” as opposed to
”substantive mandatory rules”
– Many directives can be seen as reflecting this view
Formation of Contract
• The offer and acceptance model
• Conditions for the conclusion of a contract
– The French approach
• Requirement of ”cause”/”causa”
– The English approach
• Consideration requirement
– PECL: art. 2.101 (1)”without any further agreement”
• Revocation of an offer:
– German law: an offer is generally irrevocable until it lapses, for example
at the time fixed for its acceptance
– English law: an offer is generally revocable, but can be held open by
consideration
– PECL: (compromise)
• art. 2:202 (1):offer is revocable until acceptance has been dispatched
• Art.2:202 (3): fixed time for acceptance: offer is irrevocable
– CISG art. 16 : similar rule
Content of the contract:
Restrictions on freedom of contract
• The Unfair Contract Terms directive
• Article 2: Definitions
– (a) unfair terms (article 3)
– (b):consumer – ”natural person” acting ”outside his trade,
business or profession”
• Article 3:
– Para 1: ”A contractual term which has not been individually
negotiated shall be regarded as unfair if, contrary to the
requirements of good faith, it causes a significant imbalance
in the parties’ rights and obligations arising under the contract, to
the detriment of the consumer”
– Para 2: The ”list” in the Annex (”indicative and non exhaustive”)
– Cases
• The Oceano ruling C-240/98 to C-244/98 (preliminary ruling –
jurisdiction clause)
• Freiburger Kommunalbauten C-237/02 (preliminary ruling)
• Cape Snc. and Idealservice C-541/99 and C-542/99
(Preliminary ruling, concept of consumer)
• Commission v. Kingdom of the Netherlands C-144/99
(infringement procedure)
• The principle of good faith and fair dealing:
– PECL Art. 1:201:
– (1) Each party must act in accordance with good faith and fair
dealing
– (2) The parties may not exclude or limit this duty
• Five examples:
–
–
–
–
–
Good faith in contract formation
Luring a party into a Time-Bar
Applying good faith to superseed the parties’ agreement
Good faith and reliance
Good faith and Post-Contract-Formation Comtingencies