European contract law: Boosting cross-border trade and ensuring strong rights for consumers

Organisations frustrated by many differences in contract law within the European Union may soon find relief. The European Commission has just appointed an 18-member expert group to examine the possibility of creating an ‘optional European contract law’. The group is carrying forward work done by an EU-funded Network of Excellence which has already produced a Draft Common Frame of Reference (DCFR). The Frame of Reference could provide a basis for harmonising European contract law.

Pooling input from more than 150 comparative lawyers from all jurisdictions of the European Union, the six-volume Frame of Reference aims to establish a common point of reference and a basis of understanding for all European lawyers. Viviane Reding, the EU Commissioner for Justice, has called the Frame of Reference the “embryo for a European Civil Code”.

The Draft Common Frame of Reference was developed by the CoPECL Network, an EU-wide research project launched in 2005. Setting out to compare all national jurisdictions in the area of private law (mainly contract law), the participants in the Network used their findings to produce a ‘toolbox’ of pan-European model rules for the EU legislature. Effort was made throughout the project to address the needs of a broad range of stakeholders – policy makers, legal practitioners, businesses, consumers and academics. Strong ties were cultivated with the Council of Bar and Law Societies of Europe, which was instrumental in disseminating the Network’s findings to members of the legal profession throughout Europe. National bar associations were also integrated into the project’s dissemination activities, further enhancing CoPECL’s practical relevancy.

The Network’s diligence has been rewarded with sustained interest from the policy making community. The European Council, the European Parliament and the European Commission have all been considering how the Frame of Reference can best be adapted and utilised to improve coherence in contract law in the EU. Bringing together legal experts, lawyers, consumer rights advocates and business representatives, the 18-member expert group appointed by the Commission is examining the possibility of creating an ‘optional European contract law’. This would provide businesses and consumers in the EU with a legal instrument that they could opt for in conducting cross-border transactions. The experts have been asked to draft an easily accessible text showing how the model rules might be applied under different circumstances during the lifecycle of a contract.

The Commission offers examples of how such an optional law might work in practice. For example, an Irish retailer who is unfamiliar with French law could opt for a European law contract when dealing with a French supplier. Another might be “a Polish consumer shopping on the Internet could push a ‘blue button’ on the website and choose the European contract law instrument, which would guarantee a high level of consumer protection”. The Commission is hoping that harmonised contract solutions will help tackle what it calls ‘bottlenecks’ in the Single Market. Ultimately, the goal is to boost cross-border trade and ensure strong rights for consumers.

The Draft Common Frame of Reference is likely to play a significant role in the European Union’s efforts to achieve coherence in contract law. The desire for that coherence has been written into the Commission’s 2020 strategy and is being actively pursued through a process of public consultation as of this summer. For the legal scholars who produced the Frame of Reference, it is gratifying to see that their work is gaining such wide recognition. CoPECL’s coordinator, Prof. Dr. Hans Schulte-Nölke, says he had hoped for some effect of the project, but never expected the project’s research results to have such an enormous impact within the policy making community. Now serving on the Commission’s expert group on a Common Frame of Reference, he notes that the European Council has held several working group meetings on the subject and that the European Parliament has called on the Commission to assure that the Frame of Reference is made available in the highest possible number of relevant languages.

An outline edition of the Frame of Reference is available on the European Commission website: http://ec.europa.eu/justice_home/fsj/civil/docs/dcfr_outline_edition_en.pdf
This version can also be purchased in print form.

CoPECL - Joint Network on European Private Law (duration 1/5/2005 – 30/4/2009) was a Network of Excellence funded under the 6th Framework Programme for Research of the European Union, Thematic Priority 7 – Citizens and governance in a knowledge-based society.

See: http://www.copecl.org

Contact: Prof. Dr. Hans Schulte-Nölke, schulte-noelke@uni-osnabrueck.de