Towards a European Contract Law?

The European Commission has published a green paper on policy options for progress towards a European Contract Law for consumers and businesses to make it easier, particularly for small and medium enterprises, to offer their goods and services cross-border. It has also launched a public consultation to gather views on the ideas set out in the green paper by the deadline of 31 January 2011.

The subject of European contract law has been under discussion for some time in the EU. Differences in contract law and particularly problems in understanding those differences discourage cross-border transactions. The Commission would like to address these problems.

7 options are put forward in the green paper:
1. Publication of the results of the Expert Group already established by the Commission on this topic as a source of reference without an official basis.
2. An official Commission act (possibly a Communication or Decision) to be used as a "toolbox' by the Commission when drafting proposals for new legislation or when revising existing measures.
3. Commission Recommendation on European Contract Law which would encourage Member States to incorporate the instrument into their national laws on a voluntary basis.
4. Regulation setting up an optional instrument of European Contract Law which parties would have the option of choosing to regulate their contract.
5. Directive on European Contract Law which would harmonise national contract law on the basis of minimum common standards.
6. Regulation establishing a European Contract Law which would apply to contracts by law rather than choice.
7. Regulation establishing a European Civil Code which would cover not only contract law but also other types of obligations.

It also needs to be decided if the instrument should cover both business-to-consumer and business-to-business contracts, and both cross-border and domestic contracts. The specific types of contracts to be covered also have to be defined, and in particular if these would include contracts for services as well as the sale of goods.

Property professionals are now considering how important and/or useful it would be to have standard rules on contracts in Europe and if so their preferred option from those listed above. If it is established that there is a need for a European Contract Law, CEPI would favour a solution which is clear and easy to use for both professionals and consumers.