The Draft Common Frame of Reference: Mistake and Duties of Disclosure

Abstract

The provisions of the CFR dealing with mistake, non-disclosure and pre-contract information fulfil the functions of the CFR as a legislator's guide or toolbox stated in the European Commission's Action Plan documents: to provide definitions and model rules which the European legislator could employ were it minded to deal with these topics – for example, to give consumers who have been the victims of breaches of information duties stronger remedies than the rights of withdrawal currently required by, e.g., the Doorstep and Distance Selling Directives.

The paper suggests that the CFR has a further function as a toolbox: to provide the legislator with essential background information about the different laws of the Member States. This information is necessary in order to decide whether European legislation is needed at all and, if so, how it can best be made to “fit” existing national laws. The provisions of the DCFR dealing with mistakes caused by one party giving incorrect information to the other represent what is “common core” to most of the national laws; but the provisions dealing with fraudulent non-disclosure and with mistakes that are known or should have been known to the other party do not represent common core, since on these points the laws differ widely. Rather the DCFR provisions represent a workable compromise position. This must be clearly flagged up in the Comments and Notes, or the CFR would be highly misleading.

The study shows that it would not be feasible for the European legislator to provide fuller remedies by simply stating that the consumer shall have whatever remedies for mistake or non-disclosure are available under national law: many national systems provide only very limited remedies. It would be possible to provide that the consumer should have “remedies for mistake and non-disclosure”, meaning that phrase to have an autonomous meaning, and to leave the CFR to provide a definition of those remedies. However, given the complexity of the topic and the enormous variations in the national laws, this approach would be risky: national legislators and courts might well not understand what is required. A detailed legislative scheme would be better. The DCFR offers a workable set of model rules, both on these issues under the general law of contract and for consumer contracts under the specific provisions dealing with information requirements in B2C contracts.

The DCFR provisions would also fit well into a Optional Instrument that is aiming to meet the needs of SMEs seeking to enter transnational contracts.