Volume 2, Issue 2

The Study Group on Social Justice in European Private Law was born at the University of Amsterdam in September 2003, at the initiative of Hugh Collins and Martijn Hesselink. Further meetings took place at the London School of Economics (January 2004), and Paris (April 2004), thanks to the UMR de droit comparé de Paris I, Université Paris I (notably the Director, Hélène Ruiz Fabri and a member of the group, Horatia Muir Watt) where various interested members of the group from throughout Europe convened to deliberate. From these meetings and intensive e-mail discussions emerged the collective Manifesto on Social Justice in European Contract Law . The Manifesto was published in November 2004 in the European Law Journal.

The paper seeks to provide the constitutional background to the debate about the place of ‘social justice’ in European contract lawmaking. It examines, first, the constitutional justification for the EC's intervention into contract law; second, the legal criteria governing the content of the EC's rules affecting contract law; and, third, the effect exerted by the EC on residual national competence. Its fundamental aim is to elucidate the dynamic and, in places, ambiguous nature of the relationship between the EU and its Member States, and to show how this impinges on contract law in particular.

the Manifesto emphasises that European private law ought to propose a model of distributive justice that is in alignment with constitutional principles. According to this perspective, this article analyses, firstly, the idea of social justice that is embraced in the Charter of Rights. Secondly, the idea of social justice that is ascribed to private law in the current EC acquis and in harmonisation projects like the PECL is considered.

A form of contract law constitutionalization known by most European legal systems is the horizontal effect of fundamental rights and constitutional principles. This paper presents a comparative overview of fundamental rights adjudication in the private law of ten EU Member States. It draws attention to the spontaneous judicial convergences in contract law, which enable us to speak of the common ‘fact patterns’ of horizontal effect. This paper aims to demonstrate two theses: first, this horizontal effect is a pan-European phenomenon, not necessarily linked to a particular national legal culture. Second, horizontal effect in contract law is not politically neutral but inspired, at least in its application by national courts, by policies of social justice.

European contract law must be developed along lines which are different from those proposed by free market enthusiasts. To this end, it must be based upon the principles enshrined in national constitutions and developed by national courts, in accordance with various technical expedients, but which are all the natural consequence of one political design: to have courts acting as a counterweight in situations where contracting parties are structurally weak. The contract law model contained in the European Constitution is quite different from this. It is based upon the ordoliberal principle of social market economy, which permits contractual freedom only in so far as it contributes to the stability of markets. To devise contract law in line with the doctrines enunciated by national courts does not entail opposition to the market: it merely requires markets to function according to different principles than those currently valued at EC-level, such as those which involve promoting social dialogue as a means for re-examining the current economic model.

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 result can be prevented, if the leading principle of an optional instrument would require a balance to be struck 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 harmonisation, and if so, what type of harmonisation it fits best. Finally, the technique by which an optional instrument may be rendered applicable will be discussed.

The Manifesto on Social Justice in European Contract Law proposes to derive European private law principles, including principles of fairness in contract law, from the acquis communautaire. This task encounters the difficulty of the predominant regulatory character of the acquis, which resists reformulation in the traditional general and abstract principles of private law. This problem cannot be ignored or dismissed, but it can be accommodated once it is appreciated that European private law will itself comprise a modern hybrid of law and regulation in its logic and modes of governance.

Taking the current work on refining the contract law acquis as its starting point, this article considers whether there is a case for greater harmonisation of the law of damages in contract law within the EU. The law of damages is a platform for enforcing contractual interests. As long as remedies in general and damages in particular remain subject to divergent national solutions, the Community will have difficulties in achieving its goal of coherency in contract law. By demonstrating the complexities surrounding this area of law and discussing recent decisions of the European Court of Justice, it argues that the current inconsistencies in the law of damages justify action at community level. The article outlines possible options for the Community that are consistent with the current climate of political, legal and social integration within the EU. It concludes by demonstrating that Europe could use the medium of contract law and the law of damages to deliver social and economic justice.

This paper aims to demonstrate that, even if Article 82(2)(a) of the EC Treaty does not replace the market measure with a political measure with respect to contractual clauses, nonetheless it pursues social justice, whatever conception of social justice one accepts. According to a vast majority of Economics scholars, such regulation is wholly inefficient. The rule, as it stands, is supported by evidently equitable reasons: it is designed, in fact, to protect a specific class of consumers, particularly those who cannot afford innovation at a monopolistic price. This regulation has been harshly criticised, and has undergone several attempts to reduce its scope of application. I believe that a group that is concerned about social justice in European contract law cannot allow this norm to be disregarded and should, instead, invoke its application.

The structure of the relationship between the individual and the community or the state is not definite at the European level. However this is a crucial point for the definition of the ground-rules in private law, considering, in particular, that European jurists normally ascribe to private law a constitutive role both in the functioning of the integrated market and in the construction of a European citizenship. In contract law the relationship between the individual and the community or the state is mainly designated by the definition of freedom of contract and its limits. On the scene of European law, however, the question of the limits of freedom of contract finds very different and contrasting solutions. This article identifies three different modes of approaching the question, which we have experienced and are currently experiencing in Europe; they are respectively described as the paternalistic, the social and the perfectionist model. Although recent developments in the harmonisation process show a propensity for a combination of the first and the third model, this paper argues that the social model still has a chance to achieve a key role in European contract law.

To examine the link between social justice and our European identity, the paper proceeds in three stages. First, I argue that social justice is not only concerned with the distributive aims and effects of contract law but also the cultural aspects of law, by drawing an analogy between a contested economic and cultural dichotomy. Secondly, the paper explains how the idea of European identity is connected to a cultural identity and is deeply rooted in social justice. Finally, the paper examines the idea that both dimensions of social justice concern European contract law. A parallel between the construction of European contract law and the identification process for European citizens can be drawn; the two go hand in hand.

Judgment of the Court of 5 October 2004, CaixaBank France v Ministère de l'Économie, des Finances et de l'Industrie, Case C-442/02, [2004] ECR I-8961.

NB: This section presents a series of non legislative actions and legislative acts directly or indirectly linked to contract law, which were adopted at European level between end October 2005 and January 2005.

Readers will be familiar with the European Commission's plan to create a Common Frame of Reference (‘CFR’). The aim is to provide ‘fundamental principles, definitions and model rules’ that can assist in the improvement of the existing acquis communautaire, and that might form the basis of an Optional Instrument if it is decided to create one. Meanwhile there is to be a parallel review of eight consumer Directives. Readers will know that a ‘Network of Excellence’ has been funded under the Sixth Framework Programme (‘FP6’) to produce a draft CFR by the end of 2007. They will have read an account of the network of stakeholders (the ‘CFR-net’) established to comment on the researchers' drafts. This paper is one ‘researcher's’ personal report on progress since the first stakeholder workshop in March 2005.

Conference on Private Law and the Many Cultures of Europe (27–29 August 2006), University of Helsinki – Call for Papers The PriME research project and the Institute for International Economic Law at the University of Helsinki host a conference on Private Law and the Many Cultures of Europe in August 2006. The conference is intended for all scholars interested in exploring the foundations of European private law, in particular in a socio-legal perspective. The conference is also accepted as one of the yearly conferences of the so called Social Justice Group.