Band 4, Heft 3

This paper discusses the DCFR as a potential model for a European Code because core members of the study group see it as this. The paper discusses, first, the overall structure and does so in two respects: It asks the question whether one should really aim at a big Code – including all obligations and large parts of property law – and argues that one should rather concentrate on a modern and convincing Contract Law Code, given that contract law is very complex today and there are not really many common problems with other obligations anyhow; the content and structure of contract law has reduced quality in the DCFR as a result of its combination with other obligations. Moreover, this paper asks the question whether all types of contract partners should be included and argues that the DCFR is right in doing so, but that it does not really reflect modern theory on where markets fail and therefore does not convincingly find the reasons where and why to differentiate in the substantive law solutions. In the two other sections two core phenomena of modern contract law are discussed: information and formation of contracts and service contracts and networks in today's service society. These are discussed with a view to see how intensively their peculiarities have indeed influenced the structure of the DCFR. Little such influence can be detected. These examples also show how well founded is the criticism that much too often general clauses are chosen instead of finding concrete solutions.

This paper evaluates the draft Common Frame of Reference (DCFR) in terms of social justice. It concludes the DCFR has all the characteristics of a typical European compromise. Ideological and esthetical purists will certainly be disappointed. In this respect, it has much in common with the Constitutional Treaty. This is not necessarily something to be worried about. A common frame of reference is not made, in the first place (if at all), for esthetical or ideological reasons; it is meant to provide some normative guidance in the further development of European contract law. Overall, from the point of view of social justice the DCFR is fairly balanced. There is certainly room for improvement. The laissez-faire concept of juridical acts should be removed. The list of underlying values, which may play an important role in the interpretation and further development of the CFR by the courts, must be made more balanced. The protection of consumers should be extended to SMEs at least in certain cases (notably unfair terms). The classical role of good faith as a basis for new judge-made obligations should be restored. However, the characterisations of the DCFR by some scholars as ‘a law for big business and competent consumers’ or, alternatively, as a ‘massive reduction of private autonomy’ are both exaggerations.

This contribution claims that the Draft Common Frame of Reference (DCFR) for a European Private Law (2008) suffers from so-called methodological nationalism: the DCFR adopts a view of law and lawmaking developed for national societies and in doing so, it takes too little into account that what is best at the national level may not be optimal at the European one. This is demonstrated by reference to three different features of the Draft-CFR: the idea of comprehensive codification, the choice of the relevant rules and the way in which law is represented. European private law should be presented in a differentiated way, dependent on whether its function is to create binding rules, offer a source of inspiration for legal scholarship and teaching or form the first step towards the creation of an optional contract code.

This paper argues that cultural linguistic plurality, which affects us deeply, should be treated as a fundamental right in private law and examines the compatibility of cultural diversity and linguistic plurality with the DCFR. Since plurality is often presented as an obstruction to the single market, any attempt to preserve cultural linguistic plurality appears to clash with the main aim of the DCFR, to promote the internal market. In examining whether and how the DCFR overcomes this dilemma, an enquiry as to the implications of the DCFR, envisaged as creating one set of rules to apply throughout the EU, is carried out. As rules written in one language will require translation engendering complex interpretation difficulties, a twofold enquiry is made concerning the language of the DCFR itself and the language of contracts. The language of the DCFR creates difficulties on two levels: the first, semantic, since many terms of the DCFR denote without connotation. The second major difficulty relates to judicial interpretation, which runs the risk of not respecting linguistic equality, either because of a uniform interpretation or because of the possibility that the original language of the DCFR will prevail. Further, is emphasised that the DCFR fails to take account of cultural linguistic plurality as a fundamental right subject to non-discrimination, thus missing an opportunity to promote such values. As far as the language of contracts is concerned, it is suggested that certain provisions of the DCFR may enable a language-type to be imposed in certain cases. Moreover, provisions for resolving linguistic discrepancies may fail to respect linguistic equality. In sum, the DCFR runs close, perhaps unintentionally, to enhancing English as the default lingua franca in the EU. The paradox, however, is that the DCFR, though written in English, may not make much sense to Anglophones and common lawyers.

This paper shows that the pre-contractual duty provisions contained in the DCFR are of limited relevance to the negotiation of commercial contracts and, more generally, that the Draft's ability to fit the contractual relationships between businesses is weak.

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.

Legal rules on agency reflect the tension between the expectations of the principal on the one hand and the reliance of the contracting third party on the other. The Draft Common Frame of Reference speaks to situations where the representative is involved in a conflict of interest – the principal may avoid the contract if the third party knew or could reasonably be expected to have known the conflict. If the representative is misusing his authority but is not involved in a conflict of interest, the contract with the third party will remain valid; however the representative will be required to compensate the principal. It seems that the Draft Common Frame of Reference is yet to adequately address instances where the representative has misused his authority but was not involved in a conflict of interest. The rules seem to favour the representative by not allowing the principal to avoid the contract even if the representative's misuse of authority was evident to the third party. In such cases, it is proposed to shift the burden to the third party: the principal should be able to avoid the contract if the third party knew the representative's misuse of authority or if it was evident to the third party.

The present paper offers an approach to the main and most controversial topics embodied in the Chapter of the Book IV-G-DCFR referred to Personal Securities. The Chapter aims at giving an accurate model of Law built up upon the best tested rules chosen from the different Law systems of Europe. There is an obvious pretension to pick up Law experiences from different sources and to put a comprehensive Model, framed trough a syncretic compromise. However, most of the provisions set out in the Chapter mirror the common background of personal security Law developed trough centuries of uniform evolution of the ius commune in Europe. The cornerstone of the legislative approach still remains in the classic principle of guarantor's protection. Special consideration is given in the present paper to the regulation devoted to the global personal security, to the relationship between the dependent security and the duty stemmed out from a comfort letter, to the application of the general rules to the independent guarantees and to the possibilities and limits of a special regulation of personal security granted by consumers.

Burden of proof concerns fact, but not law. From a sense of the inadequacy of this over-simple starting-point, the author of this article considers whether there is any consistent view in either the consumer acquis or the DCFR as to the appropriate object of burden of proof: should it go beyond raw fact and extend to the characterisation of facts in legal terms? In order to do so, he first considers two broad elements which contribute to the ways in which European lawyers understand the line between fact and law (whether in the national or in the EC law context): the relative generality of legal propositions and the procedural and institutional significances of the distinction itself. Having then briefly explained what he means by ‘raw fact’ and ‘pure law’, he seeks to identify three broad categories of things in between: the application of relatively simple legal concepts to raw facts; the application of evaluative legal concepts to raw facts; and legal characterization beyond raw facts. In each of these (and with illustrations from national law, the acquis and the DCFR) he seeks to show that the laws considered can and sometimes do extend the application of burden of proof from its core home of pure fact (where its remit is to allocate the risk of uncertainty as to past actions, intentions or events) so as to allocate the risk of uncertainty in judicial decision-making in the application of the law and not merely in the finding of facts. The conclusion reached, though, is that while examples of all these ‘things in between’ can be found in both the acquis and the DCFR, there is no overall consistent approach as to the question whether burden of proof should be restricted to pure fact or extended to the characterisation of facts. This inconsistency should not, however, be considered as itself a sign of incoherence: the appropriateness of the allocation of risk in the application of the law should be determined by reference to the particular context of the legislation in question and as a function of the tension between its purposes, the principle of effectiveness and the principle of the national autonomy of civil procedure.

This national report deals with some of the most significant developments in Italian contract law since 2005. It focuses on consumer contracts, public contracts, and financial contracts. As far as consumer contracts and public contracts are concerned, the recently adopted Codice del consumo and Codice dei contratti pubblici are briefly discussed. Moreover, with respect to public contracts the discussion is also extended to case law dealing with precontractual liability of contracting authorities. As far as financial contracts are concerned, the report deals both with statutory law implementing the MiFID and case law dealing with remedies for breaches of rules of conduct by investment firms.

In this sectoral report the interplay between the free movements of goods, services, capital and persons and contract law is discussed. They are closely linked, since contract law provides the legal infrastructure of the free movements. However, the relevance of contract law for the internal market is not reflected in the number of ECJ rulings. Two instances in which the free movements affect contract law and contract are dealt with. First, national rules of contract law may be contrary to the free movements; specific attention is given to the role of conflict rules in this respect. Secondly, the contract which the parties concluded is contrary to a rule of national public law, which is a barrier to trade and must be set aside. This will influence the rights and obligations of the parties to the contract. In this respect a distinction between control ex post and ex ante is made. Finally, the conclusion is drawn that although the ECJ case law is not that numerous, the free movements affect contract law and contract increasingly.