Hugh Beale(Universities of Warwick, Oxford &
Amsterdam)
Drafting a CFR: the aims and approach of the Expert Group
The DCFR• Study Group
– Thorough comparative study of MS’s laws• Common principles
– Functional approach, strip away differences in terminology and concepts
• “Best solutions”
• Acquis Group– Existing Acquis
• Some improvements• Largely, existing acquis
Coverage of DCFR: obligations• Contracts
– General part (Books I-III)– Specific contracts (Book IV: sales, leasing,
services…)
• Non-contractual liability– Unjust enrichment– Benevolent intervention– Liability for damage (tort/delict)
Coverage of the DCFR: property
• Proprietary questions– Acquisition and loss of ownership of goods – Proprietary security rights in movable
assets – Trusts
“Academic CFR”
• Action Plan:– Toolbox for legislators
• Principles, definitions and model rules• Use in revision of consumer directives
– Basis for possible Optional Instrument• Especially for cross-border contracts• Instead of national law• B2C and/or B2B
• “Political CFR” likely to be narrower
Consumer Rights Directive
• Prioritisation of consumer work
• Proposed CRD (Oct 2008)– “Horizontal”
• Distance selling• Doorstep• Unfair terms• Consumer sales
– Some extension: e.g. damages in sales– Combined, more consistency
“Full harmonisation”• Rome I art 6
– C entitled to protection of own law– B must be prepared to cope with 28+ laws
• FH: MS cannot give additional protection– In some MSs, consumer protection reduced – But only “within scope” of CRD
• Too narrow or too broad• Uncertain
• pCRD now “targeted full harmonisation”• Optional Instrument (Blue Button)
The Green Paper
• Green Paper 1 July 2010: options– Do nothing– Tool box (various forms)– Recommendation to MS– Optional Instrument– Directive on European Contract Law– European Civil Code
Expert Group• Commission Decision 26 April 2010• “As if” basis
– Optional Instrument– Toolbox?
• “Workable Optional Instrument”– B2B and B2C– Sales only but expandable
• General part: suitable for any contract
The OI and PIL• Commission decision, not yet taken• Current thinking:
– Substantive law approach– Regulation introducing into law of each MS– Cf CISG but “opt-in”
• Opt-in = opt-out of CISG
– Rome I art 6 by-passed– ? Exclude use of art 9 for consumer law
B2C sales• Sales provisions• General contract law• Acquis minimum requirements
– pCRD (sales, distance & off-premises selling)
– Consumer Credit Directive (instalment sales)
• Acquis full harmonisation: copy in
“High level of consumer protection”• In MS where protection at minimum level, no
loss if choose Blue Button• In MS where high protection, will reduce
protection– B may offer choice but probably Blue Button or
nothing– To make attractive, high enough level that C
confident that reasonably protected– Higher than minimum harmonisation requirements
“Consumer sub-group” of EG
• Where does DCFR go beyond minimum?• Where do national laws go beyond minimum
on matters within scope? – E.g. blacklisted terms
• Where do national laws have rules outside scope of acquis go beyond DCFR?– E.g. lesion, Nordic Contracts Act s 36
• Which should we include in the CFR?
B2B: who might use it?• Non-national (“neutral”), in many languages• Single “operating system” / platform for
businesses across the EU• Larger firms:
– Sell c/b via subsidiaries– Expertise– Higher value contracts– Often riskier transactions
• Should aim at SMEs
What do SMEs want?
• Suspect:– More risk averse– Would like protection if
• Non-disclosure: Unknown unknowns
• Surprising or harsh general conditions
• Behaviour inconsistent with GF and fair dealing
• Harmonise protection for for SMEs?– Problems of definition
• Self-selection: Option to choose law
An Optional Instrument for SMEs• B2B contracts
– Sales first, then supply of goods and of services
• ? Targetted at SMEs– SME x SME and SME x large business– Way of reducing cost and risk of cross-border
exchanges– “Insurance”– At a premium
Why would other party agree?
• If SMEs prepared to pay “price”, other businesses will find it worth offering the OI
• If other refuses, SMEs know riskier
• Not all SMEs will want this “insurance”– They will not opt for the OI
An OI for domestic use?
• Need not be limited to cross-border contracts– If SMEs prefer the OI for domestic
contracts, why not allow its use?
OI compared to DCFR• Coverage: “re-contractualisation”• Simpler style
– Closer to PECL?
• Many articles omitted– “150 articles”– Some from general contract law– Probably not
• Agency• Assignment and transfer of contract• Conditional contracts• Plurality of parties• Prescription• Set-off
A dialogue
• 5-way dialogue– Expert Group– Commission’s CFR Team– Commission’s CRD Team– Parliament– Stakeholders
Summary and conclusion• Optional Instrument
– Sales and supply of goods and services– Cross-border and ?domestic – B2C: high level of protection– B2B: aimed at SMES
• Also want to see:– Improved consumer acquis
• Limited full harmonisation• To cover contracts outside OI
– A CFR as a toolbox