EU expert group meets to begin creation of pan-EU contract law

The Commission aims to harmonise consumer contract law more extensively by creating model clauses for consumer contracts and even creating a whole new EU contract law which retailers or consumers could 'opt in' to using instead of national laws when conducting cross-border business.

The Commission has established an expert group to create a 'common frame of reference' on which its plans will be based. That group met for the first time late last week.

"[The group] brings together legal academics, people practising contract law on a daily basis like lawyers and notaries, as well as consumer and business representatives," said a Commission statement.

The group's work will be based on research conducted by law academics. "The new group will prepare a user-friendly text in simple language. Their draft will follow the life cycle of a contract – from pre-contractual duties and the formation of a contract to remedies for the breach of a contract and the consequences of termination," said the Commission statement.

The group will propose concrete changes in summer and these will be the subject of a consultation until early next year.

The Commission said that it wanted changes in the law to increase the amount of cross-border trade that happens within the EU.

"The Commission is working to tackle bottlenecks to the Single Market under its Europe 2020 strategy, in particular by offering harmonised solutions for consumer contracts, EU model contract clauses and by making progress on the coherence of European contract law," the statement said.

The Commission has proposed the possible creation of an entirely new layer of contract law which consumers could opt for instead of their own national law.

"A possible solution could be an optional European contract law (or '28th system')," it said. "For example, an Irish retailer dealing with a French supplier, who is unfamiliar with French law, could opt for European law for the contract. In addition, a Polish consumer shopping on the Internet could push a 'blue button' on the website and choose the European contract law instrument, which would guarantee a high level of consumer protection."

EU Commissioner for Justice, Fundamental Rights and Citizenship Viviane Reding said earlier this year that she backed the creation of the 28th system.

"Business-to-consumer relationships are complicated by 27 different regimes for contractual relations," she said in February. "That means that a consumer may be able to return a defective product for a full refund within 15 days of the sale in one country, whilst a consumer in another nation may get three months.

"Such a European Contract Law would exist in parallel to the national contract laws and provide standard terms and conditions," she said. "The United States started with a uniform commercial code to become a globally competitive economy. Why couldn't we have, in the end, a European civil code for our single market?"

The expert group contains three UK-based academics. They are Professor Simon Whittaker of Oxford University, Professor Hugh Beale of Warwick University and Professor Eric Clive of Edinburgh University.