New study into creation of EU-wide contract law published

The study outlines how EU-wide contracts could be created, the terms of those contracts and how they could be applied in practice. The study (93-page / 325KB PDF) includes proposals for the rules for when a contract is considered as being offered and when it is considered to be accepted.

The rights to withdraw from a contract, legal rights for faulty goods and rules governing unfair contract terms are among the other aspects of law detailed in the study.

The study was conducted by lawyers, former judges and academics from across Europe, at the request of the Commission, a Commission press release said. The group was established in April 2010, met monthly and regularly communicated with businesses and consumer groups, the Commission said.

European-wide contracts would benefit commerce by eliminating the complications that operating within 27 nation-specific contract laws brings, the Commission has said.

Last year the Commission announced proposals for a '28th regime' of contracts which would apply across EU member states and run in conjunction with the 27 member state contract laws.

The consultation received 320 responses with some groups questioning whether the creation of a new law was necessary.

"There is evidence that small and medium enterprises ... who choose not to engage in cross-border trade within the European Union ... are more influenced by factors other than the legal system prevalent in different Member States, such as cultural and linguistic differences and transport costs," the City of London Law Society (CLLS) said in its consultation response (11-page / 136KB PDF).

"The very competence of the EU to act on this matter is doubtful. Even if divergent national laws could be shown to deter trade, it would be difficult to show that any of the options in the [Commission's proposals] would actually reduce such effect," the CLLS said,

Last month the European Parliament's Legal Affairs Committee backed the Commission's proposals and said it hoped the new contracts would be available 'off the shelf' for companies to use. This would avoid the legal costs of adhering to several different contract laws when involved in cross-border trade, the Committee said. The Parliament will now consider the proposals in more detail.

The European Commission's finalised proposals for the development of a '28th regime' of contracts is expected in the autumn.

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