On 11 October 2011, the European Commission published a proposal for a Regulation on a Common European Sales Law (“CESL”) which envisages creating an optional set of uniform European contract law rules which would operate in parallel with each EU Member States’ national contract law.
The main thrust behind the proposal is to help increase the cross-border sale of goods and services related thereto while at the same time allowing Member States the option to permit the use of the CESL in domestic business-to-consumer and business-to-business transactions.
It is the European Commission’s position that differences in contract law between Member States are a major obstacle to further integration of the EU Single Market as such differences make it more complicated and costly for parties wishing to enter into cross-border contracts for goods, particularly small businesses.
The European Commission advances the argument that by removing this impediment cross-border trade would substantially increase and such increase would help drive down consumer prices by creating greater competition between traders.
Proponents of the CESL appear reluctant to acknowledge the fact that uniform contract codes are already available to EU traders and non-EU traders (eg, the United Nations Convention on Contracts for the International Sale of Goods) and there is nothing to suggest that having an option to use a uniform contract code will automatically result in either frequent or extensive use of such code.
Many commentators argue that the CESL as a new system without established jurisprudence would create a great deal of uncertainty regarding the application of its provisions. In terms of expanding upon and harmonising the level of protection afforded to consumers across the EU the common sense approach would indicate that a tried and tested method is the best way to move forward namely the enactment of legislation that is specific in terms of the concerns that it wishes to address (eg, the implementation of the EU Directive on Distance Selling (Directive 97/7/ EC) which sets out minimum levels of protection for consumers).
Currently the European Parliament supports the idea of the CESL but the Council of Ministers has not yet given its view. There appears to be little appetite among Member States for introducing a “second regime” of contract law and therefore, it will be interesting to see whether the Council of Ministers will give its full backing to the CESL.