The European Commission is currently considering how to make progress towards a more coherent law of contract across the EU. The Commission published a Green Paper in 2010 setting out a number of possible options towards achieving this goal and launching a consultation period on the issue which closed on 31 January 2011. It hopes to make progress on implementing the reform by 2012.  

This is not the first development in this area at EU level: There have been a number of steps taken in the past to progress this idea of a pan-European contract law. Those who favour it are of the view that an integrated approach to the negotiation of contracts would help to reduce the uncertainty which can exist between member states in this area of law. However, there are still many who oppose it, perhaps because they remain unconvinced that such a move is necessary and perhaps because of the very real difficulties entailed in harmonising such diverse bodies of laws.

The options set out by the European Commission in its Green Paper are very varied, ranging from the publication of guidance without endorsement at EU level which would act as a source of inspiration for European and national legislators when drafting legislation, to the idea of a Regulation establishing a mandatory European contract law which would replace national contract laws with a uniform set of rules.

The Green Paper also raises a number of questions around the scope of any proposed solution, for example whether it should extend to both business-to-consumer and business-to-business contracts, whether it should apply to both cross-border and domestic contracts, and whether it should deal only with rules such as those relating to interpretation, formation, invalidity, performance and remedies or whether it should go further into areas such as restitution and non-contractual liability.  

Depending on the nature and extent of the European Commission's conclusions following this consultation, the development could potentially have far-reaching implications for anyone involved in the negotiation of contracts in the EU. For the moment however, we will have to wait and see how far the European Commission is prepared to go on the issue.HEAD>