The Proposal for a Regulation on a Common European Sales Law: Deficits of the Most Recent Textual Layer of European Contract Law

DOI10.3366/elr.2012.0119
Pages301-357
AuthorReinhard Zimmermann,Eva-Maria Kieninger,Horst Eidenmüller,Nils Jansen,Gerhard Wagner
Publication Date01 September 2012
Date01 September 2012
THE PROJECT OF AN OPTIONAL SALES LAW FOR EUROPE The proposal for a Regulation

The Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law (PR CESL), published on 11 October 2011,1

COM(2011) 635 final.

is a milestone in the development of European contract law. It is a text which cannot merely be labelled “academic law” in the sense of constituting a set of model rules drawn up by a group of professors.2

See R Zimmermann, “ ‘Wissenschaftliches Recht’ am Beispiel (vor allem) des europäischen Vertragsrechts”, in C Bumke and A Röthel (eds), Privates Recht (2012, forthcoming). On the authority of legal texts in general, see N Jansen, The Making of Legal Authority (2010).

The Proposal represents a draft codification of one of the core areas of private law and, possibly, constitutes the first step towards a European Civil Code.3

See A Hartkamp, M Hesselink, E Hondius, C Joustra, E du Perron and M Veldman (eds), Towards a European Civil Code, 1st edn (1994); 4th edn (2011).

As well as the sales law mentioned in the title, the Proposal covers general contract law, contracts for the supply of digital content,4

On these types of contracts, particularly from the point of view of consumer protection, see M Schmidt-Kessel, L Young, S Benninghoff, C Langhanke and G Russek, “Should the Consumer Rights Directive apply to digital content?” [2011] Gemeinschaftsprivatrecht (hereafter GPR) 7; M Loos et al, Digital Content Contracts for Consumers: Analysis of the Applicable Legal Framework and Suggestions for the Contours of a Model System of Consumer Protection in Relation to Digital Content Contracts (2011), available at http://ec.europa.eu/justice/consumermarketing/files/legal_report_final_30_august_2011.pdf.

and services closely related to a contract of sale or a contract for the supply of digital content (installation, repair, or maintenance).5

Art 5 PR CESL. Surprisingly, the draft Regulation does not cover contracts linked to a consumer credit: art 6 PR CESL, and see B.4(b) below.

The Common European Sales Law (CESL) does not apply directly to all such contracts concluded within the European Union; its use requires a specific agreement of the parties to that effect (the “opt-in model”).6

Art 8 and art 9 PR CESL; see also B.5 below.

The Commission envisages this option being exercised within the scope of the respective national law applicable under the relevant conflict of laws rules.7

Recital (10) PR CESL.

The CESL, to use terms frequently in this respect employed in private international law discourse8

For clarification, see M Fornasier, “28. versus 2. Regime – Kollisionsrechtliche Aspekte eines optionalen europäischen Vertragsrechts” (2012) 76 Rabels Zeitschrift für ausländisches und internationales Privatrecht (hereafter RabelsZ) 401.

does not, therefore, constitute a “twenty-eighth” contract law regime, but rather a “second” one, made available to contractual parties in a uniform manner within the various national legal systems

The overall objective of the draft Regulation is to improve the functioning of the internal market by facilitating cross-border trade.9

Explanatory Memorandum PR CESL section 1; Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Common European Sales Law to facilitate cross-border transactions in the single market, COM(2011) 636 final, section 1. The DCESL is evidently mainly intended for electronic trading: see also recital (26) PR CESL (“…particularly those [contracts] entered into online”). This is also apparent from the recurrent use of the ‘blue button’ image; see H Schulte-Nölke, “Der Blue Button kommt – Konturen einer rechtlichen Infrastruktur für den Binnenmarkt” (2011) 19 Zeitschrift für Europäisches Privatrecht (hereafter ZEuP) 749. However, important areas of online trading have special goodwill practices and reputational mechanisms which very considerably reduce the practical relevance of the legal regime: W Doralt, “Rote Karte oder grünes Licht für den Blue Button? Zur Frage eines optionalen europäischen Vertragsrechts” (2011) 211 Archiv für die civilistische Praxis (hereafter AcP) 1 at 24–27.

By subjecting contracts to a uniform legal regime, it should be possible for businesses to lower their transaction costs. At the same time, contracts concluded under the CESL are also intended to be attractive to consumers, for the CESL is characterised by a particularly high level of consumer protection which “in total significantly exceeds the level of protection available in each individual Member State”.10

See Commission Communication (n 9) section 2.2. The original German quotation is: “…in der Summe deutlich über dem Schutzstandard jedes einzelnen Mitgliedstaates liegt”: Schulte-Nölke (n 9) at 755 (Professor Schulte-Nölke is the German member of the Expert Group which drew up the CESL). The Commission has published country specific factsheets which show in which respects consumers would be better off under the DCESL than under the various national laws in Europe: see http://ec.europa.eu/justice/newsroom/news/20111011_en.htm.

The rationalising effects are partly, however, counteracted by two decisions of the Commission: on the one hand, the CESL is only intended to apply to cross-border contracts11

Art 4 PR CESL.

while, on the other hand, its application is restricted to consumer contracts and to contracts between traders where at least one of them runs a small or medium-sized enterprise (SME).12

Art 7 PR CESL. Small or medium-sized enterprises, as defined by the proposed Regulation, are traders which (a) employ fewer than 250 persons, and (b) have an annual turnover not exceeding EUR 50 million or an annual balance sheet total not exceeding EUR 43 million, or, for an SME which has its habitual residence in a Member State whose currency is not the euro, the equivalent amounts in the currency of that Member State. For further details, see also the Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises [2003] OJ L 124/36.

The limitation of the CESL to certain “business to business” (B2B) transactions13

This is the terminology used to date. In the list of definitions contained in the proposed Regulation (art 2 (e)) the term “business” has been replaced by “trader”. This change in terminology originated in the preparatory work for the Consumer Rights Directive (on which see A.2 below).

only is bound to lead to problems (how is a large enterprise supposed to assess whether or not the other party has an annual balance sheet total not exceeding EUR 43 million?), and subjecting internal and cross-border contracts to different legal regimes is in fundamental opposition to the spirit of the internal market.14

See also O Lando, “On a European contract law for consumers and businesses – future perspectives”, in R Schulze and J Stuyck (eds), Towards a European Contract Law (2011) 203 at 213.

Member States of the EU, however, will have the option to make the CESL available for purely internal transactions and for contracts between traders in general.15

Art 13 PR CESL.

Textual layers

The draft CESL (DCESL) now published is the latest in a long line of texts which build upon, and must therefore be, hermeneutically related to each other. The first texts were the Principles of European Contract Law (PECL) of the Lando Commission16

O Lando and H Beale (eds), Principles of European Contract Law, Part I (1995); O Lando and H Beale (eds), Principles of European Contract Law, Parts I and II (2000); O Lando, E Clive, A Prüm and R Zimmermann (eds), Principles of European Contract Law, Part III (2003); also R Zimmermann, “Principles of European contract law”, in J Basedow, KJ Hopt and R Zimmermann (eds), Max Planck Encyclopaedia of European Private Law (2012) 1325.

and the UNIDROIT Principles of International Commercial Contracts (PICC).17

UNIDROIT (ed), UNIDROIT Principles of International Commercial Contracts (UNIDROIT 1994, 2004 and 2010); see also J Kleinheisterkamp, “UNIDROIT Principles of International Commercial Contracts”, in Basedow, Hopt and Zimmermann (eds), Encyclopaedia (n 16) 1727.

These were developed at roughly the same time, and they resemble each other closely. The further steps, via the Acquis Principles (ACQP) and the Principles of European Law of the Study Group on a European Civil Code (covering various legal areas adjacent to contract law), to the Draft Common Frame of Reference (DCFR)18

C von Bar and E Clive (eds), Principles, Definitions and Model Rules of European Private Law: Draft Common Frame of Reference (DCFR), Full Edition (2009).

has already been described in detail elsewhere.19

R Zimmermann, “Europäisches Privatrecht – Irrungen, Wirrungen”, in Begegnungen im Recht –  Ringvorlesung der Bucerius Law School zu Ehren von Karsten Schmidt (2011) 321.

The DCFR was a draft “European Civil Code in all but name”20

M Hesselink, “The Common Frame of Reference as a source of European private law” (2009) 83 Tulane LR 919 at 923. See also N Jansen and R Zimmermann, “A European Civil Code in all but name: discussing the nature and purposes of the Draft Common Frame of Reference” (2010) 69 CLJ 98.

which revised and reconceptualised the contract law laid down in the PECL under the auspices of the doctrine of “juridical acts” and a general law of obligations.21

For criticism, see N Jansen and R Zimmermann, “Contract formation and mistake in European contract law: a genetic comparison of transnational model rules” (2011) 31 OJLS 625 at 629–633. For general criticism of the DCFR, see H Eidenmüller, F Faust, H Grigoleit, N Jansen, G Wagner and R Zimmermann, “The Common Frame of Reference for European private law – policy choices and codification problems” (2008) 28 OJLS 659; S Grundmann, “The structure of the DCFR – which approach for today's contract law?” (2008) 4 European...

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