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EU mulls improvements to European contract law

The European Commission, seeking to boost cross-border trade and to ensure strong rights for consumers, convened a new expert group to propose ways to improve contract law in the European Union.

The group of 18 contract law experts, lawyers and consumer representatives met for the first time on Friday in Brussels. The Commission will launch a public consultation on the most appropriate way forward to improve coherence in contract law in the summer. A possible solution could be an optional European contract law (or "28th system"). 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.

On 26 April 2010, the Commission set up an expert group on a Common Frame of Reference in the area of European contract law (Commission Decision 2010/233/EU). Until May 2011, this group will meet once a month. It brings together legal academics, people practising contract law on a daily basis like lawyers and notaries, as well as consumer and business representatives.

Legal scholars, who were funded by the EU's overall research programme (FP6), have been working on this complex area of private law for many years. Their work resulted in a Draft Common Frame of Reference. 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.

Jonathan Faull, Director General for the Justice, Freedom and Security Directorate-General, chaired the first meeting, which focused on concrete questions concerning the definition of the contract, its interpretation and formation. The European Parliament and the Council have observer status at the group’s meetings.

The Commission will also issue a policy paper and launch a public consultation in the summer on the best way forward on contract law in Europe. The consultation will run until the end of January 2011 and will cover cross-border problems faced by consumers and businesses and how best to solve them.

Background

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. This strategy was launched by President José Manuel Barroso on 3 March 2010.

The expert group meeting follows the publication this month of two important reports on the economic and social challenges facing the EU. These reports, A New Strategy for the Single Market by Professor Mario Monti, former Commissioner for the Single Market and Competition, and Project Europe 2030, chaired by former Spanish Prime Minister Felipe González Márquez, present concrete solutions on how the EU can confront pan-European challenges such as climate change, aging populations and securing citizens’ employment and social welfare.

On 19 May 2010, the Commission presented a Digital Agenda, which stressed the potential of a European contract law for completing a digital Single Market for consumers and businesses.


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