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Reproduced from "Study of the systems of private law in the EU with regard to discrimination and the creation of a European Civil Code", European Parliament, Directorate General for Research, Working Paper, Legal Affairs Series, JURI 103 EN (June 1999), Chapter III, 151-155

A European Civil Code, international agreements and European directives

Christian von Bar, Osnabrück

1. The problem

Today's European Union has long ceased to be an area in which the various national systems of private law coexisted entirely independently of each other. A huge number of long-established international agreements (EC regulations play only a subordinate role) and European directives are now in force as instruments of legal standardisation or at least harmonisation. This wealth of sources will naturally have to be exploited to the full as we try to create a European Civil Code. Both types of instrument, i.e. the international agreements and the numerous directives which affect the law of property, facilitate the tasks that lie ahead of us on the one hand. On the other hand, however, they compel us to confront a number of difficulties that have hitherto received little attention. The fact is that the existing rules enshrined in the agreements and directives need to be systematically gone over with a fine-tooth comb, incorporated into national law where necessary, supplemented in content and refined in form.They must be coordinated and dovetailed with each other, cleansed of all redundant regulation, inconsistency and terminological insularity, so that they can ultimately be fitted into a systematically coherent structure, into the 'overall picture' of a codified system. It is unlikely that anyone at the present time is able to foresee all the difficulties that will have to be surmounted on the way to this goal. As has been proved before, success can only be achieved by means of a permanent, institutionalised exchange of views and ideas between specialists and generalists.

2. The instrument of the international agreement

International agreements only help to standardise the law for the benefit of the entire European Union if all Member States of the EU accede to them or ratify them en bloc. This seems to be stating the obvious, but it has to be emphasised, because there are many areas of international law in which several multilateral conventions coexist, each with a different selection of signatories from the EU. Such conventions are inclined to cement legal differences within the EU along entirely new dividing lines instead of creating true legal unity within the territory of the Union. Generally speaking, but particularly in view [page 151] of the aim of creating a European Civil Code, we must urge legislators throughout the Union to ensure that the Member States either accede to future international agreements en bloc or not at all. In many respects this problem remains as acute as ever it was. I could mention, for example, the struggle over the Council of Europe's Lugano Convention of 21 June 1993 on Civil Liability for Damage Resulting from Activities Dangerous to the Environment,[1] other international agreements from the realm of environmental liability [2] and the New York Convention on the Limitation Period in the International Sale of Goods,[3] which is a parallel agreement to the UN Vienna Sales Convention. In the domain of environmental liability, the EU's own projects (on which the Commission is likely to present a White Paper very soon) are in competition with the planned Council of Europe convention, which is probably a considerably more radical project in terms of content. And as for the Convention on the Limitation Period, the discussions within the Commission on European Contract Law have highlighted all too clearly the weaknesses of the New York text. Europe must pool its efforts to a far greater extent than hitherto, particularly in its dealings with non-EU States, unless it wishes to see new entrenchments cut across its territory. What rhyme or reason is there, for example, in the fact that the Unidroit Ottawa Convention on International Factoring [4] and the parallel Convention on International Financial Leasing [5] entered into force on 1 May 1995 for France, Italy and Nigeria? The history of the past twenty years is littered with absurdities of this type.

3. International agreements, moreover, are often incomplete. They not only tend to focus on a narrow subject area, thereby excluding peripheral matters (just as the UN Sales Convention of 1980, for instance, excludes the sale of rights and accounts receivable), but they also make a regular habit of circumventing all issues of fundamental importance to the private-law system in general. Some examples that spring to mind are the rules on restitution in the case of invalid contracts, the difficult concurrence problems between contractual and delictual liability (a particularly important problem in transport law), the relationship between the law of obligations and the law of property or between legal grounds and court orders, and so forth. This means that standardisation is often contrived or superficial. With the exception of private international law, the private law that has been standardised by international agreements does not generally enjoy a good reputation; it is regarded as a special type of law which cuts no ice with the vast majority of lawyers. To the extent, however, that global and European conventions contain acceptable rules, as is the case with the UN Sales Convention, these rules will be incorporated in a future European Civil Code. In addition, when the time comes for a European Civil Code to enter into force, the international agreements on civil law from [page 152] which the present European rules have been derived can cease to have effect, either for all contracts within the single market or only for cross-border contracts, which would constitute real progress towards the aim of a tidy legal system. However, these international agreements would naturally remain applicable to transactions between EU and non-EU countries.

4. International agreements and European directives

It not only happens, however, that international agreements come into conflict with each other on the one hand and with legislative policy within the EU on the other hand; Europe's lawyers are also increasingly confronted with the problem of EU legislators' desire to supplement international law with internal provisions of their own. This again creates numerous coordination difficulties, both in terms of substance and in terms of pure and simple implementation rules, because solicitors, for example, under the pressure of time that is part and parcel of their everyday work, are often scarcely able to pick their way through the current chaotic tangle of sources. A particularly glaring example is the law on the sale of goods; it has to be said that the current German law on the sale of goods, for example, is in a truly intolerable state. First of all, in an international context, there is a need to get to grips with and review a conflict of laws between the particular rules to be applied under the Convention on the International Sale of Goods (CISG) and the general rules of private international law that are contained in the Convention of Rome on the Law Applicable to Contractual Obligations. Secondly, domestic legal practitioners have to juggle with four different regimes, namely the law on the sale of goods laid down by the CISG, the sales law contained in the German Civil Code, the sales law in the German Commercial Code (Handelsgesetzbuch) and the plethora of special laws, some of domestic origin and some deriving from the transposition of Community legislation, in the domain of consumer sales law. In most of the other jurisdictions in the EU, the law on the sale of goods is scarcely any clearer. Partial and regional standardisation - as in Scandinavia, for instance - only seems, from a European perspective, to worsen the overall chaos.

5. UN sales law, EU consumer protection and autonomous national sales law

One of the major tasks in the domain of European sales law has already been referred to in essence. It is first and foremost a matter of incorporating UN sales law, the provisions of European directives and national sales law into a general system that is free of duplication and contradictions. UN sales law, of course, relates to the international sale of goods (CISG, Article 1), excluding consumer sales contracts (CISG, Article 2(a)). European sales law, however, is based on precisely the opposite approach, making no distinction between cross-border and purely national cases and dealing exclusively with consumer sales contracts.

6. A future European Civil Code will undoubtedly have to deal with sales law as it relates to both business customers and consumers. For that reason, as far as the mechanics of the Code are concerned, it will be advisable on the one hand to create legal principles that apply to all sales contracts and on the other hand to create principles which apply only [page 153] for the benefit of consumers and which are therefore embodied in mandatory or semi-mandatory provisions. Even the first of these recommendations will be far from easy to put into practice for several reasons, the first being that the UN Sales Convention requires careful analysis so that two questions can be answered: are its rules entirely suitable for purely domestic cases as well as international transactions, and which of its rules represent genuine sales law and have a bearing on the law of contract in general, e.g. on the law relating to the conclusion of contracts or to impairment of the performance of obligations?

7. The concept of the consumer

The next requirement is a neat and uniform criterion for the definition of consumer sales law and indeed, if possible, for the law governing consumer contracts in general. Even in the case of this relatively straightforward matter we are still miles away from the formulation of a uniform definition. The UN Convention on the International Sale of Goods (CISG) uses a different definition to the one contained in the proposal for a directive on sales of consumer goods and associated guarantees,[6] and the latter definition differs in turn from the far broader concept of the consumer as formulated in the Rome Convention on the Law Applicable to Contractual Obligations.[7]

8. The general law governing consumer contracts

The next step will therefore comprise an examination, based on a fairly up-to-date comparative legal inventory and taking account of the existing and proposed EC Directives, with a view to determining which general rules can be developed for consumer sales law - and only for such law - within a European Civil Code. Consideration should be given, for example, to the formulation of common principles designed to afford protection against overhasty conclusion of a contract, to general rules on the law relating to standard conditions of business and to rules governing guarantees and customer service. The Commission on European Contract Law has already been dealing with some aspects of these problems,[8] while others are regulated by the EEC Directive on unfair terms in consumer contracts or in the aforementioned proposal for a consumer sales directive. But is the restriction to consumer sales law really warranted from a practical point of view? This will have to be answered in the negative, for there have long been special rules on consumer contracts at the European as well as the national level in the domains of services, credit agreements and personal security (especially suretyships). In other respects it will be a matter of continuing and, where [page 154] necessary, expanding the efforts that are already under way to dovetail the system of European directives with UN sales law. I am thinking here, for instance, of warranty law, where, although in Article 2(1) of the proposed EC consumer sales directive law ("Consumer goods must be in conformity with the contract of sale") the concept of a defect is studiously avoided, Article 2(2) is recognisably based on Article 35 of the CISG and on section 14(2) of the UK Sale and Supply of Goods Act 1979, as amended in 1994.[9]

9. Advertising statements

The proposed directive on sales of consumer goods and associated guarantees sets new standards in many respects. Take, for example, the legal remedies for purchasers or the importance the proposed directive attaches to advertisers' statements. On the latter point the authors of the proposal were able to use Article 7:18 of the Dutch Civil Code as a model. The Principles drawn up by the Commission on European Contract Law also contain a rule to the same effect,[10] although that will certainly need to be re-examined to establish whether the text needs to be adapted to the new Community legislation or whether it can be absorbed in its present form into a European Civil Code.

10. Gaps

But let us not be fooled. Despite the numerous advances that the European directives have brought about, the cover they provide is still patchy in many respects. Strategies have certainly been devised already by the Commission on European Contract Law to close some of the gaps, but market operators in Europe will still have to be prepared for some sizeable black holes. These occur in areas such as liability for consequential loss arising from defects and the right of reclamation in respect of performances already delivered under an invalid contract. All issues overlapping into other legal areas have been omitted from the directives. The European law of contract has also come more and more to be nurtured and developed exclusively from the consumer's perspective. That, however, is definitely too narrow and, unless the EU turns its attention very soon to a general examination of the law of contract, and especially sales law, in all its facets, this narrow approach will demolish the structure of the existing national systems. [page 155]


FOOTNOTES

1. European Treaty Series No 150; the text in English is available on the Council of Europe website at http://conventions.coe.int

2. These are summarised in von Bar, A Common European Law of Torts, Vol. I, 1996, points 381-382.

3. The English text of this Convention is available on the Uncitral website at http://www.uncitral.org/english/texts.

4. Convention of 28 May 1988; the English text of the Convention is available on the Unidroit website at http://www.unidroit.org/english/conventions/c-fact.htm

5. The English text of the Convention on International Financial Leasing is available on the Unidroit website at http://www.unidroit.org/english/conventions/c-leas.htm

6. Article 2(a) of the CISG states, "This Convention does not apply to sales of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use". Article 1(2) of the amended proposal of 19 January 1999 for a European Parliament and Council Directive on the sale of consumer goods and associated guarantees, COM/99/0016 final - COD 96/0161, lays down that "Consumer means any natural person who, in the contracts covered by this Directive, is acting for purposes which are not directly related to his trade, business or profession".

7. Article 5 of the EC Convention on the Law Applicable to Contractual Obligations (Rome, 1980) is worded as follows: "This Article applies to a contract the object of which is the supply of goods or services to a person ("the consumer") for a purpose which can be regarded as being outside his trade or profession, or a contract for the provision of credit for that object".

8. For details see Ole Lando's contribution to Part I of the present study, points 31-33.

9. I am indebted to my colleague Professor Hondius of Utrecht for drawing my attention to this connection.

10. Art. 6:101 Abs. 2 PECL: "If one of the parties is a professional supplier which gives information about the quality or use of services or goods or other property when marketing or advertising them or otherwise before the contract for them is concluded, the statement is to be treated as giving rise to a contractual obligation unless it is shown that the other party knew or could have not have been unaware that the statement was incorrect."


Pace Law School Institute of International Commercial Law - Last updated November 7, 2002
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