Horst Eidenmueller

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

On 11 October 2011, the European Commission published a Proposal for a Regulation on an optional Common European Sales Law (CESL). This text represents a milestone for the further development of European contract law. Our essay critically examines and evaluates the Commission’s proposal. It outlines the Commission’s draft as well as its background and deals with some of the most pressing doctrinal and policy issues raised by it. We show that the suggested range of application and the technical mode for opting into the CESL are flawed. Further, the CESL incorporates many elements and doctrines of the current acquis communautaire, such as unduly extensive information duties and withdrawal rights as well as a policing of standard contract terms, without reconsidering their proper purposes and uses. With respect to the rules on sales law, it is particularly the mandatory character of most of them that poses grave problems. We also demonstrate that the CESL’s optional character does not eliminate the quality concerns raised in this essay: The CESL might become a ‘success’ despite its shortcomings. Hence, notwithstanding its optional character, the proposed text should not be enacted. What is needed is a broad and thorough debate on the scope, forms and contents of contract law harmonization in Europe rather than the speedy legislative enactment of a flawed product.

Against False Settlement: Designing Efficient Consumer Rights Enforcement Systems in Europe

With its recent legislation on consumer ADR and ODR, the European Union (EU) pioneers the creation of a comprehensive out-of-court dispute resolution system for B2C conflicts. The proposed system raises questions as to how consumer rights can and should be efficiently enforced. We propose design principles for efficient consumer rights enforcement systems in Europe and sketch an appropriate judicial model procedure. Against this background, we critique the new EU system: mandatory consumer rights will not be fully enforced; traders will have inefficient behavioral incentives; fundamental due process values will be compromised; an unnecessary, heavily regulated, and costly private enforcement industry needs to be created; access to the courts for consumers will be seriously impaired. Mandatory consumer rights attempt to correct market failure. Such rights should be enforced in streamlined small stakes proceedings by state courts, not by private service providers.

Why Withdrawal Rights

Almost every legal system accepts the fundamental principle that promises must be kept (“pacta sunt servanda”). Yet, a consumer’s right to withdraw from a contract for the purchase goods or services (“withdrawal right”) figures prominently in European consumer law directives, in the ACQP and in the DCFR. Withdrawal rights imply a significant weakening of the fundamental principle pacta sunt servanda. However, the popular invocation of withdrawal rights is not rooted in a thorough analysis of the purposes such rights might fulfill. This article attempts to provide such an analysis by posing the central normative question: “Why Withdrawal Rights?”. It uses the tools of (behavioral) economics to identify three situational categories in which granting a withdrawal right may be justified: information asymmetries at the time of contract formation, exogenous distortions of the consumer’s preferences and endogenous distortions. The article also seeks to assess the effectiveness of withdrawal rights in achieving their stated objectives. It contains specific policy recommendations with respect to the mode in which withdrawal rights should be granted, if they are granted at all (i.e. mandatory versus optional, etc.).

Regulatory Competition in Contract Law and Dispute Resolution

This paper is the introduction to a book that contains scholarly articles on regulatory competition in contract law and dispute resolution. The paper develops fundamental research questions relating to the law market in general and regulatory competition in contract law and dispute resolution in particular. It explores various dimensions of regulatory competition such as horizontal regulatory competition, vertical regulatory competition, and regulatory competition between public and private systems. The paper also introduces the articles in the book and their main findings.

Party Autonomy, Distributive Justice and the Conclusion of Contracts in the DCFR

The rules on the conclusion of contracts are at the core of contract law. This article aims not only to describe these rules contained in Book II of the academic Draft Common Frame of Reference (DCFR) but also to illustrate the underlying values and policies. The DCFR severely restricts contractual freedom and pursues distributive aims. Unfortunately, it is certainly inefficient and often even impossible to achieve the latter goal through private law. The DCFRs provisions on non-discrimination, withdrawal rights as well as on contractual fairness in particular are critically examined against this background. These provisions address important problems, but they are not based on a convincing private law theory. The article suggests various improvements of the DCFRs rules to take party autonomy, and hence efficiency, more seriously.

Justifying Fair Price Rules in Contract Law

This article discusses the introduction of a general “fair price rule” in (European) contract law. According to such a rule, prices that create a “significant imbalance in the parties’ rights and obligations” would not bind the disadvantaged party. Justifying this rule cannot be avoided by holding, as Martijn Hesselink does, that in light of a “reasonable pluralism of worldviews,” the issue is one which a democratically elected lawmaker has to decide. A welfarist (economic) conception of justice best explains the existing (European) rules on contract formation and price, and it also casts a long and dark shadow over a general “fair price rule.”