Unfair Prices In The Common European Sales Law

At its plenary session of 26 February 2014 in Strasburg, the European Parliament voted in favour of the Common European Sales Law (CESL). The legislative resolution, which was adopted by a large majority, includes two amendments which significantly extend the protection of consumers against unfair terms, not only to individually negotiated terms but also to core terms, including price terms. The combined effect of these two amendments is that contract prices, including individually negotiated prices, in consumer contracts would become subject to unfairness control. So, if these amendments will be supported by the European Commission and the Council, this will bring a major increase in consumer protection compared not only to the Commission's proposal, but also to the minimum level of protection that the unfair terms directive of 1993 currently requires the Member States to maintain in their national laws. In this contribution to the Festschrift for Hugh Beale, I argue that there is good reason for the Council and Commission to support these amendments. Extending the unfairness control in the CESL to individually negotiated terms and core terms, including price terms, contributes to avoiding injustice, increasing consumer protection and consumer confidence. At the same time, the control of individually negotiated terms and core terms does not represent any interference with private autonomy, not even if personal freedom is understood in a purely formal libertarian sense, since no one will be obliged to opt into the CESL. Nor is the unfairness control of core terms impracticable or is it likely to lead to legal uncertainty. It will even be easier, in most cases, to assess the unfairness of the contract price - and to predict its assessment - than in the case of non-core terms, since the price on a reasonably well functioning market will be available as a reference price.

The recently proposed Common European Sales Law is intended to overcome differences between national contract laws. 19 chapters, co-authored by British and German scholars, investigate for the first time how the projected CESL would interact with various aspects of English and German law.

In October 2011, the European Commission introduced its Proposal for a Regulation on a Common European Sales Law (CESL) which covers inter alia international business sales – a subject already regulated by the Convention of International Sale of Goods (CISG) which was ratified by 78 member states. How does this new Proposal fit the existing uniform sales law? How have other regions of the world managed the coexistence of global and regional sales law unification? What can Europe learn from the U.S. experience concerning the CISG and the Uniform Commercial Code? What can we learn from the African OHADA which made CISG more or less the internal law of 17 African states, what from Australia where CISG and common law exist alongside? All these questions are intensely discussed in this highly recommendable book written by renowned authors like Larry DiMatteo, Harry Flechtner, Franco Ferrari, Robert Koch, Ulrich Magnus and Bruno Zeller.

This paper discusses the relationship between contract law and justice. In particular, it addresses the question whether the presence or absence of an unfair price rule could make a system of contract law, and thus the society to which it belongs, become unjust. The question is not merely a theoretical one; it is also practically relevant. Earlier this year, the European Parliament, in first reading, adopted two amendments to the European Commission's proposal for a Common European Sales Law (CESL) to the effect that the unfairness control of contract terms be extended both to the adequacy of the price and to individually negotiated terms. The combined effect of these two amendments, if endorsed by the Council, would be that under the CESL, unfair prices, even if they resulted from individual negotiation, would become non-binding on consumers. This would amount to the introduction of a iustum pretium rule for business-to-consumer (B2C) contracts into European contract law. The main argument of the paper is that principles of justice that would be reasonably acceptable to all, as they should be in a society like our own which is characterised by a reasonable pluralism of worldviews, are unlikely either to prohibit or require an unfair-price rule, while the main existing substantive theories of justice that do clearly require such a rule (eg in the name of the virtue of corrective justice) or proscribe it (eg because of the value of liberty), are too partisan ('too thick') to be acceptable to citizens holding different reasonable worldviews. This means that a contract law can be just whether or not in contains an unfair price rule. As a result, the question whether our contract law should contain a fair price doctrine remains a matter for the legitimate democratic lawmaker to decide upon, in a debate where also controversial worldviews are admitted. The more procedural ('thinner') principles of justice will still require that the law can (and will at some point) be justified in non-sectarian terms, but given that such more neutral grounds are readily available on either side of the debate, both the presence and the absence of a fair price rule is compatible with a legitimate and just contract law regime.

This book presents a complete and coherent view of the subject of Common European Sales Law from a range of European perspectives. The book offers a comparison of the CESL with the CISG, as well as pre-existing instruments, including the Draft Common Frame of Reference (DCFR) and the Principles of European Contract Law (PECL). It analyses the process of enactment of CESL and its scope of application, covering areas such as the sale of goods, the supplying (licensing) of digital content, the supply of trade-related services, and consumer protection. It examines the design of the CESL bifurcating businesses into large and small-to-medium sized enterprises, and the providing of rules covering digital content and the supply of trade-related services. Lastly, it studies the field of application of the CESL combined with the already existing EU consumer protection laws, as well as nation-specific laws.​

European Contract Law unification projects have recently advanced from the Draft Common Frame of Reference (2009) to a European Commission proposal for an optional Common European Sales Law (2011) which is to facilitate cross-border marketing. This book investigates for the first time how CESL and DCFR rules would interact with various aspects of domestic law, represented by English and German law. Nineteen chapters, co-authored by British and German scholars, examine such interface issues for eg pre-contractual relationships, notions of contract, formation, interpretation, and remedies, extending to non-discrimination, third parties, transfers or rights, aspects of property law, and collective proceedings. They go beyond a critical analysis of CESL and DCFR rules by demonstrating where and how CESL rules would interact with neighbouring areas of English and German law before English and German courts, how domestic traditions might influence the application, which aspects might motivate sellers and buyers to choose or reject CESL, and which might serve as model for national legislators. The findings are summarized in the final two chapters.

The book delineates, with extraordinary clarity and precision, the working of unfair competition law throughout the European Union. Its four comprehensive chapters encompass: basic considerations of definition, subject matter, enforcement, and applicable law: international provisions under the Paris convention, TRIPS, and WIPO model law; analysis of relevant EC directives and regulations and ECJ jurisprudence; and extensive discussions of the national unfair competition laws of all 25 Member States. For each Member State, specific topics covered include such considerations as the following: sources of law; competition law in a nutshell; regulation of advertising; direct marketing; sales promotion; risk of confusion; disparagement, defamation; misappropriation, imitation; impediment of competitors; and breach of the law. The author also provides a selected bibliography of sources for each country. It would be difficult to find a more useful analysis of European Unfair Competition Law than this systematic study. It is practical, thorough, clarifying, and readable, all at the same time. The author untangles the most complex of apparent contradictions with impressive skill. Copies of this book will quickly take their places on the working shelves of interested practitioners, academics, and officials throughout Europe.

The Common European Sales Law is designed as an optional instrument that European parties engaged in cross-border transactions could choose for their transactions in preference to national law. The goal is to increase cross-border transactions and perhaps to enhance European identity. But the CESL is unlikely to achieve these goals. It raises transaction costs while producing few if any benefits; it is unlikely to spur beneficial jurisdictional competition; its consumer protection provisions will make it unattractive for businesses; and its impact on European identity is likely to be small.

The purpose of this book is to honour the influential and wide-ranging work of Professor Hugh Beale. It contains essays by twenty-five very distinguished authors, each of whom has worked with Professor Beale as a co-author, as a teaching colleague, during his time as Law Commissioner of England and Wales, or as part of the study groups working in Europe on contract and commercial law. The essays reflect different aspects of Professor Beale's interests. Some concentrate on English contract law, either from a historical or a current perspective, while others are focused on aspects of European contract law. There are four essays looking at current issues relating to security and financing, and, as befits a former Law Commissioner, three essays on law reform. The essays in the final section discuss trends in transnational and European commercial law. This book brings together the reflections of eminent writers from all over Europe on important issues facing contract and commercial law and will be of interest to all scholars and practitioners working in these areas.

The book examines the ambiguous relationship between the European law on unfair commercial practices and contract law. In particular, the manuscript demonstrates that the Directive 2005/29/EC on unfair commercial practices (UCPD) has had a major impact on contract law, despite the declaration concerning the formal independence between the two branches of law established by Article 3(2) UCPD. The insights and conclusions identified in the book contribute to a better understanding of European private law and the general process of Europeanisation of private law in the European Union, and in particular of contract law.