On 18 August 2010 the UK Ministry of Justice launched a “Call for Evidence and Views” to inform its response to a European Commission Green Paper on a European contract law.
On 1 July 2010 the European Commission published a Green Paper setting out policy options for introducing a European contract law for consumers and businesses. The Paper identified some of the problems that divergent contract laws in different Member States can cause businesses and consumers and showed how these problems weakened the internal market. For example, in respect of business to consumer contracts, under Article 6 of the Rome I Regulation, if there is a contract between a business registered in one Member State and a consumer domiciled in a different Member State, the contract cannot deprive the consumer of the protection afforded by the law of his Member State, even if the parties have agreed that a different Member State law applies. Businesses with consumers in different Member States therefore have to ensure compliance with a number of Member State laws. This can be costly and undermines the internal market. In respect of business to business contracts, while businesses can chose to adopt a particular Member State law, which will apply regardless of their domicile, they do not have the option of a European contract law which could be uniform across all Member States.
The Green Paper proposes seven possible approaches to dealing with such issues, ranging from maintaining the status quo to creating a mandatory common code of contract law. The “Call for Evidence and Views” from the UK Ministry of Justice asks for responses from the UK public and businesses on this issue. It poses questions to assist those responding, asking them to state what problems they have encountered relating to the divergence of laws at national level and asking them to give their opinions as to the advantages and disadvantages of the seven options set out in the European Commission’s Green Paper.
Responses are requested by 26 November 2010, with the European Commission’s consultation closing on 31 January 2011. Depending on the evaluation of the results of the consultation, the European Commission could propose taking further action towards a European contract law by 2012.
The Ministry of Justice Call for Evidence can be found here.