Common Frame of Reference: Conciliation or Clash?

Author:Carlo Castronovo
Position:Professor, Milan Catholic University del S. Cuore

Carlo Castronovo

Professor, Milan Catholic University del S. Cuore

Common Frame of Reference: Conciliation or Clash?

In the beginning there was separation. According to the Communication of 12 February 2003, there were two favoured options from among the four originally cited in the Communication of 11 July 2001 for application in the pursuit of a ‘more coherent European contract law’ (which was the subtitle of the Action Plan document enacted by the same communication of February 2003). One was the promotion of a set of common principles in the field of contract law; the other was the improvement of the existing legislation. These two options were set forth in the context of a relationship of a means to an end: the end would be the improvement of the existing and the future acquis, and the means would be a common frame of reference (items. 2, 3, and 4 of the Action Plan).

Still, in the Communication of 11 October 2004 2 we read that "the Common Frame of Reference (CFR) will be developed to improve the coherence of the existing and future acquis" (from the document’s introduction). But by that stage something had changed. In the same document, we find one page later, in the direction we have just mentioned, that "the Commission will use the CFR as a toolbox [...] to improve the quality and coherence of the existing acquis and future legal instruments in the area of contract law" but soon after that "the CFR will provide clear definitions of legal terms, fundamental principles and coherent model rules of contract law, drawing on the EC acquis and on best solutions found in Member States’ legal orders". Finally, and possibly in a more clear way, it is stated (in item 3.1.3) that "the research preparing the CFR will aim to identify best solutions, taking into account national contract law [...] the EC acquis and relevant international instruments". At that stage, what is conceived is a kind of mixture between option II (common principles) and option III (improvement of existing EC contract law).

Thus we are told that this is a ‘new orientation’, by which "the acquis communautaire is able to provide in turn a basis for the preparation of the future European contract law"3. Thus arises the question of whether the merger of the acquis with the common frame be a good chance for this project.

If one looks at the origins and ends of European Community private law and of what may be termed the ‘common principles’ movement, they appear to be in opposition, since the latter, as the word ‘principles‘ shows, is essentially characterised in terms of generality in the sense of traditional contract law, whereas the acquis communautaire is constituted by rules related to specific situations - moreover, specified with regard to the consumer as one of the parties to the contract. On one side there is the attitude, which has been typical of classic codifications, according to which one may refer to the man without qualities, as I once expressed this idea 4 , while on the other side there is a unique qualification around which many rules have been introduced. These two regulative trends correspond to two different ideas of what a uniform law in Europe should be.

In the preface to the PECL, Ole Lando tells us that his original idea for setting up what became the Principles of European Contract Law was to "establish the legal uniformity necessary for an integrated European market"5. The introduction of the PECL speaks of ‘harmonization’ as a foundation for the "efficient conduct of cross-border business within Europe" 6 and, moreover, of a "statement" - not a re-statement, indeed - to serve as "in effect a modern European lex mercatoria". Thus, the clear aim was that of creating a set of rules on commercial contract law drafted with the technique of general private law unifying civil and commercial law, in the manner of the Swiss Code of Obligations and the Italian civil code of 1942. Apart from some material specifically dedicated to professionals (articles 2:209 and 2:210), that was the model.

The acquis communautaire, which in our context is European Community law with reference to contracts, has been generated by a very different idea of harmonisation of private law in Europe: that which has been filled by the idea of protection of the consumer, an idea that originally was alien to European community law. What I am saying is that the original Treaty of Rome did not envisage the protection of consumers. However, protection of consumers has, historically, constituted much of the content of what has been set up formally as the uniform law considered necessary to the establishment of a common market.

The basic difference between the ‘principles’ idea and the consumerist one implies a series of others.

First of all, the approach adopted by the PECL starts from freedom of contract, as "parties are free to enter into a contract and to determine its contents, subject to the requirement of good faith and fair dealing, and the mandatory rules established by (the) Principles". In general, it is non-mandatory law: "for the most part the Principles provide rules which the parties are free to vary or exclude", states the ‘Survey of chapters 1-9’ introducing the principles. And this is the meaning of article 1:102 paragraph 2. In contrast to this, European Community law is ‘zwingendes Recht’, mandatory law, since it is set up to attain specific ends precisely in consideration of the fact that they are not achievable through pure freedom of contract. Of course, the principles put good faith and fair dealing together with mandatory rules in order to constitute a kind of fence against the abuse of freedom of contract. But this is not the case for community contract law. Whereas the first rules operate, so to say, inside and around what the parties freely determine, the latter imposes models originally designed to protect one of the parties.

Protection is indeed another feature from which angle European Community private law can be viewed. If at some time there is written a history of the European Community’s private law, it should be interesting to note the way in which the historians explain how it was that, in order to build a common market, the result was consumer protection law. The reason can fairly be indicated as being that, at some point, social policies in the individual member states exerted pressure toward more consumer-friendly law but to enact it in a different way for each legal order would have produced different outcomes, impairing the idea of a common market. The transposition of the directive on unfair contract terms can be mentioned as a typical example. Once enacted in Germany, a new law on that subject - what we can call the equal protection clause for professionals, since here they were subjected to a unique regime in terms of their relationship to consumers - called for the same treatment for all European...

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