European Contract Law: the Draft Common Frame of Reference - European Union Committee Contents


This Report continues our scrutiny of the European Commission's programme of work in the area of contract law. It focuses on the proposal for a Common Frame of Reference (CFR).

We consider, in particular, the Draft Common Frame of Reference (DCFR) prepared in the course of a programme of academic research and presented to the Commission in December 2008. It contains principles, definitions and model rules in the form of a code covering wide areas of Civil Law. While we did not consider the content of the DCFR in detail, the Report notes some potentially significant issues relating to the general approach it adopts, as well as differences between its model rules and the provisions of English common law and also those of the laws of the other Member States.

How far the DCFR will be used as the basis for a European Union instrument, and what form such an instrument might take, is still undecided. The development of a harmonised code of European contract law (to which we remain opposed) appears to be off any foreseeable agenda. We doubt the value and feasibility of developing as an alternative an optional instrument which would be available to contracting parties at their option, but would, to be effective, appear to require underpinning by European legal instrument, enabling it where necessary to over-ride domestic law. We do not think that the Community or Commission has a useful role to play in promoting or developing, as a further alternative, sets of contractual terms for use by contracting parties.

We consider that the development of a form of "toolbox" to assist European legislators would be useful both to aid mutual understanding of the diverse legal systems of the EU and to improve the quality of European legislation to which the law of contract is relevant. But we question whether the DCFR, either as a whole or even in its first three Books (in which the main focus is on the law of contract), is in a form which can be used directly for that purpose, and we express concern about the process and value of seeking to reformulate it as a draft code of contract law for that purpose. We suggest that one way forward may be for the Commission to identify particular key areas that give difficulty under existing Community law or are likely to require legislative intervention, and to focus on these, rather than to attempt to restate in the abstract at a European level the whole of the law of contract. We recognise the value of the DCFR as an academic work which may provide useful material for national as well as European legislators, and the value of the discussion and comparative law material which is to accompany it as an aid to mutual understanding of the diverse legal systems represented in the European Union.

For the future, we stress the importance of continuing and effective consultation at both European and national levels and of conducting an impact assessment of any proposals developed by the Commission. We canvass the idea that the European Union might consider setting up a law reform body for large projects such as the CFR.

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