Common European Sales Law

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

This project is complete. We published advice to Government on 10 November 2011, jointly with the Scottish Law Commission

Each state of the European Union has its own legal system (or systems) leading to a variety of contract laws across the EU. The European Commission believes that this variety of national contract laws inhibits trade within the internal market.

On 11 October 2011, the European Commission published a proposal for a common European sales law which contracting parties could choose to use if they wished. This draws on previous work, including a “Feasibility Study” published in May.

The project

The Law Commission and Scottish Law Commission were asked to advise the Department for Business, Innovation and Skills and the Ministry of Justice on the potential advantages of and problems with an optional system of European contract law in relation to:

• business-to-consumer contracts, with particular reference to consumer protection and the desirability of combating barriers to trade; and
• business-to-business contracts, with particular reference to SMEs.

We think there is a case for a new optional consumer code to cover distance selling across the European Union. We are not sure, however that the current text always strikes the right balance.  Distance selling needs its own clear rules, designed around automated processes. The CESL is based on more general contract law principles and we think that it would benefit from greater focus on distance sales.

The case for a new instrument in business-to-business contracts is less pressing, and we think the proposal may need significant adjustment in this area.