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Common European Sales Law – ongoing developments

On 11 October 2011, EU Commissioners adopted the proposal for a regulation on an optional Common European Sales Law for business-to-business (B2B) and business-to-consumer (B2C) contracts for the sale of goods and related services (with exclusions including for financial services). The UK government is planning to open a consultation for stakeholders in the coming weeks.

This follows the Commission's green paper consultation last year on policy options building towards a European contract law for consumers and businesses. A feasibility study on European contract law, containing initial drafting from a group of experts, was subsequently published in May.

The Commission argues that the current system of national contract laws creates unnecessary complexity, leading to additional transaction costs, legal uncertainty, and a lack of consumer confidence. The Law Society is considering these proposals and is keen to hear comments from interested members.

While the Law Society supports efforts to improve the functioning of the Single Market and to increase cross-border trade and wishes to be constructive in discussions, it is not yet convinced that the proposals will achieve this and consequently currently does not support the initiative. The Law Society notes that there are a range of issues that determine whether or not businesses and consumers wish to engage in cross-border dealings, including differences in language, VAT rates, and whether it will be possible to obtain practical redress if something goes wrong.

In cross-border dealings, while there will be an agreement between the parties, the laws in relation to a range of issues, such as advertising, packaging requirements, product liability and non-contractual representations, as well as tort law and property law, may be equally relevant and important. It is also unlikely that the instrument itself would be self-standing from a contract law perspective.

The Law Society is therefore concerned that the new instrument may, in fact, increase complexity. However, it would like to hear members’ views on the whether such an instrument could have benefits and on the current text.

Download the proposed Regulation

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