Better Governance of Contract Law through a European Optional Instrument

In 2009 the ongoing debate on European private law resulted in a Draft Common Frame of Reference, the outcome of a large research project sponsored by the European Commission. The DCFR states as its purposes that it (i) may serve as a possible model for a political CFR, (b) will promote knowledge of private law in the jurisdictions of the EU and (iii) may be a possible source of inspiration for, inter alia, higher courts. As a step towards a political CFR, in May 2011 the Commission Expert Group on European Contract Law published a Feasibility study for a future instrument in European Contract Law. Such a future instrument will probably be an optional set of European rules of contract law, which the parties may choose as the law governing their contract (instead of or supplemental to national law).

Regarding the effects of this European Optional Instrument (EOI) important questions are whether there will be a market for it (will parties indeed choose the EOI as the governing law?) and whether it will promote cross border commerce within Europe. However, even if the EOI would not be a success measured by those standards, it is submitted that the EOI will be more than a possible source of inspiration for higher courts. Arguably, its very existence should lead national higher courts to taking the EOI into account in the interpretation and development of their national contract law.

‘Taking into account’ does not mean that courts should try to interpret national law as much as possible in conformity with the EOI (as in the case of ‘regular’ EU law). It may suffice that courts refer to a given solution in the EOI and mention how this relates to the rule(s) of their national legal system. Where appropriate, courts may explain that the EOI and national law offer different solutions to a problem and why national law should be brought in line with the EOI – or why this should not be done.

It is submitted that higher courts should take into account the EOI with a view to benchmarking their national rules and thus (a) taking a critical look at their national contract law and (b) making their national contract law more accessible (and perhaps more attractive) to international parties. Furthermore, in this way courts may contribute to a European legal culture/practice regarding the application of the EOI.