Harmonization of contract law - a real improvement for the internal market?

The BDI believes that an improvement in the internal market can be achieved only if European rules are widely accepted. This calls for a thorough impact assessment, substantiated analyses and balanced proposals.

The European Commission’s intention of introducing a European sales law has long been under discussion in Brussels. First of all, the Commission considered the various options for introduction of a European sales law in the framework of a green paper published on 1 July 2010. Following a market feasibility study in May 2011, the European Commission presented a proposal for a regulation on a European Common Sales Law in October 2011. The European Parliament voting in plenary adopted the proposal for a regulation with amendments in February 2014. In the absence of progress in the Council due to considerable objections to the proposal linked to subsidiarity and severe criticism of the proposal’s added value, the European Commission decided to overhaul the proposal in order to fully unleash the potential of e-commerce in the digital single market. To this end, the Commission conducted a public consultation on contract rules for online purchases of digital content and tangible goods which closed in early September 2015. 

A concrete need for regulation must be demonstrated

Promotion of cross-border trade offers businesses and consumers economic opportunities. However, any Instrument designed to promote cross-border trade must gain broad acceptance and support. This will be a given first and foremost if a concrete need for regulation at European level is demonstrated and a comprehensive impact assessment not only highlights corresponding regulatory gaps in the Member States or in the existing acquis but also identifies a possible concrete obstacle in the single market. In this context, it should be borne in mind that language, cultural and emotional barriers together with further practical uncertainties, inter alia secure service for receipt, constitute similarly large obstacles to cross-border activities of companies and consumers.

Fair balance of interests necessary

In addition, new rules must be structured in such a way that companies are not unnecessarily burdened. There must be no one-sided over-regulation of consumer protection. Rather, there must be fair treatment between the interests of consumers and companies and a balance between the rights and obligations of companies and consumers must be ensured.

In detail, the BDI calls in particular for attention to be paid to the following aspects:

  • The scope should be reduced to B2C transactions. The particular need for consumer protection which partially exists in the B2C area, is not a given in transactions between companies, even where one of the trading party is an SME. Inasmuch, there are already considerable reservations might arise regarding a practical demarcation between SMEs and the "Mittelstand" or large companies as well as the danger of considerable legal uncertainties in connection with a change of status during execution of the contract. Above all, binding provisions are not appropriate in this sector. Traders must be allowed to retain private autonomy over the contracts they conclude with other business partners.
  • With regard to the extent and nature of remedies available to the consumer, the BDI believes it necessary to take into account essential  contract law principles: the hierarchy of remedies, the right to cure and seller liability only in case of fault.
  • Appropriate limitation periods must be ensured. Anything else would fail to do justice to the balance of interests between consumers and companies. In particular, the principles of the burden of proof – as also expressed in the Consumer Sales Directive – should be taken into consideration in any new initiative. An extend reversal of the burden of proof  beyond the six-month period should be rejected. The same must apply for a move away from the Obligation to Report a defect without undue delay or an excessive extension of the warranty period.