Reform of European Contract Law: The Common Framework of Reference
On Monday, 26 September 2005, the Department for Constitutional Affairs is hosting a conference at the Mansion House in London to discuss the moves towards harmonising contract law across Europe.
The EC Council and Parliament have stressed the need for stakeholders and practitioners to be involved in the European contract law initiative. They have created the Common Frame of Reference network (CFR-net) to be a forum to identify the problems which arise in contract law practice. The CFR-net is also intended to suggest solutions.
The background to this is that in 1999, the European Council asked for a study on how to reform European Contract Law and the Commission undertook broad consultation. In 2003, an Action Plan proposed concrete measures including the elaboration of a Common Frame of Reference. In October 2004, a Communication set out the next steps.
The Common Frame of Reference will set out principles, definitions and model rules of contract law. It is envisaged as a contract law handbook containing the best solutions drawn from existing contract laws. It has been suggested that it could act as a toolbox to modify the existing body of EU law ("acquis communautaire") and to prepare new legislation.
It is likely that the development of the Common Frame of Reference will go hand in hand with a review of the consumer protection acquis. European consumer protection rules will be examined together with the effect they are having on consumers and businesses. A decision will then be taken as to whether changes are needed and proposals will be made.
The stated aim is to pursue the Lisbon goal of making the EU the most competitive and dynamic economy in the world. The EU hopes that reform of contract and consumer law will increase competitiveness, assist profitable and efficient transactions across the internal market, address complaints arising from inconsistent systems of contract law and increase legal transparency and coherence. An important by-product, the EU hopes, would be reduced legal advice costs and litigation.
It is planned to adopt the Common Frame of Reference by 2009, during which period it is intended the research work will be grounded in the day to day experience of businesses, consumers and legal practitioners in the CFR-net.
The network of stakeholder experts on the Common Frame of Reference in the area of European contract law have met in Brussels, last December. The London conference on 26 September aims to consider how the CFR can contribute to better regulation and legislation at Community and national level.
