The Fragmentation of EU Contract Law Provisions

1. The Fragmentation of EU Contract Law Provisions 22/06/2012 Tamas Dezso Czigler Institute For Legal Studies SSC, Hungarian Academy of Sciences Email: tczigler@jog.mta.hu

2. General questions Levels of fragmentation • International: ConventionontheInternationalSale of Goods • EU level: numerousrules • Directives • Regulations • Essentialneedforrestructuringconsumerlaw • National provisions, e.g. in Hungary: • Civil Code • ActonConsumerProtection • ActonProductLiability • Other, specfialacts EU law entered nationalregimes and made themfragmentedaswell

3. A draft of sources • Council Directive 86/653/EEC on to self-employed commercial agents • Council Directive 93/7/EEC on the return of unlawfully removed cultural objects • Directive 96/71/EC on the posting of workers • Regulation (EC) No 392/2009 on the liability of carriers of passengers by sea • Council Directive 85/374/EEC on liability for defective products. • Council Directive 85/577/EEC on contracts negotiated away from business premises • Council Directive 87/102/EEC on consumer credits • Council Directive 93/13/EEC on unfair terms in consumer contracts • Directive 97/7/EC on contracts. • Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees • Directive 2000/31/EC on electronic commerce • Directive 2008/122/EC on timeshare, long-term holiday product, resale and exchange contracts (new timeshare directive) • Directive 2005/29/EC on unfair business-to-consumer commercial practices

4. The latest developments I Directive 2011/83/EU on consumer rights Firstly: to unify and review the provisions of the following four directives: • Directive on unfair terms in consumer contracts • Directive on distance contracts • Directive on consumer sale of goods • Directive on consumer contracts negotiated away from business premises. • Later: consumer sales and unfair terms were cut out, only two directives were built in: • Directive on distance contracts • Directive on consumer contracts negotiated away from business premises

5. The latest developments II • Proposal for a regulation on a common European sales law [COM (2011) 0635 final] • optional tool • general rules of contracting • parties may choose its application while contracting • generally: only to business to consumer sales • TWO MORE REGULATIONS CREATED INTO A FRAGMENTED SYSTEM • Their relationship is hard to overview for everyday people

6. The competency question before the Lisbon Treaty Art. 94 & 95 of the Treaty Establishing the European Community Approximation of laws: Art 94: The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common marketconsultation procedure Art 95: The Council shall… adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market – co-decision procedure!! DUBIOUS PROVISIONS TO ADOPT A CIVIL CODE

7. The competency questions I Directive 2011/83/EU on consumer rights cites Art. 169 TFEU: the Union is to contribute to the attainment of a high level of consumer protection through the measures adopted pursuant to Article 114 thereof cites Art. 114 (former Art 95, the „soul” of the provisions): … The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market. THE PROBLEM STAYED THE SAME AS EARLIER

8. The competency questions II Directive2011/83/EU on consumer rights citesArt. 26(2) TFEU: The Union shall adopt measures with the aim of establishing or ensuring the functioning of the internal market, in accordance with the relevant provisions of the Treaties. – i.e. itcitesthegeneralprovisionsonthesingle market And says: The harmonisation of certain aspects of consumer distance and off-premises contracts is necessary for the promotion of a real consumer internal market striking the right balance between a high level of consumer protection and the competitiveness of enterprises, while ensuring respect for the principle of subsidiarity. UnlikePrivate International Law rules, substantiveprovisionsremainedconnectedtoinner market regulations

9. The competency questions III Proposal for a regulation on a common European sales law Cites Article 114 TFEU again!! The provisions of the Lisbon Treaty - Do not create new competencies in the field of contract law - Stil dubious background for an EU civil code - Do not say anything about the fragmentation or the restructuring of the legal sources The tension between the Parliament’s and the Council’s approach remained the same European Law Institute can be an opportunity to analyse solutions

10. The competencyquestions IV Article 115 (ex art. 94) the Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the internal market. Article 116 (ex Article 96 TEC) Where the Commission finds that a difference between the provisions laid down by law, regulation or administrative action in Member States is distorting the conditions of competition in the internal market and that the resultant distortion needs to be eliminated, it shall consult the Member States concerned. (And adopt a law in ordinary procedure, if it is required…)

11. Thank you for your attention!