SUMMARY
This Report continues our scrutiny of the European
Commission's programme of work in the area of contract law. It
focuses on the proposal for a Common Frame of Reference (CFR).
We consider, in particular, the Draft Common Frame
of Reference (DCFR) prepared in the course of a programme of academic
research and presented to the Commission in December 2008. It
contains principles, definitions and model rules in the form of
a code covering wide areas of Civil Law. While we did not consider
the content of the DCFR in detail, the Report notes some potentially
significant issues relating to the general approach it adopts,
as well as differences between its model rules and the provisions
of English common law and also those of the laws of the other
Member States.
How far the DCFR will be used as the basis for a
European Union instrument, and what form such an instrument might
take, is still undecided. The development of a harmonised code
of European contract law (to which we remain opposed) appears
to be off any foreseeable agenda. We doubt the value and feasibility
of developing as an alternative an optional instrument which would
be available to contracting parties at their option, but would,
to be effective, appear to require underpinning by European legal
instrument, enabling it where necessary to over-ride domestic
law. We do not think that the Community or Commission has a useful
role to play in promoting or developing, as a further alternative,
sets of contractual terms for use by contracting parties.
We consider that the development of a form of "toolbox"
to assist European legislators would be useful both to aid mutual
understanding of the diverse legal systems of the EU and to improve
the quality of European legislation to which the law of contract
is relevant. But we question whether the DCFR, either as a whole
or even in its first three Books (in which the main focus is on
the law of contract), is in a form which can be used directly
for that purpose, and we express concern about the process and
value of seeking to reformulate it as a draft code of contract
law for that purpose. We suggest that one way forward may be for
the Commission to identify particular key areas that give difficulty
under existing Community law or are likely to require legislative
intervention, and to focus on these, rather than to attempt to
restate in the abstract at a European level the whole of the law
of contract. We recognise the value of the DCFR as an academic
work which may provide useful material for national as well as
European legislators, and the value of the discussion and comparative
law material which is to accompany it as an aid to mutual understanding
of the diverse legal systems represented in the European Union.
For the future, we stress the importance of continuing
and effective consultation at both European and national levels
and of conducting an impact assessment of any proposals developed
by the Commission. We canvass the idea that the European Union
might consider setting up a law reform body for large projects
such as the CFR.
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