A Consumer Law for Professionals: Radical Innovation or Consolidation of Existing Practices?

In October 2011 the European Commission published its ‘Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law’ (hereinafter P.CESL). The aim of the Proposal is to create an optional contract law regime or 28th contract law system which the parties to a sales contract can opt for to apply to their contract instead of their national contract law system. Contrary to earlier initiatives taken by the Commission in the area of contract law, a limited number of specific rules that are to regulate commercial relationships in which one or more small and medium-sized enterprises (hereinafter SME) is involved, were incorporated in the P.CESL, alongside a more extensive body of rules which reflect the general law of obligations. These rules are inspired by and to a large extent copied from the Draft Common Frame of Reference (hereinafter DCFR). Underlying their insertion in the P.CESL is the belief that the existence of 27 different national sales regimes, and the transaction costs resulting from dealings with these various national laws, deters SMEs vested in one Member State from offering their goods and related services in another Member State. It is believed by some that the Commission is hereby creating some kind of ‘consumer law for professionals’, meaning that the Commission is attempting to protect SMEs contracting with large enterprises (hereinafter LEs) or with other, more powerful, SMEs. This seems surprising. The number of rules which are specifically applicable to B2B-contracts is limited, far more limited than is the case of B2C-contracts. Also, the Preamble to the P.CESL clearly states that its SME-rules mainly aim at preserving demand in the internal market. Contractual protection of SMEs against other companies is not mentioned as an express aim of the proposal. It goes without saying that the mere establishment of the internal market does not suffice to protect the weaker party in a contractual relationship. The DCFR and its preparatory works also do not mention the protection of weaker parties as one of its aims. Furthermore, whereas the Treaty on the Functioning of the European Union expressly proclaims consumer protection as one of the aims of the European Union, such appears not to be the case for SMEs. One can only refer to earlier statements of the European Commission, which seem to indicate that the Commission considers it desirable to offer some sort of protection to weaker companies involved in a B2B-contract. In its Green Paper on the Revision of the Consumer Acquis of 2007 for example the Commission considers that “some businesses, such as individual entrepreneurs or small businesses may sometimes be in a similar situation as consumers when they buy certain goods or services which raises the question whether they should benefit to a certain extent from the same protection provided for consumers.” One can therefore wonder whether the P.CESL truly aims at protecting weaker companies dealing with more powerful companies, either directly or indirectly. A comparison of the relevant articles of the P.CESL with the approach currently taken by the Member States towards the issue of inequality of bargaining power in B2B-transactions, will show that the P.CESL is at least indirectly capable of offering some sort of protection to the weaker company in a contractual relationship. The contribution hence focuses on the question whether protective commercial law currently exists at either the national or supranational level, or whether the idea is completely new, and if so, how these national rules exactly look like. The national examples will show that the creation of an extensive body of rules which aims at covering the entire life cycle of a contract as the P.CESL sets out to do, almost inevitably entails some form of protection for the weaker party in a B2B-contract. The material scope of this contribution is limited in two respects. A first limitation concerns the number of legal systems studied. The text only focuses on French-Belgian, Dutch and English contract law, as well as on the relevant provisions of the DCFR. These systems have been chosen, because each of them represents a somewhat different approach to the protection of the weaker contract party. A second limitation is of a more substantive nature, for the text only takes into account traditional national contract law and does not go into issues of competition law. Although competition law also addresses the issue of market power on the supply side, it was not taken into consideration, as the P.CESL also is only concerned with contract law.status: publishe