The Harmonization of European Contract Law: The Case of Insurance Contracts

The harmonization of European Contract Law for consumers and businesses continues to progress; however, without some standardization of the insurance contract, it will be difficult to achieve a true single market. This Article chronicles the European Union’s activities towards this goal, including the role of the Principles of European Insurance Contract Law, which provides a set of model rules for European legislators. The Article also analyzes: (i) the appropriate legal nature of the instrument of European Contract Law; (ii) the scope of that legal instrument (e.g. whether the instrument should cover both cross-border and domestic contracts, and whether it should include contracts between businesses and consumers or only those between businesses); and (iii) the most appropriate scope to answer the needs to be served. The Article argues for the use of optional instruments as a key step towards a harmonized system and offers that the best way forward is to construct a regulatory system whose ultimate objective is to be globally applicable. Lastly, the Article concludes that the law of insurance contracts is a constituent part of contract law, and as such, the best legislative practice for the regulation of insurance contracts is to restrict its scope to those issues that differentiate insurance from the general theory of obligation and contract