lar protection to consumer security providers.114 Another aspect of justice is reflected in the rules on good faith acquisition of assets, or of security rights in assets, free from a prior security right.115

Efficiency

54. General remarks. The principle of efficiency lay behind many of the debates and decisions made in the course of preparing the DCFR. There are two overlapping aspects – efficiency for the purposes of the parties who might use the rules; and efficiency for wider public purposes.

Efficiency for the purposes of the parties

55. Minimal formal and procedural restrictions. The DCFR tries to keep formalities to a minimum. For example, neither writing nor any other formality is generally required for a contract or other juridical act.116 There are exceptions for a few cases where protection seems to be specially required,117 and it is recognised that in areas beyond the scope of the DCFR (such as conveyances of land or testaments) national laws may require writing or other formalities, but the general approach is informality. Where the parties to a transaction want writing or some formality for their own purposes they can stipulate for that. Another recurring example of this aspect of the principle of efficiency is that unnecessary procedural steps are kept to a minimum. Voidable contracts can be avoided by simple notice, without any need for court procedures.118 Contractual relationships can be terminated in the same way if there has been a fundamental non-

114 IX. – 2:107, IX. – 7:103(2), IX. – 7:105(3), IX. – 7:107, IX. – 7:201(2), IX. – 7:204, IX. – 7:207(2).

115IX. – 2:108, IX. – 2:109 and IX. – 6:102.

116II. – 1:106.

117E. g. personal security provided by a consumer (IV. G. – 4:104) and donations (IV. H. – 2:101).

118II. – 7:209.

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performance of the other party’s obligations.119 A right to performance can be assigned without the need for notification to the debtor.120 The ownership of goods can be transferred without delivery.121 Non-possessory proprietary security can be readily created. To be effective against third parties registration will often be necessary but, again, the formalities are kept to a minimum in the interests of efficiency.122 The rules on set-off can be seen as based on the principle of efficiency. There is no reason for X to pay Y and then for Y to pay X, if the cross-payments can simply be set off against each other.123 Again, in the DCFR set-off is not limited to court proceedings and can be effected by simple notice.124

56.Minimal substantive restrictions. The absence of any need for consideration or causa for the conclusion of an effective contract,125 the recognition that there can be binding unilateral undertakings126 and the recognition that contracts can confer rights on third parties127 all promote efficiency (and freedom!) by making it easier for parties to achieve the legal results they want in the way they want without the need to resort to legal devices or distortions.

57.Provision of efficient default rules. It is an aid to efficiency to provide extensive default rules for common types of contract and common types of contractual problem. This is particularly useful for individuals and small businesses who do not have the same legal resources as big businesses. If matters which experience shows are likely to cause difficulty can be regulated in advance, in a fair and reasonable manner, that is much more efficient than having to litigate about them later. It is hoped that the content of the default rules will also promote efficiency.

119III. – 3:507.

120III. – 5:104(2).

121VIII. – 2:101

122See Book IX generally.

123II. – 6:102.

124III. – 6:105.

125II. – 4:101.

126II. – 1:103(2).

127II. – 9:301 to II. – 9:303.

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