The Europeanisation of

Contract Law

For many years, legal scholars around Europe have debated the possibility of a ‘European’ law of contract. The most significant contribution to date has been the Principles of European Contract Law. In the meantime, a process of Europeanising contract law has been driven by the legislative activity of the European Union, which has adopted a string of directives touching on various aspects of contract law, mainly consumer law. Many of these directives have dealt with fairly isolated aspects of contract law.

Consequently, the European influence has hitherto been rather fragmented, and lacks overall coherence. However, the EU’s contribution to date could also be regarded as a process of putting down markers for more thorough European intervention in the future. Indeed, it seems that such a process is now moving forward with the development of a Common Frame of Reference on European contract law and wholesale review of the existing consumer acquis.

The overall aim of this book is to trace the process of Europeanisation of contract law by examining critically the developments to date and their impact on English law, in particular, as well as the implications of the EU’s desire to move towards greater coherence. The arguments for and against greater convergence in the field of contract law are also covered.

Christian Twigg-Flesner LLB (Hons) PCHE PhD is a Senior Lecturer in Private Law at the University of Hull. He is also a member of the Acquis Group, working on the Principles of Existing EC Private Law, and on the Consulting Board of the Society of European Contract Law (SECOLA).

The Europeanisation of Contract Law

Current controversies in law

Christian Twigg-Flesner

First published 2008

by Routledge-Cavendish

2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN

Simultaneously published in the USA and Canada by Routledge-Cavendish

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This edition published in the Taylor & Francis e-Library, 2008.

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© 2008 Christian Twigg-Flesner

All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Twigg-Flesner, Christian, 1975–

The Europeanisation of contract law : current controversies in law /

Christian Twigg-Flesner

p. cm.

1.Contracts—Europe. 2. Contracts—European Union countries—

ISBN 0-203-92700-1 Master e-book ISBN

ISBN10: 0–415–46592–3 (hbk)

ISBN10: 1–84568–050–2 (pbk)

ISBN10: 0–203–92700–1 (ebk)

ISBN13: 978–0–415–46592–2 (hbk)

ISBN13: 978–1–84568–050–3 (pbk)

ISBN13: 978–0–203–92700–7 (ebk)

This book is dedicated to my parents, David and Antje Twigg-Flesner

Contents

2.1Introduction 21

2.2National contract rules and free movement 21

2.3Europeanisation and competence 25

2.4Europeanisation by directives 34

2.5The role of the European Court of Justice 43

2.6Conclusion 50

3.1Introduction 51

3.2Areas not covered 52

3.3Overview: key directives 54

3.4The pre-contractual phase 63

3.5Contract formation and validity 71

3.6The substance of the contract 80

3.7Performance 89

viiiContents

3.8Remedies for non-performance 95

3.9Beyond contract law: enforcement by injunction 99

3.10Conclusion 100

4.1Introduction 103

4.2Implementation into domestic law – general considerations 104

4.3Post-implementation issues 108

4.4Implementing EU law in the UK 113

4.5Interpretation and application by national courts 119

4.6Impact on contract law generally 133

4.7Conclusion 138

5.1Introduction 139

5.2The Commission’s trilogy on European contract law 140

5.3EU-wide standard contract terms 142

5.4The Common Frame of Reference 144

5.5An optional instrument 159

5.6CFR and OI: evaluation 164

5.7Competence – the perennial problem 166

5.8Review of the consumer acquis 172

5.9Conclusions 179

6.1Introduction 181

6.2A European contract code? 181

6.3Europeanisation – conclusions 190

Table of cases

EUROPEAN CASES

Case 28-30/62 Da Costa en Schake NV v Nederlandse

Belastingsadministratie [1963] ECR 31 ...................................................... 44 Case 8/74 Procureur de Roi v Dassonville [1974] ECR 837 ............................ 22 Case 41/74 Van Duyn v Home O ce [1974] ECR 1337................................ 111 Case 152/84 Marshall v Southampton & South West Hampshire Area

Health Authority (Teaching) [1986] ECR 723 .......................................... 112 Case 33/76 Rewe [1976] ECR 1989............................................................... 108 Case 120/78 Rewe v Bundesmonopolverwaltung für Branntwein

(Cassis de Dijon) [1979] ECR 649 .............................................................. 22 Case 283/81 CILFIT SrL v Ministerio della Sanita [1982] ECR 3415 ............ 44 Case 327/82 Ekro v Produktschap voor Vee en Vlees [1984] ECR 107 ......... 109 Case 16/83 Prantl [1984] ECR 1299 ............................................................... 42 Case 29/84 Commission v Germany [1985] ECR 1661 ................................... 36 Case 363/85 Commission v Italy [1987] ECR 1733......................................... 36 Case 60/86 Commission v UK (Dim-Dip Lights) [1988] ECR 3921 ............... 41 Case 382/87 Buet v Ministère Public [1989] ECR 1235 .................................. 55 C-59/89 Commission v Germany [1991] ECR I-2607..................................... 36 C-106/89 Marleasing SA v La Comercial Internacional de

Alimentacion SA [1990] ECR I-4135........................................................ 112 C-188/89 Foster v British Gas plc [1990] ECR I-3461 .................................. 112 C-339/89AlsthomAtlantiquevCompagniedeconstructionméchanique

Sulzer SA [1991] ECR I-107 ................................................................. 23, 24 C-6 & 9/90, Francovich v Italy [1991] ECR I-5357......................................... 39 C-267/91 Keck and Mithouard [1993] ECR I-6097 ........................................ 22 C-91/92 Faccini Dori v Recreb SRL [1994] ECR I-3325............................... 112 C-93/92 CMC Motorradcenter GmbH v Pelin Baskiciogullari [1993]

ECR I-5009................................................................................................ 24 C-334/92 Wagner Miret v Fondo de Garantira Salaria [1993]

ECR I-6911 .............................................................................................. 112 C-46 & 48/93 Brasserie du Pêcheur SA v Germany and

Factortame v UK [1996] ECR I-1029......................................................... 39 C-392/93 R v HM Treasury ex parte British Telecommunications plc

[1996] ECR I-1631 .............................................................................. 44, 108 Opinion 1/94 [1994] ECR I-5267 .................................................................. 171

x Table of cases

C-178/94 Dillenkofer and others v Federal Republic of Germany [1996]

ECR I-4845 .......................................................................................... 45, 46 C-192/94 El Corte Ingles SA v Rivero [1996] ECR I-1281............................ 112 C-28/95 Leur-Bloem v Inspecteur der Belastingdienst [1997]

ECR I-4161................................................................................................ 44 C-104/95 Georgios Kontogeorgas v Kartonpak AE [1996] ECR I-6643......... 93 C-261/95 Palmisani [1997] ECR I-4025 ........................................................ 108 C-296/95 R v Commissioners of Customs and Excise ex parte EMU

Tabac SARL [1998] ECR I-1605 .............................................................. 110 C-300/95 Commission v UK [1997] ECR I-2649............................................ 37 C-45/96 Bayerische Hypothekenund Wechselbank AG v Dietzinger

[1998] ECR I-1199 ..................................................................................... 56 C-319/96 Brinkman Tabakfabriken v Skatteministeriet [1998]

ECR I-5255 .............................................................................................. 108 C-140/97 Rechberger and Greindl v Republic of Austria [1999]

ECR I-3499................................................................................................ 39 C-215/97 Bellone v Yokohama SpA [1998] ECR I-2191................................. 79 C-423/97 Travel Vac SL v Sanchis [1999] ECR I-2195......................... 56, 71, 72 C-240–244/98 Oceano Grupo Editorial SA v Rocio Quintero and others

[2000] ECR I-4941....................................................................... 84, 100, 108 C-287/98 Luxembourg v Linster [2000] ECR I-6917 .................................... 109 C-376/98 Germany v Parliament and Council [2000]

ECR I-8419 .......................................................... 28, 31, 34, 55, 62, 169, 175 C-381/98 Ingmar GB Ltd v Eaton Leonard Technologies Inc [2000]

ECR I-9305 .......................................................................................... 61, 99 C-456/98 Centrosteel SrL v Adipol GmbH [2000] ECR I-6007...................... 79 C-144/99 Commission v Netherlands [2001] ECR I-3541 ................... 37, 49, 81 C-203/99 Veedfald v Arhus Amtskommune [2001] ECR I-3569 ................... 110 C-372/99 Commission v Italy [2002] ECR I-819 ............................................ 37 C-441/99 Riksskatterverket v Soghra Gharehveran [2001]

ECR I-7686 .............................................................................................. 112 C-478/99 Commission v Sweden [2002] ECR I-4147...................................... 83 C-481/99 Heininger v Bayerische Hypound Vereinsbank AG [2001]

ECR I-9945 .......................................................................................... 56, 72 C-52/00 Commission v France [2002] ECR I-3827............................ 41, 49, 106 C-168/00 Simone Leitner v TUI Deutschland [2002]

ECR I-2631 ........................................................................... 46, 95, 110, 149 C-183/00 Sanchez v Medicina Asturiana SA [2002] ECR I-3901 ................... 41 C-400/00 Club Tour, Viagens e Turismo SA v Alberto Carlos Goncalves

Garrido [2002] ECR I-4051........................................................................ 60 C-473/00 Cofidis SA v Jean-Louis Fredout [2002] ECR I-10875 .................. 108 C-206/01 Arsenal Football Club v Reid [2002] ECR I-10273 ......................... 44 C-485/01 Caprini v Conservatore Camera di Commercio, Industria,

Artigianato e Agricoltura [2002] ECR I-2371............................................. 79 C-58/02 Commission v Spain [2004] ECR I-621............................................. 37 C-151/02 Landeshauptstadt Kiel v Jaeger [2003] ECR I-8389 ...................... 109 C-237/02 Freiburger Kommunalbauten GmbH Baugesellschaft

& Co KG v Hofstetter [2004] ECR-I 3403 ............................... 47, 81, 84, 113 C-70/03 Commission v Spain [2004] ECR I-7999........................................... 37 C-235/03 QDQ Media SA v Lecha [2005] ECR I-1937 .................................. 88

Table of cases xi

C-336/03 easyCar (UK) Ltd v O ce of Fair Trading [2005]

ECR I-1947................................................................................................ 57 C-350/03 Schulte v Deutsche Bausparkasse Badenia AG [2005]

ECR I-9215 .......................................................................................... 72, 73 C-436/03 European Parliament v Council of the European Union [2006]

ECR I-3733 ...................................................................................... 170, 171 C-3/04 Poseidon Chartering v Zeeschip [2006] ECR I-2505 ........................... 61 C-66/04 United Kingdom v Parliament and Council [2005] ECR I-10553 ... 171 C-125/04 Denuit v Transorient-Mosaique Voyages & Cultures SA [2005]

ECR I-923.................................................................................................. 43 C-177/04 Commission v France [2006] ECR I-2461 ....................................... 49 C-217/04 UK v Parliament and Council [2006] ECR I-3771 ........................ 171 C-229/04 Crailsheimer Volksbank v Conrads and others [2005]

ECR I-9273 .......................................................................................... 55, 72 C-441/04 A-Punkt Schmuckhandels GmbH v Schmidt [2006]

ECR I-2093 .............................................................................................. 105 C-465/04 Honeyvem Informazioni Commerciali Srl v Mariella De Zotti

[2006] ECR I-2879 ............................................................... 99, 113, 126, 129 C-302/05 Commission v Italy [2006] ECR-10597 ........................................... 88 C-306/06 01051 Telekom v Deutsche Telekom AG, not yet decided ............... 87 C-348/07 Turgay Semen v Deutsche Tamoil GmbH (2007) OJ C 235/10........ 99

UK CASES

Bankers Insurance Company Ltd v South and Gardner [2003]

EWHC 380 (QB)........................................................................................ 85 Barret McKenzie v Escada (UK) Ltd [2001] ECC 50 ........................... 125, 128 Behnke v Bede Shipping Co [1927] 1 KB 640 ............................................... 136 Bradford Third Equitable Benefit Building Society v Borders [1941]

2 All ER 205............................................................................................. 134 Broadwater Manor School v Davis [1999] Current Law para 208 ................ 121 HP Bulmer Ltd v J Bollinger SA [1974] Ch 401 ............................................. 44 Cohen v Roche [1927] 1 KB 169................................................................... 136 Commissioners of Customs and Excise v Robertson’s Electrical Ltd

[2006] SCLR 493 ...................................................................................... 119 Co-operative Insurance Society v Argyll Stores (Holdings) Ltd [1998]

AC 1......................................................................................................... 136 Director-General of Fair Trading v First National Bank [2001]

UKHL 52; [2001] 1 All ER 97, HL ........................................ 122–4, 132, 133 Jeremy Du en v FRA Bo SpA [2000] 1 Lloyd’s Rep 180 ............................. 128 Esso Petroleum Co Ltd v Mardon [1976] QB 801 ........................................ 134 Falco Finance v Gough [1999] CCLR 16 ..................................................... 121 Gosling v Burrard-Lucas [1999] Current Law para 197................................ 121 Interfoto Library Ltd v Stiletto Visual Programmes Ltd [1989]

QB 433.............................................................................................. 123, 124 Keates v Cadogan (1851) 10 CB 591 ............................................................ 134 King v Tunnock [2000] EuLR 531 ......................................... 125, 127, 128, 129 London Borough of Newham v Kathu, Zeb and Iqbal, and the O ce of

Fair Trading (Interested Party) [2004] EWCA Civ 55........................ 120, 121

xii Table of cases

Lonsdale v Howard & Hallam Ltd [2007] UKHL 32;

[2007] 4 All ER 1 ....................................................................... 125, 129, 132 Moore v Piretta PTA Ltd [1999] 1 All ER 174...................................... 125, 127 Museprime Properties Ltd v Adhill Properties Ltd [1990] 2 EGLR 196....... 135 Notts Patent Brick and Tile Co v Butler (1866) 16 QBD 778 ....................... 135 Page v Combined Shipping and Trading Co Ltd [1997] 3 All ER 656 .......... 131 Pan Atlantic Insurance Ltd v Pine Top Insurance Ltd [1995] 2 AC 501 ....... 135 Peek v Gurney [1871–73] All ER Rep 116 .................................................... 135 Roy v MR Pearlman Ltd [1999] 2 CMLR 1155 .................................... 127, 130 Schneider v Heath (1813) 3 Camp 506 ......................................................... 135 Shogun Finance Ltd v Hudson [2003] UKHL 62;

[2004] 1 All ER (Comm) 332 ...................................................................... 12 Spice Girls Ltd v Aprilia World Service BV [2002] EMLR 27 ...................... 135 Smith v Chadwick (1884) 9 App Cas 187 ..................................................... 135 Sykes v Taylor-Rose [2004] EWCA Civ 299.................................................. 135 Tigana Ltd v Decoro Ltd [2003] EWHC 23 ................................................. 125 Walford v Miles [1992] 2 AC 128 .......................................................... 134, 137 With v O’Flanagan [1936] Ch 575 ................................................................ 135