Common European Sales Law
What is it?
In October 2011, the European Commission issued its proposal for the Common European Sales Law (CESL, the new acronym for what was previously referred to as Common European Contract Law). The proposal gives traders the choice to sell their products to citizens in another Member State on the basis of a single set of contract law rules that would stand as an alternative to the national contract law of each Member State. The set of rules would be applicable to both B2B and B2C relations. In December 2015, the European Commission published its proposal for a Directive on contracts for the online and other distance sales of goods, covering only business-to-consumer contracts. It is now expected that this proposal will be given political priority over the CESL.
Why is it important?
Businesses within the engineering industry do not experience serious problems in cross-border trading. Thanks to the freedom of contract principle and to the possibility to use self-developed contracts or other standard contracts and general conditions, European engineering companies – of which the vast majority are SMEs – are coping well with the different national legal systems. Orgalime’s General Conditions and Model Contract forms, which are voluntary but nevertheless widely used, enable smooth cross-border trading. Orgalime considers that the introduction of a new optional instrument (such as CESL) at European level would create more confusion and would be unpractical. Due to the continuing legal uncertainty in the application of this additional optional instrument and in its co-existence with existing European legal systems, it is to be feared that transaction costs for companies would increase significantly.
We do not see the need for a single set of rules creating an identical regime applicable to B2B relations throughout the European Union, even if such an instrument were to be optional. While Orgalime supports the objective of increasing the overall coherence of contract law in specific EU member states in order to have a fully operational internal market, we believe that the proposed optional Common European Sales Law instrument will not bring the claimed benefits for business – and so should not be applicable in B2B relations under any circumstances.
How we’ve been engaged
Orgalime has been following the debate on the harmonised European contract framework for more than a decade and throughout the discussions has contributed its expertise and the viewpoint of businesses that are actually active in the field. Commission officials are receptive to our opinion on this issue and have expressed their willingness to consider Orgalime’s work in this area. Several Orgalime members participated in the relevant working groups of the CFR network, and have been involved in conferences and workshops on the subject. In 2012, Orgalime published a revised position paper on the CESL that was addressed to the Commission services and MEPs involved in the dossier. The Commission has included the 2011 CESL proposal in Annex II of the 2015 Work Programme that sets out the proposals to be withdrawn (or modified), but is awaiting the views of the European Parliament and the Council before proceeding.