Harmonized Private Law (HPL)

TABLE OF CONTENTS
PART I – INTRODUCTION TO THE COURSE .............................................................................. 4
I. INTRODUCTION ......................................................................................................................... 4
II. “DIVERSITY IN THE CLASSROOM”: A SOUTH-AFRICAN EXAMPLE ......................................................... 8
III. HARMONISATION OF PRIVATE LAWS IN AFRICA ............................................................................... 9
A. Introduction ................................................................................................................................. 10
B. Vehicles for Harmonization........................................................................................................... 11
C. Paths for Harmonization ............................................................................................................... 13
D. Challenges .................................................................................................................................... 14
E. Conclusion.................................................................................................................................... 15
PART II - HARMONIZATION .................................................................................................. 16
I. INTRODUCTION............................................................................................................................. 16
A. Harmonisation vs. Unification ....................................................................................................... 16
B. Lex Mercatoria ............................................................................................................................. 17
C. Global diversity: some reflections – common v. civil law ............................................................... 18
II. OBJECTIVES OF HARMONIZATION................................................................................................ 20
III. ACTORS IN HARMONIZATION ..................................................................................................... 21
IV. FORMS OF HARMONIZATION ................................................................................................. 22
V. OBJECTS OF HARMONIZATION .................................................................................................... 22
VI. THREE ROUTES FOR HARMONIZATION ..................................................................................... 23
VII. LEVELS OF HARMONIZATION .................................................................................................. 24
VIII. CHALLENGES IN HARMONIZATION .......................................................................................... 27
PART III - EU HARMONIZATION BY THE LEGISLATOR: ANALYSING DIRECTIVES ................... 29
I. LEGAL FRAMEWORK HARMONIZATION IN THE EU .......................................................................... 29
A. Areas where the EU is competent to legislate ............................................................................... 30
B. Legislative instruments at the disposal of the EU legislator ........................................................... 32
C. Procedures to be followed............................................................................................................ 33
D. Which regulatory technique does the legislator tend to follow? .................................................... 34
II. ANALYSIS OF 7 DIRECTIVES........................................................................................................ 34
A. Method – Directives ..................................................................................................................... 34
B. Empirical Comparative Analysis .................................................................................................... 34
C. Scope and terms........................................................................................................................... 36
D. Legal basis & Procedure................................................................................................................ 41
E. Rationale for harmonization ......................................................................................................... 42
F. Type of harmonization.................................................................................................................. 43
G. Margin of discretion ..................................................................................................................... 44
H. Concluding remarks ...................................................................................................................... 45
PART IV - HARMONIZATION BY THE CJEU: 6 EXAMPLES OF CASE-LAW ............................... 46
I. INTRODUCTION ....................................................................................................................... 46
A. Questions to answer..................................................................................................................... 46

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 B. Main topics of the 7 cases here analysed ...................................................................................... 48
II. CASE LAW & LINK WITH EU LEGISLATION ..................................................................................... 48
A. Veedfald case ............................................................................................................................... 48
B. Leitner case .................................................................................................................................. 50
C. Hamilton case............................................................................................................................... 52
D. Freiburger case............................................................................................................................. 53
E. Messner case /!/........................................................................................................................... 54
F. Amazon case ................................................................................................................................ 56
III. CRITICAL OBSERVATIONS........................................................................................................... 58
IV. “PUT INTO PERSPECTIVE” – THREE EXTRA CASES ........................................................................ 59
A. Validity - Test Achats Case ............................................................................................................ 59
B. Sanctions - Commission v. France case .......................................................................................... 61
C. Contractual Liability - Courage C-453/99 Case ............................................................................... 63
V. CONCLUDING REMARKS............................................................................................................ 64
PART V - INTERNATIONAL AND EUROPEAN CONTRACT LAW .............................................. 65
I. INTRODUCTION AND BASIC PRINCIPLES......................................................................................... 65
A. Contract law and harmonization ................................................................................................... 65
B. Basic principles ............................................................................................................................. 67
II. INTERNATIONAL CONTRACT LAW................................................................................................ 68
A. International contractual dispute.................................................................................................. 68
B. International Institute for the Unification of Private Law (UNIDROIT) ............................................ 69
C. UN Commission on International Trade Law (UNCITRAL) ............................................................... 69
D. Hague Conference for Private International Law (HCCH, 1893)...................................................... 69
III. EUROPEAN CONTRACT LAW – INTRODUCTION .................................................................................. 70
IV. EUROPEAN CONTRACT LAW – LEGAL FRAMEWORK ............................................................................ 72
A. 1989 EP resolution........................................................................................................................ 72
B. 1994 EP resolution........................................................................................................................ 73
C. 1999 European Council Tampere Conclusions ............................................................................... 73
D. 2000 EP Resolution – Commission’s work program ............................................................................ 73
E. 2001 Commission Communication on European Contract Law............................................................ 73
A. 2003 Commission Communication – Action Plan........................................................................... 76
B. 2004 Commission Communication – The Way Forward ................................................................. 78
C. 2004 European Council Hague Program ........................................................................................ 78
D. 2005 Commission First Annual Progress Report on European Contract Law and the Acquis Review 79
J. 2007 Commission Second Progress Report on the CFR (July 2007)................................................. 80
K. 2008 Council report on CFR .......................................................................................................... 81
L. 2009 Draft Common Frame of Reference ...................................................................................... 81
M. 2007 Commission Green Paper on the Review of the Consumer Acquis, COM (2006) 744 Final ..... 83
N. EC Consumer Law Compendium – Acquis Review.......................................................................... 84
O. 2010 European Council Stockholm Programme (2010-2014) ......................................................... 84
P. 2010 European Commission “Europe 2020”, COM (2010) 2020 ..................................................... 84
Q. 2010 European Commission Decision setting up an expert group on a CFR in the area of European
Contract Law ......................................................................................................................................... 85
R. 2010 Commission Green Paper on policy options for progress towards a European contract law for
consumers and businesses, COM (2010) 348 final .................................................................................. 85
S. 2011 Feasibility study carried out by the Expert Group ................................................................. 86
T. 2011 Commission communication on a common European Sales Law to facilitate cross-border
transactions in the Single Market, COM(2011) 636 final ......................................................................... 86
U. Proposal for a Regulation of the EP and of the Council on a Common European Sales Law, COM
(2011) 635 final ..................................................................................................................................... 87
V. Digital Content Directive 2019/770 ............................................................................................... 88

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 W. Sales of Goods Directive 2019/771................................................................................................ 88
V. CONCLUDING REMARKS ................................................................................................................ 89
PART VI - INTERNATIONAL AND EUROPEAN HARMONIZATION OF EU COMPANY LAW...... 90
I. INTRODUCTION TO COMPANY LAW ............................................................................................. 90
II. HARMONIZATION .................................................................................................................... 90
A. Freedom of establishment ............................................................................................................ 90
B. Free movement of capital ............................................................................................................. 91
C. Harmonization through Directives and regulations........................................................................ 91
PART VII - HARMONIZATION OF PRIVATE INTERNATIONAL LAW ........................................ 93
I. THE STATUS AND PLACE OF PRIVATE INTERNATIONAL LAW .................................................................... 93
A. Is PIL national or international? .................................................................................................... 93
B. Von Savigny.................................................................................................................................. 94
C. Which law is applicable? ............................................................................................................... 95
II. PRIVATE INTERNATIONAL LAW IN THE EU .................................................................................... 95
A. EU is an area of easy and free movement ..................................................................................... 95
B. EU PIL – Treaties ........................................................................................................................... 95
C. EU PIL – Legislation....................................................................................................................... 97
D. Rome I Regulation – Regulation 593/2008 .................................................................................... 97
E. Interface between Rome I and other harmonization ..................................................................... 99
F. Further fragmentation .................................................................................................................. 99
G. Harmonization through case law ................................................................................................ 100
III. PRIVATE INTERNATIONAL LAW GLOBALLY ................................................................................... 101
PART VIII - HARMONIZATION OF CIVIL PROCEDURE .......................................................... 103
I. Introduction ...................................................................................................................... 103
II. Is harmonization of procedural law desirable and feasible? ............................................. 104
III. Judicial responses: out of CJEU case law ........................................................................... 104
IV. Legislative initiatives .................................................................................................... 105
A. International cooperation in procedural matters ........................................................................ 106
B. Regulation of cross-border proceedings: international instruments on jurisdiction and circulation of
judgments ........................................................................................................................................... 108
C. Unified procedures ..................................................................................................................... 109
PART IX - HARMONIZATION OF INTELLECTUAL PROPERTY LAW ........................................ 112
I. OVERVIEW OF INTELLECTUAL PROPERTY RIGHTS........................................................................... 112
II. EARLIEST PATENT SYSTEMS AND INTERNATIONAL ASPECTS ............................................................. 113
III. HARMONIZATION ISSUE .......................................................................................................... 114
IV. HARMONIZATION MECHANISMS ........................................................................................... 114
A. Phase 1: A creator is entitled to an intellectual property rights in one state, should get rights in
other states as well.............................................................................................................................. 114
B. Phase 2: A centralized procedure should lead to IP rights in multiple states ................................ 116
C. Phase 3: Substantive conditions for protection should not differ unnecessarily ........................... 116
D. Phase 4: One intellectual property title should cover a multi-state territory ..................................... 120
E. Phase 5: The EU patent Package....................................................................................................... 121
PART X – INTRODUCTION TO THE UNIFORM COMMERCIAL CODE .................................... 125

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PART I – INTRODUCTION TO THE COURSE

I. INTRODUCTION

It is very important to see law as a continuing thing, a process, a development. We should

rather think about international and European harmonization of private law. This stresses the
fact that harmonization is a continuing process.

We will focus on European law, but not only, we will also look at international harmonization
of private law. We will also adopt a comparative perspective.

Harmonization is about identifying similarities and differences among the different MS

systems, it is about analysing what can be reach together and what should be left to national
sovereignty decisions. Harmonization also facilitates freedom of movements.
E.g.: sometimes if the EU Commission really wants harmonization but do not have a legal basis
for that purpose, they will refer to the freedom of goods to justify their intervention.

Harmonisation of private law leads to more legal certainty. It is important that what is
harmonised is very clear. If it is bad, it can have important implications on a lot of countries
and it can lead to difficulties to reach compromises at the EU/international level. It can be very
good if the harmonised law is good, but when it is unclear/leaves a lot of uncertainty, it is even
worst. Harmonisation sometimes is meant to decrease barriers, but in the end, it can create
more barriers.

We should also be critical about harmonization of private law. Sometimes harmonization

might not be the answer or the right idea for a specific issue.

When you have a case before you, always check the scope, definitions, exceptions of the legal
document, might it be a directive, a regulation, a model law, etc. /!/
E.g.: the case of potential harmonization of euthanasia in Europe. The Patient Rights Directive
only concerns health services —> so does euthanasia fall under health services?

Besides top-down processes such as treaties and established clear rules, harmonization can
be done through guidelines or standards; it can also be bottom-up processes, through trade
associations that develop over time some common principles.

Top-down = central planning through legislation and court decisions. It regulates commerce
directly by defining what, when, how, and/or with whom market participants may buy and
sell. Bottom-up = ordering via property rights and non-legal norms. Bottom-up planning tends
to leave decisions about what, when, how, and with whom to buy and sell far more in the
hands of market participants than in the case of central planning.

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Harmonisation is not only about legal processes, it can also be about informal processes (e.g.
academics can analyse the differences and similarities in the MS systems) which can in turn
influence the harmonization legal processes. We will combine legal, business and governance
perspectives.

Other disciplines become important in harmonization (e.g. law and economics). Also, different
actors, and especially courts, are playing a role in harmonization processes, it can be the CJEU
but also national courts.

Harmonisation is also about conflict of interests: the EU hardly believing in harmonization ><
MS that do not want to give up their sovereignty.

E.g.: family law is only little harmonized, harmonization is limited to PIL questions such
as divorce procedures. For the rest, MS want to keep their sovereignty.

The more harmonisation, the better is not necessarily true. Differences must be recognised
à it is good to link news to the course, exam and assignments (we can get bonus).

1. Teaching method
* European/international/comparative perspective.

* Theoretical and practical (CJEU cases) course.

* Interactive approach (permanent evaluation): being active does not mean you have to always come
up with the right answer; ask questions; prepare yourself.

* Skills-based: group works (we really need each other to come up with a stronger answer and better
work), presentation skills, knowledge skills.

* Do not learn by heart but learning to work on issues related to harmonization à what is important
is to UNDERSTAND the process of harmonisation.

* Prepare yourself for the future: different ways of studying.

Check what is in the news (newspapers, EU newsletters, websites, blogs). Either in class, in group work
or at the exam, do not only answer the question, try to surprise the Professor with researched
information and personal/critical ideas linked to recent developments that you can bring.

* Lectures and guest lectures

* Practice sessions (e.g. compare CJEU decisions with AG opinions)

* Individual exercises (reading, analysing and summarising cases and articles): reading materials

The biggest challenge today is information overload, so you need to manage reading long texts by
selecting what is relevant/not relevant.

2. Assessment method
1. Examination (50%): oral exam with written preparation; open book.

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Open book means everything except slides: handbooks, legislation, treaties, policy documents, case-
law, articles, own notes; AG opinions. 15-30’ of written preparation. What matters is not only what is
written down in your written preparation, but also the conversation with the Prof.

It is quite likely that case questions would be related to the Directives seen in class. But for the exam,
you need to study all the Directives seen in class.

- one case question: based on the cases and directives seen in class. We will need to mention the
problem in the case and to look for the relevant provisions in the directive.

The challenge is to identify the relevant issues (the only facts that are important for the issue in front
of you). Once you have identified the relevant facts, you need to know how to deal the case: what is
the problem? which are the relevant articles? which other cases can be used?

E.g.: is the directive applicable to the present case (check Articles on scope and definitions); it may be that
an old directive is replaced by a new one; how is the old case law related to the old directive still
relevant/not relevant for the new directive that replaced the old one?

- a more opinion/critical question: sometimes arguments or answer can be found in the opinion of the
AG. We can have questions on the role of the CJEU or the interpretation by it. Your arguments have to
make sense and you can base them on references in the things you bring to the exam.

Comment, do you believe it is the right approach? Sometimes, the answers are in opinion of AG. In
controversial case, two opinions of advocate general, look at who intervene, if only Scandinavian, it
shows how controversial the case is. Need to make a sound argument with references.

E.g.: Professor gives you a sentence of an article and ask you to develop pros/cons, and to comment what
is the whole context of harmonization in this regard.

E.g.: do you think the CJ went too far in this case?

2. Continuous evaluation (20%): participation in class, exercises (reading, analysing and summarizing
reading materials, interaction, Q&A, practice exam), individual assignment case study (to be discussed
at the workshop on Wednesday 20th May, 9h30-12h30).

3. Written assignment (30%): group exercise with oral presentation (31st March)

* 3 groups of 8/9 persons.

* Implementation of a European Directive (some MS may have adopted one law while others may
have adopted 11 laws, check the EUR-Lex website to know the implementation rate of MS) —>
Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on
consumer rights.

EUR-Lex however does not mention the national cases related to the Directive, so you will have to find
them by yourself. For some Directives, there may be a lot of cases, while for others not. It depends
also on the countries and on the date of the Directive. Also, case-law related to other Directives may
be relevant for your research. Do not just focus on law but be aware of what happened before the
adoption of the instrument, look at the soft law, it can be some evidences to make your case
sometimes. You can learn from it and make an argument out of it for the judges.

* Explanation purpose of the directive/decision making-process.

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* Overview of the status of implementation and differences in MS (text and table).

We need to look if the court accused a country of a wrong implementation. We need to make a
comparison between different countries in written and in a comparative table.

* Critical reflection on comparison and relevance of harmonization (pros and cons).

We need to assess the relevance of harmonisation: is it good/ bad? Is it really helping the
consumers/companies? The coordinator doesn't have to be the one presenting orally.

—> the main focus of your analysis is implementation + country-report. But you can come with
additional information making the research more interesting.

* Written report of max. 30 pages (Calibri 11) to be summited on 19th May.

* Oral presentation of 10-15 minutes (1/2 persons in the group give the presentation).

* Peer review will be organized electronically after all the group work is done; it will be about
reviewing members of our group, including yourself à include in your mark.

It is very important to participate in this peer review, both filling the score for every participant
(including yourself) + open feedback for every participant (constructive comment on how the group
is operating and on how each person concerned operated).

It should be done for June. It should take around one hour. You can already start thinking before
about what to write, because it is a whole process.

* Research process

- How do you get information on the decision-making process and the status of
implementation in the respective Member States?

What did the MS really do with the margin of discretion given to them in the implementation of the
Directive? You must understand the harmonization process and the implementation.

- What about relevant case-law? Check if it is a preliminary ruling or an infringement

proceeding launched by the Commission.

3. Assessment criteria
* Logical, systematic, well-structured analysis of legal issues

Always analyse the parties of the case; the type of approach the Court took (teleological,
systematic/theoretical); and what about the AG approach.

Also, when you are analysis a EU directive, depending on the type of interpretation used, you may
have a different outcome. Takes this into consideration.

* Good understanding and clear explanation of the legal framework and political/business context

* Critical, well-reasoned (individual) opinion

* Correct and complete references to the relevant legal framework and use of all other relevant
sources (e.g. international, european, national legal sources, policy documents, case-law, articles):
footnotes and bibliography apply for everything, even for the oral exam

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* Relevant recent developments (bonus)

II. “DIVERSITY IN THE CLASSROOM”: A SOUTH-AFRICAN EXAMPLE

There is a lot of assumptions about we know/don’t know and what we think the others know. We
should learn from each other and each other countries and jurisdictions. What are the benefits and
challenges of having diversity in the classroom?

Diversity in the classroom: Students come to the university with different backgrounds, sets of
experiences, cultural contexts, and world views. Some students may make use, even if in an
unconscious manner, of sexist language, stereotypes or racist discourse, which sometimes make the
debate impossible. How can we remedy this?

There are different ways of combatting the engrained structural disadvantages of being a Person of
Colour and there are things to be aware of when cultural differences are present:
- In the student enrolment process (the process and the makeup of the student body);
- cultural/racial/socio-economic backgrounds of the staff and the automatic biases coming with;
- cultural awareness;
- SA developed bridging courses and extra help to try and combat the disadvantages of being non-
white and of being from lower socio-economic areas. In the end, this was seen as another way
of creating diversion and could be insulting;
- be aware of symbols around the university campus, e.g. statues of white men who although may
be important for the university are responsible for racial discrimination (Governor Macquarie)
and the messages they send and the structures they reinforce. We also need a decolonisation of
power and privilege
- reviewing the university curriculum to identify bias and infuse the different perspectives as to
not reinforce the same (white) dominant narrative - also useful to grow and improve ideas. The
counter argument is that it “infringes on academic freedom.”
- improve and adapt so that more students can contextualise and engage with courses and the
materials
- it is particularly important to combat the structural differences when it comes to the framing of
the identity of lawyers through the courses which are being taught/the way they are being
taught, to the teaching of the next generation of lawyers and whether they have been taught
conservative or progressive ways of thinking in law school
- be aware of the construction of knowledge (any assumptions, authority, sources) who produces
it, e.g. assumption that the first tax law was introduced in South Africa by European colonisation
when this wasn't the case. There are many cultural, social, political and socio-economic bias;
- access; textbooks, online resources, Wifi, etc.
- diverse students know more about ‘minority’ issues so the learning becomes reciprocated
between the student and the teacher. It pushes teachers to adopt a wider/different perspective
and they may influence or change the curriculum to include these differences;
- be aware of the types of examples being used to explain concepts in class. The assumption that
everyone knows what you're talking about might be wrong and the differences may challenge

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 these assumptions. South-African example: not knowing what a cheque was because in her
community they only dealt with cash because they were of a lower socio-economic class;
- being aware of different learning styles;
- accept that conversation will be uncomfortable;
- numbering systems for tests to get rid of bias;
- balance between acknowledging and respecting differences but exercising equity.
- More initiatives can be taken to mix the students (mix during group assignments + responsibility
on the students to talk to the others).
- People can have very opposed opinions, come from different religious group and have different
value system. We need to have tolerance and enjoy the celebration. We need to try not to be
divisive. We can stand for our opinion.
- for the teacher: s/he needs to pick which authors to be used/the authority used.
- What about oral exam? It is difficult for some. But giving an oral exam can also be a solution or
the teachers can opt for more than 1 examiner. Have different forms of assessment (to assess
everyone’s strengths) can also be interesting.
- Concept of decolonisation: what do we take as value systems? Do we use the western system?
In terms of expectations, students should know about their reality and not only about western
thinkers. Example: medical doctors are trained in a West way, but we need doctors to be able to
cure non-west diseases. It leads to difficulties. Decolonisation is a big thing in SA. Do we only look
at Europe as a source of knowledge? SA had a history prior to that.
- Socio-economic issues: it is complicated to get different socio-economic groups in a classroom.
It is again the issue of tolerance.
- We also have generation gaps, physical disabilities and sexual differences: we need to be aware
of those differences, it takes us back to tolerance and empathy
- Example with Pretoria girls schools: can we go to school with natural hair?
- Normal African hair = “wild” western hair. It is seen as a bad thing. The girls need to make their
hair look neat/ flat. It is an issue around decolonisation. What is looking good? it was about
consciousness, about acceptance. Hair was seen as a symbol of decolonisation.
- Example: How to undo the land ownership issue? It is an important issue in SA. How to
redistribute land? In Zimbabwe, they also had that land issue.
- The SA Constitutional court said no to quota. In SA, 80% of the population is African Black; 10%
is White and the 10% remaining is mixed. The staff is 90% white. How to change that? With
quotas? Because there is the constitutional principle of equality, SA cannot have quota, but it
can have affirmative actions. In employment, there is the employment equity principle (= need
perfect equality, and if it is the case, the employer needs to choose the black person).

III. HARMONISATION OF PRIVATE LAWS IN AFRICA

Feyisayo Lari-Williams is a PhD researcher in the field of business and private law. It seems that
platforms such as Uber control everything they have created: Uber creates the platform; is an actor
within the platform; is the legislator of the platform >< driver or clients which are individuals à how
can the law use other methods to balance contractual powers of the platform and individuals.

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Harmonisation will help to reach some international and regional standards, but those
standards may be too Western-oriented and not fully acknowledge and fit the African reality.

A. Introduction
The power (and weakness at the same time) of African countries is the different legal lawyers
on which they are constituted. It becomes more difficult to relate between African systems
given the huge difference of their legal systems (e.g. civil and common law systems;
French/English/Portuguese speaking). For example, in Nigeria, many lawyers are interacting:
common law, statutes, Islamic law, customary law à plurality of legal traditions and histories.

Harmonization has many benefits, but at the same time we have to be critical: harmonization
might be an option, but it does not necessary the best option. Harmonization of private law
looks at very beneficial, for example for trade. Sovereignty is also very important: MS do not
have the same negotiating powers as other countries. It is all depending on the status of the
country, of what harmonization entails and what are the objectives of harmonization. What
can be very good for some countries is not necessarily good for others.

a) Arguments for and against harmonization of private law?

The plurality of legal traditions/histories in Africa (civil law, common law, customary law,
Muslim law) is an argument for and against harmonization: harmonization can reduce
differences, disparities and obstacles (for) but it can also render things even more complex
(against). This diversity, even within countries, cause a lot of problems and issues.

Africa checked the boxes. But what should we harmonize in a continent that has this huge
level of diversity? If we harmonize statutory laws, what will happen to the different customary
and Islamic laws? Kings, village chiefs, princesses were already existing before colonization.

E.g. imagine if Nigeria ratifies its CISG and abandons its own statute laws; what will happen to all the
contracts concluded under customary laws?

Africa has taken huge steps towards harmonization. The starting point is hardly never legal
harmonization, but rather trade advancement, elimination of barriers and market integration.
Yet, you cannot ignore legal harmonization à legal harmonization is a means to an end.

Also, there is a lack of political will.

b) Levels of economic “development”

If States have different problems, from where development should start? How could we
imagine harmonizing things?

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 B. Vehicles for Harmonization
There are four main actors that have vehicle harmonization in Africa. There are very important
à distinction: harmonization (similar rules) ≠ uniformization (same rules).

a) Regional Economic Communities

The AU is the closest thing Africa has to the EU, but it does not mean that they are close.

The AU is the successor of OAU, it is composed of all African States, except some offshore
islands that are integral parts of the trans continent of European countries. It has economic,
social and political goals. It works through treaties, conventions, protocols and charter.

The AU only recognized 8 RECs as its building block à there are 8 RECs under the realm of
the AU (CEN-SAD, COMESA, EAC, ECCAS, ECOWAS, IGAD, SADC, UMA). Yet, OHADA is also
important even though it is not recognized as part of this building block.

RECs are economic actors but there is a difference between how the EU operates and how
the RECs operate. In the RECS, most of the rule-making bodies are composed of Head of
States, so members of the executive: at that level, it is almost as the executive is making
laws. There is here a problem of enforcement.

But there is no point to harmonization is there is a problem of enforcement. Most civil law
countries in Africa are monist countries (international law is automatically incorporated into
national law) ≠ most common law countries are dualist countries (need of a national
incorporation of international law). The EU mainly functions with treaties. Is dualism or
monism the best option? The answer has to do with the issue of enforcement: in this regard,
monist could be better. However, in the big picture, legislation is only a step, enforcement
and judicial certainty are also a key. In reality, it does not matter whether you are a monist
or dualist state, what drives harmonization is the political will and the need for it: if the
legislators think harmonization is needed, it does not matter whether international/regional
law are directly applicable because even if you are a dualist state, enforcement will not be a
problem as long as there is will for harmonization.

- Arab-Maghreb Union (UMA).

- Community of Sahel-Saharan States (CEN-SAD): all the MS are also part of wider economic
communities involving more countries, they have overlapping responsibilities, so there will not be
real impact from CEN-SAD.
- Southern African Development Community (SADC): 16 MS, established in 1992, political and
economic goals; harmonization of their laws is just a mean for their end, it is not an end. Even
Mauritius and Madagascar are part of it.
- Economic Community of West-African States (ECOWAS): 15 MS, established in 1975, economic
and political goals, institutions and specialized agencies. ECOWAS has achieved free movement of
persons (e.g. passports of these States are issues by ECOWAS); Common Trade Policy, Trade

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 Development Strategy, Economic Partnership Agreement. There are also infrastructures projects
across the region: there is now a good road network among ECOWAS countries so there is a lot of
investment going on. It consists of both francophone and anglophone Western African countries
(≠ in general, communities in Africa are designed around the same language).
- Common Market for Eastern and Southern Africa (COMESA): 19 MS, established in 1994, they
achieved a reduction of barriers; Tanzania, Somalia, South-Africa are not part of it.
- Economic Community of Central African States (ECCAS).
- Intergovernmental Authority on Development (IGAD).
- /!/ East African Community (EAC): one of the most hard-working institution, it wants to be the EU
of Africa; regional intergovernmental organization; only 6 MS: Burundi, Kenya, Rwanda, South-
Sudan, Tanzania, Uganda (maybe this small size allows them to achieve their goals faster); EAC
Treaty of 1999; integration pillars (customs union, common markets, monitory union, political
federation); East African Federation in process: the aim is to form a political federation; they have
a rule-making body composed of the representative legislative bodies of each MS, which
overcomes the problem of bringing the rules closer home because national legislators are part of
the rule-making themselves.

- OHADA: the AU only recognized 8 RECs as its building block, but the OHADA is also a very important
actor; Western and Central African States (French zone); 17 MS; only francophone States (Nigeria,
Ghana, Liberia, Gambia are not part of it). It is related to business/commercial law. As a commercial
lawyer, Feyisayo would have preferred Nigeria to be part of OHADA. Also, most of the OHADA MS
are also part of the ECOWAS.
- African Intellectual Property Organization (OAPI): it is related to a very specific aspect of
commercial law being IP; established in 1977 by the Bangui Agreement; all MS relinquished their
rights to make national IP laws; several organs; mainly Western and Central African States. Nigeria
would do better in being part of the OAPI because the laws achieved by OPAI are going far behind
than Nigerian laws.

à again, actions, decisions and commitment depend on the political will.

b) Business: professional networks and associations

Their powers are quite limited: they can only make suggestions, for example through Model
Laws. Apart from these model laws, a key tool towards harmonization is the mindset.
Individuals present at conferences should be informed of what they are going back to their
countries with: at conferences, interactions and sharing of ideas will, at some point, point out
the similarities in rule-making and law-making that individuals can bring back to their country.

While they are not decision-making bodies, their influence and lobby go a long way.
• African Bar Association: conferences; different sections.
• African Network of Constitutional Lawyers:
• Sahel and West African Club:
• Eastern and Southern African Business Organization:
• East African Social Enterprise Network:

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 c) Academics
As far as harmonization goes, it does not start with the black letter laws: real harmonization
starts with some background work, mostly done by academics. It is important to create the
rind mindset, the real harmonization mentality.

• Association of African Universities

• West African Examination Council (WAEC): for example, in West Africa, all students take the same
exam across high-schools and are thought using the same syllabus because they will write the
same exam à gradual elimination of differences, promotion of mobility.
E.g. the WAEC certificate obtained in Nigeria is also admissible in Ghana.
• East African Examination Council

C. Paths for Harmonization

a) Legislative
First, there are several legislative organs of the RECs (East African Legislative Assembly,
OHADA Permanent Secretariat and Council of Ministers, ECOWAS Community Parliament,
SADC Summit of Heads of States or Government).

o Uniform Laws: directly legally binding

o Treaties: directly legally binding
o Directives: stress the objective that must be achieved, States are free to design
the way they will achieve the objective.
o Model Laws: it is a suggestion, proposal to States in a subject matter.
o Guidelines

E.g. Uniform Laws – OHADA: competition law, banking law, intellectual property (but what about the
regime of the OAPI, there will be conflictual rules), the law relating to mutual and cooperative
companies, the law of civil partnerships, contract law, evidence). OAPI Bangui Agreement, 1977: OAPI
offers a very comprehensive legal regime: so, there would be a problem with the laws established
under the realm of the OAPI. There are 2 drafts till date: Contract Law and Consumer Protection Law.

E.g. Uniform Laws – OAPI: singe legal and administrative framework for the protection of IP rights in
MS; serves as the national IP law for OAPI MS; IP rights granted/protected under the Agreement
accords protection in all MS.
E.g. Uniform Laws – SADC Protocols: 26 protocols; binding on MS; education and training, extradition,
facilitation and movement of persons, finance and investment, fisheries, forestry, gender and
development, health, trade and services, etc.

E.g. Model Laws: African Model Legislation for the protection of the rights of local communities (OAU,
2000); Model Law for the Implementation of the AU Convention for the Protection of and Assistance
to Internally Displaced Persons in Africa (AU, 2018); Model Law for Medical Products Regulation (AU);
SADC Model Law on Data Protection.

13
E.g.: Personal Data Protection Guidelines for Africa.

b) Judicial
How restricted powers of the judicial bodies are?

• Judicial Organs of RECs: most of these judicial organs are supranational judicial bodies yet
related to States.
o African Court on Human and People’s Rights (competence on the basis of the Protocol
to the Charter)
o ECOWAS Court of Justice
o OHADA Common court of Justice and Arbitration
o East African Court of Justice
o COMESA Court of Justice
• Judicial Networks
o West African Jurists Association (WAJA)
o East African Judges and Magistrates Association
o East African Community (EAC) Chief Justices Forum
o ECOWAS Chief Justices Forum
o Southern African Chief Justices Forum (SACJF)

You really have courts that are supposed to be big actors in the harmonization process, but
they are being intimated by countries, so their powers are threatened. For example, it is
possible that the Court give a decision that goes against a bigger State, that will then threaten
the jurisdiction of the Court on this country.

c) Others
It is not only when we make uniform laws or uniform interpretation that we harmonize, what
are the other ways of harmonization?

Trade practice and customs; student-exchanges programs (it has a real impact in giving inputs
to your own national laws because you have a more critical vision of what your laws are,
compared to other countries); human interactions; emergence of new global challenges.

à intercontinental influence.

D. Challenges
There is a clear overlap of membership and mandates, given the large number of
organizations in Africa. Moreover, national legislators are not involved in the decision-making.
The question of enforcement remains the biggest challenge to harmonization: if we have
similar rules but no enforcement of these rules, what about harmonization? Also, in Africa,
the lack of political will towards a harmonized continent remains an issue to tackle.

14
You really see that there is an important interplay among African countries.

E. Conclusion
Are we on the path for harmonization or are we still at the very starting point? The more hope
you have, the less negative views you have. There are blocks, but when do these blocks are
going to gather together? This is the question.

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PART II - HARMONIZATION

I. INTRODUCTION
Maximum harmonization = national law may not exceed the terms of the legislation. In
practice, this prohibits gold-plating of EU legislation when it is transposed into national law;
there is no margin of discretion for MS (e.g. directives on babies and kids).

Minimum harmonization = threshold that national legislation must meet. However, national
law may exceed the terms of the legislation if desired; EU imposes a minimum that must be
respected by all MS but they can decide to go further in the protection through specific
percentages, terms and requirements for particular goods or services or transactions between
consumers and companies.

Is minimum harmonisation a good balanced, leaving a margin of discretion to States? In the

beginning, the trend was to have very detailed and specific legislations. Then, with the number
of MS was increasing we saw minimum harmonisation. Nowadays, many political parties
express some anti-European feelings, it becomes complicated for the EU to have maximum
harmonisation, except in very specific fields à circular trends.

A. Harmonisation vs. Unification

On the one hand, we will not talk about unification. With unification, everything is already
clear enough and we don’t need to implement it anymore, it is already applicable. It is about
the same, uniform acts. Unification goes further than harmonization.

On the other hand, we will talk about harmonisation. It is about making similar acts but leaving
a margin discretion to States in the implementation of these laws. At the EU level, it is
especially the case of directives, but even regulations actually leave quite some space to MS
to deal with the law. At the international level, model laws or guidelines try to harmonize;
also, conventions using vague norms can also lead to harmonization, as it leaves space for MS.

When we engage in harmonisation, we never achieve unification because there are some
many differences among countries. Even regulations actually leave quite some space to MS.

We can also have maximum harmonization, which is closer to unification. Maximum

harmonisation provides very specific requirements or many conditions. Everything is more or
less the same than unification. Yet, there is still a little bit of space to work with: even
maximum harmonization often leaves some scope of discretion to MS.
E.g.: in consumer law, there is always a right to withdraw with a specific number of days (e.g.
30 days), which let no margin of discretion to MS. In a directive, it can be written the precise number
of days. We are still in the harmonisation context ≠ unification goes further than harmonization.

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 B. Lex Mercatoria

Historically, the lex mercatoria is an old customary commercial law/practice developed over
time between traders about how to exchange, perform goods etc. In the Medieval Ages, when
people were travelling and selling their goods and a dispute emerged, there were limited local
laws developed, limited codifications. It was rather about practices, such as negotiable
instruments as from 14th. Judges were referring to those practices à case law of merchant
courts brought some influence. There was an important influence of statutes of powerful
trade guilds, confirming practices/customs between people. Some things were written over
time and there were some influential authors that wrote down the customs of merchants.

E.g.: Little Red Book of Bristol, The Consulatae of the Sea (Barcelona), Roles of Oléron.

From roman law that exist in many States, there are core principles that had an harmonized
effect. Some authors were trying to identify what were the main habits developed by traders.
Certain old customs are still used by arbitrators nowadays and still play a role in international
treaties, because some international treaties on contract laws or cross border disputes tend
to be quite broad and vague. Then arbitrators solve the dispute by referring to these old habits
that are sometimes codified in those conventions or other standardized provisions by
professional organizations. They are also used sometimes by judges.

à the Lex Mercatoria still has value today. It is a tool which can represent soft law (except for
mandatory treaty law); general principles of law (e.g. strict application of pacta sunt
servanda); international treaties (e.g. Vienna Sales Convention); or Standard (international)
conditions and terms (e.g. Incoterms).
E.g.: a lot of what we find in the Vienna Sales Convention is former lex mercatoria.

Who is engaged in the continuing role of lex mercatoria? Harmonisation is not only top-down
(national courts, arbitrators, standardization by professional organisations such as the ICC
with Incoterms). It is also a more bottom-up approach, coming from business people or
commercial practices/customs. Even more, sometimes, the treaties are simply the codification
of old practice and customs à harmonization is not always formal it can be informal; formal
and informal harmonization influence each other.

à in modern international commercial law, lex mercatoria still plays a role for legal principle
generally recognized in trade, custom, treaty law and general conditions.

When international trade law is insufficient to determine the applicable law according
to PIL rules or if national law is not suited to regulate international relationship between
parties, then recourse to lex mercatoria may be necessary.

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 C. Global diversity: some reflections – common v. civil law

Classical dichotomy
Topics Common Law Civil Law
Importance of case-law Primacy of legislation
Origin Basis in English customary law (common Basis in Roman law – rediscovery
law v. law of equity) Bologna in the 12th century
Codification no codification, but case law (judges extensive codification of Roman
made law, but some statutes have been law in civil codes
enacted in specific areas of private law)
Systematization absence of systematization or desire law systematized as much as
thereof; focus on achieving a just result, possible
more than on rationalizing the law
Legal reasoning reasoning from case to case = inductive from general legal rule to case at
reasoning hand = deductive reasoning
Precedents binding precedent (precedents coming no binding precedent (judgment
from a court higher up the hierarchy bind only binding between parties, not
a lower court; precedent however only for future cases; yet: persuasive
binding as to ratio decidendi) authority)
Institutions E.g.: causa for formation of contract, E.g.: trust
good faith

People often frame these two systems as totally different. The starting point is different
indeed: in common law, judges start to look at the case and make decisions that are the law,
≠ in civil law, the judge will interpret the legislative framework. Yet, in BEL, for example judges

18
will not necessarily ignore the judgement of other judges (//importance of case-law). Judges
motivate their decision. Yet, judgments in common law are much more longer.

Critical approach
These two systems learn and influence each other. Yet, we must think critically about the idea
that these two systems are very different.

à the dichotomy between civil law and common law is no more valid in practice because it
is much more complicated in practice.

Diversity in legal system (common law, civil law, Muslim law, customary mixed system) is not
always that relevant anymore for harmonization. This diversity can be enriching. Maybe the
differences are not as significant as before. Yet, it can be difficult to harmonise if there is too
much diversity. Judges obligation to look at precedent is less stronger than in civil law.

- Even though Roman law was the basis of civil law systems and was less important for the
development of common law, there was still an influence because of the trade exchanges
at the time à legal doctrine in recording English law has also been influenced by Roman
law. Roman law only applied on continent, to the extent that it did not interfere with
customs and local laws. There were still some (Roman law) customs influencing the
common law jurisdictions.

- There has also been a private law codification in English law (even though judge-made law
remains predominant). Also, with the influence of the EU, the UK had to implement new
laws and to apply them in particular cases. Also, in civil law systems, judges are no more
just “bouches de la loi”, they are increasingly giving policy-making roles and they influence
the law not only as an actor applying the law, sometimes there are gaps in the legislation
and the judges will step in à civil law judges are not “puppets” of legislators (e.g. judges in
civil law systems adopt an open-ended approach). But there are still differences and some
judges are more activists than other judges (e.g. Dutch judges are very activist, want to make
their judgments accessible to everyone).

- Yet, there are still some differences existing between the deductive ≠ inductive reasoning
approach, which are still different today.

- When institutions set higher standards, companies and MS have no other choice than
complying with those higher standards à informal global harmonisation. Most of the
time, this leads to a higher level of protection for consumers.

E.g.: for the GDPR, companies have no other choice than complying with high standards.

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E.g.: Mark Zukenberg wants to influence the rules that will be adopted in Europe as regards
artificial intelligence. Why? Because these rules may have an important impact on his website,
and thus he wants to make sure that he will comply with these higher European standards.

- Even institutions are no more strictly distinct, they are also influencing each other.

E.g.: trust is originally a legal entity set up for investment purposes more in common law
systems, yet it also operates today in civil law systems (according to common law systems
roles).
E.g.: the notion of good faith is also present in common law systems, even though it originated
from civil law systems.

Nowadays, we might wonder whether that one of the difference, in practice is really relevant
à it is important to have a critical approach towards this classical dichotomy.

There are still differences, but the two systems are becoming more and more similar. There
are a lot of exchange between academics (e.g. in the Hague) on cases that are read by judges
or lawyers, who in turn will write books, which allow to take ideas and cases and learnings
from other cases.

II. OBJECTIVES OF HARMONIZATION

Harmonization, either at the international or regional level, can have different goals.
- Peace and stability
- Economic growth: easier to have harmonization at business level; international level lead
to reduction of cost (because uncertainty has a cost, for example to decide which law is
going to be applied); economic growth this is also an advantage for consumers.
- Facilitating transnational business: among consumers and traders from different MS;
harmonisation leads to a reduction of costs (because it reduces uncertainty cost and
transaction costs).
- Eliminating uncertainty: you can try to use mediation to avoid the cost but if
harmonization, those costs are lower.
- Promoting transparency: if the law is similar in some countries, it eliminates uncertainty
and allow transparency, you can expect the same rules to apply.
- Improving competitiveness: You also know what to except and basically you allow more
growth.
- Reducing (transaction) costs: there are three transaction costs: 1) searching partner in
business, maybe in another country (search costs); 2) you must negotiate with that
partner, maybe there is barrier of language when negotiating, or the choice of the
applicable law may be difficult to make (negotiation costs); 3) if there is a conflict about
the compliance of the products, you must decide on all the aspects of PIL to settle your
dispute in front of a court, you could limit that cost through ADR (enforcement costs).

20
If you have different rules (e.g. about the information needed on the website to sell products
online to consumers), it does not make sense and does not work well, there will many kinds
of costs to make a transaction between a consumer in country A and a trader in country B à
search costs; negotiation coasts (e.g. costs of getting to know the law); enforcement costs.

When the prices are lower for everyone, it increases competitiveness, eliminates legal
uncertainty for both consumers and traders.

E.g. if there is a conflict between Germany and France, it can create uncertainty (which
court, which applicable law, language issue, etc). It is easier to have harmonisation in this
context. This also applies in family law, if you have a divorce issue, with common rules
everything is easier.

III. ACTORS IN HARMONIZATION

There are many actors involve in harmonisation. Harmonisation is not only a top-down
process (EU or intergovernmental organisation), it can also be a bottom-up process.

• National and international law-makers (e.g. dedicated intergovernmental organisations,

such as the MERCOSUR or the HCCH).
• Government officials.
• Judiciary: national and international judges may refer to other judges/judgements. The
ECJ is a very important actor in this regard: it helps national court to interprets
directive for example. The preliminary rulings are very important for harmonisation, it
really helps harmonising EU law. The EU Commission can also launch infringement
proceedings and those judgments can clarify how the law should be implemented. The
EU has the broadest competence, but there are many other regional judicial courts.
• Arbitrators: when they have to arbitrate a case, arbitrators will rely on Vienna
Conventions, Incoterms, but also, to a certain extent, on private international law and
thus on national laws.
• Legal professions: in all legal professions, you can be part of the informal
harmonisation process.
• Academics have an important work to do in harmonisation: they search for differences
and similarities, make nice articles and books and this can also influence the
harmonisation process; or studies conducted by academics can be used later by the
Commission; academics can work as researchers for an institution.
• Businesses networks and associations: especially with new technologies, insurance law
and artificial intelligence.
• Etc.

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à formal harmonisation (judiciary, arbitrators) and informal harmonisation. Sometimes,
formal and informal also cooperate together (e.g. work of academics is used by the
Commission).

IV. FORMS OF HARMONIZATION

Harmonisation is a slow process which takes place through very diverse forms, at the national
and international levels:
- Treaties
- Principles
- Uniform/ Model Acts
- Soft law instruments
At the EU level, the EU Commission make soft law document that play a very important role
in the harmonization process, because it is a process that take a lot of time, commission often
start with consultations with MS, they write report and communication, there is a follow up
report and so on sometimes for years. There are directives that took decade to exist.
- Customs and practices
- Case-law
- Publications of comparative research: harmonisation includes academics as experts to give
an overview of the situation in their countries.
- Cross-border exchanges between judges, practitioners, scholars, students, etc.
E.g.: Erasmus exchanges, diversity in the class, expert going aboard, lot of movement in
conferences, exchange between judges and practitioners.

à formal and informal forms of harmonisation.

V. OBJECTS OF HARMONIZATION
- As object of harmonisation, the most obvious is substantive law: in all areas (e.g. consumer
law, contracts law, company law) there is harmonization through directives, regulations.
There is also harmonization for civil procedure, though hard because they reflect the legal
culture. But, for example, in company law there is no international harmonization, it is
mostly regional harmonization.
- But private international law is also very important (e.g. HCCH).

- All cases
- Only cross-border cases: at the EU level, it is generally restricted to cross-border cases à
most of the harmonisation of the EU is through the internal market law.

- Always: harmonisation of all rules, in all cases.

- Party autonomy: when organisations are harmonizing in the context of trade or contracts,
they don't want to harmonise everything and to make uniform laws, they want to leave

22
 some freedom to the parties à In B2B relationships, there is less harmonisation than in
B2C relationships because the EU firstly wants to protect consumers.

VI. THREE ROUTES FOR HARMONIZATION

- Legislative “Route” for Harmonization (i.e. top-down approach)
§ Uniform acts/model laws: Are they directly applicable? Are they exhaustive?
§ Regional Parliament/Council à democratic organ or not? Representation of the
different MS? there is a need for more coherence between MS.
§ Restatement and pre-statements: kind of state law, term used in the US and
common law countries; t is related to the state level, when there is some kind of
state law to make a gap analysis; it shows that there is a need for harmonisation;
§ Steps:
1. Inventory of existing legislation (acquis)
2. Improvement of coherence between national laws
3. Adoption of instruments
4. Application of instruments

Model laws are very important for EU institutions: the EU Commission make an inventory of
the legislation, whether there is a need for harmonization, there is soft law, adoption and then
application of the instruments. In some of the African countries, they speak about assembly
which is sometimes composed of heads of government à problematic? Is it some democratic
organs or the representation of MS?

- Judicial “Route” for Harmonization (i.e. judges interpret treaties or conventions)

§ Judgments: judges are reading the judgments of other judges. They read each other
case law and they might disagree and will then explain and justify why they reached
this conclusion. It is not happening in all countries. They think it is important for
legal certainty that they are moving to the same direction, or at least be transparent
regarding their choices à judges can act before enactment of the law; or when
applying the law if there are gaps in the law.
§ Appeals courts;
§ /!/ Preliminary ruling procedures (CJEU): most regional courts do not have this
procedure or if they have it, they have copied the EU. This procedure allows national
courts to ask the CJEU to rule on the interpretation of EU rules. The national court
must clarify the issue at stake and must refer very specific questions to the CJEU;
refer to the CJEU for an interpretation that must help the national court to deal with
the case at stake in domestic proceedings; very precedent effect (absolutely
binding); cfr. CILFIT criteria (acte clair and acte éclairé) à Art. 267 TFEU. PRP are
very important in EU harmonisation.

23
 §Cross-references to case-law of other courts (seeking for inspiration): not all Courts
do that (e.g. French courts prefer referring to their own case law >< German, Dutch and
UK judges often cross-refer); not for all fields, especially for business law fields. This
way, Courts learn from each other, and hence difference may decrease among
different jurisdictions. That leads to some harmonization: they read each other’s
cases, but their interpretation does not need to be the same, but they are moving
in a certain direction and so in a way that is also a harmonization.
E.g.: European Patents. There were quite differences between the outcome in the MS in the
EU that led to legal uncertainty. Is it valid, is it enforced? If judges have different opinions, this
is problematic, so judges are starting to look and read each other case law for the same
technology, they are not bound by it, they will explain if they disagree and why it is not
applicable in that case.
§ References to international doctrine: using the same books to interpret the law.
§ Other roads: more informal with academics, cross-border movement of students,
exchange of ideas, expertise.

VII. LEVELS OF HARMONIZATION

- National level of harmonisation: there can be harmonization on the national level; in

federal law, model law and restatement have an important harmonisation effect.
Competences are divided in a very structured way, and from the federal level sometimes,
it is very hard to harmonise.
E.g.: in federal states like the US, the different competences are divided in a strict way. From
the federal you cannot start to harmonize, so the only way is through restatements and
model laws which is more a bottom up approach. The actors in the USA are the American
Law Statute and the Uniform Law Commission. There are still differences amongst the US
States but with this bottom up approach, there has been some harmonization.

- Regional level of harmonisation: it can have different degree of harmonization, it is easier

with fewer states that have similar needs and economies, and which are from the same
legal tradition à same legal system, same legal history (e.g. EU; OHADA). But many
economic, historical, traditional differences influence how easier it is to harmonize.

E.g: for OHADA MS, there is a big influence of historical aspects, colonialism, and of cultural and
geographical aspects; even though the economies are very similar on the level of development.

E.g.: Europe knew some challenges, when there was a big enlargement with a new block that became
a part of the EU. That also influences how far you can go to have harmonization. It is a long process.

24
In many regional organizations, they had a hard time in adopting harmonization measures,
and so they started with soft law measures, which then with time may have led to formal
harmonization à there is already the symbolic value that States agreed to join together.

Here is a non-exhaustive overview of these different regional organisations that have led to
harmonization. For each of these organisations, check the number of States, their similar
needs, economies and legal traditions. Do they have a Court? or not? Check also the influence
the EU had on other regional organisations (e.g. free movement of goods).

§ EU: 27 MS; established in 1957; Economic and political aspects (but with time it has been enlarged
to private law and PIL aspects); Council, Commission, Parliament and Court of Justice have a clear
role in harmonisation. The EU is a model for regional integration in the economic sphere.
§ African Union: 55 MS (almost the entire continent), established in 2002, as successor of the
Organization of African Unity (1963); aim to work “with regional organisations” à political aim.
There is an overlap between the organisations. In the EU, we don’t really have this issue so much
(except Benelux, but in terms of hierarchy, there has been some issues); Parliament: consultative
& advisory; Court of Justice (but limited role. Reform process, what is the potential of the AU?
§ SADC (Southern African Development Community): Southern Africa, 16 MS, established in 1992;
Limited role in terms of harmonisation, even though they have big ambitions; Political and
economic goals; Trade and barriers to trade; Economic development; Democracy, peace, stability;
Problems with tribunal à limited role; what is the potential of the SADC?
§ SACU (Southern African Customs Union): the oldest customs union in the world, established in
1910, with 5 MS; International trade & investment (tariffs, WTO, inflation); its role is not that
significant, but it may have the potential to become significant.
§ ECOWAS (Economic Community of West-African States): West-Africa, 15 MS, established in 1975;
big missions with specific areas, such as money landing; focus on economic & political issues;
‘harmonization and co-ordination… and promotion… economic reform policies, … legal matters’;
customs, rules, transport, peacekeeping; Commission, Investment & Development Bank,
Parliament, Court of Justice. The ECOWAS really went further in terms of scope and harmonisation
à important actor.
§ OHADA (Organisation pour l’harmonisation en Afrique du droit des affaires): West-African States
of the French zone, 17 MS, established in 1993; Uniforms acts which are directly applicable;
Corporate law, arbitration, commercial law, carriage, insolvency, conflict of laws; Common
currency (CFA); Common legal tradition; Council of ministers, secretariat, Court of Justice &
Arbitration à harmonization is more intense given the high level of development.
§ COMESA (Common Market for Eastern and Southern Africa): 19 MS, established in 1994; Economic
purpose: trade, investment, transport (//free movement of persons is the goal // the EU they
have developed an easy visa system); States have very different legal traditions; Authority, Council,
Court of Justice (also natural persons, but lack of funds); no significant role so far. Potential?
§ EACt (East-African Community): 6 MS, so it is easier to harmonise; established in 1999; Economic,
political, social, cultural ambitions; Free movements (goods, persons, labour, capital); Customs
union; Council, committees, legislative assembly, Court of Justice; expanded the free trade area
with COMESA and SADC and integrated part of the African Economic Community; plans for a
monetary union and regional constitution.

25
§ ASEAN (Association of South-East Asian Nations): 10 MS, established in 1967; huge scope:
economic, social, cultural, security, military; free movement of persons (not yet in force);
Cooperation in criminal matters, agreements on contract matters e.g. insurance, air freight; inter-
state cooperation, trade and development; legal entity; different histories and legal traditions;
ASEAN China Free Trade Area (ACFTA) à it goes beyond pure trade. It is very active and quite
promising.
§ CAROCOM (Caribbean Community): 15 MS, 5 associated members; established in 1968; Economic
integration (single market), trade, development, coordination foreign policy; Common history;
Small States working together, so it is easier; heads of Government, Council, Court of Justice à
small countries can also have a very big impact! (//e.g. in the EU, for the CETA, small countries such
as BEL and NDL had a big impact >< normally, bigger States have the biggest impact.
§ NAFTA (North American Free Trade Agreement): 3 MS (Canada, USA and Mexico); Free trade;
Dispute settlement panel.
A controversy on US public opinion was made by Trump: impact of the creation or destruction
of US jobs, NAFTA's impact on the environment, and NAFTA's impact on immigrants entering
the US. Trump administration: polarization Democrats and Republicans - “perhaps the worst
trade deal ever made”; So, a new agreement was concluded. Yet, this new US-Mexico-Canada
Agreement is not seen with positive assessment: Worries on US jobs, and impact on
immigrant.
§ MERCOSUR (Southern Common Market): South-America, 4/5 MS: 5 associated States: Argentina,
Brazil, Paraguay and Uruguay (Venezuela – suspended); Customs Union; Free trade, private
international law, investment law, tax issues, contractual law; Ideas for a future currency? Political
expansion?
Potential counterforce: if MERCOSUR MS can collaborate with each other, this may be a clear
counterforce to the US and EU for example >< the US and EU want to push other countries to have
deal with them, which is not necessarily good for the other countries, based on their interests à
MERCOSUR can protect South-American countries from the USA and EU powers.

What we see is that most of these regional organisations focus on economic and trade aspect.

- Global: UNIDROIT, UNICTRAL are neutral institutions which promote and inform smaller
companies on the use of the convention; the HCCH also plays a very important role.
§ UNIDROIT (International Institute for the Unification of Private Law): not all countries are
participating; it is considered more neutral than only the law of one country. It has been
established in 1926 (Rome); 63 MS; it gives principles of International Commercial Contracts (1994;
2016); it leaves space for party autonomy; advantage of neutrality because it is international.
§ UNCITRAL (United Nations Commission on International Trade Law): established in 1966 (Vienna),
it produces model laws, principles, guides and guidelines uniform rules, international conventions;
topics concern dispute resolution, e-commerce, insolvency, sale of goods, etc; its main instrument
is the CISG (1980; 93 MS) which is a very neutral Convention and offers a good legal framework for
SMEs; UNCITRAL is mostly about soft law.
§ HCCH (Hague Conference for PIL): established in 1893 and recognized as an international
organisation in the aftermath of WWII; it has about 40 conventions, such as The Hague Principles
on the Choice of Law in International Commercial Contracts (2015); the Convention on the
Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (Hague
Judgments Convention) (July 2019). It has 3 pillars:
• family law and child protection

26
• international civil procedure and legal cooperation
• cross-border commercial and finance law.

We need to know what is around a Directive à diversity, culture and tradition are very
important, so it can be difficult to harmonise. There is therefore more harmonization in trade
sectors, in economic fields where those elements are less considered. The only harmonisation
existing in family law/child protection is to be found in the HCCH Conventions.

VIII. CHALLENGES IN HARMONIZATION

- Sovereignty of States: MS are in a give-and-take position. Commission tries to harmonize,

and the MS negotiate and make compromises. This is why we have vague terms in
harmonization as there can be issues on little details. There are so many steps of
harmonisation at the EU level, that in the end, the latest harmonization act is very specific.
It is very narrow, whereas the commission had a proposal for a broad subject.

The top challenge of harmonization is States’ sovereignty: it is at the international level but
also at the regional level. Harmonization is mainly on economic issues and commercial
transactions, so when harmonization is being launched in other fields, it is much more
complicated (e.g. family law, insolvency law, private international law, tort law).

In family law, it is difficult to harmonize because of the different culture of States.

Diversity can be enriching, acknowledging differences and learning from each but there is
challenge in trying to harmonize, countries emphasized their sovereignty, especially in family
law but also in trade, there is always this give and take between the EU and MS. As a result of
a compromise between what MS are willing to give away, case-law and Directives end up
being in quite vague terms to protect their sovereignty and margin of appreciation.

- Limited Competences Organisations (focus on commercial transactions): the EU and other

organisation all have a treaty as a basis of their competence. They can harmonise only in
fields where they have the competence to do so. The EU Commission has a very broad
intention for the Directive on consumer, but it end up in a very specific directive on online
sale. Where is the legal basis on the TEU and TFEU, why is it important?
§ To check whether the institution is competent to act
§ To check the legislative procedure required, it is important for the type of voting
mechanisms (EU Parliament got more and more power to decide, we actually have a co-
decision mechanism with the Council, but it depends).

- Objectives/Agenda Organisations: agenda setting can be very important, if a certain

country presides, depending on their agenda and priorities in term of harmonization. In

27
 Europe who sets the agenda? Which country in the rotation? Countries have different
approaches regarding the agenda, which are very influential.

- Differences in national systems: cultural diversity, colonialism, language difference,

history.

- Interaction between international and regional harmonisation: UNCITRAL >< EU level

which needs to be in line with the international level. In the directives, the EU often lists
other international instruments (or it uses specific clauses to respect the hierarchy). If
things are controversial, conflicts between different treaties we need to look at the
Vienna Convention. So, regarding this interaction, we can have:
§ Issue of hierarchy
§ Disconnection clauses. E.g. Hague Choice of Court Convention, Art 26(6)

à HCCH: lot of harmonization work going on + conventions are adopted.

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PART III - EU HARMONIZATION BY THE LEGISLATOR: ANALYSING DIRECTIVES

The role of the EU legislator is very important. Moreover, many of the institutions have a
court, some are active others are not (e.g. political gaming of MS trying to limit the influence of the
Court). In Europe we tend to beyond that: the CJEU is a very significant harmonizing actor.
Sometimes, MS do not like the CJEU’s work. Moreover, there also issues on human rights (e.g.
terrorism). Also, within courts there may be divergent opinions among judges.

I. LEGAL FRAMEWORK HARMONIZATION IN THE EU

We will focus on instruments and procedures that are relevant from a private law perspective.

- In which areas is the EU competent to legislate?

In Europe, we have the principle of conferral of powers: EU only has the competence on issues
explicitly recognized by the Treaties à it is important for the Commission to indicate the legal
basis on which the instrument is based.
- Which legislative instruments does the EU legislator have at its disposal? Regulation (no
transposition) or directive (implementation needed).
- Which type of procedure must be followed?
There is the OLP and the SLP; the Council usually acts on QMV. There may be unanimity votes
in areas that MS do not want to give up and want to keep within their exclusive competence
(e.g. tax law). What about the role of the Parliament?
- Which regulatory technique does the legislator tend to follow? Minimum or maximum
harmonisation?
We start with soft law and policy instruments (green paper; consultation process) which will
end up in the legislative process. The regulatory technique refers to the way instruments are
drafted (is it open norms with more discretion for MS when implementing the Directive and
also more discretion for the CJEU when interpreting the instrument. The Court often
considered that open norms give it discretion to provide autonomous interpretation to
particular terms; or is it detailed norms). The objective of the Directive is always very
important à the Commission indicates what is the real purpose of the legislative instrument.

ð The justification given by the Commission to adopt an instrument à determines the legal
basis à determines the type of procedure.

Minimum or maximum harmonisation? We have circular trends. In the beginning, no space

was given to MS on this matter because the EU wanted certainty and quick harmonisation.
With time, minimum harmonisation has become easier as it allows more sovereignty for MS.
More recently, they have also been attempts by the EU Commission to propose maximum
harmonization in very specific fields (e.g. contract law and consumer law) but then MS were
more reluctant, expansion to new MS, frictions, so more minimum harmonization, it is easier
than trying to impose maximum harmonization. Nowadays, many political parties express

29
some anti-European feelings, it becomes complicated for the EU to have maximum
harmonisation, except in very specific fields à circular trends.

We must think about the consequence of choosing minimum or maximum harmonization.

A. Areas where the EU is competent to legislate

* Art. 4 TEU deals with the transfer of sovereignty from a MS to the EU. The EU can harmonise
only where it has the competence = principles of conferral (§1) and sincere cooperation (§2).

*Art. 5 TEU deals with the principles of conferral (§1), subsidiarity (§3) and proportionality
(§4). Art. 5(3) makes clear that the national parliaments are the guardians of the respect of
the principles of subsidiarity and proportionality.

à the first step is whether competences are for the EU or for MS (principle of conferral). Then,
if the EU is competent, the second step is to make sure that the EU acts in accordance with
the principles of subsidiarity and proportionality.

Subsidiarity: legislation should be adopted at the most appropriate level; so only if there is a
cross-border situation for which EU legislation will be the most appropriate, the EU can act.
Proportionality: the Commission has to show that a particular Directive is really necessary to
harmonise in a specific field, there is no less restrictive alternatives than a EU legislative
instrument; EU should use its right to intervene in a proportionate way à proportionality is a
major principle of EU law which applies both to MS and the EU (e.g. EU Commission). It is also
very important in the field of fundamental freedoms (internal market).
à cfr. Protocol No. 2 on the application of the principles of subsidiarity and proportionality.

The EU Commission needs to justify why a proposal is in line with these principles: every single
legislative act adopted by the EU must justify why the action will be better achieved at the EU
level and not at the one of MS, and why it is a proportionate way to achieve those goals. When
there is trend towards minimum harmonization, this principle will be invoked by MS.

EXAM: you may be required to justify whether the principles of subsidiarity and
proportionality have been respected by the Commission in adopting a Directive.

* Art. 1 TFEU: 1. This Treaty organizes the functioning of the Union and determines the areas
of, delimitation of, and arrangements for exercising its competences = PRINCIPLE.

* Art. 2 TFEU: there are exclusive (§1), shared (§2) and supplementary (§5) EU competences.

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Different types of competences attributed to the EU
* Article 3 TFEU - exclusive competence of the EU in five specific areas.

* Article 4 TFEU - shared competences of the EU

* Article 6 TFEU – complementary/supporting competences of the EU: for some other areas,
MS have an exclusive competence and are the sole which can legislate.

As regards shared competences of the EU (Art. 4 TFEU) à 3 important areas

In all these areas, the difficulties mainly concern disputes on who has competence.

1° Internal market (different freedoms – Art. 114 TFEU)

Art. 114 TFEU is a key provision for the adoption of legislative acts (directives and regulations
can be adopted on this legal basis. Yet, different legal basis can be used for one single
directive). Within the provisions in the treaty, there is some space left for MS). The procedure
provided in Art. 114 TFEU is OLP: QMV in the Council and important involvement of the EP.

For regulations, it is different: Art. 114 TFEU is an optional legal basis given their hybrid nature.
Regulation provides an alternative to the existing regime, it is not about an
approximation/harmonisation of national legislation. E.g.: Art. 118 TFEU (“uniform protection”).

/!/ there is no EU general power to regulate the internal market = it is a shared competence.

The key objective of a Directive adopted on the basis of Art. 114 TFEU is the harmonisation of
internal market, elimination of barriers, legal certainty.

But what about these other objectives such as “consumer protection” or “fundamental
rights”? Indeed, increasingly, the high level of consumer protection is also considered as a main
objective of harmonisation. There is a need to balance these different objectives à Art.
114(3) TFEU. Thus, Art. 114 TFEU can be used for private law areas where the aim is also to
eliminate barriers, to reduce disparities and have common rules // internal market, exercise
of fundamental freedoms.

So, in which areas of private law is the EU competent to legislate?

• Very broad scope of Art. 114 TFEU: legal basis for any area of private law, provided that
there is a primarily link with the internal market (e.g. consumer law, labour law, company law,
family law, financial law, IP law.) In any area of private law, the EU needs to justify a link with
the internal market to be able to act on the basis of Art. 114.
But it is controversial because the EU Commission has tried to use this legal basis for areas
that were not primarily linked to internal market, but rather to public health issues (e.g.

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Tobacco Advertising I and II cases). ECJ in Tobacco Advertising I made clear that the Directive
was primarily aimed at public health issues, and not at the internal market, so Art. 114 TFEU
could not be used as the right legal basis. Yet, in Tobacco Advertising II the EU Commission
changed the DIR and limited it primarily to internal market aims (consumer protection).
• Other (non-economic) interests must be taken into account in the legislative process.

2° Consumer protection (Art. 169)

3° Area of freedom, security and justice (Art. 81 TFEU).

Art. 81 TFEU deals with judicial cooperation in civil matters having cross-border implications.
It is linked procedural law, IPL, transnational litigation à the EU can intervene when it is
particularly necessary for the proper functioning of the internal market.

B. Legislative instruments at the disposal of the EU legislator

* Art 288 TFEU describes the legal acts that can be adopted by the Union, namely regulations,
directives, decisions, recommendations and opinions. The EU always needs to convince the MS
that harmonisation is necessary.

A regulation is directly applicable + in 99% of the cases it will have a direct effect since the EU
provisions, that must be binding in their entirety in all MS, will generally be sufficient clear to
identify rights and obligations that citizens can enforce before national courts.
≠
A directive is not directly applicable as it must be transposed by States in their national order
(in generally within 2 years) + it does not automatically have a direct effect, it depends on
whether the EU provisions are sufficient clear to identify rights and obligations that citizens
can enforce before national courts. Over time, the CJEU has developed some principles to
make sure than even when directives are not implemented, citizens can derive some
advantages (very broad vertical direct effect, but no horizontal direct effect recognised so far).

à Directive = margin of discretion for MS but degree of harmonization.

EXAM: always refer to the legal basis/relevant case law when you are arguing something. It is
a very easy way to get credits.

*Art. 169 TFEU promotes a high level of consumer protection: this is the starting point /!/
Art. 169 TFEU is the legal basis for consumer protection. When choosing a legal basis (e.g. Art.
114(3) TEU) you will find some space left for MS. Even when the EU Commission has provided
for harmonization in a certain field, there might be some reason for the MS to justify for not
implementing a directive.

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But Art. 114 and 169 TFEU may converge: for consumer protection, the Commission may
invoke Art. 114 of Art. 169, but what the Commission aims at the end is consumer protection.

*Art 352 TFEU: “residual” competence – flexibility clause

E.g.: the Statute for a European Cooperative Society (SCE): the regulation was not aimed at
approximating MS laws, but at creating a new, alternative form of cooperative society.

*Art 20 TEU: “last resort” competence – enhanced cooperation + Art. 326-334 TFEU

If it is clear that a few MS will never accept the negotiations going on with the Commission,
there is a last resort solution: when there is not enough consensus decides to negotiate
together (especially in areas where you need unanimity), a group of MS can decide to join
together à multi-speed Europe. It is very exceptional because it is not the way the EU wants
to act, it is not following the normal procedure. It is a last resort competence. It has not been
used often. It can help to harmonise in difficult areas where it is very hard to get unanimity
and where it is the sole solution to act.

E.g.: for many decades, the EU tried to come up with a EU Patent Package in 2012: for the substantive
law issues, there is QMV, but for the languages aspect unanimity is required. For the EU trademark
there are 5 recognised languages (English, French, Italian, German, Spanish) ≠ for the EU patent, there
are only 3 recognised languages, as it is cheaper (English, French, German). Thus, Italy and Spain did
not agree with that; they said ok if there is not enough money then just keep English, but do not decide
to only have 3 languages, excluding our languages à enhanced cooperation without Spain and Italy.
As a consequence, the Patent Package 2012 did not enter into force yet in Spain and Italy since they
decided to challenge this procedure.

E.g.: binational divorce law.

It is a very demanding procedure and it is exceptional: it should be the very last resort!

Cfr. specific rules provided in Art 326-327 TFEU.

Cfr. specific procedure provided in Art. 328-334 TFEU: it must be consistent with other
activities; the enhanced cooperation regime must still comply with the other EU regimes.

C. Procedures to be followed
- Article 114(1) TFEU: ordinary legislative procedure (Art. 294 TFEU). But sometimes, special
legislative procedure will be used, i.e. the Council shall act unanimously after consulting
the European Parliament (e.g. provisions relating to the rights and interests of employed
persons - Article 114(2) TFEU and Article 115 TFEU).
- Article 169(3) TFEU: ordinary legislative procedure (Art. 294 TFEU).

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 D. Which regulatory technique does the legislator tend to follow?
Internal market
- Early years: maximum harmonization.
- Cassis de Dijon (1979): principle of mutual recognition.
- New policy approach: mutual recognition in combination with minimum harmonization.
- More recently: revival of maximum harmonization in some specific areas, with regard to
specific issues, such as consumer protection à today, the EU Commission tries to engage
in maximum harmonisation.

Duty of respect for the different legal systems and traditions of the Member States: Art. 4(2)
TEU; Art. 67(1) TFEU; Art. 114(4 and 5) TFEU à national sovereignty of Member States.

II. ANALYSIS OF 7 DIRECTIVES

A. Method – Directives

What is the role of the EU legislator and the impact of Directives on national legal systems?

- Every directive starts by mentioning a preamble, the legal basis – what is the result to be
achieved. Then, you have provisions on the scope of application and on definitions.
What kind of technique is used? Are they vague/broad terms? What is the objective of the Directive?
Are there precise definitions? Is it coherent and consistent?
- Functional orientation empowerment in the TFEU
- Single/specific problem areas
- Invisible/implicit normative premises
- Follow-up and implementation by the Commission /!/

- We can also have a patchwork of directives: harmonisation is often overlapping between

directives, which creates uncertainties to know exactly what would be applicable.
- Interaction between private law and public law (e.g. contract law; product and safety
regulations; product-by-product approach).
- Some directives have broader rules with delegation to experts. The detailed rules are set
by national experts, but there is still a need for the directive to be implemented at the
national level. The EU gives the ‘master rules’.
- National sovereignty and need to “tolerate” cultural diversity à this is not an easy task!
- Directives must fit into national law/terminology.

B. Empirical Comparative Analysis

We will look at Directives, thus at secondary EU law:

34
1. Council Directive 85/374/EEC on the approximation of laws, regulations and
administrative provisions of the Member States concerning liability for defective products
[1985] OJ L210/29
2. Council Directive (EEC) 85/577 to protect the consumer in respect of contracts negotiated
away from business premises [1985] OJ L372/31
3. Council Directive (EEC) 90/314 on package travel, package holidays and package tours
[1990] OJ L158/59 & Directive (EU) 2015/2302 on package travel and linked travel
arrangements [2015] OJ L326/01 à very specific Directive.
4. Council Directive (EEC) 93/13 on unfair terms in consumer contracts [1993] OJ L95/29
5. Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the
protection of consumers in respect of distance contracts [1997] OJ L144/19
6. Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011
on consumer rights [2011] OJ L304/64
7. Directives (EU) 2019/770 and 2019/771 on certain aspects concerning contracts for the
supply of digital content/on certain aspects concerning contracts for the sale of goods
[2019] OJ L136/01.

* What do those 7 Directives have in common?

Consumer protection – protection of the “weakest party” – information disclosure –
transparency – party autonomy – fairness – cooling-off periods for consumers.
All these Directives focus on the “weakest party” = the consumer. There is a lot of
information requirements (e.g. the right to withdrawal). But do we really need all this
information, and this simplified approach? Do not the consumers also have responsibility? /!/
Ex: Amazon case. Are those information requirements (like the number of fax) not going
too far?

* When do you become/end being a consumer? If suddenly you are on the other side, you
will have to comply with other requirements. But when does that shift occurs?

The EU legislator is imposing detailed requirements, maybe it is good, maybe it is going too
far. Also, is Art.114 the right legal basis for that? Is not it imposing additional barriers to trade?

The role of the EU legislator and the impact on national legal systems
What should be the method to review these Directives?
- What is the scope of the instrument?
Look at the definition (e.g. consumer, business), at the right of withdrawal, information duties.
Are there any particularly vague/broad terms? Think about related Directives, for example
those that have amended the new one. Harmonization is often a patchwork, it overlapped
between Directives, which creates uncertainties to know exactly what would be applicable.
- What is the legal basis?
- Rationale of the harmonization? Check the Preamble.

35
- Which procedure (role EP; unanimity or qualified majority)?
- Which method of harmonization (minimum or maximum)?
- Is there a margin of discretion left to the MS (if so, give some specific examples)? To the
benefit of whom (consumer/trader)?

Some directives have more broader rules and delegate to a committee of experts, especially
in the area medial, consumer, safety products.

C. Scope and terms

a) Scope of “consumer”
1. DIR 85/374: no definition, but Art. 9(b)(ii) refers to the products “...used by the injured person
mainly for his own private use or consumption”.
2. Art. 2 DIR 85/577: a natural person who is acting for purposes outside his trade or profession.
3. Art. 2(4) DIR 90/314: consumer means the person who takes or agrees to take the package or
“other beneficiaries” or “the transferee” ≠ the traveller means any person who is seeking to
conclude a contract within the scope of this Directive.
à different, confusing notions: should not we only refer to traveller or purchaser instead
of consumer? Are people who book business trip also protected?
4. Art. 2(b) DIR 93/13: any natural person who is acting for purposes outside his trade, business
or profession.
5. Art. 2(2) DIR 97/7: any natural person who is acting for purposes outside his trade, business or
profession.
6. Art. 2(1) DIR 2011/83: any natural person who is acting for purposes outside his trade, business,
craft or profession.
7. Art. 2(6) DIR 2019/770 and Art. 2(2) 2019/771: any natural person who is acting for purposes
outside that person’s trade, business, craft or profession.
Art. 2(f) Proposal CESL: any natural person who is acting for purposes outside his trade, business,
craft or profession.

When the Directive is very specific, the definition of consumer will also be very specific. There
is the same definition of consumer in the 2nd, 4th, 5th, 6th and 7th Directives à we have a mixed
approach: general “consumer” protection + separate consumer definition in transposing acts.

There is some kind of development and different approaches being taken: there is an
exhaustive approach in the packages directive. It can have an impact in practice because the
role of consumer is changing. When is there a shift from consumer to business?

Is there any protection of certain legal persons in the directives?

Is there a special protection for employees (employee ≠ business ≠ self-employed activity)?
Are we going towards a “stable” definition of consumer?
Are we going to extend the definition to business persons concluding atypical contracts?

36
What about “mixed” purpose contracts (which are exclusively or predominantly of private use)?
May the consumer prove that he is acting for purposes which are outside of his trade, business
or profession? What is the burden of proof?

b) Scope of “business”
1. Art. 3 DIR 85/374: producer is the manufacturer of a finished product, the producer of any raw
material, the manufacturer of a component… part and any person who, by putting his name, trade
mark or other distinguishing feature on the product presents himself as its producer.
2. Art. 2 DIR 85/577: trader means a natural or legal person who acts in his commercial or
professional capacity, and anyone acting in the name or on behalf of a trader.
3. Art. 2(2) and Art. 2(3) DIR 90/314: organiser (organises packages other than occasionally);
retailer (sells or offers to sale). Cfr. also Art. 3(7-9) DIR 2015/2302: trader (capacity of organiser,
retailer, trader); organiser; retailer.
4. Art. 2(c) DIR 93/13: “seller or supplier” means a natural or legal person who, who, in contracts
covered by this Directive, is acting for purposes relating to his trade, business or profession,
whether publicly owned or privately owned.

à this difference between publicly owned and privately owned is diminishing.

5. Art. 2(3) DIR 97/7: “supplier” means any natural or legal person who, in contracts covered by
this Directive, is acting in his commercial or professional capacity.
6. DIR 2011/83: "trader" means any natural person or any legal person, irrespective of whether
privately or publicly owned, who is acting, including through any other person acting in his name
or on his behalf, for purposes relating to his trade, business, craft or profession in relation to
contracts covered by this Directive;
7. Art. 2(5) DIR 2019/770 and Art. 2(3-4) 2019/771: ‘trader’/’seller’ means any natural or legal
person, irrespective of whether privately or publicly owned, that is acting, including through any
other person acting in that natural or legal person's name or on that person's behalf, for purposes
relating to that person's trade, business, craft, or profession, in relation to contracts covered by
this Directive; ‘producer’ means a manufacturer of goods, an importer of goods into the Union or
any person purporting to be a producer by placing its name, trade mark or other distinctive sign
on the goods.
Art. 2(e) Proposal CESL: “trader” means any natural or legal person who is acting for purposes
relating to that person’s trade, business, craft or profession.

Here, we are talking about the concepts of producer/trader/organiser/seller or supplier.

EU law does not provide a uniform term of “business”, but we are gradually moving towards
a more consistent approach à there is a common feature: natural or legal person who is
acting for purposes relating to this person’s self-employed trade, business, craft or profession.
Usually, it is more about the activities that we look at. We can see here a general development
in society in a simple thing as a definition.

37
Again, we have a mixed approach: general “business” definition + separate definition in
transposing acts.

Is an intention to make profit required? Are legal persons/bodies of public law also included?
See Directive 93/13 (E.g.: what about a hospital? And a private or a public hospital?) What
about persons who are “acting in the name or on behalf of a trader? (compare DIR 85/577 with
DIR 97/7). The question of the burden of proof is also very important.

c) Right of withdrawal
1. DIR 85/374: /
2. §5 and Art. 4-7 DIR 85/577: right of cancellation – right to renounce – right of renunciation =
incoherent terminology. Duty to inform the consumer about their right; content and basic effect
of the right (not less that 7 days, but quid if no information provided?); legal effect of withdrawal;
mandatory law clause.
3. DIR 90/314: Cfr. Art. 12(5) DIR 2015/2302: MS may provide in their national law that the
traveller has the right to withdraw from the package travel contract within 14 days without reason.
4. DIR 93/13: /
5. Art. 4(1)(f), Art. 5(1), Art. 6 and Art. 12 DIR 97/7: duty to inform the consumer about this right;
content of the right (not less than 7 days); in the absence of information there is a prolongation
of the withdrawal period up to 3 months; mandatory law clause; unravelling of the contract
(reimbursement rules).
6. Art. 6(1)(h) and Art. 9-16 DIR 2011/83: duty to inform the consumer about this right; content
and basic effect of the right (14 days); exercise of the right; effects; obligations; exceptions.
7. DIR 2019/770 and 2019/771: /
Art. 40 Proposal CESL: duty to inform the consumer about this right; content and basic effect of
the right (14 days); exercise of the right; effects; obligations;

Over the years, the right of withdrawal has been extended. It was controversial. It can have a
big impact on small companies. A lot of consumer think they can just refund and there is no
need to pay for the transport. If a consumer can argue that he was not informed in a right way
about his/her right, when do we have proper access?

The issue of the relationship between international and European law also applies within
European law itself: for example, some provisions in the Directive provide for a hierarchy
among existing EU Directives.

When dealing with the right of withdrawal, we need to look at:

- the length of period: “not less than 7 days” but different implementations in MS à
incoherence and barrier to trade.

38
E.g. DIR 2011/83 is an example of maximum harmonisation à 14 days. Art. 10-12 provide that if the
consumer is not informed about the right to withdraw, there will be a year extra to use their right to
withdraw à this really strengthens that right significantly.
- the beginning of period: provided that business fulfils its information obligation. But can
it begin before a contract has been concluded or not?
E.g.: DIR 85/577 >< DIR 97/7; DIR 2011/83.
- the obligation to inform about the right of withdrawal: existence of the right; the person
to be addressed. In many MS, there are additional requirements à barriers to trade.
E.g.: annex of DIR 2011/83.
- the consequences in case of breach of the information obligation: the acquis is incoherent.
E.g.: DIR 85/577 (eternal withdrawal right; Case C-481/99 Heininger) >< DIR 97/7 (maximum of three
months). Art. 10 DIR 2011/83 (maximum 12 months).
- the formal requirements: old directives did not regulate this whereas MS did. This lead to
barriers to trade ≠ DIR 2011/83 is more specific.
- the effect of withdrawal for contractual obligations and unravelling of contract after
withdrawal: much is left to MS (e.g. DIR 85/577). It is extensively regulated: Art. 12-15 DIR
2011/83.

d) Information Duties
1. DIR 85/374: /
2. Art. 4 DIR 85/577: basic information requirement: “written notice”; no provision on
sanctions.
3. Art. 3(2) and Art. 4 DIR 90/314: information must be provided at four different stages (in
the brochure, before the contract is concluded, before the start of the journey, in the
contract). Cfr. Art. 5-8 DIR 2015/2302: very extensive information duties.
4. Art. 5 DIR 93/13: if the contract is in writing, “in plain and intelligible language”.
5. Art. 4-5 DIR 97/7: information is to be provided before and after a contract is concluded;
“in a clear and comprehensible manner”; in writing or in another durable medium available
and accessible; no specific sanctions, only extension of the right of withdrawal (Art. 6).
6. Art. 5-8 DIR 2011/83: type of contracts (distance and off-premises contracts >< other
contracts); “in a clear and comprehensible manner”; formal requirements: on paper / durable
medium / legible and in plain and intelligible language.
7. DIR 2019/770 and 2019/771: extensive information duties (full chapter)
Chapter 2 Proposal CESL: specific information requirements (supplementing earlier directives).

The information duties have increasingly increased over time. In the past there were not a lot
of sanctions for not providing information in an effective way, but now it is the case à more
coherent and consistent whole among the different Directives. Information duties is a very
important part of the Directive: there is an evolution towards more and more duties over
time, there is a search for a uniform approach.

39
The form in which the information is to be provided and the content of the information can
be different à search for a uniform approach, taking into account the specificities of some
contracts (e.g. DIR 2011/83). Also, the sanctions for failing to provide information can be
different between MS à no EU approach vis-à-vis the type of sanction that can be imposed,
except for the extension of the exercise of the right of withdrawal. Moreover, in some
Directives, we can have overlapping information obligations.

Extensive information duties: more than one directive may apply to particular types of
contracts (e.g. DIR 90/134; DIR 97/7). There can also be limited specific information duties: DIR
2019/770 and 2019/771.

The more information we give to consumers the better they are placed to use their rights, if
they are not given information they cannot exercise their rights. It is not only about
information on rights and obligations, it can include guarantees, etc. It may also be very
important to provide some duty of information for the seller.

E.g.: DIR 2011/83, Art. 5 for contracts other than, and Art. 6 (right to withdraw + Article 10).
E.g.: DIR 2015/2302 is very much detailed, it is even more precise than DIR 2011/83 à compare 1990
and 2015 Directives. Later Directives also provide some annexes that can be used by traders and sellers
to use this as a starting point in their standard terms. It is much more specialised regime that is justified
by the specificity of the travel packages legal regime.
E.g.: DIR 2019/770 and 2019/771 are built on the Consumer Rights Directive.

e) Vague terms
1. DIR 85/374: Art. 9(b)(ii): injured person mainly for his own private use or consumption; Art. 11:
“put into circulation” (producer company distribution subsidiary - third party).
2. DIR 85/577: Art. 4 in fine: MS shall lay down appropriate consumer protection; Art 1(2): the
consumer did not know or could not reasonably have known.
3. DIR 90/314: Art 4(5): to alter significantly any of the essential terms; Art. 4(7): where a
significant proportion of the services.
Cfr. Art. 5-5 DIR 2015/2302: Art. 6: clear, comprehensible and prominent manner; Art.
7(1): without undue delay; Art. 14: appropriate price reduction.
4. DIR 93/13: Art. 3(1): if it causes a significant imbalance to the parties’ rights” /!/
5. DIR 97/7: Art. 12(2): MS shall take the measures needed to ensure consumer protection; Art.
16: MS shall take appropriate measures to inform the consumer; vulnerable; appropriate manner;
“clear and comprehensive manner”.
But what is clear and comprehensive? It depends on the facts of the cases. If there is a
conflict, what is the task of the CJ and the national court?
6. DIR 2011/83: Art. 8(1): “in a way appropriate to the means”; Art. 18(3): without undue delay.
7. DIR 2019/770 and 2019/771: Art. 5 “without undue delay”; requirements for conformity; all the
general tools are now durable, even though durable could be interpreted vaguely.

40
Proposal CESL: Art. 10(2): “by any means appropriate to the circumstances”; Art. 37(2): if its
transmission had been normal it would have reached the offeror in due time, the late acceptance
is effective as an acceptance unless, without undue delay, the offeror informs the offeree”.

- “May, shall”
- Damages: it is difficult for MS to agree on one conception of damages, in consequence this
task is let to the Court which most of the time will provide a very broad autonomous
interpretation.
- Good faith: it depends on the country and the case law.
- Limited volume; “where applicable” or “where available; “reasonable”, “normally”.

As a lawyer, you can always use the broad and vague norms provided in Directives to argue
in favour of your client, by arguing that the Directive was not, for example, “appropriate”.
In some cases, the ECJ try to solve the case and look at the terms and try to interpret them;
while on other, the judge only gives a few guidance’s for MS. Role of judges might differ
especially in case between Commission and MS or discrimination case (in which discrimination
law will be apply), not so much on preliminary ruling because there is national court to
interpret it but not in the other procedure. Harmonization of private law often happen in
specific cases not strictly divide between public and private law.
The type of procedure is important, the role of the ECJ is different in those 2 situations:
- Infringement proceedings: launched by the commission against a MS because it did
not comply with EU law.
- Preliminary rulings: 2 private parties/MS

Unjust enrichment can come in a case (which is private law!). We can have indirect
harmonisation of private law though harmonisation of international law. The terms in the
directive need to be put in context by a judge (e.g. “in a way appropriate; without undue delay”).

D. Legal basis & Procedure

The legal basis is important for the procedure. It illustrates the law-making process.

1. DIR 85/374: the legal basis & procedure was based on old Article 100 EEC: unanimity in the
Council; only opinion EP that could be ignored by the Council >< now, there is a really big
involvement of the EP (Art. 114 TFEU).
2. DIR 85/577: the legal basis & procedure was based on old Article 100 EEC: unanimity in the
Council; only opinion EP that could be ignored by the Council >< now, there is a really big
involvement of the EP (Art. 114 TFEU).
3. DIR 90/314 + DIR 2015/2302: the legal basis and procedure was based on old Article 100a EEC;
QMV in the Council; in cooperation with EP (giving its opinion).
4. DIR 93/13: the legal basis and procedure was based on old Article 100a EEC; QMV in the Council;
in cooperation with EP (giving its opinion).

41
5. DIR 97/7: the legal basis and procedure was based on old Article 100a EEC; QMV in the Council;
in cooperation with EP (giving its opinion).
6. DIR 2011/83: the legal basis and procedure was based on the current Art. 114 TFEU; OLP.
7. DIR 2019/770 and 2019/771: the legal basis and procedure was based on the current Art. 114
TFEU; OLP.
Proposal CESL: the legal basis and procedure was based on the current Art. 114 TFEU; OLP.

Role of the EU parliament will be determined by the procedure. Its role has changed, now we
have a co-decision procedure (OLP) à democratic nature. There is an increased involvement
of the EP and of QMV in the Council. All the legal basis is related to internal market: the
internal market is always use as the justification as it aims to eliminate barriers to trade,
(consumer protection is not the legal basis, but it is harmonization).

E. Rationale for harmonization

You can find in the recitals of the Directive. The rationale is important for the principle of
subsidiarity; but also for the interpretation of the Directive. The rationale is used to give a
specific interpretation to the Directive.

The rationale is based on the need to eliminate disparities and legal fragmentation among MS,
as it would undermine consumers’ confidence. So, most important arguments used are based
on the internal market, but increasingly it also includes high/additional costs, fragmentation.
Judges make a teleological interpretation, i.e. they interpret in light of the treaty’s objectives.

1. §5 DIR 85/374: divergences may distort competition and affect free movement of goods within
the common market and entail a different degree of protection for consumers.
2. §6-7 DIR 85/577: any disparity between legislation on ‘doorstep selling’ practices may directly
affect the functioning of the common market; EEC Programme for consumer protection urges to
take some measures.
3. §5-12 DIR 90/314: disparities in national laws; obstacles to internal market; tourist sector is
essential to complete the internal market; several EU resolutions, programmes and
communications with regard to consumer protection. Cfr. §2-6 DIR 2015/2302: tourism plays an
important role in the economy of the Union, and package travel, package holidays and package
tours (‘packages’) represent a significant proportion of the travel market. That market has
undergone considerable changes since the adoption of Directive 90/314/EEC. Enhance
transparency and increase legal certainty for travelers and traders. Right balance between a high
level of consumer protection and the competitiveness of businesses
4. §5-13 DIR 93/13: national laws show many disparities, distortion of competition may arise;
unawareness of foreign legislation may deter consumers; approximation will facilitate the
establishment of the internal market and safeguard the citizen in his role as consumer; several
European Programmes with regard to consumer protection.

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5. §4 DIR 97/7: MS have taken different or diverging measures to protect consumers in respect of
distance selling which has had a detrimental effect on competition between businesses in the
internal market
6. §6-7 DIR 2011/83: certain disparities in national legislation create significant internal market
barriers; fragmentation undermines consumer confidence; harmonisation is necessary for the
promotion of a real consumer internal market striking the right balance between a high level of
consumer protection and the competitiveness of enterprises.
7. §3-9 DIR 2019/770 and 2019/771: achievement of a genuine digital single market,
with a high level of consumer protection; businesses face additional costs stemming from
differences in national mandatory consumer contract law rules and legal uncertainty when selling
digital content across borders; consumers are not confident when buying (online) cross border.
Proposal CESL: considerable bottlenecks to cross-border economic activity that prevent the
internal market from exploiting its full potential for growth and job creation.
Contract law related transaction costs for traders – top barriers Consumers - limited choice of
goods at higher prices, uncertainty about their rights.

There is a need to achieve a right balance between consumer protection and the
competitiveness of business/freedom to provide services.

In the earlier directives, the consumer is more instrumental: if the consumer is happy, we will
have a well working internal market –> the goal is the internal market.
In the more recent directives, the high level of consumer protection really became the goal.

F. Type of harmonization
We can have minimum or maximum harmonisation. But within a directive, we can have both:

1. §22 DIR 85/374: some issues of this Directive reached a complete harmonization (according to
the CJEU which gave an autonomous interpretation). But It is rather minimum harmonization. Yet,
in the Preamble, for certain matter, they refer to maximum harmonization.
2. Art. 8 DIR 85/577: minimum harmonisation.
3. §25 and Art. 8 DIR 90/314: minimum harmonization ≠ + Art. 4 DIR 2015/2303: maximum
harmonisation.
4. Art. 8 DIR 93/13: minimum harmonisation.
5. Art. 14 DIR 97/7: minimum harmonisation.
DIR 1999/44: minimum harmonization.
6. §2 and 7 DIR 2011/83: maximum harmonisation.
7. Art. 4 DIR 2019/770 and 2019/771: maximum harmonization.
Art. 3-4 Proposal CESL: voluntary/optional maximum harmonization.

Most of the Directives under review contain minimum harmonization clauses à MS may
maintain or adopt stricter consumer protection rules. MS have made extensive use of this

43
possibility. The outcome is a fragmented regulatory framework across the Community which
causes significant compliance costs for businesses wishing to trade cross-border.

It is often explicitly mentioned. There are trends over time. During the early time of the EC
Community, there were not many directives, but they were very specific with maximum
harmonisation. In the 80s, there were many minimum harmonisations as the commission was
criticised to go too far in harmonization (too detailed rules, no space for the MS). With the
more recent directives, there are more maximum harmonisations such as with DIR 2011/83.

It is interesting to look at those last directives, as the EU is not very popular nowadays. Many
countries have populist movements, but the EU still can take maximum harmonisation
measures in consumer law and contract law and industry as it is seen by everyone in the
interests of the all the actors.

ð We need to look at the preamble, the vague terms, the procedure, the relationship
between MS and EU (harmonisation and MS autonomy/margin of discretion).

E.g.: Germany is quite protective and will offer a higher level of protection and you will find a different
provision in national legislation then.

G. Margin of discretion
It is given throughout the directives. It also depends on the very specific Directives.

1. § 17, 20, 21; Art. 5, 8, 9, 10, 13, 15 and 16 DIR 85/374: without prejudice to the provisions of
national law concerning the right of contribution or recourse ; without prejudice to national
provisions relating to non- material damage; the laws of the MS regulating suspension or
interruption of the limitation period shall not be affected by the DIR - this DIR shall not affect [...]
national rules of contractual or non-contractual liability; any MS may provide that a producer’s
total liability for damages shall be limited.
2. last §; Art. 3(1), 3(3), 7, 8 DIR 85/577: MS may decide to exclude some minor contracts from
the scope of this Directive; MS may refrain from applying the DIR to contracts for goods/services
having a direct connection with contracts concluded with a visit of a trader; legal effects of the
exercise of the right of renunciation are governed by national law; minimum clause.
3. Art. 4(6)(b) in fine, 5(2) in fine and 8 DIR 90/314: compensation by either the organizer or the
retailer, whichever the relevant MS’s law requires for non-performance of the contract; MS may
allow compensation (for damages arising out of non-performance) to be limited; minimum clause.
Cfr. Art. 12(5), 13(1), 14(4) DIR 2015/2303: MS may provide that the traveler has the right
to withdraw from the package travel contract within a period of 14 days; MS may maintain or
introduce retailer is also responsible for the performance of the package; MS may limit
compensation to be paid.
4. Art. 8 DIR 93/13: minimum clause.

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5. Art. 7(3), 11(3)(a), 11(4) and 14 DIR 97/7: MS may lay down that the supplier may provide the
consumer with goods or services of equivalent quality and price provided that [...] ; MS may
stipulate that the burden of proof [...] can be placed on the supplier ; MS may provide for voluntary
supervision by self- regulatory bodies ; minimum clause.
Art. 1(3) 5(2) 7(1) and 8(2) DIR 1999/44: it is appropriate to approximate without however
impinging on provisions and principles of national law relating to contractual and non-contractual
liability; MS can decide that ‘second hand’ goods sold at public auctions are (not) covered by this
DIR; MS can introduce a two months period to inform about lack of conformity; liability in the case
of second hand goods – shorter (contractual) time period for liability allowed; minimum clause.
6. § 13, Art. 6(7), 7(4) in fine, 9(3) in fine, 24(1) DIR 2011/83: MS remain competent to apply the
provisions of this Directive to areas not falling within its scope; MS may maintain or introduce in
their national law language requirements regarding the contractual information ; MS may decide
not to apply the paragraph with regard to information duties related to off premises contracts on
repairs or maintenance ; in the case of off-premises contracts, MS may maintain existing national
legislation prohibiting the trader from collecting the payment from the consumer during the given
period after the conclusion of the contract ; MS shall lay down the rules on penalties applicable to
infringements of the national provisions adopted pursuant to this Directive and shall take all
measures necessary to ensure that they are implemented.
7. DIR 2019/770 and 2019/771: maximum harmonization.
Art. 3, 4, 13 and Section 1 Proposal CESL: the parties may agree that the Common European Sales
Law governs their cross-border contracts. The Common European Sales Law may be used for cross-
border contracts; a MS may decide to make the Common; European Sales Law available for ...;
parties may exclude the application of any of the provisions of the Common European Sales Law.
/!/ There is a difference between “may” and “shall”.

Even though it is maximum harmonisation, there has been some battles from MS to also get
some discretion. E.g.: DIR 2015/2302 explicitly provides that MS are left with a certain margin of
discretion in implementing certain provisions of the Directive = Art. 12(5); Art. 13(1).

H. Concluding remarks

Over time, there has been a lot of harmonisation with vague terms (and thus more discretion
given to MS) and references to the internal market. Academics have been debated of whether
it is a proper legal basis, why did the Commission not invoke consumer protection? There is
still room for more coherence.

Legal basis & procedure: we have approximation of laws because disparities between
legislation may directly affect the functioning of the common market/internal market. The
question of the legal basis also evolved over time. We moved from unanimity to OLP. There is
an increasing role of the EP. Disparities between legislation. Also, Article 114 TFEU (OLP) is the
key provision in harmonisation. What about Article 169 TFEU (old Art. 153 EC) as legal basis?

Directive on Consumer Rights (DIR 2011/83/EU) is replacing older directives. It includes many
rights for consumer; it is very broad; and it is about maximum harmonization. But does it

45
 represent a major breakthrough or is just a small step ahead? To what extent is it going too
far and gives space to different culture?

PART IV - HARMONIZATION BY THE CJEU: 6 EXAMPLES OF CASE-LAW

- DIR 85/374/EEC à case C-203/99 Veedfald and Opinion AG Colomer.

- DIR (EEC) 85/577 à case C-412/06 Hamilton and Opinion AG Poiares Madura.
- DIR (EEC) 90/314 à case C-168/00 Leitner and Opinion AG Tizzano.
- DIR (EEC) 93/13 à case C-237/02 Freiburger and Opinion AG Geelhoed.
- DIR 97/7/EC à case C-489/07 Messner and Opinion AG Trstenjak.
- DIR 2011/83/EU à case C-649/17 Amazon and Opinion AG Pitruzzella.
- DIR 2019/770 and 2019/771: no case-law yet; but cfr. C-453/99 Courage and Opinion AG Mischo.

I. INTRODUCTION

A. Questions to answer

The role of the CJEU is very important in the harmonisation process. How does the CJEU acts
as a harmonizing actor?
• Preliminary procedure (Art. 267 TFEU): national judges facing with a question of EU law
refers to the CJEU for a question on the interpretation or validity of EU law à dynamic
between CJEU which gives guidance and national courts which receive the guidance.
• Infringement proceedings (Art. 258 TFEU): in addition, the Commission can also refer to
the CJEU if a State has failed to comply with its obligations under EU law.

Interpretation: the CJEU can provide an autonomous and uniform interpretation/definition of

specific terms and concepts; the Court very much likes a teleological interpretation (referring
to the objectives found in the preamble), which allows the Court to be very broad and inclusive
in its interpretation, to provide more harmonisation; textual/systematic interpretation is more
rigid. Sometimes, the Court will also use several interpretation techniques à no systematic
approach. The type of the CJEU’s interpretation has an impact on the autonomy left to MS.

In principle, judges will choose the interpretation that will lead to more harmonization. It is
not only the CJEU imposing EU law interpretation but there is also a comparative work and a
systematic approach of what is occurring in MS.

46
To a certain extent, private law is subject to an “Europeanization”. At the same time, it is an
area where MS have more autonomy because of the integrity of national private law.

à the CJEU shall ensure that in the interpretation and application of the Treaties the law is
observed (Art. 19(1) TEU). The European economic community is a community based on the
rule of law, inasmuch as neither its member states nor its institutions can avoid a review of
the question whether the measures adopted by them are in conformity with the basic
constitutional charter, the treaty (CJEU, Case 294/83 Les Verts, §23).

Key questions:
- What are the facts of the case?
- What is/are the key legal questions?
- What are the main arguments of the CJEU in getting to the outcome of the case?
- What is the outcome of the case?
- Is there a difference between the analysis of the CJEU and the AG?
- What is the impact in terms of harmonization/the harmonization process? Does it take into
consideration the national sovereignty of MS?
- What is your evaluation of the outcome of the case?

Additional considerations:
- Which chamber of the CJEU?
- Which procedure was followed (preliminary ruling, other)?
- How many MS intervened? If it is the full court, then It is an important case. We need to look
at the intervention of MS; at the procedure.
- Does the CJEU refer to other case-law, directives, international sources?
- Does the CJEU refer to the Opinion of the AG?
- Does the CJEU refer to the preamble of the Directive?
- What kind of interpretation method is the CJEU applying?
Systematic (looking at the Directive and even EU law at large)? Teleological (emphasis on the
objectives of the Directive)? Textual (what is in the Directive)?
- Does the CJEU refer to the type/intensity of harmonization (minimum, maximum)?

Sometimes, there is a considerable difference between the AG Opinion and the CJEU decision
(e.g. Veedfald case).

The concepts of minimum and maximum harmonisation really relate to the way the Directive
is set up and the type of harmonisation that is involved in this Directive ≠ it is not related to
the Court’s decision, so try to avoid the reference to minimum/maximum harmonisation when
talking about the CJEU’s interpretation.

When doing a summary, we should never only focus on the end of the judgement. We need
to look at the key legal questions. Expect critical analysis, did the judge went too far? Is it a
stand of harmonization or is it moving forward? What effects on the MS?

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 B. Main topics of the 7 cases here analysed

1. Interpretation and clarification of consumer law directives:

- Damages: Veedfald, Leitner
- Period: Hamilton
- Unfair terms: Freiburger
- Right of withdrawal & compensation: Messner
- Information: Amazon
2. Validity consumer law directives (Test Achats)
3. Sanctions for MS that fail to comply with Consumer Law Directives (infringement proceedings):
(Commission v France)
4. Tort Law: (Transportes Urbanos)
5. Contractual liability: Courage

So, you see that there are cases which will not being directly related to private law but which
can still be interesting from an harmonization perspective.

II. CASE LAW & LINK WITH EU LEGISLATION

/!/ Study all the cases because at the exam, questions will be inspired from these cases.

A. Veedfald case
It is about DIR 85/374/EEC on product liability.

Facts: It was a kind of special case. Mr. Veedfald was due to undergo a kidney transplant
operation. The kidney was prepared for transplantation through flushing with a perfusion fluid
for that purpose; the fluid which had been manufactured in a hospital was defective and
because of that the kidney was unusable for transplantation.
Issues: Can the hospital be held liable? Or can any of the exemption of the Directive be
applicable? Which type of damage is at stake (personal injury or property damage)?
The kidney was not really problem, but the fluid was in fact the problem à did the hospital
put the fluid into circulation?
Relevant EU provisions: Art. 1 DIR (damage caused by a defect in the product), Art. 7 DIR
(exemption) & Art. 9 DIR (definition of damage).
Holding: AG and the CJEU did not really agree.
- Is it a defective product or defective service? Is the DIR applicable? The directive is
about product. If the case is about service, the directive won’t be applicable. It can be
used to determine if it is a good or a service. The court stated that it was a defective
product used in the course of providing a service (DIR applicable) (§12) >< AG
considered it to be a defective service (DIR not applicable) (§15).

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 - Is there in casu an exemption of liability? No.

• When a product is made and used in the course of providing a specific medical service, is
the product put into circulation? Yes.
There are vague terms such as “put in circulation”. DIR does not provide a definition of this
concept (§14); the Court here relied on a teleological interpretation based on the purposes
and the aim of the DIR (§14-16). Here “put in circulation” is a sort of exception. It must be
interpreted narrowly à exceptions must be interpreted strictly (§15-16). It is irrelevant
whether the product was prepared in the hospital or acquired from a third person (§17).

• Was the hospital acting for an economic purpose or in the course of business?
It is an important argument for the hospital. In EU law, even when we are dealing with a public
actor (the hospital is a system financed by public finds), it should not matter for the question
whether it is an economic activity or not. The patient is not required to pay any consideration
irrelevant for the business or economic character (§21). If the court had adopted a stricter
interpretation, the outcome would be different. But because the court preferred a teleological
interpretation and explained that the outcome was at the disadvantage of the hospital.

à important decision because clarification that this type of directive is also applicable in the
use of defective product in hospital is quite a big step.

à the exemption and the scope of the exemption must be interpreted in a limited way.

- What kind of damages: personal injury or property damage?

Damage is also not clearly defined in the DIR (§25); there is an explicit recognition of damages
resulting from death or personal injuries and damages to or destruction of an item of property.
BUT the reparation of non-damage is governed solely by national law. The Court here
emphasized the “effectiveness”, wording and purpose of the DIR (§27) à effet utile should
entail a full and proper compensation for persons injured.

The court interpretation is rather extensive, no national restriction can be allowed on this type
of damages (§28-29) à exhaustive harmonization (§32).

ECJ used a teleological approach: what kind of damages: personal injury or property damage?

AG said that ‘damage caused to a human organ which has been removed from the body of the
donor for immediate transplantation into the body of the recipient is damage caused by
personal injuries’ >< CJEU said that is does not have power to give a EU law definition to a
particular case but it only has to rule on the interpretation of EU law (§31) à national court is
required to examine under which heading the circumstances of the case are to be categorised.

49
à dynamic between ECJ and national courts: the CJEU is maybe going beyond what it strictly
should do, but in the end, it refers back to the national court; the ECJ is giving guidance but
then refers back to the national courts à preliminary ruling = cooperation between the actors.

Important elements of this case:

- Diverging opinions CJEU and AG on several crucial issues (e.g. the applicability of the
DIR: product vs. service);
- Teleological interpretation and reference to preamble can make a big difference;
- Exceptions to producer liability need to be interpreted strictly;
- Outcome: despite exhaustive (total) harmonisation and the holding that no national
restriction is allowed, the CJEU does not provide a EU definition of the different types
of damages; there is no autonomous definition of the concept of “damage” à
deference to the MS with regard to the interpretation of a key notion of private law. It
would have been nice to have clarifications from the ECJ, but this is an old case too; it
would have been different today.
- Effet utile: interpretation of EU law for national courts (preliminary procedure) should
have a useful effect for the EU directive/EU law.

/!/ do not use the concept of minimum/maximum harmonisation if you want to discuss or
assess the interpretation of the CJEU à the concepts of minimum/maximum harmonisation
are specific concepts related to the level of discretion left to MS in the implementation of EU
Directives. As regards courts it is more a matter of harmonization of EU law.

In the more recent directives there is always an explicit provision on the level of
harmonisation, so this issue is regulated by the DIR itself. If there is a lot of discretion given to
MS to go beyond what is in the DIR, it is an example of minimum harmonization.

B. Leitner case
It is about the DIR 90/314 on package travel. It is a very important case in the development of
European private law.

Facts: Family of Simone Leitner booked an all-inclusive package holiday in Turkey with a travel
agency. During this holiday Leitner showed symptoms of salmonella poisoning. She obtained
compensation for the physical pain and suffering but not for the non-material damage (caused
by loss of enjoyment of the holiday).

Issue: Does the DIR also covers a right to compensation for non-material damage resulting
from the improper performance of the obligations inherent in the package travel provisions?

Relevant EU provisions : Art. 5 (2) DIR. MS shall provide some measures for damages resulting
for the consumer from the failure to perform or the improper performance. However, for

50
damages other than personal injury may allow the compensation to be limited à margin of
discretion to MS.

/!/ may always gives discretion to MS.

Holding:
- Art. 5(2) DIR requires MS to ensure that the holiday organiser compensates the damage
resulting from failure to perform or improper performance of the contract (§19).
- Different interpretation methods: textual argument: Art. 5(2) in fine implicitly
recognises the existence of a right to compensation for damage other than personal
injury, including non-material damage (§23) and teleological interpretation: the DIR
aimed to eliminate the disparities between national laws (§20). In particular,
compensation for non-material damage would cause significant distortions (§21); Art. 5
DIR is designed to offer protection to consumers (§22).
- This Directive is about minimum harmonisation: provision can have regulatory force and
can be interpreted in a teleological way and can be given an autonomous definition. We
need to look if the court is referring to other directives (systematic approach?). The
court even does a comparative analysis.

Important elements of this case:

- AG and CJEU reach the same conclusion.
- Very brief and short CJEU judgment >< developed and complete opinion of the AG (the
AG was also referring to other Directives à kind of systematic interpretation).
- Additional arguments:
§ Nature of the harmonization: minimum harmonization does not mean that the
provisions do not have regulatory force.
§ The concept of ‘damage’: there should be a uniform and autonomous
interpretation of the concept of “damage” which must be guided by Art. 95 (3) EC.
§ Comparison with (and differentiation from) DIR 85/374 on product liability where
there was no autonomous interpretation given by the CJEU in Veedfald.
§ CJEU case law on tort law (liability of EU Institutions)
§ International treaties
§ Evolution in the legislation & case law of MS (Germany, UK, Ireland, France) - trend
towards wider/broader concept of damage

à the CJEU provided the first step to create a truly European notion of damages = important
contribution to the process of Europeanization of private law with pro-consumer approach.
But there are some controversies because not all academics support this very active role of
the CJEU: is the active role of the CJEU beneficial? did the CJEU go beyond its competence?

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/!/ be very careful when using the word “uniform”. There is a difference between saying that
a concept must be interpreted in a uniform and autonomous way ≠ and saying that a certain
court’s interpretation has created a uniform EU law. This is quite wrong because it is not
because the CJEU provides some uniform and autonomous definitions of certain concepts that
a whole area of private law will be considered as uniform à difference between
harmonisation of EU law and uniformization: you should refer to harmonisation because this
is what happens, we do not have a uniform European private law but only a harmonized one.

C. Hamilton case
It is about DIR 85/577 Doorstep selling.

Facts: Ms. Hamilton signed at her home a contract for a loan with a bank in order to finance
the acquisition of shares in a real property fund. Defective notice of her right of cancellation.
Both parties performed their obligations under the contract in full. In German law the right of
withdrawal expires one month after full performance of obligations by both parties: in such a
case, German law does not allow you to use you right of withdrawal unless you do it before
the one-month period. Ms. Hamilton wanted to invoke the right of cancellation after the one-
month deadline. It is important that both parties have performed their obligations.

Issue: Is the German one-month-expiry period in conformity with the DIR?

Relevant EU provisions: Art. 5 & 4(3) DIR (the consumer shall have the right to renounce
within a period of not less than seven days from receiption of the notice).

Holding:
- Type of interpretations: teleological interpretation: principal aim of the doorstep selling
DIR and the right of cancellation is to protect consumers against risks arising from
contracts concluded away from business premises (§32) and systematic interpretation
(looking at the whole DIR, other cases and Directives).
- No information = incorrect information: MS shall take ‘appropriate consumer protection
measures’ (§37; Art. 4 DIR). You cannot use your right of cancellation in an effective way
if you don’t know that you have that right à importance of “effet utile”.
- Is the one-month-time limit after full performance an appropriate measure?
The Court looked at the general structure of the DIR and at the wording of the Directive:
consumer protection is not absolute, there is some margin of discretion for MS (§39-40). But
the question is therefore did Germany exceeded that margin of discretion?

The CJEU also looked at general principles of civil law: full performance of a contract results
in discharge of obligations/termination (§42).

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 - The CJEU distinguishes the present case from Heininger and Schulte where the contracts
concerned had not been fully performed à here, in Hamilton, both parties had fully
performed their obligations.
- Holding of the case: time period is considered to be in accordance with EU law.
- Compare CJEU v. AG: the AG focused on awareness consumer, fairness of commercial
transactions and stability of legal relations
- Also, the Court looked in detail at the facts of the case.

Important elements of this case:

- Subtle demarcation between harmonized matters (the right of cancellation) and the
respect for national autonomy (effects of right of withdrawal) – quid of DIR 2011/83?
- Textual, systematic and teleological (reference to preamble) interpretations.
- Non-absolute character of the right of cancellation à margin of discretion of MS.
- Reference to “general principles of civil law”: is it a national or EU perspective? Is such
reference desirable?

D. Freiburger case
It is about DIR 93/13/EEC on unfair terms in consumer contracts.

Facts: Building and purchase of a parking space. There was a particular clause in the contract
which stated that “the whole of the price is due upon delivery of a security” irrespective of
any progress made in the construction. Mr. and Mrs. Hofstetter only paid after they had
accepted the parking space and had seen that it was free of defects. They refused to pay
default interest for late payment considering this clause was an unfair term in the sense of
the DIR.

Issue: Is the clause an unfair term in the sense of DIR 93/13?

Relevant EU provisions: Art. 3 & 4(1): there are some particular elements in these
provisions.
Is there a significant imbalance in the parties which can be to the detriment of the
consumer?
Was the term drafted in advance and hence must be considered as not individually
negotiated?
Look at the Annex which contains an indicative and non-exhaustive limits of the terms which
may be considered as unfair à this may be relevant for the Annex /!/
Assessment must be done in consideration of the nature of the goods/services, all the
circumstances and all other terms of the contract/another contract on which it is dependent.

Holding:
- It is a matter for national courts.

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 - Art. 3 DIR defines in a general way the factors that render a contractual term unfair (§
19; with reference to Commission v Sweden)
- Annex is indicative but non-exhaustive (§20; with reference to Commission v Sweden).
The DIR contains an annex with non-exhaustive term as regarded as unfair. In the judgement,
the annex is really indicative, other terms not on the list can be unfair.
- Art. 4 DIR unfairness test requires consideration of the relevant circumstances of the
individual case à due consideration to national law (§ 21).
Art 4(1) gives more indication of what the judge needs to take into account.
- CJEU may interpret general criteria used by EU legislator in order to define the
concept of unfair terms; it should not rule on the application of these general criteria
to a particular term à it is for national courts (§ 22, with reference to AG Opinion).
It is up to national courts to decide on the (un)fairness of the contractual terms in this
particular case: CJEU does not try to be activist and to decide for national courts.
- CJEU distinguishes this case from Océano Grupo: a term was at stake which was solely
to the benefit of the seller and which undermined the effet utile of the DIR (§23).
Indeed, the CJEU interprets the general criteria but is not applying them to the case, it is up
to the national court >< Océano Grupo Case.

The doctrine criticised the CJEU for this approach: the national court should be obliged to
interpret EU law in an effective way, with no unequal effect in comparison with national law.

Important elements of this case:

- Level of harmonization determines the margin of judicial review made by the Court
(§12 and s. of the Opinion AG)
- Multi-level governance: considerable margin of discretion for national courts and little
guidance à collaboration CJEU & national courts; practical argument (avoiding an
overflow of national unfair contract term cases); coherence of national law system.
- But the Court preserved its competence to overrule a national court where the
unfairness of a clause is manifestly evident (cfr. Océano Group).

E. Messner case /!/

It is about DIR 97/7 on distance contracts.

Facts: Ms. Messner bought a second-hand laptop on the internet at a price of 278 €. After a
couple of months, she used her right of withdrawal to revoke the contract. But the seller
claimed 316.80€ for using the laptop for about 8 months.

Issue: Is a compensation claim for the value of the use of the consumer goods in compliance
with DIR 97/7 if the consumer uses its right of withdrawal within the revocation period?

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Relevant EU provisions: Art. 6(1) - for any distance contact consumers should have a period
of a least 7 working days in which to withdraw from the contract.

Art. 6(2) – the only charge that may be made to the consumer because of the exercise of his
right of withdrawal is the direct cost of returning the goods.

Holding:
- A general requirement to pay compensation for the value of the use of goods is
incompatible with the DIR:
§ the wording and the objective (consumer protection) of Art. 6 & recital 14;
§ effet utile of the right of withdrawal (§18-24):
It is incompatible with the DIR to have such general requirement in every circumstances.
- But in some circumstances a fair compensation for the use of the goods can be justified,
in light of the principle of proportionality (‘not go beyond what is necessary to exercise
his right of withdrawal’) and some principles of civil law, such as good faith or unjust
enrichment (§ 25-26).
We see that the influence of civil law principles has been quite important for the development
of EU private law.
- National court must finally decide taking into account all relevant elements (§27-28):
§ purpose of the DIR
§ the effet utile of the right of withdrawal
§ the principle of proportionality (e.g. amount of compensation versus the
purchase price).

Important elements of this case:

- CJEU developed fairly detailed guidelines for national judges.
- Textual and teleological interpretation of the court linked to the “effet utile” and the
principle of proportionality.
- The court makes a distinction between inspection (free of charge) ≠ use (not always free
of charge) à what about the burden of proof? This distinction is complex.
- There is a need to be in line with principles of civil law (e.g. unjust enrichment) (§26 +
AG §91), which are not harmonised by the EU.
The CJEU is integrating principles of national civil law shared by many MS, even though no
document states that those principles are EU principles. The court uses those principles to
give body to the proportionality test à importance of principles of civil law.
- Task division: it is the national court that must decide how the proportionality test
outcome must be done (for 250€).
- What is the relevance of the provisions in Draft Common Frame of Reference and
Acquis Principles?

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These principles are not formally endorsed in the EU but often referred to. It is a very
important principle. The AG in §85 said that they are ‘Merely proposals which cannot assist in
the interpretation of this DIR’.
- What is the relevance of the references of the CJEU (§26) and of the AG (§91) to
“principles of civil law” including good faith?
Acquis Principles: what is the acquis collected through all the directives? What are their
common elements, their gaps? How can it be improved? The court said here that it is not
bound by the Acquis Principles, but it then looks at principles of civil law (identifying itself),
which can be found in the Acquis Principles. Why was the CJEU scared to use the principle? It
is concerning /!/ It would have been wiser to say that those instruments are not formally
binding and that instead there are principles such as like good faith, which are broadly
supported in the EU, so that they can be used to interpret the proportionality test. It would
have been easier than using the civil principles.
- See Art. 6(1)(h), 14(2) and 16 DIR 2011/83/EU.

F. Amazon case
It is about DIR 2011/83 on consumer rights. It may have some practical implications today.

Facts: Amazon EU offered a call-back system and the possibility to contact it by chat or by
email if a consumer wanted to contact Amazon. So, there was no fax number, and telephone
number could only be given after some identity questions. There is a possibility to click on
‘contact us’ opening a web page: they can be contacted by email, online conversation or
telephone. Federal Union of Consumer Organisations and Associations, Germany applied for
an injunction against Amazon EU practices for the display of information allowing consumers
to contact Amazon: arguing that there were no effective means of contacting them. It was
dismissed. The General court of Germany then referred preliminary questions to the ECJ.

Main issue: are traders who, while having means of communication such as the telephone,
fax and an email address, use them however only for communication with other traders or
the authorities, required to provide information about those communication methods when
entering into distance contracts with consumers? à how to interpret article 6(1)c?

Relevant EU provisions: Art. 6 (1) (c) – trade should provide consumers with information in a
clear and comprehensible manner; where they are available, in order to allow the consumer
to contact it quickly and communicate with it efficiently.

Holding:
- Analysis of different language versions but no clear conclusion (§36)
- Context: distance and off-premises contracts; objective: high level of consumer
protection (§37-39).
- Reference to Art. 169 TFEU and Art. 38 Charter (§39)

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 - Ensuring and effectively implementing consumer rights and, in particular, the right of
withdrawal (§41)
- Reference to Part B Model withdrawal form à systematic analysis (§42)
- Right balance between high level of consumer protection and competitiveness of
undertakings à freedom to conduct a business laid down in Art. 16 Charter (§44)
- Specific needs of consumers that are particularly vulnerable (§45)
- National court must decide whether if consumers make contact with traders through
a website and in particular of the presentation and functionality of that site, the means
of communication made available to those consumers by those traders allow
consumers to contact traders quickly and to communicate with them efficiently (§47)
- Importance of the principle of proportionality: an unconditional obligation to provide
consumers, in all circumstances, with a telephone number, or to put in place a
telephone or fax line, or to create a new email address in order to allow consumers to
contact traders may be disproportionate (§48) if there are alternatives available such
as the opportunity to call over the internet using some clicks, general template, call-
back system, instant-messaging (§52)

Important elements of this case:

- What type of interpretation? The CJEU here combined three interpretation methods:
§ Literal interpretation: looking at the different language version
§ Teleological interpretation: objectives of high level consumer protection
§ Systematic interpretation: reference to other directives
- Even though this DIR is about the protection of consumers, there is still the importance
of balancing high level of consumer protection >< competitiveness, special attention
small undertakings, efficiency, and no unnecessary burden on the company.
- Cf. Opinion AG, §28-45: internet platform – consumer choice use internet platform –
average consumer using e-commerce services (references to other directives).
- Reality check – technological developments digital area – means of communication
obsolete (AG, §98)
- Concern protection personal data (AG, §102)
- Current relevance of technical and technological developments

This type of call-back of chat systems are not uncommon today: taking into consideration the
current technical and technological developments in the area of online commerce, it is
necessary to have a balancing and proportionate approach because some means are just
obsolete today.

The AG and the CJEU are also pragmatic in the way the develop their case law: there are good
alternatives possible (call-back system, instant-messaging, etc) and they fit in a system of online-
commerce; the tools given by Amazon are enough and requiring a fax number is not

57
proportionate à this is a recognition of technological development and of interests of
companies in this particular area.

III. CRITICAL OBSERVATIONS

You should be able to answer the question what are the implications of a particular case and
what is your opinion in this regard? You should be able to use the pros and cons of
harmonization. The balance between EU competences and national discretion; the coherence
of the case law and whether the CJEU is always consistent in its interpretation; emphasis of
consumer protection or the balancing exercise of different interests are important.

o CJEU active role in shaping EU private law or is self-restriction preferable? Which role
is taking up by the Court?
In those cases, the court often used a teleological interpretation to really reach
harmonisation, to expand the concepts, in a way which is beneficial for consumer.
On the other hand, the court is sometimes reasonable to ensure that burdens on sellers are
not too high (cfr. proportionality test). There cannot be an overemphasis on consumer
interests. It is a careful balancing exercise that must be done.

o Relationship between EU competence and the remaining national competences.

The ECJ is sometimes inconsistent as normally the task between those two actors are clearly
defined. The CJ sometimes over-steps.

o Coherence in CJEU’s case-law?

o Overemphasis of the consumer interests in interpreting consumer protection directive

or careful balancing exercise of consumers and sellers interests?

o CJEU intervention more intense: what are the minimum standards of protection?

o Interpretation methods of the CJEU

In those cases, the court often used a teleological interpretation to really reach
harmonisation, to expand the concepts, in a way which is beneficial for consumer.

o Role of the level of harmonization

Often the court refers to whether the DIR it of max or min harmonisation. With max
harmonisation, the role of the court is larger and gives autonomous definition (with effet utile
of the DIR). The level of harmonization is important for the role of the court, but the court’s
interpretation itself should not be assessed from the concepts of min/max harmonization /!/

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 IV. “PUT INTO PERSPECTIVE” – THREE EXTRA CASES

All these cases show the effectiveness of EU law and interpretation of private law concepts.

A. Validity - Test Achats Case

This case is more an illustration of private law in the area of insurance law, it should not be
studied for the exam.

This case deals with DIR 2004/113 on the principle of equal treatment between men and
women in the access to and supply of goods and services.

Facts: A national consumer organization and two individuals questioned the validity of Art. 5
DIR with regard to insurance contracts, in particular a derogation with regard to differences in
premiums and benefits arising from the use of sex as a factor in the calculation. Within the
context of Insurance contracts, there is a distinction between men or women as the
circumstances are not equal on average. Those averages matter for insurance companies.
There were attempts to have harmonization in the area of insurance contract, to harmonize
the unequal treatment based on sex, in calculating premiums but it is not applicable to
calculate it based on sex. Insurances needed a transition period. There could still be some
differences accepted based on statistical data. But MS had to decide if they wanted to permit
that/those differences. A lot of MS accepted it.

It is specially related to insurance law, but it attracted a lot of attention in the international
press, especially because of the rather strange outcome, which caused an uproar in the
insurance industry à high profile case.

• “the ECJ bans gender for demand of insurance”.

• “Insurance blow for young women”
• “femmes et hommes paieront leur assurance au même tarif"

Relevant EU provision: Art. 5 about actuarial factors: “(1) MS shall ensure that in all new contracts
concluded after 21 December 2007 at the latest, the use of sex as a factor in the calculation of
premiums and benefits for the purposes of insurance and related financial services shall not result in
differences in individuals’ premiums and benefits.

(2) Notwithstanding §1, MS may decide before 21 December 2007 to permit proportionate
differences in individuals’ premiums and benefits where the use of sex is a determining factor in the
assessment of risk based on relevant and accurate actuarial and statistical data. The MS concerned
shall inform the Commission and ensure that accurate data relevant to the use of sex as a determining
actuarial factor are compiled, published and regularly updated.”

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Issue: Is Art. 5(2) DIR valid in light of the principle of equal treatment between men and
women?

Holding:
- The CJEU referred to Test Achat first preliminary ruling interpreting DIR 2004/113 and
to other judgments on non-discrimination.
- Art. 6(2) TEU: the EU must respect fundamental rights which are incorporated in the
Charter of Fundamental Rights (§16)
- DIR expressly refers to Art. 21 and 23 of the Charter: Art. 5 must be assessed in the
light of these provisions (§17)
- Legal basis of DIR = Art. 19(1) TFEU and to its ratifications in the system of the Treaties
(§18-21)
- Principles
§ (1) equality of treatment may be achieved gradually;
§ (2) EU legislator is free to determine when it will take action;
§ (3) once it has decided to act, it must do so in a coherent manner;
§ (4) transitional periods or derogations are in principle allowed.
- Widespread use of actuarial factors related to sex in insurance contracts at the time
the DIR was adopted- ‘appropriate transitional periods’ were allowed. However, Art.
5(2) permits unequal treatment without any temporal limit.
- Criteria ‘equal treatment’ (§28-29): men and women are in a “comparable” situation
and hence must not be treated differently; different situations must not be treated in
the same way and they must be assessed in the light of the subject-matter and the
purpose of the DIR (i.e. application of unisex rules on premiums and benefits in the
insurance sector – Art. 5 DIR)
- Maintaining an exemption from the rule of unisex premiums and benefits without
temporal limitation is against objective of equal treatment between men and women
which is the very purpose of the DIR and is incompatible with Art. 21 and 23 Charter
(§32)
- The provision invalid upon the expiry of an appropriate transitional period - 21
December 2012 (§33-34)

Important elements of the case:

- Teleological interpretation of the CJEU.
- Men and women have to be treated as ‘normatively comparable’ even though
‘empirically different’
The idea of non-discrimination could be achieved more gradually. The legislator needs to do
it in a coherent way and the period of adaptation had to be very clear. In this case, there is no
time limit. In the end, the conclusion of the case is that the transitional period not being
determined, the non-discrimination had an opposite effect (not being beneficial for a minority
groups) as women had to pay more than what would be in the normal rules. The only one
who were benefiting were the insurance companies à the outcome of the case led to benefits

60
to the insurance sector but actually not the consumers, and in particular women: non-
discrimination has a price and may not be “consumer friendly”.
- Despite criticism of the academia, the ECJ defers to the policy choice of EU legislator,
as there is a need to cover all situation for all à very controversial case
If now there are negative effects for some people, it cannot help it. It is strange because the
teleological interpretation is often used to help minority groups, which was not the case here.
The CJEU stressed the importance of the legal consequences of a prior decision of the EU
legislator + of the objectives pursued by the EU legislator.
- In this case, there are internal inconsistencies in EU legislation when assessing the
validity of that legislation in light of primary EU law. Here, the non-discrimination
principle has a price and may not be ‘consumer friendly’.
- Principle of non-discrimination & European Contract Law: it is traditionally governed
by freedom of contract and party autonomy.

B. Sanctions - Commission v. France case

This case is more an illustration of private law in the area of sanctions, it should not be studied
for the exam. This case deals with Dir 85/374 on liability for defective products.

Facts: in case C-52/00 Commission v France, France had not correctly implemented DIR 85/374
- supplier of a defective product is to be liable in all cases and on the same basis as the
producer. Commission believes France fails to comply with this judgment - penalty of 13715€
for each day of delay from the date judgment. This case is about the correct implementation
of a DIR, linked to the liability for defective products. According to the EU Commission, France
had not correctly implemented the directive. The court imposed a heavy penalty for each day
of delay à important sanction imposed on France.

Issue: Is this failure of France continuing? What about sanction?

Relevant EU provisions: Art. 3(3) DIR: 'Where the producer of the product cannot be
identified, each supplier of the product shall be treated as its producer unless he informs the
injured person, within a reasonable time, of the identity of the producer or of the person
who supplied him with the product […]” + Art. 260 TFEU (payment of a lump sum or financial
penalties).

Holding:
The new provision of the civil code does not yet satisfy the requirements of Art. 3(3):
The provisions intended to transpose a directive must create a legal situation that is
sufficiently clear, precise and transparent (§48)

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Art. 3(3) DIR provides in particular that the supplier cannot incur the liability imputed by the
DIR to the producer where he informs the injured person within a reasonable time of the
identity of his own supplier (§50)
non-compliance has had no adverse effects in practice irrelevant; non-compliance constitutes
a failure to fulfil obligations (§52)
The court assesses, in the light of the circumstances of the case, the financial sanctions
imposed (§58, 61, 63) à no binding method on how to calculate the penalty payments.
The CJEU also looked at the effet utile (=financial sanction intended to place a MS under
economic pressure which induces it to put an end to the infringement that has been
established) (§59-60).
This case illustrates that the court uses effet utile whenever it suits itself (i.e. here to put
economic pressure on a MS to comply with EU requirements). This type of case is very
common. Here the court is interpreting the directive using principle of civil law such as effet
utile. In some judgments both a lump sum (dissuasive effect) and a penalty payment
(persuasive effect) are imposed à private law in the area of tort law.

Facts: C-204/03 Commission v Spain is about the limitations on the right to deduct VAT laid
down in a Spanish legislation being incompatible with the Sixth VAT DIR. It is a case about
incompatibility with the directive. Transportes Urbanos - action for damages against the
Spanish State - suffered loss on account of breach by the Spanish legislature. Tribunal Supremo
doubts whether Spanish provisions on State liability are in compliance with EU law.

Issue: Is a national provision that makes a State Liability claim subject to a requirement of
prior exhaustion of remedies against a harmful administrative measure in compliance with EU
law and its well-established principle of State Liability?
In particular, look at the distinction: breach of EU law ≠ but not in case of a breach of the
national Constitution à is Spain liable for that defect in the legislation?

Previous case law: Francovich and Brasserie du Pêcheur à it is very similar to those cases.

Holding:
EU principle of State Liability: it is inherent in the Treaties.
There are conditions: the rule of EU law infringed must be intended to confer rights on them;
The breach of the rule must be sufficiently serious; Direct causal link between the breach and
the loss of damages.
In this case, if there is a breach of Spanish constitutional law, then it would be liability. But
here, according to Spanish law, there is no incompatibility. There is no equivalent for the
sanctions with incompliance with EU law or Spanish law. The court said that this situation is
unacceptable.
- MS must make reparation on the basis of national law based on:

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 § Principle of equivalence: Rules applicable to actions apply without distinction to
actions alleging infringements of EU law and to “similar” actions alleging
infringements of national law (§33-34) à breach of this principle (§35-44).
§ Principle of effectiveness (§31): Actions are similar à breach of this principle (§45).

Important elements of the case:

- Specific obligation on national courts to provide full and effective protection of EU rights
(attribute of federalism – strengthening of EU power)
- Low number of cases (filter of national courts)
- Deterrent effect
- Conditions clear? (diverging opinions)
- Type of breach? Incorrect transposition of a DIR.
- Court formation: Grand Chamber à constitutional importance of state liability claims

C. Contractual Liability - Courage C-453/99 Case

/!/ this is a mandatory reading material

Private enforcement of competition law became much more feasible, and not only
enforcement by other stakeholders (e.g. the Commission) but also parties to an agreement
can invoke Article 101 TFEU à development of competition law at large.

Facts: The lease agreement at issue contained an obligation to exclusively purchase a fixed
minimum quantity of specified beers (‘tied house agreement’). Crehan claims the illegality of
the agreement (anti-competitive agreement). But according to English law there cannot be
claim for damages for parties to an agreement.

There is a lot of agreements between beer producers and bars. There is a whole network of
agreement related to the beer market à very dense and complicated market. These
agreements can be strict/restrictive, and it is not easy to get out of this type of agreement
(e.g. often a package deal with beers, cocktails, etc). For the EU, it was a big case because until
then it was not possible to get damages from another party in such cases. The court then
referred to Van Gend & Loos (autonomous legal order creating rights & obligations).

Situation in Europe:
How is EU competition law normally enforced? EU institutions would be happier if there would
be more private enforcement at the national level >< US: emphasis on private enforcement.
Lately, in Europe, there has been attempts to promote private enforcement. This case just re-
affirms this shift à interface between European private law and European competition law.

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Issue: Is it possible for a party to an agreement prohibited under Article 81 EC (Art. 101 TFEU)
to claim damages from his co-contractor à is this English law compatible with competition
law? Can parties invoke Article 101 to invoke damages?

Holding:
This case is also very important from a perspective of private law, from an harmonization view:
- Autonomous legal order (Van Gend & Loos) (19) – creation of obligations and rights for
individuals à the CJEU went far in this case in giving guidance.
- Sanction 101(2) – automatic nullity (§22): compensation should be possible in those cases,
it opened the door.
- Art. 101-102 TFEU – direct effect between individuals (§23); “any individual” can rely on a
breach of Art. 101 TFEU even if he is a party
- Effectiveness EU law (effet utile) (§26)
- Actions for damages before national courts can make a significant contribution to the
maintenance of effective competition (§27)
- National autonomy regarding court’s jurisdiction and detailed procedural rules (principles
of equivalence an effectiveness) (§29)
Is that equivalent to national procedural rules on claims for damages? Does that sufficiently
comply with the principles of effectiveness?
- Considerations (§30): unjust enrichment; no profit can be made from your own unlawful
conduct (general principle); economic and legal context: bargaining power, conduct
parties, freedom to negotiate, capacity to avoid loss, weaker position, network of
contracts.

You can see all these things in other cases in private law à importance of the principles of
private law, even in competition cases.

V. CONCLUDING REMARKS
- There is an active role of the CJEU where it often gives an autonomous interpretation
and follows a teleological interpretation in order to achieve:
§ High level of consumer protection
§ Internal market
- Is there a respect of national autonomy? Discretion of MS is important, the court
needs to do a balancing exercise also taking into consideration of MS.
- We always have interaction between the EU legislator, the CJEU and academics.
- European private law is being developed through less typical cases such as cases
between the Commission and a MS (infringement proceedings).

/!/ try to always use the most recent numbering of the Treaties.

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PART V - INTERNATIONAL AND EUROPEAN CONTRACT LAW

We should be able to "work" with these documents from the Commission: identify the
relevant parts of such preparatory documents that may be helpful in getting a better
understanding of the "final" legislative documents à we will more focus on the process of
harmonization, rather on the content.
Here, the efforts made by the EP in the process of a European contract law have started in
the 1990s, it was a very long process of consultations between EU legislative actors à 2019
DIR (on sales and digital content) are only the result of this very long consultations process.
You have to focus on the Draft Common Frame of Reference: it is very important in the whole
process of harmonization. It has a huge influence throughout the harmonization process,
together with a review of the acquis.
Parts of the slides are in fact meant to study these very long documents: you don’t have to
read every single page of these long documents, but you should be able to work with them
and to grasp their essence in a very short time frame.

I. INTRODUCTION AND BASIC PRINCIPLES

A. Contract law and harmonization

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Contract law is at the interface of various legal domains (contract law, consumer law, sales law,
insurance law, employment law, family law, financial law, company law, construction law, property
law, IP law, competition law, public procurement law, PIL) à contract law interferes with other
fields. If you harmonize contract law, it will have an effect on these other fields.

Contract law has national, European (CoE to a certain extent; in the EU it is quite complicated
because various DGs are involved so there is a need of cooperation) and international (United
Nations – CISG and UNCITRAL; UNIDROIT) components. We will focus on European harmonization
but there is also a lot of references to international instruments à European level is also
influenced by documents existing at the international level.

EU multilevel governance = national/MS (national legislation and national judges); EU level (EU
legislator through DIR ; case law of the CJEU); international level à this multilevel governing
system produce common business practices and standard contracts.

There is an influence at different levels: legislators, companies, judges but also academics.
Harmonization is not only about formal harmonisation, there are other indirect ways such as
exchange programs, arbitrators, academics working on principles, study groups, etc.
Academics have played a very big role in the harmonization process (especially in contract
law) à attempts of EU institutions to “build” on the work of academics. The definitions of key
concepts are also very important. Analysis of the case law is very important too. Different
methods have been used by academics: biding code vs restatement of common principles.
• Commission on European Contract law (Lando Commission) – Principles of European Contract Law
(PECL) à Professor Lando is a very important actor!
• Pavia Group – European Contract Code
• Study Group on a European Civil Code

Acquis = the whole body of DIR existing in the field of private law at the moment of this whole
review and consultation process; the DIR we looked at were part of this acquis and of the
analysis of this group of experts. On the basis of this acquis, the European Commission has to
decide whether we need to harmonise more? Do we have reasons to justify harmonisation?
What is there now? What is the coherent wall? Do we need more? Can we justify adopting
new directives? In which field of law? Do we go for minimal harmonisation/maximum? Do we
have more tailored measures?
• Scope/definitions
• Need for (more) coherence
• Legal basis and legislative procedure: Art. 114 or Art. 169 TFEU
• Margin of discretion – method of harmonization: how far should the EU institutions go in
harmonization? should it be minimum or maximum harmonization?

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There has been tensions over time about what was the best option/solution; EU Commission and MS
are not always going on the same track. There is a long process in deciding what is the best instruments
for the EU Commission to regulate a sector.
• DIR 2011/83/EU: is it a major breakthrough or just a small step ahead? What is the relationship
between this DIR and the more recent DIR which are very specific? /!/
• DCD and DSG DIR: is the focus on digitalization justified?
The 2019 DIR are much narrower than what some people intended in the beginning as regards the
whole process of harmonization which was going on.

Sometimes CJEU don’t leave a lot of discretion, but sometimes when looking at the text, there
are options to choose. MS can play with that, sometimes it is maybe a bit pragmatic.
• Balance between the role of the EU legislator with the MS and the CJEU.
• Balance between the role of the national judge and the CJEU.
• Can we talk about an activism from the CJEU?
• Can we talk about a “consumer-friendly jurisprudence”?

The principles that guide this harmonization process are the principles of subsidiarity and
proportionality. The EU Commission needs to assess whether these principles are followed.
The legislative process is also important: unanimity or qualified majority? Art. 114 TFEU
(Ordinary Legislative Procedure) or Art. 169 TFEU?

B. Basic principles

- Party autonomy and freedom of contract: it is up to the parties to decide what they put
in the contract. But there are some limits to that freedom: there should be a legal
framework either as a default system (if no specific agreement by the parties) or as
mandatory rules (e.g. protection of consumers in contract law).
- Internal market: free movement of goods, persons, services and capital. It might also be
justified for reasons of consumer protection or environmental protection. Contract law
has an impact on the internal market: it is closely related to the internal market since we
don’t want obstacles in the internal market.
- Consumer protection: the EU wants a high level of consumer of protection.
- Legal certainty: the European Commission can use this principle to justify harmonisation,
together with the balancing exercise between consumer protection and the right of
business to develop activities.
- Cross-border transactions: the EU can only step in when it is related to cross-border
transactions. This is based on the principles of subsidiarity/ proportionality and on the
conferred power doctrine à the EU wants to reduce transaction costs by removing
discrepancies. In this interface between contract and consumer law, the EU wants high
level of protection but also safeguarding the interests of SMEs (avoid high burden on the
seller, especially when it is a SME). The B2C relation is very different with SMEs.

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Those basic principles are very important. They are all balanced in one way or another. And
they of course have a cost. Harmonization has a cost.

II. INTERNATIONAL CONTRACT LAW

A. International contractual dispute

There is an international contractual dispute when:
- There is an international component: there needs to be a connection with more than one
legal system. Then we need to know whether there is a “real” conflict of laws (or is there
a uniform law applicable to the dispute?)
- There is a contractual component: but what is contractual? What is the actual issues? It
should bet the interpretation of the contract.
- There is a dispute: we can have conflicts of law rules. It could be helpful to have an
international contract law or there can be PIL rules on what law will be applicable and then
this national law will decide on the interpretation à jurisdiction, applicable law,
enforcement and recognition.

Harmonized or uniform law? All the complexities of PIL will pop up and why would not we make an
international law? Organisations like UNCITRAL and UNIDROIT are bringing up these issues. Indeed,
international contract law is fragmented but there is a gradually increasing body of uniform law:
through global substantive law (CISG, E-Signature Convention, UNIDROIT Principles), regional
substantive law (all these directives and regulations) and procedural rules (HCCH). UNIDROIT,
UNCITRAL and HCCH deal primarily with commercial and contact law. In other subjects, harmonisation
was not very successful. We need international standards to have more equal interpretation. If there
is international uniform law, it would be easier.

Is uniform substantive law “must” for the resolution of international disputes? It is not a must
because we can always look at the PIL rules and then on the law of a particular State, but the common
principles are more neutral and more helpful for all the parties.

E.g.: Cass, 19 June 2009: there was already a contract between a Dutch company (buyer) and a French
company (the seller). The seller requested a recalculation of the price agreed in the contract because of
70% price increasing, but there was a gap in the contract: there was no hardship clause in the contract. The
buyer sued the seller in Belgium à Is the CISG applicable? Does the CISG contain rules on hardship? Can
the Belgian court use another international instrument for gap-filling purposes? Need to find a balanced
solution between fundamental principles of contract law and the gap in the contract. Of course, mediation
and conciliation should be preferred instead of court adjudication = last resort.

Guidelines from UNIDROIT or UNICTRAL are sometimes more important basis for the law.
There is also the advantage of neutrality of such instruments (more than use of PIL). This is
reflected in the principles of commercial contracts. CISG neutrality is also the most important
point à are UNIDROIT, UNCITRAL and HCCH complementary or overlapping? These bodies

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have launched the development of a resource tool for international commercial contracts. In
reality, even though they work on the same matters, they are quite complementary and work
differently, but it is desirable that they work together.

B. International Institute for the Unification of Private Law (UNIDROIT)

UNIDROIT was established in 1926 (Rome) - 63 MS. It produces uniform rules, international
conventions, and the production of model laws, sets of principles, guides and guidelines.
Uniform laws are very important, including in the process of legislation. It deals with
commercial contracts, security interests, transnational civil procedure and more sectorial
topics (e.g. transport). Using an international entity such as UNIDROIT gives important party
autonomy and more neutrality. Neutrality is an important reason for arbitrators/companies
to choose a Convention as the applicable law, and not a national law. Party autonomy is also
very present à UNIDROIT is quite successful though relatively limited in means.

See the Principles of International Commercial Contracts (1994; 2016).

C. UN Commission on International Trade Law (UNCITRAL)

UNCITRAL is an UN agency and hence it goes slower. It was established in 1966 (Vienna). Its
drafting techniques are uniform rules, international conventions, and the production of model
laws, sets of principles, guides and guidelines. It deals with dispute resolution, ecommerce,
insolvency, sale of goods, etc. Party autonomy, neutrality and protection of SMEs is also
reflected in the CISG elaborated by UNCITRAL. As an UN Agency, it has the advantages and
disadvantages of being part of the UN framework (bureaucracy, need for reform, small role within
UN, etc.)

D. Hague Conference for Private International Law (HCCH, 1893)

HCCH has broader competences (e.g. it includes family matters). It is on conflict-of-law and it
does not cover substantive elements. It has produced about 40 conventions. Its main focus is
on jurisdiction, applicable law, recognition and enforcement of foreign judgements, legal &
judicial cooperation à PIL issues. It has three main pillars:
• family law and child protection
• international civil procedure and legal cooperation
• cross-border commercial and finance law.

The Hague Principles on the Choice of Law in International Commercial Contracts (2015) is a
soft law instrument (first soft law normative instrument of the HCCH) but it is quite relevant
and has indirect harmonizing effects. These Principles promote party autonomy.
• Even though countries are not obliged to do so, some national law have been adopted on the
basis of these Principles (e.g. Paraguay; Australia).
• UNICTRAL has endorsed and recommended States implementing those principles.
• It is the first HCCH instrument officially endorsed by UNCITRAL.
• It is a very important document although it is soft law.

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See also the very recent Convention on the Recognition and Enforcement of Foreign
Judgments in Civil or Commercial Matters (Hague Judgments Convention) (July 2019).

Importance of the HCCH à the harmonization of PIL also remains important.

III. EUROPEAN CONTRACT LAW – INTRODUCTION

Is there a need for harmonization? What should be harmonised and how?

- B2C? B2B? or both?
- Cross-border transactions and domestic transactions? (
The wish to cover both can be seen as being better. Often the EU tries to cover both cross-
border and domestic transaction, although it is not easy to do. It tries to have legal certainty
and to reduce the transaction costs. MS can choose if they apply the rules on domestic
transactions. Why? Because the consumer needs to know which rule is applicable. If you
harmonize cross-border transactions, it is easier to have to same rules for domestic
transactions, so it is all the same. MS can also rather choose for domestic rules, because they
have a higher consumer protection. It is a multilevel process involving different actors.

Those who said that these issues impacted their cross-border business (even if minimally)
were enterprises of at least medium size and those who did not have direct trading experience
(but were interested in it), in both groups 44% indicated they were troubled to some extent
by this problem. In the latter group the proportion of those who felt this was a great barrier
was only 9%, but well below the average, only 41% said it had no impact (15% had no opinion).

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The groups that said often or always are relatively small: there is no major obstacle that would
prevent people from not engaging in cross-border sales.

72% have refused to sell to foreign consumer. You would expect respondents of the survey
not being very interest in ECL à it is kind of surprising because EU companies very likely or at

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least likely to use such European consumer contract law instruments. Is not very likely that
the quality and costs (of transaction) of contract law is the reason to enter into a contract,
mostly the price will be the reason to enter into a contract.

What kind of contract law would they prefer to have? Majority of 53% would like European
contract law replacing national contract law >< almost 40% would like to see European
contract law as an alternative to national contract law.
There are no huge obstacles for companies to enter into cross-border contract law:
harmonization law is only one piece of the puzzle, it may reduce the differences and then
lower the transaction costs, but there is no overwhelming problem of cross-border
transactions because of the differences between contract law.

Towards a European Civil Code? There are different perspectives on this question within the
EU institutions: the European Parliament is a believer in terms of very-far going in
harmonisation in the area of private area >< the European Council. There is a dream of a
European Civil Code. Was the idea to have a true European Civil Code or not? In the end, some
MS are reluctant of too much harmonization.

IV. EUROPEAN CONTRACT LAW – LEGAL FRAMEWORK

A. 1989 EP resolution
The EU had just signed the Single European Act for the creation of a “single market” (1986).

The European Parliament pointed out a fragmented harmonization and a need for a more
coherent harmonization / need for a modernized and common system of private law. We need

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to agree about the priorities and to have one perfect EPL. This Resolution aimed to promote
reciprocal understanding of various existing codes and systems of private law in MS. The EP
suggested a “unification” of >< harmonization: assistance with “unification” – moral and
material encouragement to studies of comparative law and to codifying endeavours.

It started with the preparatory work on a European Code of Private Law: MS that agree to
“unification” formed a committee of experts to define the priorities and organize the
undertaking of unification. In addition, there were some financial support centres for
comparative legal studies and codification endeavours.

B. 1994 EP resolution
In 1994, the European Commission had not yet undertaken preparatory work, but the EP
wanted to already go further à a progressive harmonization was essential to complete the
internal market. European Commission was called to commence on the possibility of drawing
up a Common European Code of Private Law. A Committee of experts was set to propose
priorities for partial harmonization (short term) and more general harmonization (long term).
The promotion of harmonization and standardization was made both at the world and
European level à the EP is a true believer not only in harmonization but also in unification
through a European Code of Private Law.

C. 1999 European Council Tampere Conclusions

The European Council dedicated a special meeting in Tampere, Finland, in October 1999, to
the establishment of an Area of Freedom, Security and Justice. At that time, there were not a
lot of concrete conclusions about contract law. One of them emphasizes the principle of
mutual recognition and of minimum harmonization à they wanted discretion for MS.

Conclusions, point 39: “As regards substantive law, an overall study is requested on the need to
approximate MS’ legislation in civil matters in order to eliminate obstacles to the good functioning of
civil proceedings. The Council should report back by 2001.”

D. 2000 EP Resolution – Commission’s work program

The Council was not doing anything, and the EP was encouraging it to do something. The
European Commission was again called to carry out a study à it was finally stated that there
will be a study, a communication, etc. The Commission was ready to answer to this class: it
replied in July 2000: they will present a communication to the other institutions and the
general public with the aim of launching a detailed and wide-ranging discussion.

E. 2001 Commission Communication on European Contract Law

So, the Commission agreed to write a communication. This is the first step towards the
implementation of the Tampere conclusions of the European Council.

What were the objectives of the Commission?

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- The objective was to identify concrete problems and to propose solutions.
- The idea was to bring all the stakeholders (businesses, legal practitioners, academics,
consumer groups, etc) and to do something about the fragmentation and gaps à broaden
the debate on European contract law, especially about cross-border transactions.
- Due to fragmented harmonization, the Commission wanted a case by case approach. Yet,
this approach would lead to inconsistencies and to a quite non-uniform implementation.
- It was also necessary to take into account future commercial and technological trends. T
- The focus was clearly put on cross-border transactions: are companies discouraged to
cross-border exchange because of differences in national contact laws? would this lead to
an increase in costs for companies?
- More precisely, the focus was put on contracts of sale and service contracts; rules on
performance, non-performance and remedies; formation of a contract, validity and
interpretation; rules on securities; unjust enrichment; tort law. The focus was not put on
employment law and family law (too much sensitive).

Gap analysis - analysis directive – topics

- Conclusion of a contract
- Form and content of an offer
- Is it a product, a service or a digital?
- Acceptance and performance of a contract (e.g. rights and obligations)
- Content of the information at various stages
- Execution and non-execution of the contract

There are overlaps with many DIR, including those studied in class (e.g. DIR 2011/83; DIR 90/314;
DIR 2000/35; DIR 86/653 relating to self-employed commercial agents; DIR on electronic commerce,
DIR on electronic signatures; DIR on resale right, DIR on public service contracts, DIR on public work
contracts). Many of the gaps analysis were actually made on the basis of the different existing
directives. They looked at the similarities, differences, interpretations between EU directives.
They also looked at EU case law. They gave an autonomous interpretation of different terms
such as ‘unfair terms’. They looked at abstract terms à what are the gaps? what are the
problems? /!/ importance of DIR 2011/83 on consumer protection.

The European Commission listed specific gaps in Annex III such as:
- Pre-contractual obligations and the link with information requirements: you can have information
requirements before entering into the contract/while the contract is performed/even after the
performance of the contract.
- Concept of “contract”: would this concept also cover precontractual obligations?
- Formation of a contract: offer and acceptance
- Form: electronically/written/oral
- Extra-contractual liability
- Contractual obligations: information requirements, rights and obligations of the parties and
execution obligations, guarantees.

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- Termination (and remedies)
- Extra-contractual liability

/!/ mandatory nature of consumer protection rules but minimum harmonization.

Solutions proposed by the Commission Communication

This 2001 Communication proposed 4 solutions, while always keeping in mind the subsidiarity
and proportionality principle. Is a combination of those solutions possible? Should we
differentiate according to sectors or have a real common set of rules?
1. No EU action and leaving the solution to the market:
- That is good from the perspective of party autonomy and freedom of choice of contract law:
private ordering mechanisms (e.g standard contracts: self-interest vs. public interest), trade
associations and PIL will remain important.
- A lot of power will be given to Member States
- But you will not remove all the differences.
- Soft harmonization
- Information and ADR mechanisms for disputes

2. Promote the development of non-binding common contract law principles:

- Existing work on common principles – further comparative research and cooperation
• Principles of European Contract Law/Lando Principles: would it be a good option to only
promote those principles?
• Academic initative supported by the EU
• PECL have been influential in recent legislative reforms of EU MS and even beyond eu
• Growing recognition of the need of harmonization
• Scope of application: commercial and consumer contracts
- Source of inspiration for national legislators, contracting parties, national courts, arbitrators
Some kind of informal harmonization through non-binding common principles = voluntary basis of MS.
- Common principles/guidelines/codes of conduct à creation of customary law
- Development standard contracts
- Broad dissemination
- But there will still be some gaps

3. Review and improve existing legislation:

Look at the acquis and see how we can improve the consistency, terminology, quality of the acquis. It
is good to have a common set of rules at the EU level and to clarify what is impossible à acquis review
and improving of quality will always be beneficial.

We have the Interim Report European Commission to the Stockholm European Council “Improving
and simplifying the regulatory environment”, COM(2001) 130: concerning consolidation, codification
and recasting; quality of drafting; coherence; coordination; simplifying and clarifying; evaluation
effects; extension of scope (e.g. exclusions).

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 4. Adopt a new instrument on EU level
It is the most controversial step. Should we go for a directive or a regulation or a recommendation
(which bring flexibility, transparency, uniformity, legal certainty)? Or maybe just a communication (the
European Commission has all these instruments according to the treaty)? Should it be of a binding
nature? The European Commission can promote the development of non-binding common contract
law principles, which would be purely optional and co-exist with national rules (on a voluntary basis).

Even if you would adopt a regulation, what about the default rules for parties to rely on in the absence
of a choice? And which would be the EU mandatory rules replacing national rules?

à what about a combination of all those solutions? These documents want to find solution
to the gaps/ analyse but also to raise a lot of questions. Maybe it could be better to review
and improve existing legislation, to create more coherence, clarifying thing, etc.

A. 2003 Commission Communication – Action Plan

The EU wanted minimum harmonisation: we can start with an informal harmonisation based
on the principles, the judges can already take this into account. For the solutions proposed,
the same process than the 2001 Communication has been used: identify the problems, issue
solutions and have stakeholder meeting à a follow-up of the 2001 Document. Stakeholders
could give their opinion on what were the problems and on what would be the best option.

What were the problems identified?

1.1. Uniform application of Community law
§ Similar situations treated differently (e.g. right of withdrawal, information requirements)
§ Applicability several Community instruments – conflicting results
§ Abstract legal terms (e.g. contract, damage, equitable remuneration - see Leitner-case)
§ Dilemma legislator sector-specific regulation
§ Inconsistencies national implementations
§ Minimum harmonization (e.g. cooling off periods) à EU minimum harmonization was posing
some problems because of differences.

1.2. Role of private international law

§ Choice of law
§ Bargaining power
§ Costs advice unknown applicable law (SMEs, consumers). The EU institutions are often very
worried regarding this cost.
§ EU minimum harmonization was posing some problems because of differences.

1.3. Implications internal market raised by the stakeholders

§ Mandatory vs. non-mandatory rules
§ “Standard” terms

What were the solutions proposed?

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 - Small minority support Option 1 to leave everything to the market.
- Considerable support for Option 2 to promote non-binding common contract law principles.
- There was an overwhelming majority support for Option 3 to review of the acquis
- There was a majority against Option 4 to adopt a new instrument (directive/regulation).

à Was it too early?

Common Frame of Reference

There is no need to abandon a sector specific approach. We can keep this approach.

The proposed action is a mix of regulatory (regulation, directives, recommendations) and non-
regulatory measures (co-regulation and self-regulation, financial interventions, information
campaign, voluntary sectoral agreements). We will increase the coherence of EU acquis/improve
the quality of the directive, we will give some money to the academics, so they can create a
Common Frame of Reference (CFR) à promotion of the elaboration of EU-wide general,
contract terms. We can then use this as a reference for harmonization, for inspiration. It will
also help to examine whether problems in ECL require non-sector specific instruments. They
thought that when they would have that, it would be enough à not true.

What were the objectives of the CFR?

- Review European contract law acquis:
§ Remedy identified inconsistencies
§ Increase quality of drafting
§ Simplify and clarify existing provisions
§ Adapt legislation to new economic and commercial developments
§ Fill and overcome gaps
- Increase convergence
- CFR could be the basis for the further reflection on an optional instrument in European
contract law: they had already realizing that with the big majority against option 4, if they
would harmonize in this field an optional and complementary instrument would be better.

What would be content of this CFR?

- Contract law
- Rules on conclusion, validity and interpretation of contracts, performance, non-performance,
remedies, credit securities, unjust enrichment.

What would be the sources of this CFR?

§ Common principles/best solutions national law (e.g. good faith, freedom of contract)
§ Case-law of national courts
§ Contractual practice
§ Existing acquis

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There is very long part about general principles. Also, what is the general rule in MS on the
conclusion of contract, who could use it, what would this optional instrument be? They were
bringing together many different actors. We got a bigger group of experts, which can help to
identify which directives can get priority. It is an optional instrument so the parties can decide
whether or not this would be applicable to their transaction. However, the parties are often
not aware of the existence of the document.

à Is it overambitious? It was indeed a very big project.

B. 2004 Commission Communication – The Way Forward

It is a follow-up of the 2003 Commission Action Plan. It gives a structure to the CFR:
fundamental principles (e.g. good faith, contractual freedom), definition (e.g. contract, damage)
and model rules (e.g. conclusion of a contract, form of a contract, validity, interpretation,
performance and non-performance, remedies, assignment, prescription).

The CFR can help also national legislators, arbitrators; it can be a basis for standard contact
terms (both in B2C and B2B transactions), for Commission contracts with third parties; it can
also be a basis for optional instrument (Annex II); it can be a source of inspiration for the CJEU.

On the one hand, CFR is about improving the present and reviewing the future acquis. On the
other hand, CFR is a toolbox to improve the quality and coherence of the acquis (=simplifying
the acquis) à parallel activities of these working groups, but with influence between them.

The EU Commission studied eight consumer directives: importance of the high level of
consumer protection; elimination of internal market barriers, regulatory simplification.
We were only in 2004 but the EU Commission highlighted that for the future, the CFR could
be used as a basis for optional instrument (because of the fundamental principles, definitions
and model rules it provides). It was also clear that the CFR would not be a binding instrument
(optional instrument – annex II) à opt-in (contractual freedom); binding/non-binding;
regulation/recommendation; general contract law and specific contract law; B2C and B2B.

Preparation CFR in 2004: funding (6th Framework Programme); governance and transparency:
stakeholder participation with several criteria (diversity of legal traditions, balance of
economic interests, commitment, technical expertise).

C. 2004 European Council Hague Program

It is a follow-up of the EU Council of Tampere “Strengthening freedom, security and justice”.
“3.4.4. Ensuring coherence and upgrading the quality of EU legislation: In matters of contract law, the
quality of existing and future Community law should be improved by measures of consolidation,
codification and rationalisation of legal instruments in force and by developing a common frame of
reference. A framework should be set up to explore the possibilities to develop EU-wide standard terms
and conditions of contract law which could be used by companies and trade associations in the Union.”

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In the end, this Program was not pursued.

Intermediate conclusions
- Starting point: freedom of contract
- Fragmented harmonization à need for action.
- Good governance - quality of acquis (consolidation, codification, recasting) à need for
action
- Cross-border transactions – Optional instrument à need for action.
- But there was also a need of funding for academics to make comparative analysis, etc.

Two major tasks remained (which were complementary):

- Drafting the CFR
- Consumer Acquis Review (it was necessary to test findings of the CFR preparation in a
consumer acquis review).

D. 2005 Commission First Annual Progress Report on European Contract Law and the
Acquis Review

Drafting of the CFR

- This report put the priority on consumer contracts.
- Who were involved? The authors of this report were researchers, CFR-network of
stakeholder experts and MS expert network.
- Was it a vertical or a horizontal harmonising measure? It is about the scope. For example,
the CRD is a horizontal directive because it covers very broad category of situations. It is
the result of this process >< DIR on travel package is vertical because it is limited to the
specific topic.
- The process of this drafting: interaction between proposals, comments, reports,
workshops, etc à European Discussion Forum.

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Should we keep the CFR broad? Should we have B2C and B2B? or should we just keep it with
consumers? The priority is about consumer contract /!/

Consumer Acquis Review

- Who were involved? The authors were the European Commission and the Network of
academics & legal practitioners.
- It was about the identification of regulatory problems, internal market barriers, consumer
protection lacunae; and problems which stem from directives or incorrect
implementation/application by MS.
- The process went through comparative law analysis (of legislation, national case law and
administrative decisions)/recommendation/consultation/comments/workshops.
- The possible outcomes were vertical harmonisation for individual directives and/or
horizontal harmonisation.

Promotion of elaboration of EU-wide standard contract terms

The European Commission also published available standard terms and conditions on a
website. But this initiative was not taken forward: there was already sufficient work with the
drafting of the CFR and the reviewing of the consumer acquis.
J. 2007 Commission Second Progress Report on the CFR (July 2007)

- Reprioritization consumer contract law issues

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The list of issues covered in the process became shorter and shorter. It was important to
reprioritize because the workload became heavier and heavier. The input came with the
Green Paper Review on Consumer Acquis of February 2007.
§ Consumer sales
§ Pre-contractual information
§ Unfair terms
§ Right of withdrawal (this right was already harmonized a bit, but not that much)
§ Right to damages
- Feedback from the European Council
§ Support prioritization consumer contract law issues
§ Separation B2B and B2C
§ We will never have a European Civil Code: maybe we should not try to put everything in one
big document.
- Feedback from the European Parliament
§ Support prioritization consumer contract law issues
§ Separation B2B and B2C
§ Need for cooperation with EP
§ The EP is a true believer of having a real uniform European Private Law. But it was also realist:
maybe we should focus on consumers now and then, if possible, go on general contract law.

K. 2008 Council report on CFR

This Report is a product of MS. It gave guidance on the CFR and proposed a Draft Common
Frame of Reference (interim edition):
- Purpose: there is no European Civil Code or set of standard terms à tool for better lawmaking.
- Content:
– Not mere consolidation and systematization, we need to do more.
– Definitions, general principles and model rules
– Based on Community legislation, national law, legal traditions, research
- Scope: General contract law, including consumer contract law;
- Legal effect: it is not a binding legal instrument for MS/ institutions, it gives guidelines, it is based
on a voluntary basis, it can be a source of inspiration or reference in lawmaking process.

L. 2009 Draft Common Frame of Reference

It was launched by the Commission on European Contract Law (Lando Commission) –
Principles of European Contract Law (PECL). The Study Group on a European Civil Code and
the Research Group on Existing EC Private Law (Acquis Group) were also involved à academic
text (not politically endorsed by the UN institutions). The UN and MS have funded it and
promoted it, but it is not their document.

- It can be used as a source of inspiration à it brings new developments and there has been
an input of stakeholders.
- Wider coverage than PECL/CFR: specific contracts, non-contractual obligations, movable
property

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- Not only consumer contracts, but also general contract law
- Useful when there is a reform foreseen in a country of their civil code: it gives an
overview of the majority positions in the different MS.
When the ECJ mentions that there is this draft common frame of reference, many actors will know
about it, the AG, for example, when dealing with European private law, can consult it and get
inspiration. Nevertheless, they are not forced to use this unless the rule is integrated in the national
civil code. Especially, it is very handy when there is a need to rethink national contracts law, countries
can look at the DCFR get some inspiration.

DCFR & Acquis Review

- Testing compliance with underlying principles
- Consistency, clear and coherent terminology (Leistner)
- Eliminating overlaps and gaps
- Identification best solutions - recommendations

Structure of the DCFR

It has a very clear structure. For example, it provides how it will deal with human rights. This
is a draft, it is probable that it will have a non-binding character.
- Principles
– Interim edition: 15 principles (e.g. justice, freedom, internal market, welfare, cultural
and linguistic diversity, protection human rights, legal certainty, rationality, predictability,
efficiency, solidarity and social responsibility)
E.g.: prescription is a balance between legal certainty and justice; non-discriminaiton is a balance
between contractual freedom and justice.
– Conflicting principles – model rules
– “Principes directeurs”: contractual freedom, contractual security and contractual
“loyalty”
– Underlying principles vs overriding principles à overlap
– Underlying principles
• Contractual freedom: mandatory rules; default rules; whether/with
whom/under what conditions?
• Security: binding force contract, unless exceptional change of circumstances;
good faith and cooperation; certainty and flexibility; effective remedies.
• Justice: equal treatment; no reliance on unlawful, dishonest or unreasonable
conduct; no grossly excessive demands; protecting the vulnerable
• Efficiency: minimal formal and procedural restrictions; eficient default rules;
Information duties; stability.
– Overriding principles
• Protection human rights (non-discrimination)
• Promotion of solidarity and social responsibility (donation, trust)
• Preservation of cultural and linguistic diversity
• Protection and promotion of welfare
• Promotion of the internal market

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 • Freedom
• Security
• Justice
• Efficiency

- Some examples of definitions

– good faith and fair dealing (art. I.-1:103 DCFR)
– reasonableness (art. I-1 :104 DCFFR)
– consumer (art. I.-1:105 DCFR): “any natural person who is acting primarily for purposes which
are not related to his or her trade, business or profession” à this definition is modelled on
directive consumer protection, procedural law, case law and legislation on conflict of laws.
– business (art. I.-1:105 DCFR): “any natural or legal person, irrespective of whether publicly or
privately owned, who is acting for purposes relating to the person’s self-employed trade, work
or profession, even if the person does not intend to make a profit in the course of the activity”
à this definition is modelled on directives, procedural law, case law and legislation on conflict
of laws.

- Model rules (including comments and notes)

You can use it as a source of inspiration; it is a mode law. These are all the topics that were
kept after all the communications (overview):
I - General (field of application, good faith, “consumer”, “business”)
II - Contract and other juridical acts (“contract”, party autonomy, non-discrimination,
pre-contractual duties, formation contract, offer and acceptance, right of withdrawal,
invalidity, interpretation, content, unfair terms)
III - Obligations (performance, non-performance, termination).

It is a very rich document in terms of harmonization, looking at case law, directives, MS

national law à very useful document. You also see the link with the DIR studied in class.

M. 2007 Commission Green Paper on the Review of the Consumer Acquis, COM
(2006) 744 Final
There is a whole long life and harmonization process before the adoption of a Directive of
Regulation. Green Paper is one of these soft-law instruments. The European Commission
evaluated eight Directives (because of incoherence and ambiguities) and focused on the:
- Evaluation of MS implementation à considerable differences.
- New market developments (digital technology, digital services, on-line auctions),
- Fragmentation of rules
- Lack of confidence consumers (see Eurobarometer survey): not only related to law, it may also be
related to other issues.
The Commission came up with possible options for the future:
1. Vertical approach?
2. Is there some room for a mixed approach? Could we envisage a horizontal
instrument combined with vertical action?

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 3. No legislative action

à what do we know now? what do we do? what do we want for the future?

The idea was to have a broader scope of this horizontal instrument: should it be minimum or
maximum harmonization? Should it focus on both domestic and cross-border instruments?
Should it be distance selling or face-to-face selling? All these questioning resulted in the
adoption of Directive 2011/83/EU on consumer rights.
• What about the history of this Directive?
• Horizontal or vertical instrument?
• Does this instrument apply both to domestic and cross-border sellings?
• Distance selling and face-to-face?
• Full or minimum harmonization?
• Consumer/business?
• Definitions?

N. EC Consumer Law Compendium – Acquis Review

- Evaluation of the eight Directives: incoherence and ambiguities
- Evaluation of the implementation by MS: considerable differences
- Common structures in the DIR: notions of consumer and business; right of withdrawal;
information duties
- Recommendations: horizontal measures (directive/regulation) à definitions; information
duties; general rules of withdrawal; mandatory consumer rights; relationship between
consumer rights and choice of law clauses.

O. 2010 European Council Stockholm Programme (2010-2014)

It is a follow-up of the Tampere and Hague Programmes. There were challenges due to the
2008 financial crisis; it recalls that the CFR must be a tool for better lawmaking.
“The European Council reaffirms that the common frame of reference for European contract law
should be a non-binding set of fundamental principles, definitions and model rules to be used by the
lawmakers at Union level to ensure greater coherence and quality in the lawmaking process. The
Commission is invited to submit a proposal on a common frame of reference.”

P. 2010 European Commission “Europe 2020”, COM (2010) 2020

This document is much broader than the type of documents we discussed before. This is
broader than contract law. What happens in contract law fits in here as well. It is good for the
EU if there is more cross-border trade à it is related to the harmonization and the
development of common rules because costs of transaction have an impact on the economy.

It deals with the EU’s growth strategy for a smart, sustainable and inclusive economy and a
high level of employment, productivity, social cohesion. It presents 5 targets for the EU in
2020 (employment, R&D, climate change/energy, education and poverty/social exclusion).

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The aim of contract law is to make it easier and less costly for businesses and consumers to
conclude contracts with partners in other EU countries by offering harmonised solutions for
consumer contracts, EU model contract clauses and progress towards an optional European
Contract Law. It is also linked to the Digital Agenda for Europe (Flagship Initiative).

à this is not only about contract law, maybe they see contract law as a tool that can be used
within the context.

Q. 2010 European Commission Decision setting up an expert group on a CFR in

the area of European Contract Law
It deals with feasibility of user-friendly instrument of European contract law; B2B and B2C;
legal certainty; selection parts of DCFR which are directly/indirectly related to contract law
(other research, acquis review); restructuring/revising/supplementing.

It is again an expert group of 20 independent members (scientific and research organizations,

legal practitioners, civil society from different geographical, gender and cultural backgrounds).

à what do we need to do? Do we need to do more? Do we need to go further in

harmonisation?

There were also some “optional” elements: idea which started in those earlier documents of
the harmonization process but continued to be taken up again and again as an optional option.
In 2010 there was again a new expert group set up à involvement of experts, academics and
other stakeholders helping the Commission to draft documents. The Commission explicitly
says that if we harmonize this area well, if we are capable of having one European contract
law this can also be used as a model for other regional/international organizations, which are
so far mostly focused on the internal market and freedom of movements.

R. 2010 Commission Green Paper on policy options for progress towards a

European contract law for consumers and businesses, COM (2010) 348 final

Regarding the policy option, we are dealing with all the same issues: B2B vs. B2C; facilitating
cross-border transactions (transaction costs, legal uncertainty, lack of consumer confidence,
language issues, advice foreign law); based on the PECL, UNCITRAL, CISG à uniform international
standards; competitive advantage of the EU.

Do we have a stronger language than in previous communications?

The Commission already gave four options. In addition, three additional options have been
proposed in this 2010 Green Paper: 5) Directive on ECL; 6) Regulation establishing ECL; 7)
Regulation establishing a European Civil Code à importance of the principles of subsidiarity
and proportionality in the process of these documents.

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 • Binding or non-binding instrument?
• The initial preference was also to include B2B, but you can see in the 2019 DIR that finally it
did not end up in the inclusion of B2B transactions à separate documents for B2B and B2C
transactions.
• Cross-border and domestic? Online environment?
• Material scope? Narrow/broad definition of contract, pre-contractual duties, formation, right
of withdrawal, representation, grounds of invalidity, interpretation, contents and effects,
performance, non-performance, plurality of debtors/creditors, change of parties,
prescription, merger); specific types of contracts? service contracts?
• Link with the European Civil Code project/process?

Again, the question is what do we do in 2010? where should we go? where should be the
focus? What kind of instruments should we opt for (binding or non-binding)? Can we go for a
European civil code? There was no support for the most far going options (options 3 + 5-7)
but there was so support1 for option 4 = complementary but not replacing instrument. Option
4 provides for a regulation optional for the MS. It is very strange, because normally a
regulation is never optional. Now it is optional for the people doing a transaction. We are
playing with the possible instruments. It is soft-law, optional for the parties on whether they
want to use it à for option 4, principles of subsidiarity and proportionality are very important.

/!/ EXAM: we should always discuss: B2B/B2C? which harmonization? which scope? is it cross-
border or domestic? legal basis? purpose of the DIR? à we need to look at the DIR and make
all the considerations we made for the directive for the group assignment.

S. 2011 Feasibility study carried out by the Expert Group

The mandate of the Expert Group was:
• For B2C transactions it is mandatory >< for B2B transactions freedom of contract.
• Sales contracts and service contracts associated with sales • Self-standing instrument
• User-friendly and clear
• High level of consumer protection
• Introductory provisions
• Formation of contracts and right to withdraw or avoid
• Contract content
• Obligations and remedies à installation, maintenance or repair
• Damages/Interest/restitution/prescription.

T. 2011 Commission communication on a common European Sales Law to

facilitate cross-border transactions in the Single Market, COM(2011) 636 final

1
Resolution EP June 2011 on policy options for progress towards a ECL for consumers and business & Opinion
European Economic and Social Committee March 2011.

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It focused only on cross-border transactions; B2C (CRD but still differences between MS) and
B2B (few specific issues harmonized, CISG then applies).

U. Proposal for a Regulation of the EP and of the Council on a Common European

Sales Law, COM (2011) 635 final
- The legal basis was also Art. 114 TFEU.
- Behind this proposal we had a “Toolbox” Expert Group, Sounding Board and the feedback
of stakeholders.
- It provides for a comprehensive set of uniform contract law rules.
- It is a “second regime” of contract law: in other words, it is an an optional regime (opt-in
or opt-out).
- It focuses on cross-border contracts (transaction costs, complexity): MS may include
domestic contracts.
- B2C and B2B (including SMEs): MS may include C2C and all B2B.
In terms of legal certainty it could be good to have the same rules for domestic and cross-
border contracts. It focused on B2B and B2C.
- High (common) level of consumer protection
- International dimension
- Flanking measures (e.g. development of a “European model contract terms”)
- Again, importance of the principles of subsidiarity and proportionality /!/
- Relationship with choice of law rules is without prejudice
- Relationship with Article 6(2) Rome I: there is no problem; PCESL offers a high level of
consumer protection and fully harmonises mandatory consumer protection rules.
- It also provides some content on digital content (related services: repair, maintenance,
installation)
- Freedom of contract and party autonomy (Art. 1 CESL)
- Agreement of the parties (Art. 8 PCESL): it is important that both parties can understand
this choice and be informed à they should agree.
- Informed choice (Art. 9 PCESL).
- Annex I CESL: introductory provisions; making a binding contract; assessing what is in the
contract; obligations and remedies of parties to a sale; obligations and remedies of parties
to a service; damages and interest; restitution; prescription; Appendix 1 and 2 (model of
withdrawal form).
- Annex II Standard Information Notice CESL

/!/ It is quite strange to have a regulation (very far-going document) which is optional (not
automatically binding for MS, opt-in or opt-out option) = HYBRID DOCUMENT.

à READ Art. 3 PCESL (optional nature); Art. 4 PCESL (cross-border contracts); Art. 5 PCESL
(sales contracts, digital content, related services); Art. 6 PCESL (B2C and B2B SME). These
provisions help understanding the wording/construct of the optional nature of the regulation.

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Further questions and considerations
• Self-standing set of contract rules?
• Sufficiently clear?
• Legal certainty?
• Mandatory provisions?
• High level of consumer protection?
• Increased competition internal market?

Look at the structure of this proposal but do not study it because actually it was never adopted
because it was very controversial, in particular the very broad scope, the hybrid nature of this
document, the very detailed rules à in the end it was unsuccessful!

What were the alternatives after this unsuccessful proposal?

There are still many things that are unclear (e.g. conclusion and performance of contracts).
They continued to discuss and to think about alternatives: what should be the next step after
this unsuccessful proposal?
• More specific instruments: focused on digitalization
• International agreement
• Spill-over
• Mutual learning between courts
• Cooperation between regulators
• Educating lawyers
• Open-method of coordination (OMC)

What we see is that those alternatives promote mutual learning/best practices/soft law. It
must be a voluntary decision and includes all actors (e.g. legislators, judges, regulators,
academics, private actors, NGOs).

V. Digital Content Directive 2019/770

• It focused on B2C only.
• Its scope includes digital content and services (see relationship with DIR 2019/771).
• Self-standing set of contract rules?
• Is the scope sufficiently clear? Is the relationship with DIR 2019/771 sufficient clear?
• Mandatory provisions?
• High level of consumer protection and legal certainty?
• Increased competition internal market – easier for SMEs to sell EU wide
• Maximum harmonization but…..

W. Sales of Goods Directive 2019/771

• It focused on B2C only.
• Its scope covers all types of goods, including goods with digital elements.

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 • Self-standing set of contract rules?
• Is the scope sufficiently clear? Is the relationship with DIR 2019/770 sufficient clear?
• Mandatory provisions?
• High level of consumer protection and legal certainty?
• Increased competition internal market – easier for SMEs to sell EU wide
• Maximum harmonization, but….

V. CONCLUDING REMARKS
- Organic” growth European private law
- Importance of the whole “legislative path” behind the legislative instrument to correctly
understand and interpret those documents
- Complicating or simplifying the legal environment?
- Is this EPL too broad or not broad enough?
- What about the role of DIR 2011/83 and its role with other documents?
DIR 2011/83, DIR 2019/770 and DIR 2019/771 are the result of these long processes, but their
result is much narrower than the one expected in the proposals and in the process.

Questions we can get at the exam about a directive

Is this B2C or also B2B?
Are there unclarities?
What is the scope?
Is it horizontal or vertical?
Is this domestic or cross-border?
Is the harmonization minimum or maximum?
Does it leave discretion?
Do you find it a good directive?

EXAMPLE OF AN EXAM QUESTION: summarize the important steps of the harmonization of European
contract law and illustrate the big controversies in that process through 3 concrete examples in the
Common European Sales Law / in the 2019 Directives à try to understand the process, the important
questions that came back in this whole process.

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PART VI - INTERNATIONAL AND EUROPEAN HARMONIZATION OF EU COMPANY LAW

This is not part of the exam materials since this guest lecture was not given J

I. INTRODUCTION TO COMPANY LAW

Some ideas:
- Companies can have various establishment;
- There is the issue of public limited liability;
- Company law relates to the establishment, existence including its governance, and liquidation
(outside of an insolvency context) of a company; to the organisational rules/structure of a
company from the beginning to the end. The relationship with workers is not company law.
- Companies have the Freedom of establishment.
- 2 PIL theories regarding which law is applicable to a company exist:
• law of the creation/statutory seat doctrine (e.g. Belgium)
• law of the real seat
- There is a new 2017 Directive (Directive (EU) 2017/1132 of the EP and of the Council of 14 June
2017 relating to certain aspects of company law), successor of the shareholder right I directive,
which is only for shareholders and listed companies (shares are listed on the stock market).

1) Company law is not comprehensive (not all-encompassing). There is no one set of rules. It
addresses certain aspects related to companies or certain company’s form. It had never been
an EU objective to address everything in company law. A large extend is still national. The EU
regulated it only when it though there was a business need.

2) Inaction: The last decade, very little attention was given to company law at the European
stage, due to the 2008 financial crisis (bank crisis with investors losing a lot of money). Due to
the crisis, the EU intervened to protect the investors. This inaction for company law led to a
lot of actions at the domestic level. If Europe is not improving (top-down), then the national
legislator can innovate (bottom-up) to create a good environment for company. It led to the
so-called competition for charter: the MS try to make company law attractive but not at the
detriment of the creditors. In BE, the new Belgian company code is a result of the EU inaction.

II. HARMONIZATION
The European treaty, as interpreted by the ECJ but limited. They relate to only two aspects:
- Freedom of establishment (freedom to move around your seat)
- Free movement of capital (freedom to invest in a company in the EU)

A. Freedom of establishment
Lot of cases about FoE rules before the CJEU because this freedom is rather vague, bit by bit
the CJEU gave substance to it.

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E.g. - CJEU: When a home country accepts for a company to move, the company can move to another
country. A host country can have to apply a foreign law in its jurisdiction. For example, the company
law of company A can travel to company B. A branch was established in Denmark and the UK company
could be established there because there is not a requirement anymore. UK law is applicable to
Denmark. This relates to the extent to which the host country has to accept the foreign law to be
applied in its jurisdiction. The right to leave is a privilege of the home country (// Daily Mail)

Polbud Case
This case is an extreme attend of the CJEU to liberalise the freedom of establishment. ECJ
recognize that there is free competition between MS, it was also an inspiration because there
was never the political motivation to introduce a cross border trans-border seat. It is about a
Polish company registered in Luxembourg (according to Luxembourg law). Because of the
registration, lux law is applicable to a polish company (which has no connection to
Luxembourg). The CJEU said that it is included in the freedom of establishment. It means that
when establishing a company, we can choose where and we can freely choose to move the
seat by just registering in another country. Companies can choose any company law. MS
cannot impede this, they must allow it. Companies can move around freely. The bold moves
of the ECJ inspired the EU Commission: it is easy to give a cross-border transfer seat directive
(it’s on the way). This case is an exception to the European inaction. Transferring seat means
transforming the applicable law à according to this case, a company can move freely. For
example, a Belgian company can transfer its seat to France, but then will become a French
company. There is a need for an European procedure for this because if we just follow national
law, there will be a lot of difference. We therefore need harmonisation on this topic as the
transfer to different law will be complicated. This is why the commission is intervening.

B. Free movement of capital

Relate to the so-called golden share cases: share held by Government or Government
controlled entity that grants special rights in a company, meaning right that go beyond
company law (veto rights at the general level of). Cases are all the same: formally government
owned entity that is privatized. It means that company should be controlled by private
investors instead of the government (example: oil and gas (BEL), public transport (UK). All
cases related to privatization, yet all the cases of golden have been annulled except for the
Belgian one; giving special rights to government is possible but they should be very much
delineated and not subject to any discretion by the government. Only Belgian succeeded.
Foreign investors could be scared by the golden shares taking over control of company is not
possible due to special rights.

C. Harmonization through Directives and regulations

• One of the first directive was about the importance to inform whose the directors of a
company. When you appoint a director in a public or private limited liability company, the
decision has to be published. It is about substantial rules of specific areas of company laws.

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E.g.: Limitation of the power of the board cannot be opposed against the creditors (creditors
protection rule). Harmonizing directives are addressing certain aspects of company law, never all.
• Regulations are introducing European company forms:
- EEIG (European Economic Interest Grouping): an EU legal entity designed to enable cross-
border cooperation between companies. It has unlimited liability and is not liable
for corporation tax.
- SCE (Societas Cooperativa Europaea): a European Cooperative (Societas Cooperativa Europaea
is Latin for "European Cooperative Society").
- SE (Societas Europaea): a European (Public) Limited Company. If there are problems with
relation of workers, there is the possibility for them to interfere through voting for ex. In GER
and CHE, there is a mandatory involvement of the workers. So we can use the SE to have less
mandatory involvement.

• Need for a minimum capital: the EU has introduced this condition in the 2nd directive about
capital on issuing dividend in 1976. Belgium would use this DIR to other company forms as
well, which was not required: expanded the working of EU law. BE used this directive as
the ‘capital’ concept is interesting and created more companies subjected to the directive.
The Dutch said that the ‘capital’ concept is useless, so it launched a company vehicle not
subject to the directive/not subject to capital. The NDL took the strategic option to create
a vehicle to make it not subject to EU law. Yet, the Belgian legislator later accepted that
the Dutch approach was better: expansion of EU law is now reversed in Belgium.
Gold-plating is now reversed in company law. All Europe that could be reversed is reversed.
Gold-plating is a pejorative term to characterize the process where an EU directive is given
additional powers when being transposed into the national laws of member states. In
operational terms, the European Commission defines gold-plating "an excess of norms,
guidelines and procedures accumulated at national, regional and local levels, which interfere
with the expected policy goals to be achieved by such regulation."

• Recent actions at the EU level

§ Directive on digitalisation (will probably be voted in 2020): there is now the possibility to
establish company online (not for all company’s forms).
§ Cross-border transfer of seat
§ Directive of 2017 related to shareholders and listed company

• Conclusion:
o Basically, now we have the Directive 2017 (success, for shareholders and listed companies),
and that’s it.
o Harmonisation is not obvious sometimes. Sometimes, there is no need for harmonisation.
o European Company law is not encompassing ‘cherry picking’
o ECJ expanded freedom based on the treaty.

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PART VII - HARMONIZATION OF PRIVATE INTERNATIONAL LAW

This guest lecture of Prof. Kruger will focus on the international and European harmonization
process of private international law. We will look at the harmonization of private international
law. This international and European levels are intertwined.

Introduction on Private International Law

- Is PIL not the exact opposite of harmonisation?
On the one hand, it is the opposite since PIL leads to the application of different national rules,
depending on the forum. On the other hand, States are now uniformizing their laws, some PIL
rules are indeed already harmonized at the European or international level à harmonization
of private law (e.g. harmonization of consumer law, if you harmonize that you do not need PIL
anymore because French law will be almost exactly the same of Belgian law) ≠ harmonization of PIL
(e.g. private law of different countries still varies, but at least there are some common procedural rules
on deciding which law is applicable or which court is competent).

- Why should PIL be harmonised?

It is already a trend: we went towards harmonization to have a consensus on to choose the
applicable law and the competent court. In the EU, if we have a common market and easy
movement of goods, persons and capital across borders, it makes sense to agree on which law
will apply to a sales or services contract.

- When did the endeavours to harmonised PIL start?

There have been different forms of harmonization: 1) at the regional level: in the EU, it started
with the creation of the area of freedom, security and justice >< in other regions of the world,
there has been several points at which this harmonization started; 2) at the international level,
there has been calls for harmonized PIL already in the 1900s.

I. THE STATUS AND PLACE OF PRIVATE INTERNATIONAL LAW

A. Is PIL national or international?
PIL is a system linking the systems, which necessarily differ from each other. If national laws
are identical, there is no need to have PIL rules because the same rules will apply.

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 B. Von Savigny
• Von Savigny is an important German scholar in the development of PIL.
• He considered that if PIL regulates the system, it obviously needs to be international law,
it cannot be national. PIL is a branch of international law in its essence.
• He said that we need a universal approach between nations. How to do it? For him, it
must be the same for all the contracts.
We need to start from the legal relationship and not a system: if we know that, we will bring
this legal relationship into a legal system: he did not start with the idea that we have different
systems with all their different approaches, he started with a universal approach between
nations à seeking of sitz of a legal relationship à sitz = legal system that can claim application
• He was criticised because he said that it is self-evident that sometimes foreign law needs
to be applied. Foreign law is not a concession, it is the natural law of the legal relationship.
Ex: if there is a contract between a GE and a FR, we need to see where is the sitz = the seat of the
legal relationship = the natural law of the legal relationship.
• This approach is neutral as we start from the legal relationship or legal fact, and not from
a particular national statute or legislative intentions.
• The idea that foreign law is equal to national law was criticised. Before him, people started
from the statute itself: you look at the law, and the law gives its scope >< the idea of a
determinant legal relationship for Von Savigny.

Twisted developments
• National sovereignty: in the 1800s, sovereignty was of great importance. It was the time
of nationalisation in terms of bringing more power to the nation-state (every state has its
own laws, etc).
• Codifications: in Europe, countries were making codification. In these codifications, there
were sometimes references to international situations.
• Different connecting factors: nationalisation was problematic for international trade:
there is indeed a problem in having different connecting factors in an issue. It is better to
unify these rules so that we at least know that no matter the competent court, the same
law will be applicable.
- Von Savigny: determine the seat of the legal relationship = jurisdiction with the closest
relationship
§ Proximity theory – closest relationship
§ Starting point – relationship involved – no more focus on scope of
applicability of statute but what is the seat of relationship.
- Statutists – determine the scope of application of the statute;
§ PIL as set of attributive rules – international relationship attributed to
certain nation, whose law is applicable;
• International harmony of decisions if all States apply this system of applicability of closest
legal relationship.
• Bilateral rules (blind attributive rules): applicability of foreign law or application of lex fori
can be applied.

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• Ordre public: if the applicable foreign law is too shocking, then you can avoid applying it
by invoking public policy.

C. Which law is applicable?

It depends on who you ask, on who will be competent.

II. PRIVATE INTERNATIONAL LAW IN THE EU

In the 60s, they realized that if we have an area of free movement (especially of capital) we
will have to harmonize. If you don’t get pay, you will have to initiate proceedings. EU started
on the procedural side of PIL (i.e. jurisdiction and recognition and enforcement of
judgements). As from the 70s, the EU looked at the law applicable to contracts. There was a
need to have a harmonized approach on the applicable law: common rules are clearer, we
know what and where are the rights. It is also easier for the parties to negotiate alternative
solutions rather than going to courts because they know what are the common rules
applicable, that would in any case be applied by whatever court.

A. EU is an area of easy and free movement

The EU wants easy movement of goods, capital and persons, so the debtors would move their
money. National private international law meant that 1) it was easy for the debtors to hide
and 2) there was uncertainty in the contracts (//conflicts-of-law). Therefore, there was a need
for change and to be able to enforce the orders. Moreover, there was a need of a harmonised
approach to determine the applicable law to overcome this uncertainty. EU PIL first started
on the procedural side (jurisdiction, recognition and enforcement) with the 1) Brussels
Convention 1968 on Jurisdictions and recognition and enforcement of judgements and it quite
fast also covered the question of the law applicable to contracts with the 2) Rome Convention
1980 on law applicable to contracts.

B. EU PIL – Treaties

From the third pillar to the first pillar

It was part of the “third pillar” (police & judicial cooperation): actions could be taken in the
sphere of PIL based on the third pillar. It was a forum where MS could negotiate and come to
an agreement. Their decision had to be signed by each State à intergovernmental approach
of international law. Rome Convention and Brussels Convention were still international law, it
was not about an EU law that would be directly applicable.
Then with the Treaty of Amsterdam (1997 – into force in 1999) moved PIL aspects to the first
pillar: it became an EU matter, which means that the EU could legislate on this area through
regulations, directives, etc à Art. 65 ToA: PIL almost became a goal in itself: “judicial
cooperation in civil matters having cross-border implications…insofar as necessary for the
proper functioning of the internal market”. The EU could make regulation on ‘judicial

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cooperation in civil matter’ i.e. on PIL. There were many discussions on what it means ‘insofar
as necessary for the proper functioning of the internal market”. It must be interpreted strictly.

At the time of the ToA, three MS were reluctant: Denmark, UK and Ireland. A compromise was
set. Some MS wanted to transfer PIL to the EU level, so the compromise was that it would be
possible but only for the proper functioning of the internal market:
- UK and Ireland were divided as they wanted PIL but other topics were debated. Then it was
decided that every time there is a measure taken under Art. 65, they have an option (opt-in and
opt-out). They can do this whenever they want even after the measure has been taken. They will
opt-in after the negotiation, and during the negotiations, they will use it to modify the legislation,
e.g. we will not be part of this future legislation (opt-out) if there is not this and this. The other MS
wanted the UK to be part of the Treaty.
- Denmark had an option to change the Protocol to have the same situation than UK/Ireland (opt-
in and out options); but a referendum went in favour of their first position. They didn’t want the
opt-in/opt-out possibility à Denmark opted out of the Treaty of Amsterdam.

Some issues
Some say PIL harmonization was necessary for legal certainty in the internal market. On the
one hand, is the Rome Convention on the law applicable to contracts necessary for the proper
functioning of the internal market? On the other hand, when people contract across the
borders this also lead to risk of legal uncertainty. Traders would maybe refrain from trading if
there is a lot of legal risks. But truth is that traders don’t make their decisions based on the
law or on the legal uncertainty arising from a contractual dispute. At the same time, they don’t
want to waste time and cost on trial since this would impair the internal market.

E.g.: dispute arising because you have not delivered the right chocolate to a German company.
German law says it is not good enough and according to German law, you don’t have to pay for the
chocolates. The Belgian law says that it should be under Belgian law and Belgian laws offers more
nuanced solutions than just not paying à in this situation, having rules on the applicable law is
necessary for the proper functioning of the internal market.

E.g.: are rules applicable to divorce necessary for the proper functioning of the internal
market? It will always be connected somehow. Depending how far you argue, you can always have a
link. As an example of a link made with the internal market, if people work abroad (free movement of
workers) they take their family with them, and then they divorce, but which rules will be applicable?

E.g.: 2019 Regulation on matrimonial property is an example of enhanced cooperation; Rome

III on the law applicable to divorce and legal separation. For example, some MS did not join Rome III
because they did not want to recognize same sex marriages.

The fact that EU is moving towards this area is a sign that EU is taking too much power from
the point of view of MS >< UK did not agree with that.

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TFEU – Treaty of Lisbon 2012
Things became even broader with the TFEU (Lisbon, 2012): “particularly when necessary for
the proper functioning of the internal market” à you see the difference between “insofar as”
and “particularly when”, it is now broader, it should not be strictly necessary for the internal
market. ToL loosened the link with the internal market to be able to include “particularly”.

Ordinary legislative procedure to adopt EU PIL rules, except for family law which still needs
unanimity in the Council. Every MS has the right to veto in family matters. With the OLP, the
EU Commission initiates the proceedings, then it goes to the Council and EP (majority).

Civil proceedings, ADR and training became included in the field of PIL.

C. EU PIL – Legislation
EU has mostly legislated in PIL through regulations.
- Jurisdiction and recognition & enforcement
- Applicable law
- Mixed: maintenance, insolvency, succession, matrimonial property, register partnership.
- (other aspects of procedural law)
- Various domains of private law

D. Rome I Regulation – Regulation 593/2008

Rome I is an EU PIL instrument on the law applicable to contracts.

There were a lot of litigations about forum. If we harmonized how to find the applicable law,
there is no more need to fight about the jurisdiction.

The purposes are: legal certainty – counter forum shopping – facilitation of cross-border
business.
Rome I provides for two general rules: party autonomy (parties can choose the applicable law
through an choice-of-court agreement); and if no agreement, habitual residence of the seller,
with some variations. It also provides two exceptions: public policy and mandatory provisions.

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Public Policy exception - Art. 21 Rome I
Whenever the applicable is against national public policy then the court of the forum can
refuse to apply it. It is for each MS to decide what is public policy. In the EU context, it is very
limited. We have a unified system of PIL but there is still some diversity. The CJEU gave a lot
of judgement on this topic, especially regarding Brussels I à need of mutual trust among MS.

E.g: C-681/13, Diageo Brands v Simiramida - the Fundamental misinterpretation of trademark

law: in a previous case before Bulgarian courts, the Bulgarian company Simiramida imported some
“Johnny Walker” bottles. However, the Dutch company Diageo Brands is proprietor of the trade mark
“Johnny Walker” and has an exclusive local importer in the Bulgarian market. Diageo Brands
considered this to be an infringement of its trade mark and requested to have it seized. Bulgarian
courts however annulled that order. In the present case before Dutch courts, Simiramida requested
the Netherlands courts to order Diageo Brands to pay it, by way of compensation for the damage it
claims to have suffered as a result of the seizure carried out at the request of the latter company.
Simiramida bases its claim on the judgment given by the Bulgarian courts which held that seizure to
be unlawful. In its defence, Diageo Brands submits that that judgment cannot be recognised in the
Netherlands on the ground that it is manifestly contrary to public policy in the Netherlands, since
Bulgarian courts sad manifestly misapplied EU law. The Dutch courts upheld the arguments of Diageo
Brands because Bulgarian courts misinterpreted trade mark law. They nevertheless referred to the
CJEU à public policy really depends on the MS themselves; there is the principle of mutual trust
within the EU that all MS must apply according to which all MS/judges are equally capable of
interpreting EU law. If they don’t apply it correctly, it’s not an issue of public policy à public policy
exception is allowed only in exceptional cases.

Ex: C-302/13, FlyLAL v Air Baltic: FlyLAL, a Lithuanian airline, acted in a non-competitional way,
because it forced Air Baltic out of the market. The court said that was not an issue of public policy to
refuse a foreign judgement. The court emphasised the idea of mutual trust à issue of competition
law. But the CJEU made clear that it was not public policy.

Negative dimension of public policy: applying conflict rules on recognition and enforcement
of a foreign judgment may result in unacceptable results in view of the lex fori.
- PIL can contain implicit or explicit reservations to refuse application, recognition and enforcement
in such cases;
- Invoked when foreign law is manifestly incompatible with the fundamental principles/public
policy of the forum country.

Overriding mandatory provisions – Art. 9 Rome I

Overriding mandatory provisions of the forum or other State: harmonization of PIL recognizes
severe differences in domestic laws. These OMP are rules which cannot be derogated from by
parties in normal national proceedings, because, for example, it will be against fundamental
principles or fundamental protection. Those rules impose themselves.
- Incompatibility with those does not amount to incompatibility with public policy;

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- Based on principle so fundamental that they deserve protection of the public policy reservation
and must be applied to case regardless of the applicable law.

The difference with public policy: in PIL, there is a need for a connecting factor bringing the
case to a particular law. If that law contains something that is contrary to fundamental values
(outrageous), the provision will not be applies = public policy exception, which is a negative
dimension >< rules are so important that they will be applied no matter what = overriding
mandatory provisions = positive dimension.

E.g.: CJEU, C-381/98, Ingmar GB: Ingmar GB was an agent, appointed by a Californian company,
for representing the company in the UK. Californian law was chosen as the applicable law. A dispute
arose and the contract between the agent and the company terminated. The company did not pay the
amount that had to be paid under EU law. Ingmar thus went to EU court and argued that the Directive
on agency was an overriding mandatory provision. A directive can be a source of OMP. A Directive
needs to be transposed in national law, and EU law can be an OMP.

But if a directive can be an OMP, can a national legislation transposing a directive be an OMP?

E.g.: CJEU, C-184/12, Unamar: Belgian commercial agent went before Belgian courts. The
princpal (BUL) argued that Bulgarian law had been chosen as the applicable law to the contract. The
agent (BE) argued that the choice should not be followed, because there is an overriding mandatory
provision of Belgian law. BEL and BUL are both EU MS, so both of them have transposed the Directive.
Belgium decided to give additional protection to agents: Belgian transposition went further, but the
Bulgarian one was correct, it was in compliance with EU law, but less protective than Belgian law which
went further. This case went before the Belgian Cass: can the BE transposition (of harmonised law) be
an overriding mandatory provision? The CJEU considered that this extra rule could also be considered
as an overriding mandatory law à even if we have harmonization through directives, even the part
that is not harmonised can be considered as mandatory for a specific country, insofar as the legislator
has properly justified this decision to transpose it into an overriding nature.

So, there is harmonization but there is fragmentation as well.

E. Interface between Rome I and other harmonization

- Posting of workers: The Posting Workers Directive ensures minimum wages by applying
the law of the place of working. But the place of working as the connecting factor might
be different from the connecting factor laid down in Rome I Regulation. There is now a
pending case at the CJEU on the relationship between posted workers and Rome I.
- E-commerce
- Assignment of claims

They harmonised law with some PIL aspects.

F. Further fragmentation

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- Concerns about further fragmentation and the special position of Ireland, the UK and
Denmark, which have opt-in options to those EU PIL instruments.
- Increasing use of enhanced cooperation in family law, which then leads to partial
harmonisation. E.g.: Rome III Regulations on divorce and legal separation + 2019 Regulation on
maintenance, patrimonial aspects of register partners are all enhanced cooperation.
- Further fragmentation with Brexit: consumer rights will carry on in the UK but they will amend
it step by step. For PIL, the UK has the Withdrawal Act (all of EU legislation will no longer applicable,
and the UK will consider the rules to be their own law, it wants to amend it step by step). It will be
difficult because many EU regulations remain on reciprocity. What has been decided is that when
EU law is based on reciprocity, the transition from UK law to EU law will not apply. It will not
become UK law. However, Rome I is not really based on reciprocity: it is a regulation having laws
on which rules are applicable. It is a system trying to find the applicable law, it is not about
reciprocity. Therefore, the UK will continue to apply it (as it will be seen as UK rules when the
transition will be over).
- Reciprocity is a connecting factor on which law is applicable.

G. Harmonization through case law

CJEU also restricts national PIL for free movements of goods, persons and companies. What is
here very important is the principle of mutual trust among MS.

Free movement and EU citizenship

- C-148/02, Garcia Avello
- C-353/06, Grunkin and Paul
- C-208/09, Sayn-Wittgensten: woman in Germany put in her name a noble title; it is not allowed in
Austria. The Austrian authority refused her name based on their own PIL. The ECJ said that Austria
cannot use its own PIL to clock/hamper free movements, but if it is part of society fundamental
ideas, it can be an exception.
These three cases on names make clear that a MS national PIL rules cannot block the internal
market/the free movement of EU citizens. This is the principle of mutual trust.

Free movement and companies

- C-210/06, Cartesio
- C-106/16, POLBUD

CJEU guards over uniform interpretation

Once you have a harmonised instrument, you also want a uniform interpretation: sometimes
we have harmonised laws, which are interpreted in different ways, this is an issue. The CJEU
made clear that we should go towards a uniform interpretation à CJEU has binding power in
the interpretation of EU instruments.
o C-334/10, Tacconi (culpa in contrahendo);
o C-29/10, Koelzsch (place where the person habitually works)

Compare with CISG Advisory Council: we have a different approach taken at the level of the
CISG which is interpreted by so many countries and thus there are contradictions in the

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interpretation. So, there is now a CISG Advisory Council, which is a private initiative aiming to
promote a uniform interpretation of the CISG. It is a private initiative in the sense that its
members do not represent countries or legal cultures, but they are scholars who look beyond
the cooking pot for ideas and for a more profound understanding of issues relating to the
CISG. With that, MS believed that judges should read other judges’ judgement to come to a
uniform interpretation. They wanted an overarching body to interpret the convention. It is
complicated for such an international body. This group of scholars gives the “correct”
interpretation, either through a question that they get from court; or by issuing their own
opinion on issues they consider problematic.
The EU wanted to avoid this problem of interpretation à CJEU.

III. PRIVATE INTERNATIONAL LAW GLOBALLY

At the global level, these are different organization working on harmonization.
- Hague Conference (HCCH): has adopted about 40 conventions and set of principles on the
applicable law, jurisdiction, recognition and enforcement. E.g. : Conventions on agency
(ratified by some EU) and traffic accidents; Principles of Choice of law for commercial contract
(countries can incorporate those principles into their national law, but only Paraguay did; it can
also be used as a source of inspiration for all countries worldwide).
- Commission Internationale de l’État Civil (CIEC): instruments in the field of family law (e.g.
recognition of children born outside of wedlock, surrogacy, divorce, use of particular documents
for marriage). That Commission is under a lot of pressure because two important MS
(Germany and France) have withdrawn their support, while they already had only a few
MS. The existing instruments will continue to exist but without enforcement mechanisms
or insurance of their proper implementation.
- Institut de Droit International (IDI): soft law instruments.
- UNCITRAL: soft law instruments and model laws.

But we have a problem of fragmentation when there is harmonization/unification at several

levels: we have laws at the EU level and at the international level. The EU itself has ratified
some Conventions and Protocol of the HCCH, such as the Hague Maintenance Protocol à
different sets of legislation applying to the same issue à disconnection clauses. Conventions
and EU Regulations, in their final provisions, determine the relationship between new
instruments and pre-existing ones, these are very important provisions. It is very technical.

E.g. Rome II Regulation and HCCH Convention on traffic accidents. The current situation is that
Rome II has a disconnection clause giving preference to the Convention on traffic accidents and
product liability. For the future, the EU Commission wants to change that, but it might be very difficult
to put this into practice, it would maybe require some MS to withdraw from the Conventions.

Relationship between HCCH and EU: examples of reverse subsidiarity and cooperation:
• Principles on Choice of Law

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• Maintenance Protocol 2007: the EU was busy making a Maintenance Regulation and the HCCH was
also busy making a new convention and protocol on maintenance obligations. It is a bit frustrating
for the HCCH if 27 MS go on way, because there are here for common harmonisation. What
happened is that the Regulation came into force as well as the Convention and the Protocol But,
the Regulation (Art. 15) refers to the HCCH: they have actually draw that whole international
harmonisation into European harmonisation à reverse subsidiarity: it is better to harmonise at
the international level rather than only at the European level.
- We also have some harmonisation thanks to the CJEU:
§ C-400/10, PPU McB: about child abduction; the CJEU interpreted the convention and
regulation and tried to open it up broadly.
§ C)381/08, Car Trim GmbH: Brussels I; the CJEU used Incoterms to interpret the Brussels
I Regulation. Let’s use those 2 instruments in the same way.
§ C-214/17, Mölk: about interpreting the 2007 Hague Protocol on Maintenance. How to
interpret it? The CJEU said that while interpreting, judges must look at the HCCH
documents and try to find a way to harmonise.

Would Von Savigny be happy today? Yes, he would quite happy. We are moving now more
towards global harmonisation.

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PART VIII - HARMONIZATION OF CIVIL PROCEDURE

This guest lecture given by Professor dr. Marta Pertegas. The focus will be put on the
international and European harmonization process of civil procedure.

I. Introduction
We will focus on harmonization process at the worldwide level. In practice, civil procedure is
really important to make sure that your rights in theory become in practice a remedy that can
be enforced. Why procedural law is important? How this harmonization processes take place
in three different ways?

Procedural rules (≠substantive rules) is about the construction and the administration at the
rules in practice. Procedural law is remedial law, or rules of court by which a court hears and
determines what happens in lawsuit, civil, criminal or administrative proceedings. The rules
are designed to ensure a fair and consistent application of due process (USA) or fundamental
justice (other common law countries) to all cases that come before a court. Procedural law is
not an abstract exercise, we want to create rules that are in line with fundamental principles.

L. Fuller (The Morality of Law) wrote: “The term "procedural" is, however, broadly appropriate
as indicating that we are concerned, not with the substantive aims of legal rules, but with the
ways in which a system of rules for governing human conduct must be constructed and
administered if it is to be efficacious and at the same time remain what it purports to be.”

The main actors in a procedure are generally the claimant and the defendant. From the
perspective of the parties involved in any kind of process, what is common is that they all
want their fundamental rights to be respected.

Why procedural law is important?

• The right to an effective remedy and the right to a fait trial are fundamental rights laid
down in Article 47 of the Charter of Fundamental Rights of the European Union
All the actors involved want their fundamental rights to be respected à need of procedural rules in
line with fundamental rights. It is not an abstract exercise to have procedural rules applied. In it is quite
striking to see the important impact the current Covid crisis has on the area of administration of justice
—> these fundamental rights are also threatened.
• The right to a fair trial is not the same for the plaintiff and the defendant
An effective remedy for the plaintiff is to have access to speedy and accessible procedures ≠ an
effective remedy for the defendant is to have sufficient information: for the defendant a speedy
procedure should not mean that the defendant has insufficient information.
• Cost repercussions: all of this is also connected to the cost implications.

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We want access to justice for all and from that perspective it must also be thought in terms of cost
repercussions and cost analysis.
• Addition challenges in an international context?
We have both initiatives at the EU or global level. How the domestic rules are complemented with the
international procedural rules? What do you think about cross-border cases? In a cross-border setting
all these issues of fundamental rights become even more important, for example because costs are
bigger. What are the benefits of any process of harmonization? Whenever there is a cross-border
element, there is a more solid ground to move into process of harmonization because all the important
elements of procedural law are challenged by cross-border disputes.

II. Is harmonization of procedural law desirable and feasible?

We are going to focus on civil procedural rules, not on criminal or other procedural rules. We
should not take for granted that harmonization is desirable and feasible. It is desirable because
it avoids multiplication of proceedings. It is feasible because it is not substantive (not the
core/content), so maybe procedural law is more open for harmonisation.

It is necessary to guarantee enforceability of the decision and to avoid duplication of

proceedings (simply because there would be no dialogue between court adjudication). This
area of the law is not substantive and thus it does not concern the core of the dispute.
Accordingly, it is more open for harmonization.

1) Quasi universal rule: procedural matters are governed by the law of the forum. There is
a natural tendency to address these procedural matters by the law of the forum.
- Regardless of dispute settlement form
- Focus on court adjudication
For example, the ECJ is always mentioning procedural autonomy of MS but at the same time it is also
challenging procedural rules of MS on the basis of the internal market.
- Procedural diversity lead to incentive for forum shopping (want speedy remedy, cheaper,
more efficient)
2) But despite of this, there is a desirability to harmonize procedural law. At which level?
At the bilateral, regional or global level?
- EU: is the diversity of procedural rules hampering the functioning of the internal market?
Why did the EU has showed an interest in the harmonization of procedural law? There are
some legislative and judicial responses.
- Is it really possible to have global rules dealing with procedural rules? There is a limited
mandate for HCCU, UNICITRAL or UNIDROIT.

III. Judicial responses: out of CJEU case law

The CJEU has undertaken a very intense process of harmonizing sets of procedural rules, even
though such initiatives were not existing at the legislative level. To respond to the question
whether procedural rules are an obstacle to the internal market, the CJEU has insisted on

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procedural discretion and the universal rule according to which each state is sovereign to
enact its own procedural rules. However, in some cases procedural rules were contested.
E.g.: a rule makes a distinction depending of the domicile of the person filling the appeal. If we
have a rule of national civil procedure requiring, on an appeal, the payment of security for the costs of
the proceedings (caution judicatum solvi), quid if it is only imposed to non-residents? These rules
discriminate foreigners on the basis of the place where the parties appeal if they are residents or not.
Is this an obstacle for EU law? Yes.

- Case C-43/95 Data Delecta and Forsberg: this case concerned a rule of Swedish civil
procedure requiring, on an appeal, the payment of security for the costs of the proceedings
for non-residents (cautio judicatum solvi). The CJEU found that EU law gives the right to equal
treatment to EU citizens. This rule is discriminatory since it represents an obstacle to EU
citizens in those MS. Even though this action only targets Swedish rules, this security provision
(cautio judicatum solvi) that exists in other national procedural laws of other jurisdictions, has
potential consequences on cross-border cases that would involve non-residents. So, if we find
a provision stating this rule in a Civil Code, it should not be applied.

- Case C-398/92, Mund&Fester: this case deals with a national provision of civil procedure
which, in the case of a judgement to be enforced in another MS, authorises seizure simply on
the ground that enforcement is to take place abroad. This national provision makes a
distinction whenever the judgement was rendered. When it is clear that it could be enforced
domestically, we would not have the automatic seizure of the assets of the debtor à it only
applies where the enforcement is to take place abroad The CJEU found that this rule was
discriminatory à covert form of discrimination. The CJEU also tried to counter some
application of national procedural rule, but very cautiously. It is not comparable to other areas
of law, they have to 95% respect national autonomy of each MS. It has to build an argument
that those national rules violate fundamental principles of EU law, which are provided in the
Treaties and which MS have ratified.

The CJEU has been very helpful in harmonizing national civil procedural rules.

IV. Legislative initiatives

What did the law makers do to harmonise this domain? Three different layers have been used.

1) International cooperation in procedural matters (minimum level of intervention, it still

safeguards the autonomy of MS, which can maintain their rules but some bridges are
created. It is not really harmonization at this level):
- Cross border service of documents
- Cross-border taking of evidence
2) Regulations of cross border proceedings (closer on impeding on procedural autonomy,
rules become harmonized to a certain level, a lot has been done at the EU level, not so much
at the international level):

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- International jurisdiction
- Recognition and enforcement of foreign judgments
3) Unified procedures (very extreme form of harmonization because it tries to bring
together certain procedural rules in different jurisdiction and to create unified procedures):
- Sectorial initiatives (e.g. collective redress and damage claims in competition law)
- European small claims procedure, European order for payment, EAPO à the claimant can
choose between national or European procedure.

A. International cooperation in procedural matters

International cooperation: service of documents

You are not harmonized set of rules but through communication and cooperation between
two MS judges are creating “building bridges” for cross border transmission of documents.

Within the European Union, we have the Service Regulation (EC) No 1393/2007 of the
European Parliament and of the Council of 13 November 2007.
• Towards a new EU Regulation in 2020
• How in practice? An Expert Group has been set up by the European Commission. Prof. Pertegas
thinks that this expert group was a sterile exercise, as the commission already had its proposition
ready when it set up the expert group. It led to the Commission proposal COM (2018) 379 final,
which is now under review by European Parliament and Council of EU.

Worldwide, we have the 1965 Hague Service Convention (quite transposable; 76 Contracting
States). We will examine the degree of change it will bring to national procedural rules.
- It establishes a system which brings actual notice of the document to the addresses in
sufficient time to respond
- It facilitates proof that service has been effected (model certificate of service)
- This Convention is actually not about services /!/ but rather about the effective
transmission of documents for services abroad – means of service remain governed by law
of requested State. Service procedures are still made at the domestic level. It is about
procedural sovereignty. How to bridge the gap?
- A product of the 60s: how does it fit in the ear of electronic and information technology?
It may be needed to adapt this Convention regarding the new means of communications.
Can you serve by means of social media for instance? Unlikely that the convention would
be renegotiate, rather a new interpretation. The 1965 Convention made no reference to
any digital means of the transmission of documents. So, from the text of the Convention,
it will not be possible to use emails.

In this area of the law, we have to work on the basis of the opinions of experts who give non-
binding reinterpretation. It is very unlikely that the MS of this 1965 Convention have a
willingness to re-negotiate it, so in turn we have to rely on the opinions of these experts.

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In practice, how does it work? What are the channels of transmission? And what is the main
channel of transmission?

Central authorities exist in this domain. Each MS has to define what their national central
authority is, such as the ministry of justice. Central Authorities are the key to the effective
system of legal cooperation established under the Service Convention. Each State is required
to designate a Central Authority under the Convention. Within the EU, this system is much
more bureaucratic, more steps have to be taken. It is strange that the USA has outsourced the
convention by creating a private service company to serve documents. It happens quickly (as
it is a private company) but it costs a lot.

We do not want the applicant to wait forever: the moment the claimant has approved that
the document has been served through this process, it can go ahead. The fact that the
defendant does not come up (default judgement) does not prevent the decision to be taken:
there is proof that the service took place.

The Convention in a globalized and digitalized world (cfr. 2020 HCCH Report)
• Ongoing work for the development and wide implementation of digital systems to
support and improve the operation of both the Service and Evidence Conventions
• Obstacles
§ Diverse information technology around the world
§ Diverse legal framework and current practices on the electronic transmission of requests
under the Convention: not all States are bound by this service convention, while all States
use the same technological means.
§ Legal and technological barriers: no international court that could be bothered by the
fact that there are barriers making cross-border transmission of documents complicated
§ How would a possible international system for electronic transmission be financed?

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à it is unlikely that the Convention will be changed.

International cooperation: taking evidence abroad

It is linked to territoriality. How to facilitate the proceedings here but evidence abroad?

Within the EU, we have the Evidence Regulation (EC) No 1206/2001 of 28 May 2001.
• It has been recently illustrated in the CJEU case law.
• EP 2017 Resolution on common minimum standards of civil procedure in the EU: the EP
suggested to recast the Services and Evidence Regulations, but so far, no recast regulation
has been adopted. This exists beside the national means of obtaining evidences.

Worldwide, we have the 1970 Hague Evidence Convention (63 Contracting Parties).
In those minimum standards (//harmonisation), we need to change some aspects of the evidence
regulation. The CJEU delivered some decisions on this topic, met with reluctance by doctrine. On two
occasions, the CJEU said that the evidence regulation existed besides other domestic means to get
evidence. So, there are two mechanisms: domestic civil procedural codes + mechanisms in the
Evidence Regulation. But it is weird because a regulation should in principle not prevail over domestic
rules. The Commission here kept the dichotomy of procedural rules.

Cooperative regime
- Judicial cooperation between States
- Like the service convention, it does not interfere with a domestic law governing the taking
of evidence

How does the convention relate to internal law?

- It is not mandatory because of the use of non-permissive language (e.g: “may”)
- Some Contracting States consider that the Convention must be used whenever evidence
is requested from abroad (i.e. mandatory)
- Possibility to use internal law of the forum of State of origin but need to respect
sovereignty of State where evidence is located.

There are two main methods for the taking of evidences abroad
1. Letter of Request (Chapter I of the Convention)
2. Use of diplomatic officers, consular agents, and commissioners (Chapter II of the
Convention) à see 2020 Guide to Good Practices on the Use of Video-Link: this Guide
aims to highlight the good practices that different States have, especially those States which
are parties to the Convention, and to try to expand those good practices worldwide.

E.g.: would the means of digital means will increase after the Covid19? Yes probably.

B. Regulation of cross-border proceedings: international instruments on

jurisdiction and circulation of judgments

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We get closer to imposing on the procedural autonomy. We set up uniform rules on
international jurisdiction or on recognition and enforcement of foreign judgements. These
rules have been harmonised a lot in the EU à international jurisdiction and recognition and
enforcement of foreign judgements are two connected, yet distinct, matters

Within the European Union, we have had five decades of “Brussels” scheme à international
jurisdiction is the cornerstone of the EU Civil Justice.
• From 1968 Brussels Convention to Brussels I and Brussels I Recast (Brussels Ibis)
• Regulations on matrimonial and parental responsibility, successions, child support
It is not limited to civil and commercial matters; similar regulations have been adopted in family
matters à very significant movement of harmonisation of civil procedures when it comes to create
uniformity with regards to international jurisdiction rules.
• Uniform rules on international jurisdiction
Having legal certainty and predictability at the very first stage of proceedings is very related to one of
the aims that the EU wants to achieve: removal of barriers, same rules should apply to all judgments
within the EU (e.g. suppression of exequatur becomes the exequatur is a kind of control by the MS
seized of the judgment delivered by the MS of origin). These rules also aim to prevent forum shopping.
But all these common rules also come with a price. We want to prevent any form of control in the MS
where the judgement is to be enforced à mutual trust in civil procedures is meant to be guaranteed
by the creation of uniform rules.

At the worldwide level, we have a piecemeal approach.

• Cfr. 2019 Hague Judgments Convention is adopted but not yet into force
• Ongoing work for the prevention of parallel proceedings.
Courts have been willing to take into consideration proceedings happening elsewhere: cost effects.
We do not want the applicant to occur double costs because the judgment of State A does not have
effect in State B à such parallel proceedings is not ideal for the claimant nor for the defendant; and
the limited resources given to domestic court administration is also very detrimental for the
administration that will have to make a double work à lack of cooperation is detrimental for an easy
access to justice.

C. Unified procedures
It is not about bringing together certain procedural rules, but it more about creating unified
procedures. This only happened in the EU: unified procedures is the most drastic approach.
E.g.: European Small Claims Procedures, European Order for Payment and EAPO.

European Order for Payment

• It is based on the Regulation (EC) No 1896/2006, as amended by Regulation (EU) No
2015/2021. It is in force since 12 December 2008.
• It applies where there is a swift and efficient recovery of outstanding uncontested
debt à autonomous EU definition of what an outstanding uncontested debt is.

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 • It does not replace national procedures: it is still complementarity to national
procedure. Besides the national procedures, the EU has imposed a European order
for payment.
• We need a cross border element to have this procedure available.
• 2015 EOP Report: it functions “in a sound and satisfactory way” but at the same
time, it is a relatively unknown procedure.
Does it work well? People are unaware of the existence of this instrument. There is little use in practice
of this procedure. Indeed, the plaintiff decides to follow either the regulation or the domestic
procedure. It would mean that in countries where the procedure is bad/lacking/not beneficial, people
will turn to the regulation. By creating multiplication of procedure/more fragmentation, it is difficult
for the defendant à uncertainty.
• Non-legislative and implementation measures are needed (Ontanu, 2017)
In many countries, no implementation measures have been taken. The practitioners need to
take it into account. It will depend on what the claimant wants.

European Small Claims Procedure (ESCP)

• 2002 Green Paper: excessive costs, delays and complexity of domestic procedures
• It is based on Regulation (EC) No 861/2007, as amended by Regulation (EU) No
2015/2421. It is in force since 1 January 2009.
• It applies to small value claims, especially those involving consumers or requiring
tailormade procedure.
• There were many discussions on the amount/ threshold of the claim à since 14 July
2017, it deals with claims up to 5000€.
• It is still complementarity to national procedure, if some national procedure is
available.
• Little use in practice
The advantage of the ESCP is that it allows to make use of the whole system of implementation
put in place by the EU institutions à this system can be used for the disputes that fall under
its scope of application. Yet, there is only a little use in practice.

European Account Preservation Order (EAPO)

• It is based on the Regulation EU No. 655/2014. It applies since 18 January 2017.
• It covers the situation where creditors request the preservation of the amount owed
in a debtor's bank account located in the EU. It would prevent debtors from removing
or dissipating their assets during the time it takes to obtain and enforce a judgment
on the merits.
• The EAPO is available to the creditor in cross-border cases, as an alternative to
instruments existing under national law.
• First CJEU case: C-555/18 where an EAPO was requested by a Bulgarian creditor for
the defendant’s bank accounts in Sweden: the amount shall remain available to be

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 enforced; if this money is not in your jurisdiction you do not have the domestic
enforcement measures, and thus the EAPO will help, as it was confirmed in this case.

à Uniform islands of common set of rules in the vast ocean of civil procedural rules

What brings the future?

- EP resolution of 4 July 2017 with recommendations to the Commission on common

minimum standards of civil procedure in the European Union
In 2017 the EP very wisely already recommended a common minimum standard of civil procedure, this
is much more than a recast of the services and evidence regulations. The EP is talking about “a
minimum standard” which would mean that in all areas of civil procedural law, we will have certain
European standards, and this will change the picture of procedural law that exists so far because. The
Commission started with the process of harmonization of these two regulations but other than that it
has not moved forward. However, some criticism can be made: was the request of EP premature? is
there real political willingness to create those European standards?
- There is a currently ongoing project between UNIDROIT and European Law Institute (based
in Vienna, organisation which tries to facilitate the modernization of European law in all areas of
law. In the area of civil procedure, they have undertaken a very ambitious objective) of concluding
European Rules of Civil Procedure.
It is a major attempt to surpass the domestic procedural rules. It is led by academics; thus, it will be a
non-binding initiative which can inspire the legislator to ensure that national rules are in line with EU
standards.
- Political willingness to have more international intervention?
States are very keen to keep the control in the area of procedural law: we see less progress in this area
than maybe in more substantive areas.
- And beyond?

à The CJEU has a very broad role as regards harmonization of civil procedure: whenever a
national procedural rule may have a cross-border effect, the CJEU is allowed to intervene.

/!/ EXAM: 1) describe the current status of European and international harmonization in the
area of procedural law (theoretical explanation) and then 2) explain, in your opinion, whether
it is desirable/feasible to go for further harmonization in this area? (argumentation, using the
correct terminology).

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PART IX - HARMONIZATION OF INTELLECTUAL PROPERTY LAW

Where do you want to protect your invention: usual answer everywhere? The aim of this
lecture is to answer to question where can we protect our invention rights.

I. OVERVIEW OF INTELLECTUAL PROPERTY RIGHTS

Freedom of trade (opposite to intellectual property) implies that one cannot own an idea. In
principle, we cannot stop someone copying your idea and building a successful business out
of it. Therefore, government fields need to incentive people to innovate. IP is not really an
exception to the freedom of trade, but it is an individual field because there are many IP rights.
The traditional justification for creating exclusive rights over intellectual creation, as
exceptions to this principle of freedom of trade:
- Intellectual creativity benefits society as a whole
- The reward of temporary exclusivity stimulates creativity
- The right holders make their creations public.

We have a classical division between:

Traditional industrial property rights
o Patents;
o Utility models;
o Design rights (outer appearance of a good);
o Trademarks (sign to distinguish the origin of goods and services).
Modern industrial property rights
o Breeders’ rights/ plant variety
o Semiconductor topographies
o Database rights
Artistic rights
o Copyright
o Related rights

E.g.: Coca-Cola trademark: Coca-Cola trademarked the name, the visual of the letters, the design rights
of the bottle, the indication of origin. Coca-Cola could have registered a patent on the recipe, but it
didn’t do it because for a patent, it needs to make public the recipe.

E.g.: Broccoli and Tomatoes cases in EU: The cases concern the patentability of biological products
through the description of the procedure for achieving that product (a product-by-process claim). The
Enlarged Board of Appeal ruled that such products were patentable.

E.g.: Yakult product is linked to harmonisation

E.g.: INTEL sound of the microprocessor: it was the sound when you turned on a computer. It indicated
that it was linked to Intel. It’s a trademark as it gives the origin.

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Features of Intellectual Property Rights
- Scope is limited to the state that have granted the rights: the exclusivity arises out of the
sovereignty of a particular state, so it is territorially limited. The scope is limited to the
state that gives the exclusivity.
- Society has to be able to reap the benefits of the creation eventually, so the exclusivity is
limited in time.
- For some rights, registration is required (for patent and trademark).
- Maintaining the right may be subject to the payment of a fee (every 10 years for
trademark or every year for a patent)
- The rights are generally treated as object of property:
§ Economic value
§ Transferable – licensable
§ Protection against expropriation
§ Can be bought sell and so on

II. EARLIEST PATENT SYSTEMS AND INTERNATIONAL ASPECTS

There is a need for harmonisation, because patents are of purely national scope. Patent
systems have been existing for a long time. It evolved from a system where sovereigns (Kings)
will grant a patent as a favour and a mean of levering taxes; to a system where everyone can
ask for a patent and a tax to the government.

Italy
- Early 15th century: privileges granted by the sovereign on a case-by-case basis
- 1474: Statute of Venice: 10 years’ protection; Intangible property, like “book privileges”
England
- 14th – 16th century: privileges granted by the sovereign on a case-by-case basis
- 1624: Statute of Monopolies: 14 years’ protection for “new manufacture”.
USA
- Art. 1, sec. 8 of the Constitution (1787): “The Congress shall have power … to promote the progress
of science and useful arts, by securing for limited times to authors and inventors the exclusive right
to their respective writings and discoveries”.
France
- Useful Discoveries act of 1791: “It would be an attack on the essence of human rights, not to
consider an industrial discovery as the property of its author…”
- The French patent act was “exported” to Belgium (1795) and the Netherlands (1810) by Napoleon.

IP is important, it has evolved differently in every state. On the international level, providing
protection of intellectual property may stimulate innovation, but it can pose a competitive
disadvantage. Imagine a state surrounded by more innovative states. Wouldn’t it be tempting
to simply copy your neighbours’ innovations, rather than offering foreign companies
monopolies in your domestic market? Having a mosaic of territories with and without

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protection can form a barrier to trade. Rights holders want protection beyond the borders of
their own country. There is a need for harmonization.
§ Netherlands, 1869-1910
§ Modern counterparts?

III. HARMONIZATION ISSUE

Because of the various national origins of IP law there are significant differences between
national systems. On the other hand, different systems have historically influence each other
as well. With internationalization of trade, following harmonization issues arise:
• A creator entitled to an IP right in one state, should be able to get rights in other states as
well à one wants substantive rights in other countries
• A centralized procedure should lead to IP rights in multiple states à one invokes rights in
different countries through a streamline procedure
• The substantive conditions for protection should not differ unnecessarily among states
• One IP title should cover a multi-state territory à a single IP title is valid in other countries.

How do countries address those 4 issues?

IV. HARMONIZATION MECHANISMS

At the international level, we have multi-lateral treaties (approximation of laws and
procedural harmonization). Also, in IP, the process of drafting treaties is backed up by
organisation such as WIPO and WTO. At the European level, we have European conventions /
treaties (Council of Europe; European Economic Community) and secondary EU legislation
(directives à approximation of laws; and regulation à unitary titles). We have a special case
in the Benelux with treaty providing unitary titles.

A. Phase 1: A creator is entitled to an intellectual property rights in one state,

should get rights in other states as well
It is about the same substantive right in different jurisdictions, about levelling the playing field.

There are four important treaties in this regard. The Paris and Berne treaties are 2 out-
breaking treaties, still in force and being used.

- Paris Convention for the Protection of Industrial Property (1883):

§ Protects well-known trademarks throughout the Paris Union (for patent, utility model ><
not artistic IP)
§ Establishes a “right of priority”
§ Emphasizes the independence of different national counterparts of an intellectual property
right (>< harmonisation?) à a balance has to be made.

- Berne Convention for the Protection of Literary and Artistic Works (1886)

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 § Authors are entitled to national treatment in all Union member states. It came up with the
term “national treatment” in all Union MS: a foreign author gets the same treatment than
at national. It virtually forms a new territory.

- Convention Establishing the World Intellectual Property Organization (1967):

§ Platform for cooperation and harmonization.

- Trade-Related Aspects of Intellectual Property Rights (1994):

§ All members must apply similar minimal standards of IP protection
§ No direct effect

Paris Convention Priority right

Paris: union where all contracting states form a union with one territory.

Process to get a patent over an idea:

- Patent application in first country
- Examination of patent application
- Grant of a patent

The filing date (1) is very important: it establishes what knowledge is “prior art”, to determine
if the patent is new or invented (if it is not new, no patent will be granted). This A. part was
about getting substantive right recognised everywhere.

How the priority rights work? Field application in one country, on a fielding date, it determines
which knowledge prior to your invention (prior art). Everything known to the public in the
prior art will determine whether invention is new and invented.

If you file it at first country and you want it protected country, you would have to go there.
Priority claim is that you have 12 months to file it in another country, then the filing date
would be the date of the original finding.

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 B. Phase 2: A centralized procedure should lead to IP rights in multiple states
Having the substantive right (A.) is not enough. A centralised procedure should lead to
intellectual property rights in multiple states. We want to avoid having to travel to each
country to ask for a paten. It started a long time ago
Trademarks:
- Madrid Agreement Concerning the International Registration of Marks (1891)
- Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks
(1989). There are number grounds on which offices can refuse the registration, but there is a
centralised procedure.

Design Rights:
- The Hague Agreement Concerning the International Deposit of Industrial Designs (1925)

Patents:
- Patent Cooperation Treaty (1970): it is the more recent one with 153 MS as of 1 April 2020 (Samoa
Island just joined the Treaty)

There is no international patent in the end. It ends with deadlines for national and or regional
phase entries. They take it as if it was a domestic demand. It stills ends out in parallel national
examination.

C. Phase 3: Substantive conditions for protection should not differ unnecessarily

They should not differ unnecessarily. It’s nice to have the same procedure for 30 months with
the Patent Cooperation Treaty but, then there are differences at the domestic level.

Harmonisation of the substantive conditions for protection:

Trademarks
- First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member
States relating to trade marks
- Trademark Law Treaty (1994)
- Directive 2008/95/EC Parliament and Council 22 October 2008

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 Design Rights
- Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal
protection of designs. There are a lot of litigation about the directive.
- Design Law Treaty (in preparation)

Patents
- Convention on the Unification of Certain Points of Substantive Law on Patents for Invention (1963)
- Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the Legal
Protection of biotechnological inventions
- Patent Law Treaty (2000)

ð There is a certain level of harmonisation with the Strasbourg Convention 1963 (≠treaty).
The EU has not made a parallel directive here (parallel to Trademarks and design rights).
ð The filling date is important. We need to secure it -> thanks to the Patent Law Treaty 2000,
there will be a clear filling date.

Harmonisation of trademark law: EU Trademark Directive

Recitals 2, 4, 6 and 8 in the preamble to Directive 2008/95 state:

§ (2) The trade mark laws applicable in the Member States before the entry into force of [First] Directive [89/104]
contained disparities which may have impeded the free movement of goods and freedom to provide services
and may have distorted competition within the common market. It was therefore necessary to approximate the
laws of the Member States in order to ensure the proper functioning of the internal market.
§ (4) It does not appear to be necessary to undertake full-scale approximation of the trade mark laws of the
Member States. It will be sufficient if approximation is limited to those national provisions of law which most
directly affect the functioning of the internal market.
§ (6) Member States should also remain free to fix the provisions of procedure concerning the registration, the
revocation and the invalidity of trade marks acquired by registration. (...)
§ (8) Attainment of the objectives at which this approximation of laws is aiming requires that the conditions for
obtaining and continuing to hold a registered trade mark be, in general, identical in all Member States. (...) The
grounds for refusal or invalidity concerning the trade mark itself (...) should be listed in an exhaustive manner,
even if some of these grounds are listed as an option for the Member States which should therefore be able to
maintain or introduce those grounds in their legislation (...).

à Application: CJEU C-320/12 – Malaysia Dairy Industries Pte. Ltd v. Ankenævnet for Patenter og Varemærker
(Yakult case)

Art. 4(4)(g) Dir. 2008/95/EC:

§ Any Member State may, in addition, provide that a trade mark shall not be registered or, if registered, shall be
liable to be declared invalid where, and to the extent that: the trade mark is liable to be confused with a mark which
was in use abroad on the filing date of the application and which is still in use there, provided that at the date of the
application the applicant was acting in bad faith.

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Denmark, art. 15(3)(3) Consolidated Law No 109 of 24 January 2012:

§ A trade mark is also excluded from registration if it is identical to or differs only insubstantially from a trade mark
which at the time of the application, or as the case may be the time of priority claimed in support of the application,
has been brought into use abroad and is still used there for goods or services of the same or similar kind as those for
which the later mark is sought to be registered, and at the time of the application the applicant knew or should have
known of the foreign mark.

Harmonisation in relation to substantive rules of central importance (functioning of internal market) à

harmonization in relation to those rules – even if optional – is complete.

Link between “bad faith” in the directive and “bad faith” in the Community TM Regulation.

Determination of bad faith: take into consideration all the relevant factors specific to the particular case which
pertained at the time of filing.

Ex of the Yakult case:

Yakult is a Japanese company having an IP right for the form of the bottle. There was a conflict
with Malaysia, but they settled it. Malaysia was awarded of Japanese’s trademark. But
Malaysia applied for a trademark in Denmark for the exact same bottle -> case of bad faith.
The Danish patent and law contain a provision about bad faith. But Danish law had to be read
in line with EU law. In EU law, bad faith is not a mandatory ground for refusal, but rather an
optional ground. This provision should be read as having a harmonised effect. It is an
autonomous EU concept. The trademark regulation, assessing bad faith, has the same concept
than EU law. In this case, harmonization in relation to those rules – even if optional – is
complete. Determination of bad faith will need to take into consideration all the relevant
factors specific to the particular case which pertained at the time of filing.

Harmonisation of Patent Law: Strasbourg Convention

Is the Strasbourg Convention (Council of Europe) an instrument of harmonisation? It does not
have a lot of practical role anymore (replaced by the EU Patent Convention).

Convention on the Unification of Certain Points of Substantive Law on Patents for Invention (1963) – Council of
Europe
§ Art. 1: In the Contracting States, patents shall be granted for any inventions which are susceptible of
industrial application, which are new and which involve an inventive step. An invention which does not comply
with these conditions shall not be the subject of a valid patent. A patent declared invalid because the invention
does not comply with these conditions shall be considered invalid ab initio.
§ Art. 2: The Contracting States shall not be bound to provide for the grant of patents in respect of:
inventions the publication or exploitation of which would be contrary to ordre public or morality, provided
that the exploitation shall not be deemed to be so contrary merely because it is prohibited by a law or
regulation;
plant or animal varieties or essentially biological processes for the production of plants or animals; this
provision does not apply to micro-biological processes and the products thereof.

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 Harmonisation of Patent Law: Munich Convention
The Munich convention (Convention on the Grant of European Patents, 1973) = the EU Patent
Convention) explains in Art.1 its goal; and how the system works in practice in Art 2(2).
Art. 1: A system of law, common to the Contracting States, for the grant of patents for invention is
established by this Convention.
Art. 2(2): The European patent shall, in each of the Contracting States for which it is granted, have the
effect of and be subject to the same conditions as a national patent granted by that State, unless this
Convention provides otherwise.
The patent granted would have the same effect in foreign countries as if it was national.

Languages of the European Patent Office are English, German, and French. Every European
patent is granted in one of these languages, whereby the claims are also translated in the two
other languages (Art. 145(6) EPC). Contracting States may also require a translation into their
official language (Art. 65(1) EPC) à this arrangement makes the European patent extremely
costly. See also London agreement.

Art. 52(1): European patents shall be granted for any inventions that can be granted a patent
(they need to be new, involve an inventive step and are of industrial application). Art. 52(2):
lists the elements that shall not be regarded as inventions. See also Art. 52(3).

It does more than granting patent. It also determines the conditions under which you can get
a patent, scope of protection à huge harmonising effect in Europe. Also, the European
Patent Office has Examining Divisions and Opposition Divisions, and Boards of Appeal, which
interpret and apply the European Patent Convention. The resulting case law has a harmonising
effect in the contracting states.

The ECP was actually conceived as a step on the way to unitary patent protection in the EC
(Art. 142(1). Also, the European Patent Convention does not, by itself, create a unitary title –
the European patent is best compared to a bundle of national patents.

Each national part can be owned and transferred

separately. Infringement is dealt with in each
contracting state in accordance with the laws of
that contracting state (Art. 1(2) and 64(3) EPC).
The validity of each part is judged by the same
standards (Art. 138 EPC), but the courts of each
contracting state have exclusively jurisdiction for
their national part (Art. 24(4) Brussels Ibis.).
Litigation becomes complex and costly à there
is a very real risk of diverging decisions
concerning infringement and validity.

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 There are 38 MS to the Patent Convention. There are 2 extension States (i.e. States which can
extend the effect of patent): Bosnia and Montenegro. And there are some other states with
special features (Morocco, Tunisia, Moldova, Georgia, Cambodia).

- We have first an Invention

- Fill up application
- Letter of the European Search
Report
- Publication of the application
- Possibility to respond to the
examiner report
- European patent

Unlike the system established by the Patent Cooperation Treaty, it does end with a European
patent (no need to go to national legislation). It is therefore finish. However, to enforce the
patent, there is a need to validate the patent in selected contracting states. It makes it
expensive as there is a need to translate the docs.
Conclusion on the Munich Convention:
- The EPC contains provisions taken literally and deliberately from Directive 98/44/EC.
- Rule 28(1)(c) EPC: European patents shall not be granted in respect of biotechnological
inventions if uses of human embryos for industrial or commercial purposes.
- Rule 26(1) EPC: for European patent applications and patents concerning biotechnological
inventions, the provisions of the EPC shall be applied and interpreted in accordance with
it. Directive 98/44/EC shall be used as a supplementary means of interpretation.
à The mere identity of the wording of Rule 28(c) EPC and of Article 6(2)(c) of the Directive
cannot lead to the conclusion that the ECJ now has jurisdiction to decide matters for the EPO
under the EPC. See also Art. 23(3) EPC and the case Dior v. Evora.
- A person can only get a patent if it is new, innovative, it has to be an invention (no
definition)
- There is case law about mixed invention
- The Strasbourg Convention is not relevant anymore as the Munich convention took over
the harmonised effect of the Strasbourg Convention.

D. Phase 4: One intellectual property title should cover a multi-state territory

It is the ideal situation. What we hope to achieve is one single title that is valid in different
States. This is already the case for
- Trademarks (e.g.: Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14
June 2017 on the European Union trade mark).

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- and plant variety rights (e.g.: Council Regulation (EC) No 2100/94 of 27 July 1994 on Community
plant variety rights)
- and design rights (e.g.: Council Regulation (EC) No 6/2002 of 12 December 2001 on Community
designs)

Why not for patents? A patent is different from the others: the goods for which you will use
trademark/design right can be assessed upon standardized terms to describe the goods (><
patent). There is a serious problem of public accessibility with patents: the main core of patent
application is published in one single language. Should the EU translate the entire description
in all EU official languages? The detailed and technical description with jargon being used
makes it difficult: translation has to be done right. In this regard, patent is different from the
rest. E.g.: of a patent on a localisation system. The document gives the description, the field of
invention, description in its technical detail, claim (scope of the monopoly) à just in one language!

What about Brexit? An EU trademark is a single title that gives protection throughout the 28
MS. Because of Brexit, the trademark will give protection only in 27 MS. However, the
Withdrawal Agreement ensures continuity: existing EU rights will give rise to equivalent UK
national right after Brexit; pending EU applications will lead to new “priority rights” during
transitional period, allowing applicants to apply for equivalent UK national right à if there
was a valid IP before Brexit, you will get an equal protection in the UK automatically.
Moreover, there are new sort of priority rights (sui genuine for BREXIT) >< priority right in the
Paris Convention.

EU Trademarks and Registered Community Designs: the right is granted by a dedicated EU

agency, upon application (EUIPO); third parties can oppose a registered right; an internal
appeal is possible at the EUIPO BoA (Art. 55 CDR; Art. 66 EUTMR); the CJEU hears appeals from
decisions of the BoA (Art. 61 CDR; Art. 72 EUTMR). Note: the CJEU deals with substantive
issues of trademark/design law.

A special case – the Benelux: the Benelux is moving faster than the EU: Art. 350 TFEU; Uniform
Benelux Trademark Act (19 March 1962); Uniform Benelux Design Act (25 October 1966);
Benelux Treaty on IP (25 February 2005).

E. Phase 5: The EU patent Package

It is the counter part of trademark in EU.
Why patents are different and the issue of language in the EU
Patents create negative effects/obligations towards everybody. They contain way more text
than the other IP rights. Patent specifications give detailed description – Rule 42 EOC
(technical field, background art, technical problem and solution, one way of carrying out the
invention); claims – Rule 43 EPC (the matter for which protection is sought), drawings.

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To whom is the patent specification addressed? Parties that want to know whether they
infringe the patent or not (legal certainty) and courts that are asked to enforce the patent à
do all the concerned parties have access to the patent specification in a language they
understand? Does everybody have a right to have info in a language they understand?

E.g. In the Belgian patent system, people can request a patent, but they have to obey to the rules of
language (DE, FR or GER). Then they are granted the patent in the language it has been requested. BE
therefore fails the test of the red question.

At the EU level, in accordance with the EU population, the most widely spoken mother tongue
is German (16%), followed by Italian and English (13% each), French (12%), then Spanish and
Polish (8% each) à 54% of EU citizens knows at least 1 foreign language well enough to be
able to have a conversation, but some countries to better than others: Poland (50%;) Spain
(46%); Italy: (38%). These MS are below the average.

The long road to the EU patent

Convention for the European Patent for the Common Market (1975) never entered into force.
It was conceived as a special agreement in the sense of art. 142 EPC. Reservations were made
by Italy, including art. 88 (translation of the specification). It was not ratified by all the Member
States, so it never entered into force. For the next 45 years, the EU MS have attempted to
create a unitary system of patent protection.
There were attempts to revive the “community patent”, such as
- Agreement relating to community patents (1989)
- Proposal for a Council Regulation on the Community patent (2000)
- A Draft agreement creating a court with jurisdiction to hear actions related to European and
Community patents. It was held to be incompatible with the provisions of the EU and FEU Treaties
by CJEU.
- A provision introduced by the ToL and the use of enhanced cooperation opened the door.

The legal basis of the EU patents are Art. 118 TFEU and Art. 20(1) TEU

The EU patent package is about:

- Trying to reach a Unitary effect;
- 2 council decisions allowing to get on with enhanced cooperation (without Italy and Spain);
- For language, unanimity requirements, which makes it very complicated.

The EU instruments of the ‘EU patent package’ are:

- Council Decision 2011/167/EU of 10 March 2011 authorising enhanced cooperation in the area of
the creation of unitary patent protection
- Regulation (EU) No 1257/2012 of the European Parliament and of the Council implementing
enhanced cooperation in the area of the creation of unitary patent protection

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- Council Regulation (EU) No 1260/2012 of 17 December 2012 implementing enhanced cooperation
in the area of the creation of unitary patent protection with regard to the applicable translation
arrangements
- Regulation (EU) No 542/2014 of the European Parliament and of the Council of 15 May 2014
amending Regulation (EU) No 1215/2012 as regards the rules to be applied with respect to the
Unified Patent Court and the Benelux Court of Justice
- and a multilateral treaty: the Agreement on a Unified Patent Court

EU instruments is not everything, we also have a multilateral treaty. MS decided to create a

multilateral treaty without the states not part of the enhanced procedure. It shows the
ambition of the project.

CJEU cases
There were some dissenting MS: Spain, Poland and Croatia did not sign the UPC Agreement.
There were complaints of Italy and Spain. Spain and Italy did not agree with the proposed
legislation, which necessitated the use of “enhanced cooperation”.
• CJEU C-274/11 and C-295/11, Kingdom of Spain and Italian Republic v. Council
o Did the Council have competence?
o Did the enhanced cooperation constitute misuse of powers?
o Was enhanced cooperation chosen as a last resort?
o Did the decision infringe art. 20(1) TEU (higher level of integration)?
o Did the decision infringe art. 118 TFEU (throughout the Union)?
o Did the decision infringe art. 326 TFEU (not undermine the internal market)?
o Did the decision infringe art. 327 TFEU (respect non-participating MS)?
o Did the enhanced cooperation disregard the judicial system of the Union?
• CJEU C-146/13, Kingdom of Spain v. Eur. Parl. and Council). In the end, the CJEU does not
get to interpret substantive patent law, as this is “national law”.
• Italy eventually joined the “enhanced cooperation”

The UPC Agreement has never entered into force. What was needed to enforce it?
• A minimum of 13 MS, which was met.
• The ratification of the 3 MS with the most patent (FRA, UK, GER). Did we got them
on board? Kind of for Germany: the German constitutional court got an annulation

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 request to not sign the document. Indeed, Germany has suspended deposit of
ratification instrument because of a pending case. For the past 3 years, the German
court is thinking about what to do:
§ If the court decides to annul the request à the EU patent package will be
one ratification short to enter into force.
§ Depending on the grounds, the court can ratify the document or, if it is
linked to fundamental problems, Germany won’t be able to ratify it.
Also, we have the problem of Brexit: the UK is important for the entry into force and its
application. What if the UK leaves? Could the EuPP proceed without UK? There are dissenting
opinions on it.

à the future of the UPC is uncertain.

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PART X – INTRODUCTION TO THE UNIFORM COMMERCIAL CODE

This guest lecture was given by Professor David Frisch from Richmond University (US, Virginia).

Introduction
Almost 70 years have passed since the adoption of the UCC and its impact on the way towards
an international commercial code is very important.

In the United States, in each State there are two legal regimes that co-exist: state law (state
common law, administrative rules and regulations) and federal level (federal common law,
administrative rules and regulations, conventions and treaties) —> if there is any conflict
between state and federal law, the US C° provides for the supremacy of the federal law.

The proposal to have a federal commercial code was rejected. The main reason behind was
an issue of state power.

History of the UCC

Two organizations were behind the adoption of the UCC: The Uniform Law Commission
(previously known as the NCCUSL) and the American Law Institute.

• The Uniform Law Commission (ULC)

Uniformization: it is so much better to have one set of rules that govern, no matter where the
parties do come from.

The ULC is comprised of commissioners: governor of each state will appoint its own
commissioners, the number of which depends on each State —> political importance since
the governor appoints the commissioners.

E.g.: imagine the Executive Committee (EC) of the ULC decides that what the US needs if a uniform set
of parking rules. The first step will be for the EC to appoint a drafting committee comprised of
commissioners, not necessarily experts in the subject matter of the statute but commissioners which
are geographically diverse, and which have interests in the subject matter. In addition to the
commissioners who make up the committee, the EC will then appoint a reporter, which is always an
academic and expert in the subject matter of statute —> the reporter drafts the statute. The drafting
committee and the reporter will meet several times a year, these « draft meetings » only begin on
Friday morning and finish on Sunday afternoon. These drafting meetings are open to the public. Three
years later, the drafting committee and the report have agreed on « the uniform parking rules ». Then,
the members of the drafting committee and the reporter will join together to make this draft voted by
the commissioners of the ULC. The drafting committee will then read word for word, including
punctuation, the statute they have agreed on. If the commissioners make objections, the drafting
committee will have to make amendments. If the text is approved, each ULC commissioner will have

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the responsibility to make this statute enacted in their respective state —> the statute does not
automatically become state law. At first, it is only a « private » law.

In the academic literature, the ULC is described as a private legislator: it is important for the
commissioners to have a political connection, once the statute has been approved they have
to take it back to their respective legislatures and to convince them to enact the Statute —>
if the State enacts the Statute, it becomes State law.

For example, in Article 1, it is provided that if there are consumer protection statutes outside
the UCC, they continue to govern. But if there is a conflict between the UCC and another state
statute, this issue will be dealt as any conflict between two statutes: the more recent statute
is likely to prevail. So, if the statute was adopted after the UCC, the judge would probably
argue that the statute was intended to displace the conflicting provisions of the UCC; if the
statute predated the UCC, the judge would probably argue that the UCC applies.

The drafting committee aims to make the affected parties happy: the committee does not
want the affected parties to then lobby the state to prevent the enfacement of the statute
when it is presented to the legislators of each State.

• The American Law Institute (ALI)

Members are elected; membership is comprised of practitioners, judges and academics,
approximately 3000 members. Their primary work is to produce restatements of the law: the
propose of a restatement is to simplify and clarify the common law and to make it more
accessible to lawyers.

• Two separate organizations

The ULC and the ALI do not work together but they joined their forces in the 1940s to produce
the UCC. Everyone realized we needed the forces of two organizations since it was a heavy
project but also an expensive project (ALI funded the project).

• Karl Llewellyn
Karl Llewellyn was one of the greatest American academic legal scholars of the20th century.
He was also the chief reporter of the UCC: he was born in Seattle (Washington) in 1893 and
soon afterwards his family moved to Brooklyn (New-York). When he was 16 a neighbor
convinced his father that his son has to study sometime in Germany. Karl became bilingual
and felt in love with Germany, including German philosophy, which played an important role
in its understanding and development of commercial law. Karl Llewellyn is the only American
ever to have received a particular award from Germany. He went back to the US and became
an academic in the fields of tort and commercial law. In the early 1900s he worked for a
famous law firm and then joined Columbia University. In addition to his work in commercial

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law, he was one of the lawyers of legal realism the law in action matters as much, if not more,
as the law on the books.

He did draft, he was primarily responsible for Article 2 UCC, which deals with contracts for the
sales of goods —> Article 2 is a jurisprudential thought. It reflects Llewellyn’s philosophy. He
wanted a statute that would accommodate what business people actually do and would
reflect their actual commercial behaviour —> academic genius behind the UCC.

• William A. Schnader
He was also the President of the ULC: he believed that states, and not the federal government,
had to be responsible for commercial law. He wanted the federal state to remain out of this.
He enlisted Llewellyn to revise the Statute —> political genius behind the UCC.

• Refusal of the New York State

Once the text of the UCC was agreed by the two organizations, the State of New York rejected
this text. Today, every State, the district of Columbia, Virgin Islands and Puerto Rico have
enacted the UCC, except Louisiana which has only adopted some parts of the UCC.

When a State enacts the UCC, whatever States decide to do with the UCC (e.g. amendments
or implement the full version), it is binding on the courts of that State. You will therefore have
to look at the courts of the State you are in order to know how they apply the UCC à rule of
precedent, as an essential element of common law.

Uniform Commercial Code

The UCC is divided in parts and then in sections: the first number of the article refers to the
number of the section (e.g. §1-101); the second number of the article refers to the number of
the part of the section (e.g. §1-101); based on the section number, you will know what this
particular provision is about.

• Not a uniform code

UCC is not uniform: it is state law. Sometimes, when states implement the UCC they made
some amendments depending on their concerns and priorities. With more than 50
jurisdictions at work, uniformity is impossible to achieve. There are major conflicts.

E.g.: Article 1 was revised in the early 2000s: ULC and ALI revised that provisions, bringing up to date,
but this did not change the law everywhere. It then went to states to decide whether they repeal
existing Article 1 and to replace it with the revised Article 1. About 40 States have replaced the original
Article 1 (drafted in the 1950s) with the revised version (2001), but not all the States did. And even in
States which have the same version, it might not be exactly the same. For example, when Article 1 was
revised, they modified the definition of good faith, to include an objective standard. When some States
revised Article 1 they reheated this expended definition of good faith and hold on with the traditional

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old definition of good faith. For example, both Virginia and Texas revised their Article 1, but Virginia
kept the old definition of good faith while Texas adopted the revised definition of good faith.

UCC is not a code: it is not a codification of a particular law on a particular subject. There are
still other statutes at the state level related to particular areas of law also covered by the code
(e.g. consumer sales and consumer protection). In addition to state law that supplements the
code, there are also some federal laws (e.g. Food Security Act). In addition to federal law, there
are also international instruments, such as the CISG. On a purely domestic level, the UCC is not
a comprehensive code, there are areas of commercial practices that are fully untouched by
the UCC. In turn, lawyers have to turn to other state laws or to federal laws to resolve
important issues not dealt by the UCC.

• Relationship with international instruments

The problem is that the US have not ratified many international instruments. What is the
reason behind that? It could be that domestic laws are preferable to the international
versions, which represent a less developed framework for a country that is highly divided in
terms of laws? Whatever the reason, the failure of the US to ratify international instruments
created an opportunity for the ULC and the ALI to step in and to play a role in the
harmonization of private and commercial law. There has been no consistency in their
approach. The challenge is to accommodate the wishes of the States.

For example, the existence of two regimes: the CISG and Article 2 of the UCC gives rise to
uncertainties and lack of uniformity. Whenever you have a study group the recommendations
will always be to change the draft version. It is almost impossible to have a feedback like “it is
perfect, do not change anything”. The CISG and the comments was the approach adopted by
the drafting committee called to revise the version of Article 2. Since that project failed, so did
the comments. So, in the 2000s, there has been an opinion that Article 2 had to be brought
up to date. This project was a total absolute failure: from the beginning, large businesses were
against any change to Article 2. After 10 years of fixing the new version of Article 2, the drafting
committee finally completed it. However, no State implemented the revised version of Article
2 à all States still apply the old version of Article 2. The aim of the revised version was to
include the CISG in Article 2, but as it turned out, the CISG had very little influence in the
drafting of new Article 2. What are the reasons for that?

- The focus was on Article 2 and the drafting committee was actually not thinking about the
CISG
- The representatives were concerned about how Article 2 applies to them, affects them but
weren’t thinking about the CISG
- There was a lack of familiarity with the CISG
- Article 2 was drafted in the context of common law contracts >< CISG is not drafted on the
basis of a civil or common law tradition.

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- Article 2 was drafted in the context of a broader commercial code, and hence, its rules had
to conform with the rest of this broader framework of the UCC >< CISG is not part of a broader
context.
- CISG is less broad than Article 2.
- In some cases, Article 2 treats merchants and non-merchants differently, sometimes these
special merchant rules to both parties, sometimes to only one parties >< CISG does not
distinguish between merchants and non-merchants.
- But the new version of Article 2 followed the lead of the CISG and rejected the definitions of
the Incoterms and rather provide that what was important was the intention of the parties.

If the applicable law is US law, and that the element of the issue is not covered in the CISG,
Article 2 UCC will apply, no matter what the CISG would say. If UCC applies, it is the UCC. If the
CISG applies, then the CISG applies.

E.g.: one party from Canada, one party from the US (Oregon), the contract involved the sales of
timbers. Before the Oregon courts, the defendant invokes the statute of frauds. The claimant argued
that there was an exception à what about the application of the statute of fraud (§2-201 UCC). This
case went on appeal à the only issue on appeal was the application of §2-201 UCC. You have to
understand that going on appeal takes time and is expensive. In that opinion, in a footnote, the court
asked the question why are being asked to decide that statute of fraud issue? One party is to Canada
(which has ratified the CISG) and the other party is from the USA (which has ratified the CISG) à the
governing law is CISG and there is no statute of fraud in the CISG, we should apply the CISG and do not
loose time into appeals.

But in some areas, the influence of international instruments has been great. For example,
Article 5 was revised in the 1990s and the revision was particularly influenced by the ICC
uniform customs. Also, in the field of electronic communications, the influence of
international documents has been important.

• Article 1: General Provisions

Article 1 only applies if some other articles of the UCC apply. For example, if Article 2 applies,
Article 1 apples —> Article 1 supplements the other provisions of the UCC.

See §1-103. Construction of Uniform Commercial Code to Promote its Purposes and Policies:
Applicability of Supplemental Principles of Law

(a) The Uniform Commercial Code must be liberally construed and applied to promote its underlying
purposes and policies, which are: (1) to simplify, clarify, and modernize the law governing commercial
transactions; (2) to permit the continued expansion of commercial practices through custom, usage,
and agreement of the parties; and (3) to make uniform the law among the various jurisdictions.

(b) Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of
law and equity, including the law merchant and the law relative to capacity to contract, principal and

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agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating
or invalidating cause supplement its provisions.

§1-103(a): if you read §1-103(a), you will see that courts in one State cannot ignore decisions
in other States, since the aim of the UCC is to make uniform the law. Imagine there are two
ways to construe a particular issue. If one party wants the Virginia court seized to construe
the B way, and there are cases from many other states (California, New York, etc) that support
this B way. As a judge, even if you believe that the A construction is better, you have to follow
the B way. Courts in one State cannot ignore decisions in other States.

§1-103(b): for example, there is no section in Article 2 that talks about the rest as a defence: does
that mean that you cannot raise rests as a defence? No; You can bring this non-UCC doctrine in a UCC-
covered case by way of §1.103 (b). If you want to describe yourself in the area of contract for the sales
of goods, you don’t only have to know what is in Articles 2 and Article 1 (which supplements Article 2)
but you will also have to know the common law of contracts, since it continues to apply to sales, unless
common law has been displaced by a particular provision of Article 2.

See §1-201. General Definitions

(a) Unless the context otherwise requires, words or phrases defined in this section, or in the additional
definitions contained in other articles of the Uniform Commercial Code that apply to particular articles
or parts thereof, have the meanings stated.

(b) Subject to definitions contained in other articles of the Uniform Commercial Code that apply to
particular articles or parts thereof:

There are 43 definitions in Article 1. Because they are in Article 1, they apply throughout the
UCC. In addition to the definitions of Article 1, each provision of the UCC will have its own
definitions. E.g.: Articles 2 and 9 have their own definition of the term « goods ».

• Article 2: Sales of Goods

See §2-201. Formal Requirements; Statute of Frauds.

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or
more is not enforceable by way of action or defense unless there is some writing sufficient to indicate
that a contract for sale has been made between the parties and signed by the party against whom
enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits
or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph
beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and
sufficient against the sender is received and the party receiving it has reason to know its contents, it

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satisfies the requirements of subsection (1) against such party unless written notice of objection to its
contents is given within 10 days after it is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other
respects is enforceable

(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in
the ordinary course of the seller's business and the seller, before notice of repudiation is received and
under circumstances which reasonably indicate that the goods are for the buyer, has made either a
substantial beginning of their manufacture or commitments for their procurement; or
(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in
court that a contract for sale was made, but the contract is not enforceable under this provision beyond
the quantity of goods admitted; or
(c) with respect to goods for which payment has been made and accepted or which have been received
and accepted (Sec. 2-606).
• Article 2A: Leases
It was added in the 1990s.
• Article 3: Negotiable instruments
• Article 4: Bank deposits and collections
It covers what we called bill of ladings.
• Article 4A: funds transfers
It was added in the 1999. It deals with all sales wire transfers.
• Article 5: Letters of credit
• Article 6: Bulk sales
In case of bulk sales, Article 2 and 6 will apply.
• Article 7: Document of titles
• Article 8: Investment securities
• Article 9: Secured transactions

• Official comments
Following every section of the UCC are following official comments: the aim is to explain the
section and to provide some background. But the comments are not law and are not part of
the statute: they are not binding on a court, but they are highly persuasive. But if there is a
conflict between a statement in the official comments and what is written in the black letter
of the statute, the statute governs.

• Personal opinion of Professor Frisch

Article 9 UCC was substantially revised in 2001 and again in 2010. Revised version looks
nothing as the original version. Not only the committee did substantial changes in terms of
changing the rules, but more than 66 provisions have been added à crucial change. The
committee considered whether the CISG had to be revised in light of the new developments
and new technologies (e.g. smart contracts). The drafting committee will recommend that

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changes may be made to a number of articles because many articles are affected by these
new technologies. We will probably see the UCC moving towards the 21st century. If you look
at Article 2, it is a very recent provision, adapted to the current developments (are electronic
signatures also include? would a text message/an e-mail constitute a writing?) The new terms
for writing that appear in Article 9 is record. In terms of the major revisions, after the
disastrous revision of Article 2 which took more than 10 years and result in absolutely nothing,
organizations are afraid. Though, articles need to revise in line. What we will probably see are
piecemeal revisions of the articles in order to adapt them with recent technologies. One
desirable area to revise is software contracts.

E.g.: suppose you develop software, we enter into a licensing agreement, I have the right to use your
software, what law governs? There are several possibilities, the source of law is uncertain. There is a
lot of uncertainties with litigation, but Professor does not think it makes sense for the relevant law to
be uncertain à the law could cover that Article 2 UCC covers transactions >< Article 2 was designed
to apply to sales (but most software implies licensing) and Article 2 only applies to goods, i.e. tangible
movable things (but can software be qualified as goods?) If Article 2 UCC does not apply, what is left?
Common law.

à software contracts and emergent technologies are areas where harmonisation would be
the most relevant for the development of the UCC. /!/

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 Practice Oral Exam

The exam will be a digital oral exam through Blackboard Collaborate.

You can use the digital versions of the course materials: you don’t need to print everything.

You should give a succinct answer: the exam will last 10-15’ minutes (5-7’ for the case question
+ 5-7’ for the opinion question). You will have about 30 minutes for preparation.

Question 1: Case

- This question will be based on the Directives and case law discussed in class
- Start with the important facts
- Then refer to the different possibilities/arguments by mentioning the relevant
provisions of each instrument (e.g. here, CRD, Unfair Terms Directive, CJEU case law)
As a lawyer, what is the best option to your clients? Consider the legal arguments that you
can invoke but also the remedies.
- Always mention the legal basis on which your answer is based
- Always mention at least one or two case law
- Make link with what we discussed in class

Mr. and Mrs. Van den Boogaerd are consumers and have concluded a consumer sales contract
/ a B2C sales contract with HybriCar. There are several Directives that apply to consumers,
however all of them do not apply in the present case. DIR 2019/770 is related to digital
content, DIR 2019/771 (which will replace the current Consumer Sales Directive) would apply
in there was an issue with the conformity of the goods.

1) The most important DIR to apply in the present case is the Unfair Terms Directive
(minimum harmonization): here, we have standards terms and negotiations à Art. 3 DIR: the
terms of the contract were not individually negotiated and caused a significant imbalance
between the parties’ rights and obligations and which was detrimental to the consumer). For
a sale of a car (=big investment by consumers) the seller has moral requirements in how the
information is given and mentioned to the clients. The seller also mentions that the buyers
did not need to read these standard terms à it is not an appropriate behavior.

Annex of the DIR: it is important to mention that the Annex is only indicative and not
exhaustive (Art. 3.3 DIR – 1b of the annex but you can also interpret the terms and behaviors
more broadly and linked this cause to 1d, 1e, 1i or 1o of the annex).

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CJEU, Freiburger: this CJEU case related to Art. 4(1) of the Unfair Terms DIR: the national court
has to take into account all the circumstances of the case (including the fact that there was a
meeting of the minds).

Also, what would be the type of remedies? According to Art. 6, the termination of the contract
is not an option, but the contract can continue without the unfair terms.

2) DIR 2011/83 is also here applicable, but its applicability will be limited since the CRD mainly
applies to distance and off-premises sales contracts à Article 18 DIR 2011/83 is relevant.
• Art. 18(1): here the parties have agreed on the time of delivery, i.e. the good (here a car) will
be delivered within 6 months at the latest
• Art. 18(2): however, the seller failed to deliver the car after 6 months, after 8 months and after
12 months. Mr. and Mrs. Van den Boogaerd then had to call upon the trader to deliver the car
within an additional fixed period. After that additional period, if the good is still not delivered,
consumers are entitled to terminate the contract.
• Art. 18(3): upon termination of the contract in accordance with §2, the trader shall reimburse
all sums paid by the consumers under the contract.
• Art. 18(4): consumers are also entitled to remedies according to national law.

So, here, Mr. and Mrs. Van den Boogaerd, will benefit from the application of Article 18 CRD,
which reflects their situation.

What about remedies? The sole point on which I doubt is that the consumers did not explicitly
give the HybriCar an additional period of time to deliver the car once the 6 months were
passed. Yet, since they have waited another period of 6 months before considering
terminating the contract, I here argued that Art. 18(2) in fine here applies and that the
consumers are entitled to terminate the contract. In addition, in accordance with Art. 18(3)
the trader shall reimburse all the sums paid by the consumers under the contract, i.e. advance
payment of €6.750. Here, I do argue that the mandatory provisions of EU law on consumer
protection (“shall be entitled to terminate the contract; “shall reimburse”) will prevail over
the termination clause contained in the standard terms and conditions of the parties.

Counter arguments: HybriCar’s counterclaims related to the termination clause are not likely
to be successful since it is contrary to mandatory provisions of EU law à EU mandatory rules
(including EU consumer protection) are limits to the principle of freedom of contract.2

2
VERHEYEN, W., “Stuck between Consumer Protection and Carrier’s Limited Liability: The Recourse Gap in the
Case of E-Commerce”, Zbornik Pravnog Fakulteta u Zagrebu, Vol. 66, Nos. 2-3 (2016) 185-222.

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Question 2: Statement

- We will get questions such as: describe the current state of harmonization at the EU
level of PIL; in which fields there should be more or less harmonization
- Divide your answer into three parts: 1) explain the context; 2) explain the statement
and give 2 arguments pros and 2 arguments cons; 3) give your own opinion.
- Really try to identify the key features: when? what? why? who? what is controversial?
- If you have a statement or citation from an article, it is always a good idea to include
the main things that you find in the statement (e.g. CESL, political climate of rising
nationalism, legal basis, sovereignty, national identity)
- Don’t spend too much time on description, your own opinion is very important /!/ You
don’t have to agree with the Professors or with the EU, as long as you have good
arguments.

“The European Commission’s recent proposal for a common European sales law was made in a political
climate of rising nationalism. The Commission makes a solid and constitutional (legal basis) case for its
proposal. However, its argument, which focuses exclusively on the internal market, is not likely to fully
convince the opposition. The reason is that it fails to address the widespread notion, underlying also
many technical arguments, that Member States should remain sovereign in matters of general private
law for the reason that private law is a matter of national identity.” (2012)

1) Explain the context of this statement by focusing on the development of EU Contract Law
during the last decade and with attention to the current status of harmonization

à you should explain into details the CESL: very controversial proposal, when did that
happen? what was the features of these documents? what was the position of the EU? what
about the scope of the CESL (compared to current Directives? what was the status of the CESL
(min/max harmonization)? You will also raise the legal basis relied upon by the EU.

As from 2010, the Commission strengthened its commitment towards a EU Contract Law for
consumers and businesses, notably through its 2010 Green Paper on policy options for
progress towards EU Contract Law. Since one decade, the Commission has been ambitious to
facilitate cross-border transactions and to strengthen the functioning internal market. In this
document, several potions were proposed by the document, and the less far going was
preferred (where the principles of proportionality and subsidiarity will be guaranteed). A
Regulation, though optional, was then suggested by the EP and the Council in 2011. This
proposal was however never adopted given that it was very controversial. Although the EU
has made considerable efforts, there are still many things that remain unclear (B2B? what are
the next steps?) Today, two recent Directives of maximum harmonization have been adopted
(2019/770 and 2019/771) but they are limited to B2C sales contracts (and particularly cover
distance sales). Since the last decade, the trend has indeed been to opt for maximum

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harmonization. Together with DIR 2011/83 on consumer rights they are the results of long
legislative processes, but their result remains much narrower than the one we could have
expected when reading the proposals and seeing the long legislative processes.

2) Explain the statement, arguments pros and cons, your own opinion on the desirability of
harmonization of contract law

à you can go on with the concepts of political climate of rising nationalism, sovereignty,
national identity.

This statement is making clear that at the end it is a question of balance between EU interests
and MS interests. On the one hand, the well-developed EU requires further harmonization in
those areas such as contract law since common rules in this regard are essential for a “real
internal market” where consumers and traders are not restrained to make cross-border
transactions. Divergences among MS in this regard do pose obstacles and the EU, following its
aim to strengthen the internal market, wishes to remove those barriers, including through the
harmonization of general private law. On the other hand, general private law is an area of law
which has always been a matter of national identity yet slowly becoming given to the EU and
MS also want to retain some of their competences in those particular areas.

The reluctance of MS towards a too fast harmonization of private law is understandable. They
have agreed to be part of a supranational organization for which they have offered many
competences >< but they also want to maintain national sovereignty in those areas which
relate to their national identity. The way private law is construed, and we have also noticed it
with private international law, is very proper to States. But the problem is the following: if we
want to develop the EU and to answer to the needs of EU businesses and EU consumers we
have to remove the barriers that prevent them to enjoy their freedoms of movement and
their right to conclude cross-border transactions. So, MS, by being parties to this supranational
organization, also have to ensure that those who must benefit from EU values and promises
to truly benefit from them. In other words, if MS are too reluctant to harmonize those matters
of national identity, nationals of EU MS will remain nationals of EU MS and will not be able to
enjoy the freedoms and guarantees the EU has sought and seeks to offer them.

ADDITIONAL CONSIDERATIONS FOR THE STATEMENT QUESTION

- Emphasize the similitudes/differences between the EU level (focus on consumer
protection) and the international level (CISG focuses on B2B sales) à you could ask
yourself whether further harmonization is necessary at the EU level where
harmonization is already made at the international level. But at the same time, the type
of harmonization is not exactly the same: B2C (EU level) >< B2B (international level).

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 - National sovereignty: MS have given part of their national sovereignty to the
supranational organization à EU goals >< MS goals (every cultural and social
characteristic of a MS also has impacts on the way MS want further harmonization).
- You can also mention the activism of the CJEU: is it too active or not?
- Different actors involved: the legislator has not been capable of having a full-fledged
harmonization in the area of contract law, but you could say it is not only the legislator
who is an important actor of harmonization à CJEU and national courts also play an
important role in the way they interpret EU instruments; but also businesses associations
that use broader principles and develop contract law through their practices.
- Comparison with the UCC in the USA.
- In terms of legal certainty for legal consumers, it will be better to have one uniform
framework applying to all MS without the possibility of MS to go further and to adapt to
their particular needs >< but as more countries are participating to harmonization, as
more difficulties there are for reaching an agreement on harmonization.
- You could mention some things that happen earlier than in the last decade (e.g. position
of the EP which from the very beginning wanted to go much further and proposed a
European Civil Code à we are far from that now!
- /!/ if you make comparisons, don’t forget to also consider the limitations of such
comparisons.

ADDITIONAL CONSIDERATIONS ON THE ORAL EXAM

- Think about the three guest lectures we had à what are the commonalities/differences
between those different topics. E.g.: enhanced cooperation.
- Read all the documents on European Contract Law: broaden the debate on European
contract law
- Look at the different stakeholders: businesses, legal practitioners, academics, consumer
groups and public administrations
- Identify what are the issues and which solutions are the best
- Minimum or maximum harmonization? Describe the context, the trends and
development: what were the problems, gaps and solutions proposed for minimum or
maximum harmonization. What is your opinion? Put it in a broader context. Are there
issues of codification of case law?
- It is very important to develop your own opinion and use the terminologies used in class.
- It is an open book exam, so it requires opinions and reflects: use arguments and refer to
them, to case law.
- Talk about the relationship between MS and the EU
- If we come up with a Directive, is this vertical or horizontal harmonization measures? In
terms of the scope and the topic (e.g. Travel Package DIR is a vertical harmonization measure)

à read most directives and judgments as possible: when you read a CJEU decision, it is really
important to start reading the key words at the beginning of the judgments, because they

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resume the issues at stake. Then, it is convenient to read the conclusion at the end, and to
take into account the arguments of the parties, summed up by the Court at the beginning of
the answer of every preliminary question à sum up every judgment because this is how we
learn to read a CJEU decision properly à "this is not the day of the exam that you will discover
the directives, otherwise you will fail”.

TIPS FOR THE EXAM

• Key questions
• Problems that were identified
• Is it minimal/ maximum harmonisation? do I like it or not, what do I think?
• Does it leave discretion to MS or not?
• You could raise all the issues from class. à You have to give your opinion, with arguments
from the documents. And use the terminology of the class. It is more about opinions and
applying things
• Only read the documents we have properly discussed

ORAL OPEN EXAM: TWO QUESTIONS

Case question: based on the cases and directives seen in class. We will need to mention the
problem in the case and to look for the relevant provisions in the directive. The challenge is
to identify the relevant issues (the only facts that are important for the issue in front of you).
Once you have identified the relevant facts, you need to know how to deal the case: what is
the problem? which are the relevant articles? which other cases can be used?

Critical question: develop your arguments based on what you have learned in class à strong
legal arguments are needed (based on literature, case law, legislation).

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