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2014 | Buch

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Institutional Competition between Optional Codes in European Contract Law

A Theoretical and Empirical Analysis

verfasst von: Alexander J. Wulf

Verlag: Springer Fachmedien Wiesbaden

Buchreihe : Ökonomische Analyse des Rechts

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

The Commission of the European Union has identified divergences between the national contract laws of the Member States as an obstacle to the completion of the European Internal Market and put this issue on its highest political agenda. Alexander J. Wulf analyses and predicts the effects. The study is situated in the context of the recent developments in the discussion on European contract law. The book begins with an introduction to the economic and legal theories that serve as the rationale for the development of the line of argument. These theories are then applied to the issues involved in the current controversy on European contract law. The author develops a model that he uses to analyze the institutional processes of European contract law. Empirical data are employed to test this model and discuss the results. From his analysis the author develops criteria that can serve as a starting point for thinking about the economic desirability of an optional European contract law.

Inhaltsverzeichnis

Frontmatter

0. Introduction

Abstract

The Commission of the European Union has identified divergences between the Member States’ national contract laws as an obstacle to the completion of the European Internal Market and put this issue on its highest political agenda. Among the different solutions proposed by the European Commission was that of creating an optional instrument for European contract law (OI). Since then, there have been further political developments. The Commission’s most recent policy initiative for European contract law is its proposal for a Common European Sales Law (CESL). This proposal is less ambitious in scope than the previously discussed optional European contract law. The CESL is nonetheless described as a possible first, albeit modest step towards an optional European contract law. For this reason and because the introduction of a comprehensive optional European contract code has been the main policy option under discussion for European contract law over the past decades, the idea of such a code remains relevant.

Alexander J. Wulf

Theoretical Framework

Frontmatter

1. The Debate on an Optional European Contract Law

Abstract

In 1989 the European Parliament passed its first resolution on European contract law entitled “Resolution of the European Parliament of May 26, 1989 on action to bring into line the private law of the Member States”. In it the Parliament called for the preparation of a European Civil Code to promote the European Internal Market. In 1994 the Parliament passed the “Resolution of the European Parliament on the harmonization of certain sectors of the private law of the Member States” in which it called once more for a convergence of private law throughout the Member States of the European Union (Member States), preferably in the form of a European Civil Code. The Parliament considered this to be a necessary step towards the completion of the internal market.

Alexander J. Wulf

2. The Theory of Institutional Competition in European Contract Law

Abstract

Institutional competition has been extensively discussed in the literature on European contract law. This chapter introduces the main findings of this theoretical debate. The findings are not cohesive. There has been disagreement on many of the most important parameters of institutional competition. These disagreements range from whether institutional competition in European contract law takes place at all, whether this competition is beneficial or detrimental to welfare and the European economy and whether it renders the Commission’s harmonization efforts superfluous or, on the contrary, makes them all the more necessary. The aim of this chapter is not to dissolve these disagreements or to evaluate the opposing opinions, but to introduce the concept of institutional competition in European contract law from a general point of view and to portray the various existing views and opinions about it.

Alexander J. Wulf

3. An Optional European Contract Code in the Institutional Competition between European Contract Laws

Abstract

Whether an optional European contract code would in fact be desirable for European contract law can only be judged by assessing its effect on the competition between multiple contract codes on the European market for contract laws. In this section I therefore develop an economic model of the institutional competition in European contract law. The model examines the competitive processes that take place in European contract law from a conceptual perspective, applying economic reasoning. It assumes an analogy between legal products and economic products. This assumption is necessary in order to apply economic reasoning and the theory of transaction costs to the competitive relationship between national contract laws and optional contract laws.

Alexander J. Wulf

Empirical Research

Frontmatter

4. Methodology

Abstract

The section 1.3.1, “Requests for Empirical Research”, reveals that many participants in the academic debate on the European contract law have asked for quantitative research on the relevant issues. In the past these issues have been addressed only by a few descriptive surveys. No other relevant secondary data, e.g. quantitative economic data, court records, contract records have been reported. The statistical analysis presented in this book is therefore based on the data gathered in one of these surveys which is entitled “Civil Justice and Choice of Contract Law: A Business Survey”. I contributed to this survey by creating the research design and organizing the data collection and the computation of the results. Survey research as it is known today is a relatively new research methodology that became increasingly popular in the 1930s.

Alexander J. Wulf

5. Association Analysis for the Choice of Proper Contract Law and Dispute Resolution Forum in Cross-Border Contracts

Abstract

In international contracting, the contracting parties must choose the applicable contract law and the dispute resolution forum. In the absence of a direct choice in the form of a choice of law and forum selection clause, the applicable law and competent forum are determined by the international conflict of law rules. In the discussion on an optional European contract law and the discussion on privately drafted contract laws such as the Principles of European Contract Law (PECL) or the UNIDROIT Principles of International Commercial Contract (PICC), the question has been posed as to the extent to which the choice of contract law and choice of forum are interrelated. This may be important for our understanding of the competition between contract codes in European contract law.

Alexander J. Wulf

6. Regression Models for Addressing Questions in European Contract Law

Abstract

The binary logistic regression models presented in this section form the main part of the empirical research addressed in this book. The models are used to estimate the main parameters of the Cycle of European Contract Law model with a view to predicting and describing the effects that introducing an optional European contract law would have on contracting behaviour in the European Internal Market. The binary logistic regression models help to do this by providing data that can be taken as a basis for characterising the supporters of a European contract law, the supporters of a European civil justice system and the users of the existing optional contract laws and to explain the motivations and interests of these businesses. In the final part of this book these results are used to evaluate the arguments for and against a possible optional European contract law and the different options for its implementation in European contract law.

Alexander J. Wulf

7. The Transaction Costs Latent Variable Model

Abstract

This chapter investigates whether the described theory of transaction costs can be identified on the basis of the empirical data obtained. It tests whether the theory can be adequately modelled by the two key variables that were derived from the theory, information costs and the suboptimal choice of law costs arising from provisions of the chosen contract law that fail to fully meet the requirements of the contracting parties in the given case (abbreviated in what follows as suboptimal choice of law costs). A latent variable model, a confirmatory factor analysis, is employed to investigate whether the concepts of information costs and suboptimal choice of law costs adequately describe the transaction costs involved in crossborder transactions. This question needs to be operationalised so that it can be investigated.

Alexander J. Wulf

Conclusions

Frontmatter

8. Assessment of the Desirability of an Optional European Contract Law

Abstract

The comprehensive theoretical and empirical analyses presented in the previous two parts of this book have led to some valuable insights on European contract law and an optional European contract code. The theoretical Cycle of European Contract Law model helped to gain a better understanding of the competitive and innovative processes that develop between the legislative instruments currently governing cross-border transactions in Europe. It then helped to predict the effects that introducing an optional European contract code would have on European contract law. The empirical association analyses provided some useful answers to the question as to whether practitioners differentiate between the dispute resolution forum and the applicable contract law when deciding between them for a cross-border transaction.

Alexander J. Wulf

Backmatter

Titel: Institutional Competition between Optional Codes in European Contract Law
verfasst von: Alexander J. Wulf
Verlag: Springer Fachmedien Wiesbaden
Electronic ISBN: 978-3-658-05801-2
Print ISBN: 978-3-658-05800-5
DOI: https://doi.org/10.1007/978-3-658-05801-2