The Common European Sales Law's Compliance with the Subsidiarity Principle of the European Union

Article excerpt

Abstract

The European Union is considering a proposal to create a uniform sales law that would apply to cross-border sales agreements: the Common European Sales Law (CESL). If adopted, the CESL would be an optional instrument: traders could write their contracts with other traders and consumers to make the CESL govern their sales contracts. This Comment addresses whether the CESL complies with the EU's subsidiarity principle, which prohibits the EU from passing any regulations that address matters that can be sufficiently addressed by lower government authorities. One of the EU's primary objectives is completing the internal market among the member states, which the CESL would allegedly encourage by reducing traders' legal costs in cross-border trade. Ultimately, however, the CESL violates the subsidiarity principle precisely because of its optional nature. Traders seeking to engage in crossborder trade will not willingly choose to operate under a legal regime with no preexisting case law, no guarantees of consistent rulings by member states' judiciaries, provisions that prevent the CESL's broader application outside of sales contracts, and particularly high consumer protections.

Table of Contents

I. Introduction............................................................................................................... 318

II. A Political and Economic Framework for the Subsidiarity Principle............................ 321

A. Efficiency Analysis of the Subsidiarity Principle.......................................................... 321

B. Decentralization as a Response to the Underlying Democratic Deficit in the EU.......................................................................................................................... 323

C. Subsidiarity Case Law: Skirting the Centralization Debate.......................................... 327

ΙII. CESL Provisions That Complicate the Development of European Contract Law.............................................................................................................................. 328

IV. Legal Arguments for and against the Common European Sales Law's Compliance with the Subsidiarity Principle...................................................................... 333

A. The Commission's Leg^l Support.............................................................................. 333

B. Member States in Support......................................................................................... 337

C. Member States in Opposition.................................................................................... 339

V. Solution: An Optional Instrument Violates the Subsidiarity Principle............................ 342

VI. Conclusion.............................................................................................................. 344

I. Introduction

In November 2011, the European Commission (the Commission) formally proposed the Common European Sales Law (CESL).1 The product of a comparative study of contract law within the EU,2 the CESL is an attempt to consolidate further the EU internal market by reducing transaction costs for traders and consumers engaged in cross-border transactions. The CESL emphasizes both uniform background contract rules and stronger consumer protections to incentivize both traders and consumers to participate in the regime. Similar to the Uniform Commercial Code (UCC) in the United States,3 the CESL's provisions draw on the merchant practices and contract law of the member states, thereby theoretically streamlining legal issues that traders face when conducting business in multiple jurisdictions.

There is one key difference, however, between the UCC and the CESL. While the UCC replaces and supplements the law in states that have selectively adopted its provisions, the CESL does not. Instead, the CESL would stand alongside member states' sales laws as a second national law. …