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The Future of the Commercial Contract in Scholarship and Law Reform pp 1–23Cite as

The Future of the Commercial Contract in Scholarship and Law Reform: An Introduction

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Abstract

This chapter maps out our volume on the commercial contract law in scholarship and law reform. It starts by outlining the general distinction between commercial and non-commercial contract law and by introducing and critically reflecting on recent law reform in this area of law. It then moves on to introducing and contextualising the contributions which the chapters on Parts II and III of this volume make to scholarly debate of selected distinctive aspects of commercial contracts and of the interface of commercial contracts and contract law with public international law. The chapter concludes with an outlook and brief summary of the general findings of the research presented in this volume.

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Notes

  1. 1.

    COM(2011) 635 final.

  2. 2.

    Lando and Beale (2000). The full text can be accessed online among other sites at https://www.trans-lex.org/400200/_/pecl/.

  3. 3.

    Von Bar and Clive (2010).

  4. 4.

    http://fidic.org/. See Christie in this volume.

  5. 5.

    See D’Alvia and Oosterhuis in this volume.

  6. 6.

    See also Sect. 5 below.

  7. 7.

    See Sect. 3.1 below and see Heidemann in this volume.

  8. 8.

    Art. 1 (1) CISG: “This Convention applies to contracts of sale of goods between parties whose places of business are in different States:”

  9. 9.

    Art. 2 CISG: “This Convention does not apply to sales: (a) of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use;….”

  10. 10.

    Art. 1 (3) CISG: “Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.”

  11. 11.

    Interestingly, Herber and Czerwenka do not refer to the merchant and non-merchant dichotomy but only to the relationship with national consumer laws which may maintain diverging categories from CISG specifying personal use as an exception to its applicability, Herber and Czerwenka (1991), pp. 23–25.

  12. 12.

    See Bell et al. (2008), pp. 453–480.

  13. 13.

    See in detail Heidemann (2016).

  14. 14.

    English merchant law was merged into general law in the seventeenth century and special adjudication displaced. See on this McKendrick (2016), pp. 3–8. For a more detailed account and a good read on the subject see also Plucknett (1956), pp. 657 et seq.

  15. 15.

    See Articles L110-1(1) and (2) of the French Code de Commerce, CdC.

  16. 16.

    See in detail Heidemann (2016), e.g. pp. 698–699 and similar Austen-Baker (2008).

  17. 17.

    See Dalhuisen in this volume who suggests the recognition and promotion of ‘minimum standards’ in commercial contracts.

  18. 18.

    See the critique of this assumption by Austen-Baker (2008).

  19. 19.

    See the Guardian newspaper of 20 Feb 2018 at https://www.theguardian.com/business/2018/feb/20/mps-publish-full-unredacted-report-into-rbs-small-business-scandal. See also Sara Hourani in this volume.

  20. 20.

    See on this Heidemann (2016). See also Austen-Baker (2008), pp. 61 and 64.

  21. 21.

    Art. 121-1 CdC.

  22. 22.

    Dalhuisen in this volume.

  23. 23.

    Federal Bulletin, BGBl. 1998 I Nr. 38, 1474–1484 (22 June 1998).

  24. 24.

    Section 13 of the German Civil Code, Buergerliches Gesetzbuch, BGB.

  25. 25.

    Only a merchant can commit insolvency offences.

  26. 26.

    See Austen-Baker (2008), p. 61.

  27. 27.

    Relevant EU Directives and Regulations open with a scope provision which stereotypically include the phrase ‘[f]or the purposes of this Regulation’ or ‘[f]or the purposes of this Directive’, see Heidemann (2016), pp. 679–681. Examples are Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees, [1999] OJ L 171/12; Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours, [1990] OJ L 158/59; Recital 7 and Article 3 of the Proposal for a Directive of the European Parliament and of the Council on package travel and assisted travel arrangements, amending Regulation (EC) No. 2006/2004, Directive 2011/83/EU and repealing Council Directive 90/314/EEC, COM(2013) 512 final; Regulation (EC) No. 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/9, [2004] OJ L 46/1; Directive 94/47/EC of the European Parliament and the Council of 26 October 1994 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis, [1994] OJ L 280/83; Directive 2008/122/EC of the European Parliament and the Council of 14 January 2009, [2009] OJ L 33/10; Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), [2008] OJ L 177/12; Council Regulation (EC) No. 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [2001] OJ L 12/1; Regulation (EU) No. 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (‘Brussels I Recast’), [2012] OJ L 351/1.

  28. 28.

    And indeed the British in respect of the Consumer Rights Act 2015, see Sect. 3.2.3 below.

  29. 29.

    Reforms of the HGB have been proposed as early as 1965 by Raiser and in 1975 by Raisch. Criticism of the existing structure is regularly voiced by scholars, to no avail, see Raisch (1965, 1975), Raiser (1969), and Schmidt (2005).

  30. 30.

    The reform was effected by way of the Bundesgesetz über besondere zivilrechtliche Vorschriften für Unternehmen (Unternehmensgesetzbuch – UGB) as of 1 January 2007, available at www.ris.bka.gv.at/Dokument.wxe?Abfrage=BundesnormenDokumentnummer=NOR30004735; and enacted by the Handelsrechts-Änderungsgesetz (HaRÄG), Federal Bulletin (BGBl.) I Nr. 120/2005, available at www.ris.bka.gv.at/Dokument.wxe?Abfrage=BgblAuthDokumentnummer=BGBLA_2005_I_120.

  31. 31.

    See note 26 above.

  32. 32.

    Directive 2011/83/EU.

  33. 33.

    See Anagnostopoulou in this volume.

  34. 34.

    The ‘consumerism’ debate started in the early 1970s in the US and in Europe and linked the subject to general political debate which still hinders a meaningful political and academic review of underlying concepts. See for an early contribution to the concerns raised against ‘consumerism’ Powers (1971). A transaction based view would arrive at different results than the identity based approach in consumer law. ‘Consumer’ law would cover a wider spectrum of contracting parties including professionals acting ‘in the course of their business’ in some cases. This contradicts a person centered view that seeks to perpetuate the character of consumer as weak and in need of privileges and protection which is often seen as a political statement defending consumers against abusive and greedy business practices (and business people), a scenario of perpetrator and victim in short. While this aim is doubtlessly justified in a modern world of mass production on a global scale the attitude reveals a possibly inadvertent adherence to the old class system with static roles for model identities which is most definitely obsolete. Consumer law must not be a vehicle to introduce new class-like divisions and classifications of equal citizens. New law can be devised in new forms. The transaction based method is clearly a more modern version of the creation of the law merchant and can be used to devise complementary law for consumers. Similar considerations have been made in the law of (international) taxation but not followed through. See Heidemann (2016) and Heidemann in this volume.

  35. 35.

    See Explanatory Note No. 24 to the Consumer Rights Act 2015.

  36. 36.

    The law merchant is used as reference to trade usages and customs in the Sale of Goods Act (SGA) 1979 section 62(2): ‘the rules of the common law, including the law merchant, except in so far as they are inconsistent with the provisions of [the SGA] … apply to contracts for the sale of goods.’

  37. 37.

    See Pédamon in this volume.

  38. 38.

    See Karaiskos in this volume.

  39. 39.

    Discounting incorporation agreements which are regarded as (multilateral) contracts in civil law jurisdictions.

  40. 40.

    See further Karaiskos in this volume.

  41. 41.

    See further on this imbalance Hourani in this volume.

  42. 42.

    See also Dalhuisen in this volume.

  43. 43.

    See Karaiskos in this volume at Sect. 6.

  44. 44.

    Such as hardship rules in the UNIDROIT Principles for International Commercial Contracts, UPICC.

  45. 45.

    Section 313 Buergerliches Gesetzbuch, BGB.

  46. 46.

    See Pédamon in this volume.

  47. 47.

    Examples are insurers, creditors and lenders.

  48. 48.

    English translation officially endorsed by the Federal Ministry of Justice and available at https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p3170.

  49. 49.

    See for instance Neumann (2012), p. 517. See also Association Henri Capitant (2008), p. 77; Weller (2009), p. 517; Eidenmueller (2008), p. 539; Eidenmueller et al. (2008).

  50. 50.

    As well as potentially party autonomy.

  51. 51.

    This discussion was started by Ronald Coase in the early twentieth century with his publication ‘The Nature of the Firm’, Coase (1937).

  52. 52.

    See on this for instance Solinas (2014).

  53. 53.

    And a winner of the Nobel Prize for Economics in 1991.

  54. 54.

    Which is shown by the use of the term firm in the legally informal but economically relevant sense.

  55. 55.

    One tragic example is the collapse of the ‘Rana Plaza’ textile factory building in Dakha, Bangla-Desh in 2013 causing over 3500 people, mostly textile workers, to be killed or injured. The flagrant breach of building regulations that led to this disaster was of course not directly attributable to the Western retailers whose suppliers were based in the building. The moral and ethical involvement is compelling though and called once again for a response on the part of retailers, by politicians, consumers and campaigners.

  56. 56.

    Examples are the United Nations Global Compact, the OECD Guidelines and the standards issued by the International Labour Organisation to name a few. In the UK, stock market listed companies are required to comply with the UK Corporate Governance Code as part of listing requirements or explain why they do not comply, see Listing Rules 9.8.6. (5) and (6) of the Financial Conduct Authority (FCA), the UK supervisory body for the stock market, available at https://www.handbook.fca.org.uk/handbook/LR/9/8.html. The UK has also adapted the Proceeds of Crime Act 2002 (sections 241 and 241A) by way of the section 13 of the Criminal Finances Act 2017 expanding forfeiture rules to assets obtained in connection with human rights violations. This may not have helped the Rana Plaza building collapse case, though. See for more detail on the subject of ‘transnational governance’ Gless (2015), pp. 45 et seq.; Calliess and Zumbansen (2012), pp. 181–247.

  57. 57.

    See Andhov in this volume. See also Austen-Baker (2008) who describes these regulatory mechanisms of contract on page 73: “In short, the contractual norm of propriety of means, coupled with those of reciprocity and contractual solidarity, will tend to perform the role some seek to fill through regulation.” Commentators generally do not consider the commercial or non-commercial nature of transactions, though. It is submitted here that the tension in consumer contracts or the failures of commercial dealings in a social context cannot be captured without making this distinction and analysing the characteristics of both commercial and private scenarios.

  58. 58.

    See Thomas in this volume who throws a spotlight on recent activities of so called vulture funds and the wider practice in sovereign debt management.

  59. 59.

    Practices like ‘netting’ do not rely on classic enforcement or performance or even offset, they are economically driven. See on this Lehmann (2017). Even within the EU classic contractual performance and traditional insolvency law seems to have been officially abandoned in the area of debt enforcement in banking relationships with the advent of the Bank Resolution Directive 2014/59/EU.

  60. 60.

    See in depth Dalhuisen (2016) and Juutilainen (2018).

  61. 61.

    See Heidemann in this volume.

  62. 62.

    See Oosterhuis in this volume.

  63. 63.

    See Heidemann in this volume.

  64. 64.

    As the drafters of the 1969 Vienna Convention on the Law of Treaties, VCLT, in fact did, see Klabbers (2001), pp. 305–313.

  65. 65.

    Klabbers (2001), p. 293.

  66. 66.

    See Sect. 4.3 above.

  67. 67.

    Basedow (2006), p. 731.

  68. 68.

    Such as the UNIDROIT, UNCITRAL and Hague conventions on leasing and factoring, the applicable law or bills of lading.

  69. 69.

    Basedow (2006), p. 733.

  70. 70.

    Ibid. 732.

  71. 71.

    Ibid.

  72. 72.

    Ibid.

  73. 73.

    Resolution 3201 (S-VI) adopted by the General Assembly, “Declaration on the Establishment of a New International Economic Order”, 1974.

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    Maren Heidemann

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    Maren Heidemann

  2. Law School, University of Exeter, Exeter, UK

    Joseph Lee

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Heidemann, M. (2018). The Future of the Commercial Contract in Scholarship and Law Reform: An Introduction. In: Heidemann, M., Lee, J. (eds) The Future of the Commercial Contract in Scholarship and Law Reform. Springer, Cham. https://doi.org/10.1007/978-3-319-95969-6_1

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