THE PRINCIPLES

OF EUROPEAN CONTRACT LAW

Prepared by

the Commision on European Contract Law

1999

text in English

Introduction to the Principles of European

Contract Law

Prepared by

The Commission on European Contract Law

A businessman is negotiating a contract with a company in another State of the European Union, but neither party wishes to apply the law of the other country.

A lawyer is advising parties to a contract involving parties in different States.

An arbitrator has to decide a dispute under a contract "to be governed by internationally accepted principles of law".

A professor of law wants his students to gain an understanding of the way in which contracts are treated by the laws of the different States of the European Union, and to learn the common principles.

A legislator is drafting a code or a statute on the law of contracts. An European Union official is drafting a new Directive affecting contracts.

All these need to know the principles of contract law shared by the legal systems of the Member States and to have a concise, comprehensive and workable statement of them. The Principles of European Contract Law Parts I and II(1), and part III (2) will provide this.

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You will find the text of the articles of Parts I-III in the third section below.

The Principles have been drawn up by an independent body of experts from each Member State of the European Union under a project supported by the European Commission and many other organisations. The principles are stated in the form of articles with a detailed commentary explaining the purpose and operation of each article. In the comments there are illustrations, ultra short cases which show how the rules are to operate

in practice. Each article also has comparative notes surveying the national laws and other international provisions on the topic.

The Principles of European Contract Law Parts I and II (hereinafter referred to as PECL I and II.)cover the core rules of contract, formation, authority of agents, validity, interpretation,, contents, performance, non-performance (breach) and remedies. The Principles previously published in Part I (1995) are included in a revised and re-ordered form. Part III covers plurality of parties, assignment of claims, substitution of new debt, transfer of contract, set-off, prescription, illegality, conditions and capitalisation of interest.

Throughout Europe there is great interest in developing a common European civil and commercial law. The European Parliament has twice called for the creation of a European Civil Code. The Principles of European Contract Law are essential steps in these projects.

The Background of the Principles

The European Union have promoted a European régime of academic lawyers whose platform is Europe and whose writings and debates are concerned with the future European law. This new European régime resembles that of the American. In the United States the writings on contract law - as on other subjects - deal with the problems and issues common to the common law states. There are considerable differences between the contract laws of the several states. These differences, however, do not prevent a debate which can be based on common concepts and a common legal method. Such a common language and a common legal method is also slowly emerging in Europe. The American and the new European régimes are inspiring each other. Together with lawyers from other countries they are in the process of becoming a world community of academic lawyers.

To day, however, the domestic law is the main subject of the European law schools. And Europe has as many legal sciences as there are legal systems. This, in fact, is a great waste of efforts and talent. It will be an enormous improvement of resources and ideas and enrich the legal science considerably when in the third millennium the talents will unite to establish and later maintain a European- or a world- private law.(3)And the efforts and money which it will cost to unify the private law will be amply repaid when it is there. Much of the work to cultivate the many domestic laws will then be saved.