Professor Mads Andenæs JUS5240/JUR1240 Comparative Private Law

Going over outline and reading, once again Any questions?

Lecture Outline Autumn Introduction 2. The proposal for a common European sales law 3. Overview of the topics of the course. Placing the proposal for a common European sales law and the DCFR in an international perspective. 4. The discipline of comparative law. Legal transplants and convergence of legal families

Lecture Outline Autumn European Contract Law and international contract law conventions 6. Applying comparative method in private law and contract law in particular. 7. Formation of contracts. 8. Interpretation, Reasonableness, Good faith. 9. Liability and other Remedies.

Updated reading list (on the web site) With web links and other features that may be helpful. Moss, G.C.: Lectures on Comparative Law (160 pages) (to be found in the bookstore Akademika published in "Stensilserien for Institutt for Privatrett-nr 166 IfP " and M Andenas and D Fairgrieve, ‘There is A World Elsewhere’ — Lord Bingham and Comparative Law in M Andenas and D Fairgrieve (eds) Tom Bingham and the Transformation of the Law (Oxford University Press 2009), 402 (Available as ebook from the University Library by using "BIBSYS ASK" online-system and on Sacco, R.: Legal Formants: A Dynamic Approach to Comparative Law, in 39 American Journal of Comparative Law (1991), pages 1-34, (Available from the University Library by using "BIBSYS ASK" online-system) Sacco, R.: One Hundred Years of Comparative Law, in 75 Tulane Law Review (2001) (Available from the University Library by using "BIBSYS ASK" online-system)

Updated reading list Sir Basil Markesinis, Jørg Fedtke, Engaging With Foreign Law (Hart Publishing, Oxford 2009, Comparative Law in Commercial Practice, Ch 10, ISBN-10: ) p (Available as ebook from the University Library by using "BIBSYS ASK" online-system). Moss, G.C.: International Commercial Law, Institute of Private Law, Oslo 2010, pages (to be found in the bookstore Akademika published in "Stensilserien for Institutt for Privatrett"/"copy series from the Institute of Private Law" no 185) Kåre Lilleholt, «European Private Law: Unification, Harmonisation or Coordination», i Roger Brownsword, Hans-W. Micklitz, Leone Niglia and Stephen Weatherill (eds.), The Foundations of European Private Law, Oxford 2011, s. 353– 361. Hans-W. Micklitz and Norbert Reich ’The Commission Proposal for a “Regulation on a Common European Sales Law (CESL)” – Too Broad or Not Broad Enough?’, EUI Working Paper LAW 2012/04. equence=3 and VI) and C (ca 430 pages). equence=3

Supplementary reading Principles, Definitions and Model Rules of European Private Law, Draft Common Frame of Reference, DCFR See also: Definitions and Model Rules of European Private Law, Draft Common Frame of Reference, DCFR Proposal for EU Regulation on Common sales law with other materials on The EU Consumer Rights Directive, Sir Basil Markesinis, Jørg Fedtke, Engaging With Foreign Law (Hart Publishing, Oxford 2009, ISBN-10: ). (Available as ebook from the University Library by using "BIBSYS ASK" online-system) C (ca 430 pages).

Supplementary reading Moss, G.C.: Contract or Licence? Regulation of Petroleum Investment in Russia and Foreign legal Advice, in Journal of Energy & Natural Resources Law, 1998, pages Journal of Energy & Natural Resources Law, 1998, pages Moss, G.C.: INTERNATIONAL CONTRACTS BETWEEN COMMON LAW AND CIVIL LAW: IS NON-STATE LAW TO BE PREFERRED? THE DIFFICULTY OF INTERPRETING LEGAL STANDARDS SUCH AS GOOD FAITH, Global Jurist: Vol. 7: Iss. 1 (Advances), Article 3 pp.1-38 Gordley, J., Von Mehren, A., An introduction to the comparative study of private law, Cambridge University Press, Tetley, W.: Mixed Jurisdictions: Common Laws vs. Civil Law (Codified and Uncodified), part I and part II, (56 pages) 1/ 1/ Joint network on European Private Law, with further links: Schulze, R. (ed), “New Features in Contract Law”, Sellier European Law Publishers, 2007

Supplementary reading Introduction to the Principles of European Contract Law, with further bibliographic references: UNIDROIT Principles of International Commercial Contracts, with further bibliographic references: Vogenauer, S., Weatherill, S., The Harmonisation of European Contract Law, Studies of the Oxford Institute of European and Comparative Law, 2006 Wilhelmsson, T., Paunio, E., Pohjolainen, A. (eds), “Private Law and the Many Cultures of Europe”, Kluwer Law International, 2007 Zimmermann, M., Reimann, The Oxford Handbook of Comparative Law, Oxford University Press, 2006 Zweigert, K. and H. Kötz: Introduction to Comparative Law, 3rd ed Clarendon Press, Oxford 1998: Parts B (except chapter V and VI) and C (ca 430 pages).

Examination and past papers

The main topics: 2. The proposal for a common European sales law The European Commission proposal for a Regulation on a Common European Sales Law (COM(2011) 635 final). Background and reactions ‘Legal base’ in the EU The Internal Market, consumers, business and contract law

3. Overview of the topics of the course. Placing the proposal for a common European sales law and the DCFR in an international perspective. Follow up from first lecture and Professor Lilleholt’s lecture on European Sales Law.

4. The discipline of comparative law. Legal transplants and convergence of legal families. What is comparative law and what functions may it serve? Law making: legislation, case law Understanding law and legal rules The normative and the factual, effects and context Legal transplants Legal families Convergence of legal families

5. European Contract Law and international contract law conventions Return to the conventions, model laws, EU legislation, and different iniatives. What do they cover or let out? Some differences between international and EU instruments : the international focus on the commercial/professional EU law on consumer protection Conventions optional/declaratory/derogable (freedom of contract), EU directives mandatory

6. Applying comparative method in private law and contract law in particular. The role of comparative law and method in private law Contract law: commercial and consumer law The autonomy of the national

7. Formation of contracts. 8. Interpretation, Reasonableness, Good faith. 9. Liability and other Remedies.

7. Formation of contracts. Offer, accept, binding contract Do offers bind, is ’consideration’ required? To what extent is a universal model found in the conventions and model laws? EU law and the formation of contracts.

8. Interpretation, Reasonableness, Good faith. Interpretation in different national traditions. The role of reasonableness and good faith.

Reading for the next lecture: 4. The discipline of comparative law. Legal transplants and convergence of legal families: Moss, G.C.: International Commercial Law or Lectures on Comparative Law M Andenas and D Fairgrieve, ‘There is A World Elsewhere’ (Available as ebook) Sir Basil Markesinis, Jørg Fedtke, Engaging With Foreign Law (Hart Publishing, Oxford 2009, Comparative Law in Commercial Practice, Ch 10, ISBN-10: ) p

Placing the proposal for a common European sales law and the DCFR in an international perspective

A Common European Sales Law? Proposal for regulation: COM(2011) 635 final An optional “2 nd regime” for cross-border contracts Scope: sales of goods, supply of digital content, related services Relevance for comparative law

Contract law in Europe Varies from country to country Private international law Uniform law –CISG –EU legislation, minimum harmonisation, total harmonisation Model laws etc.: UNIDROIT Principles, PECL, DCFR

The process up to CESL The Commission’s Action Plan (2003) CoPECL Network (2005) Draft Common Frame of Reference (2009) –Study Group on a European Civil Code –Acquis Group French texts on terminology and principles (2008) Feasibility Study (2011) CESL (2011)

The DCFR Black letter rules Comments Comparative notes

Contents DCFR Book I General provisions Book II Contracts and other juridical acts Book III Obligations and corresponding rights Book IV Specific contracts and the rights and obligations arising from them Book V Benevolent intervention in another’s affairs

Contents DCFR (ctd.) Book VI Non-contractual liability arising out of damage caused to another Book VII Unjustified enrichment Book VIII Acquisition and loss of ownership in movables Book IX Proprietary security rights in movable assets Book X Trusts

EU legislation on contracts Primarily on consumer contracts Most recent: Consumer Rights Directive (2011/83) –deadline 13 December 2012 –contracts concluded after 13 June 2014

CESL – a second regime Norwegian law German law French law Existing law CESL

Application of CESL Chosen by the parties Cross-border contract (unless otherwise decided) At least one party in a Member State Contract for the sale of goods, for the supply of digital content, related services Trader and consumer or SMB (unless otherwise decided)

Recourse to other law? Autonomous interpretation Issues with the scope of CESL must be settled without recourse to national law

Content of CESL Making a binding contract Interpretation Obligations and remedies Damages and interest Restitution Prescription

Conclusion of contract Definition of contract Offer and acceptance Right to withdraw Defects in consent

Voidability due to mistake Article 48 Inaccuracy in communication

Interpretation Common intention Particular meaning known to the other party Meaning that a reasonable person would give to it Relevant matters –circumstances –practices –good faith and fair dealing

35 DCFR and Common Law DCFR Relationship to national legal systems and traditions Special issues relating to the Common Law.

36 DCFR and its general reception Some support from participants Critical approaches typified by Zimmermann and Hugh Collins

37 ESL and its general reception Some support from participants Critical approaches typified by Zimmermann and Micklitz

38 The autonomies of law The autonomies of law as a challenge to a European Civil Code or DCFR National legal systems Private law, public law Commercial law, private law European law in the national traditions of private law A set of false dichotomies?

39 European law and the challenge of common law Common law contracts in areas such as finance, IP Common law practice with US and London firms.

40 The efficiency of the common law World Bank: Doing Business –Understanding regulation 2004 –Removing obstacles to growth 2005 Réponse de l’Association Henri Capitant aux Rapports "Doing business" de la Banque Mondiale - Les droits de tradition civiliste en question

41 How the common law sees itself Tennekoon and Wood

42 The role of legislation in the common law of commerce Contract, case law and default rules in legislation. Limited. No general codifications. Exceptions, insurance codifications.

43 Some features of the common law of England: traditional argument Structure of contract law is different: limited default rules, contract practice aims at providing an autonomous and complete regime. Interpretation of contracts: exclusionary rules (pre-contractual negotiations and postcontractual behaviour) and literalism. Role of good faith. Creditor-friendly.

44 How is the common law developing Law on interpretation of contracts is changing: exclusionary rules and literalism. Role of good faith. Creditor-friendliness is less obvious in insolvency but still more freedom in constructing securities. Structure of contract law remains different in this respect: limited default rules, contract practice aims at providing an autonomous and complete regime. But here many areas follow this direction.

45 Critical perspectives on these common law features Structure of contract law: what is the cost of current contract law practice with no default rules to rely on, transaction cost in contracting, quality of contract terms Interpretation of contracts: did these rules ever provide the benefits envisaged? Creditor-friendliness: the economic cost benefit analysis. Personal credit and security rights. Creditor protection and access to credit without security.

46 Absence of principles P Birks English Private Law

How do courts use comparative law? 47

48 The national paradigm and the closed system Did it ever apply? –In legislative reform – In the courts Current developments: Italian and English courts, the US. –Fairchild v Glenhaven Funeral Services Ltd, [2002] UKHL 22. –Sentenza n del 16 ottobre 2007 (Sezione Prima Civile, Presidente M. G. Luccioli, Relatore A. GiustiSentenza n del 16 ottobre 2007 (Sezione Prima Civile, Presidente M. G. Luccioli, Relatore A. Giusti, “Salute,accanimento terapeutico,stato vegetativo,eutanasia”). –Roper v Simmons 543 US 551 (2005).

49 The positions in the US debate. Harold Koh, Sir Basil Markesinis, Jeremy Waldron, the ‘liberal’ justices Mary-Ann Glendon, The Federalist Society, the conservative justices

50 The positions in the English debate. Sir Basil Markesinis, Lord Bingham: making use of comparative law as a tool John Bell: limitations of context but still of use in policy reform and legal analysis Jane Stapleton, Lord Hoffmann

51 Can courts make use of comparative law? –The use of foreign law –The indirect entry points for foreign law and comparative law

4. Formation of contracts In the international instruments, in the DCFR In national law: different models 52

Formation in common law Two main elements: 1) Agreement a) Offer b) Acceptance 2) Consideration Other elements: Intention to create legal relations, Capacity, Formalities 53

The offer in common law Definition – Statement by one person to another person, evincing his/her willingness to enter into contractual relations with that person on certain terms. Distinguish offer from an “Invitation to Treat” – auctions, tenders, Carbolic Smoke Ball. 54

«Consideration» in common law 1) Must be a connection between the consideration and the promise which it is said to support. 2) Must move from the promisee, but not necessarily to the promisor (Coulls v Bagot’s Executor and Trustee). 3) Must be sufficient but need not be adequate (Chappell & Co v Nestle & Co Ltd)– Illegal consideration is not sufficient, and excessively inadequate consideration may not be sufficient. 4) Past consideration is not good consideration (Lampleigh v Brathwait). 55

French law and «cause» Art 1108 of the Code Civil: Consent, Capacity, Object, Cause 56

Formation in the international instruments: UNIDROIT Principles. The Convention on the International Sale of Goods (CISG) adopted by UNCITRAL. PECL. DCFR. EU consumer law ESL 57

Formation in the UNIDROIT Principles : PICC third edition 2010 CHAPTER 2 — FORMATION AND AUTHORITY OF AGENTS SECTION 1: FORMATION 58

CISG The Convention on the International Sale of Goods (CISG) adopted by UNCITRAL Part II. Formation of the contract 59

Formation in PECL and DCFR : DCFR: contract as ‘bilateral or multilateral juridical act’. ‘BGB’ translated into English’? Role of legal scholarship. ‘Juridical act’ and ‘contract’, Art II.-1:1010(1) DCFR. PECL: less precise? 60

Formation in PECL: Article 2:101 (1) A contract is concluded if: (a) the parties intend to be legally bound, and (b) they reach a sufficient agreement without any further requirement. (2) A contract need not be concluded or evidenced in writing nor is it subject to any other requirement as to form. The contract may be proved by any means, including witnesses. 61

Formation in DCFR: Article II.-4:101 PECL Article 2:101 para(2) has been removed: (2) A contract need not be concluded or evidenced in writing nor is it subject to any other requirement as to form. The contract may be proved by any means, including witnesses. 62

UNIDROIT PICC and UNCITRAL CISG No such general part relating to the formation of contract law 63

Offer and acceptance in PICC and CISG UNIDROIT PICC and UNCITRAL CISG: An offer must be such that, through its acceptance, a contractcan be brought into existence. It must therefore be sufficiently definite and be based on the intention, on the part of the offeror, to be bound: Art 14 CISG; Art PICC; Art 2:201(1) PECL; Art II.– 4:201(1) DCFR. 64

Effectiveness and revocal An offer becomes effective as soon as it reaches the offeree; Art 15(1) CISG; Art PICC. Until that moment the offeror may revoke it at any time. Art 15(2) CISG; Art PICC. 65

Revocal Even an offer that has already reached the offeree, and has therefore become effective, may however be revoked as long as the revocation reaches the offeree before the latter has dispatched his acceptance. This is not the case if: (i) the offer indicates that it is irrevocable;(ii) the offer states a fixed time for its acceptance; or (iii) the offeree can reasonably rely upon the offer being irrevocable and has already acted in reliance upon the offer. Art 16 CISG; Art PICC. 66

Rejection and acceptance by statement and conduct An offer also lapses as a result of a rejection reaching the offeror. Art 17 CISG; Art PICC. Acceptance by means of statement or conduct; the moment when the acceptance becomes effective and the contract is thus concluded; time limits for acceptance and the consequences of late acceptance. Arts 2:204– 2:208 PECL. 67

An offer also lapses as a result of a rejection reaching the offeror. Art 17 CISG; Art PICC; Art 2:203 PECL. Far reaching agreement on acceptance: acceptance by means of statement or conduct; the moment when the acceptance becomes effective and the contract is thus concluded; time limits for acceptance and the consequences of late acceptance; modified acceptance. Arts 2:204–2:208 PECL; Arts II.– 4:204–4:208 DCFR. 68

Differences between PECL and PICC 69

DCFR and ESL compared 70

5. Interpretation, Reasonableness, Good Faith In the international instruments, in the DCFR In national law: different models 71

Interpretation, Reasonableness, Good Faith in the Common Law 72

Interpretation, Reasonableness, Good Faith in German, French and Italian law 73

Interpretation, Reasonableness, Good Faith in the international instruments: UNIDROIT Principles. The Convention on the International Sale of Goods (CISG) adopted by UNCITRAL. PECL. DCFR. ESL. 74

In the UNIDROIT Principles : 75

CISG The Convention on the International Sale of Goods (CISG) adopted by UNCITRAL 76

In PECL and DCFR : 77

6. Liability and other Remedies In the international instruments, in the DCFR In national law: different models 78

Liability and other Remedies in the Common Law 79

Liability and other Remedies in German, French and Italian law 80

Interpretation, Reasonableness, Good Faith in the international instruments: UNIDROIT Principles. The Convention on the International Sale of Goods (CISG) adopted by UNCITRAL. PECL. DCFR. 81

In the UNIDROIT Principles : 82

CISG The Convention on the International Sale of Goods (CISG) adopted by UNCITRAL 83

In PECL and DCFR : 84