What is the problem? Varying national contractual rules hamper the single market

Every EU Member State has its own contractual rules and often, the clauses in force differ from one country to another. This is a serious challenge to the smooth functioning of the internal market. For instance, businesses trading across borders may face high legal costs when their contracts are subject to foreign consumer law. Those costs are passed on to consumers who will eventually have to pay higher prices fore products or services.

Why is EU action needed? Legal uncertainty strangling cross-border e-commerce

Divergent rules mean that some companies could decide not to enter foreign markets because of the high compliance costs. Businesses then lose out in market reach and consumers end up with less choice. The full potential of cross-border e-commerce therefore remains unfulfilled.

What will the Commission do? Additional contract law instrument

The Commission will complement the EU Consumer Rights Directive with an additional instrument. This would eliminate internal market barriers stemming from fragmented national contract laws and would help to achieving a digital single market for consumers and businesses.

In 2010:

• The Commission consulted the public on policy options on European Contract Law for consumers and businesses (public consultation is opened until 31 January 2011).
• Set up an Expert Group to study the feasibility of a user-friendly instrument of European Contract Law.

In 2011:

• Conduct an impact assessment to evaluate different possible policy options for achieving the best result.

Contact:

ken.ducatel@ec.europa.eu