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Contractual Networks and the Small Business Act: Towards European Principles?
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1725-6739
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EUI LAW; 2008/15
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CAFAGGI, Fabrizio, Contractual Networks and the Small Business Act: Towards European Principles?, EUI LAW, 2008/15 - https://hdl.handle.net/1814/8771
Abstract
In this paper, I address the issue of contractual networks in the European context. The
term “contractual networks” encompasses both multilateral contracts and networks of
linked bilateral contracts. Contractual networks are hybrid forms of organisation located
between markets and hierarchies. Networks differ from market contracts because the
participants are not impersonal agents, but well identified players chosen on the basis of
resource complementarities. They permit resource bundling that markets are unable to
achieve. They differ from hierarchies because enterprises are autonomous and legally
independent even if they may be economically dependent. The main characteristics of
contractual networks are: interdependence, stability of relationships, long-term duration
and multiplicity. Moreover, competition can also supplement cooperation as partners
can cooperate on some projects whilst competing in other ways. The increasing
importance of networks at EU level forces us to rethink two main policy issues: 1) how,
and according to which variables, important is it to distinguish between contract and
company law in relation to inter-enterprise coordination; 2) how to regulate multilateral
contracts among enterprises. So far, contractual networks have not been adequately
recognised at European level where, at least implicitly, the traditional partition between
exchange and organisational contracts has held firm. The Council asked the European
Commission to define a new framework for small and medium enterprises (SMEs), and
the latter recently launched a program to draft a Small Business Act which will include
a company law statute for SMEs. Despite the inattention of both European contract law
drafters and private international law, networks, especially those among SMEs, have
gained momentum in policy-making. The ever more frequent references to networks,
both contractual and organisational, in relation to policies associated with
competitiveness and growth suggest that it may be necessary to coordinate with the
governance dimension associated with their private law regimes. The paper suggests
that Principles of European contractual networks (PECON) are defined and coordinated
with the current DCFR. I sketch some of the possible guiding ideas and the necessity of
coordinating substantive principles with private international law principles pursuant to
the ROME I Regulation. It also proposes that the forthcoming Small Business Act
should incorporate guidelines concerning contractual networks, be they domestic or
transeuropean.