Self-regulation in European Contract Law
European Journal of Legal Studies, 2007, 1, 1
CAFAGGI, Fabrizio, Self-regulation in European Contract Law, European Journal of Legal Studies, 2007, 1, 1 - http://hdl.handle.net/1814/6846
Retrieved from Cadmus, EUI Research Repository
This essay focuses on rule-making procedures in European Contract Law and the role of self-regulation. Self-regulation may serve different purposes in this respect: it operates as a standard-setting mechanism for contracts, in particular through standardisation; it may interpret European and national law offering firms and consumers guidelines: and finally it contributes to monitoring the conduct of contracting parties to ensure compliance, and it provides enforcement mechanisms. Self-regulation plays already a significant role at European level, it is already relevant for European Contract Law and may perform important functions in the process of drafting the Common frame of references and more broadly in the process of harmonisation of ECL. This paper addresses self-regulation as a complementary means to harmonize and regulate ECL. Two main choices may characterize the use of self-regulation as a means of harmonising European Contract Law. On the one hand, self-regulation can be a partial or a total device for harmonization, i.e. (a) it can be a complement to hard or soft law harmonisation or (b) it can, in certain areas, substitute hard law harmonization . On the other hand, self-regulation can be general and/or sector specific, i.e. it can operate within the general Common Frame of reference or it can specify the general standard forms to be used for individual sectors, unregulated or regulated (banking, insurance, securities). The choice between the first two alternatives, complementarity or substitution will partly depend on the form of legislation. The role of self-regulation will increase in a principle-based legislative framework and decrease in a rule-based framework. In practical terms self-regulation operates both as a complement and as a substitute. It is a complement when it specifies or interprets existing legislation. It is a substitute when harmonises, by means of Standard contract forms, Framework contracts or Master Agreements, contractual relationships otherwise regulated at State level in different fashions. In turn from the perspective of the State or the European institutions the use of self-regulation in ECL may imply a functional change: from the ‘theoretical’ monopoly of law making to a duopoly. But the change could be even more radical if the public legislator, be it at European or national level, becomes a coordinator and/or a mediator among different self-regulatory bodies, negotiating among themselves contract law rules. The evolution of the regulatory state in Europe will probably affect which combination between these two identities will emerge in the next future. The main aims of the paper are (1) to demonstrate the necessity to consider self-regulation as a significant component of the debate concerning the definition of Common Frame of References related to European Contract law, (2) to identify the role and the limits of self-regulation in the formation of European Contract Law, and (3), more in general, to show the strong correlation between the governance of self-regulatory bodies and the substance of European Contract Law.
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Keyword(s): European Law