The European commission's green paper on European contract law: context, content and constitutionality

In July 2001 the European Commission published a Communication to the Council and the European Parliament, its so-called 'Green Paper' on European Contract Law (COM (2001) 398). This document seeks feedback on the options sketched by the Commission for future European Community action in the contract law field. The present note, which incorporates as an Appendix the text of the Green Paper itself, is designed to explain the background to the Commission's intervention (the first section, pp. 339-350 below), to provide a brief commentary on the content of the Green Paper (the second section, pp. 350-356) and then to assess the constitutional implications of a proposed advance towards a European Contract Law (the third section, pp. 356-371). It is argued that the debate about the creation of a European contract law is properly seen not merely as a matter of cultural feasibility and of commercial desirability, but that in addition assessment of the EC's potential contribution is heavily conditioned by increasing constitutional anxieties about the EC's legitimate role in the field of market regulation. The Green Paper avoids explicit treatment of the constitutional dimension of European contract law, yet, it is argued in this note, this is in fact unavoidable in the wake of the European Court's seminal judgment of October 2000 in the so-called 'Tobacco Advertising' case in which it for the first time invalidated a measure of harmonisation of laws on the basis that an insufficient connection with the process of market-building had been shown by the European Community's legislature. This demands that the constitutional validity of legislative proposals in the field of contract law be examined with care, for the EC, an entity created by an international Treaty, has been endowed with no general competence as lawmaker in this or any other field, even though past legislative practice may have tended to obscure this constitutionally fundamental principle.