Will firms consider a European optional instrument in contract law?

• Main Author: LOW, Gary
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: Contract law; Harmonisation; Behavioural analysis; Transnational Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/2303; https://ink.library.smu.edu.sg/context/sol_research/article/4255/viewcontent/10.1007_2Fs10657_011_9276_1__1_.pdf
• Institution: Singapore Management University

The diversity of contract laws is said by the Commission to discouragecross-border trade and hinder the development by SMEs of a pan-European commercialpolicy. An optional instrument containing both facilitative general contractrules and mandatory consumer protection rules, one of the solutions proposed by theCommission, is gaining rapid support from key stakeholders. Drawing from firms’own views on the problems of legal diversity, and insights from organisationalscience, this article sets out the circumstances in which firms will likely consider aEuropean optional code. Results are mixed: some firms may consider it, whileothers may ignore it. Much depends the firm’s aspirations (i.e. SMEs cannot beassumed as-yet to have pan-European aspirations), how the firm perceives theproblems of legal diversity, and how it searches for and decides upon solutions. Itwould appear that a European optional instrument may not be as useful or widelyconsidered as its proponents would like to believe.