Non-Optional Elements in an Optional European Contract Law. Reflections from a Private International Law Perspective

The EC Commission is considering the enactment of an optional instrument of European Contract Law. From a common market perspective such instrument will only be successful if it covers areas of mandatory law (consumer protection and insurance). A fundamental question relates to the regulatory model that could be used to provide parties with an option to choose the instrument. Legal literature proposes a change of Art. 3 para. 1 of the Rome Convention to the effect that an optional instrument may be chosen as the lex causae of a contract. There are, however, several technical problems making this regulatory model burdensome. This is particularly true with an optional instrument covering areas of mandatory law ('non-optional elements'). A second model would be to implement a rule on direct applicability similar to Art. 1 para. 1 lit. a) CISG. However, since a European optional instrument would cover all types of contracts, it would be very hard if not impossible to find a proper rule of direct applicability for all possible cases. Therefore, an optional instrument should simply be enacted as an EC regulation establishing substantive contract law that is directly applicable in all member states and providing parties with an option. The choice granted in the optional instrument would thus depend on the applicability of the law of an EC member state to the contract. An analysis shows that such a regulatory approach would produce the best results.