G. Passarelli, Contract Law in Contemporary International Commerce, Erstauflage, 2019, Nomos
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Gianluigi Passarelli
Contract Law in Contemporary International Commerce
Considerations on the complex relationship between legal process and market process in the new era of globalisation
Von RA Dr. Gianluigi Passarelli, Ph.D.
Erstauflage
Baden-Baden: Nomos, 2019, 207 S., Broschiert,52,00 Euro inkl. MwSt.
ISBN 978-3-8487-6038-1
This interesting monograph draws the attention to some difficulties of the ROM – I- VO of the EU. The aim of the volume is to present concrete proposals for a new understanding of international contract law against the background of the application of the ROM I Regulation of the EU.
According to the recitals of the Rome I Regulation, “in the interests of the proper functioning of the internal market, it is necessary to make the outcome of disputes more predictable and to promote certainty as to the law applicable and the free movement of judgments”.
It is already critical here whether the first starting point has been redeemed in practice. The second starting point is even more critical and this is where the study starts. In order to penetrate this argumentation, an approach is necessary that critically examines the complex relationship between legal proceedings and market processes. In this area, the study identifies clear deficits and critically discusses them.
At a time when treaties are increasingly being concluded by international players from different legal cultures, international contract law needs a different frame of reference. The predominance of Anglo-American contract practice can still be discerned in international contract drafting. But more and more actors from other legal cultures are shaping contract practice and introducing new accents, as it is the case with China or Russia, for example. This also forces changes in the theory and practice of international treaties. This development is reflected in the practice of international private law. The contractual framework of this legal sector of the Conflict of Laws is regulated by the EU in the ROM I Regulation, a regulation not all legal practitioners are happy with. The regulations are interpreted quite differently from the different perspectives of the still existing national legal cultures and then require a binding interpretation by the European Court of Justice.
The monograph proposes a new approach of contract law in the era of globalization where the “new” change in economic releationships calls for “new” changes in the law, with the aim to bring economic benefits to the markets, to quote the preface of this book.
This volume concentrates on the modern economic analysis of contract law and on the conflict between legal certainty and legal congruence. In his conclusion, the author points to the urgent need for a new theory of contract law.
To illustrate this, in Part 2 of the book, the author analyses the practice of international transactions in the business field. In doing so, he intensively deals with the contradiction between the constitution of general rules of law with the aim of legal certainty, which is opposed by the demand for individuality, difference and flexibility in the drafting of contracts, whereby these demands are not always and everywhere incompatible.
In order to solve these problems, the author discusses the current solution models of an economic theory of law, especially marginal cost analysis, and asks how this affects the interpretation of contracts, such as the determination of the willingness to commit to a contract and its scope. In many areas, the author argues on the basis of comparative law in the field of commercial law.
In the further course of the discussion, the author discusses the Rome I Regulation (EU), which is contrasted to the “Second Restatement of Conflict of Laws” and turns his attention to the considerable differences in the initial concept, which is ultimately not surprising. In this context, the author also deals with groundbreaking studies of german IPR – authors with regard to the determination of the characteristic performance in connection with the determination of the p.i.l. In order to show this in more detail, the author discusses details of the interpretation of Art. 4 of the Rome I Regulation with regard to the inclusion of franchise agreements f.e.. However, it also deals with problems of international labour law, such as temporary employment abroad.
Of particular interest is the section on the advantages and disadvantages of rigid regulations: “The analysis of previous pages shows that the major change introduced by Rome I was to replace the flexible approach of the Rome Convention with hard-and-fast-rules”. This criticism had already been voiced on several occasions in the run-up to the legislative process. This is particularly problematic in the case of the “Escape-Clause”. The author pleads de lege ferenda for more flexible regulations and a stronger weighting of party autonomy, which becomes problematic in several parts of EU-Law.
In the last chapter, the author makes concrete proposals and almost puts his arguments together. He has considerable doubts as to whether the strict rules are consistent with the obligation of judges to arrive at fair judgments in an individual case. As a result, these legal regulations can also have a market-damaging effect, with political discourses as the deciding factor in a bureaucratic environment. It should not be overlooked that these rules are also conceived against the background of a consumer protection concept where this area is ultimately not directly concerned. In order to arrive at better regulations, the author suggests learning from the mistakes made in ROM-I. The author of this study also suggests that the Commission should take the necessary steps to ensure that these rules are applied correctly. He sees this regulation at least in part as a step backwards in the context of a “European Crisis of the Conflict of Laws”. Against this background, he makes concrete proposals to arrive at more market-oriented regulations, since in his opinion the Rome I Regulation represents a missed opportunity. An improvement, however, would require a completely new legislative process, which is currently not in sight.
Irrespective of this, this very interesting study highlights existing problems of the Rome I Regulation in relation to a more market-oriented legal understanding against the background of an internationalization of contract practice.
abstract
According to the Rome I Regulation, ‘the proper functioning of the internal market creates a need, in order to improve the predictability of the outcomes of litigation, certainty as to the law applicable […] therefore legal certainty should be highly foreseeable and as a consequence […] the courts should retain a degree of discretion’.
To illustrate this reasoning, it is necessary to conduct an analysis that focuses critically on the complex relationship between legal processes and market processes. Therefore, this book focuses on a modern economic analysis of contract law as well as on the battle between legal certainty and legal congruence.
In its conclusion, the book points out the urgent need for a new contract law theory that enhances the real economic intentions of the parties involved, and for a new reasonable rule of PiL that does not harm the contractual parties that represent the principal players in the market.