Lookup NU author(s): Professor Sophia Tang
This is the authors' accepted manuscript of a book chapter that has been published in its final definitive form by Bloomsbury, 2017.
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The EU conflicts rules in cross-border contracts have been improved continuously. A lot of previous difficulties that hampered the effective application of the law in practice have been addressed by the later reforms and the CJEU’s judgments. All those reforms and interpretations have shown a consistent tendency to improve certainty and predictability for the parties. Certainty is an objective not only in ordinary commercial contracts, but also in contracts with inequality of bargaining power. Although the protective conflicts rules make fairness the most important goal, they also seek to balance fairness and certainty. It is necessary to note that certainty may not necessarily lead to efficiency. The law can only promote commercial efficiency if it allocates risk in the most appropriate and reasonably predictable way. As a result, certainty cannot be achieved by establishing rigid and improper rules. In ordinary commercial contracts, authorities should trust sophisticated commercial participants which are in the best position to allocate their own commercial risk, and provide them with as much autonomy as they can. The law will only be there to assist such autonomy to be exercised in a mutually predictable manner. In the absence of autonomy, certainty is achieved by considering the most reasonable expectations of rational businessmen in this field and the rules should avoid being too rigid. In consumer contracts, certainty should be achieved by appropriate legal intervention, given the existence of inequality of power. It is fair to conclude that the EU conflicts scheme in contractual litigation is generally successful in providing certainty without sacrificing other important values in both commercial and consumer contracts. However, uncertainty continues to exist, though only on a small number of occasions. Uncertainty is mainly caused by ambiguous and not well thought-through legislative provisions; inconsistent and unclear CJEU interpretation in some cases; and inconsistency between jurisdiction and choice of law rules. They are not fundamentally problematic but small weaknesses reduce certainty and efficiency of cross-border transactions. These weaknesses are relatively easy to address by updating the legislation or the CJEU’s interpretation. Attention should be paid to the consistency between existing judgments on the same provision and related provisions. Guidance needs to be detailed enough to avoid different implementation and misunderstanding by national courts.
Author(s): Tang Z
Editor(s): Beaumont P; Mihail D; Trimmings K; Burcu Y
Series Editor(s): P Beaumont, J Harris
Publication type: Book Chapter
Publication status: Published
Book Title: Cross-Border Litigation in Europe
Print publication date: 16/11/2017
Acceptance date: 03/10/2016
Series Title: Private International Law Study
Place Published: London
Library holdings: Search Newcastle University Library for this item