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What’s New items on this topic [go to the What's New page or archive for the full item]:

 

12/12/2014: Export control sanctions on Sudan, South Sudan and Central African Republic

The Export Control (Sudan, South Sudan and Central African Republic Sanctions) Regulations 2014 (SI 2014/3258) come into force on 31 December 2014. The regulations put in place trade restrictions against Sudan, South Sudan and the Central African Republic in order to implement EU regulations which prohibit financial assistance offered for military activities in the region.

14/10/2011: Proposed EU sale of goods code
http://ec.europa.eu/news/environment/111014_en.htm

The EU Commission has issued a formal proposal for a Regulation on a Common European Sales Law. The new Law would be a second contract law regime within the national law of each Member State. Where the parties have agreed to use the Common European Sales Law, its rules will be the only national rules applicable for matters falling within its scope. Where a matter falls within the scope of the Common European Sales Law, there is thus no scope for the application of any other national rules.

This agreement to use the Common European Sales Law would be a choice between two different sets of sales law within the same national law. This choice is different from and must not be confused with the choice of the applicable law to a contract which parties in different EU member states may make under the “Rome I” regulation.

In a business to consumer sale, the problem for the business is that making the sale contract subject to the law of the business’s jurisdiction may not have the effect of depriving the consumer of the protection of the mandatory provisions of the law of his habitual residence (Article 6 (2) of the Rome I Regulation).

In a business to business sale, there are no such protections for the purchaser. If the seller is a large company and the buyer is a Small or Medium-sized Enterprise <SME>, it will often be the case that the seller will insist on the law of its home country to apply to the contract.

The proposed Sales Law will be available for application to business to consumer sales if the parties agree and are based in different <EU member States>. In this case, the seller will be able to review the text of the law in English and know that it will be applied by the court in the event of any dispute.

In the case of business to business sales, the proposed Sales Law will be available for application to the contract as long as both parties are based in different EU member states and at least one of them is an SME.

The EU Commission’s rationale for the proposed Sales Law is based on the argument that despite harmonisation, barriers to cross-border trade still remain – such as the differences between national sales laws across the EU. Currently, companies wishing to sell across borders in the EU may have to adapt to up to 26 different national contract laws, translate them and hire lawyers, costing an average €10 000 for each market. Adapting their websites can cost another €3 000 on average. According to the Commission, traders dissuaded by the complicated and costly process of dealing with these differences miss out on at least €26bn in sales every year. 

The Commission claims that the proposed Law would remove this obstacle, easing cross-border trade and giving consumers greater choice, lower prices and the same high level of protection for their rights across all EU countries.

Legaleze comment: the proposed Sales Law is to be welcomed cautiously. It does provide a reasonable solution to the legal costs and uncertainties faced by sellers wishing to sell to consumers in other EU member states. As the proposed Law will be based on a Regulation which applies directly in the law of all EU member States, rather than a Directive addressed to member state governments, the law will be the same throughout the EU.

However, some legal advice will still be required in order to appreciate its limitations. In particular:

(i) Since the Common European Sales Law will not cover every aspect of a contract (e.g. illegality of contracts, representation) the existing rules of the Member State's civil law that is applicable to the contract will still regulate such residual questions.

(ii) The new Law will be a completely new code which will have to be interpreted by new European case law as decided cases on existing UK law or the law of any other member state will have no application.

(iii) Consumers will have to consent to the application of the Sales Law by completing a “Standard Information Notice.

(iv) With regard to jurisdiction for resolving any disputes, the consumer will retain the right to sue and be sued in the courts of his home country regardless of any jurisdiction clause in the contract.

Next steps: the proposal now needs approval from EU countries and the European Parliament, which has already signalled its support in a vote earlier this year.

The full text of the proposal with Explanatory Memorandum may be found at:

http://ec.europa.eu/justice/contract/files/common_sales_law/regulation_sales_law_en.pdf

26/02/2014: Optional European sales law receives backing in the European Parliament
http://europa.eu/rapid/press-release_MEMO-14-137_en.htm?locale=en
A proposal for an optional European Sales Law for consumers and businesses [see What’s new item: 14/10/2011: EU Commission proposes Standard European sales law to ease cross-border shopping has been backed by the European Parliament, subject to certain amendments limiting the law to distance contracts, notably online contracts.
To become law the proposed Regulation will now have to be adopted by the Council of Ministers using the ‘ordinary legislative procedure’ (co-decision).

[Page created: 03/03/2014]

 

 

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