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16 September 2013

Towards a user-friendly European sales law?

ERA conference discussed the main issues of the proposed CESL Regulation


Foto: Towards a user-friendly European sales law?.



The proposed Common European Sales Law aims to facilitate the sale of goods and services across borders and to provide legal certainty for traders and consumers. It would allow retailers to sell their products on the basis of a single set of rules to be implemented alongside Member States’ contract laws. The conference “A Common European Sales Law (CESL) for e-commerce?” organised by ERA on 12-13 September 2013 in Trier discussed the main issues of the Regulation.

The conference, scheduled before the trilogue between European Commission, Parliament and Council which is due to start in October discussed the scope of the Regulation and the question of linked and mixed-purpose contracts as well as flanking measures for CESL.

Professor Dirk Staudenmayer, Head of the Contract Law Unit at the Commission’s DG Justice, explained why, in his view, a minimum harmonisation approach, like the one suggested by the European Parliament’s Internal Market Committee, would not achieve the aim of the proposed CESL ”to allow businesses to sell their products on the basis of one single law”. On the contrary, with minimum harmonisation 28 different laws in the Member States would remain with which businesses may have to comply. In addition, “Every national law would have to be changed”, he said. This would cause costs to businesses independently of whether they want to export or only to sell domestically. The Common European Sales Law would, in contrast, only cause familiarisation costs to the businesses which choose to apply it. Those businesses would do this if the resulting transaction costs savings would outbalance the costs. 

With regard to consumer protection, Professor Staudenmayer argued that the level of consumer protection proposed by the Commission is equal or higher than the EU acquis and overall comparable or higher than the non-harmonised national areas of contract law. While such a high level is admittedly a cost for businesses coming from countries with a lower level of consumer protection, given that the application of the CESL is optional, companies would choose it if they are selling high quality products, i.e. are not afraid of a high return rate, and their savings outweigh these costs.

Ursula Pachl, Deputy Director General of BEUC, criticised CESL’s optional nature as an inappropriate way of protecting European consumers. She pointed out that under such a regime the choice of what mandatory consumer protection rules would apply would be left to businesses. It would thus allow the circumvention of national legal protection standards.

Ms Pachl highlighted that if CESL’s scope was to be reduced to ‘distance-selling’ contracts, consumers would be confronted with fundamentally different rights online versus offline, a situation which cannot be justified by a selling method and would confuse consumers. This would mean that when consumers encounter for example defective goods, different remedies would apply to online and offline contracts for the same product.

Professor Friedrich Graf von Westphalen, Partner at Friedrich Graf von Westphalen and Partners, discussed the exclusion from the original Commission proposal of mixed-purpose contracts including for example the lease of goods and linked contracts such as contract including the grant of a loan by the trader. In his view, the user-friendliness and practical importance of CESL would be enhanced by the amendments of the Legal Affairs Committee which include mixed purpose contracts and linked contracts.

Diana Wallis, former Vice President of the European Parliament, discussed flanking measures for CESL such as standard contract terms, databases on court decisions, training and dispute resolution, which were not included in the Commission proposal but were discussed in the Parliament. She argued that the introduction of standard contract terms would be even more helpful especially for SMEs than the availability of CESL in all EU languages. Since the CESL will be difficult to understand for people, “a great deal of communication to businesses and consumers would be necessary” in addition to traditional training measures for legal practitioners.

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