The Old and the New Limits to Freedom of Contract in Europe

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258 Maria Rosaria Marella ERCL 2/2006 Now in contract law the relationship between the individual and the community or the state is mainly designated by the definition of freedom of contract and its limits. 1 Public policy is used to define a general limit to freedom of contract. On the scene of European law, however, the question of limits of freedom of contract finds very different and contrasting solutions. In this paper I describe three different modes of approaching the question, which we have experienced and are currently experiencing in Europe; three models of setting the limits of freedom of contract that are related to three different ways of conceiving the relationship between the individual and the community. I will define them respectively the paternalistic, the social and the perfectionist model. My sense is that all these three models still coexist in our legal systems or at least in some of them, although I will describe them as developing one after another in a diachronic dimension. European contract law has to cope with these models, choose one of them or possibly none of them … . II. Harmonising the Limits of Freedom of Contract: the Techniques Before of describing the three models and their respective problems, I will talk briefly about the possible techniques of harmonising rules or principles regarding the limits of freedom of contract. By this expression we usually understand the legal problems that mandatory rules and general clauses like the bonus mores, ordre public and public policy normally confront. Although not all the European civil law systems implement the same standards (no ordre public clause is provided by the German BGB, for example) this circumstance does not make any significant difference as to the extent of freedom of contract. Limits to freedom of contract are enforced in the different legal systems in order to respond to several and comparable needs: basically to protect the public interest in efficiency, morality or equity that might or might not overlap with the interests of the parties, the interests of one party representing a specific(ally protected) social group, or the interests of third parties. 2 However, the national solutions to these needs can be and actually are disparate. 1 S. D. Grimm, ‘Soziale, wirtschaftliche und politische Voraussetzungen der Vertragsfreiheit. Eine vergleichende Skizze’, in La formazione storica del diritto moderno in Europa: atti del terzo congresso internazionale della Società Italiana di Storia del Diritto, vol III (Firenze: Olschki, 1977) 1221, 1224: ‘welche Verträge frei abgeschlossen werden können, charakterisiert darum eine Gesellschaft’. 2 C. G. Paulus / W. Zenker, ‘Grenzen der Privatautonomie’ (2001) Juristische Schulung 1.
ERCL 2/2006 The Old and the New Limits to Freedom of Contract in Europe 259 Now, on the one hand, the phenomenon of an increasing contractualization of social life makes the definition of limits of freedom of contract urgent, as new spheres of social life, traditionally imagined as external to the market realm, are progressively ‘corrupted’ by a market rationale. Undoubtedly the definition of limits to freedom of contract is an issue at stake in the harmonisation process. Some provisions of the European Charter of Fundamental Rights clearly show that this problem has already been perceived and confronted at the European level. By introducing a market-inalienability rule for body parts, Article 3 of the Charter aims to ban the very idea of exchange from this area, notwithstanding the increasing impact of biotechnologies on society both from a cultural and an economic point of view. Article 8 restricts the viability of market transactions concerning personal data by imposing special requirements for their circulation. The general principle of human dignity sanctioned by Article 1 is a potential source of new limits on freedom of contract in European law. 3 On the other hand, the peculiarity of the topic makes its harmonisation quite problematic. Unlike most topics in contract law, the question of limits of freedom of contract is widely perceived as a not a –merely technical question; on the contrary it is regarded as a matter of highly political choices, the harmonisation of which involves an intrusion into the intangible sphere of national sovereignty. For this reason the harmonisation projects have been so far very cautious or even laconic in this respect. Article 2 of the Pavia project of a Code Européen des Contrats mentions mandatory rules, bonus mores and ordre public provided by the Code itself, by EC law and by the laws of Member States as general limits of freedom of contract. The implementation of such a provision presupposes a body of common background rules, both of judicial and legislative origin (criminal law rules, administrative pronouncements etc) and a uniform interpretation of general clauses, whose vagueness makes the harmonisation on this specific point infeasible. The Principles of European Contract Law (PECL) came late to this point. The first move was to leave the question aside given the great variety among the legal systems of Member States. Later the solution was found in the following (and predictable) formula: ‘A contract is of no effect to the extent that it is contrary to principles recognised as fundamental in the laws of Member States of the European Union’ (Article 15: 101). The provision implies a conver- 3 For this schematization of the limits to freedom of contract set by the EU Charter see G. Resta, ‘Diritti della personalità e limiti della libertà contrattuale nell’evoluzione del diritto europeo’, paper presented at the conference ‘Diritti fondamentali e formazione del diritto privato europeo’, Università di Roma Tre, 28 June 2002, on file with author.
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