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

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260 Maria Rosaria Marella ERCL 2/2006 gence of the EU Member States around what has to be conceptualised as fundamental limits of freedom of contract. Here one faces a general problem that usually arises with the so-called common core approach: from the point of view of methodological accuracy, one ought to establish what the rules are, what the exceptions are, and separate sharply the rule from the exception for each European legal system, in order to identify a framework of converging rules providing comparable solutions to the same problems. In any case, this method usually leads to the acceptance of any rule that seems to be shared by all the national systems in question, and to the exclusion of whatever national solution can be seen as an exception. The result merges with the minimum common factor strategy, that is the attempt commonly pursued by the EU institutions to create a European law that does not collide with any national legal rule, principle or institution, in order to preserve the idea of the intangibleness of national sovereignty on legal issues supposedly influenced by policy-making. 4 At this very point, however, a second, specific problem arises: the combination of the common core approach with the minimum common factor strategy necessarily leads to an extremely narrow notion of freedom of contract. This seems to be an undesirable and infeasible outcome in the light of the latest developments in European law. It would even clash with the current general tendency toward an increasing contractualization of social life and against a common understanding of contracts ‘as a facility for expanding valuable choices and as providing the necessary security for the pursuit of more detailed plans in life.’ 5 Let us consider for instance the legal treatment of prostitution and related commercial activities in different Member States: prostitution is no longer criminalised in the Netherlands, Belgium and in Germany. According to these laws (explicitly in the German Prostitutionsgesetz) 6 the contract between the prostitute and the client is enforceable. In addition, any other kind of (not otherwise criminalised) sex-work enterprises (like sex-chat lines, peepshows, etc) can be supported by enforceable contracts and, according to some interpreters, even agreements between spouses or partners concerning sexual intercourse inside and outside of marriage or cohabitation will be held as valid, as the question at stake is no longer the possibility of taking money 4 On the multiple strategies in the harmonization process see M. R. Marella, ‘The Non- Subversive Function of European Private Law: The Case of Harmonisation of Family Law’ (2006) 12 European Law Journal 78–105. 5 H. Collins, The Law of Contracts (London: Butterworths, 4 th ed., 2003) 106. 6 Gesetz zur Regelung der Rechtsverhältnisse der Prostituierten, 20 December 2001, Bundesgesetzblatt 2001 I, 3983.
ERCL 2/2006 The Old and the New Limits to Freedom of Contract in Europe 261 from bodily services according to the law, but rather turning sexual transactions into enforceable contracts. In contrast, other Member States have enacted a total (Sweden) or partial (France) abolitionist policy. Consequently not only the prostitute/client transactions, but also commercial contracts even indirectly related to prostitution (like landlord/tenant contractual relations, according to the dominant interpretation in French case law) 7 are treated as void. Now, the combination of the common core approach with the minimum common factor strategy would require setting the notion of freedom of contract – in reference to sexual transactions and the like – at the level established by Swedish law. In other words, the consequence of harmonising the notion of immoral/illegal contract would be to select and enforce the narrowest notion of freedom of contract among those enacted in Europe. However, this outcome conflicts with the increasingly common idea that courts should enforce contracts in respect of all types of social relations, as long as they do not break conventional moral standards and do not frustrate the fair distributive scheme. 8 Moreover, in the Jany case, 9 the ECJ has followed the opposite point of view as far as the relation between prostitution and the market is concerned! More precisely the Court has stated that prostitution is not contrary to public policy in the EC and sex-workers enjoy freedom of movement and establishment within the European Union borders. III. The Limits of Freedom of Contract in Europe: the Models 1. The Paternalistic Model This is the most traditional model. The ideological framework is the individualism of Classical Legal Thought. The state is entitled to interfere with selfdetermination of individuals (freedom of contract) as long as its intervention is legitimated by the superior moral authority of the law and is restricted to very narrow ambits. The law enforces the free will of the parties unless it collides with various interests pursued by the state. Contracts are basically set aside when they threaten the integrity of the state and its institutions (by restoring, for example, feudal structures) or funda- 7 S. M. Iacub / P. Maniglier, Antimanuel d’éducation sexuelle (Rosny Cedex: Bréal, 2005) 236. 8 Collins, n 5 above, 99. 9 Case 268/99 Jany v Staatsecretaris van Justitutie, ECJ 20 November 2001.
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The Old and the New Limits to Freedom of Contract in Europe

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