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

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264 Maria Rosaria Marella ERCL 2/2006 by the state in order to protect the weaker party (normally: the wife). Now, these agreements are regularly treated as void by Italian courts because made in violation of public policy. 16 In so doing Italian courts express their concern or even their distrust for wives’ ability to identify and fulfil their own good. Bargaining occurs in a context where emotional bonds overcome rational choices and contracts are likely to defeat the legislator’s protective intent. However, case law shows that most of the time the husband brings suit asserting that the contract is void and consequently his financial obligation has to be assessed according to the legal regime! Thus the private ordering that the Italian courts resist could enhance rather than worsen wives’ entitlements whereas the limit imposed on spouses’ freedom of contract in order to protect the weaker party has the effect of weakening her further rather than making her better off. 17 In my own view, the first model also embraces Gunther Teubner’s understanding of German judicial law on family guarantees. 18 This was the case for German courts to establish a new content for the bonus mores clause of § 138(1) BGB by drawing on a ‘social’ notion of contractual fairness. The paramount decision is the so called ‘collateral’ case, 19 where the Federal Constitutional Court (FCC) established constitutional standards to be applied to private contracts when there is reason to believe that there exists an inequality of bargaining power. 20 In the light of a revised notion of freedom of contract which substantially overlaps with the fundamental right to self-determination and to this extent justifies a constitutional control of private law relations, the FCC annulled a collateral guarantee between the bank and the debtor’s daughter with respect to a loan that the debtor had received from the bank. Teubner’s standpoint represents the reaction of a liberal theorist against the way of conceiving limits to freedom of contract that I will define as ‘the social’ model. According to Teubner, the question involved by the ruinoese Burgeschaften decisions is not one of inequality of bargaining power, 21 nor a 16 E multis Cass, 11 giugno 1997, n 5244, (1998) Giurisprudenza italiana, I, 1, 218. 17 S. M. R. Marella, ‘La contrattualizzazione delle relazioni di coppia. Appunti per una rilettura’ (2003) 21 Rivista critica del diritto privato, 3; idem, ‘The Family Economy v. the Labor Market’, in J. Conaghan / K. Rittich (eds), Labour Law, Work and Family. Critical and Comparative Perspectives (Oxford, London, New York: OUP, 2005) 205. 18 G. Teubner, ‘Ein Fall von struktureller Korruption? Die Familienbürgschaft in der Kollision unverträglicher Handlungslogiken (BVerfGE 89, 214 ff.)’ Kritische Vierteljahresschrift für Gesetzgebung und Rechtswissenschaft (1999–2000) 83, 388. 19 FCC, Decision of 19 October 1993, BVerfGE 89, 214. 20 S. P. Zumbansen, ‘Public Values, Private Contracts and the Colliding Worlds of Family and the Market’ (2003) 11 Feminist Legal Studies 71, 75. 21 Teubner, n 18 above, 389.
ERCL 2/2006 The Old and the New Limits to Freedom of Contract in Europe 265 problem of violation of individual fundamental rights. 22 It is rather the clash of incompatible legal spheres or rationales, more precisely, the case of corruption of the solidarity-based family sphere by the logic of contract law and the underlying dynamics of the market. 23 Any concern for fairness in contract law is banned from this perspective: it is just not an interpretive issue here. On the contrary, the analysis concentrates on legal and social aspects different from those concerning the contractual relation between the bank and the consumer as unequal bargaining partners. The focus here shifts to the ‘impossibility’ of a guarantor, who is at the same time supposed to be bound to the debtor by ties of familial solidarity and to be led to the rational choice by the typical individualism of a market actor. The evidence of such impossibility requires more rigorous boundaries to freedom of contract in order to preserve non-market-like social realms from the corruptive influence of the market rationale. In Teubner’s view, such boundaries find their constitutional foundation in those principles of the Grundgesetz that construe social institutions like the family, art, 24 education, etc, upon values other than the rationality and the individualism of the market. As to our discourse on freedom of contract, this amounts to assigning to constitutional principles or constitutional rights 25 – the role of defining impenetrable areas of market inalienability by removing specific rights or entitlements from the individual’s ability to dispose of them freely by contract. Therefore, although Teubner’s interpretation of the bonus mores clause explicitly rejects paternalist motives, for the simple reason that it does not focus on the individual/State relationship, it ultimately fits in the general scheme of this first model. 2. The Social Model According to classical liberal thought freedom of contract is a basic condition for fulfilling the wellbeing of society and justice. 26 Therefore limits to freedom of contract, as already seen in the paternalistic model, are theoretically conceived as exceptions, although they are in fact valuable tools for enacting state policies and goals. At the beginning of the 19 th century another strand of socio-philosophical and legal thought produced an alternative vision, according to which freedom 22 Ibid, 390. 23 Ibid, 392. 24 See also C. Beat Graber / G. Teubner, ‘Art and Money: Constitutional Rights in the Private Sphere’ (1998) 18 Oxford Journal of Legal Studies 61. 25 Beat Graber / Teubner, n 24 above. 26 Grimm, n 1 above, 1232.
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