Common European Sales Law: Research Paper on the Economic Aspects of the European Commission's Impact Assessment

15-02-2013

In recent years, an extensive debate has evolved on the need for harmonisation of European sales law, with the existing diversity of contract laws in Member States being perceived as a barrier to trade and hence as burdensome for the European internal market. In November 2010 the European Commission commissioned a study supporting its Impact Assessment (IA) preparation on this matter. This report suggests that differences in contract law between Member States (MS) do create a barrier to trade, and the value of trade foregone each year between MS due to differences in contract law amounts to some tens of billions of euros. The aim of this paper is to assess the robustness and validity of the method used by the Commission to calculate opportunity and transaction costs, as well as the soundness of the economic model applied to the assessment of policy options; and to assess the reliability of the Commission's assumptions in this respect and whether they can stand up to scrutiny.

In recent years, an extensive debate has evolved on the need for harmonisation of European sales law, with the existing diversity of contract laws in Member States being perceived as a barrier to trade and hence as burdensome for the European internal market. In November 2010 the European Commission commissioned a study supporting its Impact Assessment (IA) preparation on this matter. This report suggests that differences in contract law between Member States (MS) do create a barrier to trade, and the value of trade foregone each year between MS due to differences in contract law amounts to some tens of billions of euros. The aim of this paper is to assess the robustness and validity of the method used by the Commission to calculate opportunity and transaction costs, as well as the soundness of the economic model applied to the assessment of policy options; and to assess the reliability of the Commission's assumptions in this respect and whether they can stand up to scrutiny.