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If it isn’t broken, don’t fix it. Hasty Commission action might tamper with well-functioning Contract Law


03 Feb 2011


Trade & Society

The European Commission is thinking about tampering with Contract Law, by working towards a voluntary legal framework at EU level which could unnecessarily complicate business-relationships that at present appear to function suitably well. Orgalime President, Richard Dick commented “The Commission claims that due to differing contract law regimes in the Member States, companies are prevented from doing business between Member States. This is absolutely not the case, and neither is it the case in my country, the UK, where we have different legal regimes between England and Scotland.”

The Commission is considering developing an optional 28th contract law regime at EU level, for which Orgalime sees no added value or improvement of the status-quo for the B-2-B area. For decades companies have been making cross-border sales on a daily basis, most of the time without any legal assistance. Many sectors of the engineering industry export as much as 80% of their output which should be sufficient proof that cross-border trade functions very well, despite differences in the national law systems. “Thanks to the freedom of contract principle and to the possibility of using in-house or other standard contracts and general conditions, European engineering companies - of which the vast majority are SMEs - are coping very well with the different national legal systems. We therefore do not see the need for any changes in the B-2-B area” added Mr Dick.

In the last ten years, the positions of researchers and academics on the one hand and industry representatives on the other have diverged considerably on the European Contract Law issue; this is why the engineering industries oppose any decisions on the way forward taken in haste and without a genuine consensus among industry, academia and governments. Orgalime would like to see the Commission subject any future plans to an additional evaluation by a wider audience, including independent experts and practitioners from industry, before deciding on what common action, if any, to take. “The engineering industry is Europe’s main manufacturing exporter and contributes substantially to the balance of payment of European countries. We do not need this kind of interference in our businesses and business practices” concludes Richard Dick.


Notes for Editors:

Orgalime Position Paper:

Orgalime, the European Engineering Industries Association, speaks for 32 trade federations representing some 130,000 companies in the mechanical, electrical, electronic, metalworking & metal articles industries of 22 European countries. The industry employs some 10.6 million people in the EU and in 2009 accounted for some €1,427 billion of annual output. The industry not only represents some
28% of the output of manufactured products but also a third of the manufactured exports of the European Union.