The Law of Society: Governance Through Contract

This paper focuses on contract law as a central field in contemporary regulatory practice. In recent years, governance by contract has emerged as the central concept in the context of domestic privatization, domestic and transnational commercial relations and law-and-development projects. Meanwhile, as a result of the neo-formalist attack on contract law, governance of contract through contract adjudication, consumer protection law and judicial intervention into private law relations has come under severe pressure. Building on early historical critique of the formalist foundations of an allegedly private law of the market, the paper assesses the current justifications for contractual governance and posits that only an expanded legal realist perspective can adequately explain the complex nature of contractual agreements in contemporary practice. The paper argues for an understanding of contracts as complex societal arrangements that visibilize and negotiate conflicting rationalities and interests. Institutionally, contractual governance has been unfolding in a complex, historically grown and ideologically continually contested regulatory field. Governance through contract, then, denotes a wide field of conflicting concepts, ideas and symbols, that are themselves deeply entrenched in theories of society, market and the state. From this perspective, we are well advised to study contracts in their socio-economic, historical and cultural context. A careful reading of scholars such as Henry Sumner Maine, Morris Cohen, Robert Hale, Karl Llewellyn, Stewart Macaulay and Ian Macneil offers a deeper understanding of the institutional and normative dimensions of contractual governance. Their analysis is particularly helpful in assessing currently ongoing shifts away from a welfare state based regulation (governance) of contractual relations. Such shifts are occurring on two levels. First, they take place against the backdrop of a neo-liberal critique of government interference into allegedly private relations. Secondly, the increasingly influential return to formalism in contract law, which privileges a functionalist, purportedly technical and autonomous design and execution of contractual agreements over the view of regulated contracts, is linked to a particular concept of sovereignty. The ensuing revival of freedom of contract occurs in remarkable neglect of the experiences of welfare state adjudication of private law adjudication and a continuing contestation of the political in private relationships. The paper takes up the Legal Realists\u27 search for the \u27basis of contract\u27, but seeks to redirect the focus from the traditional perspective on state vs. market to a disembedded understanding of contractual governance as delineating multipolar and multirational regulatory regimes. Where Globalization has led to a fragmentation, disembeddedness and transnationalization of contexts and, thus, has been challenging traditional understanding of embeddedness, the task should no longer be to try applying a largely nation-state oriented Legal Realist perspective and critique to the sphere of contemporary contractual governance, but - rather - to translate its aims into a more reflexive set of instruments of legal critique. Even if Globalization has led to a dramatic denationalization of many regulatory fields and functions, it is still not clear, whether and how Globalization replaces, complements or aggravates transformations of societal governance, with and through contract

Common European Sales Law (CESL) and Private International Law: Some Critical Remarks

This article is an updated and revised version of the contribution published by the author in XI Anuario Español de Derecho Internacional Privado, 2011, 25-61, under the title: “La Propuesta de Reglamento relativo a una normativa común de compraventa europea y el Derecho internacional privado”.La Propuesta de Reglamento del Parlamento Europeo y del Consejo relativo a una normativa común de compraventa europea de 11 de octubre de 2011 (PCESL) introduce una reglamentación material para algunas compraventas transfronterizas que no desplaza la aplicación de las normas de conflicto (en particular de las contenidas de los Reglamentos “Roma I” y “Roma II”). Al contrario, el instrumento opcional contenido en la Propuesta de Reglamento (CESL) presupone la aplicación de la ley de un Estado miembro, como lex contractus. Una vez escogida por las partes, la CESL desplaza a las normas internas cobre compraventa de la ley del Estado miembro. Esta opción del legislador comunitario plantea numerosos problemas e interrogantes acerca de las relaciones entre la CESL y las normas de Derecho internacional privado y en torno a su coexistencia con otros convenios internacionales y el propio acervo comunitario. El análisis de estas relaciones es el objeto del presente estudio, que permite concluir con una valoración negativa de la competitividad internacional de este nuevo instrumento comunitario.The Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law of 11 October 2011 (PCESL) introduces a substantive regulation for some cross-border sales contracts that does not displace the application of conflict-of-laws rules (especially those included in “Rome I” and “Rome II” Regulations). On the contrary, the optional instrument included in the Proposal (CESL) presupposes the application of the law of a Member State as lex contractus. Once the parties have chosen the CESL, this regime prevails over the internal rules on sales contracts of the law of that Member State. The formula used by the European legislator gives rise to many concerns and questions about the relationships between the CESL and the conflict-of-laws rules and about its cohabitation with other international conventions and the European acquis itself. The analysis of these relationships is the subject of this article, which concludes with a negative assessment on the international competitiveness of the new European instrument