CYIL 2012

PARALLEL NATIONAL AND INTERNATIONAL LAWS ȃ CZECH LAW AND THE PROPOSED… substantial transaction costs 48 savings in being able to use a unitary sales law. 49 T his Part will highlight some of the characteristics, structure, concepts, and key provisions of CESL. 3.1 Opt-in: A Second National Law Regime As noted previously, CESL would be enacted as a Regulation with direct effect in the Czech Republic. It would take the form of a second national law. Existing national law would still be operative in areas outside the coverage of CESL: purely domestic transactions, international transactions where the CISG would apply (for example, where the EU country and the non EU country are from Contracting States of the CISG), and in subject areas such as services unrelated to the sale or supply of goods or digital content. When applicable, CESL would preclude the application of the CPA. However, CESL only applies if both parties expressly agree to its application and when both parties are from EU countries or in some situations where only one party is from an EU country. The voluntary, opt-in nature will likely be problematic for the ultimate success of CESL as a widely used law. It is only through its widespread use that the purpose of CESL improvement of the common market will be reached. The reliance on express agreements of both parties in B2SME and B2C transactions is not a major obstacle. This is because the party with superior bargaining power and information is the one that dictates the choice of law. This party is generally a business in B2C transactions, and, to a lesser extent, a larger business in B2SME contracts. Commissioner Viviane Reding noted that the “attractiveness of the optional instrument for businesses will therefore be important for its success.” 50 CESL attempts to dampen bargaining superiority by requiring a number of pre contractual informational duties, including providing information about the nature of the contract and the contents of CESL. This is unlikely to shift the balance of power, however, since, in most cases, the consumer or SME’s preference for dealing will prevent them from objecting to the choice of law. Thus, the choice of CESL as applicable law by businesses with superior bargaining power is essential since the entire purpose of the CESL project is advanced by its widespread application. But will CESL prove to be an attractive choice of law for such businesses? A key issue for the attractiveness of CESL to businesses would be its flexibility. A contract law is more attractive to businesses if it consists primarily of default rules 48 For a transaction costs analysis of European contract law see Roger Halson & David Campbell, “Harmonisation and Its Discontents: Transaction Costs Critique of a European Contract Law,” in Larry DiMatteo, Qi Zhou, Séverine Saintier, et al., eds. Commercial Contract Law: Transatlantic Perspectives (Cambridge University Press: 2013 (in press). 49 See Larry DiMatteo, “The Curious Case of Transborder Sales Law: A Comparative Analysis of CESL, CISG, and the UCC”, in Ulrich Magnus ed ., CISG versus Regional Sales Law Unification (Sellier European Publishers 2012) (in press). 50 Viviane Reding, “The Next Steps Towards a European Contract Law for Businesses and Consumers”. Reiner Schulze & Jules Stuyck eds., Towards a European Contract Law (Munich: Sellier European Publishers 2011), 19.

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