In the UK, there is an ongoing and interesting debate about the deluge of EU law which impacts and. many would say, unecessarily interferes with and complicates our own laws. Good examples of this relate to Human Rights laws and employment laws.
Conversely, whilst there is a free market in the EU, commercial laws to reflect and harmonise the single market are conspicuous by their absence, meaning that both businesses and consumers may be reluctant to enter into a contract because the other party is in a different EU country and if something goes wrong, it is unclear what law applies and where. Most small businesses and consumers tend to be less than 100% aware of English law, so it’s no surprise there is inherent wariness.
With the exponential increase in trading online, this also creates significant issues – a consumer may buy a product thinking they are dealing with a UK company when in fact they are not, the business selling to them may be abroad, the website may be registered or hosted abroad, again causing potentially complex legal and jurisdictional issues.
It’s therefore good news that the EU is proposing an optional set of contract rules which would be applicable across the EU. The first point to note is the optional nature of the proposed laws. Both for business to business and business to consumer contracts the parties can decide whether to make the contract subject to the proposed cross border laws or not.
Full details of the suggested new law and what appear to be the clear advantages of it, are here. To us, this seems like a no brainer in principle and something which should have been adopted years ago. However, it is also worth remembering that the courts and legal systems across the EU are markedly different, with the UK having a particularly different approach and it’s still unclear as to what the rules may say about where a dispute should be dealt with, in terms of which country’s courts should deal with it, process, cost and enforcement, so we await to see what happens if the draft proposal gets to the next stage.
We’ll continue to monitor and hopefully, the law will be agreed and implemented asap !
In the meantime, if you need a solicitor for a contract for your business, whether dealing with an entity in the UK or abroad, we can assist.
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