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Get the Outline Edition for free! + Gratis The work of the Study Group and the why a rule is formulated as it is, how it Acquis Group on the “Draft Common relates to other rules and where its roots Frame of Reference (DCFR)” will be lie in the European legal systems. completed soon. This 6 volume opus Order today and get the DCFR Outline includes not only draft model rules but Edition for free! full comments and notes, which explain Free shipping for order value higher than 30 EUR. This order Please fax this form or click here. My Address can be cancelled within 2 weeks after reception of goods.  Principles, Definitions and Model Rules of European Private Law DCFR. Full Edition October 2009. Approx. 6100 pages 6 volumes in slipcase. Hardcover 3 798.– ISBN 978-3-86653-098-0  Principles, Definitions and Model Rules of European Private Law Date, Signature DCFR. Outline Edition February 2009. VI, 643 pages. Paperback 3 14.90 ISBN 978-3-86653-097-3 097 sellier.elp · Geibelstraße 8 · D – 81679 München · Tel   + 49. 89. 451 084   58 - 0 · Fax  +  49. 89. 451 084   58 - 9 · www.sellier.de  Principles, Definitions and Model Rules of European Private Law Draft Common Frame of Reference (DCFR) Outline Edition Prepared by the Study Group on a European Civil Code and the Research Group on EC Private Law (Acquis Group) Based in part on a revised version of the Principles of European Contract Law Edited by Christian von Bar, Eric Clive and Hans Schulte-Nölke and Hugh Beale, Johnny Herre, Jérôme Huet, Matthias Storme, Stephen Swann, Paul Varul, Anna Veneziano and Fryderyk Zoll More texts by the Study Group and the Acquis Group are available at www.law-net.eu. The print of this edition was supported by the Dieter Fuchs Stiftung in Dissen (Germany). ISBN 978-3-86653-097-3 The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.d-nb.de. © 2009 by sellier. european law publishers GmbH, Munich. All rights reserved. No part of this publication may be reproduced, trans- lated, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of the publisher. The Index was prepared by Rechtsanwältin Dr. Martina Schulz, Pohlheim. Design: Sandra Sellier, Munich. Production: Karina Hack, Munich. Typesetting: fidus Publikations-Service GmbH, Augsburg. Typeface: Goudy Old Style and Goudy Sans from Linotype. Printing and binding: Friedrich Pustet KG, Regensburg. Printed on acid-free, non-ageing paper. Printed in Germany.  Table of contents Introduction 1 Academic contributors and funders 47 Principles 57 Table of Destinations 101 Table of Derivations 113 Model Rules 131 Book I General provisions 177 Book II Contracts and other juridical acts 183 Book III Obligations and corresponding rights 229 Book IV Specific contracts and the rights and obligations arising from them 277 Book V Benevolent intervention in another’s affairs 391 Book VI Non-contractual liability arising out of damage caused to another 395 Book VII Unjustified enrichment 413 Book VIII Acquisition and loss of ownership of goods 421 V Table of contents Book IX Proprietary security rights in movable assets 447 Book X Trusts 501 Annex Definitions 545 Index 571  Introduction General 1. DCFR and CFR distinguished........................................... 3 2. Revision of the interim outline edition................................ 4 3. Paperback and hardcover editions of the final DCFR................. 5 4. An academic, not a politically authorised text........................ 6 5. About this outline edition.............................................. 6 The purposes of the DCFR 6. A possible model for a political CFR................................... 7 7. Legal science, research and education.................................. 7 8. A possible source of inspiration........................................ 7 Contents of the DCFR 9. Principles, definitions and model rules................................. 9 10. Meaning of ‘principles’.................................................. 9 11. Fundamental principles................................................. 10 12. The approach taken to fundamental principles in the Interim Outline Edition................................................. 10 13. The approach taken in the Principes directeurs......................... 11 14. Lessons learned from the Principes directeurs........................... 13 15. Underlying principles................................................... 13 16. Overriding principles.................................................... 14 17. Protection of human rights............................................. 14 18. Promotion of solidarity and social responsibility....................... 15 19. Preservation of cultural and linguistic diversity........................ 15 20. Protection and promotion of welfare................................... 16 21. Promotion of the internal market...................................... 17 22. Freedom, security, justice and efficiency............................... 17 23. Definitions............................................................... 17 24. Model rules.............................................................. 18 25. Comments and notes.................................................... 18 1  Introduction Revision of the interim outline edition 26. Overview................................................................ 18 27. Book I.................................................................... 19 28. Book II................................................................... 19 29. Book III.................................................................. 20 30. Book IV.................................................................. 21 31. Books V-VII.............................................................. 22 32. Books VIII-X............................................................. 22 33. Definitions............................................................... 22 The coverage of the DCFR 34. Wider coverage than PECL............................................. 23 35. Specific contracts........................................................ 23 36. Non-contractual obligations............................................ 23 37. Matters of movable property law....................................... 24 38. Matters excluded........................................................ 24 39. Reasons for the approach adopted...................................... 24 40. Contract law as part of private law..................................... 24 Structure and language of the DCFR model rules 41. Structure of the model rules............................................ 25 42. Mode of numbering the model rules.................................... 25 43. Ten books................................................................ 26 44. Books II and III.......................................................... 27 45. Contracts and obligations............................................... 27 46. Contractual and non-contractual obligations.......................... 28 47. Language................................................................. 29 48. Accessibility and intelligibility......................................... 29 How the DCFR relates to PECL, the SGECC PEL series, the Acquis and the Insurance Contract Group series 49. Based in part on the PECL.............................................. 30 50. Deviations from the PECL.............................................. 30 51. Examples................................................................ 31 52. Input from stakeholders................................................. 31 53. Developments since the publication of the PECL...................... 32 54. The PEL series........................................................... 33 55. Deviations from the PEL series......................................... 34 2 General Intr. 1 56. Improvements........................................................... 34 57. The Acquis Principles (ACQP)........................................ 35 58. Principles of European Insurance Contract Law....................... 35 How the DCFR may be used as preparatory work for the CFR 59. Announcements by the Commission................................... 36 60. Purposes of the CFR..................................................... 36 61. Green Paper on the Review of the Consumer Acquis................. 37 62. Draft proposal for a Directive on consumer contractual rights........ 37 63. Improving the existing and future acquis: model rules................ 38 64. Improving the acquis: developing a coherent terminology............ 39 65. No functional terminology list without rules.......................... 40 66. Coverage of the CFR.................................................... 40 67. Consumer law........................................................... 41 68. Revision of the acquis and further harmonisation measures.......... 41 69. Terms and concepts referred to in Directives.......................... 42 70. When in doubt, topics should be included............................. 42 71. Essential background information...................................... 42 72. Good faith as an example............................................... 43 73. Presupposed rules of national law...................................... 44 74. DCFR not structured on an ‘everything or nothing’ basis............. 44 Developments after this edition 75. Full version of the DCFR............................................... 45 76. Consumer credit contracts not covered................................ 45 77. Evaluating the DCFR................................................... 45 78. CFR...................................................................... 45 79. Square brackets.......................................................... 46 80. The CFR as the basis for an optional instrument...................... 46 General 1. DCFR and CFR distinguished. In this volume the Study Group on a European Civil Code (the ‘Study Group’) and the Research Group on Existing EC Private Law (the ‘Acquis Group’) present the revised and final academic Draft of a Common Frame of Reference (DCFR). It contains Principles, Definitions and Model Rules of European 3 Intr. 2 Introduction Private Law in an outline edition. Among other goals, its completion fulfils an obligation to the European Commission undertaken in 2005. The Commission’s Research Directorate-General funded part of the work. One purpose of the text is to serve as a draft for drawing up a ‘political’ Common Frame of Reference (CFR) which was first called for by the European Commission’s ‘Action Plan on A More Coherent European Contract Law’ of February 2003.1 As is explained more precisely below, the DCFR and the CFR must be clearly distin- guished. The DCFR serves several other important purposes. 2. Revision of the interim outline edition. A year ago, the DCFR was published for the first time in an interim outline edition.2 This edi- tion is a revision in three main ways. First, the interim edition did not contain model rules in Book IV on loan contracts and contracts for donation, nor in Books VIII to X on acquisition and loss of ownership of goods, on proprietary security rights in movable assets, and on trusts. They have now been included. Secondly, one of the purposes of publishing an interim edition was to provide an opportunity for interested parties to comment on the draft and make suggestions for improvement. The public discussion of the interim outline edition prompted the research groups to revise at various places the text which had already been published. The research groups are grateful to all who have taken part in that critical evaluation, whether in pub- lications, at conferences or in personal correspondence, and who have contributed to the improvement of the text. Naturally, not all the suggestions we received have been acted upon: some, for exam- ple, advocated solutions which had already been rejected after full discussion by the Study Group or the Acquis Group. But many sug- gestions for improvement have been gratefully adopted. Further revi- sions resulted from our own further reflections and discussions, the results of the research conducted by the evaluative teams in the net- work and the conclusions which we drew from the process of trans- 1 COM (2003) final, OJ C 63/1 (referred to below as Action Plan). 2 von Bar/Clive/Schulte-Nölke and Beale/Herre/Huet/Schlechtriem/ Storme/Swann/Varul/Veneziano/Zoll, Principles, Definitions and Mod- el Rules of European Private Law. Draft Common Frame of Reference (Munich 2008) (referred to below as IOE). 4 General Intr. 3 lating the first three Books into French.3 That applies in particular to Books I-III, but is not confined to them. (For more details, see paras 26-33). Thirdly, this revised edition contains an additional self-con- tained section in which we set out four underlying principles under- pinning the DCFR. This draws on the Principes directeurs du droit Eu- ropéen du contrat, the subject-matter of an independent research pro- ject, which published its output in 2008. 4 The conclusions of the economic impact group, which analysed particular rules of the DCFR from an economic perspective, were also made available to us. 3. Paperback and hardcover editions of the final DCFR. Like the 2008 interim edition this revised edition is only an outline edition because it appears without comments and notes. The European Commission received in December 2008 the material published here along with an explanatory and illustrative commentary on each model rule. The Commission has also received the extensive comparative legal ma- terial which has been gathered and digested in the past years. The entire work will be published in book form later in the year. At the same time we considered that the publication of a compact and inexpensive second paperback edition would help promote the wider dissemination and discussion of these texts. The complete edition will be voluminous. It will invite study at one’s desk at home or in the office, but it will be too bulky to pack into luggage taken to meetings 3 By Professor Jacques Ghestin (Paris); published at http://www.fondation- droitcontinental.org/Documents/Traduc-vBar-livre%20I-II-III-%2008- 2008.doc. 4 Fauvarque-Cosson/Mazeaud and Wicker/Racine/Sautonie-Laguionie/ Bujoli (eds.), Principes contractuels commun. Projet de cadre commun de référence (Paris 2008); Fauvarque-Cosson/Mazeaud and Tenenbaum, Terminologie contractuelle commune. Projet de cadre commun de référ- ence (Paris 2008). These studies have also been published in English: European Contract Law. Materials for a Common Frame of Reference: Terminology, Guiding Principles, Model Rules. Produced by Association Henri Capitant des Amis de la Culture Juridique Française and Société de Législation Comparée. Edited by Fauvarque-Cosson and Denis Ma- zeaud. Prepared by Racine, Sautonie-Laguionie, Tenenbaum and Wicker (Munich 2008). 5 Intr. 4 Introduction or conferences. That is another reason for also publishing a second edition in outline form, essentially Articles only. 4. An academic, not a politically authorised text. It must be stressed that what we refer to today as the DCFR originates in an initiative of European legal scholars. It amounts to the compression into rule form of decades of independent research and co-operation by aca- demics with expertise in private law, comparative law and European Community law. The independence of the two Groups and of all the contributors has been maintained and respected unreservedly at ev- ery stage of our labours. That in turn has made it possible to take on board many of the suggestions received in the course of a large num- ber of meetings with stakeholders and other experts throughout the continent. The two Groups alone, however, bear responsibility for the content of this volume. In particular, it does not contain a single rule or definition or principle which has been approved or mandated by a politically legitimated body at European or national level (save, of course, where it coincides with existing EU or national legisla- tion). It may be that at a later point in time the DCFR will be carried over at least in part into a CFR, but that is a question for others to decide. This introduction merely sets out some considerations which might usefully be taken into account during the possible process of transformation. 5. About this outline edition. This final outline edition consists of an introduction, the names of the academic contributors and an acknowledgement of our funders and donors, an overview of the guiding principles underlying the model rules, a set of definitions (referred to in I. – 1:108 (Definitions in Annex) and listed later in the Annex to the model rules), tables of derivations and destina- tions, and the model rules. The introduction explains the purposes pursued in preparing the DCFR and outlines its contents, coverage and structure. It describes the amendments to the 2008 interim edi- tion and elucidates the relationship between the DCFR and the pub- lications which have already appeared or will appear in the course of the preparatory work. Finally, it sketches out how the DCFR might flow into the development of the CFR. 6 The purposes of the DCFR Intr. 8 The purposes of the DCFR 6. A possible model for a political CFR. As already indicated, this DCFR is (among other things) a possible model for an actual or ‘political’ Common Frame of Reference (CFR). The DCFR presents a concrete text, hammered out in all its detail, to those who will be deciding questions relating to a CFR. A ‘political’ CFR would not necessarily, of course, have the same coverage and contents as this academic DCFR. The question of which functions the DCFR can perform in the development of the CFR is considered under para- graphs 59-74 of this introduction. 7. Legal science, research and education. However, the DCFR ought not to be regarded merely as a building block of a ‘political’ Common Frame of Reference. The DCFR will stand on its own and retain its significance whatever happens in relation to a CFR. The DCFR is an academic text. It sets out the results of a large European research project and invites evaluation from that perspective. The breadth of that scholarly endeavour will be apparent when the full edition is published. Independently of the fate of the CFR, it is hoped that the DCFR will promote knowledge of private law in the jurisdictions of the European Union. In particular it will help to show how much national private laws resemble one another and have provided mu- tual stimulus for development – and indeed how much those laws may be regarded as regional manifestations of an overall common European legacy. The function of the DCFR is thus separate from that of the CFR in that the former serves to sharpen awareness of the existence of a European private law and also (via the comparative notes that will appear in the full edition) to demonstrate the rela- tively small number of cases in which the different legal systems produce substantially different answers to common problems. The DCFR may furnish the notion of a European private law with a new foundation which increases mutual understanding and promotes col- lective deliberation on private law in Europe. 8. A possible source of inspiration. The drafters of the DCFR nurture the hope that it will be seen also outside the academic world as a text from which inspiration can be gained for suitable solutions for pri- 7 Intr. 8 Introduction vate law questions. Shortly after their publication the Principles of European Contract Law (PECL)5, which the DCFR (in its second and third Books) incorporates in a partly revised form (see paragraphs 49- 53), received the attention of many higher courts in Europe and of numerous official bodies charged with preparing the modernisation of the relevant national law of contract. This development is set to continue in the context of the DCFR. It will have repercussions for reform projects within the European Union, at both national and Community law levels, and beyond the EU. If the content of the 5 Ole Lando and Hugh Beale (eds.), Principles of European Contract Law Parts I and II. Prepared by the Commission on European Contract Law (The Hague 1999); Ole Lando, Eric Clive, André Prüm and Reinhard Zimmermann (eds.), Principles of European Contract Law Part III (The Hague, London and Boston 2003). Translations are available in French (Principes du droit européen du contract. Version française préparée par Georges Rouhette, avec le concours de Isabelle de Lamberterie, Denis Tallon et Claude Witz, Droit privé comparé et europeéen, vol. 2, Paris 2003); German (Grundregeln des Europäischen Vertragsrechts, Teile I und II, Kommission für Europäisches Vertragsrecht. Deutsche Ausgabe von Christian von Bar und Reinhard Zimmermann, München 2002; Grundregeln des Europäischen Vertragsrechts Teil III, Kommission für Europäisches Vertragsrecht. Deutsche Ausgabe von Christian von Bar und Reinhard Zimmermann, München 2005); Italian (Commissione per il Diritto Europeo dei Contratti. Principi di Diritto Europeo dei Contra- tti, Parte I & II, Edizione italiana a cura di Carlo Castronovo, Milano 2001; Commissione per il Diritto Europeo dei Contratti. Principi di Di- ritto Europeo dei Contratti, Parte III. Edizione italiana a cura di Carlo Castronovo, Milano 2005) and Spanish (Principios de Derecho Contrac- tual Europeo, Partes I y II. Edición española a cargo de Pilar Barres Benn- loch, José Miguel Embid Irujo, Fernando Martínes Sanz, Madrid 2003). Matthias Storme translated the articles of Parts I-III into Dutch (Tijd- schrift voor privaatrecht 2005, 1181-1241); M.-A. Zachariasiewicz and J. Bełdowski translated the PECL articles of Parts I and II (Kwartalnik Prawa Prywatnego 3/2004, 814-881) and J. Bełdowski and A. Kozioł the articles of Part III (Kwartalnik Prawa Prywatnego 3/2006, 847-859) into the Polish language, Christian Takoff Parts I-III (Targovsko pravo 1/2005, 15-85) into the Bulgarian language. 8 Contents of the DCFR Intr. 10 DCFR is convincing, it may contribute to a harmonious and informal Europeanisation of private law. Contents of the DCFR 9. Principles, definitions and model rules. The DCFR contains ‘prin- ciples, definitions and model rules’. The title of this book thus fol- lows the scheme set out in the European Commission’s communica- tions (referred to below in paragraph 59) and in our contract with the Commission. The notion of ‘definitions’ is reasonably clear. The notions of ‘principles’ and ‘model rules’, however, appear to overlap and require some explanation. 10. Meaning of ‘principles’. The European Commission’s communi- cations concerning the CFR do not elaborate on the concept of ‘principles’. The word is susceptible to different interpretations. It is sometimes used, in the present context, as a synonym for rules which do not have the force of law. This is how it appears to be used, for example, in the ‘Principles’ of European Contract Law (PECL), which referred to themselves in article 1:101(1) as ‘Principles... intended to be applied as general rules of contract law in the Euro- pean Union’ (italics added). The word appears to be used in a similar sense in the Unidroit Principles of International Commercial Con- tracts.6 In this sense the DCFR can be said to consist of principles and definitions. It is essentially of the same nature as those other instru- ments in relation to which the word ‘principles’ has become familiar. Alternatively, the word ‘principles’ might be reserved for those rules which are of a more general nature, such as those on freedom of contract or good faith. In this sense the DCFR’s model rules could be said to include principles. However, in the following paragraphs we explore a third meaning. 6 Unidroit Principles of International Commercial Contracts 2004 (Rome 2004), Preamble (Purpose of the Principles) paragraph (1): “These Prin- ciples set forth general rules for international commercial contracts”. 9 Intr. 11 Introduction 11. Fundamental principles. The word ‘principles’ surfaces occasion- ally in the Commission communications mentioned already, but with the prefix ‘fundamental’ attached. That suggests that it may have been meant to denote essentially abstract basic values. The model rules of course build on such fundamental principles in any event, whether they are stated or not. There can be no doubt about their importance. Private law is one of those fields of law which are, or at least should be, based on and guided by deep-rooted principles. To some extent such fundamental principles are a matter of inter- pretation and debate. It is clear that the DCFR does not perceive private law, and in particular contract law, as merely the balancing of private law relations between equally strong natural and legal per- sons. But different readers may have different interpretations of, and views on, the extent to which the DCFR suggests the correction of market failures or contains elements of ‘social justice’ and protection for weaker parties. 12. The approach taken to fundamental principles in the Interim Out- line Edition. In the Introduction to the Interim Outline Edition we asked readers to consider whether it would be useful to include in the DCFR a separate part containing a statement of basic principles and values underlying the model rules. We suggested that this part could possibly be formulated as recitals, i. e. an introductory list of reasons for the essential substance of the following text, or in a discursive preface. To give some idea of what a statement of underlying prin- ciples might look like, primarily in relation to contract law, some possible fundamental principles were outlined.7 The statement of principles in the Interim Outline Edition listed no fewer than fifteen items – justice; freedom; protection of human rights; economic wel- fare; solidarity and social responsibility; establishing an area of free- dom, security and justice; promotion of the internal market; protec- tion of consumers and others in need of protection; preservation of cultural and linguistic plurality; rationality; legal certainty; predict- ability; efficiency; protection of reasonable reliance; and the proper allocation of responsibility for the creation of risks.8 These were not 7 See IOE Introduction at paragraphs 23-36. 8 See IOE Introduction at paragraphs 22 and 35. 10 Contents of the DCFR Intr. 13 ranked in any order of priority. It was stressed that the principles would inevitably conflict with each other and that it was the func- tion of the model rules to find an appropriate balance. 9 Feedback was mixed. Some commentators welcomed the express mention of non- mercantile values like human rights and solidarity and social respon- sibility. Others expressed doubts as to the practical value of such a large, diverse and non-prioritised list. There were powerful calls for full account to be taken of the work done on governing principles by the Association Henri Capitant and the Société de législation com- parée10 as part of the ‘CoPECL Network of Excellence’ working on the CFR project.11 To that we now turn. 13. The approach taken by the Principes directeurs. The Association Henri Capitant and the Société de législation comparée published their Principes directeurs du droit européen du contrat early in 2008.12 We will refer to these as the Principes directeurs to distinguish them from the principles we later discuss. The evaluative group charged with this project approached their task by distilling out the main principles underlying the Principles of European Contract Law, and comparing them with equivalent principles from a number of na- tional systems and international and European instruments.13 They identified three main principles – liberté contractuelle, sécurité contrac- 9 IOE Introduction paragraph 23. 10 See note 4 above. 11 Joint Network on European Private Law (CoPECL: Common Principles of European Contract Law), Network of Excellence under the 6th EU Framework Programme for Research and Technological Development, Priority 7 – FP6-2002-CITIZENS- 3, Contract N8 513351 (co-ordinator: Professor Hans Schulte-Nölke, Osnabrück). 12 The Principes form part of the book cited in note 4 above. 13 The national systems used were mainly the Dutch, English, French, Ger- man, Italian and Spanish. The international instruments used (in addi- tion to the PECL) were mainly the UN Convention on Contracts for the International Sale of Goods (CISG), the Unidroit Principles on Interna- tional Commercial Contracts (2004) and the draft European Code of Contract produced by the Academy of European Private Law based in Pavia. 11 Intr. 13 Introduction tuelle et loyauté contractuelle – contractual freedom, contractual secu- rity and contractual “loyalty” – each with sub-principles. The word “loyalty” is within quotation marks because it does not fully capture the French word loyauté in this context. The key elements are good faith, fairness and co-operation in the contractual relationship. Loyauté comprises a duty to act in conformity with the requirements of good faith and fair dealing, from the negotiation of the contract until all of its provisions have been given effect, a prohibition on using contractual rights and terms in a way which does not respect the objective that justified their inclusion in the contract and a duty to co-operate so far as necessary for the performance of the contrac- tual obligations; it also requires a party not to act in contradiction of prior declarations or conduct on which the other party might have legitimately relied.14 The principles and sub-principles were expres- sed in eleven draft articles drafted in such a way as to be suitable for insertion in one block at the beginning of model rules. The approach adopted by the evaluative group is very attractive. The principles are expressed in an elegant, resonant and focussed way. They are backed up by persuasive analysis and discussion. However, we think that the approach, and to some extent the substance, has to be slightly dif- ferent for the purposes of the DCFR. There are two reasons for this. First, the Principes directeurs relate only to contract law. For the pur- poses of the DCFR a statement of underlying principles has to be wide enough to cover also non-contractual obligations and aspects of property law. Secondly, it does not seem appropriate to incorporate the governing principles as a block of actual model rules at the beginning of the DCFR. They function at a different level. They are a distillation from the model rules and have a more descriptive func- tion. They sometimes overlap and often conflict with each other. Almost all of the sub-principles, it is true, have direct counterparts in Articles of the DCFR but those Articles appear in, and are adapted to, particular contexts where they may be subject to qualifications and exceptions. It would weaken the DCFR to extract them and put them in one group at the beginning: it would clearly be undesirable to duplicate them. Moreover those Articles are by no means the only ones which reflect and illustrate underlying principles. A discursive 14 Op. cit fn 4 above at p. 198. 12 Contents of the DCFR Intr. 15 approach seems more appropriate for an introductory statement of principles of this type. This was the clear preference of the Compi- lation and Redaction Team and the Co-ordinating Committee of the Study Group when they discussed this matter in April and June 2008. 14. Lessons learned from the Principes directeurs. Nonetheless les- sons can be learned from the Principes directeurs. The most important is that the many fundamental principles listed in the introduction to the Interim Outline Edition can be organised and presented in a more effective way. A small group of them (corresponding to some extent to those identified in the Principes directeurs) can be extracted and discussed at greater length. These are the principles which are all-pervasive within the DCFR. They can be detected by looking into the model rules. They are underlying principles. They furnished grounds for arguments about the merits of particular rules. The re- maining principles mentioned in the introduction to the Interim Outline Edition are generally of a rather high political nature. They could be said to be overriding rather than underlying. Although some of them are strongly reflected in parts of the DCFR, they are primarily relevant to an assessment from the outside of the DCFR as a whole. Before commenting briefly on these two categories of princi- ples we note only that another lesson to be learned from the Principes directeurs is that there are different ways of dealing with fundamental principles in an instrument like the DCFR. It will be for others to decide how if at all to deal with fundamental principles in an official CFR. One obvious technique would be to use recitals, but the form and content of these would depend on the form and content of the instrument. It would be premature to adopt that technique here. 15. Underlying principles. For the broader purposes of the DCFR we suggest that the underlying principles should be grouped under the headings of freedom, security, justice and efficiency (rather than lib- erté contractuelle, sécurité contractuelle et loyauté contractuelle as in the Principes directeurs). This does not mean that the principle of con- tractual “loyalty” is lost. To a large extent it is covered by the wider principle of justice, without which many of the rules in the DCFR cannot be satisfactorily explained. To some extent it is simply an as- 13 Intr. 16 Introduction pect of contractual security viewed from the standpoint of the other party.15 One party’s contractual security is increased by the fact that the other is expected to co-operate and act in accordance with the requirements of good faith and fair dealing. Nothing is more detri- mental to contractual security than a contractual partner who does not do so: a cheating and untrustworthy partner, and even an unco- operative partner, may be worse than no partner at all. The heading of efficiency is added because, although this is often an aspect of freedom (freedom from unnecessary impediments and costs), it can- not always be accommodated under one of the other headings. These four principles of freedom, security, justice and efficiency are devel- oped and illustrated at length in the section on underlying principles which precedes the model rules. 16. Overriding principles. Into the category of “overriding princi- ples” of a high political nature we would place the protection of human rights, the promotion of solidarity and social responsibility, the preservation of cultural and linguistic diversity, the protection and promotion of welfare and the promotion of the internal market. Freedom, security, justice and efficiency also have a role to play as overriding principles. They have a double role: the two categories overlap. So they are briefly mentioned here too as well as being discussed at greater length later. 17. Protection of human rights. The DCFR itself recognises the over- riding nature of this principle. One of the very first Articles provides that the model rules are to be read in the light of any applicable instruments guaranteeing human rights and fundamental freedoms.16 However, this is an overriding principle which is also reflected quite strongly in the content of the model rules themselves, most notably in the rules on non-discrimination in Books II and III17 and in many of the rules in Book VI on non-contractual liability arising out of damage caused to another.18 These rules could also be seen, of course, 15 This overlap is recognised by the Principes directeurs themselves. See ar- ticle 0:201, alinea 2. 16 I. – 1:102(2). 17 See II. – 2:101 to II. – 2:105 and III. – 1:105. 14 Contents of the DCFR Intr. 19 as examples of rules which foster justice and preserve and promote security. Principles overlap as well as conflict. 18. Promotion of solidarity and social responsibility. The promotion of solidarity and social responsibility is generally regarded as primar- ily the function of public law (using, for example, criminal law, tax law and social welfare law) rather than private law. However, the promotion of solidarity and social responsibility is not absent from the private law rules in the DCFR. In the contractual context the word “solidarity” is often used to mean loyalty or security. It is of great importance to the DCFR. The principle of solidarity and social responsibility is also strongly reflected, for example, in the rules on benevolent intervention in another’s affairs, which try to minimise disincentives to acting out of neighbourly solidarity.19 It is also re- flected in the rules on donation, which try to minimise disincentives to charitable giving (an expression of solidarity and social responsi- bility which was at one time all-important and is still extremely important).20 Moreover some of the rules in Book VI on non-con- tractual liability for damage caused to another protect against types of behaviour which are harmful for society in general. 21 Many of these rules could also be regarded as examples of rules which promote security. 19. Preservation of cultural and linguistic diversity. Nothing could illustrate better the point that fundamental principles conflict than the juxtaposition of this item with the preceding one and the two following ones. In a pluralistic society like Europe it is manifest that the preservation of cultural and linguistic diversity is an all-impor- tant principle, vital to the very existence of the Union. But where a particular aspect of human life has not only a cultural content but also a strong functional content, this principle may conflict with the 18 See, in particular, VI. – 2:201 (Personal injury and consequential loss); VI. – 2:203 (Infringement of dignity, liberty and privacy) and VI. – 2:206 (Loss upon infringement of property and lawful possession). 19 Book V. 20 Book IV, Part H. 21 VI. – 2:209; see also VI-3:202, VI-3:206 and VI. – 5:103. 15 Intr. 20 Introduction principles of solidarity, the protection and promotion of welfare and the promotion of the internal market. Private law is a prime exam- ple. Within the rules of the DCFR itself there are some reflections of the principle of respect for cultural and linguistic diversity.22 How- ever, the impetus for the DCFR in its present form and for its present purposes came from, on the one hand, recognition of cultural and linguistic diversity and, on the other, concerns about the harmful effects for the internal market (and consequently for the welfare of European citizens and businesses) of an excessive diversity of con- tract law systems. The CFR project is not an attempt to create a single law of the whole of Europe. Rather, the purpose of the CFR as a legislator’s guide or toolbox is to enable the meaning of European legislation to be clear to people from diverse legal backgrounds. Moreover, existing cultural diversity was respected by the participa- tion on an equal footing of lawyers from all European legal cultures in the preparation of the DCFR and by the serious attempt to reflect, as far as possible, all legal systems of the EU Member States in the Notes. This resulted in unity out of diversity, at a soft-law level. Linguistic diversity will be respected by ensuring that the DCFR is translated into as many European languages as possible. 20. Protection and promotion of welfare. The Interim Outline Edi- tion referred to “economic welfare” but there is no reason to confine this principle to only one aspect of welfare. This principle embraces all or almost all the others. The whole purpose and raison d’être of the DCFR could be said to derive from this principle. If it does not help to promote the welfare of the citizens and businesses of Europe – however indirectly, however slowly, however slightly – it will have 22 See e. g. II. – 1:104(2) (potential applicability of local usages); II. – 3:102(2)(c) and (3) (language used for communication when business is marketing to consumers); II. – 9:109 (language to be used for communi- cations relating to the contract); IV. A. – 6:103(1)(e) (language for con- sumer guarantee document); IX. – 3:310(1)(d) (language to be used for declaration to proposed European register of proprietary security); IX. – 3:319(2) (language to be used for request to secured creditor for informa- tion about entry in register) and IX. – 7:210(3) (language to be used for a type of notice by secured creditor). 16 Contents of the DCFR Intr. 23 failed. Although all-embracing, this principle is too general to be useful on its own. 21. Promotion of the internal market. This principle is really a sub- head of the last. The most obvious way in which the welfare of the citizens and businesses of Europe can be promoted by the DCFR is by the promotion of the smooth functioning of the internal market. Whether this is just by improving the quality, and hence the acces- sibility and usability, of present and future EU legislation or whether it is by the development of one or more optional instruments are political decisions. 22. Freedom, security, justice and efficiency. As underlying princi- ples within the DCFR, these will be discussed and developed later. They also have a role to play as overriding principles for the purposes of assessment from the outside. The DCFR as a whole falls to be assessed very largely by the criterion of how well it embodies and balances these principles. At the level of overriding political princi- ples, reference may also be made to the EU specific aims of estab- lishing an area of freedom, security and justice and promoting the free movement of goods, persons, services and capital between the Member States. If the political will were there, the DCFR could make a contribution to the achievement of these aims. 23. Definitions. ‘Definitions’ have the function of suggestions for the development of a uniform European legal terminology. Some particularly important concepts are defined for these purposes at the outset in Book I. For other defined terms DCFR I. – 1:108 provides that ‘The definitions in the Annex apply for all the purposes of these rules unless the context otherwise requires.’ This expressly incorpo- rates the list of terminology in the Annex as part of the DCFR. This drafting technique, by which the definitions are set out in an appen- dage to the main text, was chosen in order to keep the first chapter short and to enable the list of terminology to be extended at any time without great editorial labour. The substance is partly distilled from the acquis, but predominantly derived from the model rules of the DCFR. If the definitions are essential for the model rules, it is also true that the model rules are essential for the definitions. There 17 Intr. 24 Introduction would be little value in a set of definitions which was internally incoherent. The definitions can be seen as components which can be used in the making of rules and sets of rules, but there is no point in having components which are incompatible with each other and cannot fit together. In contrast to a dictionary of terms assembled from disparate sources, the definitions in the Annex have been test- ed in the model rules and revised and refined as the model rules have developed. Ultimately, useful definitions cannot be composed with- out model rules and useful model rules can hardly be drafted without definitions. 24. Model rules. The greatest part of the DCFR consists of ‘model rules’. The adjective ‘model’ indicates that the rules are not put for- ward as having any normative force but are soft law rules of the kind contained in the Principles of European Contract Law and similar publications. Whether particular rules might be used as a model for legislation, for example, for the improvement of the internal coher- ence of the acquis communautaire is for others to decide. 25. Comments and notes. In the full edition the model rules will be supplemented by comments and notes. The comments will elucidate each rule, will often illustrate its application by means of examples, and will outline the critical policy considerations at stake. The notes will reflect the legal position in the national legal systems and, where relevant, the current Community law. International instruments such as the UN Convention on Contracts for the International Sale of Goods (CISG) and the Unidroit Principles of International Com- mercial Contracts 2004 are also mentioned where appropriate. How the notes were assembled is described in the section on the academic contributors and our funders. Revision of the interim outline edition 26. Overview. This final edition of the DCFR deviates in a number of respects from the Interim Outline Edition of 2008. We referred earlier to the new Books that are included and to the statement of principles which underlie the model rules, now placed in a separate 18 Revision of the interim outline edition Intr. 28 section between this introduction and the model rules. Here we mention some of the more detailed changes to the Articles published in the Interim Outline Edition. One general change has been the elimination of a number of redundant provisions. Another general change has been the expansion of the expression “goods and servi- ces” in a number of acquis-based provisions to include assets other than “goods” in the narrow sense of corporeal movables in which the word is defined in the DCFR. Finally, the catalogue of definitions has been revised and added to, with material which was misplaced there either expunged or, on occasion, upgraded to the model rules. Here we have frequently taken up points made in public discussion of the text. Although it would be excessive to give details of every drafting or editing change made since the publication of the Interim Outline Edition, a few of the more significant changes will now be men- tioned. 27. Book I. The main changes here are the inclusion of some provi- sions taken from elsewhere in the Interim Outline Edition. Of par- ticular note is I. – 1:103 (Good faith and fair dealing). Paragraph (1) is a more developed version of a definition which formerly appeared only in the Annex of definitions. It is included here because of its importance. Paragraph (2), on inconsistent actings, has been insert- ed following a recommendation by the evaluative group formed by the Association Henri Capitant and the Société de Législation Com- parée. The text of the former Annex 2 (Computation of time) has been integrated into Book I: see I. – 1:110. 28. Book II. The definition of “contract” in II. – 1:101(1) has been shortened. It now refers to “an agreement which is intended to give rise to a binding legal relationship or to have some other legal effect.” The definition formerly contained additional words designed to cater for the case where there was no subjective intention but an agree- ment was carved out of what the parties said or did. However, that point is sufficiently provided for by a later Article (II. – 4:102) and does not need to be repeated here. There is a similar change in the definition of “juridical act” in II. – 1:101(2). The earlier definition had been criticised by commentators on the ground that it did not make the element of intention necessary and was therefore too wide. 19 Intr. 29 Introduction Again, the point that intention may have to be objectively ascer- tained is sufficiently covered by a later Article (II. – 4:302). A re- ference to the rules on good faith and fair dealing in II. – 1:102 (Party autonomy) gave rise to confusion and has been deleted. The words “promise or undertaking” formerly in II. – 1:103 (Binding effect) were criticised as unnecessary duplication. “Undertaking” alone is now used. A new paragraph (3) has been added to II. – 1:106 (Form). This generalises a rule which originally appeared in the Chapter on dona- tion. There are numerous changes in Chapter 3 in particular with regard to information duties, which reflect further work done by the Acquis Group and also react to many comments received. Of par- ticular note is the provision on specific duties for businesses market- ing to consumers (II. – 3:102), where paragraph (1) has been refor- mulated in order to reflect the underlying acquis more closely. The provisions on sanctions for breach of information duties have been refined and a new Article (II. – 3:501) on liability for damages for breach of a duty imposed by Chapter 3 has been included. The contra proferentem rule in II. – 8:103 has been modified and expanded, fol- lowing a suggestion by the evaluative group formed by the Associa- tion Henri Capitant and the Société de Législation Comparée. 29. Book III. A new generalised provision on tacit prolongation (III. – 1:111) has been inserted, again following a suggestion by the evaluative group formed by the Association Henri Capitant and the Société de Législation Comparée. A new paragraph (3) has been inserted in III. – 2:102 (Time of performance) on the recommenda- tion of the Acquis Group, and a new Article has been inserted (III. – 3:205) to make it clear that when a supplier replaces a defective item the supplier has a right and an obligation to take back the replaced item. Some minor adjustments have been made to the rules on the effects of termination for non-performance of contractual obliga- tions (Chapter 3, Section 5, Sub-section 3). New rules on interest in commercial contracts have been inserted on the recommendation of the Acquis Group (III. – 3:710 and III. – 3:711). In Chapter 5 the rule on the requirements for an assignment (III. – 5:104) has been modified to bring it into line with the equivalent rule in the Book on the transfer of ownership of corporeal movables and, for the same reason, a new Article has been added on the effects on an assignment 20 Revision of the interim outline edition Intr. 30 of initial invalidity, subsequent avoidance, withdrawal, termination and revocation (III. – 5:118). The rule on the effect of a contractual prohibition of assignment (III. – 5:108) has been firmed up and part of it removed and generalised in a new rule on competition between an assignee and an assignor receiving the proceeds of performance (III. – 5:122). Chapter 5 has been expanded by the inclusion of Ar- ticles on the substitution or addition of a new debtor in such a way that the original debtor is not discharged (Chapter 5, Section 2). A new Article has been added to enable a principal to take over the rights of an agent against a third party if the agent becomes insolvent (III. – 5:401) and to give the third party, in such a case, an option to hold the principal liable for the agent’s obligations under the con- tract ((III. – 5:402). These rules will be particularly relevant in cases of so-called indirect representation where the agent contracts in the agent’s own name. As a consequence of some of these changes Chap- ter 5 has been renamed “Change of parties”. The Article on the requirements for set-off (III. – 6:102) has been redrafted after it was drawn to our attention that there was a difference in substance be- tween the English and French texts in the PECL, and it has been expanded to make it clear that the rights being set off against each other must both be available for that purpose, and not for example frozen on the application of an arresting creditor. And, finally, two of the Articles on prescription (III. – 7:302 and III. – 7:303) have been slightly expanded partly to take account of developments in relation to mediation. 30. Book IV. The main change in Book IV has been the elimination of redundant or overlapping provisions, including some provisions which repeated the substance of rules already found in Books II or III. The presence of these redundant provisions had been rightly criti- cised by commentators on the Interim Outline Edition. Most of these provisions had a proper role to play in the self-standing PEL Books in order to complete the picture but are unnecessary in the DCFR. In a few cases, new or revised rules in earlier Books (e. g. on tacit prolongation and interpretation against the dominant party) enabled provisions in Book IV which were formerly necessary to be now deleted. A slight adjustment has been made in IV. A. – 2:305 (Third party rights or claims in general) in order to bring the text 21 Intr. 31 Introduction into line with the agreed policy as expressed in the comments. Sev- eral changes have been made in the Chapter on mandate. These were made partly to make it more clear that the chapter applies not only to contracts for the conclusion of a contract for the principal but also to contracts, for example with estate agents or brokers of various kinds, for the negotiation or facilitation of a contract to be concluded by the principal and, given that scope, partly in the inter- ests of more precise terminology. For example, an estate agent with authority to negotiate but not conclude a contract for the principal is more accurately described as an “agent” than as a “representative”, which was the word used in the Interim Outline Edition. 31. Books V-VII. Only minor drafting changes have been made in these Books. 32. Books VIII-X. Books VIII, IX and X were prepared in the same manner as the other books of the DCFR on the basis of deliberation in working teams, advisory councils and plenary meetings. However, for reasons primarily of time, the Compilation and Redaction Team was not able to give these Books the same complete scrutiny as it was able to bestow on the others. 33. Definitions. Some helpful comments were received on the An- nex of definitions. As a result, some definitions which had been inserted primarily as drafting aids rather than to elucidate the mean- ing of a term or concept have been deleted. This has sometimes meant using a few more words than before in some Articles. A few definitions have been changed in the interests of greater clarity or precision. A few terms which were defined only in the Annex in the Interim Outline Edition have now, because of their importance, been moved to the text of the model rules. The list of definitions still contains definitions taken from, or derived from, the model rules as well as some definitions which, because of their generality, do not have a natural home in any one model rule. This makes for a mixed list but the purpose is simply the convenience of the reader. Where a definition is taken or derived from an Article in the model rules a cross-reference to that Article has been added. Again this responds to a useful suggestion made by commentators. 22 The coverage of the DCFR Intr. 36 The coverage of the DCFR 34. Wider coverage than PECL. The coverage of the PECL was al- ready quite wide. They had rules not only on the formation, validity, interpretation and contents of contracts and, by analogy, other jur- idical acts, but also on the performance of obligations resulting from them and on the remedies for non-performance of such obligations. Indeed the later Chapters had many rules applying to private law rights and obligations in general – for example, rules on a plurality of parties, on the assignment of rights to performance, on set-off and on prescription. To this extent the Principles went well beyond the law on contracts as such. The DCFR continues this coverage but it goes further. 35. Specific contracts. The DCFR also covers (in Book IV) a series of model rules on so-called ‘specific contracts’ and the rights and obligations arising from them. For their field of application these latter rules expand and make more specific the general provisions (in Books I-III), deviate from them where the context so requires, or address matters not covered by them. 36. Non-contractual obligations. The DCFR also covers other pri- vate law rights and obligations within its scope even if they do not arise from a contract. It covers, for example, those arising as the result of an unjustified enrichment, of damage caused to another and of benevolent intervention in another’s affairs. It also covers obliga- tions which a person might have, for example, by virtue of being in possession of assets subject to proprietary security or by virtue of being a trustee. It thus embraces non-contractual obligations to a far greater extent than the PECL. It is noted below (paragraphs 44- 46) that Book III contains some general rules which are applicable to all obligation within the scope of the DCFR, whether contractual or not. The advantage of this approach is that the rules in Book III can be taken for granted, or slightly modified where appropriate, in the later Books on non-contractual matters. The alternative would be an unacceptable amount of unnecessary repetition. 23 Intr. 37 Introduction 37. Matters of movable property law. The DCFR also covers some matters of movable property law, namely acquisition and loss of own- ership, proprietary security, and trust law. They form the content of Books VIII, IX and X and are published here for the first time. 38. Matters excluded. DCFR I. – 1:101(2) lists all matters which are excluded from its intended field of application. These are in particu- lar: the status or legal capacity of natural persons, wills and succes- sion, family relationships, negotiable instruments, employment rela- tionships, immovable property law, company law, and the law of civil procedure and enforcement of claims. 39. Reasons for the approach adopted. The coverage of the DCFR is thus considerably broader than what the European Commission seems to have in mind for the coverage of the CFR (see paragraph 59 below). The ‘academic’ frame of reference is not subject to the constraints of the ‘political’ frame of reference. While the DCFR is linked to the CFR, it is conceived as an independent text. The research teams began in the tradition of the Commission on Euro- pean Contract Law but with the aim of extending its coverage. When this work started there were no political discussions underway on the creation of a CFR of any kind, neither for contract law nor for any other part of the law. Our contract with the Research Directo- rate-General to receive funding under the sixth European Frame- work Programme on Research reflects this; it obliges us to address all the matters listed above. The relatively broad coverage of the DCFR may be seen as advantageous also from a political perspective. Only a comprehensive DCFR creates a concrete basis for the discussion of the coverage of the political CFR and thereby allows for an informed decision of the responsible political institutions. 40. Contract law as part of private law. There are good reasons for including more than rules on general contract law in the DCFR. These general rules need to be tested to see whether or in what respect they have to be adjusted, amended and revised within the framework of the most important of the specific contracts. Nor can the DCFR contain only rules dealing with consumer contracts. The two Groups concur in the view that consumer law is not a self-stand- 24 Structure and language of the DCFR model rules Intr. 42 ing area of private law. It consists of some deviations from the general principles of private law, but it is built on them and cannot be de- veloped without them. And ‘private law’ for this purpose is not con- fined to the law on contract and contractual obligations. The correct dividing line between contract law (in this wide sense) and some other areas of law is in any event difficult to determine precisely.23 The DCFR therefore approaches the whole of the law of obligations as an organic entity or unit. Some areas of property law with regard to movable property are dealt with for more or less identical reasons and because some aspects of property law are of great relevance to the good functioning of the internal market. Structure and language of the DCFR model rules 41. Structure of the model rules. The structure of the model rules was discussed on many occasions by the Study Group and the joint Compilation and Redaction Team. It was accepted from an early stage that the whole text would be divided into Books and that each Book would be subdivided into Chapters, Sections, Sub-sections (where appropriate) and Articles. In addition the Book on specific contracts and the rights and obligations arising from them was to be divided, because of its size, into Parts, each dealing with a particular type of contract (e. g. Book IV.A: Sale). All of this was relatively uncontroversial. 42. Mode of numbering the model rules. The mode of numbering the model rules corresponds in its basic approach to the technique used in many of the newer European codifications. This too was chosen in order to enable necessary changes to be made later without more than minor editorial labour. Books are numbered by capitalised Roman numerals, i. e., Book I (General provisions), Book II (Con- tracts and other juridical acts), etc. Only one Book (Book IV (Spe- cific contracts and rights and obligations arising from them)) is di- 23 See, in more detail, von Bar and Drobnig (eds.), The Interaction of Contract Law and Tort and Property Law in Europe (Munich 2004). This study was conducted on behalf of the European Commission. 25 Intr. 43 Introduction vided into Parts: Part A (Sale), Part B (Lease of goods), etc. Chap- ters, sections (and also sub-sections) are numbered using Arabic numerals, e. g. chapter 5, section 2, sub-section 4, etc. Articles are then numbered sequentially within each Book (or Part) using Arabic numerals. The first Arabic digit, preceding the colon, is the number of the relevant chapter. The digit immediately following the colon is the number of the relevant section of that chapter. The remaining digits give the number of the Article within the section; sub-sections do not affect the numbering. For example, III. – 3:509 (Effect on obligations under the contract) is the ninth Article in section 5 (Termination) of the third chapter (Remedies for non-performance) of the third book (Obligations and corresponding rights). It was not possible, however, to devise a numbering system that would indicate every subdivision of the text without the system becoming too com- plicated to be workable. One cannot see from the numbering that III. – 3:509 is the first Article within sub-section 3 (Effects of termi- nation). 43. Ten books. To a large extent the allocation of the subject mat- ter to the different Books was also uncontroversial. It was readily agreed that Book I should be a short and general guide for the reader on how to use the whole text – dealing, for example, with its intend- ed scope of application, how it should be interpreted and developed and where to find definitions of key terms. The later Books, from Book IV on, also gave rise to little difficulty so far as structure was concerned. There was discussion about the best order, but eventually it was settled that this would be: Specific contracts and rights and obligations arising from them (Book IV); Benevolent intervention in another’s affairs (Book V); Non-contractual liability arising out of damage caused to another (Book VI); Unjustified enrichment (Book VII); Acquisition and loss of ownership of goods (Book VIII); Pro- prietary security rights in movable assets (Book IX) and Trust (Book X). An important argument for putting the rules on specific con- tracts and their obligational effects in a Book of their own (subdi- vided into Parts) rather than in separate Books is that it would be easier in the future to add new Parts dealing with other specific contracts without affecting the numbering of later Books and their contents. 26 Structure and language of the DCFR model rules Intr. 45 44. Books II and III. The difficult decisions concerned Books II and III. There was never much doubt that these Books should cover the material in the existing Principles of European Contract Law (PECL, see paragraph 8 above and paragraphs 49-53 below) – general rules on contracts and other juridical acts, and general rules on contrac- tual and (in most cases) other obligations – but there was consider- able difficulty in deciding how this material should be divided up be- tween and within them, and what they should be called. It was only after decisions were taken by the Co-ordinating Group on how the key terms ‘contract’ and ‘obligation’ would be used in the model rules, and after a special Structure Group was set up, that the way forward became clear. Book II would deal with contracts and other juridical acts (how they are formed, how they are interpreted, when they are invalid, how their content is determined and so on) while Book III would deal with obligations within the scope of the DCFR – both contractual and non-contractual – and corresponding rights. 45. Contracts and obligations. A feature of this division of material is a clear distinction between a contract seen as a type of agreement – a type of juridical act – and the legal relationship, usually involving reciprocal sets of obligations and rights, which results from it. Book II deals with contracts as juridical acts; Book III deals with the obliga- tions and rights resulting from contracts seen as juridical acts, as well as with non-contractual obligations and rights. To this extent a structural division which in the PECL was only implicit is made explicit in the DCFR. Some commentators on the Interim Outline Edition called for a simpler structure more like that of the PECL, one which, at least in relation to contracts and contractual obligations, would follow a natural “chronological” order. However, it has to be noted that the DCFR does in fact follow such an order. It begins with the pre-contractual stage and then proceeds to formation, right of withdrawal, representation (i. e. how a contract can be concluded for a principal by a representative), grounds of invalidity, interpretation, contents and effects, performance, remedies for non-performance, plurality of debtors and creditors, change of parties, set-off and mer- ger, and prescription. This is essentially the same order as is followed in the PECL. The only difference is that the DCFR inserts a break at the point where the rules cease to talk about contracts as agreements 27 Intr. 46 Introduction (formation, interpretation, invalidity, contents and effects etc.) and start to talk about the rights and obligations arising from them. At this point a new Book is begun and a new Chapter on obligations and corresponding rights in general is inserted. It is not an enormous change. It hardly affects the order or content of the model rules. And it is justified not only because there is a difference between a contract and the rights and obligations arising out of it, and it is an aid to clarity of thought to recognise this, but also because it is useful to have the opening Chapter of Book III as a home for some Articles which are otherwise difficult to place, such as those on conditional and time-limited rights and obligations. To eliminate the break be- tween Books II and III would be a regrettable step backwards for which it is difficult to see any justification. 46. Contractual and non-contractual obligations. A further problem was how best to deal with contractual and non-contractual obliga- tions within Book III. One technique which was tried was to deal first with contractual obligations and then to have a separate part on non-contractual obligations. However, this proved cumbersome and unsatisfactory. It involved either unnecessary repetition or extensive and detailed cross-references to earlier Articles. Either way the text was unattractive and heavy for the reader to use. In the end it was found that the best technique was to frame the Articles in Book III so far as possible in general terms so that they could apply to both contractual and non-contractual obligations. Where a particular Ar- ticle applied only to contractual obligations this could be clearly stated, see III. – 1:101 (“This Book applies, except as otherwise pro- vided, to all obligations within the scope of these rules, whether they are contractual or not...”). For example, the rules on termination can only apply to contractual obligations (see III. – 3:501(1) (Scope and definition)); the same is true for III. – 3:601 (Right to reduce price) (the restriction on the scope of application follows from the word “price”) and III. – 3:203 (When creditor need not allow debtor an opportunity to cure) paragraph (a), the wording of which limits its application to contractual obligations. It need hardly be added that if a CFR were to be confined to contracts and contractual obligations it would be a very easy matter to use the model rules in Book III for that purpose. Most of them would need no alteration. 28 Structure and language of the DCFR model rules Intr. 48 47. Language. The DCFR is being published first in English. This has been the working language for all the Groups responsible for for- mulating the model rules. However, for a substantial portion of the Books (or, in the case of Book IV, its Parts), teams have already com- posed a large number of translations into other languages. These will be published successively, first in the PEL series (see paragraphs 54- 56 below) and later separately for the DCFR. In the course of these translations the English formulation of the model rules has often it- self been revised. In autumn 2008 the Fondation pour le droit continen- tal (Paris) published a translation of the first three Books of the DCFR (in the version of the interim outline edition). 24 A Czech translation of the interim outline addition appeared shortly after- wards. 25 The research teams are intent on publishing the model rules of the DCFR as quickly and in as many languages as is possible. How- ever, the English version is the only version of the DCFR which has been discussed and adopted by the responsible bodies of the partici- pating groups and by the Compilation and Redaction Team. 48. Accessibility and intelligibility. In the preparation of the DCFR every attempt was made to achieve not only a clear and coherent structure, but also a plain and clear wording. Whether the model rules and definitions are seen as a tool for better lawmaking or as the possible basis for one or more optional instruments it is important that they should be fit for their purpose. The terminology should be precise and should be used consistently. The word “contract” for example should be used in one sense, not three or more. The termi- nology should be as suitable as possible for use across a large number of translations. It should therefore try to avoid legalese and techni- calities drawn from any one legal system. An attempt has been made to find, wherever possible, descriptive language which can be readily translated without carrying unwanted baggage with it. It is for this reason that words like “rescission”, “tort” and “delict” have been avoided. The concepts used should be capable of fitting together coherently in model rules, whatever the content of those model 24 By Professor Jacques Ghestin, see fn. 3 above. 25 By a team led by Professor Přemysl Raban, published in Karlovarská Právní Revuei 2/2008, 1-222. 29 Intr. 49 Introduction rules. The text should be well-organised, accessible and readable. Being designed for the Europe of the 21st century, it should be ex- pressed in gender neutral terms. It should be as simple as is consistent with the need to convey accurately the intended meaning. It should not contain irrational, redundant, or conflicting provisions. Wheth- er the DCFR achieves these aims is for others to judge. Certainly, considerable efforts were made to try to achieve them. How the DCFR relates to PECL, the SGECC PEL series, the Acquis and the Insurance Contract Group series 49. Based in part on the PECL. In Books II and III the DCFR contains many rules derived from the Principles of European Contract Law (PECL). These rules have been adopted with the express agreement of the Commission on European Contract Law, whose successor group is the Study Group. Tables of derivations and destinations will help the reader to trace PECL articles within the DCFR. However, the PECL could not simply be incorporated as they stood. Deviations were unavoidable in part due to the different purpose, structure and coverage of the DCFR and in part because the scope of the PECL needed to be broadened so as to embrace matters of consumer pro- tection. 50. Deviations from the PECL. A primary purpose of the DCFR is to try to develop clear and consistent concepts and terminology. In pursuit of this aim the Study Group gave much consideration to the most appropriate way of using terms like ‘contract’ and ‘obligation’, taking into account not only national systems, but also prevailing usage in European and international instruments dealing with pri- vate law topics. One reason for many of the drafting changes from the PECL is the clearer distinction now drawn (as noted above) be- tween a contract (seen as a type of agreement or juridical act) and the relationship (usually consisting of reciprocal rights and obliga- tions) to which it gives rise. This has a number of consequences throughout the text. 30 How the DCFR relates to PECL, the SGECC PEL series Intr. 52 51. Examples. For example, under the DCFR it is not the contract which is performed. A contract is concluded; obligations are per- formed. Similarly, a contract is not terminated. It is the contractual relationship, or particular rights and obligations arising from it, which will be terminated. The new focus on rights and obligations in Book III also made possible the consistent use of ‘creditor’ and ‘debtor’ rather than terms like ‘aggrieved party’ and ‘other party’, which were commonly used in the PECL. The decision to use ‘ob- ligation’ consistently as the counterpart of a right to performance also meant some drafting changes. The PECL sometimes used ‘duty’ in this sense and sometimes ‘obligation’. The need for clear concepts and terminology also meant more frequent references than in the PECL to juridical acts other than contracts. A juridical act is defined in II. – 1:101 as a statement or agreement which is intended to have legal effect as such. All legal systems have to deal with various types of juridical act other than contracts, but not all use such a term and not all have generalised rules. Examples of such juridical acts might be offers, acceptances, notices of termination, authorisations, guar- antees, acts of assignment, unilateral promises and so on. The PECL dealt with these by an article (1:107) which applied the Principles to them ‘with appropriate modifications’. However, this technique is a short-cut which should only be used with great care and only when the appropriate modifications will be slight and fairly obvious. In this instance what modifications would be appropriate was not always apparent. It was therefore decided, as far back as 2004, to deal sepa- rately with other juridical acts. Some commentators on the Interim Outline Edition have ascribed a significance to this modest func- tional decision which it certainly did not have in the eyes of the drafters. 52. Input from stakeholders. Other changes in PECL articles resul- ted from the input from stakeholders to the workshops held by the European Commission on selected topics. For example, the rules on representation were changed in several significant respects for this reason, as were the rules on pre-contractual statements forming part of a contract, the rules on variation by a court of contractual rights and obligations on a change of circumstances and the rules on so- called ‘implied terms’ of a contract. Sometimes even the process of 31 Intr. 53 Introduction preparing for stakeholder meetings which did not, in the end, take place led to proposals for changes in PECL which were eventually adopted. This was the case, for example, with the chapter on plur- ality of debtors and creditors, where academic criticism on one or two specific points also played a role. 53. Developments since the publication of the PECL. Finally, there were some specific articles or groups of articles from the PECL which, in the light of recent developments or further work and thought, seemed to merit improvement. For example, the PECL rules on sti- pulations in favour of third parties, although a considerable achieve- ment at the time, seemed in need of some expansion in the light of recent developments in national systems and international instru- ments. The detailed work which was done on the specific contracts in Book IV, and the rights and obligations resulting from them, some- times suggested a need for some additions to, and changes in, the general rules in Books II and III. For example, it was found that it would be advantageous to have a general rule on ‘mixed contracts’ in Book II and a general rule on notifications of non-conformities in Book III. It was also found that the rules on ‘cure’ by a seller which were developed in the Part of Book IV on sale could usefully be generalised and placed in Book III. The work done on other later Books also sometimes fed back into Books II and III. For example, the work done on unjustified enrichment showed that rather more de- veloped rules were needed on the restitutionary effects of terminated contractual relationships, while the work on the acquisition and loss of ownership of goods (and also on proprietary security rights in movable assets) fed back into the treatment of assignment in Book III. Although the general approach was to follow the PECL as much as possible there were, inevitably, a number of cases where it was found that small drafting changes could increase clarity or consis- tency. For example, the PECL sometimes used the word “claim” in the sense of a demand based on the assertion of a right and some- times in the sense of a right to performance. The DCFR uses “claim” only in the first sense and uses a “right to performance” where this is what is meant. Again, the PECL referred sometimes to contract “terms” and sometimes to contract “clauses”. The DCFR prefers 32 How the DCFR relates to PECL, the SGECC PEL series Intr. 54 “terms”, which has the advantage of applying with equal facility to written and non-written contracts. 54. The PEL series. The Study Group began its work in 1998. From the outset it was envisaged that at the appropriate time its results would be presented in an integrated complete edition, but it was only gradually that its structure took shape (see paragraphs 41-46 above). As a first step the tasks in the component parts of the project had to be organised and deliberated. The results are being published in a separate series, the ‘Principles of European Law’ (PEL). To date six volumes have appeared. They cover sales,26 leases,27 services,28 com- mercial agency, franchise and distribution,29 personal security con- tracts,30 and benevolent interventions in another’s affairs.31 Further books will follow (in 2009 and 2010) on the law regarding non- 26 Principles of European Law. Study Group on a European Civil Code. Sales (PEL S). Prepared by Ewoud Hondius, Viola Heutger, Christoph Jeloschek, Hanna Sivesand, Aneta Wiewiorowska (Sellier, Bruylant, Staempfli, Oxford University Press 2008). 27 Principles of European Law. Study Group on a European Civil Code. Lease of Goods (PEL LG). Prepared by Kåre Lilleholt, Anders Victorin†, Andreas Fötschl, Berte-Elen R. Konow, Andreas Meidell, Amund Bjør- anger Tørum (Sellier, Bruylant, Staempfli, Oxford University Press 2007). 28 Principles of European Law. Study Group on a European Civil Code. Service Contracts (PEL SC). Prepared by Maurits Barendrecht, Chris Jansen, Marco Loos, Andrea Pinna, Rui Cascão, Stéphanie van Gulijk (Sellier, Bruylant, Staempfli, Oxford University Press 2006). 29 Principles of European Law. Study Group on a European Civil Code. Commercial Agency, Franchise and Distribution Contracts (PEL CAFDC). Prepared by Martijn W. Hesselink, Jacobien W. Rutgers, Oda- via Bueno Díaz, Manola Scotton, Muriel Veldmann (Sellier, Bruylant, Staempfli, Oxford University Press 2006). 30 Principles of European Law. Study Group on a European Civil Code. Personal Security (PEL Pers.Sec.). Prepared by Ulrich Drobnig (Sellier, Bruylant, Staempfli, Oxford University Press 2007). 31 Principles of European Law. Study Group on a European Civil Code. Benevolent Intervention in Another’s Affairs (PEL Ben.Int.). Prepared 33 Intr. 55 Introduction contractual liability arising out of damage caused to another, on unjustified enrichment law, on mandate contracts, and all the sub- jects related to property law. The volumes published within the PEL series contain additional material which will not be reproduced in the full DCFR, namely the comparative introductions to the various Books, Parts and Chapters and the translations of the model rules published within the PEL series. The continuation of the PEL series will also enable the publication of the full edition of the DCFR in- dependently of whether all gaps in the compilation and editing of the comparative legal material can actually be filled in time. 55. Deviations from the PEL series. In some cases, however, the mod- el rules which the reader encounters in this DCFR deviate from their equivalent published in the PEL series. There are several reasons for such changes. First, in drafting a self-standing set of model rules for a given subject (such as e. g. service contracts) it proved necessary to have much more repetition of rules which were already part of the PECL. Such repetitions became superfluous in an integrated DCFR text which states these rules at a more general level (i. e. in Books II and III). The DCFR is therefore considerably shorter than it would have been had all PEL model rules been included as they stood. 56. Improvements. The second reason for changing some already published PEL model rules is that, at the stage of revising and editing for DCFR purposes, the Compilation and Redaction Team saw room for some improvements. After consulting the authors of the relevant PEL book, the CRT submitted the redrafted rules to the Study Group’s Co-ordinating Committee for approval, amendment or re- jection. Resulting changes are in part limited to mere drafting, but occasionally go to substance. They are a consequence of the syste- matic revision of the model rules which commenced in 2006, the integration of ideas from others (including stakeholders) and the compilation of the list of terminology, which revealed some incon- by Christian von Bar (Sellier, Bruylant, Staempfli, Oxford University Press 2006). 34 How the DCFR relates to PECL, the SGECC PEL series Intr. 58 sistencies in the earlier texts. The DCFR in turn, in its full edition, reflects yet further refinements as compared with the interim outline edition. 57. The Acquis Principles (ACQP). The Research Group on the Ex- isting EC Private Law, commonly called the Acquis Group, is also publishing its findings in a separate series.32 The Acquis Principles are an attempt to present and structure the bulky and rather incoher- ent patchwork of EC private law in a way that should allow the cur- rent state of its development to be made clear and relevant legisla- tion and case law to be found easily. This also permits identification of shared features, contradictions and gaps in the acquis. Thus, the ACQP may have a function for themselves, namely as a source for the drafting, transposition and interpretation of EC law. Within the process of elaborating the DCFR, the Acquis Group and its output contribute to the task of ensuring that the existing EC law is appro- priately reflected. The ACQP are consequently one of the sources from which the Compilation and Redaction Team has drawn. 58. Principles of European Insurance Contract Law. The CoPECL network of researchers established under the sixth framework pro- gramme for research (see below: academic contributors and funders) also includes the ‘Project Group Restatement of European Insurance Contract Law (I