Optional law for firms and consumers: An economic analysis of opting into the Common European Sales Law

This article forms part of a special edition of the Common Market Law Review.

Publishers Abstract:

The European Commission has launched Common European Sales Law (CESL) as an optional instrument for European firms and consumers. Several critical opinions have been raised against the optional nature, characterizing it as an instrument for social dumping (i.e. lowering consumer protection standards, given that no set of rules with higher levels of protection would ever be chosen by firms), as depriving consumers of any meaningful choice, and emphasizing its futility.

In this article the authors present an economic argument showing how these critiques present theoretical flaws, even if one does not rely on the efficiency gains that increasing cross border trade may bring in terms of having more efficient firms serving consumers in other national markets. In Section 2 the authors summarize some of the critiques raised against the optional nature of the CESL or Contract Law more generally. In section 3 they present their main economic argument of choice of legal regime by firms under an optional instrument with pre-existing national laws.

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