Law, Consulting

A standardized European Convention on the Sale of Goods by no means sells itself

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On 11 October 2011 the European Commission decided on a proposal for an ordinance on a common European Convention on the Sale of Goods. The convention is set to further develop the single, standardized European market. At present, when it comes to cross-border trade between companies and overseas purchases by consumers, the 27 different national legal systems of the individual member states continue to apply in spite of the single market, which in practice represents a hindrance to both small-scale exporters and consumers.



However, the ordinance is not to be viewed as a major breakthrough in the further development of the single market. For one thing, the regulations of the ordinance will not incorporate all areas of cross-border trade, and what's more, the national legal systems will not be affected. As such, the new EU Convention on the International Sale of Goods will be introduced as an optional, 28th legal system and would only apply if purchasers and vendors agree on its application when drafting cross-border contract.

According to the rules set out in EU legislation, the European Council and the European Parliament must agree on the ordinance. However, among the legal rules of the EU is the principle of subsidiarity. In the subsidiarity objection, in accordance with the Lisbon Treaty of 1 December 2009, a new instrument was created that should integrate the national parliaments into the formal EU legislative procedure right from the outset.

The national parliaments will have eight weeks time from the submission of the proposal to state their position. Two votes will hereby be allocated to each member state. This is a logical procedure given that many EU states have a parliament that have a two-chamber structure. Thus in Germany the national parliament, the Bundestag, has one vote, while the representatives of the German federal states, the Bundesrat (Federal Council), has the second. A quorum also applies that determines the effectiveness of national subsidiarity objections, at an EU-level. In order to review its legal parliamentary bills, the EU Commission is only legally obliged to review its legal parliamentary bills in the event that one third of the votes are in objection – the quorum is low in matters of justice.

With regard to the EU Convention on the International Sale of Goods, it appears that the quorum is not fulfilled. Incidentally, one of the few subsidiarity objections came from the German Bundestag, which, in thus voting, followed the recommendations of the majority of the experts invited to the hearing by the judiciary committee. One point of criticism that was presented was the incompleteness of the draft, which may therefore be likely to result in recourse back to the national legal systems.

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