THE PRINCIPLES OF EUROPEAN CONTRACT LAW (PECL)

The present state of contract law in the European Community is still characterized by the coexistence of national contract laws. The functioning of the internal market would attempt to achieve convergence in national contract law by promoting the development of common Principles of European Contract Law (PECL). They should reflect solutions common to all national legal orders in the European Union. Common contract law principles would serve as guidelines for Member States when new legislation is going to be drafted in a situation where the legislative measures at the European level were mainly related to consumer law. The principles clearly embrace freedom of contract as their main rule. Terms which have been individually negotiated take preference over those which are not. Remedies for non-performance may be excluded or restricted unless it would be contrary to good faith and fair dealing to invoke the exclusion or restriction. The principles include a fundamental terminology e.g. meaning of terms 'non-performance' or a 'material' matter (it is one which a reasonable person in the same situation as one party ought to have known would influence the other party in its decision whether to contract on the proposed terms or to contract at all). PECL are intended to be applied as general rules of contract law in Community. The principles will apply when the parties have agreed to incorporate them into their contract or that their contract is to be governed by them.