T he concept of freedom in US and European contract law

1. The concept of freedom in US and European contract law Tamas Dezso Ziegler ziegler.tamas@tatk.elte.hu

2. EU contractlaw is ratherrigid and paternalistic, while US lawputs more stressonindividualfreedom and the free market. • Why?

3. US Contract Law (consumer issues) • Free to chose remedies • Transfers freedom to the parties • Shorter warranties – lower prices • Market sets the framework of contracts + (Uniform Commercial Code) • 5 yrs warranty is available, if you pay for it • Stricter rules • A contract is a contract • Active consumers: class actions • Role of institutions is limited (Advocate general, Food and Drug Administration, Federal Trade Commission) • Institutions as „quasi-lawmakers” • See e.g. FTC’s mail or telephone order rule

4. Uniform Commercial Code Adopted by the National Conference of Commissioners on Uniform State Laws(NCCUSL) and the American Law Institute (ALI)

5. EU „CONTRACT LAW” • Consumer protection: basedon EU law • Remediesset in law • Electroniccontracting: maycancelthecontract in twoweeks • Longer „warranty” times (twoyears) • Otherrulesmissing: domesticlawapplies • No Europe-wide U.C.C. • Features • Paternatistic • Authoritiesactinstead of consumers • Notalwaysuseful: foreigncurrencyloans

6. FREEDOM IN THE US • Concept of freedom changes in time (Eric Foner: the Story of American freedom) • Radical reconstructions • Struggle: Freedom from the britons, freedom of black people, women, workers, etc. • Bill of rights (esp. speech, press, religion) • Freedom to business (end of XIXth century): • »The market, not democratic politics, was the true realm of freedom: liberty meant „the liberty to buy and sell, and mend and make, where, when and how we please”, without interference by the state.« (cites Edwin Lawrence Godkin) • „The right of each man to labour as much as he chooses and to enjoy his own earnings, is the foundation stone of… freedoms.” (Horace White)

7. FREEDOM IN THE US • Ronald Reagan • „Thosewhowould trade ourfreedomforthesoupkitchen of thewelfarestate told usthattheyhave a utopiansolution of peacewithoutvictory… Theysayweoffersimpleanswerstocomplexproblems… [Theysay] „Giveupyourdreams of freedombecausetosaveourownskins, wearewillingtomake a dealwithyourslavemasters”. • Robert Welch • „Wehave a canserousdisease of collectivismfirmlyimplantednow. Wehavepeople feeling thatnothingshould be donebythem, buteverythingforthembythegovernment. Itsdisasterousravagesarequite far advanced. Pushthecommunists back, get out of thebed of Europe that is dyingwiththiscancer of collectivism…” • Friedman & Hayek: mainstreamopinion

8. POSSIBLE REASONS • Emilio Gentile • Civil (lay) religion v. political religion • US lay religion of peace, freedom, republic (not democracy!), the selected nation myth • My opinion: freedom of contract and freedom of business is a part of it • Lobbying • Against consumers but: class actions against companies • Fear of repression • Government is always dangerous • FEAR FROM THE GOVERNMENT

9. FREEDOM IN THE EU (CONTRACT LAW) • Basically different path! • Freedom as interpreted by ordoliberals like Alexander Rüstow and politicians like Konrad Adenauer • Consumer protection: such rules did not exist in EEC member states before • Tried to defend the consumer, as the weaker party • Lobby power of consumer organisationa • FEAR FROM BUSINESSES

10. FREEDOM IN THE EU (CONTRACT LAW) • Differentanswerswhythiscouldhappen • Functionalistapproach: EU generatestheserules • Intergovernmentalapproach: theystemfromthegoverments in Europe • Constructivistapproach: somevaluesexist in memberstateswhichareacceptedbythe EU