Immorality of Contracts in Europe: Four Approaches

Summary

LAW, MORALITY AND EUROPEAN INTEGRATION

The project of European integration that was embarked upon in the 1950s finds itself at a crossroads. Its internal and external borders are put under pressure in an actual sense by the refugee crisis as well as in an economic sense by the consequences of the economic crisis that has impacted the EU's development in recent years. Law, which forms one of the pillars of the integration project, does not remain unaffected by this. European contract law may be conceived of as the combination of EU law on contractual transactions and national systems of contract law. It provides the framework for the conclusion of transactions within the EU's internal market and, thus, shapes the internal market (e.g. determining which products can be traded in the EU and among Member States) as well as brings out, into the open, tensions among Member States and the Union (e.g. whether a common rule can be decided upon and which institution has the final say on that). The questions of how to conceptualise the European legal order and how to handle conflicts among rules deriving from different levels of governance are discussed by constitutional theorists and, increasingly often, scholars in the field of European private law.

In contract law, these questions are not as new as they may seem. All European countries have rules that establish which transactions can be made the subject of a contract. Mandatory rules of law may prohibit the conclusion of certain types of contract; for example, a law may forbid the conclusion of a contract for sex work, mediation in surrogate motherhood arrangements, or the organisation of a lottery. Furthermore, contracts infringing public policy or good morals are held to be null and void. Rules of contract law, thus, express the relationship between law and morality; they determine which issues can be made the subject of a legally valid and enforceable agreement according to the values underlying the legal order to which they pertain. Since different Member States adhere to values that sometimes converge and sometimes diverge, while the demarcation between illegal and immoral contracts also differs from one country to another, European contract law has long faced the question of how to approach Member States’ diversity from a European perspective. In particular, Member States’ views on morality may clash with the EU's market-oriented approach.