European Contract Law: Are No Oral Modification Clauses Not Worth the Paper They are Written on? – DCFR II.-4:105 v. CISG 29(2), UNIDROIT Principles 2.1.18, UCC § 2-209 and Comparative Law
CURRENT LEGAL PROBLEMS Vol. 63, pp. 511-596, G. Letsas & C. O'Cinneide, eds., Oxford University Press, 2010
73 Pages Posted: 1 Aug 2010 Last revised: 22 Jun 2011
Date Written: July 29, 2010
The European Commission appears determined to take action in order to harmonize contract law in the European Union. Most recently, it has issued a Green Paper on 1 July 2010. In order to aid the process of harmonization, a large-scale academic study had been commissioned, the 'Draft Common Frame of Reference' (DCFR). The black-letter rules of this Restatement-like project were published in 2008 and 2009, the full comments and notes became available in late 2009 and early 2010. The DCFR has not only attracted praise, but also criticism on a macro-level.
My paper takes a micro-approach by analyzing one particular DCFR rule, the rule dealing with no oral modification clauses (NOM-clauses), DCFR II.-4:105. This rule is singled out because it is one of the relatively few rules in which the drafters of the DCFR have consciously deviated from the approach taken by the Convention on Contracts for the International Sale of Goods (CISG, 1980 Vienna Convention, Article 29(2)) and the UNIDROIT Principles for International Commercial Contracts 2004 (Article 2.1.18).
Following a brief introduction outlining the European activities in the area of contract law harmonization and the general problem raised by NOM-clauses, Part 2 of this article describes several jurisdictions that treat NOM-clauses as unenforceable, or did so in the past. Part 3 describes jurisdictions and legal instruments that give effect to NOM-clauses; in many jurisdictions, this approach has overcome earlier resistance. A particular focus of the comparative analysis is on the contract law in the US, in England & Wales, Germany, and the internationally harmonized legal instruments (CISG and UNIDROIT Principles), but the situation in Austria, Australia, Italy, the Netherlands, and Scotland is also briefly considered.
In Part 4, I discuss the policy reasons counseling for and against the enforcement of NOM-clauses, and conclude that NOM-clauses should generally be enforceable. Parts 5-9 address several limitations to the enforceability of NOM-clauses in jurisdictions that usually do consider them to be effective (novation, rescission/termination, collateral contracts, waiver, estoppel, venire-contra-factum-proprium exceptions, and NOM-clauses in standard terms and conditions).
Part 10 critically analyzes the solution adopted by the drafters of the DCFR in DCFR II.-4:105. I conclude that the comparative analysis regrettably opted for breadth instead of depth. The analysis is devoid of any discussion of policy arguments. The comparative analysis of the national solutions is mostly based on ‘the law in the books’, contrary to the principle of comparative law to focus on the ‘law in action’, and is not always accurate. What is more, the model rule itself is internally inconsistent.
I conclude by asking whether the deficiencies in DCFR II.-4:105 are in any way representative for the DCFR and what policy questions should be addressed when drafting a rule on NOM-clauses.
Keywords: Contract Law, European Contract Law, Draft Common Frame of Reference, DCFR, no oral modification clauses, NOM, no variation except in writing, Comparative Law, zipper clause, CISG, UNIDROIT-Principles
JEL Classification: K12, K33, K41, D63, D78, D90, D99, F02, F15, F23
Suggested Citation: Suggested Citation