THE CONSTITUTIONALIZATION OF CONTRACT LAW:
Something New under the Sun?

Olha Cherednychenko (Utrecht University)

Due to the sharp analytical and historical distinction between private and public law, which is common in European legal systems, contract law has traditionally been considered to be immune from the effect of constitutional rights. This traditional view has, however, been put under pressure as a result of the tendency towards the so-called constitutionalization of contract law. The idea behind this development is that contract law is not an autonomous system for dispensing justice between private parties, but that it is subordinate to the value system of the Constitution. As a result of this, the role of constitutional rights, which were conceived as an instrument for the protection of the individual against the power of the State, is no longer limited to this kind of relationship. Contractual relations have been losing their immunity from the effect of constitutional rights. In this article, an attempt is made to explain what the constitutionalization of contract law actually entails and to assess the desirability of this development. The central question to be discussed is whether by the use of constitutional rights in contract law something substantially new can be gained for the protection of the weaker contractual party in comparison with the well-established contract law concepts such as duties to inform. The answer to this question will become crystallized in the course of analysing three cases which arose in three different legal systems at the beginning of the 1990s and in which the same results were attained, though in different ways, i.e. the famous German Bürgschaft case, on the one hand, and the English O'Brien and the Dutch Van Lanschot Bankiers v Bink cases, on the other.

Cite as: Olha Cherednychenko, The Constitutionalization of Contract Law: Something New under the Sun?, vol 8.1 ELECTRONIC JOURNAL OF COMPARATIVE LAW, (March 2004), <http://www.ejcl.org/81/art81-3.html>

Contents
1. Introduction
2. Different solutions to the same problem
3. Two parallel tendencies in modern private law
4. The constitutionalization of contract law: What is this all about?
5. The Bürgschaft case: A top-down approach by the German Constitutional Court
5.1 From the theory of indirect effect of constitutional rights in private law indirectly to the theory of direct effect?
5.2 Balancing competing interests: The right to party autonomy v. the right to party autonomy in conjunction with the principle of the social state?
5.3 Party autonomy v. party autonomy in conjunction with the principle of the social state: Is there a possibility to strike an appropriate balance?
6. The O'Brien and Van Lanschot Bankiers v Bink cases: A bottom-up approach by the English House of Lords and the Dutch Supreme Court
7. Conclusion
Notes

To Article

WP download Word download Ascii download WP download
download download download download


To Issue Archives Search Comments Help EJCL home