Website for exchange in the EuSoCo project

Lifetime Contracts and the Draft Common Frame of Reference – Update of the Trento Agenda

June 25, 2010 By: udo.reifner Category: 1.3 General & discussions, 2010 Hamburg

Udo Reifner/Luca Nogler


The following points have been updated from the paper presented at the Trento seminar on September 25, 2009. We use the notion “lifetime contracts” as a working definition for social longterm contracts like labour, tenancy and consumer (credit) contracts. From a political perspective we should relate to “economic and social interest covered by labour, consumer and tenancy law” . This relates to the existing social associations (trade unions, consumer organisations and tenancy associations) as well as to the correponding law associations (Int.Labour Law; IACL; Deutscher Mietrechtstag etc) providing our project with the chance to political support and a link to the social movement. Since the concept of consumer law is quite unclear covering a mere market orientation in its neo-liberal information model on one hand while on the other it also covers what is called “the economic interest” of consumers which coincides with “debtor’s protection” especially present in credit law we should make it clear that our focus on consumer law is economic and social and not informational.

We are aware of the fact that other socially meaningful longterm contracts do exist in the area of goods of first necessity, associations, company law but we assume that the idea of a life time contract based on the legal idea of renting (location conduction) has nowhere emerged so clearly as in these three areas. The points made here are very preliminary and incentives for work and partition of labour. We would like to get as much material and hints as to the national and international discussions in this area as possible The project will be conducted in the three official EU-languages: German, French and English. English will be the organisational language. In theory we should refer to the concepts inherent in all three languages. Papers can also be presented in the mother tongue of the author if a summary or explanation in one of these languages is available. In our discussions we will provide short translations but make no restriction to the use of either of these languages.

Questions for Research: Lifetime Contracts in a European Perspective

  1. Sales Law Model: The general principles and provisions of the DCFR as well as of the leading European codes as well as the international agreements on contracts are based on the commercial sales law model. (Wieacker; Grossi: 1964:48; Jhering 1921) Free will and exchange of property (Vertragsfreiheit und Eigentum, Schuldrecht und Sachenrecht) define formation and contents of the contract when it was “formed”. Its performance (Erfüllung) is completed by the delivery of the defined goods and money. The purpose of the exchange lies in itself. (Do ut des) (Savigny, Pothier, Planiol/Ripert, Larenz)
  2. Service Society: Society has gradually developed from a sales and property based society into a service, credit and lease society (Rifkin, Offe, Scharpf). While for ordinary citizens the economy has always been a service economy (labour contracts) the third sector of production (services) now represents 70% of the economy (Baethge). Consumption has turned from sales to services, credit and renting. Non-commercial (social) interests of ordinary citizens (consumers, workers and tenants) have become dominant in the law. Especially derived from long-term relations with businesses they entered the legal system and developed a vast body of social law. The legal problems of these relations have new qualitative elements concerning the life, well-being, reproduction and aspirations of groups and families ( “lifetime”). They go well beyond the quantitative nature of commercial mutuality. Labour law, tenant law and consumer credit law have therefore developed alternatives to the existing general principles of the sales law trying to either influence, evade or supersede them. (v. Gierke, Menger, Duguit, Lotmar, Sinzheimer, Mengoni).
  3. EU-Contract Law Critique: The separation of these legal areas from general contract law in the national codifications and among each other (code du travail, code de la consommation, Abzahlungsgesetz, Tarifvertragsgesetz, housing or even administrative law), among legal scholars (consumer/labour/tenants lawyers and civil/commercial lawyers), have created rather unconnected parallel sections in law, legal doctrine and legal professions. But their critique is shared are not alone in their critique. The principles of EU contract law have got harsh comments from legal realism (sull’esempio storico di Gierke), social activism (Manifesto) and culturally minded groups (France).
    1. Economic analyse of law has criticised the inefficiency of spot contract ideology with regard to long-term relations (Bolton/Detrimont). Within the civil law doctrine the impossibility to find adequate solutions for existing long term relations with the given sales law model has constantly been recalled . (Long-term versus short term: Rochfeld; storicamente v. ovviamente Gierke)
    2. Historically codifications and in particular the German BGB have been approached off lacking social care and social values (Menger, Gierke). Especially the DCFR has been criticized for its lack of social values (Lurger, Mattei, Hesselink, Collins, Wilhelmsson, Wheatherhill, Micklitz) and it roots in the pragmatic (English) common law instead of the (French) heuristic civil law tradition. (Social versus commercial: Gridel, Pavia project)
    3. International codes like the DCFR using exclusively English language have not only made a selection of participants and their educational background and experience but also provide forms of thinking while excluding notions which have no systematic counterpart. This is especially grave since the Common Law is perhaps the furthest point one can get from traditional continental European legal systems.
  4. DCFR defence: There is more in the DCFR than in the national law of obligations
    1. A number of general rules (cooperation, continuing performance, adaptation, good faith, fair dealing, time-limited rights, non-discrimination, cancellation) concern long term relations and social issues.
    2. EU-Consumer law (acquis) has been used as a visible and explicit basis of the DCFR.
    3. Specific long-term contracts (lease, service, mandate, agency, franchise, distributorship, personal security) occupy an important area of the model contracts.
    4. The code uses the structure and principles of the French and German civil code.
    5. The code is not applicable to labour contracts.
    6. The code wants only to be a toolbox.

Need for Research: DCFR requires principles of lifetime contracts

  1. The specific critique of lifetime contracts: In the light of lifetime contracts this defence of the DCFR is not satisfactory.
    1. Fundamental social principles: Each lifetime contract has developed own principles on human labour (ILO-conventions), responsible credit (ECRC principles) and decent housing. The draft leaves such “fundamental principles” to the national legislator since they are hard to integrate into Common Law and therefore lack consensus. Social discrimination, usury, minimum wages, individual hardship, duty of care are examples.

    2. Consumer law: Consumer law is not a unified body of law. Already at its starting points two forms of consumer protection (informational procedural approach – substantial compensatory approach) have divided consumer law into two diverse and even contradictory parts of the law. (Reich, Stauder, Micklitz, Tonner, Bourgoignie, Wilhelmsson, Howels, Lurger) The “informed choice” consumer law of the upper class and the consumer law of the needy lower class. The EU has never integrated both parts of national consumer law. Thus such consumer law which represents the tradition of debtors’ protection, usury, social discrimination, minimum product standards for all, support in default situations, rules for illness, unemployment, accidents, sudden death etc. Especially the three underlying threats of unemployment, overindebtedness and homelessness are not considered. In addition the informational EU-consumer law is centred around formal sales law models. The new Draft of a Consumer Law Directive excludes financial services, tenant law and labour issues thus restricting itself to the informational approach in spot contracts just as the EU project which led to the Acquis Consommation of the EU and later to the DCFR. The focus on consumer credit contracts although unlike tenant and labour law highly regulated in the form of the consumer information and sales law model (information, withdrawal, access etc) helps to escape the legal trap consumer sales law poses when applied to small items and daily spot contracts. It uses the opposite starting point than the Consumer Acquis which excludes consumer credit contracts from its foundations.

    3. Labour Law: The fact that employment relations are excluded from the scope of the code or from the principles does not imply that there is no interest of labour lawyers to be represented in these principles. First there are increasing numbers of contractual relations which are not labour contracts but fulfill the same functions for the creditor through other forms like for example contracts on independent labour or franchising contracts etc. Second if the general part of contract law – as it was orginally the case with the German BGB – is only functional with the logique of the market and not orientated at protecting the personality of the debtor and his or her lifetime the logic of labour contracts will have difficulty to become general guidelines for other long term relations which presently is the case in many countries. For example the economic crisis has led a number of States to pose social conditions to the banks when using government help. In Italy the “Tremonti bonds have led to a transformation of the system of default in credit contracts where now issues which in labour law are recognised since long (illness, unemployment) have now also be observed in general consumer contracts.

    4. Free will and property versus longterm relations: DCFR rules on long term contracts are still based on free will and property which was hold to be the Romanistic tradition of law. They do not threat the rented time but only the specificities of objects, roles and actors within the different long term relations. Comparing the analysis on the contradictions between sales model principles and longterm contracts Gierke’s Dauernde Schuldverhältnisse (1914), Grossi’s Locazione e rapporti reali di godimento nella problematica del diritto comune (1963) and Rochfeld’s Durée et Exécution du Contrat (2004) indicate why alternative principles would be necessary. Where term as a flow of time (unlike the limitations of time in legal terms like period, duration, history, delay, termination, expiry, previous, later, past) is already an orphant in contract law lifetime and its implications is totally outside its regards.
    5. Common Law versus Civil Law: The civilistic tradition of topical thinking, hierarchic values, justice as the utmost goal of the law together with continental philosophy has created a hierarchy of legal notions which are difficult to translate into the language of a legal and philosophical system in which pragmatism and the multitude of principles prevail. The somehow arbitrary matrix of leading principles replacing the word justice within the DCFR where freedom, security, justice, efficiency are juxtaposed to a second layer of human rights, solidarity, social responsibility and diversity (Antoniolli) turn dogmatic reasoning from a consistent system of thought into an arbitrarily usable tool of legal reasoning. Creating new English notions to overcome its common law identification in the DCFR is unsatisfactory. Notions like privé et publique, domage et volonté, durée et terme cannot be transferred into one single English word but only if the whole system is translated and learned. A joint European legal body requires a new legal language which uses untranslated but incorporated notions from either a Romanistic or a Germanistic tradition. (see for example the use of the word “Gesellschaft” in English philosophy)

Logic of the Research: Lifetime Contract is a legal figure like a Sales Contracts

  1. Historical, economic and social analyse shows that the three lifetime contracts can be used as a homogeneous basis for developing one coherent set of principles complementing the sales model.
    1. Roman origins:The different lifetime contracts have emerged from one single type of contract model: the rent model (locatio conductio). It had been the market driven alternative to the sales model (emptio venditio) who overtook the role of the core model leaving behind a scattered landscape of rent contracts only when in the middle of the 19th century the first step in globalisation required world wide trade in the form of the transfer of abstract property titles. (Hedemann, Waline, Wieacker, Grossi) In this property rights lifetime is invisibly frozen and only apparent in the analysis of its price. Instead the underlying idea of locatio conductio (rent) was before applied to all forms of renting the flow of anothers lifetime in labour (locatio conductio operarum and operis), things (locatio conductio rei) and interchangeable items resembling modern money (locatio condictio irregularis). Its interesting development into the revival of the locatio ad longum tempus the middle ages where the productive use of the rented time became a decisive requirement overriding the property rights of the dominus (Grossi) shows modern solutions for lifetime contracts today. Also in tenancy or labour contracts para-ownership rights (for example the protection in specific forms) take into account that the lifetime of a person is at stake.

Comment: The common roots of the different lifetime contracts have been obscured by the continual use of pre-captialist forms of using others time where gratuity, faith and generosity ruled. Until today loan (Darlehen), lease (Verwahrung and Leihe) and mandate (Auftrag) reflect the ancient forms of unilateral benevolent obligations of the Roman law (mutuum, deposito and pegno, mandatum)

    1. Economic contract theory: The joint basis of the three lifetime contracts is also visible in its object of use if analysed in economic terms. All three market driven legal forms of exchange make others’ lifetime available in the form of capital. Human capital (labour), real capital (goods) and money capital (credit) are indeed the appearances of one functioning capital that can be used by others.

Comment: This again has been obscured this time by a misunderstanding of ancient slavery, the form in which foreign labour had been applied. “Renting” the human workforce or quoting and valuing in terms of capital has been seen as immoral by socialists (Lotmar) as well as by conservatives just like renting money for interest has been banned by clerical as well as progressive institutions. In both cases the rejection of the idea to view labour as a form of capital one can rent from its owner (in Roman and Babylonian law free persons were allowed to rent themselves out as slaves for a certain period to pay there debt and still remain free) or to view living in a home as using others capital or creating wealth out of the use of debt money does not question the common basis they have in rent and capital. It is its primitive idea that even if lifetime is at stake one could trade it only with regard to its exchange value and not taking into account that real life is concerned. (see Lotmar, Sinzheimer, Mengoni, Marx, Lasalle)

    1. Needs approach: Also from a sociological viewpoint the three lifetime contracts form a unity. While in sociological terms the consumer and worker is the same person which seeks to reproduce himself by working for his consumption where the salary is only a means to links both parts of an integrated process of reproduction both aspects of human life are already integrated in the third form of lifetime contracts. Consumer credit connect labour and consumption in so far as it advances his future labour income for present consumption. All three contracts therefore organise the same social process of reproduction in a society based on the partition of labour and its combination through money.

SWOT Analysis of the EuSoCo Approach

  1. Weakness and Threats: Joint research to develop a common core of principles for lifetime contracts has disadvantages in so far as the involved scholars have little in common and mostly lack experience in cross over legal research.
    1. Labour law is different: Labour lawyers have developed an own language and own forms of legal reasoning. They have an additional source of law neither in collective agreement and enterprise democracy that has no counterpart in general civil law nor in the other areas of lifetime contracts. Consumer credit law is a quite abstract law, which needs knowledge in business economics as well as in mathematics to be able to understand its implications. The links to bank lawyers dealing with mere commercial issues are therefore much closer than to lawyers who deal with other lifetime issues. Again tenant law has developed into an own body of law closely linked to public law and state programs to provide decent housing for people.
    2. No common reality: The close relation these lawyers have with economic and social circumstances in the generation and performance of these contracts has alienated them from general contract law. As each area (least the fairly new discipline of consumer credit law) has separately developed its principles of deviating from general contract law their own general parts have little in common with general contract law and even less with each other.
    3. Few international rules: Lifetime contracts focus on socially protective rights which globalisation did not directly include into the grading mechanisms of trade where a vast body of international law has been created. Those rules reflecting the human dimension of these contracts are still deeply rooted in national law. It develops only gradually with the emergence of international labour, housing and consumer credit markets. Parochial attitudes already overcome within labour and consumer credit law (the latter thanks to the globalisation of consumer sales law) still exist with regard to the relation between their area of law and the general body of international law. (Unidroit principles, EU-Directives, GATT etc)
  2. Strength and Opportunities: The disadvantages are matched by important advantages.
    1. Interdisciplinary skills: Lawyers in all three areas have common skills in so far in none of these areas a mere abstraction from social factors is possible and all of them have experience in interdisciplinary work. In addition they are linked by a common moral persuasion that human values and lifetime should get a more prominent place in contractual relations. The peculiarities of labour law with regard to the other areas may not be so important as it appears. Tenant and consumer credit law also use collective principles which may either be laid down in solemn declarations (Principles of responsible credit, UN housing declarations) or in public law and the constitutions and become effective through the introduction into the contract via general clauses and its interpretation in good faith. All of them have to combine public law and private law approaches in the application of lifetime contracts and all of them have additional institutions where consumers, workers or tenants have a word to say in the performance and development of the contractual relations after the contract has been concluded. (workers council, trade unions, consumer centrals, banking ombudsman, tenants associations, housing administration)
    2. Emerging globalization of social rights: The discussion on nationally rooted protective rights needs internationalisation. There is a general consensus, that globalisation has brought with it a transfer of activity from real economics to money systems, from value orientation to neo-liberalism, from substantive rights to deregulation which all together have caused enormous social problems, discrimination and different social and economic developments in the world that threaten peaceful coexistence. All over the world at EU, UN, Mercosur, ILO, Council of Europe levels attempts are made to create principles of social rights as a corrective counterpart to a mere economic globalization process. Especially in labour, housing and credit such principles have to be developed internationally out of a thorough knowledge of national systems and the law. EuSoCo could thus have an additional function in organising such a process.

Conditions for Research: Status quo

  1. Research Deficit: The existing work on European Contract law Study Groups and their principles has to a large extent neglected lifetime contracts concerning labour, housing and consumer credit but contain elements which have to be selected in order to reach a status of the “Acquis for Social Longterm Contracts” in the European academic discussion. (Each part has to be filled out)
    1. Principles of European Contract Law (PECL) (Lando)
    2. Code Européen des Contrats (Académie des Privatistes Européens, Pavia) (Gandolfi)
    3. “The Common Core of European Private Law” (CoPECL=Common Principles of European Contract Law) (Schulte-Noelke)
      1. Research Group on the Existing EC Private Law (‘Acquis Group’) (Ajani; Schulte-Noelke)
      2. Study Group on a European Civil Code (von Bar)
      3. Project Group on a Restatement of European
    4. “Consumer Acquis” (EU-Commission) (Staudenmeyer)
    5. “Social Justice Group” (Hesselink, Collins)
      1. European Social Contract Law (EuSoCo) (Nogler/Reifner)
    6. “Society of European Contract Law” (Secola) (Bianca, Collins, Grundmann)
    7. “Ius Commune Casebooks for the Common Law of Europe” (van Gerven)
  2. Research Assets (international): Besides this European Contract Research there are a number of research projects which have already tried to put together information on lifetime contracts in an international European perspective which could serve as a basis for discussion.
    1. In tenancy law the European Tenancy Law Group at the European University Institute (Christoph Schmidt) in Florence has issued national and general reports. (
    2. In labour law: a) the European Labour Law Network beetwen the Universities of Hagen (Bernd Waas) and Leiden (Guus Heerma van Voss) which will organise the working groups with responsibility for formulating the Restatement of European employment contract law. b) Perulli, A. (2003). Economically Dependent/Quasi-subordinate (Parasubordinate) Employment: Legal, Social and Economic Aspects. Study for the EuropeanCommission. Retrieved April 27, 2006, from:; c) Green paper on Modernising labour law to meet the challenges of the 21st century [Bruxelles, 22.11.2006 COM (2006) 708 final] and the dibattito conseguente (see for example: The labour lawyers and the Green Paper on “Modernising labour law to meet the challenges of the 21st century”. A critical and constructive evaluation, – 11k -).
    3. In consumer credit law a number of projects mandated by the EU have been conducted in consumer credit (many studies in relation to the Consumer Credit Directives 1987,1998,2002,2008 i.e. Reifner/Huls/Niemi/Springeneer 2002; Eric Balat ??); Domont-Naert; Howells … mortgage loans (Köndgen 2004; European Mortgage Federation) personal credit guarantees (Ciacchi 2007)
  3. Research assets (national): There is a long going national discussion on the relation between the three elements of lifetime contracts as well as about discussion concerning general principles of lifetime contracts which has to be summarised at least for the most important legal areas which could be grouped according to the scientific access present in the research group.
    1. Germany/Netherlands/Austria, (Switzerland, Hungary) i.e……
      1. Labour and consumer law (Gamillscheg)
      2. Tenancy and credit law (Derleder)
      3. Credit and labour law (microcredit to autonomous workers; programmes in supporto f independent labour.)
      4. Social Contracts (Amstutz/Abegg/Karava 2006; Reifner 2008) and Social Protection in the law (Lurger)
    2. Italy/Spain; c. France (Belgium); d. Finland (Scandinavia); e. UK (Ireland); f. Poland (Czech Republic, Balcans) (???)

Contents of Research

  1. General Research:
    1. Are the previous theses on the omission of lifetime contracts correct and can they be illustrated and founded with regard to each research group?
      1. DCFR as a sale law; social deficit; omission of SLTC in the special as well as the general parts; Underlying philosophy
      2. Contributions from other groups
    2. Which SLTC principles can be found in this body of European contract law
  2. Monodisciplinary research: The research should get started with the following steps with regard to labour law, consumer credit law and tenancy law (single life time contracts (SLTC)
    1. Rules of the DCFR regulating this SLTC
    2. Relation of the SLTC with regard to the general law of obligation in the national context. Exemptions, own principles and discussions
    3. Principles of SLTC in general with regard to general principles of the DCFR
    4. General description of the way social needs, weaknesses and lifetime is protected on the national leven in this DCFR according to the steps a longterm contract goes through: Preparation, conclusion, social problems, adaptation and termination.
    5. General principles of sheltering social weakness in national law especially the collective or public dimension of SLTCs
  3. Interdisciplinary research: Is there such a thing as a lifetime contract in historical and social perspective and could there be a legal theory.
    1. Historical perspective (Roman law, Codex Hammurabi, feudal regulations)
    2. Principles of Social Justice with regard to human needs (theoretical approaches, human rights discussion, basic needs discussion)
    3. Economic and social effects of existing contract law for lifetime relations.

Comments are closed.