European Contract Law and Economic Welfare: A View from Law and Economics

The current enterprise of designing and making politically feasible a European Contract Law requires more ambitious goals than just introducing technical improvements in the acquis and smoothing the functioning of the internal market. The paper presents a position of the substantive goals of European Contract Law, from an economic approach to legal rules and institutions, linked to the promotion of the joint economic welfare of the contracting parties. In this respect, economic thinking tends to be more sceptical concerning the ability of Contract Law to bring about wealth redistribution policies than most legal scholars are. In the paper, the optimal scope of European Contract Law that is tentatively defended hinges upon inter-firm transactions, although keeping in mind the nature of consumer protection legislation as a regulatory framework to correct the informational market failures in consumer markets.