Principles of European Law on Service Contracts (PEL SC)

Principles of European Law on Service Contracts (PEL SC)

Principles of European Law Study Group on a European Civil Code Service Contracts (PEL SC) prepared by Professor Maurits Barendrecht Professor Chris Jansen Professor Marco Loos Dr. Dr. Andrea Pinna Dr. Rui Cascão Stéphanie van Gulijk in collaboration with the Dutch Working Team with advice from the Advisory Council and the Drafting Commitee and Professor Hugh Beale, London/Warwick approved by the Co-ordinating Group. Particular advice on the Drafting of the Articles from Professor Eric Clive, Edinburgh. Sellier. European Law Publishers Stæmpfli Publishers Ltd. Berne

The Dutch Working Team Amsterdam: Professor Martijn Hesselink;Dr.Jacobien Rutgers, Odavia Bueno Diaz (Spanish Law), Manola Scotton (Italian Law), Muriel Veldman; Tilburg: Professor Maurits Barendrecht, Professor Chris Jansen, Professor Marco Loos (Dutch Law), Dr. Dr. Andrea Pinna (French Law), Dr. Rui Cascão (Portuguese Law), Roland Lohnert (German Law, until June 2002), Stéphanie van Gulijk (as of December 2003); Utrecht: Professor Ewoud Hondius,Dr.John Dickie (English Law, until October 2002), Dr. Viola Heutger, Georgios Arnokouros (Greek Law, until the end of 2002), Dr. Christoph Jeloschek (Austrian Law), Dr. Hanna Sivesand (Swedish Law), Aneta Wiewiorowska (Polish Law) The Advisory Council on Services Contracts Professor Johnny Herre (Stockholm), Professor Jérôme Huet (Paris), Professor Hector MacQueen (Edinburgh) Professor Ewan McKendrick (Oxford), Professor Peter Schlechtriem (Freiburg i. Br.) The Co-ordinating Group Professor Guido Alpa (Genua/Rome, until May 2005), Professor Kaspars Balodis (Riga, since December 2004), Professor Christian v. Bar (Osnabrück), Professor Maurits Barendrecht (Tilburg, until May 2005), Professor Hugh Beale (London), Professor Michael Joachim Bonell (Rome), Professor Mifsud G. Bonnici (Valetta, since December 2004), Professor Carlo Castronovo (Milan), Professor Eric Clive (Edinburgh), Professor Ulrich Drobnig (Hamburg), Professor Bénédicte Fauvarque-Cosson (Paris), Professor Marcel Fontaine (Leuven, until December 2003), Professor Andreas Furrer (Luzern, since December 2003), Professor Jacques Ghestin (Paris), Professor Sir Roy Goode (Oxford, until December 2002), Professor Viggo Hagstrøm (Oslo, since June 2002), Professor Arthur Hartkamp (The Hague, until December 2002), Justitierådet Professor Torgny Håstad (Stockholm), Professor Johnny Herre (Stockholm), Professor Martijn Hesselink (Amsterdam), Professor Ewoud Hondius (Utrecht, until May 2005), Professor Jérôme Huet (Paris), Professor Giovanni Iudica (Milan, since June 2004), Dr. Monika Jurcova (Trnava, since June 2006), Professor Konstantinos Kerameus (Athens), Professor Ole Lando (Copenhagen), Professor Kåre Lilleholt (Bergen, since June 2003), Professor Brigitta Lurger (Graz), Professor Hector MacQueen (Edinburgh), Professor Denis Mazeaud (Paris, since June 2005), Professor Ewan McKendrick (Oxford), Professor Valentinas Mikelenas (Vilnius, since December 2004), Professor Eoin O Dell (Dublin, until June 2006), Professor Edgar du Perron (Amsterdam), Professor Denis Philippe (Leuven, since June 2004), Professor Jerzy Rajski (Warsaw), Professor Christina Ramberg (Gothenburg), Professor Philippe Rémy (Poitiers), Judge Professor Encarna Roca y Trias (Madrid/ Barcelona), Professor Peter Schlechtriem (Freiburg i. Br.), Professor Martin Schmidt-Kessel (Osnabrück, since December 2004), Professor Jorge Sinde Monteiro (Coimbra, until December 2004), Professor Lena Sisula-Tulokas (Helsinki), Professor Sophie Stijns (Leuven), Professor Matthias Storme (Leuven), Professor Jan Svidron (Trnava, June 2005 until June 2006), Dr. Stephen Swann (Osnabrück), Professor Luboš Tichý (Prague, since June 2005), Professor Verica Trstenjak (Maribor), Professor Vibe Ulfbeck (Copenhagen, since June 2006), Professor Paul Varul (Tartu, since June 2003), Professor Lajos Vékás (Budapest), Professor Anna Veneziano (Rome)

Further Members of the Study Group s Advisory Councils Professor John W. Blackie (Strathclyde, Tort Law, Trust Law), Professor Michael G. Bridge (London, Property Law and Security), Professor Angel Carrasco (Toledo, Security), Professor Pierre Crocq (Paris, Security), Dr. Eugenie Dacoronia (Athens, Tort Law, Leases), Professor Júlio Manuel Vieira Gomes (Oporto, Unjustified enrichment law and benevolent intervention in another s affairs), Professor Helmut Grothe (Berlin, Lease of Movables), Professor Jan Kleineman (Stockholm, Tort Law until June 2003), Professor Irene Kull (Tartu, Lease of Movables; Gratuitous Contracts, Trust Law), Professor Marco Loos (Amsterdam, Service Contracts; Mandate), Professor Graham Moffat (Warwick, Trust Law), Professor Maria A.L. Puelinckx-van Coene (Antwerp, Gratuitous Contracts), Professor Palao Moreno (Valencia, Tort Law) Dr. Kristina Siig (Arhus, Unjustified enrichment law and benevolent intervention in another s affairs), Professor Stefano Troiano (Verona, Gratuitous Contracts), Professor Antoni Vaquer Aloy (Lleida, Lease of Movables, Gratuitous Contracts), Professor Alain Verbeke (Leuven, Lease of Movables), Professor Anders Victorin (Stockholm, deceased 2006, Lease of Movables), Professor Sarah Worthington (London, Lease of Movables).

Volume 3 To be cited as: PEL/Barendrecht/Jansen/Loos/Pinna/Cascão/van Gulijk, SC, Gen. Introd. I PEL/Barendrecht/Jansen/Loos/Pinna/Cascão/van Gulijk, SC, Chapter I, Gen., A PEL/Barendrecht/Jansen/Loos/Pinna/Cascão/van Gulijk, SC, Chapter I, Article 1: 101,, A PEL/Barendrecht/Jansen/Loos/Pinna/Cascão/van Gulijk, SC, Chapter I, Article 1: 101, Nat. Notes, 1 PEL/Barendrecht/Jansen/Loos/Pinna/Cascão/van Gulijk, SC, Chapter I, Article 1: 101, Comp. Notes, 1 ISSN 1860-0905 ISBN-10 3-7272-1801-0 (Staempfli) ISBN-13 978-3-7272-1801-9 (Staempfli) ISBN-10 2-8027-2141-0 (Bruylant) ISBN-13 978-2-8027-2141-3 (Bruylant) ISBN-10 3-935808-41-0 (Sellier. European Law Publishers) ISBN-13 978-3-935808-41-5 (Sellier. European Law Publishers) Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar. 2007 by Sellier. European Law Publishers, Munich together with Study Group on a European Civil Code. Dieses Werk einschließlich aller seiner Teile ist urheberrechtlich geschützt. Jede Verwertung außerhalb der engen Grenzen des Urheberrechtsgesetzes ist ohne Zustimmung des Verlages unzulässig und strafbar. Das gilt insbesondere für Vervielfältigungen, Übersetzungen, Mikroverfilmungen und die Einspeicherung und Verarbeitung in elektronischen Systemen. Das Register wurde erstellt von RA Dr. Martina Schulz, Pohlheim. The Index was prepared by RA Dr. Martina Schulz, Pohlheim. Gestaltung: Sandra Sellier, München. Herstellung: Karina Hack, München. Satz: fidus Publikations- Service GmbH, Augsburg. Druck und Bindung: Friedrich Pustet KG, Regensburg. Gedruckt auf säurefreiem, alterungsbeständigem Papier. Printed in Germany

Foreword The Study Group on a European Civil Code has taken upon itself the task of drafting common European principles for the most important aspects of the law of obligations and for certain parts of the law of property in moveables which are especially relevant for the functioning of the common market. It was founded in 1999 as a successor body to the Commission on European Contract Law, on whose work the Study Group is building. The two groups pursue identical aims. However, the Study Group has a more farreaching focus in terms of subject-matter and as an ultimate goal it aspires to a consolidated composite text of the material worked out by itself and the Commission on European Contract Law. Both groups have undertaken to ascertain and formulate European standards of patrimonial law for the Member States of the European Union. The Commission on European Contract has already achieved this for the field of general contract law (Lando and Beale [eds.], Principles of European Contract Law, Parts I and II combined and revised, The Hague, 2000; Lando/Clive/Prüm/Zimmermann [eds.], Principles of European Contract Law Part III, The Hague, 2003). These Principles of European Contract Law (PECL) are being adopted with adjustments by the Study Group on a European Civil Code to take account of new developments and input from its research partners. The Study Group is itself dovetailing its principles with those of the PECL, extending their encapsulation of standards of patrimonial law in three directions: (i) by developing rules for specific types of contracts; (ii) by developing rules for extracontractual obligations, i.e. the law of tort/delict, the law of unjustified enrichment, and the law of benevolent intervention in another s affairs (negotiorum gestio); and (iii) by developing rules for fundamental questions in the law on mobile assets in particular transfer of ownership and security for credit. Like the Commission on European Contract Law s Principles of European Contract Law, the results of the research conducted by the Study Group on a European Civil Code seek to advance the process of Europeanisation of private law. We have undertaken this endeavour on our own personal initiative and merely present the results of a pan-european research project. It is a study in comparative law in so far as we have always taken care to identify the legal position in the Member States of the European Union and to set out the results of this research in the introductions and notes. That of course does not mean that we have only been concerned with documenting the pool of shared legal values or that we simply adopted the majority position among the legal systems where common ground was missing. Rather we have consistently striven to draw up sound and fitting principles, that is to say, we have also recurrently developed proposals and concepts for the further development of private law in Europe. The working methods of the Commission on European Contract Law and the Study Group on a European Civil Code are or were likewise quite similar. The Study Group, however, has had the benefit of Working (or Research) Teams groups of younger legal scholars under the supervision of a senior member of the Group (a Team Leader) which undertook the basic comparative legal research, developed the drafts for discussion and VII

Foreword assembled the extensive material required for the notes. Furthermore, to each Working Team was allocated a consultative body an Advisory Council. These bodies deliberately kept small in the interests of efficiency were formed from leading experts in the relevant field of law who are representative of the major European legal systems. The proposals drafted by the Working Teams and critically scrutinised and improved in a series of meetings by the respective Advisory Council were submitted for discussion on a revolving basis to the actual decision-making body of the Study Group on a European Civil Code, the Co-ordinating Group. Until June 2004 the Co-ordinating Group consisted of representatives from all the jurisdictions belonging to the EU immediately prior to its enlargement in Spring 2004 and in addition legal scholars from Estonia, Hungary, Norway, Poland, Slovenia and Switzerland. Representatives from the Czech Republic, Malta, Latvia, Lithuania and Slovakia joined us after the June meeting 2004 in Warsaw. However, due to reasons of time and capacity, it was only occasionally possible to summarise in the notes the current legal position in the new Member States of the EU. We are keen to fill the outstanding gaps (of which we are only too painfully aware) at a later point in time. Besides its permanent members, other participants in the Co-ordinating Group with voting rights included all the Team Leaders and when the relevant material was up for discussion the members of the Advisory Council concerned. The results of the deliberations during the week-long sitting of the Co-ordinating Group were incorporated into the text of the Articles and the commentaries which returned to the agenda for the next meeting of the Co-ordinating Group (or the next but one depending on the work load of the Group and the Team affected). Each part of the project was the subject of debate on manifold occasions, some stretching over many years. Where a unanimous opinion could not be achieved, majority votes were taken. As far as possible the Articles drafted in English were translated into the other languages either by members of the Team or third parties commissioned for the purpose. The number of languages into which the Articles could be translated admittedly varies considerably from volume to volume. That is in part a consequence of the fact that not all Working Teams were equipped with the same measure of financial support. We also had to resign ourselves to the absence of a perfectly uniform editorial style. Our editing guidelines provided a common basis for scholarly publication, but at the margin had to accommodate preferences of individual teams. However, this should not cause the reader any problems in comprehension. Work on these Principles had begun long before the European Commission published its Communication on European Contract Law (in 2001), its Action Plan for a more coherent European contract law (in 2003), and its follow-up Communication European Contract Law and the revision of the acquis: the way forward (in 2004). (All of these early documents concerning European contract law are still available on the Commission s website: http:/ /europe.eu.int/comm/consumers/cons_int/safe_shop/fair_ bus_pract/cont_law/index_en.htm). These documents for their part were published before we formed the Network of Excellence, together with other European research groups and institutions, which will collaborate in the preparation of an Academic Common Frame of Reference with the support of funds from the European Community s Sixth Framework Programme. The texts laid before the public by the Study Group on a European Civil Code are therefore not necessarily identical with those which the Network of Excellence will propose to the European Commission. Rather they represent VIII

Foreword for the time being texts which the Study Group considers should serve as the starting point for the comprehensive process of discussion and consultation envisaged for the coming years. Whether that process will require any changes to our texts (and, if so, which changes) is something which will have to be weighed up carefully in a spirit of academic independence after a review of the arguments. The political domain can then determine at a later date which of our proposals, if any, it wishes to take up. In order to leave no room for misunderstanding, it is important to stress that these Principles have been prepared by impartial and independent-minded scholars whose sole interest has been a devotion to the subject-matter. None of us have been rewarded for taking part or mandated to do so. None of us would want to give the impression that we claim any political legitimation for promoting harmonisation of the law. Our legitimation is confined to curiosity and an interest in Europe. In other words, the volumes in this series are to be understood exclusively as the results of scholarly legal research within large international teams. Like every other scholarly legal work, they restate the current law and introduce possible models for its further development; no less, but also no more. We are not a homogenous group whose every member is an advocate of the idea of a European Civil Code. We are, after all, only a Study Group. The question whether a European Civil Code is or is not desirable is a political one to which each member can only express an individual view. Osnabrück, July 2006 Christian v. Bar

Our Sponsors The project of the Study Group on a European Civil Code represents a research endeavour in legal science of extraordinary magnitude. Without the generous financial support of many organisations its realisation would not have been possible. Our thanks go first of all to the Deutsche Forschungsgemeinschaft (DFG), which has supplied the lion s share of the financing including the salaries of the Working Teams based in Germany and the direct travel costs for the meetings of the Co-ordinating Group and the numerous Advisory Councils. The work of the Dutch Working Teams was financed by the Nederlandse Organisatie voor Wetenschappelijk Onderzoek (NWO). Further personnel costs were met by the Flemish Fonds voor Wetenschappelijk Onderzoek- Vlaanderen (FWO), the Onassis-Foundation, the Austrian Fonds zur Förderung der wissenschaftlichen Forschung and the Fundação Calouste Gulbenkian. In addition we have consistently been able to fall back on funds made available to the respective organisers of the week long sittings of the Co-ordinating Group by the relevant university or other sources within the country concerned. It is therefore with the deepest gratitude that I must also mention the Consiglio nazionale forense (Rom) and the Istituto di diritto privato of the Università di Roma La Sapienza, which co-financed the meeting in Rome (June 2000). The session in Salzburg (December 2000) was supported by the Austrian Bundesministerium für Bildung, Wissenschaft und Kultur, the Universität Salzburg and the Institut für Rechtspolitik of the Universität Salzburg. The discussions in Stockholm (June 2001) were assisted by the Department of Law, Stockholm University, the Supreme Court Justice Edward Casseĺs Foundation and Stiftelsen Juridisk Fakultetslitteratur (SJF). The meeting in Oxford (December 2001) had the support of Shearman & Sterling, the Hulme Trust, Berwin Leighton Paisner and the Oxford University Press (OUP). The session in Valencia (June 2002) was made possible by the Asociación Nacional de Registradores de la Propiedad, Mercantil y Bienes Muebles, the Universitat de València, the Ministerio Español de Ciencia y Tecnología, the Facultad de Derecho of the Universitat de València, the Departamento de Derecho Internacional, Departamento de Derecho Civil and the Departamento de Derecho Mercantil Manuel Broseta Pont of the Universitat de València, the law firm Cuatrecasas, the Generalitat Valenciana, the Corts Valencianes, the Diputación Provincial de Valencia, the Ayuntamiento de Valencia, the Colegio de Abogados de Valencia and Aranzadi Publishing Company. The subsequent meeting in Oporto (December 2002) was substantially assisted by the Universidade Católica Portuguesa Centro Regional do Porto. For the week long session in Helsinki (June 2003) we were able to rely on funds from Suomen Kultuurirahasto (Finnish Cultural Foundation), the Niilo Helanderin Säätiö (Niilo Helander Foundation), the Suomalainen Lakimeisyhdistys (Finnish Lawyers Association), the Ministry of Justice and the Ministry for Foreign Affairs, the Nordea Bank, Roschier Holmberg Attorneys Ltd., Hannes Snellman Attorneys Ltd., the Department of Private Law and the Institute of International Commercial Law (KATTI) of Helsinki University. The session in Leuven (December 2003) was supported by Katholieke Universiteit Leuven, Faculteit Rechtsgeleerdheid, and the FWO Vlaanderen Fonds voor Wetenschappelijk Onderzoek (Flanders Scientific Research Fund). The meeting of the Group XI

Our Sponsors in Warsaw (June 2004) was substantially assisted by the Fundacja Fundusz Wspolpracy (The Cooperation Fund) and the Faculty of Law and Administration of Warsaw University. The meeting in Milan (December 2004) was supported by the Università Bocconi and its Istituto di diritto comparato, by the Milan Camera di Commercio, by the Associazione Civilisti Italiani and by the Comune di Milano. The meeting in Berlin (June 2005) was made possible by PricewaterhouseCoopers Deutschland AG, Frankfurt/Berlin; Sievert AG & Co., Osnabrück, and by Verband deutscher Hypothekenbanken e.v., Berlin. The meeting in Tartu (December 2005) was supported by the University of Tartu, its Faculty of Law, its Institute of Law and its Institute of Private Law, by the Estonian Supreme Court, the Ministry of Justice, the Tartu City Government, Iuridicum Foundation, the Law Offices Concordia, Lepik & Luhaäär, Luiga Mody Hääl Borenius, Ots & Co, Aivar Pilv, Aare Raig, Raidla & Partners, Sorainen, Tark & Co, Teder Glikman & Partners, Paul Varul, Alvin Rödl & Partner and Lextal Law Firm. The meeting in Oslo (June 2006) was made possible by the kongelige Justis- og Politidepartement (The Royal Ministry of Justice), by Sigvald Bergesen d.y., by hustru Nankis Almennyttige stiftelse, Storebrand and the law firms Wiersholm and BA-HR. We thank all of these organisations and institutions for the funds which they made available to us and for the extraordinary warmth of hospitality with which our hosts received us. Osnabrück, July 2006 Christian v. Bar

Preface to this volume The following text on the law of service contracts, hereby presented to the interested public, has been deliberated by the Co-ordinating Group of the Study Group on a European Civil Code during its week-long meetings in Rome (June 2000), Salzburg (December 2000), Stockholm (June 2001), Oxford (December 2001), Valencia (June 2002), Oporto (December 202), Helsinki (June 2003) and Leuven (December 2003). In preparation of the respective meetings, thorough deliberations with the Advisory Council of the Working Team have taken place. As the preceding pages clearly show, this text is very much the result of a collective effort. The Tilburg members of the Dutch Working Team are jointly responsible for the text as it stands, but we had an author for each Chapter who took the lead: Chris Jansen (Chapter 1 General), Maurits Barendrecht (Chapter 2 Construction), Marco Loos (Chapter 3 Processing and Chapter 4 Storage), StØphanie van Gulijk (Chapter 5 Design), Andrea Pinna (Chapter 6 Information) and Rui Casc¼o (Chapter 7 Treatment). Drafting common principles on the law of service contracts was a novel experience for everyone involved. The existing codes only deal with a limited number of services, so to some extent we had to invent a method of codification ourselves. Extensive discussions in the Co-ordinating Group and in the Advisory Council resulted in a procedure in which we first identified the most common types of services that tend to cause legal conflicts. This was not an easy task, because it entails an abstraction from the thousands of different types of services provided on the market, into a manageable number of categories. We identified six categories, of which some are close to legal tradition (construction, storage, and to some extent treatment) and others an answer to challenges that come from the modern practice of contract law (processing, design, information). Yet other types we identified, e.g representation, intermediation and education, we had at least for the time being to leave outside the scope of the Team s work due to time and financial restraints. Then, we tried to find the answers the legal systems provide in regard to the most important issues that lead to conflicts in the six categories of service contracts. The comparative law material used in this volume has been collected by the Amsterdam, Utrecht and Tilburg members of the Dutch Working Team. The reader will note that there are some gaps in this material, in particular because the Dutch Working Team did not succeed in contracting researchers from Denmark, Scotland, Ireland and Luxemburg. Moreover, in some jurisdictions it was difficult to find general answers to some of the questions we had, highly abstract as they sometimes were. Case law tends to be very case-specific in this area and the number of general treatises we could rely on was small. This resulted in a number of draft rules, supported by comparative material. These rules were extensively discussed in meetings of the Co-ordinating Group and in the Advisory Council and adjusted if they did not sufficiently reflect the usual approach of the issue in the European jurisdictions. XIII

Preface to this volume In the next stage, some general principles were derived from the principles found for the six categories. These found their way in the General Provisions, which were again discussed and improved in several stages. Then, the long process of fine-tuning text, comments and notes began. We are confident that the principles resulting from this very interactive process generally reflect the current approach of legal problems in the area of service contracts. However, the relative lack of legal tradition in this area and the dynamic developments in the services economy is something the reader should keep in mind when using these principles. There will be flaws, and issues we missed. Legislation, case law and doctrine have been stated as of January 2003. We are very grateful to Andrea Pinna, who was in charge of the process of getting the documents ready for publication. We are also grateful to Hildegard Penn who to our regret did not live to see this publication printed for the English language check; Valerie Verberne for the material text editing, Jeanine Leytens for the tables, Jeanette Andersson and Prof. Christina Ramberg for the Swedish translation; Prof. JØrôme Huet for the French translation, Prof. Marco Loos for the Dutch translation; Prof. Martin Schmidt-Kessel, Wiss.Mit. Friederike Schäfer and Wiss.Mit. Sandra Rohlfing for the German translation. Before publication this text was circulated to stakeholders under the CFR net exercise as part of the European Commission s contract law programme. However, as explained in the foreword by Prof. von Bar, their comments could not be reflected in these texts. Tilburg, August 2006 Maurits Barendrecht

Short Table of Contents Text of Articles 1 Principles of European Law on Service Contracts General Introduction 127 Chapter 1: General Provisions General Relation to Other Parts of the Principles 131 Article 1:101: Scope of Application 139 Article 1:102: Price 153 Article 1:103: Pre-contractual Duties to Warn 162 Article 1:104: Duty to Co-operate 182 Article 1:105: Circumstances in which the Service Is to Be Performed 196 Article 1:106: Duties of the Service Provider regarding Input 201 Article 1:107: General Standard of Care for Services 216 Article 1:108: Result Stated or Envisaged by the Client 226 Article 1:109: Directions of the Client 235 Article 1:110: Contractual Duty of the Service Provider to Warn 246 Article 1:111: Variation of the Service Contract 260 Article 1:112: Remedies for Breach of Duties of the Service Provider 274 Article 1:113: Failure to Notify for Non-Conformity 278 Article 1:114: Limitation of Liability 288 Article 1:115: Cancellation of the Service Contract 300 Chapter 2: Construction General 309 Relation to Other Parts of the Principles 312 Article 2:101: Scope of Application 321 Article 2:102: Duty to Co-operate of the Client 329 Article 2:103: Duty of Care of the Constructor 335 Article 2:104: Conformity 341 Article 2:105: Inspection, Supervision and Acceptance 352 Article 2:106: Handing over of the Structure 366 Article 2:107: Payment of the Price 373 Article 2:108: Risks 377 Article 2:109: Specific Performance and Cure 385 XV

Short Table of Contents Article 2:110: Resort to Other Remedies 391 Article 2:111: Prescription of Remedies based on Non-Conformity 394 Chapter 3: Processing General 401 Relation to Other Parts of the Principles 404 Article 3:101: Scope of Application 412 Article 3:102: Duty to Co-operate of the Client 421 Article 3:103: Circumstances in which the Service Is to Be Performed 426 Article 3:104: Duty of Care of the Processor 433 Article 3:105: Conformity 446 Article 3:106: Inspection and Supervision 451 Article 3:107: Return of the Thing 455 Article 3:108: Payment of the Price 461 Article 3:109: Risks 466 Article 3:110: Specific Performance and Cure 473 Article 3:111: Resort to Other Remedies 481 Article 3:112: Limitation of Liability 487 Chapter 4: Storage General 495 Relation to Other Parts of the Principles 499 Article 4:101: Scope of Application 506 Article 4:102: Pre-contractual Duty to Warn of the Client 522 Article 4:103: Circumstances in which the Service Is to Be Performed 528 Article 4:104: Duties of the Storer regarding Input 533 Article 4:105: Duty of Care of the Storer 540 Article 4:106: Return of the Thing 551 Article 4:107: Conformity 560 Article 4:108: Payment of the Price 570 Article 4:109: Duty to Give Account 575 Article 4:110: Risks 580 Article 4:111: Remedies for Non-Conformity 586 Article 4:112: Limitation of Liability 591 Article 4:113: Liability of the Hotel-Keeper 599 Chapter 5: Design General 615 Relation to Other Parts of the Principles 618 Article 5:101: Scope of Application 627 Article 5:102: Pre-contractual Duty of the Designer to Warn 638 XVI

Short Table of Contents Article 5:103: Duty to Co-operate of the Client 643 Article 5:104: Duty of Care of the Designer 650 Article 5:105: Conformity 662 Article 5:106: Handing over of the Design 670 Article 5:107: Duty of the Designer to Keep Records 676 Article 5:108: Limitation of Liability 680 Chapter 6: Information General 687 Relation to Other Parts of the Principles 690 Article 6:101: Scope of Application 700 Article 6:102: Circumstances in which the Service Is to Be Performed 714 Article 6:103: Duties of the Information Provider regarding Input 720 Article 6:104: Duty of Care of the Information Provider 727 Article 6:105: Conformity 746 Article 6:106: Duty to Give Account 751 Article 6:107: Conflict of Interest 759 Article 6:108: Influence of Ability of the Client 766 Article 6:109: Causation 772 Chapter 7: Treatment General 781 Relation to Other Parts of the Principles 786 Article 7:101: Scope of Application 793 Article 7:102: Circumstances in which the service Is to Be performed 802 Article 7:103: Duties of the Treatment Provider regarding Input 809 Article 7:104: Duty of Care of the Treatment Provider 816 Article 7:105: Duty to Inform of the Treatment Provider 836 Article 7:106: Duty to Inform in case of Unnecessary or Experimental Treatment 853 Article 7:107: Exceptions to the Duty to Inform 858 Article 7:108: Duty to Obtain Consent 864 Article 7:109: Duty to Give Account 875 Article 7:110: Remedies for Non-Performance 891 Article 7:111: Central Liability of Treatment Providing Organisations 895 Annexes 901 XVII

Table of Contents Foreword Our Sponsors Preface to this volume VII XI XIII Text of Articles English 3 Service Contracts Dutch 26 Dienstverleningsovereenkomsten French 53 Contrats de Service German 77 Verträge über Dienstleistungen Swedish 102 Avtal om Tjänster Principles of European Law on Service Contracts General Introduction I. General 127 II. Economic Importance 127 III. Relation to General Contract Law (PECL) 127 IV. Mainly Default Rules: Some Mandatory Protection 129 V. Structure of this Part: General and Specific Rules 129 VI. External Relationship not Dealt with 129 VII. Member States Investigated 130 XIX

Table of Contents Chapter 1: General Provisions Chapter 1: General Provisions General A. General Idea 131 B. Scope of Application 132 C. Basic Principles 133 D. Terminology 135 E. Sources 135 Relation to Other Parts of the Principles F. Relation to the Principles of European Contract Law 137 G. Relation to the Principles of European Sales Law and the Principles of European Law on Commercial Agency, Franchising and Distribution Contracts 137 H. Relation to Chapters 2 to 7 of this Part of the Principles 137 I. Character of the Rules 139 Article 1:101: Scope of Application A. General Idea 140 B. Interests at Stake and Policy Considerations 142 C. Comparative Overview 142 D. Preferred Option 143 E. Relation to PECL and Other Parts of the Principles 143 F. Relation to the Principles of European Sales Law 143 G. Relation to the Principles of European Law on Commercial Agency, Franchising and Distribution Contracts 146 H. Relation to Other Chapters of the Principles of European Law on Service Contracts 147 I. Character of the Rule 147 J. Remedies 148 1. Legal qualification of (PELSC) services in (specific) contract law 148 1. Legal qualification of PELSC services in (specific) contract law 149 Article 1:102: Price A. General Idea 154 B. Interests at Stake and Policy Considerations 155 C. Comparative Overview 155 XX

Chapter 1: General Provisions Table of Contents D. Preferred Option 156 E. Relation to PECL and Other Parts of the Principles 156 F. Relation to Other Chapters of this Part of the Principles 157 G. Burden of Proof 157 H. Character of the Rule 157 I. Remedies 157 1. The service provider is entitled to payment of a price 158 2. Determination of price according to service contract law 158 1. The service provider is entitled to payment of a price 159 2. Determination of price according to service contract law 160 Article 1:103: Pre-contractual Duties to Warn A. General Idea 163 B. Interests at Stake and Policy Considerations 167 C. Comparative Overview 169 D. Preferred Option 169 E. Relation to PECL and Other Parts of the Principles 172 F. Relation to Other Chapters of this Part of the Principles 172 G. Burden of Proof 176 H. Character of the Rule 176 I. Remedies 177 1. Pre-contractual duties to warn in (services) contract law 178 1. Pre-contractual duties to warn in (services) contract law 179 Article 1:104: Duty to Co-operate A. General Idea 183 B. Interests at Stake and Policy Considerations 186 C. Comparative Overview 187 D. Preferred Option 188 E. Relation to PECL and Other Parts of the Principles 189 F. Relation to Other Chapters of this Part of the Principles 189 G. Character of the Rule 190 H. Remedies 190 XXI

Table of Contents Chapter 1: General Provisions 1. The client s specific duties to co-operate under a service contract 191 2. The service provider s duty to co-operate 192 1. The client s specific duties to co-operate under a service contract 192 2. The service provider s duty to co-operate 195 Article 1:105: Circumstances in which the Service Is to Be Performed A. General Idea 196 B. Interests at Stake and Policy Considerations 197 C. Comparative Overview 198 D. Preferred Option 198 E. Relation to PECL and Other Parts of the Principles 199 F. Relation to Other Chapters of this Part of the Principles 199 G. Character of the Rule 199 H. Remedies 200 1. The duty of the service provider to take into account the circumstances in which the service has to be performed 201 Article 1:106: Duties of the Service Provider regarding Input A. General Idea 202 B. Interests at Stake and Policy Considerations 204 C. Comparative Overview 205 D. Preferred Option 205 E. Relation to PECL and Other Parts of the Principles 206 F. Relation to Other Chapters of this Part of the Principles 207 G. Character of the Rule 207 H. Remedies 208 1. Performance of the service through subcontractors 210 2. Quality of tools and materials used in the course of the service 210 1. Performance of the service through subcontractors 211 2. Quality of tools and materials used in the course of the service 214 XXII

Chapter 1: General Provisions Table of Contents Article 1:107: General Standard of Care for Services A. General Idea 216 B. Interests at Stake and Policy Considerations 218 C. Comparative Overview 219 D. Preferred Option 220 E. Relation to PECL and Other Parts of the Principles 220 F. Relation to Other Chapters of this Part of the Principles 220 G. Burden of Proof 221 H. Character of the Rule 221 I. Remedies 221 1. The duty of care of the service provider in (specific) contract law 223 1. The duty of care of the service provider in (specific) contract law 224 Article 1:108: Result Stated or Envisaged by the Client A. General Idea 226 B. Interests at Stake and Policy Considerations 229 C. Comparative Overview 230 D. Preferred Option 230 E. Relation to PECL and Other Parts of the Principles 231 F. Relation to Other Chapters of this Part of the Principles 231 G. Burden of Proof 231 H. Character of the Rule 232 I. Remedies 232 1. The duty of the service provider to achieve the specific result stated or envisaged by the client at the time of the conclusion of the contract 233 1. The duty of the service provider to achieve the specific result stated or envisaged by the client at the time of the conclusion of the contract 233 Article 1:109: Directions of the Client A. General Idea 236 B. Interests at Stake and Policy Considerations 237 XXIII

Table of Contents Chapter 1: General Provisions C. Comparative Overview 238 D. Preferred Option 239 E. Relation to PECL and Other Parts of the Principles 240 F. Relation to Other Chapters of this Part of the Principles 240 G. Character of the Rule 241 H. Remedies 241 1. The duty of the service provider to follow the client s directions 242 2. Disculpation of the service provider in the event of inadequate directions of the client 243 1. The duty of the service provider to follow the client s directions 243 2. Disculpation of the service provider in the event of inadequate directions of the client 244 Article 1:110: Contractual Duty of the Service Provider to Warn A. General Idea 247 B. Interests at Stake and Policy Considerations 248 C. Comparative Overview 250 D. Preferred Option 250 E. Relation to PECL and Other Parts of the Principles 252 F. Relation to Other Chapters of this Part of the Principles 252 G. Burden of Proof 252 H. Character of the Rule 252 I. Remedies 253 1. The contractual duty to warn of the service provider in (specific) contract law 255 2. Consequences in case of breach of the duty to warn 255 1. The contractual duty to warn of the service provider in (specific) contract law 256 2. Consequences in case of breach of the duty to warn 258 Article 1:111: Variation of the Service Contract A. General Idea 260 B. Interests at Stake and Policy Considerations 264 XXIV

Chapter 1: General Provisions Table of Contents C. Comparative Overview 265 D. Preferred Option 266 E. Relation to PECL and Other Parts of the Principles 266 F. Relation to Other Chapters of this Part of the Principles 267 G. Burden of Proof 267 H. Character of the Rule 268 I. Remedies 268 1. External cost-increasing circumstances and (specific) contract law 268 2. Change of the service ordered by the client 269 1. External cost-increasing circumstances and (specific) contract law 269 2. Change of the service ordered by the client 272 Article 1:112: Remedies for Breach of Duties of the Service Provider A. General Idea 275 B. Interests at Stake and Policy Considerations 276 C. Comparative Overview 276 D. Preferred Option 277 E. Relation to PECL and Other Parts of the Principles 277 F. Relation to Other Chapters of this Part of the Principles 277 G. Character of the Rule 278 H. Remedies 278 278 Article 1:113: Failure to Notify for Non-Conformity A. General Idea 278 B. Interests at Stake and Policy Considerations 280 C. Comparative Overview 281 D. Preferred Option 281 E. Relation to PECL and Other Parts of the Principles 282 F. Relation to Other Chapters of this Part of the Principles 282 G. Character of the Rule 283 H. Remedies 283 1. The duty to notify of the client in (specific) contract law 285 2. Consequences in case of failure to notify 285 XXV

Table of Contents Chapter 1: General Provisions 1. The duty to notify of the client in (specific) contract law 285 2. Consequences in case of failure to notify 287 Article 1:114: Limitation of Liability A. General Idea 288 B. Interests at Stake and Policy Considerations 289 C. Comparative Overview 289 D. Preferred Option 290 E. Relation to PECL and Other Parts of the Principles 291 F. Relation to Other Chapters of this Part of the Principles 291 G. Burden of Proof 291 H. Character of the Rule 292 I. Remedies 292 1. Limitation or exclusion of liability for death or personal injury 292 2. Limitation or exclusion of liability for damage other than death or personal injury 293 1. Limitation or exclusion of liability for death or personal injury 294 2. Limitation or exclusion of liability for damage other than death or personal injury 295 Article 1:115: Cancellation of the Service Contract A. General Idea 300 B. Interests at Stake and Policy Considerations 301 C. Comparative Overview 302 D. Preferred Option 302 E. Relation to PECL and Other Parts of the Principles 303 F. Relation to Other Chapters of this Part of the Principles 303 G. Burden of Proof 303 H. Character of the Rule 303 I. Remedies 303 1. The right of the client to cancel the service in (specific) contract law 304 2. Consequences in case of cancellation of the service by the client 304 XXVI

Chapter 2: Construction Table of Contents 1. The right of the client to cancel the service in (specific) contract law 305 2. Consequences in case of cancellation of the service by the client 306 Chapter 2: Construction General A. General Idea 309 B. Scope of Application 309 C. Basic Principles 309 D. Terminology 311 E. Sources of the Rules 311 Relation to Other Parts of the Principles F. Relation to the Principles of European Contract Law (PECL) in General 312 G. Relation to Article 7:102 PECL (Time of Performance) 312 H. Relation to Chapter 1 (General Provisions): General Remark 313 I. Relation to Article 1:102 (Price) 313 J. Relation to Article 1:103 (Pre-contractual Duties to Warn) 314 K. Relation to Article 1:105 (Circumstances in which the Service Is to Be Performed) 315 L. Relation to Article 1:106 (Duties of the Service Provider regarding Input) 316 M. Relation to Article 1:109 (Directions of the Client) 316 N. Relation to Article 1:110 (Contractual Duty of the Service Provider to Warn) 317 O. Relation to Article 1:111 (Variation of the Service Contract) 317 P. Relation to Article 1:112 (Remedies for Breach of Duties of the Service Provider) 318 Q. Relation to Article 1:113 (Failure to Notify for Non-Conformity) 318 R. Relation to Article 1:114 (Limitation of Liability) 319 S. Relation to Article 1:115 (Cancellation of the Service Contract) 319 T. Relation to Other Chapters on Specific Services: Design and Processing 319 U. Relation to the Principles of European Sales Law (PELS) 320 V. Character of the Rules 321 Article 2:101: Scope of Application A. General Idea 321 B. Interests at Stake and Policy Considerations 322 C. Comparative Overview 322 D. Preferred Option 322 E. Relation to PECL and PELS 323 XXVII

Table of Contents Chapter 2: Construction F. Design by the Client or the Constructor 324 G. Construction Work on Existing Immovables or Processing? 324 H. Character of the Rule 325 I. Remedies 325 1. Scope of the Rules on Construction 325 2. Standard Conditions 326 1. Scope of the Rules on Construction 326 2. Standard Conditions 328 Article 2:102: Duty to Co-operate of the Client A. General Idea 329 B. Interests at Stake and Policy Considerations 330 C. Comparative Overview 330 D. Preferred Option 331 E. Relation to PECL and Other Parts of the Principles 331 F. Other Issues for Co-operation 331 G. Character of the Rule 332 H. Remedies 332 1. Duty to Co-operate in General 332 2. Duty to Give Access 332 1. Duty to Co-operate in General 332 2. Duty to Give Access 334 Article 2:103: Duty of Care of the Constructor A. General Idea 335 B. Interests at Stake and Policy Considerations 335 C. Comparative Overview 336 D. Preferred Option 336 E. Relation to PECL and Other Parts of the Principles 336 F. Nuisance 337 G. Burden of Proof 337 H. Character of the Rules 337 I. Remedies 337 XXVIII

Chapter 2: Construction Table of Contents 1. General Standard of Care 337 2. Prevention of damage to (the existing part of the structure) and to other persons and goods 338 1. General Standard of Care 338 2. Prevention of damage to (the existing part of the structure) and to other persons and goods 340 Article 2:104: Conformity A. General Idea 341 B. Interests at Stake and Policy Considerations 342 C. Comparative Overview 343 D. Preferred Option 344 E. Relation to PECL and Other Parts of the Principles 345 F. Terminology 346 G. Relying on Incompetence? 346 H. Specific Purpose 347 I. Burden of Proof 348 J. Character of the Rule 348 K. Remedies 348 1. Fitness for purpose 348 1. Fitness for purpose 349 Article 2:105: Inspection, Supervision and Acceptance A. General Idea 352 B. Interests at Stake and Policy Considerations 353 C. Comparative Overview 354 D. Preferred Option 354 E. Relation to PECL and Other Parts of the Principles 354 F. Constructor Relying on the Knowledge of the Client or Supervisor 355 G. Burden of Proof 356 H. Character 356 I. Remedies 357 XXIX

Table of Contents Chapter 2: Construction 1. Right to Supervise and Inspect During the Performance of the Service? 357 2. Obligation to Inspect the Finalised Structure? 357 3. Liability for Defects not noticed during Inspection 357 4. Inadequate Performance of Agreed Duty to Supervise: Defence or Contributory Negligence? 358 1. Right to Supervise and Inspect During the Performance of the Service? 359 2. Obligation to Inspect the Finalised Structure? 360 3. Liability for Defects not Noticed during Inspection 362 4. Inadequate Performance of Agreed Duty to Supervise: Defence or Contributory Negligence? 365 Article 2:106: Handing over of the Structure A. General Idea 367 B. Interests at Stake and Policy Considerations 367 C. Comparative Overview 368 D. Preferred Option 369 E. Relation to PECL and Other Parts of the Principles 370 F. Burden of Proof 370 G. Character 370 H. Remedies 370 1. Procedure of Handing over of the Structure: Delivery and Acceptance 371 1. Procedure of Handing over of the Structure: Delivery and Acceptance 371 Article 2:107: Payment of the Price A. General Idea 373 B. Interests at Stake and Policy Considerations 374 C. Comparative Overview 374 D. Preferred Option 374 E. Relation to PECL and Other Parts of the Principles 375 F. Character of the Rule 375 G. Remedies 375 XXX

Chapter 2: Construction Table of Contents 1. Moment of Payment of the Price 375 1. Moment of Payment of the Price 376 Article 2:108: Risks A. General idea 377 B. Interests at Stake and Policy Considerations 378 C. Comparative Overview 378 D. Preferred Option 379 E. Relation to PECL and Other Parts of the Principles 380 F. Burden of Proof 380 G. Character of the Rule 380 H. Remedies 381 1. General System of Risk 381 2. Risk as to Materials and Goods Provided by Other Party 381 1. General System of Risk 381 2. Risk as to Materials and Goods Provided by Other Party 384 Article 2:109: Specific Performance and Cure A. General Idea 386 B. Interests at Stake and Policy Considerations 387 C. Comparative Overview 387 D. Preferred Option 387 E. Restrictions to the Right to Cure 388 F. Relation to PECL and Other Parts of the Principles 389 G. Character of the Rule 389 H. Remedies 389 1. Specific Performance 389 1. Specific Performance 390 XXXI

Table of Contents Chapter 3: Processing Article 2:110: Resort to Other Remedies A. General Idea 391 B. Interests at Stake and Policy Considerations 392 C. Comparative Overview 392 D. Preferred Option: Exceptions to the Right to Termination 392 E. Relation to PECL and Other Parts of the Principles 392 F. Character of the Rule 393 G. Remedies 393 1. Right to Cure 393 1. Right to Cure 393 Article 2:111: Prescription of Remedies based on Non-Conformity A. General Idea 395 B. Interests at Stake and Policy Considerations 395 C. Comparative Overview 395 D. Preferred Option 396 E. Relation to PECL and Other Parts of the Principles 396 F. Character of the Rule 396 G. Remedies 397 1. Limitation Period for Actions based on Defects 397 1. Limitation Period for Actions based on Defects 397 Chapter 3: Processing General A. General Idea 401 B. Scope of Application of this Chapter 401 C. Basic Principles 401 D. Terminology 403 E. Sources 403 Relation to Other Parts of the Principles F. Relation to Principles of European Contract Law (PECL) in General 404 XXXII

Chapter 3: Processing Table of Contents G. Relation to Chapter 1 (General Provisions) of the Principles of European Law on Service Contracts (PELSC) in General 405 H. Relation to Article 1:102 (Price) 405 I. Relation to Article 1:103 (Pre-contractual Duties to Warn) 406 J. Relation to Article 1:106 (Duties of the Service Provider regarding Input) 407 K. Relation to Article 1:109 (Directions of the Client) 407 L. Relation to Article 1:110 (Contractual Duty of the Service Provider to Warn) 408 M. Relation to Article 1:111 (Variation of the Service Contract) 409 N. Relation to Article 1:112 (Remedies for Breach of Duties of the Service Provider) 409 O. Relation to Article 1:113 (Failure to Notify for Non-Conformity) 410 P. Relation to Article 1:115 (Cancellation of the Service Contract) 410 Q. Relation to Chapters 2 (Construction) and 4 (Storage) 410 R. Relation to Principles of European Law on Sales (PELS) 412 S. Mandatory or Default Rule 412 Article 3:101: Scope of Application A. General Idea 413 B. Interests at Stake and Policy Considerations 413 C. Comparative Overview 414 D. Preferred Option 414 E. Relation to PECL and Other Parts of the Principles 414 F. Scope of Application of the Rules 415 G. Character of the Rule 417 H. Remedies 417 1. Place in existing codes/statutes/case law 417 2. Application to immovable and movable goods? 417 3. Application of rules to gratuitous processing services 418 1. Place in existing codes/statutes/case law 418 2. Application to movable and immovable goods? 419 3. Application of rules to gratuitous processing services 420 Article 3:102: Duty to Co-operate of the Client A. General Idea 421 B. Interests at Stake and Policy Considerations 421 C. Comparative Overview 422 XXXIII

Table of Contents Chapter 3: Processing D. Preferred Option 422 E. Relation to PECL and Other Parts of the Principles 422 F. Specific Duties to Co-operate for Processing Contracts 423 G. Burden of Proof 423 H. Character of the Rule 423 I. Remedies 423 1. Client s obligation to hand over (the control over) the good or give access to the good on time 424 1. Client s obligation to hand over (the control over) the good or give access to the good on time 424 Article 3:103: Circumstances in which the Service Is to Be Performed A. General Idea 426 B. Interests at Stake and Policy Considerations 426 C. Comparative Overview 427 D. Preferred Option 427 E. Relation to PECL and Other Parts of the Principles 428 F. Specific Duty as to Existing Circumstances in Processing Contracts 428 G. Burden of Proof 429 H. Character of the Rule 429 I. Remedies 429 1. Processor s duty to collect information and to investigate the good 429 2. Duty to warn for specific dangers 430 1. Processor s duty to collect information and to investigate the good 430 2. Duty to warn for specific dangers 431 Article 3:104: Duty of Care of the Processor A. General Idea 433 B. Interests at Stake and Policy Considerations 433 C. Comparative Overview 434 D. Preferred Option 434 E. Relation to PECL and Other Parts of the Principles 435 F. Prevention of Occurrence of Damage to the Thing 437 XXXIV