Publication Type
Journal Article
Version
publishedVersion
Publication Date
7-2010
Abstract
Differences between contract laws of Member States are often said to impose costs on and deter cross-border trade, and in order to increase cross-border trade, these contract laws ought to be harmonized. This article promises a paradigm shift in considering whether there is a need for harmonization; and if so, what form it ought to take. A behavioural approach is adopted to answer two underlying questions: how do actors think about these differences when they decide to contract? How does the form of harmonization influence such decisions? Insights from disciplines like cognitive and social psychology are identified and applied to find out how actors think and what motivates them to make the decisions they do. Psychology reveals that most actors do not think about differences between contract laws, a point which questions the need for harmonization. Furthermore, most actors prefer the status quo, strongly suggesting that harmonization by way of optional rules may not achieve the desired result.
Keywords
cross-border trade, European contract law, harmonization, behavioural economics, psychology
Discipline
Contracts | Law and Economics | Social Welfare Law
Research Areas
Asian and Comparative Legal Systems
Publication
European Review of Private Law
Volume
38
Issue
2
First Page
285
Last Page
305
ISSN
0928-9801
Publisher
Kluwer Law International
Citation
LOW, Gary.
The (ir)relevance of harmonization and legal diversity to European Contract Law - A perspective from Psychology. (2010). European Review of Private Law. 38, (2), 285-305.
Available at: https://ink.library.smu.edu.sg/sol_research/2582
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://ssrn.com/abstract=1456327