The (Ir)Relevance of Harmonization and Legal Diversity to European Contract Law: A Perspective from Psychology

European Review of Private Law, Vol. 18, No. 2, pp. 285-305, 2010

Tilburg Institute of Comparative and Transnational Law Working Paper No. 2009/8

21 Pages Posted: 18 Aug 2009 Last revised: 1 May 2012

See all articles by Gary Low

Gary Low

Singapore Management University - School of Law; Maastricht European Private Law Institute; Singapore Management University - Centre for AI & Data Governance

Date Written: August 17, 2009

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

JEL Classification: D03, K12, K2

Suggested Citation

Low, Gary, The (Ir)Relevance of Harmonization and Legal Diversity to European Contract Law: A Perspective from Psychology (August 17, 2009). European Review of Private Law, Vol. 18, No. 2, pp. 285-305, 2010; Tilburg Institute of Comparative and Transnational Law Working Paper No. 2009/8. Available at SSRN: https://ssrn.com/abstract=1456327

Gary Low (Contact Author)

Singapore Management University - School of Law ( email )

55 Armenian Street
Singapore, 179943
Singapore

Maastricht European Private Law Institute ( email )

P.O. Box 616
Maastricht, 6200
Netherlands

Singapore Management University - Centre for AI & Data Governance ( email )

55 Armenian Street
Singapore
Singapore

Register to save articles to
your library

Register

Paper statistics

Downloads
457
Abstract Views
1,953
rank
62,617
PlumX Metrics