Harmonization, Preferences, and the Calculus of Consent in Commercial and Other Law

Abstract

The European Union is exploring a move toward harmonization in the form of a common commercial code (CESL), with some mandatory provisions especially with respect to consumer law, but alsoincorporating a large dose of business-to-business law that would be optional at the enterprise, rather than jurisdictional, level. This paper begins with the question of when harmonization is preferable to diversity, and not just with respect to commercial law. It tackles the problem from the perspective of the median voters in jurisdictions, some of which have similar preferences and some not. It introduces the ability of a stable and like-minded group to impose external costs on others, and then also on the ability of like-minded players to benefit by favoring central decisionmaking rather than local authority and local preferences.