EU Competition Law and Contract
University of Cambridge - Faculty of Law
In D Leczykiewicz and S Weatherill (eds), The Involvement of EU Law in Private Law Relationships (Studies of the Oxford Institute of European and Comparative Law, Hart Publishing, Oxford 2013)
Oxford Legal Studies Research Paper No. 31/2013
This chapter explores the courts reaction to a co-contractor who fails to comply with the terms of that contract, but seeks to resist an action for breach of contract by claiming that to enforce the contract would be contrary to EU competition law - the Euro-defence. Reliance on Euro-defences has acquired and retains a distinct pejorative sense amongst judges in the English court. Using Shavell’s basic theory of litigation it is argued that the Euro-defence dilutes the incentive to comply with contracts and also creates a strong incentive for a party with valid contractual rights to settle unmeritorious claims. Using Calkins theory of courts react to litigation strategies it is argued that the judicial reaction has been first to increase the burdens faced by a party wishing to raise the Euro-defence and secondly to reduce the benefit to be had by successfully raising the Euro-defence. The chapter concludes by considering whether the defensive invocation of EU competition law remains as a mechanism for ensuring compliance with competition law.
Date posted: April 9, 2013