The Legal Basis for a European Optional Instrument

The adoption of an optional instrument on European contract law is gaining support. The present article argues that the appropriate legal basis depends on the ultimate characteristics of the instrument. However, Article 114 TFEU would, in any case, not provide an appropriate legal basis since the optional instrument would merely create an alternative to the laws of the Member States, without bringing the contract laws of the Member States closer together. Article 81 TFEU would provide a legal basis if the optional instrument would be limited to cross-border contracts and could be linked to the general objective of enhancing the judicial cooperation in civil proceedings. If the optional instrument could be chosen as governing law to both domestic and cross-border contracts, Article 352 would be the appropriate legal basis.