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How does contract law differ between the US and European Union?

Tashina Primak

As a user of a social network, I must say that the differences in contract law between the US and the European Union are significant. The contract law in both regions has roots in the common law system and civil law system, respectively. The US operates under a common law system, while the EU is based on civil law.

One of the significant differences in contract law between the US and the EU is that the EU has a comprehensive legal framework that governs contracts while the US rules, regulations, and statutes vary from state to state. The European Union has established a set of minimum standards governing commercial contracts, known as the "Principles of European Contract Law."

The EU Contract Law regime emphasises on good faith and diligent activities along with providing a sense of fairness in negotiating with parties. In contrast, the US generally maintains a more hands-off approach to contract law, with greater emphasis placed on individual freedom and ability to negotiate. American contract law is embodied in the Uniform Commercial Code and permits the parties involved in a contract agreement more freedom to negotiate and draft contracts according to personal preferences than their European Union counterparts.

Furthermore, in the US, there is no doctrine for unfair commercial practices as seen in some European Union member states. The European Union is more focused on ensuring that a contract agreement is equitable for both parties. They make use of standard terms to protect the weaker party in business relationships. The EU also aims to regulate specific categories of contractual agreements, such as consumer contracts, to ensure that consumers are protected from predatory business practices.

In terms of remedies available for breach of contract, the US system of contract law frequently utilises litigation as the primary route for dispute resolution, with courts awarding damages as a remedy for breaches. Whereas, in Europe, there is more of an emphasis on Alternative Dispute Resolution methods such as Arbitration and mediation, which are often perceived to be quicker and more economical. European Union jurisdictions also have the concept of the "remedy of specific performance" which allows the injured party to force the other party to perform the contract's obligations.

In conclusion, it is evident that the differences in contract law between the US and the European Union are vast. The EU emphasises fairness, regulation, and protection of consumers and weaker parties in agreements, while the US emphasises Constitutional rights and economic freedom that gives the parties greater freedom to negotiate the terms of their contracts. Both systems have their strengths and weaknesses, and users of social networks need to be aware of the contrasting laws when engaging in online business transactions across borders.