Though not the centrepiece, sustainability was already on the radar of the Manifesto for Social Justice in European Contract Law in 2004: ‘It is important to align the general principles of social justice that govern the market order with standards designed to protect public goods such as a healthy environment.’ Twenty years later, as humanity continues to overshoot multiple planetary boundaries, it is high time to seriously reflect on and develop concrete strategies for how the alignment between contract law and sustainability can happen.
Under the auspices of the Green Deal, a burgeoning of sustainability law is reshaping European consumer law. A Directive on empowering consumers for the green transition amended several existing directives, together with the proposed Green Claims Directive, to ensure that consumers get reliable environmental information about the products they buy. The Right to Repair Directive aims to promote sustainable consumption by making repair easier and more attractive. The Eco-Design Regulation is giving shape to a European principle of sustainable products, aiming to make durable, repairable goods the market default. This means consumers no longer have to choose, with more and ‘better’ information of course, between sustainable and unsustainable goods – just like we don’t expect them to pick between safe and unsafe products. Though still founded in internal market competence (Art. 114 TFEU), these instruments began to speak of ‘promoting more sustainable consumption’, ‘the free movement of sustainable products’ and ‘a high level of consumer protection and environmental protection’, which embodies, however humbly, a shift in thinking.
At its foundation, the EU has always occupied itself with sustainability. Art. 3 TEU, which defines the Union’s objectives, declares that the internal market shall ‘work for the sustainable development of Europe’ based on ‘a high level of protection and improvement of the quality of the environment’. Art. 11 TFEU establishes an overarching integration principle, providing that environmental protection ‘must be integrated into’ all of the Union’s activities and policies. (This is quite strong wording compared with other ‘principles of general application’ under Title II TFEU.) The same principle, verbatim, is also incorporated into Art. 37 of the Charter of Fundamental Rights of the EU, which signals the relevance of sustainability not only as an institutional mandate but also as a matter of individual rights and citizen welfare. Even regarding the fundamental freedoms, if they can be invoked against environmental measures, why can’t we also endorse the ‘free movement of sustainable products’, ‘free movement of repair services’ and ‘free movement of non-extractive business’? There is no doubt that the EU legal order mandates contract law, insofar as it falls under EU competence, to be sustainable. Unfortunately, these charming high principles have only remained ‘a topic for Sunday speeches of politicians’.
Even more unfortunate is that, for many contract lawyers, sustainability is not even a topic of passing interest. I began this post by highlighting the how-question as to the alignment of contract law and sustainability – as if the if-question has been settled. That is far from the truth, at least on the national law level which contract law is still largely married to. Quite some classical doctrinalists religiously subscribe to the conviction that private law strictly concerns interpersonal and corrective justice (see an elegant apology by Weinrib). External factors, such as social justice and environmental protection, should thus not be tasked on private law but left to public law. Privity of contract then unapologetically lends itself to shielding contractual parties from being held accountable of the material impact of their agreements. As such, in the name of freedom of contract, corporate giants are legally enabled to extract from nature, exploit workers and suppliers and squeeze profits from customers. Consumers can keep buying cheap products and taking budget flights, while remaining unbothered by the staggering impact of private consumption.
But let’s be real: One can hardly deny that the realisation of private autonomy is dependent on certain material conditions – think of a functioning productive and reproductive system, a strong state apparatus that backs law enforcement and a sound natural environment that is liveable and extractable. And, in turn, private autonomy has a significant bearing on those sustaining conditions. In light of such embeddedness, how can private law claim to protect private autonomy while eroding the very foundations that make such autonomy possible?
With this contextualised notion of private autonomy, we are also moving towards a more constitutive understanding of private law (and law in general) – as vividly presented in Katharina Pistor’s The Code of Capital. Indeed, Europeanisation has instrumentalised private law as a tool to catalyse the internal market project; materialisation and constitutionalisation have enlisted private law to promote social rights and distributive justice; and private regulatory power in ordering market governance lays bare the crucial role private law plays in conferring bargaining power already at a pre-distributive level. The instrumentalist, distributive and power-conferring nature of private law must be embraced. Yet we still need a robust elaboration of the place of sustainability within that framework. This ecological dimension is crucial for a Manifesto on social justice, as the poor bear the brunt of the climate and environmental crises to which the rich contribute most. The disadvantaged cannot even afford sustainable products, while the affluent indulge in carbon intensive lifestyles on yachts and private jets. Private law invisiblises nature and marginalises the vulnerable – two sides of the same coin. The green transition has an undeniable distributive dimension, and social justice cannot be delivered without a solidaristic approach to environmental justice.
While the high-level principles and the piecemeal fixes in EU law have been laid out, we still need a more coherent and systematic integration of sustainability into the classic building blocks of contract law. Open norms like good faith and public morals are good starting points for channelling environmental concerns into private law – climate litigation cases, like the Shell case, has already explored this potential. Some jurisdictions, such as China, have even introduced an overarching ‘green principle’ into their civil codes, explicitly empowering judges to develop the green boundaries of private autonomy. Contract terms should be interpreted with sustainability in mind, avoiding undermining the parties’ environmental commitments due to vagueness or ‘unenforceability’ while promoting the implicit inclusion of such promises. As to more concrete doctrines, the notion of contractual non-conformity should zoom out of the economic utility of the product itself to stipulate for the lack of durability or reparability or the general adverse environmental impact (see arguments in the context of the Sales of Goods Directive and the CISG). Recoverable damages can go beyond physical harm and mental distress to cover the frustration of one party’s consciously deployed sustainable purchasing decisions which relate to the core of autonomy itself (see Sarah Dadush’s discussion on ‘identity harm’). A fair price, rooted in the ancient doctrine of iustum pretium, and contractual fairness in general should not only reflect a just exchange between the parties but also account for the environmental costs of the transaction. All these green interpretations are adaptable to a social dimension: non-conformity can include social non-conformity, identity harm can apply to frustrated ethical consumption efforts, and a fair price should factor in the social costs of production (such as a living wage clause). Of course, all these moves must be made in light of the material power dynamics between the parties, ensuring that powerful actors do not unduly dodge liabilities while also preventing the imposition of unbearable burdens on already vulnerable parties.
Several participants to the Symposium are directly tackling the implications of sustainability for private law. To name a few, Tom Hick advocates for a sustainable (re-)configuration of the freedom of contract; Jennifer Nedelsky and Aleksa Radonjić have foregrounded the stakes of property law in a sustainable society; Riccardo Fornasari explores how climate litigation challenges private law’s capital accumulation rationale. There is increasing interest in aligning private law with a socially and ecologically sustainable way of living on our planet, and this must be incorporated into any a future-proof iteration of the Manifesto. If private law concerns a set of rules that govern our relationships and connections, sustainability is the key to re-imagine, re-evaluate and re-situate our embedded selves in relation to others, our communities and our planet.
Art by Tomoko Nagao
Il quarto stato with motta, campari, pirelli, armani, prada, chicco, alitalia and visa at piazza duomo
2016 Digital contents
© 2024 TOMOKO NAGAO
