The Draft Common Frame of Reference, Public Policy, Mandatory Rules and the Welfare State

This paper discusses public policy, mandatory rules and the Draft Common Frame of Reference (DCFR) from a multi-level perspective. The DCFR provides rules in this respect (Article II.-7:301 DCFR; Article II.-7:302 DCFR), which involve a multi-level approach, since they refer to mandatory rules which may be either national or European. Moreover, the rule concerning public policy refers to fundamental principles recognized as such in the Member States of the European Union. From the text itself, it is not self-evident whether it concerns merely principles which are recognized at large within the European Union or whether it also may concern fundamental principles which are merely recognized in one Member State. The application of mandatory rules and the notion of public policy also has another dimension which has a multi-level character. It concerns the role of national contract law within the Member States and in particular within the national welfare states. Contract law and the market belong to the institutional framework of the welfare state. From political science literature it follows that various types of welfare states can still be distinguished within the European Union even though convergence is taking place. Each of them is characterized by its own interaction between the market, the state and civil society or the family. Moreover, in general, the welfare state and social policy still belong to the competence of the Member States. When one of the elements of the welfare state's institutional framework is harmonized on a European level, it has consequences with respect to the social order within a Member State. Given that contract law plays a role within the welfare state, this raises the question as to what extent contract law should be harmonized on a European level without having a European social order