No. 2




The Principle of Freedom of Contracts in the Harmonising European Civil Law, and the Reform of Civil Law in Estonia

31 October 2000


RiTo No. 2, 2000

The aim of harmonising European civil law is to reduce differences between legal systems in order to guarantee a uniform European economic space and legal culture.

In the course of reforming Estonian civil law, several important laws have been passed. The draft law on obligations and amendments to the General Principles of the Civil Code Act have been submitted to the Riigikogu. After their adoption, necessary changes for harmonising civil law in the most important fields have been made. An essential principle of civil law – the principle of private autonomy – expresses itself most directly through freedom of contract. An effective legal order, on the one hand, does not in itself guarantee the freedom of contract necessary for a society based on market economy; on the other hand, there are also no restrictions that are necessary to harmonise domestic law with European law.

Estonia in the development of its economy and market relations has reached a stage where the necessity of restrictions can be felt. The draft law on obligations foresees a number of restrictions on the freedom of the parties to conclude a contract, to determine its content and form. The freedom to enter into contracts can be restricted only with law or with self-restrictions. The freedom to enter into contracts includes also pre-contractual relations and pre-contractual negotiations, which is an important innovation for the Estonian legal system. Determining the content of a contract is limited with general requirements to the content of transactions, the main requirement being conformity with good practice and public order. Equally important are the restrictions set by law the interpretation of which depends to a large extent on the court practice. The current legal order does not guarantee actual freedom of form in contractual relations. But the draft law on obligations makes it possible to guarantee to the parties the freedom of form and reduce formality in settling contractual disputes. A tendency towards full contractual freedom recognised by classical contract law can be noted in the Estonian legal practice. In harmonising civil law in Europe it is considered necessary to restrict significantly the freedom of contract in the interests of certain groups of people. The legislator, when making decisions, should therefore assess to what extent and in which limits to establish restrictions on freedom of contract in order to guarantee free development of the members of society. The article explores different aspects of setting restrictions to freedom of contract on the basis of the changes planned in Estonian civil law.

Full article in Estonian

Irene Kull, born 1961, lawyer, University of Tartu 1984, mag iur 1996 University of Tartu, additional education: University of Münster 1998. Work: 1984-85 Estonian Supreme Court, consultant, 1985 University of Tartu Chair of Civil Law of the Private Law Institute, lecturer, 1996-99 keeper of the Chair of Civil Law. Affiliation: 1996 member of the board of the Estonian Academic Law Society.