Private actors as norm-setters through choice-of-law: The limits of regulatory competition

This paper discusses the position of private actors as norm-setters in European private law. It discusses what position self-regulation has as a source of law beside public regulation. Although self-regulation is an important source of norms in practice, since it is not legally binding self-regulation does not per se translate into 'lawmaking' in European private law. One way in which private actors nonetheless could have a lawmaking role in this field is through 'regulatory competition': the theory suggests that through choices of law that private actors make in their contracts, a competition of rules may ensue, which could result in the adoption of a new 'best' rule in legislation. The paper explores whether support for this process can be found in the theory and practice of European contract law, and concludes that empirical evidence at this time falls short of showing that regulatory competition occurs in European contract law. The limits to this strategy for lawmaking in a multilevel system of regulation suggest that alternative governance mechanisms need further exploration.