Magic circle firm Allen & Overy warned that a pan-European contract law could create ‘confusion and uncertainty’ for business, as the deadline for submissions to a European Commission consultation on the issue passed this week.

The firm also criticised a lack of business representation on the commission’s advisory panel, echoing concerns raised by the Law Society about a lack of representation from English law practitioners.

Allen & Overy cited research suggesting that European consumers are far more concerned about website and payment security issues than they are about foreign contract laws. The Bar Council meanwhile urged the EC to ‘show restraint’ amid ‘concerns that the commission is planning a maximalist approach’.

The commission is drafting a legal ‘toolbox’ to harmonise contract law across Europe. It says that it wants to protect consumers and make it easier and less costly for small and medium-sized businesses to trade across borders.

Allen & Overy litigation partner Joanna Page said: ‘Without full engagement, businesses risk sleepwalking into a regime that creates confusion and uncertainty, which would ultimately be harmful to trade of all kinds across Europe. Businesses are grappling with a deluge of other legislative and regulatory reform arising out of the downturn, and simply have too much on their plate to give these proposals the attention that they require.’

EU justice commissioner Viviane Reding said: ‘I want both consumers and businesses to benefit fully from our single market, without having to navigate a legal maze when buying and selling in another EU country.’

An Ipsos MORI poll of more than 3,000 consumers in Europe, commissioned by Allen & Overy, found that local contract law was not considered to be a concern by 74% when they were buying goods online from retailers in other European countries.