Europe neither needs nor can afford the EU-wide single contract law proposed by the European Commission this week, solicitors have warned.

Frank Tschentscher, insolvency and re-structuring partner at German firm Schultze & Braun said: ‘Brussels is suggesting bolting on a new 28th law to the 27 existing laws of the member states. We are used to incorporating directives into national law, but adding a new substantive law is unprecedented.’

The proposed new law, announced on 11 October, is to apply to cross-border contracts for the sale of goods and for the supply of digital content, such as video, audio and digital games. It will cover related service contracts, such as installation, maintenance and repair, but most other services, including financial services, are to be excluded.

Law Society president John Wotton said: ‘The Society is supportive of efforts to improve the functioning of the internal market and to increase cross-border trade. However, even after a body of case-law has been developed for the optional element, it will be difficult to ensure the new system is uniformly applied across all 27 EU member states with their different legal cultures.’

Magic circle firm Allen & Overy litigation partner Joanna Page said: ‘We question whether an optional law will make any difference at all to cross border trade. Our fear is that it will simply introduce unnecessary complexity into people's contracts, leading to uncertainty and, ultimately, to disputes. Europe does not need and cannot afford this initiative.

Magic circle firm Freshfields Bruckhaus Deringer corporate law principal consultant Vanessa Knapp said: ‘The market seems to be pointing to factors like language barriers and VAT complexities to account for any missed cross border trade opportunities rather than the absence of contract law uniformity.’