Differences of Property Transfer Systems in Europe - the challenge of substantive unification of contract law in the 21st century

Jovičić, Katarina and Vukadinović, Slobodan (2021) Differences of Property Transfer Systems in Europe - the challenge of substantive unification of contract law in the 21st century. In: Property law - challenges of the 21st century. Union University School of Law, Belgrade, pp. 125-140. ISBN 978-86-7952-060-9

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Abstract

Although there is a tendency towards substantive unification of contract law, the conflict-of-law approach still proves to be necessary. Tendencies in Europe in the late 20th and early 21st century show a continuance of the commitment to build a unique European legal area, which includes a substantive unification of contract law. A significant obstacle, or rather a challenge is in the existence of differences between national legal systems in terms of property right transfer methods. This situation is a logical consequence of national legal traditions and of the development of rules regarding this issue in Europe, where there are still two different basic systems of passing of property: the French system, by which the final preferred purpose and effects of a legal transaction are achieved by the conclusion of the contract itself and, on the other hand, the German system, which implies that by concluding the contract, the contracting parties accept the obligation to transfer ownership rights in the next step. The authors have conducted research on whether these two systems are irreconcilable. The paper further analyses whether it is possible and necessary to reach a unique solution by which this question would be universally regulated in the European legal area. Upon finding reasons for the fact that leading countries are still not prepared to relinquish their legal traditions on this issue, the authors examine the practical legal importance and consequences of the described differences. Going a step further, the paper concludes that the described differences are concerning legal theory and history, and that the practical legal importance of the issue is not of fundamental significance. The legal analysis shows that the central question is not always about the moment of the transfer of rights. The crucial issue is the moment of risk transfer, which usually is the issue of higher legal importance and of practical legal consequences. This is further accentuated by the fact that the moments of property transfer and risk transfer do not necessarily coincide. In this way, the practical legal importance of the primary differences is relativized and reduced.

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