“Social force majeure” — A new concept in Nordic consumer law

Empirical research from various countries indicates that overindebtedness of consumers is, to a considerable extent, attributable to unexpected changes in the consumer's situation caused by illness, unemployment, and other such circumstances. It is therefore relevant to discuss whether and in what way such circumstances should be taken into account in the rules of private law. In Nordic (especially Finnish) legislation, mainly from the 1980s, there are several provisions which provide for mitigation of sanctions against a defaulting consumer if the delay is caused by illness, unemployment, etc. Such rules are contained, inter alia, in the legislation on consumer credit and on interest on delayed payments.On the basis of these provisions as well as some practices developed by the consumer authorities, a general principle of social force majeure is seen to be evolving. This doctrinal principle would enable the courts and other decision-makers to take into account unfavourable changes in the consumer's health, work, housing, and family situation in cases not regulated by specific legislation, e.g., by giving the consumer the right of withdrawal from burdensome contracts in such circumstances or to protect his right to retain electricity and telephone connections in spite of his temporary payment difficulties. The principle is expected to carry increasing weight in the future, especially in the practice of the consumer authorities. Strong arguments speak in favour of the general acceptance of such a principle.

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Wirtschaftliche Unmöglichkeit aus sozialen Gründen — eine neue Rechtsfigur in den Nordischen Staaten

Zusammenfassung Empirisch-rechtssoziologische Untersuchungen aus verschiedenen Ländern kommen zu dem Ergebnis, daß Verschuldung und Zahlungsunfähigkeit von Verbrauchern zu einem großen Teil auf unerwartete Umweltänderungen zurückzuführen sind, etwa Krankheit, Arbeitslosigkeit und ähnliches. Es ist deshalb wichtig zu diskutieren, ob und in welcher Weise solche Umstände bei der Anwendung von Privatrechtsvorschriften berücksichtigt werden sollen. In den Nordischen Staaten, insbesondere in Finnland, gibt es seit den achtziger Jahren gesetzliche Vorschriften, die eine Abmilderung von Sanktionen gegen in Verzug geratene Schuldner vorsehen, wenn der Verzug auf Krankheit, Arbeitslosigkeit usw. zurückgeht. Diese Regeln finden sich im Recht des Konsumentenkredits und der Verzugszinsen. Auf der Basis dieser Vorschriften entwickelt sich eine neue Rechtsfigur der wirtschaftlichen Unmöglichkeit aus sozialen Gründen. Dieser Grundsatz würde es Gerichten und anderen Entscheidungsträgern ermöglichen, nachteilige Veränderungen der Gesundheit, Arbeitswelt, Haushalt und Familie des Verbrauchers auch in noch nicht gesetzlich geregelten Bereichen zu berücksichtigen, z.B. durch Gewährung eines Auflösungsrechts bei übermäßig belastenden Verträgen oder durch Schutz seines Rechts auf Versorgung mit Elektrizität und Telefon trotz zeitweiliger Zahlungsschwierigkeiten. Es wird erwartet, daß sich dieses Prinzip in Zukunft verstärkt durchsetzen wird, insbesondere in der Praxis von Verbraucherschutzbehörden. Wichtige Argumente sprechen für die allgemeine Anerkennung dieses Prinzips.

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Thomas Wilhelmsson is Professor of Civil and Commercial Law at the Institute of Private Law, Faculty of Law, University of Helsinki, Vuorikatu 5, SF-00100 Helsinki, Finland, and a member of the Finnish Market Court.     

Is fairness blind?—The effect of framing on preferences for effort-sharing rules

This paper uses a choice experiment to study citizens' preferences for effort-sharing rules for reducing carbon dioxide emissions. For a given global cost and level of emission reduction, we study the willingness to pay for various rules that imply different distributions of the cost between EU, the US, China and Africa. The focus of this paper is on the use of two different treatments, one where the respondents were informed about the country (or country group) names and one where the names were replaced with anonymous labels A-D. This allows us to test whether people's preferences for effort-sharing rules depend on the framing of the problem. We find that the ranking of the rules and the strength of the preferences are not significantly different between the two treatments, and hence we find no evidence of ingroup bias in preferences for effort-sharing rules.     

Identifying intraorganisational and interorganisational alliance conflicts—A longitudinal study of an alliance pilot project in the high technology industry

The extant literature on alliances tends to neglect the effects of intraorganisational relationships within each alliance partner on the implementation of the alliance. To address this gap, this paper investigates both interorganisational and intraorganisational conflicts occurring during the implementation of a service alliance and aims at developing categories of conflicts as well as analysing how these conflict categories affect the implementation of the alliance. Thus, the overall purpose is to contribute to our understanding of implementation issues in alliances for the delivery of services. In order to do so, one case of a high-technology alliance has been studied longitudinally, with the researcher acting as a participant observer. Three interrelated categories of conflicts are developed through an analysis of the data: 1) the scope of the alliance, 2) the customer relationship, and 3) the implementation process. One important conclusion of this study is that the perspectives of several of the stakeholders, including the customers indirectly involved in the alliance, should be included when implementing service alliances.     

The business model in entrepreneurial marketing: A communication perspective on business angels' opportunity interpretation

Entrepreneurial marketing has emerged as a recent perspective within the marketing field, taking the challenges and characteristics of small firms and founding teams into account. Specifically, in the early stages of entrepreneurial marketing, besides potential customers a variety of other stakeholders tend to be in the center of attention. Among these stakeholders, business angels as early-stage investors represent a vital target group. In this paper, we aim to shed light on entrepreneurial marketing in the early phases of new venture creation, in which entrepreneurial firms have an inherent need to market the value of a business opportunity toward potential investors. In particular, we contribute to the literature by introducing the business model as a narrative device for the marketing of early-stage new ventures toward potential business angels. In this regard, the business model is suggested as playing a critical role through making the inherent economic value of a technology explicit. Building on narrative theory, we investigate the role that the business model plays in the decision-making process of 17 business angels. Based on our findings, we propose a model that links the business model to a business angel's interpretation of an investment opportunity and discuss implications for theory and practice.     

Enhancing Security Through Efficiency Focus—Insights From a Multiple Stakeholder Pilot Implementation

Efficiency and security are often regarded as opposing factors in transport operations, with increased security causing decreased efficiency. The use of information technology holds the promise of enabling improved efficiency in freight transport operations and this article suggests and elaborates on the proposition that “An increased focus on efficiency will result in improved security for carrier operations.” The research for this article involved a literature review, the collection of empirical data through one in‐depth case study, and elaboration on a proposition through a field pilot implementation. The selected focus was carrier operations in connection with port terminals carrying out RoRo operations on trailers. The article explores and describes how measures to increase efficiency result in increased security.     

Exchange rates dynamics revisited: a panel data test of the fractional integration order

We test the possibility that exchange rates from nine developed countries have a unit root against the alternate possibility that they are fractionally integrated. Theoretically, exchange rates are only expected to follow a random walk under restrictive assumptions. However, most traditional unit root tests cannot reject a unit root in exchange rates, and time series tests that allow for fractional integration have given inconclusive results. To increase the power of the test of the integration order we develop two panel data tests of the fractional integration order. Monte Carlo simulations show that these tests are correctly sized and have relatively high power compared to other similar tests. Moreover, our empirical results show that we can reject a unit root in exchange rates with a high probability, but the integration order is close to one. This indicates that exchange rates are mean-reverting, although the reversion is slow, resulting in long swings.     

The Abuse of the “Confident Consumer” as a Justification for EC Consumer Law

A reference to the need to create confident cross-border consumers who can contribute to the strengthening of the internal market has often been used as one of the main arguments for EC consumer policy and legislation. The argument has been presented in order to justify both the creation of a minimum safety net for consumers (the minimum confidence argument) and the current turn towards more total harmonisation of consumer protection (the harmonised confidence argument). In the paper these lines of argument are critically evaluated with reference to common sense knowledge about the behaviour of consumers as well as on the basis of Eurobarometer data concerning consumer confidence. In this light the substantive minimum harmonisation measures which have been justified with reference to the need for promoting consumer confidence seem only to a limited extent relevant with respect to the creation of such confidence. The current turn towards total harmonisation most certainly cannot be justified in this way. Other substantive measures, facilitating the access to a counterparty, would be more important in order to create consumer confidence in cross-border shopping, but the Community has almost systematically avoided adopting such measures.     

Foreign Firms and Chinese Employment

This paper examines the effect of foreign direct investment (FDI) on employment in the Chinese manufacturing sector. As one of the world's largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job creation, and the effect of FDI on employment is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on employment in domestic firms. We analyse FDI and employment in China using a large sample of manufacturing firms for the period 1998–2004. Our results show that FDI has positive effects on employment growth. The relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate. Employment growth is also relatively high in private domestic Chinese firms. There also seems to be a positive indirect effect of FDI on employment in private domestically‐owned firms, presumably caused by spillovers.     

Entry into Swedish Retail and Wholesale Trade Markets

This paper examines, using a zero-inflated negative binomial regression model, what determined entry into the Swedish retail and wholesale trade markets between 1990 and 1996. According to the results, high returns on equity and low sunk costs seemed to attract more entry into retail trade industries, while recent entry and higher total industry sales were associated with more entry into both retail and wholesale trade local markets.     

Control of unfair contract terms and social values: EC and Nordic approaches

The paper analyses the relationship between traditional market rational contract law and rules on the control of unfair contract terms. The question is asked to what extent Nordic and EC rules on such control express a radical departure from traditional contract values. As a background Nordic law is compared to the recently adopted EC Directive on Unfair Terms in Consumer Contracts. The most important differences are that individually negotiated contracts as well as the essential terms of the contract are excluded from the scope of the Directive, exclusions which have no counterpart in Nordic law. The abstract and static approach of the Directive also differs from Nordic thinking.As to the question of the impact of these rules, the paper first focuses on the possibilities of the contractual fairness principle functioning as an instrument for redistribution of wealth. The EC Directive does not include this aim, as the contract balance is expressly left outside the scope of the Directive. Nordic law, which contains more possibilities in this respect, has mostly focused on deviators. Not even this adjustment-friendly milieu has exerted any general influence on the prevailing balance between contractual performances in the market. The fairness principle contains other social values as well, such as autonomy, responsibility, freedom, fair consequences, access to justice, security, and social responsibility. Many of these values, which in the welfarist contract law are interpreted materially, are in their formal form central also to the market society, based on the rule of law. The fairness principle, as understood in the EC Directive, does not in any radical way upset the traditional values of contract law.

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Die Kontrolle unlauterer Geschäftsbedingungen und gesellschaftliche Werte: Die Ansätze der Europäischen Gemeinschaft und der Nordischen Staaten

Zusammenfassung Der Beitrag analysiert die Beziehung zwischen dem traditionellen marktrationalen Vertragsrecht und den Vorschriften gegen unlautere Geschäftsbedingungen. Er stellt die Frage, wie stark sich diese Regelungen der Nordischen Staaten und die der Europäischen Gemeinschaft von den traditionellen vertragsrechtlichen Prinzipien entfernen. Als Hintergrund wird das Nordische Recht mit der kürzlich verabschiedeten EG-Richtlinie über unfaire Bedingungen in Konsumentenverträgen verglichen. Der wichtigste Unterschied besteht darin, da\ individuell ausgehandelte Verträge ebenso wie essentienelle Bestandteile des Vertrages vom Anwendungsbereich der Direktive ausgeschlossen werden, ein Ausschlu\, der im Nordischen Recht keine Entsprechung hat. Der abstrakte und statische Ansatz der Direktive unterscheidet sich vom Nordischen Denken. Was die Wirkungen der Bestimmungen gegen unlautere Geschäftsbedingungen anlangt, so befa\t sich der Beitrag mit den Möglichkeiten des Prinzips der vertraglichen Fairne\ als Instrument für Wohlstandsumverteilung. Die EG-Richtlinie verfolgt dieses Ziel nicht, ebenso wie sie auch ausdrücklich das Prinzip des vertraglichen Gleichgewichtes nicht mit einbezieht. Nicht einmal aber das interventionistische Milieu des Nordischen Rechts hat irgendeinen allgemeineren Einflu\ auf das vorherrschende Gleichgewicht zwischen dem vertraglichen Marktergebnis beider Vertragsparteien ausgeübt. Hinter dem Fairne\-Prinzip stehen auch andere gesellschaftliche Werte, wie Autonomie, Verantwortlichkeit, Freiheit, Rechtsschutz, Sicherheit oder soziale Verantwortlichkeit. Viele dieser Werten werden im wohlfahrtsorientierten Vertragsrecht materiell interpretiert, sind aber in ihrem formalen Gehalt auch zentral für eine rechtsstaatlich fundierte Marktgesellschaft. Das Fairne\-Prinzip, so wie es die EG-Richtlinie versteht, stellt sich nicht grundlegend gegen die traditionellen Werte des Vertragsrechts.

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The paper was presented at the Fourth International Conference on Consumer Law in Buenos Aires, May 1993.