Business Negotiations and the Law by Rinaldo Carlotta;

Author:Rinaldo, Carlotta;
Language: eng
Format: epub
Publisher: Taylor & Francis Group
Published: 2020-06-15T00:00:00+00:00

35 See, with specific reference to the category of SMEs according to the European Commission’s definition, Hesselink (Ch 2, n 1) 350f. On the problem of small businesses see especially Larry Garvin, ‘Small Businesses and the False Dichotomies of Contract Law’ (2005) 40 Wake Forest Law Review 296f, who defines small business an ‘assorted group’, where generalisations are hazardous.

36 Hesselink (Ch 2, n 1) 351ff.

37 Micklitz (Ch 2, n 2) 321.

With reference to the criteria for the assessment of weakness in negotiations, the Directive (EU) 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chain goes a step further. While still basing the distinction between protected and non-protected parties on clearly quantifiable elements, it relies on annual turnover considering it as a suitable approximation for relative bargaining power and as a symptom of asymmetry.38 Moreover, it adopts a dynamic approach and recognises that size is not relevant in absolute values, but only in relation to the size of the counterparty. Accordingly, it does not only address SMEs: in defining the scope of application of the rules it provides, it distinguishes five categories of sale contracts in the agricultural and food supply chain that are identified by the fact that suppliers are smaller than their buyers – this being an indicator of bargaining weakness.

Other elements, however, should also be taken into account. As already observed, asymmetries can be structural and they characterise specific contractual relations, such as franchising, subcontracting agreements, agency.39 Furthermore, information asymmetries or inferiority in market position can entail the subservience of one of the parties in a contractual relation.

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