I. Setting
On 1st October 2010, a new research group led by Dr. Martin Illmer has been set up at the Max Planck Institute for Comparative and Private International Law. For a term of five years, the group’s research concerns the law of service contracts from a comparative perspective, focussing on German, French and English law as well as proposed European models for a law of service contracts. An emphasis of the group’s research is the evaluation and assessment of private law making by reference to standard contract forms in the field of service contracts. The aim of the group’s research is a matrix which could serve as a basis for different models regulating the (private) law of service contracts.
Currently, the research group consists of Dr. Martin Illmer as the group’s leader, Julia Salkowski  and Jonas Huth  as junior researchers. In the course of 2010, the group may be extended to up to five persons.
 
II. The socio-legal background
Modern economies in Europe are undergoing radical changes. One of the most significant trends over the last decades is the move from the industrial age to the post-industrial service society. In the Western world and particularly within the EU, the traditional industries and industrial production are declining while at the same time the provision of services of all sorts is becoming the driving force of national economies and cross-border trade. Recent estimates suggest that more than 50% of GDP of the EU Member States is generated by the provision of services and that more than 60% of jobs in the EU are in the services sector.
Despite its fundamental importance, the law of service contracts throughout Europe is characterised by uncertainty, incoherence and fragmentation. There is not even a law of service contracts in terms of a single legal regime, neither in the national laws nor on the European level. The major European legal systems differ significantly despite their common origins in Roman law.
German law has developed towards a basic dichotomy of Werkvertrag (contract for a result) and Dienstvertrag (contract for best efforts). Systematically both types are mutually exclusive. Many social phenomena requiring contracts, however, do not fit into this dichotomy as they contain elements of both types and as time- and/or project-oriented criteria characterise the contractual obligations far more than the dichotomy. Market players respond by creating their own legal regimes via private law-making. Prominent examples are building contracts largely regulated by the so-called Verdingungsordnung für Bauleistungen (VOB) as well as insurance and banking contracts. The response by the courts is to either apply the privately-made law (if it exists) or to ignore the dichotomy, look at the individual contract and apply rules from both contract types as they fit. The legal rules merely serve as toolboxes for the judiciary. The legislative surrendered.
French law traditionally followed a similar dichotomy of obligation de moyen and obligation de resultat. Recently, however, the initially limited concept of a contrat d’entreprise has emerged into a broad, yet blurred category covering all sorts of service contracts. The relationship with the dichotomy is unclear and the legal framework in the Code civil is so limited that in fact the judiciary is developing this new contract type case by case, often rather inconsistently.
The English common law of contract traditionally mainly concerns general aspects of contract law. A more or less comprehensive legislative framework exists to date only with regard to the contract of sale and partnerships. Service contracts are not a distinct category of English contract law to which a certain set of rules applies (whether judge-made or by legislation) but a rather vague residual category covering a vast array of social phenomena. The courts deal with them on a case-by-case basis. Their approach is functional, not conceptual or systematic. Often, the law of service contracts is set by private law-making, usually in standard contract forms drafted by professional associations.
Against this diverse background, European legislation on service contracts is increasingly invading into national laws. The European Union is, however, not following a coherent strategy. Some areas of service contracts, usually sector-specific, are highly regulated while others are not regulated at all. This fragmentation of the law is aggravated by incoherent terminology and diverging concepts of service contracts as between EU primary and secondary law as well as between different regimes of EU secondary law. But even worse, the terms “services” and “service contracts” lack a consistent positive definition throughout the national laws and EU law. They are regularly used as residual categories in contrast to goods and the contract of sale.

III. The status quo of legal research
The status quo of legal research resembles the status quo of the law. It is highly underdeveloped and neglected. Despite the obvious need for research, in particular basic comparative research in order to pave the way for a modern law of service contracts, research in the field of contract law has up to date focused either on the contract of sale ever since the seminal comparative work by Ernst Rabel (“Das Recht des Warenkaufs”, 1936/1957) or on general issues of contract law (regardless of the particular type of contract).
So far, German legal scholars have neglected the law of service contracts, its taxonomy, the relevant matrix and coordinates for setting up a system as well as the functioning of the current legal regime in practice. Basic research is very limited, often out-dated (dating from the early 20th century after the BGB had entered into force) and does not take account of the modern economic changes and the increasing impact of EU law. The field is tilled by practitioners in the form of practitioner handbooks providing the tools for handling the various types of service contracts occurring in practice. Their focus is not on the system as a whole, and their approach is problem-oriented rather than systematic. The situation is very similar in most other European countries. Especially in England, legal scholarship devotes very little, if any, research to service contracts. In addition to the lack of legal research in the national systems, there is virtually no comparative research with regard to service contracts, again in vast contrast to the contract of sale. The so-called Draft Common Frame of Reference, a legal regime for a future European private law set up by groups of legal scholars from various European countries, deals with service contracts in a new and unprecedented way which is to be scrutinized and assessed critically.

IV. The way forward
Considering the status quo of the law of service contracts and legal research in Europe, a comparative approach is required. Only the comparative view will reveal common roots, dividing lines and parallel structures to then better understand the current approaches which serve as benchmarks towards harmonisation. Starting from the German legal system, the group intends to take a close look at the English and French legal systems as well as the Draft Common Frame of Reference.
As regards the structure of the group’s research, it will first identify the range of social phenomena potentially qualifying for services within the meaning of a legal regime of service contracts. In a second step, the group will assess similarities and disparities in order to develop either one set of criteria qualifying a contract as a service contract or different sets of criteria establishing different types of service contracts. The decision whether to go for the largest common denominator or whether to break down the initial field into sub-categories is closely linked to the third, most important step – developing a comprehensive taxonomy of the law of service contracts. To what extent can hard and fast rules reflect the complexity of real life with regard to service contracts? Should legal rules aim at regulating all aspects like a codification or rather merely provide a basic framework and leave details to legal practice? Which distinguishing criterion is best-suited for developing a taxonomy? What interdependencies exist within a matrix of the law of service contracts? While considering the existing national regimes by way of a comparative approach, their taxonomy may well have to be modified, reshaped or even be abandoned. This may require structuring the matrix and its coordinates identified in the first two steps in an entirely new way, in fact challenging many of the traditional patterns.