The limits of contract laws. The control of contractual power in trade practices and the preservation of freedom of contract within agrifood global supply chains

The paper examines the architecture of contracting and the instruments to control the exercise and the abuse of private regulatory power along supply chains. The design of the contractual architecture and its implementation may cause significant unfairness in power distribution that can translate in misallocation of market opportunities, gains, and losses for chain participants.The control of private regulatory power can protect freedom of contract and the space of choices by individual parties. Control over the use of private regulatory power within global chains can be implemented through different mechanisms: governance and enforcement. In this chapter we have focused on the latter and examined the various available tools and their combination comparing contract laws and unfair trade practice laws, leaving competition law outside the picture.We have suggested that current domestic and transnational contract laws present significant shortcomings and that unfair trade practice regulation can complement contract laws to ensure that private regulation of a large number of domestic and transnational contracts are regulated fairly and effectively. In particular, a supply chain approach to unfair commercial practices allows the control of the systemic effects they produce.The enforcement of UTPs along global chains may allow the control over the use of contractual power by chain leaders and lead suppliers to a greater extent than contract law. We have distinguished between prospective and retrospective enforcement. The former prohibits conducts for the future, the latter eliminates the effects of past unlawful behavior. Unlike conventional contract law, still mostly focused on retrospective enforcement, UTP law largely expands the scope of prospective collective enforcement.The enforcement of UTP legislation in global markets is definitively an underdeveloped field of interest in both current legislation and scholarly debate. More and more, administrative authorities and courts will be confronted with the need not only to cooperate for the ascertainment of infringements occurred in cross-border situations but also to coordinate their sanctioning and remedial responses to unfair practices having systemic effects along global value chains, in a way that enhances the effectiveness, proportionality and dissuasiveness of UTP law enforcement. The lessons learnt in the domain of contract and tort laws in transnational contexts will be an important starting point, to which major complements may be offered by a supply chain approach applied to both rules’ definition and their enforcement