Non-compliance with Government Contract Terms: A Comparative View on Procurement Regulation and Contractual Remedies

In EU public procurement law, there is a regulatory vacuum of non-compliance with contract terms and the legal consequences. The matter becomes even more complex when considering the largely undefined relationship between illegal modifications and non-compliance. This Chapter aims to bring those issues afore and compares different national approaches to non-compliance and its remedies, including Germany and Austria, France, the UK, Spain, Italy, Denmark, Finland, Romania, and Poland. For a better overview, this Chapter provides summary tables of the different EU and national remedies to illegal modifications and non-compliance, including the scope and effects of the two most common remedies contract termination and ineffectiveness. The comparative legal analysis shows that non-compliance is neither regulated in the EU Directives nor in most national public procurement codes (with three exceptions: Denmark, Spain, and Italy). While there is some CJEU case law on identifying and remedying illegal contract modifications (like the Finn-Frogne ruling), there is no guidance from EU courts on non-compliance and its legal consequences. Most Member States treat non-compliance with the public contract as part of private contract law that falls under the general jurisdiction of civil courts. Hence, the national regulatory and judicial approaches to non-compliance with the public contract are as multifarious as the number of Member States, and therefore far from being harmonized across the EU. By comparing and categorizing the different national approaches and remedies to illegal modifications and non-compliance, this Chapter aims to bring more light into the dark side of contract changes under EU law.