Sustainable supply chains - contracts and liability

RQ1) How should the treaty obligations concerning sustainability, which delineate the scope of CSDDD, be understood in a private law context?

The directive refers to several international treaties in delineating its scope. However, these treaties are aimed at regulating the relationships between states and the question is how they should be understood when applied to private actors in a supply chain.

RQ2) How can contracts be used as a tool to live up to the requirements under the CSDDD?

The directive is based on the idea of long-term contracts as a central steering instrument to achieve sustainability goals in the supply chain. This contrasts with the traditional idea of contracts as a commercial tool. Furthermore, under the directive, contracts with SMEs must be ‘fair, just and reasonable’. It is unclear what this requirement entails, and to which extent contractual solutions aiming to further third-party interests can also be enforced by third parties, i.e., the victims of non-sustainable practices. Finally, the CSDDD requires Member States to ensure that businesses can suspend or terminate a business relationship if necessary. This may extend beyond traditional contract law sanctions, raising the question of how national contract laws will align with the CSDDD.

RQ3) Under which conditions can a private company and board members incur liability for not living up to the requirements in the CSDDD?

This research question deals with the question whether companies can incur liability for not living up to the due diligence requirements. It covers several issues regarding e.g., the basis of liability, contributory negligence, causation, the impact of contractual solutions on liability and the relationship between corporate governance models and liability, including liability of board members.