Laws on contracts are set by individual member states in the European Union (EU). However, the EU has harmonised some aspects of contract law across the whole of the European Community. In addition, some EU legislation affects contract law because it takes precedence over national laws.
If you deal with a business in another EU country, there is a choice about where you make the contract - ie, under which jurisdiction you agree the terms. Alternatively, the EU has produced a standard contract. This is called the "Principles of European Contract Law". You can include these the terms in any EU contract if both sides agree to it.