Some time ago, I put on this blog some basic informations about French Contract Law, in four posts (the first of them is here).
In February 2015, a law was voted by the French Parliament, which allowed the Government to enact a reform of our Contract Law.
The February 2015 Act leaves until February 2016 for enacting the ordinance that will set forth the revised Contract Law.
It is already possible to give a quick look at what will be the revised French Contract Law, as opposed to what it is today.
I – French Contract Law as of today
In 1804, the Code civil has set forth the core of Contract Law, the rules that apply to every contract (i.e. how does a contract come into existence and under which conditions, and how it is executed, modified and terminated).
Such rules were left almost unchanged for more than two centuries, except for two major adjunctions:
1) During all that time, French courts were very prolific and even if there is no formal rule of precedent in our legal system, the Code civil provisions have been enriched by our judges, who built coherent adjunctions to the texts written in 1804. It must be said that their work was generally useful and well-thought. For instance, essential rules about precontractual negotiations were issued by our judges, who set forth that as a rule of principle, you can walk away from the negotiations as long as the parties do not agree on closing the contract, but a party that allows precontractual discussions to go on without telling the other that he/she has no intention of closing the contract can be liable to the other party.
2) After the Code civil was passed, specific bodies of rules were enacted, generally aiming at protecting a weaker party, from a structural point of view. The best examples are Labor Law and Consumer Law which today have their own body of texts and case law, and their own logic, but each of these branches of law is based on general contract Law and therefore on the Code civil.
II – French Contract Law from now on.
Two elements give us some clues about what the revised French Contract Law will be, because the February 2015 act contained some indicatory provisions, and because our Ministry of Justice submitted a project to a public consultation.
The three trends that I identified in the project can be synthetized as follows: security, clarification, and protection.
1) The revised Contract Law project brings more security to the parties, notably by consecrating in the Code civil solutions that were created by the courts, and useful ones, like the precontractual negotiations rules, hence protecting such solutions from a change in case law. At the same time, case law solutions viewed as bad for the business are clearly rejected by the legislator, like the insufficient protection given to the promise to enter a contract.
2) The project also brings clarification, by setting forth some principles, which were until now only expressed by the courts and the legal literature. For instance, formal recognition is given to the freedom of entering a contract. The notion of cause, which is at the same time the consideration and the reason why a party enters a contract is suppressed, even if the concrete solutions based on that notion are kept onboard (like the possibility to set aside a clause that contradicts a debtor’s essential obligation).
3) Finally, the project means to give better protection to the weakest party, and that could be criticized. For instance, a legal hardship provision will be introduced, allowing a party who has to face increased costs of contract execution, due to a change in the economic context, to ask for a renegotiation… if such party did not waive that possibility in the contract. Such legal protection is not absurd, but it is a subject that is already addressed (i) by specific bodies of law, like Consumer Law, (ii) by French bankruptcy Act, and possibly (iii) by contractual provisions.
Professor at Paris 1 Panthéon – Sorbonne University