Archives de Tag: French Contract Law

mai 31, 2015 · 3:29

French Contract Law : what is going to change ?

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.

 Bruno DONDERO

Professor at Paris 1 Panthéon – Sorbonne University

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juin 24, 2014 · 1:42

Des nouvelles de la réforme du droit des contrats: « je vais bien, mais je n’arrive pas tout de suite! »

Elle est passée par ici, elle repassera par là… Ou bien « now you see it, now you don’t ».

Pour ceux qui s’inquiètent, et se prennent à penser que notre droit des contrats ne sera jamais réformé, juste un point d’étape.

Pour rappel, un projet de loi prévoyait que le gouvernement serait habilité à réformer par voie d’ordonnance, entre autre, le droit des contrats. L’article relatif au droit des contrats avait été supprimé par le Sénat, mais rétabli par l’Assemblée nationale. https://brunodondero.wordpress.com/2014/04/21/reforme-du-droit-des-contrats-par-ordonnance-le-retour/

Dans cette situation, la procédure parlementaire prévoit qu’une commission mixte paritaire (CMP), regroupant des députés et des sénateurs se réunit. Cette CMP n’a pu parvenir à un accord. Le site du Sénat indique: Réunie le mardi 13 mai 2014, la commission mixte paritaire a constaté ne pouvoir parvenir à élaborer un texte commun sur les dispositions restant en discussion du projet de loi relatif à la modernisation et à la simplification du droit et des procédures dans les domaines de la justice et des affaires intérieures.

Conformément à ce que prévoit l’art. 45 de la Constitution: Si la commission mixte ne parvient pas à l’adoption d’un texte commun ou si ce texte n’est pas adopté dans les conditions prévues à l’alinéa précédent, le Gouvernement peut, après une nouvelle lecture par l’Assemblée nationale et par le Sénat, demander à l’Assemblée nationale de statuer définitivement. En ce cas, l’Assemblée nationale peut reprendre soit le texte élaboré par la commission mixte, soit le dernier texte voté par elle, modifié le cas échéant par un ou plusieurs des amendements adoptés par le Sénat.

C’est donc l’Assemblée nationale, et le parti des « pro-réforme du droit des contrats par voie d’ordonnance » qui devraient l’emporter. Mais la route est encore longue, avant d’arriver à la loi d’habilitation, qui elle-même débouchera sur une ordonnance… après un certain temps. Le projet de loi contient rappelons-le un article 16 relatif aux délais de « réalisation » de la loi. Il est prévu que « I. Les ordonnances prévues par la présente loi doivent être prises dans un délai de (…) 3° Douze mois à compter de la publication de la présente loi en ce qui concerne (…) l’article 3 [relatif au droit des contrats]« .

Ce même article 16 prévoit en un II que « Pour chaque ordonnance prévue par la présente loi, un projet de loi de ratification est déposé devant le Parlement« . Ce texte prévoit différents délais, dont un de « six mois à compter de sa publication en ce qui concerne le I des articles 1er, 2 et 3« . Or l’article 3, relatif au droit des contrats, ne comporte pas de I, ni de II ou de III… Bref, encore un peu de travail, y compris de forme…

Bruno Dondero

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mars 15, 2014 · 6:15

A quick introduction to French Contract Law (4): Revision project, conclusion

French Contract Law is a quite old field of law, considerably rich from an intellectual standpoint. It is interesting to point out some of its basic features to non-French lawyers, students and scholars.

 

Revision project and conclusion

A revision project of the French Contract Law has been in discussion for some years now, specifically in order to integrate case law solutions. Case law solutions are generally known, but it would be useful to bring them to the general knowledge in a clearer way through inserting them into the articles of the Code civil.

It is interesting to see how French Law, which is a continental system of law traditionally seen as based on Codes, gives in fact great authority to case law in the field of Contract Law.

It must also be said that Contract Law, as it results from the Code civil, is the general legislation that applies to parties in a situation of equality. Specific bodies of Law also apply to particular situations. For instance, a contract concluded between a consumer or a non-professional and a professional will also be regulated by specific rules included the Code de la consommation.

 

By Bruno DONDERO,

professor at Paris 1 Panthéon – Sorbonne University

bruno.dondero@univ-paris1.fr

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mars 15, 2014 · 6:11

A quick introduction to French Contract Law (3): enforceability, role of the judge

French Contract Law is a quite old field of law, considerably rich from an intellectual standpoint. It is interesting to point out some of its basic features to non-French lawyers, students and scholars.

 

Enforceability

The contract is binding upon the parties, by the mere fact that it exists. However, the contracting parties may strengthen their commitments with some specific clauses. For instance, a penalty clause or a cancellation clause can be inserted in the contract.

The penalty clause provides for an amount of money to be paid by the debtor when he/she doesn’t perform its obligations, or when he/she does it improperly. This amount of money corresponds to the compensation for the damage caused by said non-performance. In case such provision is not inserted, the judge shall assess the damage by himself/herself. In case a penalty clause is provided, the judge can reduce the amount when it appears to be clearly excessive – this remains an exceptional situation where the judge can modify the contract.

The cancellation clause provides that the contract will be terminated in the event that one of the parties doesn’t perform its obligations, of if another event takes place, as set forth by the parties.

Role of the judge

The French judge can be requested by one of the parties to enforce the contract. In doing so, the judge frequently has to interpret the contract. Interpretation can lead the judge to add some obligations into it.

The judge can also be requested to cancel the contract, or to declare one or several clauses invalid. In the case of partial cancellation, the contract can still be valid, apart from the invalid clauses, or it can be totally cancelled.

As a rule, the judge cannot modify the contract to restore balance in the contractual relationship.

 

By Bruno DONDERO,

professor at Paris 1 Panthéon – Sorbonne University

bruno.dondero@univ-paris1.fr

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mars 15, 2014 · 6:06

A quick introduction to French Contract Law (2): autonomy of willingness, creation of the contract, proof, cancellation

French Contract Law is a quite old field of law, considerably rich from an intellectual standpoint. It is interesting to point out some of its basic features to non-French lawyers, students and scholars.

 

 

 

Autonomy of willingness

Among French Contract Law principles, a very important one is the principle of autonomy of willingness (théorie de l’autonomie de la volonté). Basically, it means that it is through their willingness that the contracting parties are bound to a contract. Even if the Law also matters, the Civil code provides that the “agreements lawfully entered into take the place of the law for those who have made them” (article 1134, one of the most important provisions of French Law. Therefore, as a rule, contracting parties cannot terminate a contract unless they all agree to its termination.

Creation of the contract and proof

Several important rules are deduced from the principle of autonomy of willingness. One of them is the principle of consensualisme. It means that as a rule, it is enough to agree on the essential points of the contract to consider it as legally constituted. For instance, a sale contract is achieved by means of the sole agreement on the identity of the good and the price. The delivery of the good and the payment of the price are obligations arising from the contract, which therefore comes into being before the delivery of the good to the buyer and the payment of the price.

That said, in practice, we quite often put an act in writing, for two reasons.

First, the French law requires a written act for certain contracts to be legally constituted.

Secondly, a written act is frequently requested in order to comply with proof issues. Indeed, above 1,500 euros, French law requires as a rule a written document signed by the contracting parties. In case there is no written document, it is generally not possible to prove the existence of the contract, except if special circumstances exist, as for instance: moral impossibility as a justification for not requiring a written document (for instance a contract concluded between members of the same family, etc.) or an incomplete written contract.

There is also the peculiar situation where one of the contracting parties is a merchant or a commercial legal person (partnership or corporation), and the contract is related to the business of that party. In that case, the principle is the freedom of proof. That is to say that the existence of the contract can be established in court even without a written document from the contracting parties; when making its decision about the existence of the contract, the judge will make up his/her mind on the basis of factual elements brought by the contracting parties, such as letters or e-mails.

 

Importance of consent and cancellation

The willingness of the contracting parties and their consent to the contract are particularly important under French Contract Law. This explains why the contract can be canceled if the consent was irregularly granted. If a party deceives the other or behaves with violence in order to oblige the other to sign the contract, and even when a contracting party got it wrong on his/her own about the deal, the contract can be canceled. It shall be noted that French Law requires the judge’s intervention to cancel a contract.

When a contract is canceled, it is deprived of effect for the future. As for the past, the ex-contracting parties shall be put back in the position they were in before concluding the contract, which may imply refunds.

By Bruno DONDERO,

professor at Paris 1 Panthéon – Sorbonne University

bruno.dondero@univ-paris1.fr

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