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THE NEW FRENCH LAW OF CONTRACT

  • Solène Rowan (a1)

Abstract

The article analyses the recent reform of contract law in France. The section of the Civil Code on the law of contract was amended and restructured in its entirety last year. The revised section came into force on 1 October 2016. The article considers its main innovations and compares them with the corresponding principles of English law and some contract law international instruments, mainly the UNIDROIT Principles and the Principles of European Contract Law. The article also assesses whether the new provisions achieve their stated aim of rendering French contract law more accessible, predictable, influential abroad and commercially attractive.

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1 de Montholon, C-F, Récits de la captivité de l'Empereur Napoléon à Sainte-Hélène (Paulin 1847) 401 .

2 Ordonnance no 2016-131 du 10 février 2016 portant réforme du droit des contrats, du régime général et de la preuve des obligations, JORF no 0035 of 11 February 2016. The Ordonnance was translated by John Cartwright, Bénédicte Fauvarque-Cosson and Simon Whittaker: <http://www.textes.justice.gouv.fr/art_pix/THE-LAW-OF-CONTRACT-2-5-16.pdf>. Many of the translations of the new articles used in this paper are based on their excellent work.

3 Arts 1101–1231–7 directly regulate contracts but there have also been reforms in other areas (the ‘general legal regime of obligations’ and the ‘proof of obligations’) and in total 353 new articles have been introduced. The focus of this article is solely on the new contract law rules.

4 Ministerial Res No 0300-2016-JUS of 17 October 2016.

5 JEM Portalis, ‘Discours préliminaire du premier projet de Code civil’ in Fenet, PA, Receuil complet de travaux preparatoires du Code civil (Vidocq 1836).

6 One example is the extension by the courts of the principle in art 1134 of the 1804 Code that contracts should be performed in good faith to the pre-contractual negotiation, formation and termination stages. Another is the primacy given by the courts to specific performance and their restrictive interpretation of art 1142 of the 1804 Code, which emphasized damages to the exclusion of other remedies. The courts were also particularly creative in using ‘la cause’ to interfere with contracts and promote what they perceived to be fair.

7 For a detailed account of the process of ‘codification, decodification and recodification’ of French private law, see Vogenauer, S, ‘The Avant-projet de rforme: an Overview’ in Cartwright, J, Vogenauer, S and Whittaker, S (eds), Reforming the French Law of Obligations, Comparative Reflections on the Avant-Projet de Réforme du Droit des Obligations et de la Prescription (Hart 2009) 47 .

8 On the ‘extraordinary influence’ of the Civil Code in the world, see Zweigert, K and Kötz, H, An Introduction to Comparative Law (3rd edn, Oxford University Press 1998) 98 .

9 Vogenauer (n 7) 7.

10 ibid.

11 Fauvarque-Cosson, B and Patris-Godechot, S, Le code civil face à son destin (La Documentation Française 2006) 89 .

12 See European Parliament Res A2-157/89 and Res A3-0329/94.

13 COM (2001) 398 final.

14 Fauvarque-Cosson and Patris-Godechot (n 11).

15 See the publication of the Draft Common Frame of Reference in 2008 and the Common European Sales Law proposals COM/2011.0635 that were abandoned by the European Commission.

16 ‘Doing Business in 2004: Understanding Regulation’ (World Bank and Oxford University Press 2003; ‘Doing Business in 2005: Removing Obstacles to Growth’ (World Bank and Oxford University Press 2004); ‘Doing Business in 2006: Creating Jobs’ (World Bank and Oxford University Press 2005).

17 See Fauvarque-Cosson and Patris-Godechot (n 11) 152–7.

18 ibid.

19 Avant-Projet de Réforme du Droit des Obligations (Art 1101 à 1386 du Code civil) et du Droit de la Prescription (Art 2234 à 2281 du Code Civil) under the direction of P Catala, 22 Sept 2005 (Documentation française 2006) translated in English by John Cartwright and Simon Whittaker <http://www.justice.gouv.fr/art_pix/rapportcatatla0905-anglais.pdf>.

20 Vogenauer (n 7) 17.

21 Ministère de la Justice, Projet de réforme du droit des contrats, July 2008. A new version was drafted in 2009. See also Terré, F, Pour une reforme du droit des contrats (Dalloz 2008).

22 See Christiane Taubira's intervention in Parliament on 16 April 2014 <https://www.youtube.com/watch?v=OFrpvFh-I4s>.

23 The Conseil Constitutionnel was asked by members of the Senate to review the constitutionality of giving the government authority to legislate on such an important topic without parliamentary debate. The Conseil Constitutionnel held that the authority complied with art 38 of the Constitution, which allows the government to legislate by decree in certain circumstances; it was limited and had clear and precise goals. See its Dec No 2015-510 DC of 12 February 2015.

24 Projet d'Ordonnance portant réforme du droit des contrats, du régime général et de la preuve des obligations published on 25 February 2015.

25 Ordonnance no 2016-131 du 10 février 2016 portant réforme du droit des contrats, du régime général et de la preuve des obligations, JORF no 0035 of 11 February 2016.

26 Rapport au Président de la République relatif à l'Ordonnance no 2016–131 du 10 février 2016 portant réforme du droit des contrats, du régime général et de la preuve des obligations, JORF no 0035 of 11 February 2016.

27 ibid.

28 ibid.

29 ibid.

30 Art 1100 to art 1303-4 of the Civil Code.

31 Art 1304 to art 1352-9 of the Civil Code.

32 Art 1353 to 1386-1 of the Civil Code.

33 Rapport au Président (n 26).

34 It was implied from an interpretation a contrario of art 6 of the 1804 Code.

35 Convention’ has been replaced by ‘contrat’.

36 Rowan, S, Remedies for Breach of Contract: A Comparative Analysis of the Protection of Performance (Oxford University Press 2012) 4950 .

37 Court of Appeal of Poitiers, 1st Civ Chamber, 4 July 2006, Juris-data no 2006-313835.

38 Civ (3) 29 April 1987 RTD civ 1987.536 note J Mestre; Civ (3) 3 June 1992, GP 1992.II.656 note J-P Barbier.

39 Civ (1) 31 Jan 1995, D 1995.389 note C Jamin.

40 Com 20 oct 1998, Bull civ IV, no 244; Com 8 March 2005, Bull civ IV, no 44. On the ‘duty of loyalty’ and the ‘duty of co-operation’, see Bell, J, Boyron, S, and Whittaker, S, Principles of French Law (2nd edn, Oxford University Press 2008) 332–4.

41 Art 1.1 of the UNIDROIT Principles (freedom of contract); art 1.3 of the UNIDROIT Principles (binding force of contract); art 1.7 of the UNIDROIT Principles (good faith); art 1:201 PECL (Good faith);

42 For a summary of English law on this point, see Beale, H (ed), Chitty on Contracts (32nd edn, Sweet & Maxwell 2015) [1:039]–[1:054A].

43 Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433, 439 (Bingham LJ).

44 Walford v Miles [1992] 2 AC 128, 138 (Lord Ackner).

45 Chantepie, G and Latina, M, La réforme du droit des obligations, Commentaire théorique et pratique dans l'ordre du Code civil (Dalloz 2016) 139 .

46 The Ordonnance was officially translated by John Cartwright, Bénédicte Fauvarque-Cosson, and Simon Whittaker <http://www.textes.justice.gouv.fr/art_pix/THE-LAW-OF-CONTRACT-2-5-16.pdf>. The translations of the new articles used in this article are not gender-neutral so as to follow the style used in their work.

47 See art 1137 of the Civil Code (réticence dolosive).

48 Rapport au Président (n 26).

49 Benabent, A, Droit civil, Les obligations (12th edn, Montchrestien 2010) [279]–[285]; Deshayes, O, Genicon, T and Laithier, Y-M, Réforme du droit des contrats, du régime général et de la preuve des obligations, Commentaire article par article (LexisNexis 2016) 79 .

50 See art 3.2.5 of the UNIDROIT Principles and art 4:107 of the Principles of European Contract Law, which require that a party discloses information where non-disclosure would otherwise amount to fraud.

51 [2012] 1 WLR 472 at [92].

52 eg contracts of utmost good faith, such as insurance contracts.

53 eg if the parties negotiating the contract are in a partnership.

54 H Beale, ‘La réforme du droit Français des contrats et le “droit européen des contrats”: perspective de la Law Commission anglaise’ RDC 2006.146.

55 Arts 1131–1133 of the 1804 Civil Code.

56 Bell, Boyron and Whittaker (n 40) 317.

57 See the well-known Chronopost decision: Com 22 Oct 1996, D 1997.121 note A Sériaux; Com 30 May 2006, D 2006.1599 note X Delpech and D Mazeaud.

58 See the well-known Video cassette decision: Civ (1) 3 July 1996, D 1997.500 note P Reigné.

59 Deshayes, Genicon and Laithier (n 48) 171.

60 Rapport au Président (n 26).

61 T Genicon, ‘Défence et illustration de la cause en droit des contrats – à propos du projet de reforme du droit des contrats, du régime général et de la preuve des obligations’ D 2015.1551.

62 R Boffa, ‘Juste cause (et injuste clause)’ D 2015.335

63 Contra Genicon (n 61).

64 Arts 1371, 1385, 1410, and 1411 of the Quebec Civil Code.

65 Arts 1325 and 1343–1345 of the Codice Civile.

66 Markesinis, B, ‘ Cause and Consideration: a Study in Parallel37(1) CLJ 53 .

67 Bell, Boyron and Whittaker (n 40) 321-2.

68 [1980] AC 827, 844-7 (Lord Wilberforce).

69 Arts 1152 and 1231 of the 1804 Code; Art L442-6-I-2 of the Commercial Code.

70 Consumers are protected by the Consumer Rights Act 2015.

71 See the protection provided by the Unfair Contract Terms Act 1977.

72 See Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Ltd v Beavis [2016] AC 1172 (SC); it is also not possible to exclude liability for one's own fraud.

73 [1997] AC 514 (PC).

74 ibid at 518.

75 Translation by Cartwright et al. (n 2).

76 Civ 6 March 1876, 1876.1.193 noted by A Giboulot.

77 P Stoffel-Munck, ‘L'imprévision et la réforme des effets du contrat’, RCD Hors-Série 2016.30.

78 Soc 25 Feb 1992, D 1992.390 noted by M Defossez; Com 29 June 2010, RDC 2011.1.34 noted by E Savaux.

79 Para 313(1) of the BGB; art 1467 of the Italian Civil Code.

80 Art 6.2.2 of the UNIDROIT Principles.

81 Art 6:111 of the Principles of European Contract Law.

82 McKendrick, E, Contract Law, Text, Cases, and Materials (7th edn, Oxford University Press 2016) 740–2.

83 Art 1142 of 1804 Code.

84 Rowan (n 36) 37–52.

85 Civ (3) 11 May 2005, RDC 2005.323 note D Mazeaud.

86 Civ (3) 17 Jan 1984, RTD civ 1984.711.

87 Rapport au Président (n 26).

88 Chantepie and Latina (n 45) 546–54; Deshayes, Genicon and Laithier (n 48) 485–8.

89 Art 7.2.2 of the UNIDROIT Principles.

90 Art 9:102 of the Principles of European Contract Law.

91 Wedgwood v Adams (1843) 49 ER 958.

92 Tito v Waddell (No 2) [1977] Ch 106 325–8 (Megarry VC).

93 [1996] AC 344 (HL).

94 Art 1184 of the 1804 Code.

95 One exception was where the contract included a termination clause. Another exception was where the breach was so serious (comportement grave) that continuation of the contract was extremely difficult or impossible: Civ (1) 13 Oct 1998, Bull civ I no 300, D 1999.198 note C Jamin; see Rowan (n 36) 80–94.

96 Rochfeld, J, ‘Résolution et exception d'inexécution’ in Rémy-Corlay, P and Fenouillet, D (eds), Les concepts contractuels français à l'heure des Principes du droit européen des contrats (Dalloz 2003) 216 .

97 Introductory comments of Rochfeld in Avant-Projet de Réforme du Droit des Obligations (Art 1101 à 1386 du Code civil) et du Droit de la Prescription (Art 2234 à 2281 du Code Civil) under the direction of P Catala, 22 Sept 2005 (Documentation française 2006).

98 R Cassin, ‘Réflexions sur la résolution judiciaire des contrats pour inexécution’ RTD civ 1945.12, [2].

99 Rapport au Président (n 26).

100 Except where there is urgency: art 1226 of the Civil Code.

101 For a statutory exception, see section 90 of the Consumer Credit Act 1974.

102 Vitol SA v Norelf Ltd (the ‘Santa Clara’) [1996] AC 800 (HL) (Lord Steyn).

103 James Spencer Co Ltd v Tame Valley Padding Co Ltd (CA, 8 April 1998); SNCB Holding v UBS AG [2012] EWHC 2044 (Comm); [2012] All ER (D) 259 [73] (Cooke J).

104 See the exceptions mentioned to this general principle in Rowan, S, ‘Resisting Termination: Some Comparative Observations’ in Dyson, A, Goudkamp, J and Wilmot-Smith, F (eds), Defences in Contract (Hart 2017) 163 . See also Whittaker, S, ‘A Period of Grace for Contractual Performance?’ in Andenas, M et al. (eds), Liber Amicorum Guido Alpa, Private Law Beyond the National Systems (BIICL 2007) 1083 . For examples of statutory exceptions, see the Law Property Act 1925, section 146; the Consumer Credit Act 1974, sections 76, 87 and 98.

105 Art 7.3.2 of the UNIDROIT Principles.

106 Art 9.303 of the Principles of European Contract Law.

107 Art 7.1.5 of the UNIDROIT Principles and art 8.106 of the Principles of European Contract Law.

108 Schelhaas, H, ‘Commentary on article 7.1 of the UNIDROIT Principles’ in Vogenauer, S (ed), Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd edn, Oxford University Press 2015).

109 See art 7.1.4 of the UNIDROIT Principles and art 8.104 of Principles of European Contract Law.

110 An example is the law on termination, which had little coverage in the 1804 Civil Code. The absence of a comprehensive termination regime meant that termination principles developed mainly in the cases, with solutions that were not always coherent and predictable. The Ordonnance has introduced a comprehensive termination regime and there is now less need to rely on case law. Similarly, the 1804 Code did not contain a single article on the formation of contracts, which was dealt with only by judge-made rules. The Ordonnance has introduced 15 new articles that regulate this area, rendering the case law less important.

111 Although note the various texts that attempt to ‘restate’ English law using a series of propositions or statements of principles, eg Andrews, N, Contract Rules, Decoding English Law (Intersentia 2016).

112 On the role of the courts and the authority of case law in civil law, see Bell, J, French Legal Culture (Butterworths Lexis 2001) 6672 .

113 Statistics of the Cour de cassation: <https://www.courdecassation.fr/IMG///CC-STATISTIQUES-2015.pdf>.

114 Rapport au Président (n 26). See the article by J Cartwright ‘Un regard anglais sur les forces et faiblesses du droit français des contrats’ RDC 2015.691.

115 Cartwright (n 114) 289.

116 ibid.

117 Mestre, J, ‘Préface’ to Fages, B, Le comportement du contractant (PUAM 1997).

118 Stoffel-Munck (n 77)

119 Art 6.2.2 UNIDROIT Principles.

120 Art 7.3.1 of the UNIDROIT Principles and art 8.103 of the Principles of European Contract Law.

121 Whittaker, S, ‘How Does French Law Deal with Anticipatory Breaches of Contract?45 (1996) ICLQ 662 .

122 Art 111 of the Terré Project (n 20); Art 169 of the Ministry of Justice reform project 2008 (n 20).

123 Official report of the session of 23 January 2014 in the Sénat <https://www.senat.fr/seances/s201401/s20140123/s20140123014.html>.

124 Avant-Projet de Loi, Réforme de la responsabilité civile <http://www.textes.justice.gouv.fr/art_pix/avpjl-responsabilite-civile.pdf>.

125 Projet de réforme de la responsabilité civile of 13 March 2017 <http://www.justice.gouv.fr/publication/Projet_de_reforme_de_la_responsabilite_civile_13032017.pdf>.

126 For example, the introduction of a form of mitigation (proposed art 1263) and an ‘amende civile’ which is akin to punitive damages (proposed art 1266-1).

My thanks go to Gregg Rowan for his comments and suggestions on an earlier draft.

Keywords

THE NEW FRENCH LAW OF CONTRACT

  • Solène Rowan (a1)

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