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The 2015 Reformation of French Contractual Law: to secure and preserve contractual relations

Home > French Business Law | Published 2015-10-15

280 articles regarding contract law have not been modified since 1804, the year of the elaboration of Civil Code, and yet contractual law is the pedestal upon which all relations between individuals, professionals, and professionals and individuals is governed. Finally, the government decided after 10 years of waiting that it was the time to launch reforms so that France could regain its influence and relevance in Europe on an international scale. Therefore, Picovschi Lawyers wish inform you of the different objectives of the project.

The steps of the 2015 Project for Contractual Reform

The Contract Reform Project is part of more general “Justice of Reform of the 21st century” project, directed by “Keeper of the Seals,” Christiane Taubira. Her principal objective is to bring legal security to all contractual operations in codifying the jurisprudential advances that are adapted by societal evolution and by ongoing change.

The project was put online by the government so that those surfing the web could bring their contributions and formulate their own suggestions for the project. This phase of consultation ended April 30, 2015 and left in its place a period for consultation between experts. The government decided to legislate by ordinance, which means that that they obtained Parliamentary authorization to legislate without debating details of the text, in favor of a general direction. Conforming to article 38 of the Constitution according to the ratification of ordinances, the project of law ratification will be filed before Parliament to ratify the ordinance, giving it legislative value.

The Objectives followed by the 2015 Contractual Reform Project

The principal objectives governing this reform project share a general goal of legal security.

Firstly, the principal of consent is reinforced. This fundamental principal of contract law signifies that the during the formation of the contract the parties are in agreement. Article 1108 of Civil Code poses four conditions for validating contracts, these being the consent of parties, their ability to contract, a certain object and a legal cause. Concerning consent, article 1109 of Civil Code states that a contract cannot be valid if it was given in error, extorted by violence, or by fraud.

The reform project intends to insert a new cause for the nullity of a contract with the idea of “economic violence.” If a person is found abusing the state of necessity, it would constitute vice of consent and consequently would be a reason for the nullity of a contract.

Secondly, the reform intends to respond to the need for predictability. Extensive case law related to this in alignment with economic evolutions, necessitate that it should be established by law that one can not be opposed by the inviolability of the contractual agreement. The introduction of a clause of lack of predictability into Civil Code should be released. It authorizes the renegotiation of contracts if all parties are in agreement, until an unseen change in circumstances brings upon unpredictable changes, leaving the execution of a contract impossible. In administrative law since March 30 1916 by the judgment of the General Lighting Company of Bordeaux, the theory of predictability has been long accepted in administrative contracts.

The third reform aims to reinforce the equilibrium in contractual relations by protecting the weaker party if necessary, through inserting the prohibition of unfair terms within Civil Code. This being for the civil right to know the prohibitions that already exist in commerce law, in commercial law, but also in law of our British and German co-patriots. Article L132-1 of Commercial Code thus considers clauses as abusive that have the object or effect to create, within contracts concluded between professionals and non-professionals or consumers at the detriment of the latter, a significant disequilibrium between the rights and obligations of the parties of the contracts.

The reform of contractual law has long been under project, but it seems that after waiting ten years, 2015 will be the year to put change in place. Our law firm obtains all jurisprudential and legislative news present and future so that we can give well informed advice to our clients. Contractual agreements are at the heart of our daily work and the life of a business in general, and so it is finally time that the law takes into account all the evolutions of business by reforming contractual law.

This article is available online for public information purposes. It is updated regularly, as needed. Due to the constant evolution of the laws and the legal system, we cannot guarantee that the information in this article is still applicable. We invite you to contact us with any legal questions or concerns you have regarding this topic at +33 1 56 79 11 00. In no way can this firm be held liable for articles that contain inaccuracies or are now out of date.

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