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Montesquieu Law Review: Special Issue 6; December 2017

The Reform of French Contract Law

Abstracts:
   

Editorial:
The Spirit of the Reform of French Contract Law
François Ancel, judge at the Tribunal de grande instance, Paris

It is always difficult to fathom the spirit of a law, and all the more so that of an Ordinance where, in accordance with Article 38 of the French Constitution, it is elaborated by the Government and, once legislative authorisation has been granted, does not give rise to parliamentary debate. Nevertheless, the elaboration process for the reform introduced by Ordinance n°2016-131 of 10 February 2016 on the reform of contract law, the general regime of obligations and proof of obligations, intimately linked to the European construct, has left its mark. This can be found by retracing the reasons for and aims of the reform. It also serves to reveal the spirit thereof, which is both liberal and protective, staying true to tradition and yet breaking with it.

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I. The characteristic aspects of the reform

The Contract, Definition and Classifications: Reflections in the Light of the Ordinance of 10 February 2016
Professor Suzanne Lequette, Université de Picardie Jules Verne

Nowadays, the contract refers to a complex reality. Thus ordinary contract law must, as a whole, deal with the diversity of models and offer each the appropriate legal framework. The definition of the contract, together with the presentation of its classifications – inasmuch as they are the keystone of the French contractual system – play a decisive role in this respect. While the definition of the contract must be able to embrace reality as a whole so as to guarantee the unity of ordinary law, the identification of relevant classifications may serve in understanding contractual reality in all its diversity and restoring the necessary precision to ordinary law. While the Ordinance adopted on 10 February 2016 has attempted to renew the definition of the contract and the presentation of its classifications, it must be concluded that the amendments made remain insufficient to restore consistency to ordinary law.


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I. The characteristic aspects of the reform

The creation of a legal theory of the conclusion of the contract
Professor Laura Sautonie-Laguionie
, IRDAP, University of Bordeaux

By creating a section devoted to the conclusion of the contract in the Civil Code, the reform improves the regulation of the entire contractual process. By adopting a progressive approach in the constraints imposed on the negotiating partners, and by refusing to make the offer a unilateral act subject as a consequence to the penalties under contract law, the Civil Code makes a distinction based on whether a preparatory contract is concluded, in order to reserve the principle of binding force to the latter, whereas the pre-contractual period is more the preserve of contractual freedom, within the sole limits of tortious liability.

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I. The characteristic aspects of the reform

The abolition of the cause: a clean slate and new bases for court intervention (standard-form contracts, dependence, error)?
Professor Judith Rochfeld, Sorbonne School of Law, University of Paris I (Panthéon-Sorbonne)

Amongst the particularly significant changes it introduces, the 2016 reform of French contract law has eliminated the notion of cause. Many of its applications, however, are found in various scattered rules. Only certain scenarios remain outside the scope of the reform. We can therefore expect some continuity in judicial solutions. Nevertheless, the emergence of other bases, such as the rules on standard-form contracts or abuse of dependency, which can be used to target factual situations that were once taken into account under the guise of the review of the existence of a cause. It is also necessary to consider the broad concept of error, which can serve to compensate for the reduction in scope of the review of the existence of a "consideration".


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I. The characteristic aspects of the reform

The Search for a Global and Lasting Contractual Balance: the Content of the Contract and the Change of Circumstances
Professor Olivier Deshayes
, University of Cergy-Pontoise

The new French contract law differs from the previous law by the power it gives the courts to review the balance between the rights and obligations of the parties. This is at least suggested by two major innovations: the introduction of a judicial review of the "significant imbalance" and the consecration of a judicial revision or termination of contracts in case of change of circumstances. Is this a revolution? It is argued here that this is not the case.

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I. The characteristic aspects of the reform

Establishing an ordinary law of representation in the Civil Code
Professor Guillaume Wicker, IRDAP, University of Bordeaux

Abstract: Newly instituted in the Civil Code, the ordinary law of representation finds part of its inspiration in the law of agency, but its scope goes far beyond that. Apart from being applicable to all forms of representation, it enshrines a broad conception of the institution, based on the notion of power, which fully integrates imperfect representation. It also resolves undecided issues such as the sanction of misuse of powers and the absence of powers. Finally, it innovates through a framework of conflicts of interest and the introduction of an enquiry procedure concerning the scope of the representative's powers.

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I. The characteristic aspects of the reform

Penalties for contractual non-performance: the art of doing something new with something old, and vice versa
Professor Hélène Boucard, Équipe de recherche en droit privé (EA 1230), University of Poitiers

The new Articles 1217 et seq. of the Civil Code bring together, if not all the rules relative to contractual non-performance, at least those relative to the sanction thereof: defence of non-performance, enforced performance in kind, reduction in price, termination of the contract and, while awaiting the announced reform of civil liability, contractual damages. In their principle, these penalties were already known to the Napoleonic Code, if only in those provisions specific to certain contracts. The innovation therefore lies essentially in their generalisation in ordinary contract law, and concerns the modalities for their implementation. The Ordinance of 10 February 2016 works towards a variable dejudicialisation of those penalties, the courts no longer being seised a priori but rather potentially a posteriori; a prioritisation of those sanctions, which is implicit in the conditions set for their use extended by the powers recognised to the courts ; and, lastly, sketching out the rules for combining the various sanctions.

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I. The characteristic aspects of the reform

The circulation of contracts and obligations: reinforcing the objectification of undertakings?
Professor Valérie Lasserre, Université du Maine

The reform of contract law and the general regime of obligations of 10 February 2016 has given a new place to voluntary assignment, the assignment of debt and the assignment of contract, which all come under a proprietary mechanism that transfers credits, debts or the standing as party to a contract respectively from one collection of assets to another. It would therefore appear that the reinforcement of the circulation of obligations and contracts is part of the objectification of contractual undertakings, in the general vein of the historical development described by E. Gaudemet at the end of the 19th century in his recently republished thesis of 1898: Etude sur le transport de dettes à titre particulier. Nonetheless, despite the reinforcement of a circulation dynamic, personal ties are still taken into consideration, because they are necessarily affected by the assignment. The transfer of an obligation or contract inexorably alters the legal ties uniting a creditor and a debtor. The new rules, far from disregarding the contractual partners, establish a strict framework for the possibility for one party to amend certain aspects of the obligation without the consent of the contractual partner. It is therefore necessary to consider the persistence of personal relations in the circulation of obligations and contracts, after examining the reinforcement of that circulation.

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II. The impacts of the reform

The impact of the reform on economic law
Didier Ferrier, Emeritus Professor, Université de Montpellier

The reform of the law of obligations and contracts inspired by recent developments in economic law, has an effect in turn on the latter by, on the one hand, reinforcing and, on the other, by disrupting it. This reinforcement stems from the new provisions of ordinary law, the application of which may be very useful in relations governed by economic law, and obviously in the new provisions of ordinary law incorporating concepts and measures hitherto specific to economic law by giving them a general scope and hence greater authority. The disruption may, however, result precisely from such borrowings, firstly owing to changes brought to the notions and measures of economic law, the interpretation and application of which may themselves be amended; and secondly owing to competition, which the new ordinary provisions would be capable bringing to similar provisions of economic law which thus risk being marginalised or even eliminated altogether.

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II. The impacts of the reform

Company law and the reform of ordinary contract law
Professor Bernard Saintourens, IRDAP, University of Bordeaux

The adoption of the Ordinance of 10 February 2016, reforming the law of contracts and obligations, placed company law in an unprecedented situation. Until then, reformed from the inside (mainly through frequent changes to the Commercial Code) company law has been affected by the first reform of the ordinary law on contracts of this magnitude since the Civil Code of 1804. This reform, which has obviously not been prepared in consideration of companies, has raised many questions about such essential points as the ability of a company to be validly bound by a legal act or the rules governing its representation in the act. Beyond these questions concerning the contracting company, which it seems possible to answer, the reform can also be considered as bringing more efficiency and security to contracts concluded in connection with a company, be they associates’ agreements or transfers of shares, amendments of which company law practitioners ought to be aware.

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II. The impacts of the reform

The impact of Civil Code reform on administrative contracts
Professor Jean-François Brisson, University of Bordeaux

Based on a concept of combination with public service requirements, administrative contracts maintain “push-pull” relations with the Civil Code as a synallagmatic undertaking. Reception of the Civil Code in administrative case law depends on the needs of the service, the content of the civil law norm concerned and the public law context in which the administration inscribes its action. Depending on the case, it will be for the administrative courts either to reject the Civil Code or to retain it as source of inspiration or even as a directly applicable rule. The freedom of the administrative courts thus corresponds to the Civil Code’s silence with regard to administrative contracts.

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III. International perspectives on the French reform

The Franco-Quebecois paradox of the cause
Honourable Benoît Moore, Justice of the Superior Court of Québec

Unlike French law, the 1994 Civil Code of Quebec retained the notion of cause in its two subjective and objective senses. This decision had been the subject of prior debate, with some proposing not to retain it on the grounds that it was not useful in Quebec law. Despite this, the cause was retained but the courts continue to neglect giving the concept any real function. There is therefore an interesting paradox: French law, whilst retaining its functions, has decided to abandon the cause on the grounds, inter alia, that it was a dangerous tool allowing the courts to intercede in the contract; while Quebec law has retained this notion when it is, for all practical purposes, devoid of any function other than purely formal.

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III. International perspectives on the French reform

The reform of French contract law – a German perspective
Professor Reiner Schulze, Centre for European Private Law, University of Münster

The reforms to the German and French law of obligations have made changes in several key respects. Such changes follow international tendencies as outlined by the CISG from 1980 and which were transferred to European level by the ‘Principles of European Contract Law’. As a result, the law of contract in each country have converged in some instances (e.g. with regard to the requirements for conclusion of contract and the structure of remedies for non-conforming performance). Principle structural distinctions still remain due to the inclusion in the respective national system and new legislation places different emphases, yet the potential for mutual inspiration between the French and German law of obligations has increased considerably. This is shown, for example, by the new French provisions on pre-contractual information duties and on price reduction, which are notable for the future development of German law. Furthermore, the example of the new provisions on modification of the contract due to a change of circumstances allows for the possibility for the courts to use the other’s experience as part of a ‘comparative interpretation’.

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III. International perspectives on the French reform

The Romanian perspective on the new French contract law
Professor Razvan Dinca, Vice-Dean of the Faculty of Law, University of Bucharest

Romanian legal history testifies to a specific vocation for French law: to serve as a guide in the development of national laws which, all around the world, are related to France’s legal culture. To that end, this study examines how this French vocation transcends the time of the recodification of contract law, comparing the French reform with the Romanian, the latter preceding the former by several years. The conclusion is conflicting. Born of the same tradition and facing similar challenges such as new technologies or competition from the Anglo-American model, the respective reforms either yield similar solutions or adopt opposing positions on points of resistance or receptivity.

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