Volume 13, Issue 4

This paper provides an overview of the political process which led to the adoption of one of the most important reforms of the Code civil since 1804. This major revision of the French Code civil took place by way of an ‘ordonnance’ (delegated legislation). That, in itself, was highly controversial. As regards substance, the most controversial points related to the need to strike a new balance between contractual justice and legal certainty in French contract law to make it better suited to economic and social life in the twenty-first century. The French contract law reform began at the instigation of President Chirac, was continued under Sarkozy’s presidency and was finally completed while François Hollande was the President of France. This background might suggest that, from a political standpoint, the new provisions of the Code civil successfully struck the right balance between legal certainty and contractual justice; if only political life were so simple. As will be shown in the second part of this paper, many questions remain open. The first part recounts the story behind the reform, from its origins to its completion. The second part gives some further insight into some emblematic new provisions of the Code civil.

Since their enactment in 1804 as part of the French civil Code, the provisions relating to contract law had, until recently, remained almost untouched. That is not to say that the law of contract had not altered, but rather that the text of the Code was no longer an accurate reflection of the actual state of the law as interpreted by the courts. An extensively restructured and modernized version came into force on 1st October 2016. In an attempt to map the new French law of contract, this paper first seeks to evaluate the robustness of the guiding principles set out in the Code. By analysing how these principles are applied to the formation, interpretation and enforcement of contracts, the paper concludes that freedom of contract and good faith emerge strengthened by the reforms, while the binding force of contract has become more qualified. The paper also highlights the existence of less obvious but important trends relating to the parties’ behaviour and to the role of the judge. It demonstrates how unilateralism, anticipation, and equity are implicit core ideas lying behind many of the new rules.

The recent reform of French law of contract consecrates and indeed reinforces those mechanisms designed to protect weaker parties that had been recognized progressively by the courts. This is not to say that the brief for contractual justice is now exhausted. Many questions have arisen that are not dealt with by the new legislation, but nor are they by the law of other Member States of the European Union, or indeed by the Common Frame of Reference. Three examples of contemporary problems that contract lawyers should address, are discussed here: access to vital goods and services to persons; the quality of goods and services provided under the contract; and the production process of these goods and services. On these three points, proposals are made which might serve as a basis for a new manifesto for social justice in European contract law.

More than ten years after the French President at the time first announced it – during the bicentenary celebration of the Napoleonic Code, the reform of the law of contracts has taken shape. The reform’s objectives are to make the law more accessible while increasing legal certainty; objectives often put forward during successive legal reforms without necessarily being met. Its purpose is also to increase the efficiency of French contract law, which will encourage business growth, and is evident, for instance, by the fact that unilateral will is being dealt with several times in the reform. In addition, contractual freedom, captured within the preliminary provisions, sets the tone for a more flexible legal framework. Although the reform codifies several solutions derived from case-law, it also introduces noteworthy innovations such as, in particular, a duty to inform, a legal framework for unforeseeable situations, means of action against unfair clauses in adhesion contracts, or even the ability to reduce the price in the event of incomplete performance of the contract. This reform recognizes contractual freedom, which can – in any event – only be a step in the right direction! This article analyses the modification to French contract law made by Ordinance N° 2016–131 and their impact on corporate acquisitions.

Has French law abandoned the concept of « cause » ? That is the impression one might have on reading the new provisions of the Civil Code, introduced by the Ordonnance of 10 February 2016, and certain commentaries. Accused of being a source of deviance and misunderstanding, the « cause » had to be eradicated, it was said, so that clarity, security and attractiveness of the Code be restored. A closer look, however, shows how far from reality this much-told fable actually is. Two sets of factors bear witness to the perennity of the « cause » in the new law. Firstly, the vast majority of previous « cause »-based solutions are taken up by new provisions. The « cause » remains but its presence is masked by a new designation (« motive » or « purpose », for example). Secondly, there are situations where, in a quest for coherence or in order to fill a gap, a « cause »-based reasoning will prevail exactly as it did before the reform. When all is said and done, it is a strange reform that removes the name while allowing the substance to remain.

With the reform of contract law, will economic players be able to continue to do good business? If the economic environment did not see the reform of the law of obligations as a reform of first urgency, the new law resulting from the ordinance of 10 February 2016 finds a fair balance which should satisfy most economic actors. Admittedly, like any reform, the Ordinance creates new risks: new powers of the judge, multiplication of legal standards, the scope of contractual freedom ... It is then up to the parties, to whom the law assigns more power, to identify its risks and to manage them appropriately by drawing up customized contractual clauses. The success of the reform thus depends on its good reception and its development by practice.

An outlyer’s view of this very interesting reform raises several issues from an international and comparative perspective. One may be the link established here between form and substance, of particular relevance in contract law; another could be the reach and scope of the new provisions as intended by the drafters, given their aim to capture new forms of contracting; and a third questions the method used to integrate foreign and European developments, with a view to widen the horizons of the reform.

France and Germany do not only have very prominent private law codifications, but are also countries which have taken the EC Sales Directive 1999 (among other EU developments) as an invitation to engage in an overall reform of their old Codes at the wake of the 21 st Century. This invites to a comparison, namely because one reform occurred when transposing the directive, within two years – the other, however, after almost 1 ½ decades of considerations and discussions. The common thrust is orienting the Codes more towards international models – the CISG in one case and different sets of principles developed during the 20 years around the turn of the Millenium (and to some extent inspired by the CISG) in the other. Another common thrust is simplification, in one case mainly the drastic reduction of forms of breach, their streamlining and the installation of a (more) coherent regime on the breach of contracts; in the other – later – case a more extensive overall endeavour of simplification – in many parts of the Code and its institutions. The most striking difference may well be that Germany, in its reform, chose to integrate consumer law into the old Civil Code – thus bringing the main part of European contract law into the Civil Code –, while France stayed with the model it had installed as a true protagonist in this respect. This is the model of splitting contract law into a Code civil and a Code de la consommation. Two different models of why parties in contractual relationships should be protected – for instance why and when they should be protected against ‘unfair’ contract terms – can be sensed behind these choices. Many other changes, albeit of high importance, may be seen as being more specific and narrower. In France, the most important single change seems to us not to be the one most severely criticized, the ‘abandon de la cause’, but the move towards a system where the good faith principle inspires all questions and all phases of contracting and thus assumes the role of a truly overarching principle. The development named second (but also the one named first) moves France more into the direction of what seemed to be a distinctive as well as a somewhat peculiar feature of the German development. Altogether, the two countries seem to be more internationally oriented and closer to each other in their grand Civil Codes after the respective reforms. The ‘grande réforme franҫaise’ – rather a step towards a common European model than one of splendid national isolation.