Roche & Cie

Contract law reform: a new order

15 Mar 2016

The Minister of Justice presented to the Council of Ministers the order on the Law Reform on private contracts. It should soon be published in the “Official Journal”.

The order reforming contract law will not have suffered from the recent departure of Christiane Taubira the Chancellery. The text has been presented in extremis (1) to the Council of Ministers on February 10 by Jean-Jacques Urvoas, new Minister of Justice. She will soon appear in the “Official Journal”. A draft ratification law to be tabled in Parliament within six months of publication of the order. To public consultation there almost a year (from 25 February to 30 April 2015), the draft order has evolved to “a coherent text able to meet the expectations of all stakeholders, by providing a secure right, efficient, simultaneously protecting, “according to the minutes of the Cabinet. This is certainly a reform of unprecedented scale, bringing the rewriting of more than 300 articles of the Civil Code.

No Great changes

The question is to “renovate without upsetting for the law to be more suited to practical needs of individuals and businesses.” Private construction contracts are actually impacted without messing up in practice. The ordinance codifies indeed jurisprudential solutions such as the ability to cancel a contract for abuse of the state of dependence of one party. But abandoning established case law recognizing the right to adapt – through negotiation or default before the judge – an untenable contract made for one of the parties due to unforeseen economic shocks. Might constitute such a circumstance a “major international crisis and unpredictable that affects the price of a raw material” and that no longer allows a company to provide the same product at the price agreed in the contract, except to sell at a loss.

Move unfair terms

Furthermore, in line with the consumer law, the reform introduces a device to fight against unfair terms in standard contracts (whose terms are imposed to the counterparty). “Thus, a small business that can not but accept the general conditions of his partner can do ignore clauses which create a manifestly excessive imbalance of rights and obligations”. The text also enshrines the concept of good faith throughout the life of the contract.

Watchwords efficiency and speed

Steps have been taken “for economic actors”: the ability to form interrogation actions to manage the risk of nullity of the contract with the other contracting party or to acquire contracts to develop its activities. The ordinance reduces the formalities related to the transfer of obligations to optimize the management of its assets. The text also allows a party, in cases of serious non-performance, to terminate the contract by simple notification to the creditor. “Conversely, the other party may oppose a simple reduction of the price for not annihilate the contract which has been generally well executed,” says the report. For example, “an individual who installed a new kitchen in her apartment will be content with a lesser quality worktop installed by mistake, instead of refusing to pay the full price initially agreed to require a complete reinstall. “

Moreover, the text facilitates electronic archiving of business recognizing the electronic media the same probative force as the original document. “Specifically, a company that bet the scan will be required to produce, in case of disputes, the paper version of a document if it exists.”

This reform is only a first step. The Government will also renovate the law of civil liability – a plan to which are also subject builders. The Chancellery will within days submit to public consultation its proposed reform in this area.

(1). To recall, the Ministry of Justice was empowered by Parliament via the law of simplification of the law in the fields of justice and home affairs on 16 February 2015 reforming the law of private contracts by ordinance. He had to take it in a period of twelve months from the publication of this Act or before February 17, 2016.

Consult the minutes of the Council of Ministers