Business Contracts

Unilateral rescission by notice, as provided for in Article 1226 of the Civil Code, is a codification of the right granted by case law to the creditor of an unfulfilled obligation to rescind the contract at his own risk . According to the Court of Cassation, the seriousness of one party's conduct may justify the other party's unilateral termination of the contract at its own risk , irrespective of …

Unilateral rescission by notice

Unilateral rescission by notice, as provided for in Article 1226 of the Civil Code, is a codification of the right granted by case law to the creditor of an unfulfilled obligation to rescind the contract at his own risk . According to the Court of Cassation, the seriousness of one party's conduct may justify the other party's unilateral termination of the contract at its own risk , irrespective of whether the contract is for a fixed term or not .

Before the reform of contract law, rescission by notice was an exception to the principle of judicial rescission. The new law elevates it to the status of a principle competing with judicial rescission" . In addition, before the new law, unilateral termination was subject to prior formal notice to the other party; the creditor seeking rescission was only liable to pay damages if the court considered, a posteriori, that he had abused this prerogative; in the latter case, it was up to the debtor seeking to claim the abusive unilateral termination to demonstrate that the breach attributed to to that partywas not serious, whereas in principle, in the case of judicial rescission, it is up to the plaintiff to prove the seriousness of the non-performance.

Henceforth, new Article 1226 of the Civil Code stipulates: “The creditor may, at his own risk, rescind the contract by notice. Except in emergencies, he must first give notice to the defaulting debtor to meet his obligations within a reasonable time. According to case law, a company does not demonstrate an emergency situation exempting it from sending a formal notice to its subcontractor when it produces a non-judicial expert report that is not corroborated by other documents submitted in the proceedings and does not, on its own, establish the existence of defects attributable to the mason . Furthermore, since the creditor did not send its co-contractor a formal notice prior to termination, there is no need to examine whether the alleged breach was sufficiently serious to justify termination at the creditor's risk .

According to the Court of Cassation, the creditor may also dispense with prior formal notice, "where it is clear from the circumstances that this would be futile” , such being the case, according to the Court, “where the conduct of one of the parties is so serious as to make it materially impossible to continue the contractual relationship”. According to the Paris Court of Appeal, a circumstance-based verbal threat is not such as to render the formal notice required under Article 1226 devoid of effect .

Article 1226 continues: "The formal notice must expressly state that if the debtor fails to fulfil his obligation, the creditor will be entitled to rescind the contract .

Where non-performance persists, the creditor notifies the debtor of the rescission of the contract and the reasons for it.

In application of this law, it has been ruled that a contractor who, within the framework of a contract for services, carried out the total removal of a peephole which had damaged a wall, breached his contractual obligation, or at the very least his obligation to advise, by drawing up a quotation for renovation work in line with the existing product, even though the existing product and the product to be installed were not interchangeable, This created confusion in the mind of the project owner, with the result that these breaches constituted a serious breach of his obligations, justifying unilateral rescission of the contract by notice under Article 1226 of the Civil Code, ordering him to pay the project owner the over-payment of the advance payment made, corresponding to the difference between this advance payment and the cost of the services correctly carried out .

Unilateral rescission by notice is also governed by Article 1228 of the Civil Code, which authorizes the court to set aside rescission in favor of specific performance of the contract or an award of damages: “The court may, depending on the circumstances, find or order rescission or performance of the contract, possibly granting a deadline to the debtor, or award only damages”.

Cass. 1re civ., 13 October 1998, LawLex2010000957JBJ, regarding an anesthesia-resuscitation contract: the seriousness of the conduct of one party to a contract may justify the other party terminating it unilaterally at its own risk, and that this degree of seriousness, the assessment of which is given by a regulatory authority is not binding on the courts, is not necessarily exclusive of a period of notice.

CA Chambéry, 15 November 2022, LawLex202400007553JBJ.

Cass. 1re civ, 28 October 2003, LawLex2010000957JBJ.

Report to the President of the Republic relating to Ordinance No 2016-131 of 10 February 2016 reforming the law of contracts, the general regime and proof of obligations, p. 18-19: “Unilateral rescission is, however, no longer understood as an exception to the principle of judicial rescission, but is treated as an autonomous faculty offered to the creditor who, as the victim of non-performance, will henceforth have the choice, in particular in the absence of an express resolutory clause, between the two modes of rescission, judicial or unilateral”.

CA Orléans, 28 May 2024, LawLex202400007558JBJ. See in the same sense, JC Bordeaux, 27 February 2024, LawLex202400002005JBJ.

CA Bordeaux, 24 January 2024, LawLex202400000608JBJ.

Cass. com. 18 October 2023, LawLex202300012682JBJ.

CA Paris, 11 September 2024, LawLex202400007555JBJ.

CA Amiens, 19 January 2021, LawLex202300003106JBJ.

Business Contracts

328. Unilateral rescission by notice

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

328. Unilateral rescission by notice

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise