Business Contracts

Of all the remedies available to the creditor of an non-performed obligation under Article 1217 of the Civil Code, which resulted from the reform of contract law, rescission is the most radical. With the exception of the case of rescission of the contract for non-performance resulting from force majeure, governed by Article 1218 of the Civil Code, which, distinguishing depending on whether the imp …

Rescission/Termination

Of all the remedies available to the creditor of an non-performed obligation under Article 1217 of the Civil Code, which resulted from the reform of contract law, rescission is the most radical. With the exception of the case of rescission of the contract for non-performance resulting from force majeure, governed by Article 1218 of the Civil Code, which, distinguishing depending on whether the impediment is temporary or definitive, provides for, in the former case, suspension of performance unless the resulting delay justifies rescission of the contract, and in the latter, rescission of the contract ipso jure, rescission  is dealt with in Articles 1224 et seq. of the Civil Code in a separate sub-section, within the section devoted to non-performance of the contract.

Before the reform of contract law, in accordance with the provisions of former Article 1184, rescission (résolution) was mainly the result of a judicial application and possibly of stipulations in the contract, while unilateral rescission for serious non-performance at the creditor's risk was strictly regulated by legal precedent. Whereas rescission, applicable to contracts with immediate performance, was the sanction for failure to perform a contract which could be brought before the courts - since, under former article 1184 , the resolutory condition was always implied in bilateral contracts - termination (résiliation), applicable to contracts with successive performance, was no more than the manifestation of the right to unilaterally terminate the contract, provided that a contractual term so provided. In addition, rescission had retroactive effect, whereas termination was valid only for the future.

Reversing the priorities between these different modes of rescission, the reform of contract law has made the resolutory clause the primary mechanism for rescission, ahead of unilateral rescission in the event of serious non-performance, and judicial rescission (Art. 1224) . In addition, following the abandonment by the reform of the legal fiction of retroactivity pertaining to rescission, under Article 1229  termination is no longer anything more than “a specific case of rescission clearly limited by the provisions of the article, applicable both to instantaneous contracts and to contracts of successive performance, and being characterized by the fact that it does not give rise to a refund” .

Former Art. 1184, Civil Code: “A resolutive condition is always implied in bilateral contracts, in the event that one of the parties fails to fulfill his or her promise”.

In this case, the contract is not automatically rescinded. The party to whom the undertaking has not been fulfilled has the option of either forcing the other party to comply with the agreement, where this is possible, or requesting that the agreement be rescinded with damages.

Rescission must be requested in court, and the defendant may be granted a time-limit depending on the circumstances".

Art. 1224, Civil Code: “ Rescission results either from the application of a resolutory clause or, in the event of sufficiently serious non-performance, from notification by the creditor to the debtor or from a court judgment.”

Art. 1229, Civil Code: “(...) When the services exchanged could only find their worth through the full performance of the rescinded contract, the parties must return in full what they have obtained from each other. Where the services exchanged have become of value as the contract is performed by both parties, there is no right to restitution for the period prior to the last service not received in return; in this case, the rescission is qualified as a termination (...)”.

Cf. Report to the President of the Republic on Ordinance No 2016-131 of 10 February 2016 reforming the law of contracts, the general regime and proof of obligations, OJ of 11 February 2016.

Business Contracts

326. Rescission/Termination

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Sous parties

Les notions juridiques connexes

326. Rescission/Termination

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Sous parties

Les notions juridiques connexes

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