Business Contracts

Prior to the reform of contract law, the possibility for the aggrieved party to accept the non-conforming services of the debtor in return for a proportional reduction in price was only recognized by case law. Thus, even when the parties to a contract for work had agreed on the price, the agreed remuneration could be judicially reduced if it proved excessive in view of the inadequacy of the servic …

Reduction of price

Prior to the reform of contract law, the possibility for the aggrieved party to accept the non-conforming services of the debtor in return for a proportional reduction in price was only recognized by case law. Thus, even when the parties to a contract for work had agreed on the price, the agreed remuneration could be judicially reduced if it proved excessive in view of the inadequacy of the service provided by the contractor , such being the case where the latter had carried out only limited services for which his remuneration appeared excessive . Similarly, the courts could reduce the contractually agreed fees of a chartered accountant when they appeared excessive, provided that they had not been paid with full knowledge of the work performed and after the service was rendered .

In the Civil Code, only specific provisions, for example in the case of warranty against latent defects through the action estimatoire (action for a reduction of the price due to defect)  , or in the case of real estate sales in the event of inaccurate content  or inaccurate measurement by more than one twentieth  , provided for a reduction in the price. 

Contrary to these specific provisions, new Article 1223 allows the aggrieved party of an incompletely performed obligation to accept a price reduction, without having to refer the matter to the court - provided that the parties agree - and that he or she first puts the debtor on notice to perform the obligation in full. This intermediate sanction between the right to withhold performance (exception d'inexécution) and rescission allows the contract to be amended to reflect the actual performance rather than what was contractually agreed.

In application of new Article 1223 of the Civil Code, the Aix-en-Provence Court of Appeal has specified that, in the presence of defects in the installation of a swimming pool resulting from the contractor's work, the project owner is entitled to withhold payment of an invoice in order to reduce the price of the service, since parties to whom the undertaking has not been fulfilled, or has been fulfilled incompletely, may obtain a reduction in the price, which may be applied in advance or retrospectively, depending on whether or not the price has already been paid in full or in part . Similarly, when the project owner has already paid the entire invoice and has, on two occasions, unsuccessfully served notice on the contractor to complete the installation work on his gate, and when the parties have not reached an agreement on a possible amicable rescission of the dispute, it is appropriate to order a reduction of the price equal to the cost of the repairs and adjustments to be carried out . Conversely, the project owner is not entitled to claim a reduction in the price of the service when his conduct is the cause of the non-performance of several services provided for in the contract .

CA Rennes, 26 March 2009, LawLex202200004498JBJ.

CA Besançon, 1 April 2010, LawLex202200006748JBJ.

CA Grenoble, 3 May 2018, LawLex202200010115JBJ; CA Reims, 22 January 2019, LawLex202400007395JBJ; 5 February 2019, LawLex202400007394JBJ.

CA Aix-en-Provence, 23 September 2021, LawLex202200006732JBJ; CA Riom, 26 September 2023, LawLex202400006522JBJ.

CA Douai, 26 September 2024, LawLex202400007396JBJ.

CA Bordeaux, 28 May 2024, LawLex202400003999JBJ.

Business Contracts

321. Reduction of price

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

321. Reduction of price

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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