Business Contracts

The exceptio non adimpleti contractus (non-performance exception) has long been recognized by case law: the interdependence of reciprocal obligations arising from a contract for works and services allows one of the parties not to perform its obligation when the other fails to perform its own . Codifying this case law solution, new Article 1217 of the Civil Code allows the party against whom the ob …

Right to withhold performance (exception d'inexécution)

The exceptio non adimpleti contractus (non-performance exception) has long been recognized by case law: the interdependence of reciprocal obligations arising from a contract for works and services allows one of the parties not to perform its obligation when the other fails to perform its own . Codifying this case law solution, new Article 1217 of the Civil Code allows the party against whom the obligation has not been performed, or has been performed imperfectly, to “refuse to perform or suspend performance of its own obligation”. Article 1219 specifies that “a party may refuse to perform his obligation, even though it is due, if the other party does not perform his and if this non-performance is sufficiently serious”. Article 1220 of the Civil Code goes further, adding that “a party may suspend performance of his obligation if it is clear that his co-contractor will not perform when due, and if the consequences of such non-performance are sufficiently serious for him. This suspension must be notified as soon as possible”.

The burden of proving the non-performance of the debtor's obligations lies with the co-contracting party availing itself of the right not to perform i.e. the excipiens . Thus, it is up to the owner who, under the terms of a contract for services, has entrusted his horse to a trainer bound by a best-efforts obligation to use his knowledge and skill to the best of his ability to improve the horse's sporting performance, to provide proof of fault on the part of the trainer, if he wishes to invoke the anticipatory breach to refuse to pay the agreed price, and not for the trainer to establish that he has indeed performed his obligation . Similarly, in the context of a construction contract, it is for the project owner who intends to rely on the withholding of performance to oppose payment of the balance of the price to establish, when it has accepted the work, that the failure to perform which it alleges relates to services distinct from those covered by the reservations mentioned in the acceptance note .

With regard to the subject matter of the proof, the excipiens must not only establish contractual non-performance, but above all the sufficiently serious nature of this non-performance . According to case law, a sufficiently serious breach of contract is characterized either by a breach of an essential obligation of the contract, by material harm suffered by the creditor, or by the debtor's bad faith or unfair conduct, with the assessment of the severity of the contractual breaches concerned being left to the discretion of the courts . The Court of Cassation has thus emphasized that, even if anticipatory  breach constitutes a defense on the merits that can be raised in the event of total or partial non-performance by the debtor of his obligations, the project owner is not entitled to rely on it when the services provided for in the contract have been performed with the exception of some completion and rework work, and this work is not of a sufficiently serious nature to justify it . However, a project owner is entitled to raise a non-performance defense against a company whose business is the design and creation of printing and communication materials, where a visual examination of the catalogs produced shows that printing defects affect approximately 30% of the visuals and that the aesthetic defects and lower quality of the photos of certain products - especially in the competitive context of a trade show - reveal the criterion of severity of the breaches required by the provisions of Article 1219 of the Civil Code .

As already required by case law, Article 1219 of the Civil Code makes anticipatory breach subject to a condition of proportionality . Therefore, in order to uphold a claim for anticipatory breach, a court of appeal cannot simply point out that the project owner was late in responding to several calls for funds, even though his main obligation is to pay the funds as the work progresses, in accordance with the agreed schedule, without investigating whether the project owner's failure to perform during the course of the work justified his refusal to pay or his delays in paying the sums claimed .

Lastly, an excipiens is not entitled to plead anticipatory breach if the claim has been extinguished, as in the case of a claim arising from a contract for services which has not been declared as a liability in the context of insolvency proceedings. Thus, in order to uphold the claim  raised by the project owner against the contractor subject to insolvency proceedings, a court of appeal cannot hold that the contractor has failed to implement an installation in working order, without noting that the project owner has included his claim for damages in the liabilities of the insolvency proceedings, even though this claim arose prior to the opening of the proceedings and the obligation to perform incumbent on the defaulting contractor can only be resolved in damages . Similarly, a project owner that has failed to declare as a liability in the insolvency proceedings of the contractor with whom it had entered into a works contract the claim arising from this contract, which it claims has been set off against another claim assigned by the contractor to the bank, cannot assert anticipatory breach against the bank, since the transferred debtor does not have more rights against the bank than against the transferor .

For a recent example, see CA Bordeaux, 16 September 2021, LawLex202200004527JBJ, which states that, when the garage owner has failed to fulfill his repair obligation, the vehicle owner is entitled to invoke the garage's failure to fulfill this obligation as grounds for refusing payment for an unnecessary repair.

CA Chambéry, 2 April 2024, LawLex202400006037JBJ, specifying that it is for the party invoking an exceptio non adimpleti contractus and seeking to establish the contractual liability of the opposing party, on the basis of Article 1231-1 of the Civil Code, to provide proof of a breach by its contracting party of its obligations that caused it harm.

Cass. com, 2 May 1990, LawLex202200004105JBJ.

Cass. com. 25 November 1997, LawLex202300003091JBJ. See also Cass. 3e civ, 2 March 2004, LawLex202300003104JBJ, noting that an undertaking claiming to rely on a claim for faulty workmanship in order to raise a non-performance plea to the liquidator's request for payment of the retention money must declare its claim as a liability and comply with the procedure for verifying claims, failing which its claim will be declared extinguished and any set-off impossible.

CA Angers, 9 February 2010, LawLex202200004510JBJ.

CA Bordeaux, 16 November 2023, LawLex202400007364JBJ.

CA Bordeaux, 16 November 2023, LawLex202400007364JBJ; CA Paris, 10 January 2024, LawLex202400007363JBJ.

CA Pau, 21 November 2023, LawLex202400006797JBJ.

Cass, 1re civ, 12 January 2012, LawLex202200004121JBJ.

CA Toulouse, 24 September 2024, LawLex202400006956JBJ.

Cass. 3e civ, 21 May 2003, LawLex202200006731JBJ.

Business Contracts

319. Right to withhold performance (exception d'inexécution)

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

319. Right to withhold performance (exception d'inexécution)

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise