Business Contracts

Under Article 1217 of the Civil Code, “the party to whom a commitment has not been performed, or has been performed imperfectly, may [...] pursue specific performance of the obligation”. Thus, in the event of non-payment on the due date, Article 1221 of the Civil Code provides that “the creditor of an obligation may, after giving formal notice, pursue its specific performance unless such performance is impossible or if there is a manifest disproportion between its cost to the debtor in good faith and its interest to the creditor”.

This provision, resulting from the reform of contract law, codifies the right to specific performance of an obligation, but limits it to cases of impossibility - material, legal or moral - of performance, as already recognized by case law under former Article 1184 of the Civil Code, by adding the economic impossibility of performance resulting from a manifest disproportion between the cost of specific performance for the debtor in good faith and its interest for the creditor. The aim of this new exception is to prevent the debtor from being forced to perform at a high cost, without any real interest on the part of the creditor, whereas an award of damages could have provided adequate compensation at a much lower cost. Litigation concerning the construction of single-family homes is an illustration of this trend in case law, which the legislator has tried to curb.

Based on the premise that the party to whom a commitment has not been fulfilled can force the other party to perform the agreement where this is possible, the Court of Cassation ruled that a project owner who had signed a contract for the construction of a single-family home, paid the full price and refused to sign the acceptance report, was entitled to order the contractor to demolish and then rebuild the house, or, failing that, to pay a sum equivalent to the cost of the demolition and rebuilding operations, in the presence of non-conformity with the contractual stipulations, it being irrelevant that this non-conformity does not render the building unfit for its purpose and use, and does not concern the essential and decisive elements of the contract . Similarly, according to the Court, the undertaking responsible for designing an extension to a chalet by creating an annex building connected to the existing one by an awning, which made a mistake in the layout of the new constructions resulting in the partial obscuring of a window in the old building, may be ordered to demolish and rebuild the structure, since the layout of said constructions did not comply with the contractual stipulations and the possibility of bringing them into conformity, which was not contested, was identified by the legal expert .

However, in anticipation of the application of Article 1221 in a ruling issued under the law applicable prior to the reform of contract law, the Court of Cassation reversed its position, holding that the project owner's requests for an order to rectify the height of the partitions, and to demolish and rebuild the pool area, must be rejected where no defects relating to the height of the partitions have been found, and where the demolition and reconstruction work objected to by the builder has been deemed disproportionate to the harm suffered .

Article 1222 of the Civil Code supplements the provisions of Article 1221 by adding that: “After formal notice, the creditor may also, within a reasonable period and at a reasonable cost, himself enforce the obligation or, with the prior authorization of the court, destroy what has been done in breach of it. He may ask the debtor to reimburse the sums incurred for that purpose”.

Cass. 3e civ, 11 May 2005, LawLex202200003449JBJ, for a construction level 0.33 m below contractual stipulations.

Cass. 3e civ, June 16, 2015, LawLex202200006739JBJ; overruled the appellate court's decision rejecting the project owner's claim for specific performance of the contract on the grounds that the extension in question did not suffer from any defect or encroach on any other property, and that reparation should be limited in the absence of justification for the exorbitant amount claimed in respect of a demolition/reconstruction operation, since the new construction was not built in accordance with the contractual stipulations, and the possibility of bringing it into conformity, which was not contested, had been identified by the legal expert.

Cass. 3e civ, 13 February 2020, LawLex202200006740JBJ.

320. Specific performance