Business Contracts

By virtue of paragraph 1 of Article 1186, added to the Civil Code by the reform of the law of obligations, a validly formed contract becomes null and void if one of its essential elements disappears. As a sanction for a properly formed contract which loses an element essential to its validity after it has been formed, the notion of “caducité” (voidness) differs from that of “nullité” (invalidity), …

Contract null and void (caducité)

By virtue of paragraph 1 of Article 1186, added to the Civil Code by the reform of the law of obligations, a validly formed contract becomes null and void if one of its essential elements disappears. As a sanction for a properly formed contract which loses an element essential to its validity after it has been formed, the notion of “caducité” (voidness) differs from that of “nullité” (invalidity), which sanctions the formation of a contract in the absence of an essential element - the contract has not been formed - and from that of “résolution” (rescission), which sanctions the wrongful performance of a contract.

Article 1186 further provides: “Where the performance of several contracts is necessary for the performance of the same transaction, and one of them no longer exists, contracts the performance of which is rendered impossible by this loss, and contracts for which the performance of the non-existent contract was a decisive condition of a party's consent, are void. Such contracts will only become null and void, however, if the contracting party against whom it is sought was aware of the existence of the overall transaction when he gave his consent”. In addition, in accordance with Article 1187, where the contract is declared null and void, it ceases to exist and may give rise to restitution in accordance with the terms of Articles 1352 to 1352-9.

As a result of these provisions, which partly codify case law, a sale may be null and void, either because the contract of sale, duly formed, has lost an element essential to its validity (e.g. failure of the suspensive condition ) or its content (e.g. withdrawal of the price  or of the cause or object of the contract, before the reform of contract law), or because it is inseparable from another contract, the loss of which prevents its performance. In the latter case, the courts will attempt to characterize inseparability between the contracts in question in order to declare the latter null and void following the disappearance of the former . The rescission of an operating contract thus leads to the voiding of a supply contract, since these contracts contribute to the same economic operation and constitute an indivisible contractual whole .

The Paris Court of Appeal recently reiterated that, in order to assess the interdependence of a group of related contracts, it is necessary to determine not only whether the overall operation was intended to be indivisible, but also whether it was known as such by the party concerned by its voiding .  If the contract of sale becomes null and void, the purchaser must return the property sold, and the seller the price, minus any indemnity corresponding to the depreciation suffered by the property as a result of the use made of it by the purchaser, taking into account the harm arising for the latter from the nullifying of the contractual ensemble .

Cass. 3e civ., 21 March 2019, LawLex202300006660JBJ: the deed of sale whose suspensive condition has not been fulfilled is null and void. See also. Cass. 3e civ., June 16, 1999, LawLex202200003448JBJ: a sale granted to a company subject to the condition precedent that the beneficiary of a preferential pact does not exercise his preferential right at the price set in the deed is null and void, provided that the condition precedent has not been lifted before the stipulated date and that the beneficiary has declared his express acceptance of the sale under the conditions set out in the notification.

Cass. com., 2 November 1993, LawLex202200003287JBJ: the exclusive beer supply agreement concluded for a period of ten years becomes null and void when the brewery worker's salary is no longer set on a parity basis at departmental level, but is negotiated at company level between union representatives and the employer, with the result that, since this change, the price of beer depends in part solely on the will of the supplier. See previously Cass. com. 30 June 1980, LawLex202300006610JBJ, for a butane and propane supply contract.

Cass. 3e .civ, 15 April 2015, LawLex202200003279JBJ, rejecting the indivisibility between a contract for the sale of lots in a hotel residence and the related lease contract, and hence the voiding of the former following the termination of the latter, since the transaction, which makes it possible to gain a tax advantage through the acquisition of a lot and the simultaneous conclusion of a firm eleven-year commercial lease with a management company, the fact that the lease rent proposed by the company's buyer is less advantageous than in the previous lease cannot be analyzed as constituting an absence of a contract.

Cass. 1re civ., 4 April 2006, LawLex202300006604JBJ; 13 March 2019, LawLex202300006602JBJ: the voiding of a contract of sale for non-fulfillment of one of the conditions precedent necessarily entails the voiding of the agreement for the transfer of the company shares of the same day, since the various contracts entered into by the parties constitute a whole.

CA Paris, 8 April 2022, LawLex202200003234JBJ, holding that the voiding of a contract for the construction of a house does not entail that of a contract for the sale of land, since the two contracts are not indivisible.

Cass. com. 5 June 2007, LawLex202200003276JBJ: insisting on the fact that the termination of rental and maintenance agreements does not, when these agreements constitute a complex and indivisible contractual whole, lead to the cancellation of the sales contract, but voids it.  See also CA Paris, 8 April 2022, LawLex202200003234JBJ: when contracts are interdependent, the voiding of any one of them entails the subsequent voiding of the others, unless the party responsible for nullifying the contractual whole is required to compensate the loss caused by his or her own misconduct (faute).

Business Contracts

251. Contract null and void (caducité)

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Les notions juridiques connexes

251. Contract null and void (caducité)

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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