Business Contracts

The unilateral rescission of a contract by notification, as provided for in article 1226 of the Civil Code, codifies the right granted by case law to the creditor of an unfulfilled obligation to rescind the contract at his own risk . 
Before the reform of contract law, termination by notification was an exception to the principle of judicial rescission (résolution judiciaire). The new text now est …

Unilateral rescission by notification (résolution unilatérale par voie de notification)

The unilateral rescission of a contract by notification, as provided for in article 1226 of the Civil Code, codifies the right granted by case law to the creditor of an unfulfilled obligation to rescind the contract at his own risk . 

Before the reform of contract law, termination by notification was an exception to the principle of judicial rescission (résolution judiciaire). The new text now establishes it as a principle concurrent with judicial rescission. In addition, prior to the reform, unilateral termination was subject to prior notice to the other party; the creditor initiating termination was then only liable to pay damages in the event that the court considered, a posteriori, that it had abused this prerogative; in the latter case, it was up to the debtor wishing to obtain the sanction of abusive unilateral rescission to demonstrate that the breach attributed to him was not serious, whereas in principle, in the case of judicial rescission, it is up to the plaintiff to prove the gravity of the non-performance.

New Article 1226 of the Civil Code now states: “The creditor may, at his own risk, rescind the contract by notification. Except in emergencies, he must first serve notice on the defaulting debtor to meet his obligations within a reasonable time”. According to case law, the formal notice given by the buyer pursuant to Article 1226, following the seller’s non-performance of its obligations, must be made in writing and cannot be carried out by means of a telephone call . The Court of Cassation exempts the creditor from prior formal notice however, “where it is clear from the circumstances that such notice is futile” , such being the case, according to the Court, “where the conduct of one of the parties is so serious as to make it materially impossible to continue the contractual relationship”. Thus, according to the courts, given the extremely strong and urgent demand from customers resulting from the announcement of the end of lockdown (Covid pandemic), combined with strict health measures to curb the risk of contamination, a pharmacy, after waiting in vain for the balance of its order four days after the mandatory delivery date, is entitled to terminate, without prior formal notice, the contract binding it to its supplier pursuant to Article 1226 of the Civil Code .

Article 1226 further specifies: "The formal notice must expressly state that if the debtor fails to fulfill his obligation, the creditor shall be entitled to rescind the contract.

Where non-performance persists, the creditor shall notify the debtor of the termination of the contract and the reasons for it.

The debtor may at any time bring the matter before the court to contest the termination. The creditor must then prove the seriousness of the non-performance".

According to the court, a registered letter sent by the buyer to the seller asking him to indicate whether he accepts amicable termination of the contract, and specifying that if he fails to reply by a certain date, he will commit himself to legal proceedings for rescission of the contract before the commercial court, does not constitute notification of unilateral rescission of the contract within the meaning of Article 1226, since the buyer is instead referring to a potential action for judicial rescission of the contract. Furthermore, when the contract is recinded by notification from the creditor, the court records the rescission, so that it is not the court's ruling that produces the resolutory effect, but rather a unilateral decision made by the creditor .

Unilateral rescission by notification is also governed by Article 1228 of the Civil Code, which authorizes the court to set aside rescission in favor of specific performance (exécution forcée) of the contract or an award of damages: “The court may, depending on the circumstances, declare or order rescission or performance of the contract, possibly granting the debtor a time-limit, or only award damages”.

Cass. 1re civ., 13 October 1998, LawLex2010000957JBJ, regarding an anesthesia-resuscitation contract: the seriousness of the conduct of one party to a contract may justify the unilateral termination of the contract by the other party at his or her own risk, and said seriousness, which is not binding on the courts when assessed by a regulatory authority, does not necessarily exclude a notification period; CA Douai, 11 January 2024, LawLex202400003269JBJ.

CA Bordeaux, 25 September 2023, LawLex202400002510JBJ.

Cass. com. 18 October 2023, LawLex202300012682JBJ, for a contract for services (contrat d'entreprise).

CA Lyon, 17 November 2022, LawLex202300006269JBJ.

Business Contracts

248. Unilateral rescission by notification (résolution unilatérale par voie de notification)

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248. Unilateral rescission by notification (résolution unilatérale par voie de notification)

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise