Written commercial agreement

Significant imbalance

Sudden termination of established relationships

Competition investigation – French law

Civil competition action

French competition law

Competition investigation – European law

European competition law

Vertical restraints

Distribution law

Liability for defective products

Consumer law

Prohibition of measures having equivalent effect

European business law

Corruption

Compliance

Economic law

Shareholders' agreements

Removal of company directors

Abuse of voting rights

Companies

Action for infringement (counterfeiting)

Rights conferred by the trademark

Patentability

Industrial property

Commercial rent review

Renewal of the commercial lease

Despecialization (change of use)

Commercial leases

Reform of contract law

Reform of the law of special contracts

Preliminary sales agreement

Obligation to deliver goods in conformity

Classification of the contract for services (contrat d'entreprise)

Effects of the agency agreement with respect to third parties

Business contracts

Ongoing contracts

Recovery claims

Court-approved transfer plan

Bankruptcy proceedings

Personal data breaches

White collar crime

Commercial law

500 Questions - Business Law

For better intelligibility of the law, Ordinance No 2016-131 dedicates a chapter of the Civil Code to the sanctions of contract formation, including caducité.

The former Civil Code incidentally addressed the lapse in matters of donations, but without defining it. The former Article 1131 of the Civil Code further provided: “An obligation without cause, or based on a false cause, or on an illicit c …

What are the rules applicable to lapse of contract (caducité)?

Designed at a time when France embraced liberalism, contract law adhered to fundamental principles common to all Western laws, favorable to economic activity: contractual freedom, the binding force of the contract, the neutrality of the law and the role of the courts. Covering about 300 articles, the reform of contract law altered this balance by providing greater protection to the party presumed to be weaker in the contract and granting a more significant role to the court.

Promulgated on 16 February 2015 after validation by the Constitutional Council, Law No 2015-177 on the modernization and simplification of law and procedures in the fields of justice and home affairs authorized the Government to reform contract law, the general regime, and the proof of obligations by ordinance, with the obligation to publish it within one year from the enabling law and for this text to be ratified by Parliament to acquire legislative value. Initiated by Christiane Taubira and finalized by Jean-Jacques Urvoas, the reform of contract law was thus implemented by Ordinance No 2016-131 of 10 February 2016, which came into force on 1 October 2016, and then ratified by Law No 2018-287 of 20 April 2018, applicable on 1 October 2018.

Summary of the doctrinal works led by Professors Catala (2005) and Terré (2013) and of two preliminary drafts from the Chancellery, the ordinance of 10 February 2016 is also largely inspired by contractual practice. More than a simple ratification law, the law of 20 April 2018 specifies the temporal application of the texts resulting from the reform and makes modifications - essentially technical or formal - to about twenty articles of the ordinance that raised concerns.

The reform pursues three main objectives:

make the law of obligations more readable and accessible;

make the law of obligations more efficient and attractive;

strengthen the protection of the weaker party.

In a welcome development, the ordinance has introduced innovations while codifying numerous solutions resulting from case law since 1804, such as the prohibition of perpetual obligations now set forth in Article 1210 of the Civil Code. The text streamlines the structure of Book III of the Civil Code by undertaking a work of definition and classification of contracts, notably those from doctrine or practice (framework and implementation contracts, successive performance contracts, adhesion contracts, etc.). In accordance with the first axis of the reform, it enhances the intelligibility and accessibility of French law by introducing a section dedicated to contract formation, notably pre-contracts (unilateral promise of sale and preferential agreement), the concept of lapse, and the distinction between relative and absolute nullity.

What was the spirit of the reform of contract law?

The reform of contract law presents a mixed outcome in practice because the modernization of the law, necessary and positive, is overshadowed by the choice of greater legal protectionism, which could lead to an increase in litigation over contracts.

The new law weakens the binding force of the contract at various stages of the contractual process, with, at the formation stage, the generalization of the principle of good faith, the establishment of a strengthened pre-contractual duty of information (even without an obligation to inquire in “trust contracts"), the assimilation of any abuse of dependency to the defect of duress (which may therefore lead to the annulment of the contract), and more generally, the establishment of a genuine ability to challenge the contract (mechanism of revision for unforeseen circumstances, the "deemed unwritten” nature—and thus imprescriptible according to case law—of any clause creating a significant imbalance between the rights and obligations of the parties in adhesion contracts, etc.). Consequently, the judge, a sort of “third party to the contract,” sees their powers considerably increased.

Furthermore, as the contract increasingly ceases to be the law between the parties, the protection of the supposedly weaker contracting party risks backfiring against them while generating significant legal uncertainty for undertakings. For example, the extension of the defect of duress to the abuse of “the state of dependence,” even if not economic, may encourage undertakings not to contract with partners who might be dependent (for instance, companies in difficulty) or to be particularly cautious about the commitments requested.

In international relations, the reform makes our contract law less attractive: in the event of a dispute, if the parties have stipulated that French law governs their contract, the judge may be required to examine their intent, challenge the agreement, and/or award damages if abuse of dependency, lack of information, the existence of unbalanced obligations in an adhesion contract, or insufficient justification of the price or its variation is invoked. There is no doubt that foreign undertakings (and French undertakings in their own international contracts) will prefer to opt for a more flexible, more reliable, and more respectful law of the parties' intent, such as English or Swiss law.

Finally, stemming from diverse inspirations and compromises, the reform law contains contradictory provisions, which in some aspects give it a schizophrenic character.

The legislator thus admits unilateralism by allowing one of the parties to unilaterally set the price in framework contracts (Art. 1164 Civil Code), but at the same time codifies and strengthens judicial control over abuse in price setting. It establishes a (new) regime for unfair terms (Art. 1171 Civil Code), recognizes hardship (Art. 1195 Civil Code), and generalizes the requirement of good faith to protect the party deemed weaker in the contract, yet nonetheless reaffirms the binding force of the contract, reiterated in Article 1103. Furthermore, while the reform often reflects the choice of a managed economy based on contractual solidarism, to the detriment of the market economy and contractual freedom that inspired the Civil Code of 1804, our new contract law nonetheless includes texts of liberal inspiration, such as Article 1102, para. 1, of the Civil Code, which, when it states that “everyone is free to contract or not to contract […]”, affirms the principle of freedom of contract as never before.

Practice and case law have mitigated the effects of the reform. Hardship has been excluded in many contracts by an exclusion clause from Article 1195 of the Civil Code. On many points, case law has had a moderating effect. The new regime of unfair terms under Article 1171 of the Civil Code has been deemed inapplicable to contractual relations governed by the special law of Article L.442-1, I, 2° of the Commercial Code .

The Court of Cassation limited the scope of the new text on violence by considering that “in a synallagmatic contract, obtaining a manifestly excessive advantage within the meaning of Articles 1141 and 1143 of the Civil Code must also be assessed in light of the advantages obtained by the other party” by comparing the respective counter-performances obtained by the contracting parties . Similarly, it ruled that to characterize an abuse of dependency constituting a defect in consent during the conclusion of a contract, it is not sufficient to establish that one of the parties is in a state of dependency on the other, but it must be demonstrated that the allegedly victimized party was deprived of any ability to refuse the demands of their co-contractor and that acts of pressure or particular intransigence were exerted against them .

Similarly, the Court of Cassation has adopted a restrictive interpretation of the duty to inform under Article 1112-1 of the Civil Code, now requiring proof (i) that one party possesses information, (ii) that this information is legitimately unknown to the other party or that the other party relied on their co-contractor, as well as (iii) the direct and necessary link of the information with the content of the contract or the quality of the parties, and (iv) its decisive nature for the co-contractor's consent .

Even though practice and case law have had a moderating effect, the new contract law involves three major adjustments for undertakings: a different way of negotiating their contracts, drafting them, and implementing them.

During the pre-contractual negotiation period, it is important to negotiate in good faith, to be particularly attentive to fulfilling the pre-contractual duty of information towards the other party, notably by documenting its execution, to be aware of the rules regarding offer, acceptance, and unilateral promise of contract, to avoid any abuse of dependency, and not to hesitate to use interrogatory actions.

Similarly, the way contracts are drafted must evolve. It is not about drafting an agreement entirely in one's favor. This is pointless and can prove counterproductive. It is important to consider which clauses are truly necessary, avoiding filling the contract with clauses that could be deemed unfair. Particular attention should be paid to the price-setting clause as well as the exclusion or adjustment of unforeseeability.

Finally, the application of the contract requires extreme caution. With the protection of the weaker party having been strengthened and the intervention of the judge extended, the risk of litigation is higher. It is therefore necessary to prepare for this, particularly by improving the evidence of compliance with obligations throughout the entire five-year prescription period. Thus, it will be necessary to retain proof of price increases in cases where the price is set at the initiative of one party in framework contracts. Great caution is also required when invoking a termination clause or in the event of unilateral rescission, as current law is very demanding regarding both the formalities and the substantive conditions of rescission. Finally, in the event of litigation, it is essential to scrupulously ensure compliance with prior conciliation clauses and jurisdiction clauses.

Advice: Master the new law rather than endure it.

The reform imposes three major changes for businesses:

a different way of negotiating their contracts;

Article 1171 of the Civil Code applies to contracts, even those concluded between producers, merchants, industrialists, or persons registered in the trade directory, which do not fall under the former Article L. 442-6, I, 2° (current Art. L. 442-1, I, 2°) of the Commercial Code, such as financial lease contracts concluded by credit institutions and financing companies.

Cass. com., 26 January 2022, LawLex202200000629JBJ.

The advantage obtained by a party in a synallagmatic contract is considered “manifestly excessive” within the meaning of Articles 1141 and 1143 of the Civil Code only if it is assessed by taking into account the reciprocal advantages granted by the other party, so that the alleged economic duress cannot be upheld when the overall balance of the transaction shows a favorable equilibrium for the complaining party.

Cass. 1re civ., 29 January 2025, LawLex202500000861JBJ.

The defect in consent arising from the abuse of the transferors' state of dependence on the transferee of their shares is not established as long as it results from elements concurrent with or subsequent to the signing of the deed that they had retained the ability not to comply with the transferee's demands.

Cass. com., 10 July 2024, LawLex202400005214JBJ.

Pursuant to Article 1112-1 of the Civil Code, the pre-contractual duty of information only concerns information that has a direct and necessary link with the content of the contract or the quality of a party and whose importance is decisive for the consent of the other party.

Cass. com., 14 May 2025, LawLex202500003875JBJ.

What is the overall assessment of the contract law reform?

The reform of contract law has raised numerous difficulties in the application of the law over time. Article 9 of Ordinance No 2016-131 initially provided that the reform would come into effect on 1 October 2016, with contracts concluded before this date remaining subject to the old law. The text added that when proceedings had been initiated before the ordinance came into effect, the action would be pursued and judged in accordance with the old law, this law applying “on appeal and in cassation.” However, these provisions have not always prevented the application of the new law to contracts concluded before the ordinance came into effect.

In 2017, on four occasions, the Court of Cassation applied the new law immediately to contracts that were nevertheless concluded before 1 October 2016, under the guise of interpreting the old law in light of “the evolution of contract law resulting from Ordinance No 2016-131 of 10 February 2016” .

A trend has developed of invoking before the courts the new law “or its spirit” in disputes concerning contracts concluded under the old law, often under the guise of “clarifying the contract” or “interpreting the old law in light of the new.”

To attempt to put an end to these abuses, the ratification law of 20 April 2018 supplemented Article 9 of the ordinance by providing that “contracts concluded before [1 October 2016] remain subject to the old law, including for their legal effects and for mandatory public policy provisions.” Among the articles it amended, the ratification law further distinguished the new Articles [1110, 1117, 1137, 1145, 1161, 1171, 1223, 1327, and 1343-3] of the Civil Code, intended to apply only “to legal acts concluded or established from 1 October 2018,” from those with an “interpretative character” [Articles 1112, 1143, 1165, 1216-3, 1217, 1221, 1304-4, 1305-5, 1327-1, 1328-1, 1347-6, and 1352-4], retroactively applicable from 1 October 2016, insofar as they are one with the provision of the ordinance they interpret.

Furthermore, the Court of Cassation has shown greater rigor by censuring both the erroneous retroactive application of the reform to contracts that predate it  and its anticipatory application, based on an interpretation of the old law in light of the new .

Ultimately, three legal regimes coexist in practice depending on the date of conclusion of the contract concerned, and whether the provision of the Civil Code in question has been (or not) amended and whether this amendment has (or not) an interpretative nature:

1st regime: survival of the old law for all contracts concluded or renewed before 1 October 2016;

2nd regime: application of intermediate law (i.e., provisions from the ordinance that have either not been modified by the ratification law or have been modified but hold interpretative value), for contracts concluded or renewed between 1 October 2016 and 1 October 2018;

3rd regime: application of the new law (i.e., the provisions of the ordinance amended by the ratification law that do not have interpretative value) for contracts concluded or established after 1 October 2018.

The evolution of contract law, resulting from Ordinance No 2016-131 of 10 February 2016, leads to a different assessment, in employment relationships, of the scope of offers and promises of employment contracts.

Cass. soc., 21 September 2017, LawLex202000001866JBJ.

A court of appeal cannot apply Article 1186 of the Civil Code in its version resulting from Ordinance No 2016-131 of 10 February 2016, under which the contract becomes void if one of its essential elements disappears, to a contract that was concluded before 1 October 2016, since contracts concluded before this date remain subject to the former law.

Cass. 1re civ., 19 September 2018, LawLex201800001902JBJ.

A court of appeal cannot assert that the acceptance of a unilateral promise to sell an apartment by the beneficiaries had the effect of making the sale perfect, on the grounds that the promisor, who gave her consent without restriction, cannot retract, even though the exercise of the option by the beneficiary of the unilateral promise, subsequent to the promisor's retraction, excludes any meeting of reciprocal wills to sell and acquire, and the forced completion of the sale cannot be ordered.

Cass. 3e civ., 6 December 2018, LawLex202000001819JBJ.

What is the temporal scope of application of the new contract law?

Ordinance 2016-131 introduces a new subsection in the Civil Code, entirely dedicated to negotiations. Article 1112, para. 1, new of the Civil Code enshrines the principle of freedom in the pre-contractual phase for the initiation, conduct , and termination of pre-contractual negotiations.

This principle of freedom of negotiations  is limited by the obligation imposed on negotiators to conduct them in good faith , a concept now already included among the preliminary provisions of the Civil Code. According to the new Article 1104 of the Civil Code, good faith governs not only the performance of the contract (as under the former Article 1134) but also its negotiation  and formation. However, it is not provided for by the text at the end of the contract.

The obligation of good faith is not without limits: it must, of course, respect the law of the parties .

in addition to being redundant with the provisions set out in the section dedicated to negotiations, the enshrinement of the principle of good faith at the stage of contract formation risks opening the way to a review of the parties' intent, or even their motive, and consequently, to all trials of intent ;

the issue of non-compliance with this obligation of good faith in the formation of the contract not being specified, the question of its relationship with defects in consent should inevitably arise.

Article 1112, para. 2, enshrines two classic judicial solutions: in the event of a fault committed during negotiations, the loss of expected benefits from the uncompleted contract must not be considered in the calculation of damages . Compensation must therefore be limited to the loss incurred . The loss of opportunity to obtain the expected benefits from the uncompleted contract is also excluded from the recoverable damage (provision resulting from the ratification law of the ordinance, with retroactive application).

“Anyone who uses or discloses without authorization confidential information obtained during negotiations incurs liability under the conditions of ordinary law.”

Illustration of the principle of good faith contained in the new Articles 1104 and 1112, this provision already applies in practice outside of pre-contractual negotiations, since anyone who uses confidential information during discussions is likely to incur tort liability, regardless of the outcome of the negotiations. In practice, however, it is necessary to specify the terms of implementing confidentiality through a specific agreement, as the principle enshrined in the Civil Code remains too general.

Advice: How to protect confidential information exchanged during negotiations?

Stipulate a confidentiality clause / draft a confidentiality agreement to define the confidential information likely to engage the contractual liability of the disclosing party, the duration of the obligation, the commitments to be obtained from the employees of the undertaking, a possible penalty clause, etc.

In a real estate transaction, the decision not to continue pre-contractual negotiations for financial reasons is not inherently wrongful under Article 1112 of the new Civil Code, as long as this refusal does not result from unfair behavior but follows a request for a price reduction. The fact that this request may be justified cannot deprive the seller of the freedom to decide whether or not to continue negotiations, which have otherwise taken place over a very short period.

Paris, 19 June 2020, LawLex202400001444JBJ.

The mere act of contracting, even knowingly, with a person who has entered into negotiations with a third party does not, in itself, and unless it is driven by the intent to harm or accompanied by fraudulent maneuvers, constitute a fault likely to incur the liability of its author.

Cass. com, 26 November 2003, LawLex202000001831JBJ.

The requirement of good faith set out in Article 1112, para. 1 of the Civil Code imposes, in the interest of transparency, the obligation to inform one's partner of the reasons why the proposals they make are unacceptable or insufficient as they stand to allow the conclusion of the contract.

CA Versailles, 25 January 2024, LawLex202400000734JBJ.

In accordance with Articles 1194 and 1104 of the new Civil Code, a letter of intent constitutes a clear and precise act by which the parties undertake the obligation to pursue negotiations in good faith, not in a general framework, but in one now determined by said letter, which sets out its purpose and terms, and in light of which any abuse committed by a party in exercising its right not to contract must be assessed.

CA Pau, 28 January 2019, LawLex202000001865JBJ.

If the rule that agreements must be performed in good faith allows the judge to sanction the unfair use of a contractual prerogative, it does not authorize them to infringe upon the very substance of the rights and obligations legally agreed upon by the parties.

Cass. com., 10 July 2007, LawLex202000001830JBJ.

Bad faith on the part of the party terminating the selection of a candidate following a call for tenders can be dismissed as long as the documents submitted in the debate demonstrate a genuine competition among the competing companies, through a precise and comparative evaluation of each candidate after two rounds of presentations.

CA Paris, 17 January 2024, LawLex202400000530JBJ.

In the absence of a firm and definitive agreement, the victim of a breakdown in negotiations can only obtain compensation for the damage including the costs incurred by the negotiation and preliminary studies it commissioned, and not the profits it could have expected to derive from the operation of the business if the contract had been concluded, nor even the loss of a chance to obtain these profits.

Cass. com., 26 November 2003, LawLex202000001831JBJ.

Compensation for damages is therefore limited to the loss incurred, namely the expenses incurred by the victim of the wrongful termination to see the negotiations through, provided that they correspond to useful and coherent steps given the stage of advancement of the negotiations.

What does the law of pre-contractual negotiations entail?

Ordinance 2016-131 introduced a general pre-contractual duty of information in Article 1112-1 of the Civil Code, which, being a mandatory public policy provision, cannot be limited or excluded by the parties. According to the report to the President of the Republic, the establishment of this duty of information, widely recognized in case law and already provided for by the Consumer Code, occurs independently of the duty of good faith.

“ The party who has knowledge of information that is crucial for the other party's consent must inform them as long as, legitimately, the latter is unaware of this information or trusts their co-contractor” (para. 1), knowing that “the duty to inform cannot concern the estimation of the value of the performance” (para. 2).

The scope of the duty to inform is very broad: it covers all information that has a direct and necessary link with the contract (Art. 1112-1, para. 3) .

To establish that the creditor of the pre-contractual information obligation has not fulfilled it, it is necessary to cumulatively demonstrate (1) the existence of information having a direct and necessary link with the content of the contract and determining their consent  (2), their legitimate ignorance or the trust relationship with their co-contractor, and (3) the debtor's knowledge of such information . In practice, providing proof of these conditions is complex for the creditor, so courts sometimes resort to presumption .

The Court of Cassation has set a limit on the pre-contractual duty of information. Contrary to what a literal reading of Article 1112-1 of the Civil Code might suggest, it is not sufficient to assert a lack of information having a necessary and direct link with the content of the contract to establish a violation of the text .

“ In addition to the liability of the party who was bound by it, the breach of the pre-contractual duty of information may result in the annulment of the contract under the conditions provided for in Articles 1130 et seq.” .

In other words, the failure to comply with the duty of information can result in the debtor's liability and the nullity of the contract for defect in consent . However, the breach of Article 1112-1 cannot be sanctioned by the nullity of the contract if it does not cause either an error or fraud within the meaning of Articles 1130 et seq. .

The criteria retained by Article 1112-1—“legitimate ignorance of the information” and “trust in the contracting party”—subjectivize the duty of information: they subject the debtor of the obligation to a duty to provide information on what constitutes decisive information for the consent of their co-contractor, and if they do not possess it, to a duty of inquiry.

Do they thereby eliminate any duty for the creditor of the obligation to inquire? A priori, no: a contracting party cannot legitimately ignore information allegedly crucial to their consent if they have not first informed themselves. Invoking a breach of the duty to inform is justified only when the beneficiary was unable to access the information . The absence of an obligation to inquire may nonetheless be claimed before the court by the party asserting they relied on their contracting partner.

The generalization of the duty of information to all contracts poses a problem of articulation between ordinary law and special law, and incidentally makes the assessment of pre-contractual information obligations imposed by special laws more subjective.

In principle, ordinary law covers all the rules applicable to situations not governed by specific rules: broadly interpreted, it contrasts with special law, which, as an exception, is strictly interpreted. By application of the adage “specialia generalibus derogant,” the special derogates from the general, which should normally lead to the exclusion of the general rule and theoretically excludes any interference between general law and special law.

Unfortunately, these grand principles are often ignored in practice.

Recent case law provides two examples of the cumulative application of the general duty of information and a special duty of information. In the field of tourism, the Court of Cassation issued a decision combining the general pre-contractual duty of information from the Civil Code with the special duty from the Tourism Code and upheld the conviction of a travel agency for failing to meet the ordinary law obligation, even though it had complied with its obligation under special law . This cumulative application appears questionable since the directive transposed by the Tourism Code (Directive No 2015/2302, 25 November 2015 on package travel and linked travel arrangements) is one of maximum harmonization, and the decision required the agency to provide information on entry restrictions to the United States due to a prior trip of the clients to Iran, of which the agency was unaware.

The issue of the relationship between the general obligation of information and special law arises in the context of distribution contracts providing for an obligation of exclusivity or quasi-exclusivity with the provision of a trademark or trade name, as in most franchise agreements: in this case, there is already a mandatory public policy pre-contractual information obligation on the supplier or franchisor as provided in Article L. 330-3 of the Commercial Code resulting from the codification of the Doubin law. There is already a tightening of case law, particularly regarding clauses acknowledging the provision of pre-contractual documents, sometimes referred to as boilerplate clauses . For reference, the special pre-contractual information obligation provided in Article L. 330-3 of the Commercial Code is incumbent on “any person who makes available to another person a trade name, trademark, or sign for the exercise of their activity, is required, prior to the signing of any contract concluded in the common interest of both parties”: it involves providing the other party with a document containing truthful information that allows them to commit knowingly.

The pre-contractual document in the model provided by Article L. 330-3 of the Commercial Code (Doubin Law), containing in particular the following information (Art. R. 330-1 Commercial Code):

Address of the undertaking's registered office

Identity of the business owner/management

Unique identification number of the undertaking*/RCS number/registration number in the trade directory

Date and registration or filing number of the trademark

Summary of the main stages of its evolution

Annex including the annual accounts or financial reports (AMF) for the last two fiscal years

Duration of the proposed contract, conditions for renewal, termination, and assignment, scope of exclusivities.

Nature and amount of expenses and specific investments related to the brand/trademark that the recipient of the draft contract undertakes before starting operations

Decisions are increasingly supporting the combination of the general duty of information under the Civil Code and the specific duty of information under the Doubin Law if its conditions of application are met. A franchise agreement was thus terminated at the exclusive fault of a franchisor who was deemed not to have provided sufficiently precise information on the scope of exclusivities granted to the distributor in the pre-contractual information document based solely on Article 1112-1 of the Civil Code . Similarly, it was ruled that although a complete pre-contractual information document was provided, the beneficiary bound by an exclusive supply obligation may request the annulment of a contract for fraud if the franchisor concealed that the network's situation had deteriorated between the delivery of the document and the conclusion of the contract . It may therefore sometimes be more prudent to rely on a violation of ordinary law than on non-compliance with the information obligation of the Doubin Law.

Under these conditions, what information must the supplier provide before concluding a distribution contract? Given the observation that today there is a significant risk of the contract being challenged for failure to meet the pre-contractual duty of information, it is better for the supplier to protect themselves by providing the elements exhaustively listed in Articles L. 330-3 and R. 330-1 of the Commercial Code, as well as certain information that may fall under the general pre-contractual duty of information.

The question of providing forecast accounts arises in particular. Already, even if the supplier is not required to communicate forecast accounts either under the Doubin law or a priori under the general duty of information—profitability concerning the value of the service being excluded as such from the scope of the obligation by Article 1112-1, para. 2—it remains that when forecast accounts are transmitted to the distributor, they must be sincere, realistic, and serious, under penalty of causing the nullity of the agreement .

Advice: How should undertakings subject to the pre-contractual duty of information react in practice?

be more vigilant than before, especially when entering into distribution agreements that may be subject to challenges regarding pre-contractual information;

in case of a high risk of dispute, distribute a pre-contractual information document (PID) modeled on that provided by Article L. 330-3 of the Commercial Code and containing the information provided for in Article R. 330-1 of the same code, even if the undertaking is not subject to it;

provide for the partner's signature of the pre-contractual document without merely relying on a standard clause attesting to its prior communication;

retain evidence of individual or collective negotiations as well as the transmission of pre-contractual information for the duration of the limitation period.

The professional's breach towards the consumer results in the annulment of the contract, under the conditions provided for in Articles 1130 et seq. of the Civil Code, if the lack of information concerns essential elements of the contract.

Cass. 1re civ., 20 December 2023, LawLex202400000063JBJ.

The fact that a vehicle has a foreign origin, and consequently, an ecological penalty must be paid upon its first registration on French territory constitutes essential information that must be brought to the purchaser's attention, within the meaning of Article 1112-1 of the Civil Code.

CA Douai, 1 February 2024, LawLex202400000852JBJ.

The boilerplate clause stating that the franchisee acknowledges having received the pre-contractual information within twenty days prior to the conclusion of the contract is not sufficient to establish the franchisor's fulfillment of its obligations.

CA Paris, 12 September 2018, LawLex201800001332JBJ.

Pursuant to Article 1112-1 of the Civil Code, the franchisor who fails, in the pre-contractual information document and at the conclusion of the contract, to specify the actual scope of territorial exclusivity, commits a significant breach of the duty of information. This contractual non-performance justifies the termination of the contract at their fault, the restitution of the entry fee, and the compensation for damages suffered by the franchisee.

CA Aix, 1 December 2022, LawLex202600000752JBJ.

A franchisor is guilty of fraud towards its franchisee when it fails to inform them that between the date of delivery of the pre-contractual information document and the signing of the contract, which occurred nearly fourteen months later, the situation of the network has significantly deteriorated due to the initiation of numerous insolvency proceedings against its members.

Cass. com., 4 December 2024, LawLex202400009488JBJ.

The communication of grossly unrealistic data, which targets results achieved by only 20% of franchisees and thus exceeds the margin of error inherent in any projection, is likely to cause a mistake regarding the profitability of the operation, justifying the annulment of the franchisee's contract.

CA Paris, 23 May 2018, LawLex20180000799JBJ.

The obligation to create two parking spaces resulting from a change in the building's use, initiated by the seller, if known by the seller, may constitute the information required under Article 1112-1 of the Civil Code.

The company, which could not, in its capacity as a professional, have been unaware of the non-waterproof nature of the building's roof, but nevertheless proposed attic insulation work—whose effectiveness is only conceivable on a waterproof roof—and billed for unnecessary work, committed a breach of its pre-contractual duty to inform, justifying the cost of the service as damages.

CA Colmar, 29 January 2024, LawLex202400000851JBJ.

The pre-contractual duty to inform only concerns information that has a direct and necessary link with the content of the contract or the quality of the parties, and whose importance is decisive for the consent of the other party.

The act of a seller concealing an essential document for the expression of the buyer's consent, namely the technical inspection report of the sold vehicle which indicated that it was affected by defects, constitutes a breach of their pre-contractual duty of information provided for in Article 1112-1 of the new Civil Code, which results in the annulment of the sales contract.

CA Amiens, 27 February 2020, LawLex202000001822JBJ.

The breach of the pre-contractual duty of information referred to in Article 1112-1 of the Civil Code may be sanctioned by annulment for error regarding essential qualities or for fraud, or may engage the liability of the party who omitted the information or deceived their co-contractor.

CA Amiens, 14 December 2021, LawLex202200008245JBJ.

The nullity referred to in Article 1112-1, para. 3, of the Civil Code can only be pronounced when the breach of the pre-contractual duty of information causes a defect in consent, particularly if it has caused an error in accordance with Articles 1132 to 1136 or constitutes fraudulent concealment within the meaning of Article 1137.

CA Versailles, 6 January 2022, LawLex202200003403JBJ.

The information required by Article 1112-1 of the Civil Code concerns a circumstance, an important fact, of which one party is not supposed to be aware and therefore cannot be expected to question their co-contractor about, which is not the case for property tax, nor for the mention of an incorrect amount thereof, whose intentional nature is not demonstrated.

When the professional designs a tailor-made trip with a close departure date and knows that certain entries on the clients' passports require obtaining a visa, they must verify the specific situation of these clients and alert them to the necessary timeframes, failing which they commit a fault engaging their liability.

Cass. 1re civ., 25 September 2024, LawLex202600000751JBJ.

What does the pre-contractual duty of information cover?

Ordinance 2016-131 codifies in Articles 1113 to 1122 of the Civil Code most of the judicial solutions underlying the regime of offer and acceptance: these two concepts are now respectively defined as the “theory of issuance,” according to which the issuance of acceptance of the offer renders the contract effective, is replaced by the “theory of receipt”; contractual freedom is affirmed, as the withdrawal of the offer during the fixed or reasonable period is not penalized by the forced formation of the contract.

“The offer, made to a specific or unspecified person, includes the essential elements of the proposed contract and expresses the will of its author to be bound in case of acceptance. Otherwise, it is merely an invitation to negotiate.”

It follows from this text that the offer must be sufficiently precise and firm to bind the parties in the event of acceptance .

If the offer can be freely withdrawn as long as it has not reached its recipient (Art. 1115, Civil Code) , its withdrawal during the contractually stipulated period or a reasonable period prevents the conclusion of the contract and incurs the extracontractual liability of the offeror without obligating them to compensate for the loss of expected benefits from the contract (Art. 1116, Civil Code). The offer lapses upon the expiration of the period set by its author or, failing that, at the end of a reasonable period (Art. 1117, Civil Code).

“Acceptance is the manifestation of the will of its author to be bound by the terms of the offer” .

Thus, in the absence of a restriction expressed in the offer of sale, and as soon as the parties have agreed on the designation of the property sold and its price, unconditional acceptance is sufficient to form the contract . Conversely, when the parties mutually agree to subject their respective intention to sell and/or acquire to the conclusion of a preliminary contract, their prior exchanges constitute only simple negotiations .

In this regard, the new Article 1120 confirms the adage “silence does not imply consent in law” by stating:

“Silence does not constitute acceptance, unless otherwise provided by law, customs, business relations, or particular circumstances.”

According to case law, the performance of the contract, which is the subject of the offer, is among the circumstances that allow silence to be interpreted as tacit acceptance .

In accordance with the regime followed by the offer (Art. 1115), acceptance is a unilateral receptive act: as long as the acceptance has not reached the offeror, it can be freely withdrawn, provided that the withdrawal reaches the offeror before the acceptance (Art. 1118, para. 2).

The theory of receipt is fully enshrined in Article 1121, which provides:

“The contract is concluded as soon as the acceptance reaches the offeror. It is deemed to be concluded at the place where the acceptance has reached.”

It follows, a contrario, that when the acceptance reaches the offeror too late, the contract is not concluded .

Finally, the ordinance enshrines the judicial regime of general terms and conditions of sale. The new Article 1119 thus codifies the traditional judicial solutions by stating that:

the general conditions of one party only apply if they have been communicated and accepted by the other party;

in the event of a discrepancy between the general conditions invoked by the parties, the incompatible clauses are without effect;

in case of discrepancy between the general conditions and the special conditions, the latter shall prevail.

Advice: What steps are required to effectively implement the general terms and conditions of sale as a result of the reform?

purge the GTC of terms that can be easily challenged on the grounds of significant imbalance introduced in Article 1171 of the Civil Code;

ensure a regular review of the GTC to take into account the evolution of the legal framework.

ensure the clarity and readability of clauses, particularly important clauses such as jurisdiction clauses, applicable law clauses, or retention of title clauses;

ensure to retain evidence of the communication and acceptance of the GTC by the other party.

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392. What are the rules applicable to lapse of contract (caducité)?

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