The mechanism for dealing with hardship, established by the new article 1195 of the Civil Code resulting from the reform of contract law, is likely to be seen as one of the possibilities of managing the difficulties encountered in the performance of contracts in the current context.

Article 1195 of the Civil Code allows, in substance:

  • To request a renegotiation of the contract in the event of the occurrence of an unforeseeable change in circumstances at the time of the conclusion of the contract, making the performance of its obligations excessively onerous for a party who has not accepted the risk
  • In the absence of agreement between the parties to seize the judge so that he revises the contract or puts an end to it.

The context of Covid-19 risks being one of the first to arouse the desire to take advantage of the provisions in question in such a systematic way.

The implementation of this mechanism is not easy in more ways than one.

Implementation of article 1195 of the Civil Code, recommendations:

  • First of all look at the date of conclusion of the contract: the mechanism cannot be implemented for contracts concluded before October 1, 2016 (the implementation can however be discussed in the event of renewal of the contract after this date or tacit renewal, resulting in a new contract)
  • Then check that the contract in question does not exclude the application of article 1195 of the Civil Code (considered in the state of the law as supplementary to the will) or does not adjust it
  • Characterize how current events (which are not limited to an epidemic but to all of its consequences, in particular following decisions taken by the executive power) would have an impact on the financial conditions for the provision of the service due
  • Ensure that an adaptation of the contract is realistic if this is what is to be requested of the other party
  • Formalize the request for renegotiation of the terms of the contract in order to be able to justify it, in particular in the event of a referral to the judge, by setting out the circumstances in question as well as their consequences, so as to demonstrate the existence of the conditions for implementation of article 1195 of the Civil Code
  • Outline the terms of the envisaged renegotiation to save time in discussions with the other party
  • Formalize the request for renegotiation so as to include those of the various first modalities envisaged by the first two paragraphs of article 1195 of the Civil Code (simple renegotiation, termination of the contract, joint referral to a judge to adapt the contract) which would be desired, so that the refusal of the other party, explicit or implicit after the expiry of a reasonable period, is global and allows the application to the judge of a request for the judge to review the contract or end it
  • Anticipate the referral to the judge by examining the most suitable judicial methods in terms of the powers of the judge (those of the trial judge seem more appropriate than those of the judge in chambers) and deadlines (the procedure at short notice or on a fixed day can be considered in case of emergency)

The goal being, in a potentially critical situation, to be sure to take an appropriate and fast enough route. Failing that, you have to know how to turn to other mechanisms.

Morgan James

Morgan James

author

associate lawyer

Subscribe to our newsletter

Get the latest news and updates from our team.

 

See you soon !

French