Situation 1: What to invoke if one cannot deliver a good or perform a service?
| Execution has become “impossible”: Force majeure |
Goals : not to be held liable in the event of non-performance and/or to invoke the suspension or termination of the contract (if necessary with refunds).
Definition : contractual or legal, providing that it must be an event:
beyond the control of the debtor;
which could not reasonably have been foreseen when the contract was concluded;
the effects of which cannot be avoided by appropriate measures;
preventing performance of the obligation.
| Execution has become “impossible”: Unpredictability |
Purpose : to obtain a renegotiation (revision or adaptation of the contract) or the resolution of the contract.
Definition : contractual or legal providing for three cumulative conditions:
the need for an unforeseeable change in circumstances when concluding the contract;
a change that makes performance of the contract excessively onerous;
that the party affected by the changed circumstances has not agreed to bear the risk.
| Vigilant point |
Force majeure can be difficult to characterize (complex legal concept);
The contract may provide for the treatment of force majeure;
Otherwise, the legal consequences (suspension or termination of the contract) depend on its effects.
The possibility of invoking hardship may depend on the date of conclusion of the contract (before or after October 1, 2016);
Hardship can be difficult to characterize (complex legal concept);
The contract may provide for the treatment of contingency, or even exclude it;
Failing this, the handling of the contingency may, in the absence of amicable renegotiation, require the intervention of a judge who will revise or terminate the contract.
Situation 2: What to do if we are waiting for the delivery of a good or the performance of a service that does not occur?
Either by invoking the penalty clause of the contract if one is stipulated;
Either by asking the court for an injunction, under penalty, against the other party, to have to perform;
Either by having it done by a third party, at the expense of the other party.
Termination of the contract (freeing oneself from the contract, necessity of a serious breach)
Either by bringing into play the termination clause of the contract if one is stipulated;
Either by a simple notification to the debtor;
Either by taking it to court (longer).
Either by invoking the penalty clause of the contract if one is stipulated;
Either by taking them to court (longer).
The suspension of its own obligations (exception of non-performance)
By refraining from performing the time of the non-performance of the other party.
The price review
By asking after a formal notice, if and when the execution has taken place, a modification of the price proportional to the bad execution (delay, quantity or quality).
| Vigilant point |
Processing methods that are compatible with each other can be combined (example: rescission + damages, forced execution + price review);
The choice between the processing methods depends on various criteria (expectations of the co-contracting party, performance prospects by the other party, risks associated with the processing method, etc.);
The possibility of invoking certain mechanisms may depend on the date of conclusion of the contract (before or after October 1, 2016).
The conditions to be fulfilled
The implementation of certain mechanisms requires a serious breach;
Some mechanisms require prior notice (resolution, price review, implementation of liability);
Some mechanisms are implemented at the risk and peril of the contracting party (unilateral resolution, exception of non-performance).
The obstacles
The co-contracting party may in particular invoke force majeure or unforeseen circumstances; The co-contractor may also be the subject of collective proceedings likely to paralyze the mechanisms in question.
Morgan James
Founding partner
Lawyer at the Paris staff. Morgan Jamet, founding partner of the firm, lawyer at the Paris Bar, expert in commercial law, law of companies in difficulty, practice of business contracts and acquisition law (including at the bar of the court). For 20 years, Morgan has been a lawyer and business leader. Pragmatic, he helps his clients in their decision-making. It also provides training for corporate lawyers. He enjoys pleading as much as advising.
