Situation 1: What can be invoked if one cannot deliver a good or perform a service?
| Execution has become "impossible": Force majeure |
Objectives : to avoid liability in the event of non-performance and/or to invoke the suspension or termination of the contract (where applicable with restitution).
Definition : contractual or legal, stipulating that it must be an event:
escaping the debtor's control;
which could not reasonably have been foreseen at the time the contract was concluded;
whose effects cannot be avoided by appropriate measures;
preventing the performance of the obligation.
| Execution has become "impossible": Unforeseen circumstances |
Purpose : to obtain a renegotiation (revision or adaptation of the contract) or the termination of the contract.
Definition : contractual or legal, stipulating three cumulative conditions:
the need for an unforeseen change in circumstances at the time the contract was concluded;
a change that makes the performance of the contract excessively onerous;
that the party affected by the change in circumstances has not agreed to assume the risk.
| Points to be aware of |
Force majeure can be difficult to characterize (complex legal concept);
The contract may provide for the handling of force majeure;
Otherwise, the legal consequences (suspension or termination of the contract) depend on its effects.
The possibility of invoking unforeseen circumstances may depend on the date the contract was concluded (before or after October 1, 2016);
Unforeseen circumstances can be difficult to characterize (complex legal concept);
The contract may provide for the handling of unforeseen circumstances, or even exclude them;
Failing that, the handling of unforeseen circumstances 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 goods or the completion of a service that does not occur?
Either by invoking the penalty clause of the contract if one is stipulated;
Either by seeking a court order, with a penalty payment, against the other party, to compel them to comply;
Either by having it done by a third party, at the expense of the other party.
Contract termination (being released from the contract, requiring a serious breach)
Either by invoking the termination clause of the contract if one is stipulated;
Either by simply notifying the debtor;
Either by requesting it in court (which takes longer).
Either by invoking the penalty clause of the contract if one is stipulated;
Either by demanding them in court (which takes longer).
The suspension of its own obligations (exception of non-performance)
By refraining from executing during the period of non-execution by the other party.
The price revision
By requesting, after a formal notice, if and when the execution has taken place, a modification of the price proportional to the poor execution (delay, quantity or quality).
| Points to be aware of |
The methods of treatment that are compatible with each other can be combined (example: resolution + damages, forced execution + price revision);
The choice between processing methods depends on various criteria (expectations of the contracting party, prospects of execution 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 met
The implementation of certain mechanisms requires a serious breach;
Some mechanisms require prior formal notice (termination, price revision, implementation of liability);
Some mechanisms are implemented at the risk and peril of the co-contractor (unilateral termination, exception of non-performance).
The obstacles
The co-contractor may invoke, in particular, force majeure or unforeseen circumstances; the co-contractor may also be subject to collective proceedings which could paralyze the mechanisms in question.
Morgan James
Associate founding lawyer
Morgan Jamet, a lawyer admitted to the Paris Bar and founding partner of the firm, is an expert in commercial law, insolvency law, business contracts, and mergers and acquisitions (including court proceedings). For 20 years, Morgan has practiced law and run his own business. A pragmatic lawyer, he assists his clients in their decision-making. He also provides training for in-house counsel. He enjoys both litigation and advising.
