What is the relationship between Covid-19 and obsolescence?
| Lapse |
General purpose: annihilation of the contract which proceeds only from the disappearance of one of its essential elements.
Special case: the lapse of a contract can result from the "disappearance" of another contract when their execution is necessary for the realization of the same operation and that:
– Either its execution is made impossible by this disappearance
– Either the performance of the contract that has disappeared was a determining condition of the consent of one of the parties to the contract that remains
| Covid-19 |
– Termination due to the occurrence of a force majeure event
– Termination of the contract within the framework of the application of article 1195 of the Civil Code (by mutual agreement or by decision of the judge)
– Resolution due to breaches of the other party
This may therefore result in the nullity of other contracts concluded for the purposes of the same transaction.
What are the effects of lapsing?
| Automatic cancellation of the contract |
Lapse is intended to proceed from the sole disappearance of the essential element or the contract
– It terminates the contract – The party against whom it is opposed cannot prevent it
– Only the agreement of both parties to the contract to compensate for the disappearance of the essential element or of the other contract can prevent it
| Refunds |
– Lapse is intended to possibly lead to refunds between the parties if the contract had begun to be performed and the refunds are justified
– The regime of these refunds, which varies according to their object, is defined additionally by the Civil Code
What behavior to adopt?
| For the party who wants to take advantage of the lapse fdfdfdfd |
– Ensure that the contract does not provide for stipulations that would deal with the consequences of lapsing (compensation, derogatory regime for refunds, etc.)
– Notify the other party of the lapse of the contract by characterizing the conditions of its implementation (including the fact that the party to which it is opposed was aware of the overall operation at the time of the conclusion of the contract)
– If necessary, have it legally noted
| For the party that wants to anticipate the invocation of lapse |
– Detect the situations of overall operations within the framework of which the contracts that it has concluded would fit
– Negotiate the possible maintenance of the contract likely to be null and void (through the renunciation by the other party to invoke the nullity due to the disappearance of another contract)
– Understand the refunds that may be required
– Analyze the cause of the lapse to see if it does not result from a faulty act of the other party or a third party which would allow to request compensation for the harmful consequences suffered
