The astute observer will note that the reform of contract law has simultaneously provided a precise definition of the various types of sanctions for a party's failure to fulfill its obligations and strengthened those that can be directly applied by the creditor without resorting to the courts. In this respect, while the defense of non-performance and unilateral termination are merely formally recognized through the rewriting of the Civil Code, accompanied by a refinement of their legal framework, price reduction constitutes a genuinely new type of sanction that legal professionals must consider in light of its innovative and potentially risky nature.

Article 1223 of the Civil Code states: " The creditor may, after formal notice, accept an imperfect non-performance of the contract and request a proportional reduction of the price.
If he has not yet paid, the creditor shall notify his decision to reduce the price as soon as possible ."

A preliminary, conceptual analysis reveals a significant departure from the original spirit of our law, since Article 1223 adds, with regard to the treatment of non-performance, to the compensation for resulting damages, a possible price reduction, the two remedies being cumulative.
This could represent a revolution in our legal system, since until now, in the absence of proof of damages resulting from a breach of obligations and thus the awarding of damages, a party could not challenge the financial equilibrium of the contract, except in a few rare cases.
Article 1223 of the Civil Code now enshrines this possibility by allowing a party, alleging a contractual breach, to request a price reduction, and, consequently, the judge hearing the application of said article to grant it.
It should be noted that the concept of price must clearly be considered as representing the financial consideration for an obligation, which means that this is a sanction that could be implemented in any type of contract involving such consideration.
A more pragmatic examination raises questions about the practical implementation of this mechanism, which is nevertheless intended to simplify the resolution of the difficulty posed by non-performance.
It appears, first of all, that the price reduction would be invoked in cases of imperfect non-performance.
Consequently, such a mechanism could certainly be implemented without major difficulty for obligations whose non-compliance is easily measurable, such as those relating to easily quantifiable goods or services, or those requiring performance within a certain timeframe.
But how will the imperfect nature of the non-performance be assessed when the concept of quality comes into play, or, if the concept of an obligation of means still has meaning, the implementation of those means by the debtor of the obligation?
The question then arises as to how the correlation between the imperfect nature of the non-performance and the resulting price reduction will be established. While the idea of ​​proportionality is aptly put forward, in practice it may prove quite insufficient for easily determining the amount of the price reduction.
Proportionality evokes the idea of ​​a mathematical rule that could be perfectly applied to performance and price. However, this is certainly a myth, or an intellectually simplistic approach.
Price is indeed a complex concept, and the law does not address its various components, only some of which are likely to be related to the non-performance in question. Logically, the put-out proportionality should only apply to these components.
It is highly likely that, in practice, neither the parties, nor the judge, nor even the expert appointed to provide a technical opinion, will be truly able to apply this principle of proportionality, and that the implementation of this provision will result in a highly undesirable and unpredictable disruption of the contract's economic balance.
One thing is certain: the drafter of the contract must now fully grasp the implications of this new form of sanction and, if necessary, considering the seemingly supplementary nature of Article 1223 of the Civil Code, assess the advisability of excluding or modifying its application contractually.

Morgan Jamet

Morgan Jamet

author

associate lawyer

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