Focus on the judgment of the Plenary Assembly of the Court of Cassation of January 20, 2020

Why talk about this decision which is already more than 6 months old?

The wave caused by this decision was abruptly stopped by the appearance of Covid-19, but the deconfinement leads practitioners to – finally – give it the echo it deserves.

Because this decision deserves that we stop there for two reasons: one of form, the other of substance.

First of all, the form: the judgment is rendered according to the new drafting standards that the Court of Cassation has set itself.

What are these new standards and do they imply big changes?

The "whereas" disappear in favor of a "direct" style and the paragraphs are now distributed according to the following nomenclature: 1. Facts and procedure; 2. Examination of the means(s); 3. Device.

The most important stops will now include an “enriched” motivation. Under this promising term, we should find the highlighting of the method of interpretation of the texts submitted to the Court, of the alternative solutions discarded and the history of the "precedents" within the High Court, even if it means underlining the divergences of position between the different chambers… revolutionary!

So much for the form.

Let's get to the bottom. The question submitted to the Plenary Assembly is well known to lawyers: what is the liability regime applicable to the recourse exercised by a third party to whom the non-performance of a contract has prejudiced.

Why is this question important?

The question is decisive because depending on the answer (responsibility of a contractual or quasi-criminal nature), the offending co-contracting party may or may not oppose the clauses of the contract which protect him in such a case (limitation of liability, competent jurisdiction).

Examples of damage are very numerous in practice. In the case before us, a sugar company suffers damage as a result of the interruption of the electricity supply to one of its business partners, due to poor performance of the electricity supply contract, without another fault.

What had the Court of Cassation decided before this case?

In 2006, the Plenary Assembly seemed to have laid down the principle that " the third party to a contract may invoke, on the basis of tort liability, a breach of contract when this breach has caused him damage" .

Without success since a part of the doctrine had strongly criticized, pushing certain chambers to moderate and then to deviate from the affirmed solution.

Why these resistances?

Two conceptions oppose each other: on the one hand, the partisans of "foreseeability", who think that a co-contracting party must be able to set up against third parties the clauses of the contract which protect him (limitation of liability, competent jurisdiction), and other, those who think that the victim of the breach of a contract should be able to obtain full compensation, regardless of what was provided for in this contract.

What conception do you defend?

On a very personal note, it seems to me that when a contract is formed, it is with the idea of ​​enriching oneself and therefore the parallel should be the obligation to assume the damages that this enrichment induces for third parties. It is therefore the second conception which has my favour.

But with a caveat: not all third parties are equal and when the third party is aware of the contract in question, or even derives an indirect benefit from it, he should then be protected differently against the risk of damage, as has been proposed in some bills.

What would be the right system?

For third parties totally unrelated to the contract, the principle of full compensation seems to me totally justified for the reasons already stated.

For the other third parties, two situations could be envisaged: if the fault which causes the damage consists solely of poor performance of the contract, the faulty person must benefit from the contractual clauses which protect him. If the fault is coupled with a breach of a general duty of care, it is then full reparation that must be applied.

And what is the solution adopted by the Court of Cassation?

The High Court has chosen not to distinguish according to the situation of the victim in relation to the contract and endorses the principle according to which the victim must be entitled to full compensation for his damage.

The proponents of predictability therefore lost, unless one of the bills proposing a different solution was revived and passed.

Won't there still be resistance?

In doctrine, certainly. At the level of the courts, I don't think so because by rendering a decision in which it identifies the solution it rejects and explains the reasons, the Court of Cassation makes divergent interpretations impossible. As a result, adopting a contrary solution would amount to challenging it head-on and therefore risking the cassation.

This is the strength of the works in which the form joins the content!