The involvement of article 1171 of the Civil Code and the apprehension of the significant imbalance in business relations between professionals

Court of Cassation, Commercial Chamber, January 26, 2022, n°20-16.782

The judgment of January 26, 2022 delivered by the Commercial Chamber of the Court of Cassation sheds light on the articulation of the applicable texts between common law and special law on the subject of the significant imbalance. It also specifies the conditions for bringing article 1171 of the Civil Code and its effects.

The facts giving rise to the appeal are classic in matters of relations between professionals.

A company operating in the catering and sandwich business decided to enter into a financial rental contract with a company specializing in the field to rent equipment provided by a third-party company for sixty monthly rents of €170 excluding taxes.

Following unpaid bills, the company leasing the equipment gave formal notice to pay its debtor by referring to the termination clause contained in the contract. The rental company sued the catering company for payment of the sums owed.

Under the terms of a judgment rendered on October 23, 2018, the Saint-Étienne commercial court ordered the catering company to pay the sums due to its co-contracting party. She decided to appeal.

The Lyon Court of Appeal reversed the judgment undertaken to deem Article 12 of the general conditions of the contract unwritten and thus to say that the rental contract had not been terminated and that it therefore continued until at its end.

The rental company appealed to the Court of Cassation alleging improper use of the common law text to the detriment of special law, namely Article L. 442-6, I, 2°, of the Commercial Code (prior to the order of April 24, 2019) aimed at practices that restrict competition. She also reproached a bad application of article 1171 of the Civil code as well in the apprehension of the significant imbalance as in the bringing into play of the sanction of deemed unwritten .

The Court of Cassation partially quashed the disputed judgment in that it held that the financial lease contract included a clause reserving the sole right of the rental company to take advantage of a termination by operation of law. The catering company had no similar option under the terms of the said contract.

In this judgment, the High Court seized the opportunity to provide the key to the distribution between the application of common law laid down by article 1171 of the Civil Code and the law on restrictive practices of competition (article L.442-1 , I, 2° of the Commercial Code).

As such, it recalls that article 1171 of the Civil Code is intended to apply only to the contract of adhesion, which is defined by three elements, namely, the presence of general conditions, the unilateral determination and in advance of these by one of the parties to the contract and the absence of negotiations around these general conditions ( article 1110 of the Civil Code ).

In practice, many business contracts meet its characteristics, including the contract entered into by the parties in this case.

The whole point of determining the applicable regime in advance lies in the very characterization of the significant imbalance and its sanction.

If on the basis of article L.442-1, I, 2° of the Commercial Code, the lack of reciprocity in the obligations of the parties is frequently retained by the judges as revealing the imbalance in these obligations, it is clear that that the solution adopted in this case on the basis of article 1171 of the Civil Code is quite different. ( Court of Cassation, Commercial Chamber, April 12, 2016, n°13-27.712 )

Indeed, the Court of Cassation considers that such an absence of reciprocity is justified by “ the nature of the obligations to which the parties are respectively bound ”.

However, very often, “ the nature of the obligations ” prevents any reciprocity in the bringing into play of a faculty reserved for one party.

It would therefore seem that the unbalanced nature of the non-negotiable clauses must be sought at the level of the very object of the said faculty which is not reciprocal, which is assessed in concreto , according to the general structure of the contract and not in isolation, clause by clause.

Moreover, the imbalance must not be sought on the ground of the adequacy of the price to the service unlike article L.442-1, I, 2° of the Commercial Code which allows a real control of the balance of financial services by trial judges.

It being specified that the party who intends to avail himself of article 1171 of the Civil Code must, in addition, demonstrate the “ significant ” nature of the imbalance.

And for good reason, any unfair clause within the meaning of common law will be deemed unwritten, whereas in the field of the law on restrictive practices of competition, article L.442-1, I, 2° of the Commercial Code provides, with regard to him, the involvement of the responsibility of the author of the litigious practices, which is not provided for by article 1171 of the Civil Code.

Ultimately, the adage that " specialia generalibus derogant " is not intended to apply automatically to the apprehension of contractual imbalances when article L.442-1, I, 2° of the Code of commerce should only be confined to relations between suppliers and major distributors.