2016 Contracts Law Reform: Brief Overview on the Major Modifications

Since the coming into force of the 2016 French Civil Law reform (Ordinance of 10 February 2016), it might be of interest to have a clearer view of the main changes such reform entails. The French government’s goal was to provide a more understandable, secure and attractive contract law. The Ordinance thus merely aims at codifying existing case law and simplifying positive law. Although it cannot be regarded as a breakthrough, the reform still provides some key updates and some useful changes which are addressed below.

  • Pre-contractual negotiations: the reform does not provide any revolutionary changes with regard to the pre-contractual negotiations phase. However, it confirms the introduction into the Civil Code of common law duties applying to the negotiating parties, such as the pre-contractual obligation to provide essential information or the obligation not to disclose any confidential information during the negotiations stage.
  • Preliminary contracts (“avant-contrats”): the reform strengthens the efficiency of the unilateral promise of contract (“promesse unilatérale de contrat”). From now on, any breach of a “promesse unilatérale” entails the forced execution of such promise and the nullity of any contract concluded in violation of this promise (provided of course that the breaching third party had knowledge of the existence of the promise). Also, the “questioning interpellation” (“interpellation interrogatoire”) has been created, allowing a third party to form part of a preference pact (“pacte de preference”) and to ask the pact’s recipient whether he wishes to enforce such pact. If the recipient does not reply within a reasonable time, he will not be able to file for a nullity action later on.
  • Effects of the contract: the exception of non-performance (“exception d’inexécution”) is now included into the civil code: if it is clear that a party will not perform its obligations and that the consequences of such non-performance are “serious enough” for the other party, the latter will be allowed to suspend the performance of its own obligations following notification of the breaching party. The reform also introduces into the Civil Code the notion of “unpredictability”, allowing the judicial review of a contract when the performance of such contract has become excessively expensive for a party due to an unpredictable change of circumstances. Whenever an “unpredictable” event occurs, the parties will be bound to renegotiate the contact. In the event that no agreement is reached, parties will be entitled to request the judge for a judicial review or for termination.
  • Transmission of obligations: another key aspect of the reform is that it introduces into the Civil Code a legal statutory regime for the cession of a debt as well as for the cession of a contract.

Of course, contracts concluded before the coming into force of the reform will remain subject to the previous provisions. However, vigilance is still called for since a contract renewal, even when it is tacit, shall be governed by the new provisions.

Our dedicated team is at your disposal to answer your questions about the new provisions implemented by order No. 2016-131 dated 10 February 2016.

Benjamin Balensi

Benjamin advises French companies and international groups on the development of their business strategy. He mainly works in commercial law, designing and negotiating complex contracts (joint ventures, consortiums, large partnerships), […]

Perle Pascaud-Blandin

Perle is a lawyer (Manager) of the Business Law department of the Deloitte Société d’Avocats firm and joined the law firm in 2015. She principally works in the following areas: […]