France: Force Majeure and loss of the basis for business in France

When does the obligation to perform the contract cease to apply?

First of all, it is important to emphasise that the French Civil Code contains a strict definition of force majeure. According to this definition, force majeure exists if an event independent of the will of the debtor, which could not reasonably have been foreseen at the time of the conclusion of the contract and the effects of which could not have been prevented by appropriate measures, prevents the debtor from fulfilling its contractual obligation. Only if such a situation of force majeure exists and the debtor is permanently prevented from performing due to such force majeure, the contract shall be rescinded by operation of law and the parties shall be released from their respective contractual obligations.

When may a withdrawal or an adjustment of the contractual relationship be considered?

The following applies to contracts that came into force after 01/10/2016: If a change in circumstances that could not have been foreseen when concluding the contract makes it excessively costly for one of the parties to fulfil its contractual obligations, the party that has not voluntarily assumed this economic risk may require its contractual partner to renegotiate the contract. For contracts concluded before 01/10/2016, the rule described above and introduced by the 2016 reform of French contract law does not apply. A claim for adjustment or renegotiation of the contractual provisions exists in these contracts only if the contract contains a provision that expressly provides for a contractual adjustment (so-called hardship clause).

How can future contractual relationships be optimally structured?

In any case, a clause providing for the waiver of the applicability of the provisions of the French Civil Code on the so-called imprévision (hardship) should not be accepted. Furthermore, the legal definition of force majeure is not mandatory. Therefore, in deviation from this, the contracting parties can contractually define cases of force majeure and specify what should then apply, i.e. whether the contract should be cancelled, end prematurely on a certain date, only temporarily suspended or, if necessary, continue to apply with modified conditions. The individual handling of cases of force majeure that is appropriate for the respective contractual relationship can and should be regulated by contract.

Autor: Maurice Hartmann