The French law reform on Contracts

The French law reform on Contracts enacted by the executive Order dated February 10 2016: towards a simplification, clarification and foreseeability :

It is 200 years of judicial practice which has been enshrined by the Order n°  2016-131 dated February10 2016, in order to improve the readability and the effectiveness of the contracts.

In this way France improves its business law, with a more pragmatic approach.

Said reform includes the following rules :

  •  The contract may be invalidated if one of the parties acted in bad faith by concealing an information of key importance in the consent of the co- contracting party
  • The co-contracting party must accept the General Conditions (the new law does not sate whether it must be expressly or tactilely), and the clauses which are contrary to the other party's Conditions will not be given effect.
  • The disclaimer of liability clauses shall be of no effect if it deprives of substance the core of the debtor's obligation.
  • The clauses which cause a significant imbalance in the adhesion contracts are prohibited.
  • From now, on the hardship clauses are valid and failing which any unpredictable change which would render the performance extremely onerous may give rise to a request for the agreement to be renegotiated amicably or by means of a judge.
  • Even without  any termination clause, a contract can unilaterally be terminated if certain conditions are respected (prior formal notice, followed by a further notification, and a termination notification if the non-performance persists).
  • 3 questioning claims will end an uncertain legal situation by asking the contracting party to position himself ( preferential pact, power to represent and nullity of a contract ).

This reform which concerns all contracts signed after October 1 2016, will induce companies to make balanced agreements.