Contracts

In three rulings issued on November 29, 2023, published in the Information Bulletin and Annual Report of the Cour de cassation (French Supreme Court), the Commercial Chamber of said Court reversed it case law on the requirements governing the assumption of pre-incorporation contracts.

In so doing, the Commercial Chamber wished to put an end to the undesirable effects caused by parties wishing to evade their commitments, which results in the weakening of companies during the start phase of their business activities and of third-party contracting parties who have not debtor to turn to in the event of cancellation of the relevant contract(s).

Faced with the urgency of the situation and the risk of imminent damage caused by the sudden termination of an established business relationship, the terminated business partner may ask the summary judge to order the continuation of the relevant contract. This was recalled by the Cour de Cassation (French Supreme Court) in a decision dated June 24, 2020.

On July 28, 2020, the Paris Court of Appeals ruled on the dispute between EDF and Total Direct Energie concerning the suspension by Total Direct Energie of the framework agreement for the purchase of nuclear electricity that they had entered into, due to the Covid-19 pandemic.

The Court of Appeals upheld the interim order issued by the Paris Commercial Court on May 20, 2020 and found that the Covid-19 pandemic constituted a force majeure event justifying the suspension by Total Direct Energie of the framework agreement as soon as this event occurred.

The COVID-19 pandemic affect billions of people worldwide and has an increasingly devastating impact on the economy.

Companies are facing new challenges and the need for practical legal advice is more important than ever. Legal concerns relate to health restrictions, corporate governance, contracts, business transactions, insurance, insolvency and others.

In order to best assist our clients in these difficult times, we have prepared a summary of the main issues that businesses may face as a result of COVID-19.

On May 20, the President of the Paris Commercial Court, ruling in summary proceedings, considered that the requirements for establishing the existence of force majeure provided for in the framework agreement signed by EDF and Total Direct Energy were met and ordered EDF to accept the suspension of this framework agreement.

Before being discussed before the Commercial Court, the force majeure clause had already been debated during summary

Can a party to a commercial contract escape its obligations because of the economic disruption caused by the Covid-19 pandemic?

The answer to this question, which is of the utmost interest to companies of all sizes, is to be found in the new French contract law introduced by Ordinance of February 10, 2016.