In a decision dated February 7, 2018, the Cour de Cassation (French Supreme Court) overturned existing case-law by holding that the limitation of liability clause survives the rescission of a sale transaction despite the retroactive cancellation of the sale contract.
By ruling so, the Cour de Cassation aligned its case-law with the new provisions introduced in the French Civil Code as a result of the reform of French contract law that came into force on October 1, 2016. Indeed, according to some of these new provisions, certain contractual clauses survive even in case of rescission of the underlying contract. This decision of the Cour de Cassation also provides the opportunity to go back over these new provisions.
The action for damages for breach of an established business relationship brought in the context of an intra-EU dispute is not an action in tort if a tacit contractual relationship existed between the parties.
This is the principle laid down by the Cour de Cassation (French Supreme Court) in a decision dated September 20, 2017. By ruling so, the Cour de Cassation followed the findings of a recent judgment handed down by the Court of Justice of the European Union, and departs from the case-law it traditionally applies in domestic disputes.
The validity of clauses imposed by suppliers on their authorized distributors prohibiting the online sale of their products has given rise to numerous disputes in recent years. French and EC courts generally hold that such clauses are invalid because they restrict competition.
Yet, in a decision dated September 13, 2017, the Cour de Cassation (French Supreme Court) softened its stance by recognizing suppliers who have a selective distribution network the right to impose on their distributors – subject to conditions – contractual terms prohibiting them from selling products on unauthorized online sale platforms.
Six years after the entry into force of Decree n°2009-1524 of December 9, 2009 referred to as the “Magendie” Decree, the appellate procedure is about to be significantly amended. Indeed, Decree n°2017-891 of May 6, 2017 relating to pleas of lack of jurisdiction and appeals in civil matters, published in the Official Gazette on May 10, 2017, brings about substantial changes to this procedure.
Such changes, which are primarily aimed at speeding up the appellate procedure and limiting court congestion, introduce strict rules that must be followed to avoid serious pitfalls such as invalidation, inadmissibility or nullity which may in the worst case scenario entail the sudden and final end of the appellate proceedings.
This article addresses the main procedural innovations brought about by the reform, such innovations to become effective on September 1, 2017.
Appeals lodged in disputes based on Article L. 442-6 of the French Commercial Code (the “FCC”) on restrictive trade practices – including, but not limited to, significant imbalance in the rights and obligations of contractual parties and sudden breach of established business relationships – fall within the exclusive jurisdiction of the Paris Court of Appeals. This rule had been so far applied extensively by the Cour de Cassation (French Supreme Court).
In a decision dated March 29, 2017, confirmed by a second decision dated April 26, 2017, the Cour de Cassation reversed its case law and ruled that in certain circumstances such disputes can escape the exclusive jurisdiction of the Paris Court of Appeals and be validly brought before another court of appeals.
The Cour de Cassation (French Supreme Court) recently held that a price reduction clause contractually agreed upon between a supplier and its distributor can create a significant imbalance in the rights and obligations of the parties, within the meaning of Article L. 442-6 I §2 of the French Commercial Code.
The concept of “significant imbalance”, sometimes criticized for its vagueness, is addressed in a growing number of court decisions that provide a concrete illustration thereof through a factual analysis of behaviors and contractual provisions agreed upon between business partners.
The decision commented in this article is particularly noteworthy because it recalls that, as per the terms of the above-mentioned Article, the judge is empowered to check the price set by the parties.
The European Commission has just released its preliminary report (the “Report”) on the e-commerce sector inquiry it had launched in 2015.
This inquiry is part of the European Commission’s strategy to create a digital single market. It is intended to provide an overview of the major trends in European e-commerce markets and to identify trade practices that restrict competition and limit consumer choice.
A company subject to a raid by agents of the French Competition Authority that raises concerns during the search and seizure operations is not entitled to refer itself the matter to the Juge des Libertés et de la Détention (Liberty and Custody Judge). This can only be done by the law enforcement officers who attend such operations.
Consequently, the Liberty and Custody Judge’s refusal to hear the concerns raised by the company during the raid is not a ground for annulment of the search and seizure operations.
This is the finding of the Criminal Chamber of the Cour de Cassation (French Supreme Court) in a landmark decision dated March 9, 2016 which is commented herein.
SOULIER AARPI, represented by Mr. André Soulier assisted by Ms. Stéphanie Yavordios, recently received a favorable decision from the Cour de Cassation (French Supreme Court) in a dispute concerning, in particular, the conditions in which court bailiffs enforced an ordonnance sur requête (i.e. a court order on ex parte motion) issued on the basis of Article 145 of the French Code of Civil Procedure.
The Cour de Cassation was asked to determine (i) whether disputes over the enforcement of preparatory inquiries ordered as a result of an ex parte motion fell within the jurisdiction of the juge de la rétractation (i.e. the judge having jurisdiction to withdraw a court order or decision), and (ii) whether the presence of some agents of bailiff firms during the inquiries – whereas the presence of such persons had not been expressly authorized by the court order – was likely to affect the validity of the such inquiries.
By judgment dated March 17, 2016, the Cour de Cassation firstly held that disputes over the enforcement of preparatory inquiries do not fall within the jurisdiction of the juge de la rétractation. It also held that the presence of agents of bailiff firms during the preparatory inquiries does not affect the validity of such inquiries insofar as the court bailiffs perform personally the assignments that have been entrusted to them by the court.
The principle is not new but deserves to be recalled: A party that breaches its contractual obligations may be held liable not only towards its co-contracting party but also towards third-parties.
This was re-affirmed by the Cour de Cassation (French Supreme Court) in a decision issued on October 20, 2015 in connection with a dispute related to the wrongful termination of an exclusive license agreement.
This decision is interesting to analyze, particularly with respect to third-parties, as it confirms that the latter may be awarded significant damages in compensation for the loss they have suffered as a result of the termination.
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