A major issue raised by the COVID-19 crisis is whether it constitutes a lawful ground for non-performance or modification of contracts. French law traditionally took a very strict view on the binding force of contracts and acknowledged only force majeure as a cause of discharge of contract. However, the reform of contract law passed in 2016 has introduced some changes and there are now several provisions in the code civil which may justify a discharge or an adaptation of contract in the case of a major change of circumstances. The COVID-19 crisis is now putting these provisions to test.

INTRODUCTION

The impact of the COVID-19 crisis on the national legal systems in general, and the French one in particular, is considerable. In the context of this limited contribution, however, only the impact on ongoing private law contracts shall be considered. More precisely, this contribution will focus on one of the major contract law questions raised by the crisis, namely whether it constitutes a lawful ground for non-performance of contracts.

At first sight, the answer should be no. The binding force of contracts is a basic tenet of French law, which is now formulated very clearly at the beginning of the section of the Civil Code (code civil) devoted to contracts: “Contracts which are lawfully formed have the binding force of legislation for those who have made them” (Art 1103 of the new code civil). As a matter of principle, a change of circumstances, however unfavourable to one party to a contract, should not lead to a discharge of that contract. A party must therefore perform his obligations under the contract, at whatever cost to him. If he does not, the other party will be entitled to a remedy, and may, in particular, claim damages for any loss suffered as a result of non-performance. There is hardly a legal rule without an exception, however, and there are cases where French law does accept a relaxation of the binding force of contracts and where a change of circumstances may lead to the contract being discharged or amended. But do these cases cover the specific circumstances of the current COVID-19 crisis?

As in other countries, emergency legislation has been adopted in France in the context of the crisis, but it deals only with specific contracts.