Ordonnance for the reform of the law of contract, the general regime of obligations, and proof of obligations

The order reforming the Law of Contracts, the general scheme and the proof of obligations was published in the Official Journal of the French Republic on 11 February 2016. It is the result of codification of case law laid down in these fields and has introduced a number of innovations into the Code of Civil Law.

It sets out three principles: the principle of contractual freedom (New Art. 1102), limited only by maintenance of public order, the binding force of contracts (New Art. 1103) and good faith (Art. 1104).

Amongst the important innovations, with regard to the contract conclusion process, the legislation strictly sanctions the pre-contractual obligation to inform, the proof system (Art. 1112-1) and the confidentiality obligation (Art. 1112-2).
New provisions affecting the unilateral promise to sell and the preference pact are brought in. With regard to the contents of contracts, new Articles 1170 and 1171 establish two important doctrinal principles:
– firstly in prohibiting any clause that nullifies the effect the debtor’s essential undertaking and,
– secondly, in the specific case of membership clauses, any clause creating significant imbalance between the parties’ rights and obligations. Henceforth, such clauses shall be deemed null and void.
As regards the effects of contracts, the order introduces into the Code of Civil Law the doctrine of unforeseeability.
This is seen as the option for the parties to renegotiate their contract in the event of an unforeseeable change of circumstances and in the event of the initiative’s failure, the court’s being recognized as having the power to revise or terminate the contract at the request of either of the parties (New Art. 1195).
The order also aims to modernize the general scheme of obligations by simplifying loan transfer of receivables and bringing in debt (Art. 1327) along with contract transfer (Art. 1216).
The date of effect of these provisions has been set at 1st October 2016 subject to certain provisions. Contracts concluded before the said date shall, however, remain subject to the earlier law.
Click below to view the full text of the “Ordonnance”
http://www.textes.justice.gouv.fr/art_pix/THE-LAW-OF-CONTRACT-2-5-16.pdf