A foreign business negotiating or enforcing a contract under French contract law works with rules reformed by Ordinance No. 2016-131 of 10 February 2016, in force since 1 October 2016. The French Civil Code (Code civil) governs contract formation and performance, then lists five remedies for non-performance in Article 1217.
The 2016 reform governs contracts concluded on or after 1 October 2016
The reform of French contract law made by Ordinance No. 2016-131 of 10 February 2016 came into force on 1 October 2016, contracts concluded before that date remain governed by the former law, and Law No. 2018-287 of 20 April 2018 ratified the ordinance while amending several articles.
Article 9 of the ordinance reads: “The provisions of this ordinance shall enter into force on 1 October 2016. Contracts concluded before that date remain subject to the former law” (our translation). Article 1123, third and fourth paragraphs, and Articles 1158 and 1183 applied from that date. A court action brought before 1 October 2016 is decided under the former law, on appeal and in cassation too.
The 2018 amendments took effect on 1 October 2018, under two regimes. For Articles 1112, 1217 and 1221, they are declared interpretative, so they reach contracts concluded since 1 October 2016. For Articles 1171 and 1223, the 2018 wording applies only to contracts concluded on or after 1 October 2018. A contract concluded between 1 October 2016 and 30 September 2018 therefore remains governed by the 2016 wording of these two articles. The date of conclusion decides which text applies.
Articles 1102 to 1104 make freedom of contract, binding force and good faith the ground rules
The Civil Code opens its law of contract with three ground rules: each party is free to contract within the limits set by law (Article 1102), a lawfully formed contract binds its parties like a law (Article 1103), and good faith governs negotiation, formation and performance as a matter of public policy, or ordre public (Article 1104).
Contractual freedom, under Article 1102, covers whether to contract, with whom, and on what content and form. Its limit sits in the same article: it “does not allow derogation from the rules that concern public policy” (our translation).
Article 1103 states that “contracts lawfully formed take the place of law for those who made them” (our translation), carrying over former Article 1134, first paragraph.
Article 1104 requires good faith at all three stages and adds: “This provision is a matter of public policy” (our translation). A clause therefore cannot exclude good faith, which returns in the rules on negotiations and on enforced performance.
These articles form the general law of contract; see also our guide to French commercial law.
Negotiations are free but subject to good faith, and a party who knows decisive information may have to disclose it
Under Article 1112 of the Civil Code, parties are free to start, conduct and break off pre-contractual negotiations, but they must meet the requirements of good faith; under Article 1112-1, a party who knows information of decisive importance for the other’s consent must share it when the other legitimately does not know it or trusts its counterparty.
A party may therefore walk away from a deal, but not in bad faith. After a fault in the negotiations, damages cannot compensate “the loss of the benefits expected from the contract not concluded, nor the loss of the chance of obtaining those benefits” (Article 1112, our translation).
In Cass. com., 5 June 2024, No. 23-14.904 (unpublished), a court of appeal had awarded 90,000 euros to the would-be buyer of a business for the lost chance of acquiring it. The Cour de cassation quashed the award because it compensated the lost chance of obtaining benefits expected from the contract not concluded.
Under Article 1112-1, decisive information has a direct and necessary link with the contract’s content or the parties’ status. The duty does not cover the estimate of the value of the performance. The parties can neither limit nor exclude it. A breach engages the liability of the party bound, and may also lead to annulment of the contract under the conditions laid down in Articles 1130 et seq.
Both criteria must be met. Cass. com., 14 May 2025, No. 23-17.948, published in the Bulletin, limited the duty to information linked to the contract’s content or the parties’ status “and whose importance is decisive for the other party’s consent” (our translation). A buyer of shares in a fast-food company said frying had proved impossible. The appeal failed, because that point had not been shown to be decisive.
A contract is formed by offer and acceptance and needs consent, capacity and lawful, certain content
Under the Civil Code, a contract is formed when an offer meets an acceptance by which the parties express their will to be bound, and it is valid only if the parties consent, have capacity to contract and agree on lawful and certain content.
Under Article 1113, the will to be bound “may result from a declaration or from unequivocal conduct of its author” (our translation). Conduct can therefore amount to acceptance, provided it is unequivocal.
Validity depends on Article 1128, which lists three conditions (our translation):
- the consent of the parties;
- their capacity to contract;
- a lawful and certain content.
Article 1128 corresponds to former Article 1108 of the Code. Its list does not mention cause.
Consent can also be vitiated. Under Article 1130, mistake (erreur), fraud (dol) and duress (violence) vitiate consent when they are decisive. Without them, one party would not have contracted, or would have contracted on substantially different terms. Their decisive character is assessed in the light of the persons and the circumstances.
For contracts concluded since 1 October 2018, Article 1171 deems unwritten a non-negotiable term of a contrat d’adhésion (contract of adhesion), set in advance by one party, that creates a significant imbalance between the parties’ rights and obligations. The assessment covers neither the main subject matter of the contract nor the adequacy of the price in relation to the performance. Our analysis of how Article 1171 strikes out unbalanced terms sets out the full regime.
Hardship allows a party to seek renegotiation, while force majeure suspends or ends performance
Under Article 1195 of the Civil Code, a party may ask the other party to renegotiate when a change of circumstances, unforeseeable when the contract was concluded, makes performance excessively onerous for it, provided it had not accepted that risk, whereas force majeure prevents performance and suspends it or ends the contract.
Hardship (imprévision) does not suspend the contract: the requesting party “continues to perform its obligations during the renegotiation” (our translation). If renegotiation is refused or fails, the parties may agree to terminate the contract or jointly ask the court to adapt it. Failing agreement within a reasonable period, the court may, at the application of one party, revise or end it.
Article L. 211-40-1 of the Monetary and Financial Code excludes Article 1195 for obligations arising from transactions on the securities and financial contracts referred to in paragraphs I to III of Article L. 211-1 of that code. In a dispute over a promise to purchase shares, the Cour de cassation referred a question on that exclusion to the Conseil constitutionnel, without ruling on hardship itself (Cass. com., 15 March 2023, No. 22-40.023).
Under Article 1218, force majeure is an event beyond the debtor’s control that prevents performance. The event could not reasonably be foreseen when the contract was concluded, and its effects cannot be avoided by appropriate measures. A temporary impediment suspends performance, unless the resulting delay justifies termination. A permanent impediment terminates the contract automatically, and the parties are released under the conditions of Articles 1351 and 1351-1.
The two regimes rest on different facts: hardship leaves performance possible but excessively onerous, whereas force majeure prevents it.
French law offers five remedies for non-performance, which can be combined when compatible
Article 1217 of the Civil Code gives the party to whom an undertaking has not been performed, or has been performed imperfectly, five remedies. That party may refuse or suspend its own performance, seek enforced performance in kind (exécution forcée en nature), obtain a price reduction, bring about termination or claim compensation.
Remedies that are not incompatible may be combined, and “damages may always be added to them” (our translation).
Withholding performance (exception d’inexécution) is open for an obligation already due, if the other party’s non-performance is sufficiently serious (Article 1219). Article 1220 also allows suspension when it is manifest that the counterparty will not perform when due and the consequences are sufficiently serious for the suspending party. The suspension must be notified as soon as possible.
Price reduction follows Article 1223, in its wording for contracts concluded since 1 October 2018. In the event of imperfect performance, a creditor that has not yet paid all or part of the price may, after formal notice (mise en demeure), notify the debtor as soon as possible of a proportionate reduction; any acceptance by the debtor must be in writing. A creditor that has already paid may, failing agreement, ask the court.
Enforced performance in kind is available unless impossible or manifestly disproportionate
Under Article 1221, the creditor may, after formal notice, pursue performance in kind “unless this performance is impossible or there is a manifest disproportion between its cost for the debtor in good faith and its interest for the creditor” (our translation). As noted above, this wording also governs contracts concluded since 1 October 2016.
Article 1222 adds an alternative: after formal notice, the creditor may have the obligation performed itself, within a reasonable time and at a reasonable cost, and recover the sums from the debtor. Destroying what was done in breach requires the court’s prior authorisation. The creditor may also ask the court to order an advance of the sums.
Termination follows a clause, a notice or a court decision
Under Article 1224, termination (résolution) results either from a termination clause or, where non-performance is sufficiently serious, from a notice sent by the creditor to the debtor or from a court decision. The seriousness condition applies to the notice and the court decision, not to the clause.
Contract damages are limited to foreseeable loss, and a court may adjust a manifestly excessive or derisory penalty
Under the Civil Code, contract damages are due only after formal notice, unless non-performance is definitive; the debtor answers only for loss foreseen or foreseeable at conclusion, save gross or intentional fault; and a court may moderate or increase a manifestly excessive or derisory penalty.
Article 1231 makes formal notice a precondition: unless non-performance is definitive, the debtor must first be called on to perform within a reasonable time.
Article 1231-3 caps contractual liability at the damages “which were foreseen or which could have been foreseen when the contract was concluded” (our translation). The cap falls away when non-performance results from gross or intentional fault (faute lourde ou dolosive).
A penalty clause (clause pénale) fixes in advance the sum due for non-performance. Article 1231-5 bars the court from awarding more or less. However, the court may, even of its own motion, moderate or increase a manifestly excessive or derisory penalty. The court may also, even of its own motion, reduce the penalty in proportion to the benefit that partial performance has provided to the creditor. Any stipulation contrary to these two powers is deemed unwritten (réputée non écrite). Unless non-performance is definitive, the penalty is incurred only after formal notice.
In Cass. soc., 6 May 2025, No. 22-23.897 (unpublished), the social chamber applied Article 1231-5 to a severance payment of twenty-four months’ salary in an employment contract. The Court defined a penalty clause as one fixing, in advance and as a lump sum, the compensation due for non-performance. The payment had that character, so the court of appeal should have checked whether it was manifestly excessive.
A choice of law in a contract must designate the law of a State, the Cour de cassation held in 2026
On 11 February 2026, the Cour de cassation held that a choice of law made under Article 3 of the Rome I Regulation “can only concern the law of a State” (our translation). Parties remain free to choose the law governing their international agreement, but a rule of religious law falls outside that choice.
The judgment (Cass. 1st civ., 11 February 2026, No. 24-18.329) is published in the Bulletin. When all the elements of the situation are located in one country at the time of the choice, the parties may still choose another country’s law. That choice cannot override the provisions of the first country’s law that allow no contractual derogation. The case concerned a rabbinic rule, the “God et Igoud”.
A contract meant to be governed by French law should therefore designate it as the law of a State. Under Article 1102 of the Civil Code, freedom of contract also stops at rules of public policy. Before signing, you can have your commercial contracts drafted and reviewed under French law.