How do you challenge a poorly drafted legal contract? The hybrid nature of this legal instrument complicates the issue of possible remedies. Practitioners need to navigate carefully between the contractual and judicial dimensions.
Appeal procedures
Judicial contracts, the intersection between the conventional and the judicial, have a specific recourse regime. Its nature is twofold: contractual in source and judicial in form.
Case law is consistent on this point. As the Court of Cassation regularly points out, "a judgment in which a judge merely records the parties' agreement is devoid of any legal value independently of that agreement" (Civ. 1re, 25 June 2008, no. 07-10.511).
This fundamental principle determines the remedies available.
Judicial contracts derive their authority not from the intervention of the judge, but from the will of the parties. It is this contractual origin that dictates the recourse regime. Thus, a judicial contract does not use the traditional means of appeal for judgments.
Exclusion of classic appeal and appeal in cassation
The direct consequence of the contractual nature of the judicial contract is the exclusion of the remedies reserved for judicial decisions.
The appeal is closed. The Court of Cassation has clearly ruled that "a decision that merely records a judicial contract is not subject to appeal" (Civ. 3e, 25 Feb 2016, no. 14-26.905).
This position is justified by the non-jurisdictional nature of the judge's act. The judge merely records the agreement of the parties, without creating anything or exercising his jurisdictional power.
Similarly, an appeal in cassation is not available against a judicial contract. The purpose of this extraordinary remedy is to censure a judicial decision if it does not comply with the law. However, as a judicial contract is not a judicial decision, it is not subject to this review.
This exclusion may come as a surprise to ill-informed litigants. They sometimes discover belatedly that it is impossible to appeal against an unfavourable court decision.
Actions for contractual nullity and rescission
If judicial remedies are closed, what options do dissatisfied parties have?
As judicial contracts are subject to ordinary contract law, they can only be challenged by actions for contractual nullity. As the doctrine states, "a judicial contract is subject to the rules governing agreements: the right of appeal is closed and a judicial contract can only be challenged by exercising the principal means of nullity" (Guinchard et al.).
In practice, this means that a party can challenge the contract in court by:
- Action for nullity on grounds of lack of consent (error, fraud, violence)
- Action for rescission on grounds of lesion (in the limited cases where it is allowed)
- Action for nullity on grounds of incapacity
These actions must be brought before the competent court. They are subject to the rules of ordinary law, particularly as regards limitation periods.
A concrete example? A settlement approved by a judge may be challenged on grounds of fraud if one party has intentionally concealed essential information. The action will not be brought against the act of approval but against the contract itself.
Recent legislative developments
The legislator has gradually clarified the rules governing appeals against judicial contracts.
One major change concerns article 2052 of the Civil Code. Prior to the 2016 reform of contract law, this article stated that "a transaction has, as between the parties, the force of res judicata in the final instance". This unfortunate wording created confusion about the actual nature of the settlement and erroneously suggested that it could be appealed to the Supreme Court.
Order no. 2016-131 of 10 February 2016 amended this article, which now states that "the settlement shall prevent the parties from instituting or continuing legal proceedings with the same purpose". The reference to res judicata has therefore been removed, which clarifies the applicable regime.
This legislative development demonstrates the legislature's desire to ensure greater consistency between the nature of the judicial contract and the remedies applicable to it.
The difficulty persists, however, when it comes to "homologations". Despite its name, homologation of an agreement does not convert it into a judicial decision. French law still suffers from certain terminological imperfections that can lead practitioners astray.
Note: even if approved, the agreement retains its contractual nature and must be challenged using the contractual nullity procedure.
If you are in any doubt about the exact classification of an act and the remedies available, you should seek legal advice. A mistake on this point can be fatal, as it may result in the appeal being inadmissible.
Are you planning to challenge a contract in court? Our law firm specialising in procedural and contract law can help you identify the right strategies and implement the appropriate remedies.
Sources
- Civil Code, article 2052 (version resulting from order no. 2016-131 of 10 February 2016)
- Civ. 1re, 25 June 2008, no. 07-10.511, RTD civ. 2008. 662, obs. J. Hauser
- Civ. 3e, 25 Feb 2016, no. 14-26.905
- Chainais, Ferrand and Guinchard, "Procédure civile. Droit interne et européen du procès civil", No. 1056, p. 714
- Deharo Gaëlle, "Judicial contract", Répertoire de procédure civile, September 2017
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