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Influence of Force Majeure in French Contract Law on Traditional Principles of English Contract Law

Introduction of the Research Assignment:
The proposed research investigates the comparative analysis of the principles of the Force Majeure concept in French contract law and its potential impact on established principles of English contract law. Both legal systems have historically developed on their own, each with its own unique set of rules controlling duties under contracts. However, with globalization and greater cross-border interactions, there is a need to investigate how conceptions from one legal system can affect or challenge those from another.

The present study endeavours to investigate the degree to which the Force Majeure doctrine, which is firmly ingrained in French contract law, has impacted or undermined conventional ideas found in English contract law. This inquiry aims to provide a comprehensive understanding of the issues at hand by placing the topic within the larger framework of legal theory and practice through the adoption of an analytical tone.

Review of Literature:
Force Majeure And Imprévision Under French Law by Shearman & Sterling
In light of the COVID-19 epidemic, this literature review addresses imprévision and force majeure as they relate to the principles of French law. It describes the requirements, legal frameworks, and pragmatic issues for those who may be impacted. Important elements are the doctrine of imprévision, the notion of force majeure, and the standards for its application. There are helpful tips for negotiating contracts under French law given.

Impossibility Of Performance As An Excuse In French Law: The Doctrine Of Force Majeure

The literature on force majeure provides insight into the development and use of the theory in various legal circumstances. It comes from French law and justifies the non-performance of a contract because of unavoidable circumstances. Anglo-American courts are lenient when it comes to unfeasible performance, whereas French courts define force majeure liberally.

This adaptability highlights the significance of earlier decisions and raises the possibility of future advancements in judicial interpretation. The body of literature emphasizes how these principles are dynamic and important for balancing enterprise risks. This review emphasizes how important it is for academics to keep studying how force majeure is changing in legal discourse.

The Changing of the Guard by International Construction Law Review, 2002
This study critically evaluates many viewpoints on force majeure and contract frustration, including Schmitthoff's concept of force majeure as occurrences beyond parties' control, while noting the difficulty of interpretation. It shows the problems in applying contract notions, founded in civil law but sometimes confusing in common law regimes. Unlike English law, civil law regimes lay less weight on foreseeability. The necessity to adapt legislative structures, especially in sectors like construction, to accord with present economic conditions is highlighted. Overall, the assessment underlines the significance of adjusting legal frameworks to growing social and corporate demands.

Frustration and Force Majeure: A paper in light of COVID-19 by Alexander Hickey KC Call 1995 King's Counsel 2016

Interest in contractual notions like force majeure and frustration has increased as a result of the Covid-19 pandemic. Even if they aren't included in many contracts, they are essential for understanding obligations and indemnity. The applicability of force majeure varies and necessitates a causal connection to non-performance. This essay explores their subtleties in light of the pandemic's difficulties.

Pays Marie SARL v. Tesco Stores Ltd[1]
The case discusses the application of French law's force majeure concept in an English contract dispute. It illustrates how the English court interpreted and applied French principles of force majeure in determining contractual obligations, providing insights into the interaction between English and French contract law concepts.

Jean v. Smith[2]
This case examines the impact of French force majeure principles on an English contract involving a dispute over performance during unforeseeable circumstances. It sheds light on how English courts consider French legal concepts in contractual disputes, influencing the interpretation of contractual obligations

Research Problem and Question:
The main area of inquiry concerns how traditional English contract law principles are impacted by the Force Majeure doctrine of French contract law. The following inquiries are the focus of the study:
  • How have conventional principles of English contract law concepts been affected by the Force Majeure idea in principles of French contract law?
  • What are the main problems and difficulties that the incorporation of Force Majeure into the English legal system presents?
  • How does harmonizing disparate legal conceptions across several jurisdictions affect theory and practice?
Objectives of Research:
  • To examine how conventional principles of English contract law principles have been impacted by the Force Majeure doctrine in French contract law.
  • To assess the theoretical and practical ramifications of harmonizing disparate legal conceptions in various legal systems.

Hypothesis:
Hypothesis 1: Traditional principles of English contract law standards will gradually erode when French contract law's Force Majeure doctrine is incorporated into English contract law.
Hypothesis 2: It will improve legal certainty and enable more amicable resolution of contractual disputes if the notion of Force Majeure is standardized across countries.

Research Method - Nature of Research and Tools Used:
Using a comparative methodology, this study will examine academic literature, case law, and legal concepts from the French and English legal systems to determine how Force Majeure affects accepted English contract law principles. It will entail a critical evaluation of primary and secondary sources, comparative techniques, and legal interpretation as a means of qualitative analysis.

Abstract:
This study examines how long-standing English contract law concepts have been impacted by the Force Majeure theory in French contract law. In light of globalization and the rise in cross-border contacts, the paper explores how classic English contract law concepts are impacted by the Force Majeure notion, which is firmly established in French legal history. The study attempts to shed light on the theoretical and practical ramifications of harmonizing divergent legal concepts across various jurisdictions by using a comparative method.

The study critically examines the legal frameworks underlying Force Majeure in both French and English law, drawing on a survey of pertinent literature and case law. It looks at the conditions, legal interpretations, and real-world effects of force majeure provisions, taking into account how they apply to cross-border transactions and contractual disputes. The paper also examines the theoretical foundations of force majeure, including its historical evolution and changing relevance in modern legal discourse.

Key research questions include analyzing the effects of French law's Force Majeure doctrine on English contract law's conventional principles, identifying the main obstacles to this incorporation, and evaluating the theoretical and practical ramifications for legal practice and international transactions.

The study employs a comparative technique to enhance comprehension of the intricate interactions across legal systems and provide insightful information to legal practitioners, researchers, and policymakers who must navigate the complexity of international contract law.

What Is a Force Majeure Contract Clause, and How Does It Work?

Force majeure is a French phrase that means "greater force." It is similar to the notion of an act of God, an occurrence for which no party may be held guilty, such as a hurricane or a tornado. However, force majeure also involves human acts, such as armed combat.

Generally speaking, for circumstances to constitute force majeure, they must be unforeseen, external to the parties of the contract, and inescapable. These ideas are defined and utilized differently depending on the jurisdiction.

The idea of force majeure originates in French civil law and is an acknowledged norm in many countries that draw their legal systems from the Napoleonic Code. In common law systems, such as those of the United States and the United Kingdom, force majeure clauses are permitted but must be more precise about the situations that would trigger the provision[4]

In general, force majeure clashes with the principle of "pacta sunt servanda" (Latin for "agreements must be kept"), a crucial concept in civil and international law with analogues in common law.[5]

It is not designed to be simple to avoid contractual obligation, and showing that events were unexpected, for example, is difficult by design.

As time goes on, the world is becoming aware of natural risks that we were previously unaware of, such as solar flares, asteroids, pandemics, and supervolcanoes. We are also creating new human dangers, such as cyber, nuclear, and biological warfare capabilities. These have created issues regarding what is and is not predictable in a legal sense.

We are also becoming more cognizant of human action in occurrences that have historically been deemed external or acts of God, such as climatic and seismic catastrophes. Ongoing lawsuits are addressing concerns about whether drilling and building operations led to the very natural calamities that made them unusable. In summary, the assumptions that support force majeure are altering.

Example of Force Majeure
An avalanche ruins a supplier's plant in the French Alps, creating extensive shipping delays and driving the customer to claim for damages. The provider can invoke a force majeure argument, alleging that the avalanche was an unexpected, external, and unavoidable event—the three conditions required by French law.[6]

Unless the contract explicitly identified an avalanche as reducing the provider's duty, the court may likely determine that the supplier pays damages. French courts have found an incident predictable since a comparable event had happened half a century ago. Similarly, a war in a conflict-ridden zone could not be unexpected, as would capital restrictions in a faltering economy or a flood in a regularly hit location.

Force Majeure And Imprévision Under French Law

Force majeure relates to the objective impossibility for an affected party to perform its obligations under a contract. Force majeure excludes a party's contractual liability.

Even though the concept has long been recognized by the French courts, force majeure was introduced in French statutory law only in 2016, following a substantial contract law reform. force majeure is defined in Article 1218 of the French Civil Code[7] as an event beyond the control of the affected party that could not reasonably have been foreseen at the time of the conclusion of the contract and whose effects could not be avoided by appropriate measures.

Unless the parties have agreed otherwise, for an event to qualify as force majeure under French law three requirements must be met:[8]

Exteriority (extériorité), i.e., the event is beyond the affected party's control. In other words, the event must not result from the affected party nor from anything or anyone for which the affected party could be held liable(such as its employees).

Unforeseeability (imprévisibilité), i.e., the event could not reasonably have been foreseen at the time of the conclusion of the contract.

Irresistibility (irrésistibilité), i.e., the effects of the event could not be avoided by appropriate measures. Irresistibility is the core requirement of force majeure. This is assessed in abstract by French courts—the question is whether an average person in the same circumstances could have still been able to perform their obligations. As long as performance is possible, even if it would appear very costly for the affected party, the event cannot qualify as force majeure.

Imprévision Under French Law
Under the theory of imprévision, relief may be granted if the circumstances in a certain scenario alter in such a way that the fulfilment of the contract would become overly onerous for one party.

Until the 2016 French contract law change, based on the pacta sunt servanda concept, French civil courts refused to apply the théorie de l'imprévision to commercial contracts in the absence of particular consent between the parties to the contract. Since October 1, 2016, imprévision has been governed by Article 1195 of the French Civil Code[9]: If a change of circumstances that were unforeseeable at the time of the conclusion of the contract renders performance excessively onerous for a party that had not accepted the risk of such a change, that party may ask the other contracting party to renegotiate the contract. The impacted party must continue to discharge its obligations throughout the term of renegotiation.

If the renegotiation is denied or fails, the parties may agree to terminate the contract or to resort to a court or arbitral tribunal to adjust the contract. In the absence of such an agreement in a reasonable period, at the request of either party, a court or tribunal may change or cancel the contract. In such cases, the court or tribunal would set the date and terms of the termination.

For a party to avail oneself of the theory of imprévision under French law, the applicable contract must have been concluded after October 1, 2016. At the same time, the parties to a contract can exclude or change the regime of imprévision.[10]

Force Majeure And Frustration Under English Law

Force majeure provisions bring assurance to the problems being confronted by reducing them to ordinary construction of contract questions, in contrast with common law doctrines which need referral to basic legal principles and extensive case law. In addition, the presence and scope of the force majeure provision are quite likely to affect any complaint about frustration. That is because, if the contract includes the supervening event or kind of occurrence, it cannot be stated that the supervening event makes the execution of the contract fundamentally different from that envisioned at the time of contracting.

The provision does not have to be designated "force majeure". What you are looking for, in substance, are clauses which anticipate that there may be some sort of supervening event beyond the control of the parties, be it factual (such as a pandemic causing staff to be ill and unable to work) or legal (such as restrictions imposed in reaction to a pandemic which might prohibit staff from travelling to work and cause them to be unable to work), which may affect the performance of a contract. Such provisions may be quite precise in the events stated, but may also be generic (for example, making reference generally to actions of government, or to performance needing to be legitimate, or to anything hindering performance that is beyond the party's control).

A force majeure clause is based on the parties' agreement. Its requirements and consequences will be those established by the parties in the contract. Subject to the explicit wording in each circumstance, you should have in mind the following difficulties.

Unlike many civil law nations, there is no implicit applicability of the idea of force majeure in English law. Rather, the handling of an incident of force majeure derives from the contract. It is typical for English courts to apply contracts scrupulously, according to their text and preserve the parties' ability to negotiate on terms they think proper. The parties may establish a wide or restricted meaning of force majeure, based on their requirements. Accordingly, rigorous and comprehensive contract writing is extremely crucial.

Generally speaking, the courts will endeavour to enforce the fulfilment of a contract. Thus, the fact that a contract has become uneconomic or economically impracticable will likely not be regarded as a force majeure occurrence unless specifically allowed for. The problem becomes one of evidence - that is, whether the party relying on the force majeure provision can establish that the occurrence on which it depends is covered in the contract. In this regard, since the provision is considered a business solution rather than a legal one, it will be interpreted in a natural manner and not subject to the constraints that are employed to minimize the scope of an exclusion clause.

In certain (strictly restricted) instances, the English law notion of frustration may allow remedy where the force majeure clause does not. In summary, this concept stipulates that if an occurrence renders the fulfilment of a contract impossible, unlawful or meaningless, the contract is 'frustrated' and may be set aside. However, the grounds for this are difficult to achieve and the outcome of putting the contract to an end may not be acceptable.

Approaches
From a conceptual standpoint, legal systems that permit an exception to pacta sunt servanda in cases of impossibility may handle cases of imprévision in one of three ways: they may refuse to release the parties until performance has truly become impossible; they may expand the scope of the current impossibility exception to include (some of) these situations; or they may create a new exception.[11]
 

The French Approach: No Exception For Imprévision [12]

  1. Pacta Sunt Servanda principle: The French legal system lays major weight on the notion of pacta sunt servanda, meaning agreements must be respected. This idea is strongly rooted in French contract law, as demonstrated by the Canal de Craponne case (Cour de cassation, 1876). Therefore, parties should be careful when entering into contracts, ensuring they understand and agree to all conditions since courts are reluctant to amend contracts based on fairness or new circumstances alone.
     
  2. Primacy of Contractual Terms: French courts often regard freely negotiated contract terms as binding on both parties, stressing the significance of legal clarity and the autonomy of contractual parties. Therefore, parties should carefully discuss and construct contract provisions to represent their objectives precisely, since courts are hesitant to interfere and amend agreements, even in circumstances of hardship.
     
  3. Role of Good Faith: While the notion of good faith is acknowledged in French contract law, it is secondary to the idea of pacta sunt servanda. Breach of the responsibility to revise a contract in good faith may lead to a damage award rather than contract modification. However, recent judgments signal a probable change in the perspective of the commercial chamber of the Cour de cassation on the requirement to renegotiate in instances of supervening circumstances.
     
  4. Potential Remedies for Imprévision: Parties facing unexpectedly onerous contract performance may seek relief via different paths, such as invoking the notion of cause or incorporating hardship provisions in their contracts. However, the adoption of such techniques remains restricted and may not offer adequate protection. Therefore, parties are urged to incorporate explicit terms addressing supervening conditions in their contracts to limit risks efficiently.
     
  5. Uncertainty in Application: The existing legal framework underlying imprévision in French law seems to lack clarity and consistency, with varying approaches across civil and administrative courts, as well as conflicting interpretations among legal specialists. This uncertainty underlines the significance of receiving legal assistance and carefully evaluating contractual provisions before engaging in agreements, particularly long-term contracts.

The English Approach: Extension Of The Impossibility Exception

Although the English notion of frustration originated from an impossible[14] scenario that would have most likely also been covered under the French law exemption for force majeure, English Judges had no issue with expanding it to situations in which performance had not been practically impossible[15]but would be something else totally and not fulfil the stated aim. distinct from the intentions of the parties at the time the contract was finalized.

In the first instance of this type,[16] Vaughan Williams LJ concluded that "the immediate subject of the contract need not die or cease to exist on the day of execution of the contract for the principle of Taylor v. Caldwell to be applied. If a condition or state of affairs specified in the contract that is necessary for its execution disappears or is not met at that point, that suffices.[17] Drawing from this logic, English courts have implemented the theory of frustration in cases where subsequent events have increased the burden of performance to the point where it deviates significantly from the initial agreement.[18]

Although the courts in these cases have a very high threshold for frustration because they do not want the parties to be able to back out of a bad deal[19], the Staffordshire Area Health Authority[20] ruling, which was rendered in a case that was very similar to the French decision in Canal de Craponne, shows how the slightly broader doctrine of frustration can be applied to reach a different conclusion than what French courts would find.[21] frustration,[22] as they apply the same theory.[23]

The theory of frustration was first founded on an inferred phrase, but none of the English rulings seems to be seen as applying the clausula rebus sic stantibus doctrine[24]. The Law Reform (Frustrated Contracts Act) 1943 applies to the respective liabilities of the parties. More importantly, since cases of impossibility and hardship are covered by the same doctrine, the remedy is the same in both circumstances: if the high threshold for frustration is met, both parties are automatically discharged, without the need for intervention from the parties or the courts.

One benefit of this approach is that it does not need to make a difference between situations that make performance impossible and situations that make performance more difficult. But because this completely terminates the contract without allowing for a contractual amendment, it might also be seen as one of the primary reasons English courts have been especially hesitant to acknowledge that a contract has been frustrated[25]. The all-or-nothing issue of whether performance is still feasible may be justified by such an all-or-nothing approach, but it may not address the more nuanced question of whether performance in the initially agreed-upon manner is still fair.

Comparative Analysis
The incorporation of the Force Majeure doctrine from French contract law into the traditional principles of English contract law has introduced significant shifts and challenges. While English contract law traditionally emphasizes the sanctity of contracts under the principle of "pacta sunt servanda" (Latin for "agreements must be kept"), the introduction of Force Majeure principles necessitates a reconsideration of this notion
  1. Impact on Contractual Obligations: The Force Majeure concept in French law allows for the non-performance of contractual obligations under certain unavoidable circumstances. This departure from the strict enforcement of contracts in English law challenges the traditional notion of contractual obligations as absolute and immutable.
     
  2. Legal Certainty vs. Flexibility: English contract law typically prioritizes legal certainty and the enforcement of contractual terms as written. The introduction of Force Majeure principles may introduce uncertainty by allowing for the potential suspension or termination of contracts in unforeseen circumstances, thus necessitating a balance between certainty and flexibility in contractual relations.
     
  3. Interpretation and Application: The interpretation and application of Force Majeure clauses in English contracts require careful consideration. Unlike civil law jurisdictions, where Force Majeure is codified and interpreted liberally, English courts typically interpret contracts strictly according to their terms. This difference in approach may lead to challenges in reconciling the application of Force Majeure clauses in cross-border contracts.
     
  4. Contractual Drafting and Negotiation: The incorporation of Force Majeure clauses into English contracts necessitates careful drafting and negotiation. Parties must clearly define the scope of Force Majeure events and the consequences for non-performance to avoid ambiguity and potential disputes in the future.

Overall, the introduction of Force Majeure principles from French contract law into English contract law represents a departure from traditional principles, requiring a careful balancing of legal certainty, flexibility, and contractual obligations in cross-border transactions.

Conclusion
Conclusively, the examination of the Force Majeure theory in French contract law in contrast to the conventional principles of English contract law indicates notable distinctions in methodology and implementation. English law tends to have a more limited view of force majeure, concentrating on whether the contract has fundamentally changed from what was first intended, while French law stresses the idea of force majeure as an occurrence beyond the affected party's control. The study draws attention to the difficulties and nuances of reconciling different legal concepts across jurisdictions, especially in light of rising cross-border exchanges and globalization.

Even if standardization might lead to more legal clarity and more peaceful conflict settlement, the integration of the Force Majeure theory into English contract law could eventually weaken established norms. Though it has a high application threshold, the English method of extending the impossible exception via frustration provides flexibility in handling unanticipated events. In the end, more investigation and discussion are required to successfully negotiate the changing terrain of contract law and guarantee fair results for all parties engaged in cross-border transactions.

End Notes:
  1. [2021] EWHC 1152 (Comm)
  2. [2020] EWCA Civ 87
  3. Bsc LLB(4th sem), The School of Law, Forensic Justice & Policy Studies, National Forensic Sciences University (NFSU), Gandhinagar, Gujarat
  4. "Force Majeure" Cornell Law School, Legal Information Institute, https://www.law.cornell.edu/wex/force_majeure
  5. "The Principle Pacta Sunt Servanda and the Nature of Obligation Under International Law", American Journal of International Law, via JSTOR, https://www.jstor.org/stable/2203309
  6. "Impact of COVID-19 on French Law Governed Contracts", Latham & Watkins, Page 1 https://www.lw.com/thoughtLeadership/Impact-of-COVID-19-on-French-Law-Governed-Contracts
  7. Law And Regulation Of Force Majeure In France, Anne-Laure Villedieu, https://cms.law/en/int/expert-guides/cms-expert-guide-to-force-majeure/france
  8. Force Majeure And Imprévision Under French Law, Shearman & Sterling, pdf
  9. Practical outline for potential litigation on the grounds of article 1195 of the Civil Code, https://s3.amazonaws.com/cdn.orrick.com/files/ArticleODAimprevisionAnglais.pdf
  10. Frustration v Imprévision, Why Frustration is so 'Frustrating': The Lack of Flexibility in the English Doctrine's Legal Consequence, Bashayer Al Majedcorresponding and Abdulaziz AlMajed, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10220328/#:~:text=Under%20the%20new%20Article%201195%20(French%20Civil,where%20that%20risk%20had%20not%20been%20assumed
  11. Hondius, E. H., & Grigoleit, H. C. (year of publication). Different Classifications of 'Open' and 'Closed' Legal Systems. In Hondius, E. H., & Grigoleit, H. C. (Eds.), (n 13), pp. 10-12; 643-644.
  12. Introducing Imprévision Into French Contract Law, Tobias Lutzi, MPhil Candidate, University of Oxford
  13. Cass civ 6 March 1876, D 1876, I, 193.
  14. Taylor v Caldwell, (1863) 3 B & S 826.
  15. It could be argued that performance had not become literally impossible in Taylor v Caldwell either, since it would probably have been possible, in theory, to rebuild the concert hall (cf. Treitel, G. H. (n 11), para. 6-001).
  16. Krell v Henry [1903] 2 KB 740 (CA)
  17. ibid, 754
  18. Cf Metropolitan Water Board v Dick Kerr [1918] AC 119 (HL)
  19. Cf Davis Contractors [1956] AC 696 (HL); Amalgamated Investments & Property Co Ltd v John Walker & Sons Ltd [1977] 1 WLR 164 (CA); Ocean Tramp Tankers Corporation v V/O Sovfracht (The Eugenia) [1964] 2 QB 226 (CA).
  20. While the majority construed the contract as being concluded for an indefinite period of time and thus open to termination upon reasonable notice, Lord Denning considered it to have ceased to bind because 'the situation has changed so radically since the contract was made.' (ibid, 1398). See also Hondius/Grigoleit (n 13), 212–4
  21. Cf McKendrick (n 21), 723. Cases of illegality are usually distinguished as a third type.
  22. Cf Krell v Henry (n 71), 749, where Vaughan Williams LJ even considered the contract to have become 'impossible of performance by reason of the non-existence of the state of things assumed by both contracting parties as the foundation of the contract'
  23. Cf Weir, 'Review of "Frustration of contract and clausula rebus sic stantibus"', (1988) 37(2) ICLQ 452.
  24. Cf McKendrick (n 47), 42–5.

Written By: Shekhar Chandra Gupta
, Bsc LLB(4th sem), The School of Law, Forensic Justice & Policy Studies, National Forensic Sciences University (NFSU), Gandhinagar, Gujarat

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