Business contracts are often lengthy, and it is not uncommon for one party to wish to terminate the contract early.
In such a case, the party wishing to break the contract usually refers to the clauses provided for.
In most cases, the contract provides for :
- a duration clause, which stipulates that the contract is for a fixed term and is tacitly renewable, unless terminated before the end of the term;
- a so-called “resolutory” clause, which lists a series of situations in which a party may terminate the contract before its term.
The resolutory clause, which lists an exhaustive number of situations in which it can be invoked, seems to be the only solution for breaking the contract.
In this situation, the party experiencing a situation not covered by the resolutory clause may feel that he has no solution at his disposal. But this is not the case.
Article 1224 of the French Civil Code provides that a contract may be unilaterally terminated by any party who has suffered a “sufficiently serious breach”.
The order of the termination options set out in this article left some doubt as to whether a contract could be unilaterally terminated when a resolutory clause existed.
New legal twist: The French Supreme Court (Cour de cassation) ruled on June 8, 2023 that the existence of a clause in the contract does not prevent the parties from having recourse to the mechanism of unilateral rescission.
Please note: unilateral termination is subject to certain conditions, as non-performance must be sufficiently serious.
It may therefore be necessary to send a formal notice to your co-contractor in advance, to demand that he or she respect his or her commitments.
DESRUMAUX AVOCATS can help you negotiate a contract or break one.
Staying well-informed and well advised are essential if you are to evolve serenely in the complex world of business contracts.
