All entries for November 2012
November 28, 2012
Pre–contractual period in French and German law
French and German legal system have a different perception from the pre-contractual period. In German law, they want to lengthen the contractual responsibility to the pre-contractual period. In this period, the liability is similar to the contractual liability. §311 II BGB : “An obligation with duties under section 241 (2) also comes into existence by :
the commencement of contract negotiations (Vertragverhandlungen)
the initiation of a contract where one party, with regard to a potential contractual relationship, gives the other party the possibility of affecting his rights, legal interests and other interests, or entrusts these to him, (Vertragsanbahnungen) or
similar business contacts. (ähnlichen geschäftlichen Kontakte) »
In french legal system, there is nothing in the code civil and case-law seems to retain just the first solution, that is to say the commencement of contract negotiations.
The liability during the pre-contractual period in French law is tortious liability and sanctions depend from conditions of the refuseal to contract. (article 13382-1383 from code civil). Since the case-law « Manoukian » from the 26th november 2003, we can have reparation for the wrongful termination of the negotiations only when it's for negative interest. But the principle is the freedom to contract or not, so there is no sanction for the breach of negotiation or just when it is a wrongful termination.
In german law, when there is a liability, the theory of culpa in contrahendo applies : the special nature of pre-contractual phase merits special treatments. The contractual liability applies. It's not exactly like the contractual liability, for certain authors it's a 'liability sui generis”. It's neither tortious or contractual but a liability with its owner rules. German law applies the principle that there is an economic risk of the negotiation.
We can find three causes which generate the liability of one party when it breaches negotiations in german law :
One party can be forced to damage compensation if it violated an obligation to protection (Verletzung von Sorgfaltspflichten)
The second case is the violation of the obligation to inform. (Verletzung einer Aufklärungspflicht).
The third case concerns both french and german legal system : the wrongful termination of the negotiation (unbergründeter Abbruch von Vertragsverhandlungen). Only when the party who breaks negotiations did a mistake, it can engage its liability.
French and German legal systems have two different systems of liability for breach of negotiations. In french law, it's tortious liability while in german law, the liability is based on contractual one.
November 22, 2012
Which evolution for cause and consideration ?
French law requires that the contract have a cause, English law that it be for good consideration or be contained in a deed. The cause is one of the four central notion in the contract with the object, the consent and the ability to contract in french law. A contract without cause or with an illegal cause is void. Article 1131 of the code civil “An obligation without cause or with a false cause, or with an unlawful cause may not have any effect”. There are criticism from Planiol and Carbonnier suggests less emphasis on cause and more on interests.
We can compare but only obliquely cause and consideration. The basic idea of the consideration requirement in english law is that, in order to acquire the right to enforce another’s undertaking, a party must undertake to give, or actually give, some- thing stipulated by the other as the price for his undertaking. A valuable consideration in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other. The central point of the Restatement definition of consideration continues to be the notion of “bargain”.
But what happens in gift contract ? In english law, we are not binding by a gift situation because there is in this situation no bargain.
Have this two notions a future in french and english law ?
At the european level, the draft “OHADA” about contract law establishes the renouncement to the cause in french law and the consideration in english law. As the UNIDROIT principles, this draft is focus on the agreement of both parties. The common will, result of the exchange of an offer and an acceptance, is enough to validly bind both parties in a contract.
The doctrine of cause in French law, as revitalized as it has been over the past years, shows the increasing interventionism of French Courts in relation to contract.
The future of this two notions is compromise, in the context of the European harmonization.
November 19, 2012
Cumulation of tort and contract claims
In France, England and Germany, there are three very different way of cumulation of tort and contract responsibilities. Each State has his own application for this theory. In France, we can't cumulate contract and tort claims. The contract is very important in France and if we have a contract, we can't turn away this one and use tort claim. It's not possible. We protect contracts : 3° civ : contract takes advantages when two people are engaged in a contractual relationship. The contract is the mandatory law of the parties. One exception to this principle of “non cumul” exist when we are in presence of a contracts chain.
In Germany, the principle is the choice between contract claim and tort claim, the two actions are said to be “competing” : competition of claims (“Anspruchkonkurrenz”). There are interferences between tort and contract responsibilities. Tort responsibility is often subject to same constraints as contract responsibility, like for example similar short limitation period. But we can't cumulate both claims.
In english law, it is possible to cumulate contract and tort claim. J.A. Jolowick1 said “no formal rule against overlapping responsibilities is found, either in law or in jurisprudence”. In England, rules of tort differ a lot from rules of contract law. But, as the common law system is based on the compensatory nature of damages, this cumulation cannot lead to a double recovery. Many of the standard instances of liability in delict/tort for negligently caused harm can equally be based on breach of contract.
What is here important is the notion of cumulation of tort and contract responsibilities and the notion of choice between this two claims. In French law, Bénabent explains that : « the expression of cumul or non cumul can be misleading, because it may suggest that, even if one cannot claim under both regimes, one may at least choose which to invoke. That is not the case : the rule is really one that there is no choice, as the victim of harm that occurred in the context of a contract may not rely on delictual responsability ». Because in Germany, there is a choice but it's not possible to cumulate both claim. In France there is NO choice and we can't cumulate.
What is the most protective system ? In France we want to protect contractual relationship and in England we want ton protect the injured party. Each system has own advantages and disadvantages.
1J.A. Jolowick « aucune règle formelle de non cumul des responsabilités ne se rencontre, ni dans la loi, ni dans la jurisprudence ».
- Beale H., Fauvarque-Cosson B., Rutgers J., Tallon D. and Vogenauer S., Cases, Materials and Text on Contract Law, Oxford : Hart Publishing 2010
- Hess-Fallon B and Simon A-M, Droit civil, Sirey ; 2007
- Ruff A., Thomson, Contract LAw, Sweet and Maxwell ; 2005
- Von Bar C., Drobnig U, The interaction of contract law and tort and property law in Europe - a comparative study ; 2004
November 17, 2012
The formation of the contract in English and French law
Between french and english contract law, as in the definition of the contract, there is an important difference in the formation of the contract. For a contract to exist under english law, three conditions are compulsory : an offer and an acceptance, a consideration and an intention to enter into a legal relationship. General theory of english law requires no written but it's imposed in some situations (for example in the contract of guarantee and consumer credit contract). In modern english law, a promise becomes binding in two cases. The first consists of a written promise with a deed. The second of the strictly oral or written promise made because of the consideration. The concepts of offer and acceptance in Common Law are not fundamentally different from those in french contract law, although the effects may be different. According to Common Law systems, what is necessary for a promise becomes binding is a “something” in return : the consideration. The contract is defined as an exchange, a “bargain”. There is not gratuitous contract, donations are not contractual right. Even though, this element of consideration exists, English Courts refuses to enforce a promise, if it appears that parties intended to create any legal obligations. The intention of the parties must be examined by the courts.
The contract under french law is much more based on consent and the theory of autonomy. In its article 1108, Civil Code lists four essential conditions for the validity of a contract : free and informed consent of the parties, the parties' ability to contract, a certain and determined object and a lawful clause. The contract is the product of the parties. Article 1134 of Civil Code says : “according to which agreements legally entered into operate as law for those who engaged in them ». Lawyers often interpret this provision as as an application of the theory of autonomy. This theory is based on the fact that the binding force of the contract has for only source the will of the parties. The law does not create this binding, it protects only the expression of the will and is it needs be, its execution. It comes from Canon Law, which imposed the respect of the word and philosophers of the eighteenth think that the man is free, he can just be bind by his will. “The agreement is the basis of all authority among men” (Rousseau, Du contrat social). And Kant highlights later that a person can not be subject to other laws than those it provides from itself (Métaphysique du droit). Parties in contracting can only protect their interests. This theory is the principle, however it knows certain limits with the existence of imposed contracts. The principle of french law remains that of consent but formalism is increasingly imposed. The theory of offer and acceptance exists and there is contract when meet several concordant wills. The acceptance of the offer is enough to form the contract. According to the principle of consent, no specific form is required for the formation of the contract : the meeting of minds is sufficient to create legal obligations.
French contract law is much more based on the consent and english contract law has the particularity of the consideration.
November 14, 2012
Comparison of defect of consent in England, France and Germany
In this three countries, we have not the same definition of the contract. In France, the contract is based on the consent. Article 1101 code civil : “une convention par laquelle une ou plusieurs personnes s'obligent, envers une ou plusieurs autres, à donner, à faire ou à ne pas faire quelque chose”. In common law, the contract is defines as “a promise or a set of promises that the law will enforce”. There is a principle in english law : “if a man has made a deliberate statement, and another has acted upon it, he cannot be at liberty to deny the truth of the statement he has made”.
In german law, the “Willenstheorie” is very important. The contract is : “Der Vertrag ist ein Rechtsgeschäft. Es besteht aus inhaltlich übereinstimmenden, mit Bezug aufeinander abgegebenen Willenserklärungen (Angebot und Annahme) von mindestens zwei Personen. Durch den Grundsatz der Vertragsfreiheit (Privatautonomie) wird sichergestellt, dass jeder Mensch das Recht hat, im Rahmen der Gesetze seine Verhältnisse durch Verträge eigenverantwortlich zu gestalten”
It is very important to understand what is a contract in this different countries to understand the different theories of defect of consent.
In France and Germany, there is a real theorie that doesn't exist in england.
Then, description and comparison of the different defect of consent :
France : erreur, dol, violence
England : misrepresentation, mistake, duress, undue influence and unconscionability
Germany : Irrtum, Täuschung and Drohung
code civil français, 1804
Cartwright, Misrepresentation, mistake and non disclosure, Thomson, Sweet and Maxwell ; 2007
Eliott C. and Quinn F., Contract law, 3e édition Longmann ; 2001
Fages Bertrand, Droit des obligations, LGDG Lextenso éditions ; 2009
Hess-Fallon Brigitte et Simon Anne-Marie, Droit civil, Sirey ; 2007
Conclusion : There is still important disparities but we try to harmonize european contract law with different european draft : Draft Common Frame on reference, Principles of European Contract Law...