Depriving the Debtor’s Essential Obligation of its Substance and its Remedies under the Provisions of Article 1170 of the French Civil Code

Abstract

In 1994 and thereafter, the French judiciary set a trend by utilizing the causation theory to revoke the exemption clauses of liability that constitute a violation of the contract’s essential obligations. This utilization was intended to restore economic equilibrium to the contract, in order to achieve the benefit each party seeks from concluding a contract. However, in 2016, the new amendments of the French civil code -which were issued by decree no: 131-2016- abolished the causation theory in general. Nevertheless, they retained the previous French judicial trend based on causation theory, where Article 1170 of the new amendments states clearly “any contract term which deprives a debtor’s essential obligation of its substance is deemed not written”. However, Article 1170 of the new amendments did not specify what is meant by an essential obligation? When does the contract’s term result in depriving the debtor’s essential obligation of its substance? Moreover, Article 1170 consolidates an individual penalty which may cause many legal problems. These problems are: the matter concerns an essential clause in the contract and not a secondary one, the other clauses of the contract remain valid as they have been, without any modifications or replacements and, in some cases, abolishing the clause itself might lead to further imbalance in the contract. Therefore, the legal provisions of Article 1170 should be analyzed in an analytical approach along with the previous French judicial trend with respect to these provisions. As a result, the research illustrates the urgent need to amend Article 1170 of the new amendments, in order to contribute to the stability of the economic contractual equilibrium.