Contract Law

What is a contract?

A contract is a legally binding agreement between two or more parties.

It creates:

rights and obligations for the parties involved
enforceable by law

It obeys:

General Principle (Code Civil)
Special Principle:
- Commercial Code
- Protection of the customer

Stages of a contract

Stages of a Contract

Negotiation - parties discuss the terms of the contract
Conclusion - parties agree to the terms of the contract
Execution - parties perform their obligations under the contract

Principles of a contract

Freedom of contract - parties are free to negotiate and agree to the terms of the contract
Binding force - parties are bound by the terms of the contract
Good faith - parties must act in good faith when negotiating and performing the contract
Loyalty & Cooperation - parties must cooperate and work together to perform the contract

Written Contract

Negotiation

Any type of communication about the conclusion or not of the contract is considered as a negotiation.

Bad Faith Negotiation

Negotiation in bad faith is when one party does not intend to conclude the contract.

Bad faith shows if:

the party does not intend to conclude the contract
the party is not willing to conclude the contract
the party is abusive in the negotiation

Bad faith can be proven by:

proving the bad faith intent
individual situations:

Consequences

the party in bad faith is liable for
if : no compensations
cannot be compensated

Oral Negotiation

Oral negotiation is when the parties discuss the terms of the contract orally.

Usually better for minorities => freedom to stop, back out, change mind, etc...

Written Negotiation

Written negotiation is when the parties discuss the terms of the contract in writing with a written act (not equal to a contract).

Usually better for majorities => more security, more proof, more evidence, etc...

Promise of Contract

A promise of contract is when one party promises to conclude a contract with another party.

EXCEPTION: employment contract
Obeys civil law

It includes:

All the essential information of the contract
Deadline to accept or refuse

Changing mind about a promise before deadline

2016 Contract Law Reform: the party who made the promise cannot change their mind before the deadline.

The party has the obligation to accept the contract

Preferential Beneficiary Act

The preferential beneficiary act is when one party promises to conclude a contract with another party, but the promise is made to a third party.

Example

The seller promises to sell the house to PERSON A
The seller sells the house to PERSON B

Consequences

PERSON A can ask for DAMAGES (good faith)
If we can prove that PERSON B knew about the promise with PERSON A, we can ask the court to replace the contract with PERSON B by a contract with PERSON A

Conclusion

The conclusion of a contract is when the parties agree to the terms of the contract.

The conclusion needs to be VALID and LEGAL.

Both parties need to be capable of signing the contract (age, mental health, etc...)
Both parties need to consent to the contract
The content needs to be: precise and legal

Mutual consent is when both parties agree to the terms of the contract.

Offer and acceptance are the two elements of mutual consent
Offer is when one party proposes to conclude a contract with another party
Acceptance is when the other party accepts the offer

Offer

An offer is when one party proposes to conclude a contract with another party.

Includes all essential elements of the contract
Precise, clear and detailled
Not vague or unclear

Acceptance

Acceptance is when the other party accepts the offer.

Clear
Externalized: expressed in clear, public and externalized way

The conclusion does not need to be written, UNLESS REQUIRED BY LAW

Conclusion = contract MUST BE EXECUTED, RESPECTED = BINDING

Revocation of consent is when one party changes their mind about their consent.

If some information are known after the consent and affect the consent, (and ask for damages).

Error

Error is when one party makes a mistake in the contract.

Difference between the reality we thought existed VS the reality that actually exists. = misunderstanding

EXCUSABLE: not preventable, not predictable => (and ask for damages)
INEXCUSABLE: preventable, could have been avoided => no consequences, the contract is still valid.

Errors are reviewed on individual situations/basis.

Errors about price are NEVER excusable. (except for art pieces)

Fraud

Fraud is when one party lies to the other party.

Fraud only if:

MISTAKE: a mistake was made due to the difference between the reality we thought existed VS the reality that actually exists.
INTENT: the party intentionally lied to the other party in order to make them sign the contract.

Fraud MUST be about an essential element of the contract and known by both parties.

VICTIM is always excusable! => cancel + damages

Link of dpendance = force the parties to agree because it's their only chocie

Economic Violence

Economic violence is when one party forces the other party to sign the contract.

Parties: link dependance (employee/employer) = need each other
Threat: threat of an action (verbal, physical, etc...) => exploiting the link of dependance
Gain: the party wants to maximize gain

Content

The content of the contract needs to be precise and legal.

The content must include:

Object of the contract
Price of the contract

Only parties and stakeholders can cancel the contract.

Object

The object of the contract is the subject of the contract.

Legal: the object must be legal BY LAW or BY PUBLIC INTEREST (not equal to morality)
Determined: the object must be or

Price

The price of the contract is the amount of money paid for the contract.

Determined: the price must be or

Problems with price

Problems with price are when the price is not determined or able to be determined.

If the price is missing or not determined, the contract is VOID.

The judge cannot determine the price for the parties. It will appoint an expert to determine the price.

Cancellations

Execution

The execution of a contract is when the parties perform their obligations under the contract.

In case of non-respect of the contract, or delay => DAMAGES

Stipulations

Stipulations are the obligations of the parties under the contract.

Stipulations can be problematic and be the reason to cancel the contract.

Imbalance

A stipulation is problematic when it creates a significant imabalance between the parties.

How is stipulated? How is formed? Is it clear?
Effect of the stipulation? Does it effect the balance?

If no justification of the stipulation, the contract can be cancelled or renegotiated.

Examples

Abuse in the price: the price is too high
Puts in danger financial stability

Change in circumstances

A stipulation is problematic when it creates a significant imbalance between the parties due to a change in economical circumstances.

Force majeure: event that was inevitable, unforeseeable
Non-predictable event: event that could not be predicted at the time of the conclusion

Principle of loyalty & cooperation: parties must renegotiate the contract.

Procedure

Notify the other party. Ask for renegotiation.
If no renegotiation, ask the court to:
- cancel the contract
- ask for damages.

If contract is concluded => CONTRACTUAL RESPONSABILITY.
If contract is not concluded => EXTRA-CONTRACTUAL RESPONSABILITY.

The stipulation can cancelled but the contract can still be valid.

Damages

Cost spent
Lost of a change (lost opportunity, lost time)
Damages

Only if:

Proof from the asker
Proof of a loss (financial, moral, time, etc...)
Loss has to be DIRECT (link between the parties)
Loss has to be personal (not for a third party)

Financial Loss

Financial loss is when one party loses money due to the contract. It is easily calculated.

Moral Loss

Moral loss is when one party loses their reputation due to the contract. It is difficult to calculate.

Calculated by lawyers
Compared to similar cases in the past

Electronic Contract

It obeys:

General Principle (Code Civil)
Special Principle:
- Commercial Code
- Protection of the customer
Data Protection:

Channels

Channels are the different ways to communicate electronically. (B->C, B->B, Administration ->C)

Website
Email
Platform

Stages

Stages are the different steps of an electronic contract.

Before: how do we negotiate? how do we exchange information?
Conclusion: how do we formulare offer? how do we formulate acceptance? what is the date?
Execution: Keeping records. Right to retract.

Before Conclusion

Before conclusion is when the parties discuss the terms of the contract.

-> GENERAL CONDITIONS must be clear and accessible.

General Conditions cannot be accessible by hyperlinks or link to another page.

This stage must allow the parties to:

Ask follow-up questions: via AI chatbot or window chat

Consumer can stop at ANY TIME.

Conclusion

Conclusion is when the parties agree to the terms of the contract.

Acceptance => electronic email or website.

The acceptance must includes a Two-Step validation (double-click):

Validation: the party validates the contract
Confirmation: the party confirms the contract

This is done to protect and assure the consent of the party.

The professional cannot change the contract after the firs validation. (first click)

Date

The date of the contract is the date of the acceptance.

Date of the acceptance: the date of the second click

In case of emails:

We assume emails are received immediately.
90% of the cases: the date is the date we sent the email (favorable to the customer).
10% of the cases: the date is the date the email was received.

Execution

Renegotiation: Business is not obliged to renegotiate (no principle of loyalty & cooperation).
Cancellation: No extra cost. Cancel at any time.
Retraction: 14 days to retract. If there is cost, business must pay!