CM 2 3/10

 The clauses of the contract are the most important thing

 Clauses are agreements between the parts
 Contracts last depending on the time that were accorded
 It can be for hours, days, weeks, months…
 Negotiations are a risky period of time bc they involve time, costs…
 We can manage risks through clauses
 If the permit is not given the contract will have no effect
 If both parties use the contract well is a tool to achieve predictability, certainty, as to who
does what (responsibilities), and is also useful to manage risks
 What the parties discuss and finally agree upon are the clauses

 Public policy rules (mandatory rules) (règles imperatives – d’ordre public): rules that are
always applied despite a clause in the contract rejecting the permission
 The law of the country and which governs the contract, we are bowed also by legal
obligations by the law that rules the country
o Ex: a contract between a buyer and a seller guarantees a product for 6 months but
the French government doesn’t allow that unless is a 2-year-old guarantee
 Mandatory provisions can never be derogated by the contract

 Non-mandatory rules (règles supplétives) :

 Art 1583: Sales contract is concluded between the parties and title is acquired by the
operation of the law as soon as the parties agreed on the goods and the price, whether or
not the goods have not already been delivered or the price paid.
o Ex: someone buys something but there’s a fire and the merchandise or product
they bought will not be longer delivered, so the buyer is the one that suffer the
loss under that contract that is governed under French law.

 The law maker has not decided clearly so it remains ambiguous

 Only courts can interpret the laws, and there will be judges that tell us the case law
(jurisprudence)
 Case law: is primarily the interpretation of the law retained by courts
 The supreme court decided that this law (loi supplétive) (art 1583) is not mandatory

 Clause de réserve de propriété: the buyer doesn´t become the owner immediately  The
seller maintains title over the goods until full payment (benefit: if anything goes wrong the
seller can claim restitution of the goods as you have a title as the seller is in a powerful
position), I could only claim it as if I was the possessor
  What if the parties don’t agree on a different clause on art 1583? : The law is applied to all
sellers and buyers in France
 Mortgage: is a property warranty when the creditor commits to refund a debt for a
property on a certain period of time

Art 1583: Its perfect as soon as parties agree on goods and whether or not the goods have already
been delivered and the price paid.

This article is a binding fault rule.

Agreement on good and price, then contract concluded, and title is transferred from seller to
buyer. (Exemple de l’incendie d’un produit en attente d’être livré ; c’est le buyer qui perd et non le
seller since the title is transferred to the buyer)
1. Parties may conclude a different clause
2. But if don’t agree on a different clause, it applies, with the force of a mandatory rule.

Obtaining a clause is never to be taken for granted: you have to get the agreement with the other.
This article isn’t explicitly mandatory or not. This happens a lot, and it’s because the law maker
(législateur) didn’t decide clearly. In this case, the case law (jurisprudence) interpretes the rules.
Above all, there is the cour de cassation (equivalent to supreme court), then the courts of appeal
(d’appel), then the tribunal du commerce… The Cour de Cassation decided that the article 1583
was non-mandatory.

Consequences: parties may conclude a clause saying something else. This clause is called the
“clause de reserve de propriété”, the “ownership reserve clause”: the seller maintains the title
over the good until full payment.

WARNING : Carducci considers that « jurisprudence » in English is “théorie générale du droit »,

and not the French meaning of jurisprudence, translated in English “case law”. Case law is
primarily the interpretation of the law retained by courts.

Article 1103 – Freedom of contracting

 One of the building articles of law

 Most important thing is content. Each clause is an agreement
 Negotiation duration depends on many factors

CONTRACTS

The contract is a wonderful tool to achieve:

 Security: as to the fact that the obligations of each part will be fulfilled
 Predictability / certainty: as to who does what
 To manage risks

Art 1103: Contracts that have been legally entered into are binding between the parties

Important bc of 2 reasons:

1. Legally binding: contract becomes a legal obligation and not moral but if those individuals
are highly moral they will respect the contract and agree what they agreed to do (the
gentlemen agreement – based on the moral) they will not take risks and rely only on the
moral
2. We need a valid contract in order to be legally binding and to be protected, anything
outside the law will not be valid