06 Dec Contract law reform – feedback on the workshop on contract formation
At the conference on contract law reform on 25 November 2016, Thierry CLERC led a workshop on negotiations and contract formation.
The trend is towards a balance of power between contracting parties.
General terms and conditions must be subject to negotiation and acceptance.
Contracts can now be revised in the event of a change in economic circumstances.
Pre-contractual information is compulsory, and therefore a matter of public policy.
A promise to enter into a contract is irrevocable.
The preference pact is regulated with an interrogatory action that allows a third party purchaser to find out whether or not there is a preference pact.
Certain provisions of the new law are not a matter of public policy and may be amended by the parties – in other words, contractualised – provided that a “significant imbalance” is avoided.
Recourse to the courts is still very much a feature of the new legislation.
In the United Kingdom, there is little recourse to the judge, who can neither modify nor interpret the contract – hence the very meticulous drafting of contracts and the strong propensity for negotiation.
Prof. Genicon believes that judges will have to clarify the concepts of public policy, reasonable period and significant imbalance.
In the meantime, it is up to lawyers to prepare balanced contracts, to refer to the commentaries already published and to usages, and finally to be creative in contractualising the supplementary provisions.
Judges will be looking to lawyers’ analyses to establish their case law.