INTRODUCTION

On November 25^th, 2020, the French Court of Cassation confirmed that a creditor cannot call upon the theory of Force Majeure to terminate the contract when he can no longer draw any benefit from its performance[1].

FACTS

A couple entered into a hosting agreement with a leisure company in France whereby they undertook to pay an amount of 960 euros for a stay of three weeks. A week into the stay, the husband had to be rushed to the hospital and the couple had to leave the residence a few days later.

Contending that they were not able to withdraw any benefit from the performance of the contract because of the sudden health issue of the husband, the couple sought to terminate the agreement with damages on the basis of the theory of Force Majeure.

THE COURT OF FIRST INSTANCE

The Court of First Instance ruled in favor of the couple and decided that the state of health of the husband constituted a case of Force Majeure justifying the termination of the agreement.

THE COURT OF CASSATION

Following the recourse of the leisure company, the French Court of Cassation overturned the judgement under Paragraph 1 of Article 1218 of the French Civil Code[2].  

According to the French Court of Cassation, Force Majeure is characterized where an event beyond the control of the debtor, which could not reasonably have been foreseen at the time of the conclusion of the contract and whose effects could not be avoided by appropriate measures, prevents performance of his obligation by the debtor. It follows that the creditor cannot call upon the theory of Force Majeure to terminate the contract when he can no longer draw any benefit from its performance.

The Court of Cassation held that the state of health of the husband did not prevent the couple from performing their obligation of payment and that they were only prevented from drawing any benefits out of the performance of the contract. Therefore, the judgement rendered in the First Instance was reformed.  

COMMENTARY

The decision rendered by the Court of Cassation deserves to be approved. First, the application of Force Majeure allows for the suspension or termination of the agreement if performance is temporarily or permanently prevented. It follows that the mechanism described above is triggered by a failure to perform and not by the loss of any benefit from the performance of the contract that remains possible. Second, the non-satisfaction of the individual purpose that has motivated the conclusion of the agreement does not allow the creditor to dissolve the contract. In principle, the individual motivation of each party is not integrated to the contractual field and the creditor cannot, in the absence of contractual provisions to the contrary, invoke the non-realization of the subjective purpose for which he entered into agreement in order to dissolve the contract.

It should be noted that the general rule described above can be set aside by a legal provision to the contrary or by a contractual provision that allows the creditor to dissolve the contract in the event that he is prevented from drawing any benefit out of the performance of the contract.

Although the general rule described above was enshrined by the Court of Cassation in France, we believe that Lebanese Courts are bound to reach the same outcome.  According to Article 341 of the Code of Obligations and Contracts, Force Majeure can only be triggered if the object of the obligation becomes impossible[3]. The object of the obligation must not be confused with the individual purpose that has motivated the conclusion of the agreement which does not, according to Lebanese Law, constitute an integral part of the contract[4]. Unless otherwise agreed by the parties, the creditor may not call upon the theory of Force Majeure on the grounds that an unforeseeable event has taken away the benefits that he would have otherwise withdrawn from the performance of the contract.