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Institute of Global Law

French Legal News - Contract Law

On 6 December, a plenary session of the Cour de cassation ruled that surety agreements designed to ensure the payment of rent should be directly assigned to the new owner of real estate, except where the guarantor had provided otherwise.

On 23 November 2004, the Cour de cassation rendered four decisions relating to the legal nature of life insurance contracts. The court indicated that unlike capitalisation operations and unless premiums were obviously exaggerated, the core element of life insurance contracts was the existence of a hazard to human life.

On 17 December 2003, the Commercial Section of the Cour de cassation held that a creditor could not be liable for accepting as a guarantor someone whose means were disproportionately lower than the amount she/he was committing herself/himself to pay in lieu of the debtor. The principle had already been stated in the Nahoum case rendered on 8 October 2002 (D. 2003, 414). The protective approach favoured by the same section in 1997 (Macron case, 17 June 1997, Bull. civ. IV, no. 188) – where a Bank was on the contrary made to pay damages to a guarantor whose security commitment highly exceeded his means – has now therefore clearly been overruled. But the Cour de cassation specifies in this case that the new position does not extend to the guarantor’s spouse, who may therefore sue for damages. One must also note that if the new 1st August 2003 Act had been applicable to the facts, the creditor’s right to claim performance from the guarantor would have been altogether forfeited.

The Civil Second Section of the Cour de cassation confirmed the limits set out to judicial review of excessive lawyers’ fees (18.9.2003). In 1998, the Cour de cassation had held that judges may reduce fees that appear disproportionately high. The Court now limited this solution to cases where fees were agreed upon before any work was carried out. If the agreement relating to fees was reached after the performance of the legal services, it has to be enforced however high the fees may be.

 



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