Reed Smith Client Alerts

Authors: Benoit Charot

Type: Client Alerts

Two legal persons governed by French private law may, by mutual agreement, draft their contractual documents in the English language.

On 30 May 2016, the Commercial Practices Review Commission (hereinafter the ‘CEPC’ – ‘Commission d’examen des pratiques commerciales’ in French) issued an opinion relating to the use of the French language in contractual documents. The CEPC is an advisory body of the Minister of Economic Affairs that is responsible for ensuring balanced trade relations between manufacturers, suppliers and resellers on the basis of current legislation.

Questioned about the possibility for two French companies to use the English language in their contractual relations, the CEPC responded in the affirmative insofar as this language is duly accepted by both parties.

The CEPC recalled that Article 2 of the Law of 4 August 1994 renders the use of the French language mandatory in "the designation, offer, display, description of the scope and warranty terms of, and any user or instruction manual for, any good, product or service, as well as in invoices and receipts", while also noting that the circular implementing this law, dated 19 March 1996, further specifies that "invoices and other documents exchanged between businesses that are French or foreign persons governed by private law who are not consumers or final users of the goods, products or services, are excluded from these provisions".

The CEPC thus reasoned that "it [was] not prohibited for two legal persons governed by French private law to draft their contract in the English language".

The opinion of the CEPC, which it must be stressed is not binding although it may have some bearing on court rulings, follows the line of current legal practice, while clarifying that a foreign language may be chosen by two companies, even when both of them are French.

However, the CEPC makes a point of recalling that contracts drafted in English must be translated into French in French legal procedures. Thus it cannot be ruled out that questions of interpretation may arise in the event of a dispute submitted to the French courts.

It is also important to recall that this freedom of choice of contractual language only applies to relations between businesses, and not between businesses and consumers.

One may also question the weight given to general conditions written in a foreign language, particularly if one party's mastery of the language used has not been demonstrated.

Finally, attention must be drawn to the new Article 1127-1 of the Civil Code, applicable from 1 October 2016, pursuant to which any business wishing to supply goods or services by electronic means must include in its offer the proposed languages for any contract, which must include the French language.

Reed Smith expertise The Reed Smith Paris litigation team has in-depth expertise in commercial dispute. The team, headed by Benoît Charot, comprises three partners, one counsel and six associates. It advises its French and international clients on setting up strategies to minimise their liability risks and, where possible, avoid litigation. Please contact the team for further information or if you have any questions.

 

Client Alert 2016-162