Reed Smith Client Alerts

The coronavirus COVID-19 crisis and its economic consequences (experts are anticipating an economic downturn) require today a different response than in previous crises, not only because French law has significantly changed since 2008. This alert outlines a practical scaled approach that needs to be differentiated according to the variety of possible situations, but needs to be made in a timely manner.

Authors: Daniel Kadar Stéphanie Abdesselam Laetitia Gaillard

The coronavirus crisis and its economic consequences (experts are anticipating an economic downturn) require today a different response than in previous crises, not only because French law has significantly changed since 2008:

  • While COVID-19 may be classified as a Force Majeure event, there are important legal exceptions.
  • A change in economic conditions is now officially recognised by French contract law:
    • Impact on a potential termination
    • Impact on a contract renegotiation
  • As opposed to many other legal systems, the opening of insolvency proceedings in France does not allow one to escape from a contractual relationship – waiting for insolvency to happen is not an exit strategy.
  • The coming weeks will therefore be crucial in terms of evaluating and anticipating the legal tools that can be implemented to address each situation.