How far can a contractor limit its liability? A French Law perspective

How far can a contractor limit its liability? A French Law perspective

Under French Law, the clauses limiting the liability for material breach or in case of deceit (dol) are deemed to be abusive.

It is otherwise admissible for a contractor to limit its liability BUT to a certain extend!

Considering current case law, a judge could determine that such a limitative clause is abusive (and as a consequence considered non written and unenforceable), taking into account the following parameters:

  • The activity sector foreseen;
  • The interests at stake;
  • The potential damages that could be caused in the particular situation;
  • The level of the amount taken for the limitation (potentially considered too high or too low depending on the perspective taken).

 

To illustrate, one can easily imagine the huge amounts to be potentially claimed by a co-contractor, such amounts being much higher than the agreed cap for the overall liability of the contractor.

=> Make your clause STRONG by adapting the level of the limitation.

=> Think about an INSURANCE COVERAGE to take over/complement your overall contractual liability.

 

 

 

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