The 3 termination routes for non-performance
Objective: Know the 3 termination mechanisms and how to draft an effective termination clause.
The 2016 reform established three distinct mechanisms for termination for contractual breach:
Termination clause (Art. 1225)
The most common in procurement. The clause specifies the breaches that automatically trigger termination.
Condition: Prior formal notice (registered letter with acknowledgement of receipt)
Advantage: Legal certainty if well drafted
Termination by notification (Art. 1226)
Unilateral termination by the creditor after formal notice has remained without effect.
Risk: The terminating party bears the risk if the court considers the breach insufficient
Use: Urgency or absence of a termination clause
Judicial termination (Art. 1227)
The aggrieved party asks the court to terminate the contract.
Advantage: Decision secured by the court
Disadvantage: Lengthy, costly
🌟 Termination for convenience
Unlike in public procurement, termination for convenience does not exist as of right in private contracts. It must be expressly negotiated with clear conditions: notice period, compensation for work performed, unamortised costs.
"In the event of a material breach of any of its essential obligations, the other Party may terminate the Contract as of right after formal notice sent by registered letter with acknowledgement of receipt that has remained without effect for thirty (30) calendar days, in accordance with Article 1225 of the French Civil Code."