Sudden termination and contractual force majeure

In 2017, Stanley Black & Decker, a renowned tool manufacturer, contracted a service provider to handle the commercial promotion of its products.

The contract included a force majeure clause stipulating that in the event of a suspension lasting more than 30 days, either party could terminate the agreement without notice or compensation.

In 2020, the manufacturer invoked this clause and suspended the contracts due to the Covid-19 lockdown.

30 days later, it notified the service provider of the final termination.

The service provider filed a lawsuit for the sudden termination of established business relationships (Art. L. 442-1, II, of the French Commercial Code).

The Court of Appeal dismissed the claim, ruling that the contractual force majeure clause authorized termination after 30 days, the conditions had been met, and that was the end of the matter.

The Court of Cassation overturned the decision, reiterating that while the sudden termination provisions of the Commercial Code can be set aside in cases of force majeure, this must be understood as force majeure defined and qualified by Article 1218 of the French Civil Code.

However, legal force majeure generally only allows for contract termination if the impediment is permanent. A 30-day suspension linked to a lockdown is not necessarily permanent.

The remand court will now have to determine whether the conditions for force majeure justifying contract termination were met in this specific case.