Unilateral contract termination: formal notice not always necessary
In a recent case involving Calminia, a company specializing in limestone and marble cutting, and its service provider Sodileve, responsible for machine maintenance, the intricacies of unilateral contract termination were brought to light. In 2016, Calminia expressed dissatisfaction with Sodileve's repair services. This led to a sharp decline in their relationship, culminating in Sodileve's decision in March 2017 to cease services due to the conduct of Calminia's manager. Sodileve subsequently sued for unpaid invoices.
According to Article 1224 of the French Civil Code, contract termination can result from a resolutory clause, creditor notification in cases of serious non-performance, or a court decision. Article 1226 allows for unilateral resolution by the creditor through notification, typically following a formal warning, except in emergencies.
Calminia contested the termination's validity, arguing the lack of formal notice. However, the Cour de cassation, in its October 18, 2023 ruling, upheld the termination. It found that the manager's behavior created an untenable working environment, evidenced by tensions, confrontations, and direct orders bypassing hierarchical protocols.
The French Commercial Chamber clarified that formal notice is redundant when circumstances indicate its futility. The Court of Appeal was not required to investigate the presence of a prior formal notice.
This case sets a precedent under Article 1226, highlighting the importance of maintaining professional conduct to avoid risk of unilateral contract termination.
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