In view of articles 1709 and 1710 in conjunction with articles 1134 and 1135 Code civil:

Given that when a contract envisages the formation of further contracts the fact that the price contained in those further contracts is not fixed in the initial contract does not affect the validity of the latter, in the absence of specific legal texts to the contrary, though any abuse in the fixing of the price may give rise to rescission or damages;

Given that the judgment under attack (Paris, 26 March 1991) found that on 15 November 1982 Bechtel concluded a “hire and maintenance” contract with Cofratel whereby for a period of fifteen years Cofratel would monitor the installation of telephonic services in Bechtel’s offices, and that on 28 June 1984 Bechtel informed Cofratel that it was closing some of its offices and terminating the contract; that Cofratel sued Bechtel for the sum fixed in the contract (clause pénale) for anticipatory breach of the contract, in which suit Bechtel raised the defence that the contract was void for failure to specify a determinable price;

Given that in declaring the contract void the court below stated that if “the obligation to resort to Cofratel applies only to intrinsic modifications of the installation and does not prevent Bechtel from going to other supplies for the purchase of similar or additional appliances, nevertheless since Cofratel alone may modify the apparatus installed it is therefore to this extent an exclusive supplier;

Given that in so deciding the court of appeal violated the texts cited above;

For these reasons QUASHES the decision of the Court of Appeal of Paris of 26 March 1991 and remands the case to a different section of that court.

Subsequent Developments

Assemblée plénière, 01/12/1995 (3 arrêts) : See Henri Capitant, François Terré, Yves Lequette, « Les Grands Arrêts de la Jurisprudence Civile » (Dalloz, 2000, pp. 42 to 58) : these decisions make « the question of the certainty of the price no longer a condition of the validity of the contract, but a mere means of its performance”, and at the same redefine the role of the court: until then contracts whose price was undetermined were declared null. From now on rescission or indemnification rectify abuses in the fixation of the price. The previous case law, which considered that the determination of the price was an essential element of a contract, was confronted by numerous practical difficulties, in particular when it was not possible to fix the price in advance. Certain corrective measures introduced by the cases in relation to certain types of contract did not suffice, and a change became necessary; hence these decisions of the Assemblée Plénière, which redefine the very concept of a contract.