The Court:

...

Given that it emerges from the decision under attack (Paris, 31 May 1990) that in a contract taking effect on 25 March 1971 BP appointed Huard an approved distributor for a period of fifteen years, a contract which was prolonged until 31 December 1988 by a further agreement of 14 October 1981, that in 1983 the price at which petrol could be sold in garages ceased to be fixed by law, and that Huard complains that BP made it impossible for him to sell the petrol at competitive prices despite their undertaking to include him in their system of distribution;

Given that BP complains of the judgment for granting Huard’s claim and awarding him 150,000 francs as damages whereas (1) the preamble to the distributorship contract of 2 October 1970 provided that BP was to assist Huard in various ways “within the limits of proper profitability”, and that in holding that BP was therefore bound contractually to ensure that Huard could make a proper profit in their distributorship system the Court of Appeal, contrary to article 1134 Code civil, distorted this clause, which was for the benefit of BP and not the approved distributor, and (2) no one can be held liable for breach of contract unless it is shown that the obligation unperformed was contained in the contract, and since the only complaint against BP was that it had not sought to negotiate a commercially satisfactory agreement with Huard the Court of Appeal had not shown that it was in breach of any contractual obligation for which it could be held liable in damages, this being in violation of article 1147 Code civil; and (3) since one cannot be held liable for harm suffered by one’s contractual partner when the harm is due to an external event for which he is not answerable, the Court violated articles 1147 and 1148 Code civil by failing to draw the legal consequences of its findings of fact when it held BP liable for the losses Huard suffered through being unable to resell at competitive prices despite the fact, as found, that BP was required by the policy relating to petrol prices to sell to Huard at the prices it actually charged him;

But given, first, that the Court did not say that in including Huard in its distributorship network BP was bound to “ensure him a reasonable profit” and secondly that the Court did hold (1) that the contract was a solus agreement whereby Huard could sell only petrol provided by BP, that Huard had reconstructed his service station and that “the price at which BP sold petrol to its authorised distributors was higher than that charged to its retail customers when it sold through its direct agents”, (2) that BP had undertaken to keep Huard in its chain of distributors and that Huard was not bound to become a direct agent, as BP proposed, rather than remain an independent distributor under the existing agreement, and (3) it would not necessarily be unlawful for BP to provide Huard with petrol at a price less than that charged by “branded outlets” since it could make an agreement for commercial cooperation with Huard which would fall within “the range of admitted exceptions designed to protect retailers”;

Given that in view of these findings and interpretations, revealing the complete absence of force majeure, the Court of Appeal was entitled to hold that in depriving Huard of the means of selling at competitive prices BP had not performed its contract in good faith;

From which it follows that the application for review, factually erroneous in its first contention, is in other respects baseless;

For these reasons DISMISSES the application.

Subsequent Developments

This note on subsequent developments reflects the legal situation as of October 2004.

Com 3 November 1992 [Bull IV, no 338 and JCP 1993, II, no 22164]: "An appeal court could decide that a petroleum company had not performed in good faith the approved distributor agreement concluded with the entrepreneur of a service station, since it followed from its findings and assessments that, in the absence of any case of force majeure, the supplier had deprived the distributor of the means of selling at competitive prices". Case law maintained.

Cf Martin Behar Touchais, Juriclasseur "Contrats / distribution", instalment 175 "Extinction du contrat causes (Extinction of causes of contracts)", 1998: Outside certain special texts, civil case law refuses to admit the theory of imprevision (restoration of contractual equilibrium, in response to unforeseeable events). Although the judges now admit that it can be bad faith or abuse not to take account, in particular in fixing a price, of a development or collapse in economic circumstances (Cass com 3 November 1992 - it is also what case law could deduce, if it wanted to, from the judgments Cass ass plen 1 December 1995), they do not recognise that they have the power of putting an end to the contract (still less that of confirming a termination occurring without their intervention) in the case of imprevision". See likewise the analysis put forward under the judgment of the 6 March 1876, with respect to the present judgment ("Les grands arrets de la jurisprudence civile" (Leading judgments in civil case law), no 163 op cit): "The increase in the judge's powers in relation to determination of price, which follows from the judgments given by the Assemblee pleniere on the 1 December 1995 creates a favourable context for permitting revision for imprevision. Certain recent decisions could be understood as a first step in this direction". However, the Cour de cassation, although it seems to take this path, has not expressly sanctioned the theory of imprevision ? even if by the requirement of good faith in the performance of contracts. Moreover, in the present judgment, the alteration in economic circumstances was imputable to one of the contracting parties who supplied other retailers at lower prices. Imprevision is more directed at the case of modification of economic circumstances exterior to the parties, indeed unforseeable circumstances. One can therefore either consider this case law as confirmed by the judgments of the assemblee pleniere of the 1 December 1995 or, more probably, as not having since been confirmed or contradicted.

Translation by Mr Raymond Youngs

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