The Court:

Given that according to the judgment under attack the claimants had affixed to the door of their workshop a rule forbidding their workmen to enter if they were wearing clogs, subject to a fine of ten francs; and that Dame Juillard, a worker in the factory who was subject to this rule, infringed it;

Given that while accepting that this provision was of a contractual nature and binding on Dame Juillard, the council below nevertheless reduced the liquidated damages to fifty centimes, on the basis that the fine was manifestly excessive and that article 1231 Code Napoléon permits the judge to moderate a penalty when the principal obligation has been partially executed;
But given that under articles 1134 and 1152 Code Napoléon contracts lawfully formed have the force of law to those who enter them and that if the contract provides that a party in breach of it is to pay a certain sum by way of damages, the other party must receive that sum, no more and no less, and given that once it was found that Dame Juillard’s breach of the obligation was total and not just partial, article 1231 of the code became inapplicable;

From which it follows that the judgment under attack made an erroneous application of article 1231 and thus violated the articles cited;

For these reasons QUASHES the judgment of the conseil des prud’hommes of Aubusson.

Subsequent Developments

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

Civ 14 February 1866 [Dalloz periodique 1866, I, p 84]: "Under the term of articles 1134 and 1152, agreements legally formed take the place of law for those who have made them, and when the agreement states that the person who fails to perform it will pay a certain sum as damages, the other party cannot be allowed a larger or smaller sum". Case law abandoned (legislative modification).

Cf "Les grands arrets de la jurisprudence civile (Leading judgments in civil case law)", no 166: the Cour de cassation has always maintained its position of 1866, denying any moderating power to the judges of the lower courts. Nevertheless, the evolution of economic relationships made an evolution in law necessary, in order to avoid penal clauses which are manifestly excessive. This gave rise to a reform of articles 1152 and 1231 of the Code civil, effected by the laws of the 9 July 1975 and 11 October 1985, adding, in particular, a second paragraph to article 1152 of the Code civil: "the judge can, even of his own motion, reduce or increase the penalty which had been agreed, if it is manifestly excessive or derisory. Any contrary stipulation will be deemed not included". Although the view could be taken that the legislator had considerably weakened the principle of the inviolability of the contract by these reforms, it must be recognised that the Cour de cassation "has succeeded in keeping the judges intervention in the contract exceptional, as the legislator had intended, and preserving, in that way, the efficacy of the principle of autonomy of the will". See, for a more critical analysis, Yves Picod, Juriclasseur Civil, arts 1134 and 1135, single instalment, no 74, September 1999: "the judge has a wide margin of appreciation in assessing manifest excess and the opportunity for his intervention, which results in practice in the judges often being content with simple excess, thus further weakening the obligatory power of the clause. The revision regime likewise disregards the "private penalty" function of the clause: the judges of the lower courts have thus tended sometimes to reduce the clause to pure symbolism, in the absence of detriment, without incurring any criticism (Com 11 February 1997, Bull no 47)", and even "purely and simply to set the clause aside when its repressive aspect should have remained in force (Com 16 July 1991, unpublished, pourvoi no 8919080)".

Translation by Mr Raymond Youngs

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