INVALID TRANSACTIONS IN THE REFORMED CIVIL LEGISLATION OF FRANCE: THE EXPERIENCE OF LEGAL REGULATION

Abstract

The article deals with a review of the legal regulation of the invalidity of transactions in French law, coming into effect by the 2016 reform. The classification of invalid transactions into absolutely and relatively invalid ones, which is widely known in the countries of the institutional system of law, is analyzed. The author concludes that this classification differs from the classification of invalid transactions into void and voidable. The distinction between absolutely and relatively invalid transactions is based on two criteria: absolutely nullity is a breach of public order, and relative invalidity is a breach of private interests. In addition, a relatively invalid transaction may be confirmed by a party or persons who have the right to demand its invalidation, while in the case of an absolutely invalid transaction it is impossible. Under the new French law, a contract that does not meet the conditions necessary for its validity is invalid. Invalidity must be declared by a judge if the parties do not state this by mutual consent. In other legal systems there may be another procedure for invalidating a transaction. Particular attention is paid to the legal consequences of the invalidity of transactions. Recent changes in French law provide that the transaction is subject to restitution, in addition, the injured party has the right to claim compensation for damage in accordance with the general provisions on non-contractual liability, regardless of the invalidation of the contract. The term restitution (La restitution) is used to mean return, which is typical by the law of both institutional and pandect law systems. In particular, the restitution (return) of any thing, except for a sum of money, is carried out in nature or, when this is not possible, at a value calculated on the day of returning. The person who returns the thing is responsible for its damage and spoilage; the party to the relationship, who in good faith received and sold the thing, must return only the sale price, and if received in bad faith – to pay the value on the day of reimbursement, if it exceeds the price.