The Concept of Contract in the Code Napoleon

THE CONCEPT OF CONTRACT IN THE CODE NAPOLEON

Introduction and historical background leading to the formation of the Code Napoleon

One of the biggest dilemmas that jurist over the course of history have faced is over the question of codification of law. One school of thought believes that the best and most just application of law can be achieved only when the principles that will finally be used for dispute resolution are enunciated beforehand. These principles can then be applied to each case. A conflicting view held by proponents of the other school of thought holds the view that each problem that reaches the courts of law is sui generis[1] i.e. distinct in its own sense; therefore, it would not be apt to apply a premeditated solution to the case. The principle so laid down beforehand might not be able to anticipate the kind of problems it will be called upon to address in the normal course of working of the courts. The judges should, thus, be allowed to lay down principles in every case. This ideological difference formed a part of the intense tussle between 16th century English jurists Francis Bacon and Edward Coke. While Bacon espoused the cause of a uniform code, Coke was in favour of judges laying down the law. This aspect of the source of law, ultimately forms the biggest point of difference between the English common law and Continental Civil Law. The Code Napoleon or the Code Civil des FranA§ois was declared as the supreme law to be used for governance in the territories of France[2] . The name Code Napoleon was ascribed to it in the year 1807. After Napoleon had been forced into exile, it reverted back to its original name but again in 1852 its name was changed to Code Napoleon. The code is nowadays commonly known as the French Civil code. While studying the historical background of the Napoleonic code, it would serve us well to keep in mind the fact that the Code Napoleon was not the first extensive codification of laws under one umbrella code. The very first such code was the Roman code “corpus juris” of emperor Justinian. This code formed the basis for modern jurisprudence and largely affected the subsequent codes in various countries. The notable among such codes were the “danske lov” of Denmark established by Christian V, Sweden’s (Sverige rikes lag) of 1736 and the “Allgemeines Landrecht fA¼r die PreuAŸischen Staaten”,which was compiled on the orders of Frederick the Great in the year 1794.[3] The French civil code is more important than others because of the fact that it forms the basis of the legal systems in almost the whole world except for the common law countries like the United Kingdom, USA and India.[4] The legal system of post revolution France was, to put it mildly, in shambles. The country was plagued by multiplicity of laws operating in different parts of the country. While one section was governed by the older Roman law principles (droit A©crit), the other part was under the law of customs known as coutumes (droit coutumier). These coutumes were generally different for different territories. It was in this regard that the great philosopher Voltaire quipped that a traveller in France changed his laws as often as he changed his horse.[5] Many attempts were made at drafting a uniform civil code in France but ultimately Napoleon’s attempt was most successful culminating in the adoption of the Code Napoleon in 1804. The legacy of this code remains unscarred to this date as it forms the basis of similar codifications in large parts of the modern world and many other countries where it has been adopted almost intoto.[6]

Structure of the Code

For the purpose of clarity, the French Civil code is divided into various Books. These books have further been divided into “titles” which are basically headings under which subjects like marriage, contracts and emancipation have been discussed. The code comprises of three such books. The number of articles in the code stands at 2,281. The book one of this code is titled “of persons” and contains principles for personal laws in fields like marriage, family and divorce. The book two of the code has been christened “Of property, and the Different modifications of property” and the third book which is also the most extensive is titled “Of the Different modes of Acquiring Property” and contains relevant sections regarding contracts and shall form the basis for our study into the concept of contracts laid down in the Code Napoleon.[7] The articles relevant to contracts can be found in the book three under the title IX which reads “of contracts or conventional obligations in general” and runs from article 1101 through article 1369.[8] Further conceptions and applications of the cardinal rules of contracts can be found in titles IV, V, VIII and IX. The contracts of hiring and the contract of partnership have found special mention in titles VIII and IX respectively.

Basic concepts of Contracts as laid down in the Code:

The basic elements regarding contractual agreements are stated in the articles starting from article 1108 under the heading Des conditions essentielles pour la validitA© des conventions (“Of the conditions that are essential for the validity of agreements”). The article 1108 has laid down four essential ingredients for a contract[9]. These elements are:

1. Consent of the Binding parties
2. Capacity to enter into a contract
3. A certain object forming the matter of the contract; and
4. Lawful cause.

Articles 1109 onwards up until 1122 deal with the first requirement i.e. consent. Article 1109 excludes contractual liability in cases where consent was given through mistake or under duress. Under Article 1110 errors of a lesser degree “erreurs sur la qualitA© substantielle”[10] have been designated as not grounds enough for nullifying a contract. As per the provisions of the Article 1113, if violence is exercised towards a spouse of the contracting party, it becomes grounds for nullity of contract. Reverential fear of father or mother, albeit no violence has been committed will not suffice to annul a contract. This autonomy of will or autonomie de la volontA© has been considered to be the linchpin of the French Law of Obligations.[11] The Section II is titled “Of the capacity of The contracting Parties”. It starts at article 1123 which lays down that every person who has not been declared by law to the contrary, is allowed to enter into a contract. Those incapable of entering into contracts are Minors, Interdicted Persons, Married Women (in cases laid down by law).[12] The Section III. “of the object and matter of contracts” deals with the third requirement enumerated in Article 1108. The Article 1126 stipulates for every legal contract to have for itself an object, a thing which one party is bound to give, to do or restrain from doing. The use or possession of a thing can form legal object for a contract. Article 1128 states that only the “objects of commerce” can be the object of agreements. The object should at least be determinate i.e. have a definite form. The quantity of such an object has been granted to be uncertain. Future things may be the objects of an obligation.[13] The last section that has been inserted to clarify the provisions of article 1108 is Section IV titled “of the cause”. Under Article 1131, it has been stated that a contract that does not have a cause, or has a false or unlawful cause shall be void and will have no effect. The cause will be deemed to be unlawful when it is either expressly proscribed by law, is contrary to good morals or when it is against the sustenance of public order. The Chapter III deals with the effects of obligation. Under this section, the article 1134 states that an agreement that has been formed legally in consonance with the provisions of the civil code has the force of law and cannot be revoked sans the mutual agreement of the parties that too in good faith. Articles 1142 through Article 1145 deal with the right of a creditor in cases of non-performance of a contract. Section IV of the Chapter III contains articles which lay down the principles for damages in cases of non-performance of contracts. This section has been titled “of damages and interest resulting from the non-performance of an obligation”. Article 1146 lays down that a debtor will be liable to pay damages when he has exceeded the time during which he had been contracted to give or do something. He will have to pay damages and interest if he cannot prove that the reasons for the non-performance and failure to execute his obligations under the agreement were alien to him and outside the purview of his control. The corollary of this principle is also applicable. If the reasons for the failure on part of the debtor were outside his area of influence or control, no grounds for payment of damages and applicable interest will arise. The amount that will be payable to the creditor will generally be equal to the imputed loss suffered by him or on the basis of the profit, the benefit of which he has been deprived of due to non-performance on part of the debtor. Again, it should be noted that according to contents of Article 1150, the debtor will be compelled to pay only those damages which had been or could be anticipated and foreseen at the time of entering into the contract. Remote damages are therefore, not covered under this section. In peculiar cases where the amount of damages that will be payable if the obligations are not carried out by any one of the parties has been already mentioned and agreed upon in the contract, the claimant party will be eligible to get neither any amount less than or any sum more than such agreed amount. The Section V is called “of interpretation of agreements” and lays down laws and rules regarding interpretation of ambiguous terms in a contract. This section starts at Article number 1156 which lays down that it is paramount to delve into the common intentions and objectives of the contracting parties to decipher the meaning of the terms of the contract rather than just applying a strict and literal interpretational tool. The ambiguous terms must be interpreted according to the usage and customs of the country in whose territory, the contract is made.[14] The most important stipulation under this section is that when an ambiguous term has multiple interpretations, the clause(s) will be interpreted on the basis of the interpretation that is favourable to the party who has “contracted the obligation” against the interpretation that is favourable to the party that has laid down the stipulations. The Section VI deals with the relations of contracting parties and terms of contract to third parties. The Chapter IV lists the various types of obligations that the French Civil Code recognises. Eg. Causal obligation, suspensive obligation and joint & several obligations. The Chapter V has laid down the conditions under which the obligations will be deemed to have been completed or extinct. These are-

1. By payment
2. By novation
3. Voluntary remission
4. Compensation
5. By intermixture
6. By loss of the thing
7. Nullity of recission
8. By the effect of conditional dissolution; and
9. By prescription.

All the above mentioned conditions have then been extensively explained in the succeeding section of the Chapter.

Similarities and Differences between the conception of contract in common law and in French civil law

The French civil law has been adopted almost throughout the whole continental Europe, Latin America and in many other third world countries. Therefore, the concepts of contract laid down in the Code napoleon also find resonance in many parts of the world. Since, this code has such enormous influence on modern law, it becomes, but, elementary to try and find out the points of convergence and divergence between civil law and common law while trying to understand the Code Napoleon. Before trying to get into the complexities of law, it is essential to find the difference between these two concepts by looking at their most basic tenets. For this purpose, Professor Nichols has given a lucid definition to both of them. According to him, in French law, contract is an agreement between two parties, whereas in the common law, it is a promise in return for a legal consideration.[15] A very visible difference that comes to light almost instantly is the emphasis on the intention and autonomy of parties to conclude a contract in the French law and the opposite of this in common law. In common law, if the conduct of a person points to an intention to enter into a contract although no such intention in reality exists, it will be held that such an intention did exist. Mistake will not form a ground for escaping from contractual liability, provided that such mistake was not a direct consequence of the other party’s actions.[16] Also it has been noted that the French system is averse to hold that a proposal to the public at large constitutes an offer, unlike the English courts.[17] In place of the English law concept of consideration, in the French law there exists the concept of requirement of cause and object to conclude a contract. The doctrine of cause has been extended to form the various categories of contracts like the contract of bienfeisance. The result is that this doctrine in instrumental in declaring purely gratuitous obligations valid unlike consideration in English common law. [18] aclear advantage of civil law over common law is in its recognition of an option contract. Since no consideration is paid in option contract, it will not be binding in a common law setting but since agreement is present, the French courts will recognise it. In common law, the parties might try to avoid such a situation by paying a token amount. The common law courts recognise this shortcoming of common law and have tried to address it in recent times.[19] But, the French law lacks the generality that can be made applicable to a variety of cases. In common law, when a case comes for adjudication to a court, it provides an opportunity for testing old principles in light of their relevance and developing new guidelines. The common law therefore, can boast of a law of contract that is more practical and gives greater importance to reform.[20]

Conclusions

After the formation of the European Union and growing trade and commerce and cooperation between all the states in the world due to globalisation, there is a growing demand for the harmonization of different legal systems of the world. The French civil law and the English Common Law are the most important of them and a reading into the conceptions of contract held by them shows that while both of them try and solve the same problems from different perspectives with sometimes contradictory principles, they do hold similar views regarding dispute resolution. This can be amply seen from how the common law has tried to regulate option contract, a concept that has been enshrined and recognised in Napoleon’s code. Also, the French law is trying to keep pace with the changing scenarios and has been modified some times to face the challenges of its era. For instance, the original code had given parties liberty to fix any rate of interest, but later in 1807, a maximum rate of interest of 5% in civil and 6% in commercial contracts was laid down.[21] These restrictions were again lifted in 1886 when commercial contracts were excluded from the purview of maximum rate of interest. Again in 1918, the rate of interest limitation on non commercial loans was also lifted.

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[1] JUDGE BEVERLY D EVANS, The Code Napoleon, GEORGIA HISTORICAL QUATERLY Vol. 6, No. 1 (MARCH, 1922), pp. 28-34. [2] Ibid. [3] TOM HOLMBERG, The Civil Code: An Overview, available at (https://www.napoleon-series.org/research/government/code/c_code2.html) lastaccesed on 17th march,2014. [4] Supra, see note 1. [5] Supra, see note 3. [6] The importance and the significance of this legislation can be gauged solely from the fact that when Napoleon was asked about his achievements while he was in exile on the island of St. Helena, this is what he said "My glory is not to have won forty battles, for Waterloo's defeat will blot out the memory of as many victories. But nothing can blot out my Civil Code. That will live eternally." [7] THE FRENCH CIVIL CODE: LITERALLY TRANSLATED FROM THE ORIGINAL AND OFFICIAL EDITION, PUBLISHED AT PARIS IN 1804 BY A BARRISTER OF THE INNER TEMPLE, William Benning, Law Bookseller, 1827. (available at https://files.libertyfund.org/files/2353/CivilCode_1566_Bk.pdf) last accessed on 19th March, 2014. [8] ibid [9] Supra, see note 7, Article 1108, page 304. [10] Prof. Catherine Valcke, CONVERGENCE AND DIVERGENCE BETWEEN THE ENGLISH, FRENCH, AND GERMAN CONCEPTIONS OF CONTRACT, European Review of Private Law, vol. 16, No. 1 (2008), pp. 29-62. [11] Ibid. [12] Article- 1124, Code Napoleon. [13] Article-1130, Code Napoleon. [14] Article-1159, Code Napoleon (1804) [15] NICHOLAS, The French Law of Contract 138, Butterwoths, 1932 [16] CATHERINE VALCKE, Convergence and Divergence Between English, French and German Conceptions Of Contract, European Review of Private Law, vol. 16, No. 1 (2008), pp. 29-62. [17] ANNE DE MOOR, Contract and Agreement in English and French Law, 6 Oxford J. Legal Stud. 275 1986 [18] Ibid [19] ARTHUR VON MEHREN, The French Civil Code and Contract: A Comparative Analysis of Formation and Form, LOUISIANA LAW REVIEW, 15 (1955) available at (https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=2269&context=lalrev) last accesed on 18th march, 2014. [20] Ibid. [21] MAURICE AMOS, The Code NapolA©on and the Modern World, Journal of Comparative Legislation and International Law, Third Series, Vol. 10, No. 4(1928), pp. 222-236

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