Article by John C. Reitz
For the common-law lawyer learning French contract law, there is no more mystifying rule than the requirement of the mise en demeure. The French phrase is generally translated as ‘putting in default,’ although the root meaning of the term ‘demeure’ has to do with delay. The most important function of the mise en demeure rule is to require the nonbreaching party (usually referred to in French legal writing as ‘the creditor’) to put the breaching party (referred to as ‘the debtor’) in default through a formal demand for performance before the debtor's liability for breach damages begins to accrue. A much less important effect of putting the debtor in default is transfer of the risk of accidental destruction of specific goods back to the debtor when he would not otherwise bear that risk. The level of formality required by the rule stated in the French Code civil is high: the required demand is to be made ‘by a summons or by other equivalent document.’
By performing its chief function of shielding the debtor from the accrual of damage liability, the rule treats debtors with a special forbearance that is unknown to the common law. The French appear to be divided over the wisdom of the mise en demeure. A few scholars have called for its legislative abrogation. Dean Carbonnier has suggested, with tongue only partly in cheek, that the rule may represent a ‘primitive formalism’ or evidence that punctuality is a ‘secondary quality, and not very French.’ Nevertheless, most French commentators appear to accept the rule, and recently, one has asserted that the role of the mise en demeure is ‘essential.’ The rule has also been described as ‘a reservoir of difficult questions' and has proven equally controversial in jurisdictions that have borrowed it from France, most notably Louisiana.
One of the few certainties about the mise en demeure rule is that it is intended to apply to mere ‘delay damages' (domages-intérêts moratoires). These damages are for delay in performance in situations in which the delay does not itself amount to repudiation of the entire obligation. There has been, however, a major debate in French law over whether the mise en demeure requirement applies more broadly to any kind of ‘compensatory damages' (dommages-intérêts compensatoires), the usual phrase for all other types of damages. The French Code civil applies the rule without distinction to all damages. The Cour de cassation, the French high court for civil matters, has ruled on both sides of the issue. While the prevailing view among French legal writers favors restricting the rule to delay damages, a number of French authors, including some of those writing on the subject most recently, refuse to rule out application of the mise en demeure to compensatory damages.
Even with delay damages, its undisputed area of application, the rule has a Cheshire Cat quality because of numerous exceptions to its coverage and a general decline in the level of formality required for the demand. For example, the Code civil version of the rule expressly excepts, from the protection of the rule, debtors who have breached their obligations not to do and debtors obligated to give or to do something ‘which could only be given or done within a certain time which they let pass.’ French courts have further exempted debtors who have unequivocally manifested their intention not to perform. Although the Code civil appears to require that the demand be embodied in a summons and delivered by a bailiff, courts on occasion have accepted the use of registered or even simple letters, especially in commercial matters. The well-established holding that filing suit satisfies the requirement accentuates the formalistic nature of the mise en demeure; the rule always has been satisfied at least by the time suit is filed. Moreover, the parties are free to contract out of the rule, and French courts have gone so far as to find that tacit agreements dispense with the mise en demeure. Yet the French stubbornly assert that merely specifying a due date in the contract does not, as a rule, exempt the contract from the mise en demeure requirement. It is, therefore, difficult to determine the practical significance of the rule.
Some of the French terms used to discuss the rule are even more puzzling to the common-law lawyer. Some French scholars explain the policy basis for the mise en demeure by saying that it is intended ‘to put the [breaching party] in the wrong,’ ‘to establish the debtor's faulty delay,’ or to ‘fix preventatively the imputability of the consequences of possible breach.’ These phrases are part of the language of fault, a concept that is not generally relevant to common-law thinking about contractual liability, especially for failure to perform within the contractually specified time. Most French legal writers do, however, accord a central doctrinal role to the concept of contractual fault.
The requirement of the mise en demeure can thus be translated as the ‘default rule.’ It clearly applies to delay damages but also may extend more broadly. Moreover, the rule appears to be part of the French fault theory of contractual liability. To try to make sense of the mise en demeure, this Article will explore the connections between default, fault, and delay, and examine the controversy over the rule's application to compensatory damages.
The first section of the Article will examine the Roman law roots of the default rule. The discussion will argue that despite considerable debate today about the precise nature of the default rule in Roman law, the rule appears to have been chiefly concerned with risk allocation, not delay damages. As a result, the Roman default rule probably did not represent as significant a departure from the basic rules of the fault system as the modern French default rule, which operates principally to shield debtors from liability for delay damages until they receive the required demand for performance.
The second section of the Article will study the debate over the default rule in modern French law. The discussion will illustrate the workings of the French fault conception of contractual liability and argue that the controversies over the current rule are primarily the result of disagreement over how to react to the conflict between the default rule and the basic rules of contractual fault. The discussion will contrast the majority view, which makes no effort to harmonize fault and defult and which tends to advocate limiting the default rule as much as possible, with the efforts of several writers who have conceptualized the mise en demeure as part of the general requirement of good faith on the ground that it preserves the debtor's opportunity to cure. The Article will examine how this minority rationale has proven to be an expansive theory that has pushed its proponents to advocate expanding the mise en demeure beyond the borders of delay damages to merge with the mitigation rule. Thus, the Article attempts to understand the debate in modern France over the scope of the default rule as the product of changes in the practical and doctrinal significance of the mise en demeure.
About the Author
John C. Reitz. Professor, University of Iowa College of Law.
Citation
63 Tul. L. Rev. 85 (1988)