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The indemnification of the loss does not eliminate the obligation to pay for the completed works

28/08/2017

In an unpublished decision of 20 April 2017 entered by the third civil chamber, the Cour de Cassation re-affirmed the principle that even where a loss must be indemnified in full, the amount of the indemnification may not exceed the amount of the loss (Cass. 1st Civ., 9 November 2004, Bull. I No. 264).

In the said case, a project owner had ordered sewage works from a contractor which had carried out the same after completion of a study. After the project owner had refused to pay the balance of the contractual price because the works proved ineffective, the contractor instituted proceedings seeking the payment of the amounts concerned. The appellate court ordered the contractor to refund to the project owner the balance paid by it on the price of the works and further ordered the contractor to pay to the project owner the amount of the price of the works in order, according to the expert, to cure the defects and indemnify the loss of enjoyment and the expenses incurred under Article 700 of the French Civil Procedure Code.

On the basis of Article 1147 of the French Civil Code, as drafted prior to the promulgation of the Ordinance of 10 February 2016 and according to the principle of full indemnification of the loss, the Cour de Cassation partly quashed this decision: if the contractor is found liable for having carried out works that proved ineffective, the contractor must be ordered to fully indemnify the loss, but this does not release the project owner from the obligation to pay for the works that were already completed. If the applicable conditions are satisfied, the court may order a set-off.

Cass. 3rd Civ., 20 April 2017, No. 16-13.885

Authors

Julia Pelpel-Moynot