International Development Summaries - France

Author:Mr Marco Plankensteiner
Profession:Kramer Levin Naftalis & Frankel LLP

i) Misleading commercial practices

On November 22nd, 2016, applying article L. 121-1 of the French Consumer Code, the French Supreme Court ruled that oral allegations prevail over contractual omission for the determination of the existence, or non-existence, of misleading commercial practices. The written provisions in an agreement have no impact on the existence of intentionally misleading allegations which lead the consumer to enter into the contract.


ii) Group Action

The Law on the modernization of the justice of the 21st Century ("Loi de modernisation de la justice du XXIe siècle") was promulgated on November 18th, 2016.

The Law introduces group actions in various new areas such as fighting against discrimination, data-protection, environmental protection and health.

Previously, a group action could only be initiated by authorized consumer associations for damages suffered by consumers for certain actions. Such actions included infringements by a professional of its legal or contractual obligations in connection with the sale of products or the provision of services and anti-competitive practices.

For these new types of group actions, not only do authorized consumer associations have the right to bring a group action, but also any duly-registered association whose purpose is the defense of the interests have the right as well.

The Law

iii) Unfair terms in consumer contracts

On November 28, 2016, the French Supreme Court issued an opinion on request of a lower court about three types of contractual terms, commonly used in loans granted to consumers for the purchase of vehicles, relating to the transfer to the lender of the benefit of the retention of title.

The relevant clauses concern: (i) the subrogation of the lender in right of retention of title of the seller; (ii) the option for the lender to waive the right of retention of title and to substitute a lien over the asset being financed without notifying the borrower; and (iii) the limitation of the right of the borrower to propose a buyer if the lender decides to resell the asset subject to a retention of title to obtain the repayment of the loan.

The Supreme Court considered that these clauses are abusive since they unduly restrict the ownership rights of the borrower over the asset.

Supreme Court's Opinion

iv) Flight delay

In a judgment of November 30, 2016, the French...

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