Newsletter
December 2019
SUMMARY
- ARTICLE: E commerce contracts: which applies?
- IN-BRIEF : Dépakine sentence: Can a drug be defective if it complies with its MA?
- CONTRIBUTION : A free Kbis extract for business leaders.
- SELECTED NEWSPAPER ARTICLES
ARTICLE
E commerce Contracts: which law applies?
Regulatory environment
Electronic commerce is defined as “the economic activity by which a person offers or provides goods or services remotely and electronically” (L. n° 2004-575, 21 June 2004, for confidence in the digital economy).
Over the past two decades, the development of electronic commerce has been and continues to be increasingly fast thanks to the enormous potential of the Internet and digital technology.
Moreover, in a globalised economy, while trade knows no borders, law is still very much linked to the sovereignty of States.
In this context, the question of the applicable law to e-commerce contracts is of primary importance. Indeed, when a company sells goods or services on the Internet, it may find itself concluding contracts, often in a fully automated way, under an infinite number of possible configurations (for example with a trader in the United States, with a consumer in India or in Germany, etc.).
Private international law tools, in particular those developed by the European Union, allow these situations to regain a certain legal predictability even if there are still blind spots.
As a matter of principle, the applicable law is the law designated by the parties
Where private international law instruments so permit, the simplest way is to choose the applicable law in the general conditions.
In the European Union, this is notably allowed by the Rome I Regulation on the law applicable to contractual obligations of 17 June 2008. Article 3 of the Convention allows the parties to choose the law applicable to their contract.
This regulation is universal in scope, and therefore applicable as soon as there is a link with the territory of the European Union (place of delivery or service, domicile or registered office of the contracting partner for example). However, its applicability by courts outside the EU is obviously not certain and it is therefore also necessary to consider the relevance of an appropriate extension of jurisdiction clause where possible.
Limitations arising to the choice of law
Regardless of the legal basis for choosing the law applicable to an e-commerce contract, it is important to keep in mind some limitations.
First of all, as regards the contracting party, if it is a consumer, the Rome I Regulation lays down a specific rule in its Article 6.2. While contracts concluded with a consumer may contain a choice of law clause, the law chosen must not deprive the consumer of additional protection to which he would have been entitled under the applicable law in the absence of choice. It will therefore be necessary to study potential customers and choose a law that is sufficiently protective to limit surprises.
On a more general level, it is also important to be aware of certain restrictions such as mandatory provisions (for example, in France, direct action by carriers against the consignor or consignee) or international public policy (certainly more developed in family law than in business law).
Finally, depending on the type of activity , it is important to consider whether or not there are international instruments of substantive law that would apply regardless of the law chosen. This is the case with the 1980 Vienna Convention on the International Sale of Goods (CISG), which applies by default to international sales of goods between professionals. The merchant can then perfectly well discard it in his general conditions, but it is necessary to do so explicitly.
Which law is applicable in the absence of a choice of law?
The situation is drastically complicated in the absence of a choice of law.
On one hand, when contracts only concern professionals, it is first necessary to consider the existence of directly applicable international regimes. This is the case of the CISG mentioned above but also of the so-called CMR convention on road freight transport.
These instruments have an opt-out applicability. Thus, if they are not excluded in the contracts, they will apply by default as soon as the situation falls within their scope.
Once this hypothesis has been verified or ruled out, it will be necessary to refer to the applicable conflict of laws rule.
Within the European Union, it will be necessary to look at the Rome I Regulation. Article 4 of the latter provides for a series of characteristics that make it possible to determine the applicable law.
As an example:
– In matters relating to a contract of sale, the law of the country of the seller’s habitual residence shall apply;
– In the case of services, it will be the law of the country in which the service provider has his habitual residence.
However, in the case of electronic contracts, it is sometimes complicated to locate these elements. Reference should then be made to the paragraphs at the end of Article 4 which allow, in case of difficulty, to connect the contract, for example, to the law of the country with which it has the “closest links”. Needless to say, this concept can be a source of serious litigation, which is why it is only useful in marginal cases.
On the other hand, the most sensitive issue is in fact consumer contracts.
The Rome I Regulation, on this point, contains special provisions in the absence of choice of law (Article 6).
However, these protective provisions shall apply only if the seller or service provider carries out his professional activity in the consumer’s country of residence or directs that activity there.
As these are websites, the notion of business direction has been developed by the Court of Justice of the European Union and is based on a set of clues (e.g. accessibility in the consumer’s language, domain name in the country, contact number or presence in the consumer’s country of residence).
Conclusion
In conclusion, while the provisions of private international law instruments are certainly useful, there are situations in which they do not provide optimal legal certainty and predictability.
However, it is possible to secure these contracts by anticipating and asking the right questions. The best solution then remains the choice of laws where possible.
In any case, each situation deserves careful consideration and anticipation to limit risks and unforeseen events to a minimum.
The use of a legal professional to draft its T&Cs is therefore strongly recommended.
IN BRIEF
Dépakine sentence:
Can a medical product be defective if it complies with its MA?
On November 27, 2019, Sanofi-Aventis France, the producer of Depakine, obtained, by raising an unresolved issue, the cassation of the appeal decision that had condemned it.
In this case, a child was born with severe deformities and a judicial expertise had established that this was due to the mother taking the drug in question.
The Court of Appeal was then accused of convicting the manufacturer on the basis of a defective product (i.e. a lack of “the security to which one can legitimately expect” under article 1245-3 of the Civil Code). The plea was based in particular on the fact that, on the one hand, the package leaflet indicated a risk and, on the other hand, that the said medicinal product and its package leaflet scrupulously complied with the Marketing Authorisation granted by the competent authority. However, the manufacturer considered that this case was covered by the exemption provisions of Article 1245-10, 5° of the Civil Code when the “defect is due to the product’s conformity with mandatory rules of a legislative or regulatory nature”.
While the first argument was quickly dismissed, the second one caught the full attention of the judges of cassation who ruled that the Court of Appeal had not responded to this argument; this is why it reverses the appeal judgment.
Thus, the question to be decided by the second Court of Appeal is whether validation under a MA falls within the provisions of the exemption provisions of the defective products regime. In other words, can the MA be considered as one of the mandatory rules described in Article 1245-10, 5° of the Civil Code.
To be continued!
CONTRIBUTION
A free Kbis extract for business leader
(By Christel BRANJONNEAU, « Avocat » specialised in corporate law, Paris)
From now on, it is possible for companies registered in the Trade and Companies Register to obtain their own updated digital K-bis extract free of charge, unlimited and in a secure manner.
The K-bis extract is obtained via the MonIdenNum website (www.monidenum.fr).
Registration is done via the online portal. After sending a copy of his identity card, the company manager is assigned his personal digital identity free of charge, allowing him to generate as many times as he wishes a K-bis extract on the companies for which he holds a corporate office.
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