Newsletter
October – November 2021

SUMMARY

ARTICLE:

• International sale of goods contract and payment terms: The Commercial Practices Review Commission limits the impact of the provisions of articles L. 441-9 and L.441-10 of the Commercial Code
• Dismissal for serious misconduct: the employee’s IP address can be used without declaration to the CNIL

•  BRIEFS
• Business France on October 21, 2021, the circle of investors: A recovery plan, urban spaces of innovative spaces, employment landscape: US and French visions.
• UIA Congress in Madrid on October 29, 2021: International contracts in times of crisis

ARTICLES

International sale of goods contract and payment terms : The Commercial Practices Review Commission limits the impact of the provisions of articles L. 441-9 and L.441-10 of the Commercial Code

Article L. 441-9 of the French Commercial Code establishes the principle of the obligation to issue an invoice for “any purchase of products or any provision of services for a professional activity”.

Article L. 441-10 of the French Commercial Code regulates the setting of payment terms between professionals.

These provisions are a contribution of the Law No. 2008-776 of August 4, 2008 on the modernization of the economy (LME), which was aimed, among other things, at combating late payment in commercial transactions. This is no small issue, and the European Union has intervened in this matter in order to establish a harmonized minimum framework (Dir. 2011/7/EU, Feb. 16, 2011).

Despite this harmonized minimum framework, differences remain between member states and the question arose whether articles L. 441-9 and L. 441-10 of the Commercial Code were intended to apply to contracts for the international sale of goods subject to foreign law and to the Vienna Convention on the International Sale of Goods (hereinafter “CISG”).

With respect to payment periods, the CEPC confirms a position that has already been stated, i. e. that when the contract is subject to the CISG, the maximum payment periods provided for in the Commercial Code should not apply (opinions n°16-12 and n°21-3).

However, there is a qualification to this solution: “the payment periods agreed between the parties should not constitute a manifest abuse of the creditor, i.e. reflect a clear deviation from good commercial practice and custom, contrary to good faith and fair dealing, taking into account the nature of the product” (CEPC opinion n°16-12).

Regarding invoicing, the CEPC notes in particular that, by analogy with the provisions of the Commercial Code relating to the obligation to conclude a single agreement (Opinion No. 19-7), article L. 441-9 of the Commercial Code can be analyzed as a mandatory law by virtue of the rules of private international law (article 9§1 of the Rome I Regulation). The invoicing obligation provided for in Article L. 441-9 of the French Commercial Code could perfectly well apply to an intra-Community sale.

Regarding the modalities of invoicing, the CISG expressly provides that the determination of the time, place and form is a matter for the parties. In accordance with the CISG, the parties are therefore free to determine the terms of invoicing, so that there is no need to assess them in the light of the provisions of Art. L.441-9 of the French Commercial Code.

This opinion is part of a broader body of CEPC case law that has gradually limited the scope of negotiation of international commercial contracts concluded by a French company with a foreign partner.

In the context of commercial negotiations, the choice of applicable law and jurisdiction can have a considerable impact on the negotiation, conclusion and performance of a contract, as well as on the resolution of disputes that may arise.

Dismissal for serious misconduct: the employee’s IP address can be used without declaration to the CNIL

The use of personal digital data is subject to increased legal protection under the authority of the CNIL. In principle, the processing of personal data, in particular by the employer, must be declared to the CNIL, otherwise it may be considered unlawful.

In its decision no. 1119 of November 25, 2020, the Social Chamber of the Court of Cassation decided for the first time whether an IP address and log files constitute personal data whose processing must be declared to the CNIL and whether such data can be used as evidence.

In this case, an employer used his employee’s IP address, without making a prior declaration to the CNIL, to justify his dismissal for serious misconduct.

In this case, an AFP employee, who was also the agency’s IT and freedom correspondent, was dismissed for serious misconduct, for having sent five electronic requests for information to a client company that was also a competitor of AFP, by stealing the identity of client companies.

In order to identify the IP address from which the litigious e-mails had been sent, the employer proceeded to exploit log files stored on its servers.

In its decision, the Court of Cassation overturned the decision of the Court of Appeal and confirmed that an IP address and the log files constitute personal data whose processing must be declared to the CNIL. As a result, the Court of Cassation qualifies the method of evidence as unlawful.

However, an illicit method of proof is in principle inadmissible and the employer could therefore not rely on it to justify the employee’s dismissal.

The Court of Cassation nevertheless introduces the following exception:

“the illegality of a method of proof, […] does not necessarily lead to its dismissal from the proceedings, the judge having to assess whether the use of this evidence has undermined the fairness of the procedure as a whole, by balancing the right to respect for the employee’s personal life and the right to evidence, which may justify the production of elements violating an employee’s private life on condition that such production is essential to the exercise of this right and that the violation is strictly proportionate to the aim pursued.”

Although the Court of Cassation had already admitted the production of evidence violating the right to privacy when such evidence is necessary, it generally rejected illicit methods of proof, such as clandestine recordings, for example.

From now on, the parties can, when it is essential to the exercise of the right of proof, take advantage of an illicit method of proof.

 BRIEFS

Business France on October 21, 2021, the circle of investors: A recovery plan, urban spaces of innovative spaces, employment landscape: US and French visions

Cazeau’s Lawfirm will be participating in a conference on the theme of employment with Deborah Nilson, a lawyer at the New York bar, to propose a cross analysis of labour law in France and the United States and its evolution since the health crisis.

UIA Congress in Madrid on October 29, 2021: International contracts in times of crisis

During this congress, professionals from several countries will bring their expertise on contractual negotiation techniques in times of crisis under the perspective of their respective national laws.

Nathalie CAZEAU will present the solutions offered by French law.