Given that on 15 January 1991 a fire broke out in the garage run by M. Deparis, insured by the Assurances mutuelles de France “Groupe azur” (Groupe Azur), and that the agreement which he signed on 10 September 1991 on the advice of an insurance adjuster fixed the loss at 667,382 francs, 513,233 of which was to be paid forthwith, and the balance at a later date;

In view of articles 2052 and 2053 Code civil, along with article 12 of the new Code of Civil Procedure:

Given that the decision below dismissed M. Deparis’s claim for the annulment of the agreement of 10 September 1991 on the ground that since the agreement could not be invalidated for lesion it could not be invalidated by the economic plight in which Mr. Deparis allegedly found himself;

But given that in so deciding when transactions can always be avoided for duress, and that economic constraints are closer to duress than to lesion, the court of appeal violated the texts cited above;

Secondly, in view of article 1134 Code civil:

Given that the judgment under attack held M. Deparis liable to repay the Groupe Azur the sum of 154,149 francs with interest on the ground that M. Deparis failed to repair the garage within two years;

But given that the period within which the repairs were to be made was left open in the document of 10 September 1991 and that no period of two years was specified, the court of appeal misinterpreted the terms of the document;

For these reasons QUASHES the decision of the Court of Appeal of Paris rendered on 18 March 1998 and remands the case to the Court of Appeal of Amiens.

Subsequent Developments

Civ 1, 30/05/2000, B. n° 169 : Although the doctrine set out by this judgement has not subsequently been the subject of any confirmative or contradictory decision, the judgement, widely commented upon, has nevertheless given new life to the notion of economic coercion. For Grégoire Loiseau (JCP 2001, II, 104621), “the attachment of economic coercion to duress, which is brought about by this judgement, has the consequence of borrowing the sanctions thereof (…). The victim has in practice the choice between maintaining that the contract is void and claiming indemnification”. It is certainly still the case that “situations of economic dependence, and the existence of economic domination, are in no way illegal” and that “it is only where it is unlawful that coercion degenerates into duress” (a contract entered into under unfavourable economic circumstances may not, for that sole reason, be declared void for duress). “In order to constitute economic duress, it seems therefore indispensable that one of the contracting parties should abuse the situation of weakness in which economic circumstances or the inequality of the forces present have placed the other. In this sense, although this judgement makes a considerable contribution to the extension of the scope of failure of consent by reason of duress, it is not really new. The Cour de Cassation had already concluded that economic coercion could constitute duress, in particular in the area of labour law and of clauses which were unfavourable to an employee (Soc., 5 July 1965, Bull. No. 545) or of the novation of a contract of employment under a threat of not paying the salary due in the case of refusal (Soc., 3 October 1973, Bull. No. 541), and also in company law in the case of a dispute between shareholders (Com. 18 February 1997, Bull. No. 59). See also Civ. 1, 03 April 2002 cited above.