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Case:
Bull. Civ. 1981.IV,
no. 189
Case Gilles & Levêque v. Brasserie Léopold &
Société Bertrand
Date:
27 April 1981
Note:
Translated French Cases and Materials under the direction of Professor B. Markesinis and M. le Conseiller Dominique Hascher
Translated by:
Tony Weir
Copyright:
Professor Basil Markesinis

In view of article 1129 Code civil:

Given that this text requires that in order for a contract to be valid the amount of the object of the obligation in question must be determinable;

Given that the judgment under attack found that in return for loans made respectively by the firm Brasserie Léopold and the firm A Bertrand, guaranteed by Levêque, M. and Mme Gilles bound themselves and the firm La Bourgogne, of which M. Gilles was managing director, to see that only beers produced by the Brasserie Léopold and sold by Bertrand be sold in their public house up to a minimum of 200 hectolitres for each of six years, at the end of which the loans were to be repaid; the contract was extensible for at least three years with an annual minimum throughput of 3,000 hectolitres, but was silent as to the price of the beer to be delivered, that being left to the discretion of the brewery or its distributor;

Given that the decision below, reversing the decision at first instance, held that the contract was valid notwithstanding the absence of any fixed or determinable price as this was not a contract of sale but rather a contract whereby M. and Mme Gilles undertook in return for the loan to process in their establishment a certain quantity of Léopold’s beer and to procure it from Bertrand, a third party and an independent legal person, and that the obligation to repay the loan was quite independent of the obligation of exclusivity contained in the same contract;

Given that in so deciding when there was no provision in the contract which fixed or rendered determinable the price payable for the series of deliveries of beer with the result that the obligation to buy the beer exclusively from the brewery or its distributor imposed “by reason of the loan” was purely facultative as to the latter in granting them the ability to sell at whatever price they chose, the Court of Appeal violated the text cited.

For these reasons, QUASHES the decision rendered on 27 June 1979 by the Court of Appeal of Versailles and remands the case to the Court of Appeal of Rouen.

Subsequent Developments

Com, 27/04/1981, Bull. IV, n° 189 : Position abandoned in the judgements of the Assemblée Plénière of 1 December 1995 cited above, the Cour de Cassation stating on that occasion that “Article 1129 is not applicable to the determination of the price”. Although Article 1591 of the Civil Code, which provides that “the sale price must be determined and indicated by the parties” continues nevertheless to apply to commercial sales, breaches of this rule are sanctioned, not by nullity of the contract, but under the principle of good faith in the performance of the latter, and, as a consequence, by rescission or indemnification.