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A look in the corner of restitution

Latest News A look in the corner of restitution

There is a small corner of the French law of obligations regarding quasi contracts, unjust enrichment and restitution which has been the subject of reform of the law of obligations in 2016 and to which little attention has been paid.

Under the heading “Other sources of obligations”, quasi contracts have seen their status raised within the structure of the civil code so that they now appear on the same level as contracts and the French law of tort.

Under the civil code prior to the reform, quasi contracts were limited in the code itself to two classes of quasi contract: on the one hand, the de facto management of the affairs of another person which gives rise to respective obligations of the manager and of the principal; on the other hand, restitution of monies received in error or knowingly that they are not due (restitution of undue payment).

French case-law (Req.15 June 1892) had set out the general principle that no one should be enriched at the expense of another, unless the enrichment is based on a statutory ground or contract. This general principle of unjust enrichment went beyond the specific cases of de facto management and undue payment.

The reform the French law of obligations in 2016 has codified the case law in the area in articles 1303 et seq. of the civil code, in a chapter entitled Unjust enrichment. The principle is encapsulated in article 1303 which says that a person who has been enriched at the expense of another owes to the person who has suffered the loss compensation equal to the lesser of the enrichment or the loss.

The subsidiary nature of a claim for unjust enrichment is set out in article 1303-3 which says that the impoverished party shall not have an action on this ground when another action is possible or if there is a legal impediment such as a time bar. In other words if the claimant has an action in contract, then a claim for unjust enrichment would not be possible.

The reform of the civil code also includes new provisions In regard to restitution whether that restitution results from the rescission, setting aside or termination of a contract or unjust enrichment. The provisions concerned the restitution of property, money or services. If the restitution of property is not possible then it was replaced by monetary value at the time of restitution. The restitution of service can only take place as a financial amount but in this case it is determined at the date when the service was provided.