Court of Cassation (Commercial Division), 3 June 2026, No. 24-19.612
In its judgment of 3 June 2026, the Commercial Chamber clarified the scope of Article 1225 of the Civil Code, ruling that a termination clause need not list each obligation whose non-performance could lead to termination of the contract, provided those obligations are clear and unequivocally identifiable.
This approach strikes a balance between drafting flexibility and legal certainty. While it relieves the parties of the sometimes cumbersome and redundant task of listing the relevant obligations, it does not exempt them from the fundamental requirement to ensure that breaches likely to justify automatic termination are clearly identifiable.
1. A requirement for precision, not for enumeration
According to Article 1225 of the Civil Code, “the termination clause shall specify the obligations whose non-performance will result in the termination of the contract”.
Since the 2016 reform of contract law, the scope of this requirement has been debated: is it necessary to draw up a comprehensive list of obligations subject to such sanctions, or are they sufficient if they can be identified by reading the contract?
The Court of Cassation has adopted the latter approach.
2. The context: a clause targeting ‘material’ obligations
The case concerned a sub-licence agreement for television broadcasting rights to sporting events, which was drafted in English. The contract provided for immediate and automatic termination in the event of a “material” breach, which would be translated into French as a an ‘important’ or ‘substantial’ obligation that was not remedied within thirty days.
The sub-licensee had invoked this provision, but its validity was contested by the sub-licensor. They argued that the clause did not satisfy the requirements of Article 1225 of the Civil Code because it failed to specify which obligations, if breached, would lead to termination of the contract.
The Court of Appeal upheld this argument, ruling that the reference to ‘important’ or ‘substantial’ obligations as translated in French did not allow the commitments in question to be identified with sufficient precision.
However, the Court of Cassation rejected this reasoning, stating that the mere absence of a list of obligations subject to penalty is not sufficient to render the termination clause ineffective.
3. A concrete assessment of the scope of the clause
The Commercial Chamber points out that even before the reform, the termination clause had to unequivocally express the parties’ intention and identify the obligations that would be subject to penalty in the event of non-performance. It could not be invoked to penalize a breach falling outside its scope.
However, case law did not require all the relevant obligations to be set out in the clause itself. Furthermore, neither the preparatory work for the Order of 10 February 2016 nor the ratification debates indicate an intention to strengthen this requirement.
The Court concludes that the clause may refer to obligations expressly set out in the contract or to all contractual obligations without listing them individually, provided their identification is clear and unambiguous.
4. It is useful to have flexibility, but within limits.
The decision offers drafters welcome flexibility. It helps to avoid lengthy, repetitive clauses that are sometimes inconsistent with the contract’s evolution as negotiations progress.
However, this flexibility does not permit vagueness. In complex contracts, not all provisions constitute binding obligations; some express objectives, options, cooperation procedures or intentions.
Therefore, a clause that refers indiscriminately to ‘any breach of the contract’ or to any ‘essential’, ‘material’ or ‘substantial’ obligation will only be legally sound if the contract unambiguously defines the scope of the commitments in question. Therefore, it may be useful to identify the essential obligations directly in the body of the contract and simply refer to them in the termination clause.
The termination clause can therefore remain concise. However, it must not be so concise that it becomes unreadable. Otherwise, the termination clause, which is intended to provide a predictable contractual outcome, itself becomes a source of disagreement, giving rise to litigation over the classification of the breached obligation.
