The Impact of Illegality in French Contract Law

Abstract The chapter discusses the effect of illegality on a contract in French law. It observes that, prima facie, an illegal contract should produce no legal effect in French law given the famous rule laid down by the French Civil Code which confers binding force only on contracts that have been ‘lawfully formed’. The chapter reflects on how a comparison with English contract law invites French lawyers to take a more balanced view of their own law, first, by distinguishing—as English lawyers commonly do—between two situations depending on whether the illegality exists at the time the contract is entered into or arises subsequently, and secondly, by recognizing that—as in English law—there is a benefit to maintaining the contractual relationship despite the illegality which affects it. The chapter argues that an increasingly favourable attitude to the policy of prioritizing the maintenance of a contract, expressed in the form of a favor contractus principle, is a sign that French law recognizes that not all illegalities are of equal legal significance.