Significant imbalance between professionals: the special regime takes precedence over Article 1171 of the Civil Code

In a landmark decision handed down on 23 September 2026, the Court of Cassation provided fundamental clarifications on the scope of Article 1171 of the Civil Code, establishing a rigorous framework for assessing significant imbalances in business relationships.

The background to the dispute and the grounds for the appeal

A company entrusted the provision of services to a specialist service provider. The contract included a termination clause stipulating that, in the event of serious or repeated breaches, termination would entitle the client to payment of the full amount remaining due until the end of the contract, together with a fixed penalty of 10 per cent.

Following the unilateral termination with immediate effect notified by the client, the service provider brought the matter before the courts to seek enforcement of the compensation provisions.

Upon hearing the case, the Toulouse Court of Appeal dismissed these claims, classifying the agreement as a standard-form contract. Finding the clause to be non-negotiable and creating a significant imbalance between the parties’ rights and obligations, the judges deemed it null and void on the basis of Article 1171 of the Civil Code.

The service provider appealed to the Court of Cassation. The Court of Cassation quashed the judgment of the Toulouse Court of Appeal..

La position de la Haute Juridiction

• Inapplicability of general law in principle: Article 1171 of the Civil Code cannot govern contracts entered into by an economic operator engaged in production, distribution or services, since the situation falls, by its very nature, within the specific provisions of the Commercial Code (Article L. 442-1, I, 2°).
• Role of the court: as soon as the dispute involves the provision of services between professionals, the trial judges are obliged to examine of their own motion whether the agreement falls within the scope of the special regime, thereby excluding the application of general civil law.
• Differences in penalty regimes: the Court of Cassation highlights a fundamental distinction in legal effects: whilst civil law treats an unfair term as ‘deemed unwritten’, commercial law holds the author liable in tort, giving rise to a right to compensation for proven loss.

FIRSH’s inputs

Providing support in IP, TECH, DATA and AI also requires a thorough understanding of commercial and competition law in order to draft contracts that are clear and balanced from the outset between the contracting parties, thereby avoiding many disputes at an early stage!

This case law could necessitate a systematic overhaul of operators’ drafting and litigation strategies.

Firsh supports you in reviewing your contracts, ensuring your termination and penalty clauses are watertight, and defining your litigation strategy whether you are the claimant or the defendant

Claire Poirson & Léa Monel