The French Supreme Court Amends and Clarifies its Case Law on Third-Party Claims Based on Breach of Contract

When it comes to liability claims in business-to-business relationships, French law has some specific concepts that can be surprising for foreign companies. On the one hand, third parties to a contract may invoke a breach of the contract to claim damages in tort without proving negligence or wilful misconduct of the party in breach. On the other hand, claims in a chain of contracts related to defective goods, brought by the buyer against the initial seller or manufacturer of the product, fall under the statutory warranties applicable to sales contracts, even though the buyer and the initial seller are not bound by contract.

The French Cour de cassation has recently rendered several important rulings regarding these concepts specific to French Law in which it held that:

• claims by buyers in cross-border (international) chains of sales contracts based on defects or non-conformities against parties other than their immediate seller are governed by the law applicable to tort, not to contracts¹ (1.);
• defendants to claims in tort based on a breach of contract may invoke contractual “conditions and limits of liability” against the third-party² (2.).

1. No direct contractual claim in cross-border chains of sales contracts?

In matters involving defective goods, French courts hold that buyers of goods, or works containing goods, that are defective, have a direct contractual claim not only against their immediate seller or contractor, but also against all sellers of the goods through the contractual chain.³

If such contractual claim is available, the end-buyer cannot opt for a claim in tort due to an established principle that a claim may not be brought in tort if there is a contractual basis available (principe de non-cumul).⁴ This contractual regime has an impact on the conditions, limits and time limitation periods that apply to such claim.

The questions as to whether this case-law also applies to cross-border chains of contracts governed by several laws, and which law should then apply to such contractual claim, have given rise to much debate in scholarship and before French courts.

In a landmark ruling of 1992, the European Court of Justice (ECJ) ruled that where “there is no obligation freely assumed by one party towards another“, any claim between those parties constitutes a claim in tort and, specifically in matters of international sales, that “[w]here a sub-buyer of goods purchased from an intermediate seller brings an action against the manufacturer for damages on the ground that the goods are not in conformity, it must be observed that there is no contractual relationship between the sub-buyer and the manufacturer because the latter has not undertaken any contractual obligation towards the former“.⁵ This ruling was however based on the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and whether the same principles apply to conflicts of laws remained unclear.

In two rulings dated 28 May 2025, the first civil chamber of the French Cour de cassation has now ruled that the claim of buyers against parties other than their immediate seller is governed by the law applicable to tort claims under the European rules on conflicts of laws.⁶ The French Supreme Court considered that the provisions of the Rome I and II Regulations must be interpreted in accordance with the case-law of the ECJ under the European rules governing international jurisdiction in civil matters.⁷

Therefore, the law applicable to such claim must be determined according to Regulation (EC) No 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) and not according to conflict of laws rules applicable to contractual obligations, in particular Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I).⁸

As a consequence, the buyer’s claims will in principle be governed by the law of the country where the damage occurred (see articles 4 ff. of the Rome II Regulation) and not by the law applicable to any of the sales contracts in the chain.

This does not necessarily mean that once the applicable law is determined, the courts will also apply the rules governing liability in torts to assess the merits of the claim. Courts could consider that the applicable law must be applied consistently with its own qualifications that may differ from those of the conflicts of laws rules. If one took the case where French Law applied to the claim based on the Rome II Regulation, for instance because the damage occurred in France, the end-buyer’s claim against the sellers in the chain other than its immediate seller would, despite being qualified as a claim in tort for the purposes of determining the applicable law, ultimately be of contractual nature in accordance with French internal case law mentioned above. This is what French authors, since Etienne Bartin, refer to as “secondary” or “subordinate” qualification”. Such reasoning would not be contrary to the exclusion of “renvoi” at article 24 of the Rome II Regulation as the Court would indeed apply the law designated by the Regulation.

Absent further case law the question remains open.

As the Supreme Court has in both instances overturned the appeal rulings and remanded the matters before other Courts of appeal (Nimes and Paris), these Courts will have to rule on the merits and their decisions may provide some further clarity.

2. Defendants may invoke contractual “conditions and limits of liability” against third-party claims based on a breach of contract.

Since a landmark ruling of the French Cour de cassation’s plenary assembly of 2006, third-parties to a contract may bring a claim in tort against a party in breach of such contract, subject only to proving that the breach has caused them harm.⁹

This highly debated case-law makes France one of the most favourable jurisdictions for victims that cannot base their claim on strict liability regimes, such as product liability, or contract.

In a ruling dated 3 July 2024,¹⁰ the commercial chamber of the French Supreme Court has provided some relief to sellers, producers, contractors and service providers whose goods, works or services may have caused harm to third parties.

The Court held that :

“[i]n order not to frustrate the expectations of the debtor, who has committed himself in consideration of the overall economy of the contract, and not to confer on the third party invoking the contract a more advantageous position than that which the creditor himself can claim, a third party to a contract that invokes, on the basis of tortious liability, a breach of contract that has caused it loss may be subject to the conditions and limits of liability that apply in the relationship between the contracting parties.”

While the commercial chamber does not question the existence of claims in tort based on a contractual breach, it allows defendants to such claims to rely on the “conditions and limits of liability” available under their contract. The Court thereby overturned the appeal ruling that had rejected the defendant’s request to apply the limitation of its liability in its standard terms to the third party’s claim.

Lower Courts have already started to apply the ruling by allowing defendants to invoke contractual exclusions and limitations of liability¹¹ and other contractual clauses¹² against claims by third parties based on a contractual breach and even statutory limitation periods applicable to contractual claims,¹³ but the scope of the “conditions and limits of liability” under the contract that may be invoked by defendants against third-party claims remains subject to a case-by-case analysis.

Footnotes

1. French Cour de cassation, first civil chamber, 28 May 2025 (two rulings), n°23-20.341 and 23-13.687
2. French Cour de cassation, commercial chamber, 3 July 2024 (n°21-14.947)
3. French Cour de cassation, first civil chamber, 9 October 1979, 78-12.502
4. A notable exception to this principle is the tortious liability of producers for safety defects in their products that may be cumulated for instance with a claim for latent defects (Cour de cassation, first chamber, 19 April 2023, n° 21-23.726).
5. ECJ 17 June 1992, Handte / TMCS, C-26/91, points 15 and 16
6. French Cour de cassation, first civil chamber, 28 May 2025, n°23-20.341 and 23-13.687
7. Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast)
8. France has ratified the Hague Convention of 15 June 1955 on the law applicable to international sales of moveable goods that takes precedence over the Rome I Regulation regarding claims based on sales contracts. The case-law of the ECJ does not apply to the rules of the Hague Convention. However, the Cour de cassation does not quote the Hague Convention in its ruling, probably in the interest of a uniform case-law.
9. French Cour de cassation, Assemblée Plénière, 6 October 2006, n° 05-13.255 “Boot-Shop / Myr-ho ” and 13 January 2020, n°17-19.963 “Bois Rouge”
10. French Cour de cassation, commercial chamber, 3 July 2024, n°21-14.947
11. See the rulings of the Courts of appeal of Paris (15 January 2025, n° 22/16078) and Rouen (24 July 2025, n° 24/02481); the matter ruled on by the Cour de cassation also concerned the application of a contractual limitation of liability
12. See Court of appeal of Montpellier (3 December 2024, n° 23/02461)
13. See Court of appeal of Toulouse (9 July 2025, n° 22/02696)