FRANCE Trends and Developments Contributed by: Thierry Laloum, Jordan Pontal, Julie Sarny and Gabin Dupont-Guianvarch, Willkie Farr & Gallagher LLP
In France, administrative law essentially governs the powers and rights held by the administrative authorities to implement the public services for which they are responsible. A public service is defined as an activity of public interest provided or assumed by an administrative authority, and at least partially regulated by administrative law. While private law organises the exercise of pri - vate interests and limits them only with respect to public order, administrative law is concerned with public interests, which take precedence over all private interests, either individual or col - lective. Administrative law thus grants the administrative authorities extraordinary powers beyond ordi - nary law to prioritise the needs of public over private interests. Consequently, administrative law points to an imbalance in the relationship between adminis - trative authorities and private entities. Administrative contracts – ie, contracts con - cluded by an administrative authority for public interests, are a typical example of this. Experience also shows that this imbalance can sometimes favour administrative authorities in instances regarding the prohibition of gifts in contractual matters. However, there is a strong likelihood that this imbalance can be restored by recognising and applying the principle of good faith in the perfor - mance of administrative contracts. Administrative Contracts Can Protect a Private Contracting Party’s Interests Administrative contracts are intrinsically imbal - anced in favour of administrative authorities.
In the performance of such contracts, the lat - ter enjoy extraordinary powers beyond ordinary law, meaning powers that exist even if it is not expressly stipulated in the contract. They can, for example, unilaterally modify or terminate an administrative contract. The original basis for the imbalance inherent in these contracts is public service interest, which has evolved over time to become public inter - est. Since the extraordinary powers beyond ordi - nary law of the administrative authorities allow for public interest to take precedence over any individual interest, this automatically affects a private contracting party. However, benefit to private contracting parties is not entirely overlooked within the framework of administrative contracts. The exceptional powers held by the administrative authority are balanced by the rights of the private contract - ing parties to be compensated for all or part of damage caused by an administrative authority’s decision (Council of State, 11 March 1910, Com - pagnie générale française des tramways, case No 16178; Council of State, 2 February 1983, Union des transports publics, case No 34027). If an administrative agreement is unilaterally modified, a private contracting party has the right to maintain a fair contract financially. If an administrative agreement is unilaterally termi - nated, a private contracting party has the right to full compensation for damages suffered. This involves the reimbursement of expenses incurred and profits lost – ie the gains that the private contracting party was certain of realising and has now forfeited. Beyond this right to compensation, a private contracting party cannot, in principle, challenge validity or seek the annulment of any measures
126 CHAMBERS.COM
Powered by FlippingBook