Special edition LFA Covid 19 : Commercial Law I Update April 22, 2020

Faced with the spread of COVID-19 or Coronavirus, many companies are questioning the actions they can take to address the consequences to deal with the consequences on the continuity of their economic activity, the performance of their contractual obligations.

In this document, we present some of the questions we have been asked by our clients and our answers to them.

We draw your attention to the fact that the answers provided below are given for information purposes only and are not definitive and do not constitute a legal consultation for which our firm is responsible. All liability with respect to actions taken or not taken based on the contents published in these FAQs is hereby expressly disclaimed.

These answers will be regularly completed and updated according to government announcements and the publication of various legislative and/or regulatory texts.

Actualités France

  1. Movement of goods
  2. Continuation of economic activity
  3. Supply shortage and shortages or production
  4. Force majeure and unforeseen circumstances

Actualités France

Movement of goods

What is the impact of the COVID-19 epidemic on the movement of goods?

A distinction should be made between the movement of goods within the EU (European Union) and the movement of goods between the EU and third countries. Specific reference is made to the movement of personal protective equipment.

In both cases, no “quarantine” type measures are foreseen at this stage at EU level for the movement of goods (including those from third countries to the EU). For the European Commission, the free movement of goods within the EU should remain ensured as far as possible, in particular with regard to essential, health-related or perishable goods such as food, unless there is justification to the contrary. Controls are possible, for example, but the European Commission recommends that they should not impede the functioning of supply chains.  

However, these are only guidelines (“Guidelines on border management measures to protect health and ensure the availability of essential goods and services”) from the European Commission, dated 16 March 2020, and it is important to remain attentive to the measures taken by each Member State or non-Member State on the territory of which goods transit; the situation is likely to evolve shortly.

In the same vein, the Commission recalls that it is necessary to allow the safe movement of transport workers, including lorry and train drivers, pilots and crew, to ensure the proper movement of essential goods and professionals. 

No additional certification should be imposed on goods moving legally within the EU single market according to the Commission’s guidelines. 

Restriction on the export of personal protective equipment

An implementing regulation (EU) 2020/402 published on 15 March 2020 prohibits the export from the EU of a number of items of personal protective equipment (incl. face masks and gloves), whether or not they originate in the EU (except to associated third countries such as the UK, Norway, Switzerland, etc.), unless an export authorisation is first obtained from a Member State. The Regulation will apply for a period of six weeks from 15 March 2020 to 26 April 2020. This measure may be extended or reinforced at any time.

In France, the Ministry of Economy and Finance – more precisely the Directorate-General for Companies (DGE), Dual-Use Goods Division – is competent for export licences for protective equipment. 

Regarding imports, measures have been taken to exempt certain health-related institutions from customs duties and import VAT under certain conditions. They apply to imports by public organisations, by organisations listed by the Directorate-General for Customs and Indirect Taxation (DGDDI) or by authorised humanitarian aid organisations from 30 January 2020 (possibility to apply for a refund) until 31 July 2020, unless extended.

In addition, in accordance with a decree of 30 March 2020, as amended by a decree of 6 April 2020, adopted in application of the Finance Adjustment Act for 2020 of 23 March 2020, an exemption from the “overseas octroy” – the French tax on exports to overseas territories – was introduced for certain personal protective equipment.

Concerning the safety standards of imported masks, the DGDDI allows the import of masks without CE marking until 31 May 2020, provided that the importer proves that they comply with European standards or certain foreign standards recognised as equivalent at the time of import. In this case, importers are encouraged to provide their customs declarant with the technical details of these masks so that he can establish their conformity with the European standards or their recognition as equivalent. 



European Commission, COVID-19, Guidelines for border management measures to protect health and ensure the availability of goods and essential services dated 16 March 2020

Regulation (EU) 2020/402 of 14 March 2020 making the exportation of certain products subject to the production of an export authorization

Directorate General of Customs and Indirect Taxation – “Covid-19: duty and tax free import of personal protective equipment”

Directorate-General for Customs and Indirect Taxation – “Covid-19: safety standard equivalence and other measures to ensure the availability of personal protective equipment”

Continuation of economic activity

Which commercial sectors can continue their activity during the COVID-19 crisis and on what condition?


  • Principle: Continuation of economic activity in compliance with confinement measures


On 23 March 2020 the Government adopted a decree prescribing the general necessary measures in the context of the fight against the spread of Covid-19. This decree, which follows the decree of 16 March 2020, prohibits, through 31 March 2020, for any person to move outside his or her domicile, except for movements for the following reasons, subject to the general measures to prevent the spread of the virus and avoiding any grouping of people: 

“1° Journeys between the domicile and the place(s) where the professional activity is carried out and professional journeys that cannot be postponed; 

2°Trips for the purchase of supplies necessary for the professional activity and first need supplies in establishments the activities of which remain authorized by Article 8 of this decree; 

3° Trips for health reasons, with the exception of consultations and care that can be provided remotely and, except for patients suffering from a long-term illness, those that can be postponed; 

4° Trips for compelling family reasons, for the assistance of vulnerable persons and childcare; 

5° Short trips, within the limit of one hour per day and within a maximum radius of one kilometre from domicile related either to the individual physical activity of the persons, excluding any collective sport practice and any proximity with other persons, or to the walking with only the persons grouped together in the same home, or for the needs of pets; 

6° Trips resulting from an obligation to report to the national police or gendarmerie services or to any other service or professional, imposed by the administrative police authority or the judicial authority ; 

7° Trips resulting from a summons issued by an administrative court or judicial authority; 

8° Trips for the sole purpose of participating in missions of general interest at the request of the administrative authority and under the conditions it specifies”.


The Government has clarified, through several interventions in the media, the philosophy and scope of the restrictive measures put in place to fight against the epidemic. However, it did not issue an exhaustive list of activities said to be essential to the economy of the Nation. 

The Government stressed out that “containment measures must not result in a shutdown of the Country’s economic activity but in an adjustment of the country’s economic activity to deal with the health crisis. » (https://www.economie.gouv.fr/files/files/2020/coronavirus_faq_entreprises.pdf).

Therefore, only the activities involving groupings of people and not essential to the life of the Nation should be suspended during the epidemic of COVID-19.

For other sectors, the principle is the continuity of activity in compliance with the required precautionary measures (see FAQ GGV Labour Law).

The Government requires the organization of remote working as far as technically possible. 

When teleworking is not possible, employees must continue to go to their working place, to the extent that the company’s organisation complies with the rules of social distancing which is imperative in this context of health crisis. 

Companies and employees involved in economic activities not considered as essential to the life of the Nation must continue their activity.  

As essential, Bruno Lemaire, the Minister of Finance and Economy, cited the agri-food industry, energy, transport, telecoms, waste management and part of local administrations. Chemicals and health products are also mentioned in the government’s FAQ published online. 

As example, the Government has clarified that a maintenance company contributing to the safety of an industrial site cannot stop its activity; the same for suppliers of a vital operation (“OIV -0pérateurs d’importance vitale”): these include approximately 260 public and private companies listed by the State, and the identity of which is subject to the defence secret or any hospital.


  • Exceptions: Certain establishments open to the public (so-called “ERP”) remain open despite confinement


The Government issued a decree on 14 March 2020, completed on 15 March 2020, defining which ERPs can continue their activity without restriction and thus continue to be open to the public
(https://www.legifrance.gouv.fr/eli/arrete/2020/3/14/SSAZ2007749A/jo/texte and https://www.legifrance.gouv.fr/eli/arrete/2020/3/15/SSAS2007753A/jo/texte ).  

These include businesses with the following activities:

    • Maintenance and reparation of automobiles, vehicles, engines and agricultural material 
    • Trade in automotive equipment 
    • Sale and repair of motorcycles and bicycles 
    • Material necessary for farms 
    • Retail sale of frozen food products 
    • General food trade 
    • Superettes 
    • Supermarkets 
    • Shopping malls
    • Large supermarkets (“hypermarchés”)
    • Retail sale of fruit and vegetables in specialised stores 
    • Retail sale of meat and meat products in specialised stores 
    • Retail sale of fish, crustaceans and molluscs in specialised stores 
    • Retail sale of bread, pastry and confectionery in specialised stores 
    • Retail sale of beverages in specialised stores 
    • Other food retailing in specialised stores 
    • Food distributions by charities 
    • Retail sale of fuel in specialised stores 
    • Retail sale of information and communication equipment in specialised stores 
    • Retail sale of computers, peripheral units and software in specialised stores 
    • Retail sale of telecommunications equipment in specialised stores
    • Retail sale of building materials, hardware, paints and glass in specialised stores 
    • Retail sale of newspapers and stationery in specialised stores 
    • Retail sale of pharmaceutical products in specialised stores 
    • Retail sale of medical and orthopaedic articles in specialised stores 
    • Optical retail businesses 
    • Retail sale of pet food and pet supplies 
    • Sale by automatons 
    • Hotels and similar accommodation 
    • Tourist and other short-term accommodation which constitutes a regular place of residence for the persons living there 
    • Campgrounds and parks for caravans or recreational vehicles where they are a regular place of residence for the persons living there 
    • Rental and leasing of motor vehicles 
    • Rental and leasing of other machinery, equipment and property 
    • Rental and leasing of agricultural machinery and equipment 
    • Rental and leasing of construction machinery and equipment 
    • Activities of labour placement agencies 
    • Activities of temporary employment agencies 
    • Repair of computers and personal and household goods 
    • Repair of computers and communication equipment 
    • Repair of computers and peripheral equipment 
    • Repair of communication equipment 
    • Laundry and dry-cleaning (wholesale and retail)
    • Funeral Services 
    • Financial and insurance activities 

It should be noted that ERPs classified in the category of type W (administrations, banks, offices) are not concerned by the ban on accepting the public. 

The list was completed on 18 March 2020 with the following activity: retail sale of tobacco products, electronic cigarettes, equipment and devices for vaporising in specialised stores (https://www.legifrance.gouv.fr/eli/arrete/2020/3/17/SSAZ2007919A/jo/texte ).

On the other hand, ERPs in the following categories are not open to the public through at least 15 April 2020:

  • Rooms for hearings, conferences, meetings, shows and rooms with multiple use (category L);
  • Sales shops and shopping centres, except for their delivery and order withdrawal activities (category M);
  • Restaurants and public houses, except for their delivery and take-away activities, room service in hotel restaurants and bars and contractual catering (category N); 
  • Dance halls and game rooms (category P) ; 
  • Libraries, documentation centres (category S); 
  • Exhibition halls (category T); 
  • Covered sports facilities (category X); 
  • Museums (category Y); 
  • Tents, marquees and structures (category CTS); 
  • Outdoor facilities (category PA); 
  • Early learning, education, training, holiday centres, leisure centres without accommodation, unless expressly authorized (category R).

Supply shortage and shortages or production

The COVID-19 epidemic might affect the production chain of companies.  

What should companies do when they are faced with raw material shortages or production cutbacks causing either impossibility or delays to supply their customers?  

In this situation temporary partial deliveries and/or suspension of supply for certain customers are options, subject, however, to the provisions of competition law which remains effective.  

To avoid sanctions, companies should avoid giving the impression that they pursue a strategy aimed at favouring certain customers or distribution channels over others without objective reason.  

The perception of what the company does to address shortage is even more important if a company has a dominant market position in one of the markets in which it operates. Such a position entails a specific responsibility and one should avoid giving the impression of an abuse of power.

In addition, where the customer is in a situation of economic dependence, the refusal to sell, or more generally any discriminatory practice, constitutes an abuse of such economic dependence which would likely be sanctionable.

Finally, any discriminatory practice would probably be considered by the judge as a significant imbalance between the rights and obligations of the contracting parties or as an abrupt termination of the business relationship, which is sanctionable under French law, or as a practice of unfair competition.   

In order to avoid those pitfalls, companies must examine the specific situation of each of their customers when they are unable to supply all or part of their customers. Companies should then establish criteria for allocating supplies and determine which customers should be given preference in the event of a shortage.

Among others, companies may wish to consider the following criteria: 

  • has the customer’s order already been accepted by the company?   
  • duration of the business relationship with the customer,   
  • amount of turnover achieved with the customer,   
  • degree of economic dependence of the customer on the company,   
  • can the customer replace the product by other products?   
  • does the customer have the possibility to receive supplies from a competitor and under which time frame ?   
  • what general terms and conditions and other specific contractual clauses (e.g. exclusivity clause) have been agreed with the customer? 
  • if there is a contract between the company and the customer, what are the contractual consequences in case of non-performance of the contractual obligations ?

Generally, companies should define a strategy for the distribution of supplies among customers according to objective and transparent criteria, to be applied equally to all customers concerned. Where several customers meet the same criteria, delivery quotas in relation to the quantities ordered by the customers may determine an order of preference for supply, unless other objective criteria apply.   

Note: The information given here is for informational purposes only and is based exclusively on French law. Any specific situation must be the subject of an individual analysis, considering all legal and factual aspects applicable to it.  

Force majeure and unforeseen circumstances

Does COVID-19 constitute an event of force majeure that may release either party from the performance of a contract?    

Faced with the Coronavirus epidemic and its consequences, companies are experiencing difficulties in performing their obligations under the contracts they have entered into. 

The question therefore arises as to whether companies may rely on the argument of force majeure as a ground to be released from the performance of their contractual obligations.

On 28 February 2020, Bruno Le Maire, Minister for the Economy and Finance, explained that the coronavirus was to be considered as an event of force majeure for companies, particularly concerning State public contracts, which would justify the non-application of penalties for late performance of contractual obligations. 

On 16 March 2020, President Macron announced special measures, such as the suspension of rent, water, gas and electricity bills, etc… under certain conditions, the details of which are set out in Ordinance No. 2020-316 and an order of 23 March 2020.  

But what about other contracts the performance of which is made impossible or delayed due to the current epidemic? 

Under French law, force majeure is provided for in Article 1218 of the Civil Code, created by the 2016 reform of contract law, which defines it as “an event beyond the debtor’s control, which could not reasonably have been foreseen at the time of the conclusion of the contract and whose effects cannot be avoided by appropriate measures, and which prevents the performance of the obligation by the debtor. » 

In order to rely on force majeure, a contracting party must assess whether three cumulative conditions are met:  

First, the event must be beyond the control of the concerned party, 

Second, the event must not have been reasonably foreseeable when the contract was concluded, 

 Third, the impact of the event must be unavoidable through appropriate measures. 

If all of these conditions are met, the contracting party which relies on force majeure may be released from the performance of its contractual obligations in whole or in part. 

If the contracting party is temporarily prevented from performing the contract, its obligation to perform the contract will be suspended, unless the delay in performance is such that it justifies termination of the contract. If the contracting party is prevented from performing the contract permanently, the contract will be terminated by operation of law and the contracting parties will be released from their obligations. 

Does the coronavirus constitute a case of force majeure as defined in Article 1218 of the Civil Code?  

To date, current case law addressing diseases and epidemics seems to suggest the opposite. 

Indeed, French courts addressed the issue in the past for epidemics such as the plague, H1N1 flu, dengue fever, Ebola or chikungunya and held that these health crises do not constitute events of force majeure: 

  • either because the disease or epidemic could be anticipated by means of preventive treatment (CA Paris, 25 September 1998, No. 98/024244); similarly for the H1N1 virus, the judges considered that its spreading had been widely announced even before the implementation of health regulations (CA Besançon, 2nd ch. Com, 8 Jan. 2014, RG n° 12/02291); and, for example for dengue fever, the epidemic was considered to be recurrent and therefore predictable (Nancy, 1st ch. Civ., 22 Nov. 2010, RG n° 09/00003); 
  • or because the diseases were not “sufficiently” deadly (CA Basse-Terre, 17 December 2018, No. 17/00739); 
  • or, for example for the Ebola virus, because the party invoking force majeure did not demonstrate that it was unable to perform its obligation because of the virus (CA Paris, 29 March 2016, No. 15/04263; CA Rennes, 9 March 2018, No. 18/01827); or 

French courts have therefore held that these health crises do not constitute sufficient reasons for the non-performance of a contract. 

However, one could argue quite differently for COVID-19.  

First of all, the health crisis of COVID-19 has unprecedented and serious effects. To date in France, there are approximately 25,233 officially contaminated persons and 1331 deaths.

Moreover, this is a crisis of global proportions. The WHO has described the coronavirus epidemic as a global pandemic and a global health and societal emergency requiring immediate and effective action by governments, individuals and businesses.  

In France, to contain the pandemic, public authorities are adopting measures and legislative and regulatory texts almost daily, clearly demonstrating the exceptional, unprecedented and serious nature of the situation. 

These decisions by public authorities could be described as acts of God (“faits du prince“) in administrative law or as insurmountable obstacle to the performance of contractual obligations, constituting events of force majeure. 

For public procurement, the French Government has already declared on 28 February 2020 that COVID-19 constitutes a case of force majeure [1].  

 It is therefore likely that the same position will be adopted for private law contracts. It remains to be seen whether the Government will take the lead or whether it will entrust this task to the courts.  

In this respect, the Colmar Court of Appeal has just upheld the classification of the COVID-19 epidemic as force majeure in a case of administrative detention: the person affected by this measure had been in contact with people likely to be infected by the COVID-19 virus and could not appear at the hearing. The Court considered that these exceptional circumstances were to be considered as force majeure events so that hearing should be held despite the absence of that person considering the status of limitation (Colmar, 6th c., 12 March 2020, No. 20/01098).  

Finally, it is always important to carefully look at the contracts in question and see if the contract or general conditions contain a force majeure clause. In practice, it is often the case that the parties to the contract define the events constituting force majeure and therefore exclude health crises and decisions taken by the public authorities. If a health crisis is expressly considered as force majeure in a contract, then it is necessary to carefully look at the applicable law in order to assess the fate of the contract in such a context.

[1] https://www.vie-publique.fr/discours/273763-bruno-le-maire-28022020-coronavirus et https://minefi.hosting.augure.com/Augure_Minefi/r/ContenuEnLigne/Download?id=7428EB4B-E77B-40AA-8BB9-A5C0DA473BFB&filename=2046%20-%20Discours%20de%20Bruno%20LE%20MAIRE%20-%20R%C3%A9union%20avec%20Muriel%20PENICAUD%20et%20Oliver%20VERAN%20sur%20coronavirus.pdf.

Alternatively, can the parties rely on the concept of “unforeseen circumstances” due to COVID-19 or coronavirus? 

The global health crisis of COVID-19 was qualified as a “public health emergency of international scope” by the WHO on 30 January 2020.  

It generates economic and logistical difficulties for economic agents, who may thus want to review their contracts. 

The question therefore arises as to whether this crisis allows contracts to be revised due to unforeseen circumstances or unforseeability (“imprévision”). 

Unforeseeability is a legal tool inspired by German law, which was first introduced into French law by Order No 2016-131 of 10 February 2016 which reforming French contract law.  

Under French law, unforseeability is defined as a change in circumstances which was unforeseeable at the conclusion of the contract and which renders performance excessively onerous for a contracting party (Article 1195 of the French Civil Code).  

In order to be able to rely on unforeseeability, the concerned party must bring following evidence:

  • there is a change in circumstances which was not foreseeable at the conclusion of the contract,  
  • such change renders performance of the contract excessively onerous, 
  • the contracting party did not accept the risk. 

If these cumulative conditions are met, the concerned party may request the other party to renegotiate the contract; however, it must continue to perform the contract during the renegotiation. 

If the other party refuses the renegotiation, or if the renegotiation fails, the parties may agree to terminate the contract. They may also request by mutual agreement the judge to adapt the contract.  

If the parties fail to reach an agreement within a reasonable time, one of them may refer the matter to the judge, who may decide to revise the contract or terminate it. 

However, the provisions relating to unforeseeability are applicable only to contracts and general conditions concluded after the entry into force of the reform of the French law of obligations, i.e. after 1 October 2016. Parties having concluded their contracts before that date should in principle not be entitled to rely on the rules relating to contingency, unless they have inserted such a clause in their agreements (in particular hardship, renegotiation, adaptation clauses, etc.). 

Does coronavirus fall under unforeseeability?  

As for force majeure, it seems that the COVID-19 health crisis could indeed fall under unforeseeability, making it possible for the parties to renegotiate their contract, for the duration of the crisis for example. 

Like force majeure, the rules of unforeseeability having only recently been introduced into French law, there is not yet, sufficiently established case law, especially in the area of epidemics.  

However, as indicated for force majeure, the COVID-19 pandemic is an unprecedented and extremely serious situation of global proportions.  

It is therefore reasonable to assume that the COVID-19 health crisis could fall under unforeseeability. 

The recent recognition in French law of the concept unforeseeability, as it has also been recognized in German, Italian, Polish and Japanese law, confirms this analysis and could constitute an alternative should the concept of force majeure be inapplicable.

In any event, the parties should check whether they have inserted in their contracts or general terms and conditions a clause defining cases of unforeseeability and organising its legal regime or specifically excluding this concept. 

And even in the presence of such a clause, the parties may agree to derive from it and renegotiate the terms of their contract in good faith