Beware: French Court of Cassation rules that clauses limiting or exonerating liability, agreed between the contracting parties, may also be enforced against third parties

In the Boot Shop ruling of October 2006, followed by the Bois Rouge ruling of January 2020, the Court of Cassation allowed third parties to rely on a breach of contract in tort where the breach had caused them damage. This case law conferred a significant advantage to third parties, as prior to these decisions limitation of liability clauses agreed between contracting parties were not enforceable against them by those who were not a party to the contract. 

The solution turned out to be dangerous in practice: the debtor (contracting party) found itself faced with a multitude of potential creditors, whereas it thought it had contractually committed itself to only one, the party it had contracted with. The solution additionally appeared profoundly unfair: unlike a contracting party, a third party acting on the basis of a contract could not have the content of that contract set against it, and in particular the clauses limiting or exonerating liability. This meant that the contracting party could limit its liability to a specific sum towards the other contracting party but find itself liable indefinitely towards third parties.

A turning point: The Clamageran ruling

The Clamageran ruling, handed down on 3 July 2024, represents a major turning point in this respect. 

In this case, an Italian company (Aetna Group) had transported a number of machines for exhibition at…