French Supreme Court Clarifies Limits of Tort Liability in Contract Breach

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I. Tort Liability for Contract Breach Case-law

Since the landmark Bootshop ruling in 2006, French case law has allowed a third party to a contract to bring a tort claim against a contracting party when a contractual breach causes damage to that third party.

This principle was reinforced by several decisions eliminating the need to prove a separate tortious fault. However, the July 3, 2024 ruling marks a significant shift by introducing an important limitation.

A. Brief Recap of Previous Decisions

‍Bootshop – October 6, 2006: The French Supreme Court held that a third party to a contract may invoke tort liability based on a contractual breach if it caused harm.
‍Bois Rouge – January 13, 2020: The Court went further, stating that the third party does not need to prove a distinct tortious fault. Demonstrating the causal link between the breach and the damage is enough.

B. Facts Behind the July 2024 Decision

Clamageran was responsible for handling machines owned by Aetna Group Spa.
A machine was damaged. Aetna Group Spa’s insurer, Itas Mutua, compensated the loss and sued Clamageran by subrogation.
The contract with Aetna Group France included a liability limitation clause.

II. The New Limitation: Enforceability of Liability Limitation Clauses

On appeal, judges refused to apply the liability limitation clause, arguing it was not enforceable against the insurer since it was not a party to the contract.

The Supreme Court overturned this decision, ruling that liability limitations in the contract can be enforced against a third party when the claim is based on a contractual breach.

In other words: A third party cannot obtain more than what the contracting party itself could claim. This preserves the debtor’s expectations and prevents giving the third party a more favorable position than the creditor.

III. Conclusion and Recommendations

The July 3, 2024 ruling does not abandon the Bootshop principle but narrows its scope. It marks an important step in balancing third-party protection with contractual certainty.

Businesses should:

Include clear and robust liability limitation clauses.
Ensure these clauses do not undermine essential contractual obligations, as this is key to their validity.

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Frequently Asked Questions

Why did the French Supreme Court introduce a new limit in its ruling of 3 July 2024?

The Court sets this limit to preserve the debtor’s legitimate expectations, as they entered into the agreement based on the underlying economic balance of the contract. It also aims to prevent a third party from obtaining more favourable treatment than the contractual creditor.

Why does the ruling issued on 3 July 2024 by the French Supreme Court strengthen legal certainty?

Companies—especially IT service providers, logistics firms, and transport operators—face claims from third parties such as subsidiaries, end clients, or insurers. These claims can exceed what the contracting party would be entitled in case of breach. This ruling allows businesses to limit liability toward both contracting parties and third parties.

Can third party avoid limitation‑of‑liability clauses provided by the contract?

Since the decision of July 3, 2024, a third party bringing a tort claim based on a contractual breach can be met with the contract’s limitation‑of‑liability clauses, even if they did not sign the contract. This solution prevents a third party from enjoying a more favorable regime than the contractual creditor.