In a large majority of contracts, there is a penalty clause.
The penalty clause is the clause by which a party to a contract undertakes to pay to his co-contractor a lump sum sum in case of non-performance of his obligations.
In concrete terms, a penalty clause fixes the price of the penalty for the non-fulfillment of a contractual obligation.
Since the penal clause results from an agreement of wills between the parties to the contract, it must be expressly stipulated in it.
Except in cases of force majeure, any breach of the debtor's contractual obligation is sufficient to enforce the penalty clause.
In addition, the use of the penalty clause is optional.
The creditor of an indemnity may decide either to apply the penalty clause or to waive it, in particular if he considers that the amount necessary to compensate for his loss is greater than the amount of the indemnity provided for in criminal clause, so that he is obliged to bring legal action to obtain a larger amount of compensation.
However, if need be, the judge has the faculty to interpret any clause of a contract that proves to be ambiguous or equivocal.
Indeed, Article 1231-5 of the Civil Code gives the judge the possibility of interfering in the contract.
Since this provision is of public order, no contractual stipulation can call into question this power of the judge.
Similarly, the judge may decide to revise the amount of the contractual indemnity upwards or downwards when it is manifestly excessive or derisory.
In the present case, the dispute concerned the question whether the clause relating to the recovery indemnity of a loan contract was a penalty clause capable of diminution or reduction if necessary.
According to the bank, the recovery fee is not a penalty clause because it is not intended to secure the performance of its obligation by one of the parties, but only to ensure the lender compensation in the event that he should cover costs to recover his claim.
However, the judges of appeal and cassation noted that the compensation was stipulated both as a means of compelling the borrower to the spontaneous performance of his obligation and as the conventional assessment and lump sum of the future harm suffered by the lending bank being forced to institute judicial proceedings for enforcement purposes, so that the bank was not subject to reduction.
In this respect, the Court of Cassation has held that the contractual clause, which provides that " if in order to recover the debt, the lender has recourse to a representative of the court or is prosecuting or order, the borrower undertakes to pay, in addition to the costs charged to him, a lump-sum indemnity of 7% calculated on the amount of the sums due with a minimum amount of 2000 euros. " (Cass Com 4 May 2017, n 15-19.141 ).
In the present case, the contractual indemnity was stipulated both as a means of compelling the borrower to execute spontaneously but also as a conventional and fixed assessment of the future loss suffered by the lender as a result of the obligation to initiate a procedure.
It is interesting to note that the classic criterion that allows case law to characterize a penal clause is the flat-rate assessment of the damage suffered.
It follows from that decision that the judge may vary upwards or downwards a recovery clause, since its function, among other things, is to provide for a lump sum indemnity.
As a result, the borrower can always ask the judge to reduce the amount of the contractual indemnity for recovery, in particular when the lapse of the credit term has been unilaterally imposed by the bank or in the event of legal proceedings in payment initiated by the borrower. the latter.