Damages for late performance in public contracts
Public contracts usually provide for damages for late performance, the amount of which may be substantial and out of proportion with the damage actually incurred by the contracting authority as a result of the late performance.
Traditionally, the conseil d’Etat, France’s highest administrative court, would decline to adjust the amount of these damages. However, administrative case law on this point is now trending towards admitting that courts may, under certain conditions, change the amount of damages applied under public contracts.
This new trend was recently confirmed by a decision of the Administrative Appellate Court of Nancy (Société Sogreah Consultant, case no. 09NC00896, 5 July 2010), in line with that handed down by the conseil d’Etat on 29 December 2008 (Council Housing Authority (OPHLM) of Puteaux, case no. 296930).
We believe this is a major development for businesses currently performing public contracts, so please feel free to contact us should you have any queries regarding this matter.
