Note on Cass. com., 13 May 2026, no. 24-20.159, F-B

No settlement without mutual concessions, says Article 2044 of the French Civil Code.

So far, so clear. But what is a concession? In technical terms, it is a waiver of a claim or the assumption of a new undertaking (e.g. paying a sum of money). In other words, an effort. Each party must move back from its initial position — agree to lower its ambitions, accept a sacrifice, undertake to pay a sum… all of these are concessions.

Yet how can one truly assess the reality of a concession when one is uncertain about what one is giving up? Take a simple example. Company A terminates its contract with Company B, alleging non-performance. B considers the termination unfounded and claims damages. Eventually, the parties draw closer and settle for EUR 50,000. Has B truly made a concession? If the termination was indeed unfounded and a court would have awarded B EUR 80,000, then yes, B has compromised. Conversely, if the termination was justified and B had no right to any compensation, can we still say B has made a concession?

This is the very salt of settlement: to settle is to give up knowing whether one was right or wrong. Since the dispute will never be adjudicated, the parties will never know what their rights truly were.

A recent decision of the Commercial Chamber of the French Cour de cassation, handed down under the chairmanship of Vincent Vigneau, illustrates the point.

On the facts, a company named Agence Champs Élysées (hereafter ACE), acting as a commercial agent, had entered into a verbal agency contract with the company Domaines Bonfils, a winegrowing estate. On 10 February 2020, after several years of collaboration, the parties signed a settlement agreement terminating the relationship and setting the amount of the indemnity due to the agent.

A year later, ACE sued Domaines Bonfils for nullity of the settlement, invoking two defects of consent.

First, duress, the manager of ACE having been ill at the time the agreement was signed.

Second, mistake: ACE argued that, at the time of the settlement, it was unaware of the amount of the statutory indemnity to which it was entitled. It contended that the indemnity actually agreed was below what it would have received had its commissions been indexed on the turnover generated for the principal through its services.

The Court of Appeal dismissed both grounds and rejected the action for nullity.

Before the Cour de cassation, ACE put forward two arguments stemming from one and the same fact: when settling, ACE was unaware of the statutory indemnity it could have claimed, the amount of which depended on the turnover achieved by the principal thanks to the agent’s activity — turnover that the principal had not disclosed.

From this, the appellant deduced, first, that the settlement was void on the ground that « in matters of public policy, parties may settle only on accrued rights whose value they know ». Since the provisions on the goodwill indemnity owed to a commercial agent upon termination are matters of public policy (and of European inspiration), no settlement could be reached, the argument ran, until the agent knew what indemnity could be claimed. ACE, being unaware of the extent of its rights of public policy, could not — so its counsel argued — have knowingly waived them.

The appellant further submitted, secondly, that the settlement was void under Article 1132 of the French Civil Code, the seat of mistake as to essential qualities. The argument was not entirely unambiguous, however, since it referred to Article 1132 (mistake) but described a « fraudulent concealment » — which properly belongs to Article 1137. ACE’s contention was that, by refusing to disclose its turnover (an essential input to compute the statutory indemnity), the principal had committed a fraudulent concealment.

To these arguments, the Commercial Chamber of the Cour de cassation responds in three steps.

First step

« Although it is forbidden to waive in advance the rules of protection established by a law of public policy, it is permissible to waive the accrued effects of such rules ». This rule, which rests on a chronological approach (see L. Thibierge, Rép. civ. Dalloz, V° «Transaction»), is not new. Any clause in a commercial-agency contract by which the agent would waive, in advance, its right to a termination indemnity is to be deemed unwritten (Cass. com., 21 October 2014, no. 13-18.370). Once the relationship has been terminated, however, and the right to indemnity has accrued, nothing prevents the agent from settling on the amount of the indemnity. In the same vein, settled case-law holds that «while Article L. 442-6, I, 5° (former) of the Commercial Code establishes a liability of public policy from which the parties cannot derogate in advance, it does not prevent them from agreeing on the modalities of the termination of their commercial relationship, or from settling on the indemnification of the damage caused by the abrupt nature of that termination » (Cass. com., 16 December 2014, no. 13-21.363). The same approach prevails in French employment law, where an employee may only settle after the termination of his or her employment contract.

So far, so familiar: nihil novi sub sole. Once the settlement was concluded after the termination of the contract, the right was available for disposal.

Second step

And here lies the heart of the ruling: « No principle requires that parties to a settlement — even in a field governed by a law of public policy — know in advance with precision the sums likely to be paid to them ».

The motivation (if one may still use the term « attendu ») is finely chiselled. The Commercial Chamber states, with the utmost clarity, a single rule: it is immaterial that the party waiving its right was ignorant of the quantum of the sums potentially due. Which brings us back to what we said at the outset: to settle is to give up knowing. It is to accept remaining in ignorance.

The rule seems sensible — and yet it remains slightly irritating. For if one has given up nothing, if one has made no concession, the protocol does not deserve the qualification of settlement. It therefore does not bar the action.

One may also wonder about the precise scope of the rule. The Court is in fact answering only the first branch of the ground, which contended that one cannot waive a right of public policy without knowing the extent of one’s waiver. The judgment is explicit: « The ground, in its first branch, which postulates the contrary, is not well-founded ».

In other words, the rule laid down by the Commercial Chamber should be read as an answer to the specific argument that it is impossible to settle on a right of public policy without knowing the value of the right being waived.

A contrario, what the ruling does not say is whether the waiving party’s ignorance of the value of the right being waived could ground a mistake constituting a cause of nullity.

It is well known that, under the law prior to the « J21 » Act of 18 November 2016, the settlement contract was governed by a derogatory regime, under which it could not be challenged « on grounds of mistake of law or on grounds of lesion » (former Article 2052), but could be challenged for « mistake on the object of the dispute » (former Article 2053). The boundary was decidedly porous, and courts sometimes took an expansive view of « mistake on the object of the dispute » in order to allow a settlement to be set aside for mistake as to the reality and extent of the rights being waived.

It is equally well known that since 2016, the settlement contract has returned to the general law of contract and is subject to the same grounds for nullity as any other contract.

Could the settlement at issue here be effectively challenged on the ground of mistake? The question is worth asking. Is the knowledge of the content of the right being waived not an essential quality within the meaning of Article 1132 of the Civil Code? Conversely, looking at Article 1136 of the Civil Code, a negative answer seems to impose itself: « a mistake as to value, by which a party, without making a mistake on the essential qualities of the performance, makes only an inaccurate economic assessment of it, is not a cause of nullity ».

This point not being decided in the ruling, one must await a subsequent decision before being able to assert that the rule according to which it is not necessary for the parties to « know in advance with precision the sums likely to be paid to them » is intended to bar any action in nullity grounded on a mistake as to the reality and content of the right being waived.

Third step

Nor does the ruling decide the question of fraud. The argument was an interesting one: the appellant submitted that, by refusing to disclose the turnover on which the statutory indemnity was to be calculated, the principal had committed a fraudulent concealment. This argument receives no true answer from the Court, which merely notes that « the court of appeal, which was not bound to undertake the inquiry referred to in the second branch of the ground — that inquiry not having been requested of it —, does not incur the grievance of the ground ».

In short: the fraud argument not having been raised before the lower courts (because it was only on appeal that ACE had received the turnover information and realised its error), the court of appeal cannot be reproached for not having ruled on the point.

Let us assume, for the sake of argument, that the fraud point had been raised before the trial judges. Would it have prevailed? Here too, doubt is permitted. Article 1137 of the Civil Code does not sanction fraudulent concealment when it bears on the value of the performance. But here, is it really only about value, or about something more essential — the reality of the right being waived — which would call into question the very validity of the settlement itself, for want of mutual concessions?

Decidedly, the law of settlement still harbours its share of mysteries.

Key takeaways

  • The Commercial Chamber lays down a principle: a settlement is valid even if the waiving party is unaware of the precise amount of the rights being waived, even in a field governed by public policy.
  • The classic distinction stands: waiving a public-policy protection in advance is not possible; waiving the accrued effects of such protection, however, is.
  • A grey area remains: the defects of consent, where the determining information has been concealed in order to push a party towards settlement.