Judicial Annulment of the Administrative Contract on the Grounds of Administrative Fault

Abstract

The rescission of an administrative contract due to the administration’s fault is considered one of the most severe sanctions that may be imposed on a public authority that fails to fulfill its contractual obligations. Consequently, administrative courts generally refrain from ordering such rescission unless the administration has committed a serious fault.

       There are several examples of serious administrative faults that may justify rescission, including the administration’s failure to pay amounts agreed upon to the contractor, or its failure to issue the necessary licenses required for the operation of a public facility.

      Among the applications recognized by the French Conseil d’État regarding faults that justify rescission are cases where the administration withdraws from the project that constitutes the subject of the contract without reasonable cause, or when it significantly delays the commencement of contract execution beyond what would be considered reasonable and consistent with the parties’ common intent. It may also include situations in which the administration imposes excessively severe penalties on the contractor without a substantial fault justifying such measures, such as rescinding the contract at the contractor’s expense or terminating it without legitimate grounds.

       Furthermore, according to established French legal doctrine, the contractor is not permitted to unilaterally rescind the contract even when valid grounds for rescission exist. Instead, the contractor must resort to the judiciary to obtain a judicial ruling ordering the rescission, and may not rely on the defense of non-performance.