Order N°2020-427 dated 15 April 2020 on various time limits dispositions regarding the COVID-19 pandemic

 

Order n°2020-427 dated 15 April 2020 on various time-limit dispositions regarding the covid-19 pandemic  modifies the provisions of Order 2020-306 of 25 March 2020 on the extension of the time limits during the period of health emergency and the adaptation of procedures during the same period.

It should be reminded that Order No. 2020-306 of 25 March 2020 introduced a mechanism for deferring various time limits and expiry dates. To this end, it defined, in Article 1(I), a “legally protected period” (hereinafter the “Legally Protected Period”) which runs from 12 March 2020 until the expiry of a period of one month after the end of the state of health emergency.

The end of this state of emergency is currently set for 24 May 2020 but could be modified in the coming weeks, the date of 11 May 2020 being envisaged under the terms of the report to the President of the Republic accompanying the order of 15 April 2020. To date, the Legally Protected Period therefore corresponds to the period from 12 March 2020 to 24 June 2020.

The Order of 15 April 2020 makes additions/modifications to the following points:

POSTPONEMENT OF TERMS

Article 2 of the Order of 15 April 2020 specifies the scope of Article 2 of Order 2020-306 of 25 March 2020, which provides for the postponement of any act or formality (appeal, legal action, formality, registration, declaration, notification or publication) prescribed by law or regulation on pain of penalty (nullity, lapse, foreclosure, prescription, unenforceability, irreceivability, lapse of time, automatic withdrawal, application of a special regime, nullity or forfeiture of any right) and which should have occurred between 12 March and the Legally Protected Period.

Are therefore excluded from the scope of application of Article 2 of Order No. 2020-306 the “time limits for reflection, retraction or renunciation provided for by law or regulation, nor the time limits provided for the reimbursement of sums of money in case of exercise of these rights.”

Regarding real estate sales, the withdrawal period provided for in Article L271-1 of the Construction and Housing Code is therefore excluded from the scope of this provision.

Article 2 of the Order of 25 March 2020 thus constitutes neither a suspension nor an extension of the time limit initially set for acting. It allows to accomplish a posteriori what it was impossible to do during the Legally Protected Period.

Under the terms of the Order, this Article 2 has an interpretative effect on the dispositions provided for in Article 2 of the Order of 25 March 2020; it therefore has retroactive application.

EFFECT OF PENALTIES PAYMENT AND CLAUSES SANCTIONING THE DEBTOR'S NON-PERFORMANCE

Article 4 of Order no. 2020-427 of 15 April 2020 amends and completes Article 4 of Order no. 2020-306 relating to the duration of penalty payments and the application of penalty clauses, termination clauses and forfeiture clauses, it being specified that under the terms of the first paragraph of Article 4 of the Order of 25 March 2020, these clauses and penalty payments are suspended during the Legally Protected Period.

Two paragraphs are added as follows:

  • The first paragraph refers to the postponement of the effective date of these clauses and penalty payments which should have taken place during the Legally Protected Period.

This taking of effect is postponed until the end of the Legally Protected Period, increased :

–  By a period equal to the time elapsed between 12 March 2020 and the date on which performance of the obligation should have taken place ;

–  Or by a period equal to the time elapsed between the date on which the obligation arose and the date on which it should have been performed, if this is after 12 March 2020.

For example, if a payment order granting a period of 30 days is delivered on 20 April 2020, the termination clause should theoretically have been acquired on May 20, 2020, 30 days after the delivery of the ineffective order.

Pursuant to the first paragraph added by this new Article 4, the period for activating the termination clause (which is therefore suspended during the Legally Protected Period) resumes as of the end of the Legally Protected Period, i.e. the acquisition of the termination clause on July 24, 2020.

  • The second newly added paragraph concerns the postponement of the coming into effect of clauses and penalty payments sanctioning the non-performance of an obligation other than a sum of money, which would expire after the Legally Protected Period.

The date on which these penalty payments and these clauses take effect is thus postponed to a date corresponding to the end of the extended Legally Protected Period:

–  If the obligation was to be performed before March 12, 2020, for a period equal to the time elapsed between March 12, 2020 and the end of this Legally Protected Period;

–  If the obligation is to be performed after March 12, 2020, for a period equal to the time elapsed between the day on which the obligation should have been performed and the end of this Protected Period.

This new paragraph 2 would apply, for example, in the case of a contract with an obligation to do (other than an obligation to pay) to be performed on 14 June 2020.

If the contract stipulates a penalty clause or a penalty payment taking effect at the end of a period of 10 days from the non-performance of the debtor, i.e. for our example on 25 June 2020, the period of theoretical effect on 25 June 2020 will then be extended by a period of 9 days, corresponding to the time elapsed between the day on which the obligation should have been performed (15 June 2020) and the end of the Legally Protected Period (24 June 2020).

The penalty clause or penalty payment can therefore only take effect from 5 July 2020.

Nevertheless, if a payment order within 30 days targeting the termination clause is issued on June 1, 2020, the termination clause would be acquired on July 1, 2020, i.e. after the Legally Protected Period. However, monetary obligations such as the payment of rents are excluded from the application of this second paragraph, so that the effects of the resolutory clause will not be postponed. The resolutory clause would then be acquired on July 1, 2020.

According to a literal reading of these texts, it would be more advantageous for a lessor to issue a summons to pay with respect to the resolutory clause after May 25, 2020, since its effects would not, in this case, be postponed.

It should be noted that the parties to the contract are free to exclude the application of these new provisions by express terms.

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