Limitation of liability clauses: what impacts do they have on third parties?

Analyses

2 minutes

10 April 2025

The decision of July 3, 2024 (Commercial Court, No. 21-14947) marks a turning point in the enforceability of limitation of liability clauses to third parties. Until now, a third party could invoke a contractual breach without being subject to the limitations of liability in the contract. From now on, they may be subject to these restrictions.

The practical issues

  • Rebalancing of contractual relationships

    A third party can no longer benefit from contractual obligations without being subject to the constraints.

  • Which clauses are concerned?

    The ruling does not specify if this includes penalty clauses or force majeure.

The decision of June 26, 2024 (Cass. com., n° 23-14306) revisits the notion of gross negligence and its impact on limitation of liability clauses. The Court of Cassation reminds that gross negligence does not require intentional elements but must reveal a manifest inability to fulfill the contractual obligation.

Problem raised: Within what limits can a limiting clause be set aside in the event of a serious breach?

Finally, the judgment of December 19, 2024 (Cass. 2nd civ., n° 22-17.119) specifies that only the parties to the insurance contract can challenge an exclusion clause that does not comply with the formatting requirements of Article L. 112-4 of the Insurance Code.

Impact on third parties A third party cannot challenge the formal validity of a warranty exclusion clause.

A point in contradiction with the decision of July 3, 2024, which will deserve judicial follow-up.

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