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

Published

10 April 2025

Read time

2 minutes

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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