French law / Swedish law

On this page, we will regularly inform you of some important differences between French and Swedish law and case-law. This edition concerns some differences in contract law and corporate law.

CONTRACT LAW
The conditions for a binding agreement (sales contract or other contract) differ between France and Sweden.
According to French law, a binding agreement is considered to be concluded as soon as the parties have agreed on the object and the price. Under Swedish law no agreement has been settled as long as all the conditions of the deal have not been agreed upon. Thus, a Swedish party, negotiating
a contract, might have concluded an agreement without being aware of this fact.

On the other hand, Swedish law is not as strict as French law, as concerns the determination of the price. The latter law stipulates as a condition of the contract, that the price is determined or determinable. If the price is not expressed in money but determinable, the way of fixing the price has to be clear and easily comprehensible. Otherwise, the contract may be null and void. A Swedish party drafting a contract, not aware of this, may run the risk of writing an invalid contract.

It does happen that Swedish parties submit contracts which are invalid from the outset because the method determining the price is too vague and also due to an incorrect guarantee clause. Such clause may, according to Swedish law, stipulate a negative purchase sum (the seller may have to repay more than he has received from the buyer). Such clause, not fixing the price of the seller’s counterperformance, makes the agreement invalid in France.

CORPORATE LAW
A Shareholders’ agreement or Directors’ agreement, stipulating in advance and in a general way how the Shareholders or Directors of a company will use their voting rights at the General Meeting or Board Meeting, is authorized in Sweden but forbidden in France.

Furthermore, Swedish law accepts that the number of votes connected to a share varies, e.g. one or several shares can each represent 10 votes, while the other shares represent each only one share. So, in a limited company having 1.000 registered shares, 100 shares may represent the majority
of the votes. The right to vary the votes of the shares is highly restricted under French law.

Next edition will give you more examples of differences between French and Swedish law.

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