Egyptian law and Contractual Justice, by Yousra Chaaban

My doctoral thesis compares three legal systems are concerned, the French, the English and the Egyptian one. The choice of English law, in particular, is justified by the fact, that in practice, in recent years, English law has begun to take place on the Egyptian legal scene, especially in matters of arbitration and commercial contracts. Furthermore, English law brings very interesting and enriching ideas for Egyptian Law, in terms of a preventive tool of contractual balance, such as the doctrine of inequality of bargaining power. This post discusses first the particularism of Egyptian law as a comparative legal system (1), before turning to the theme of “dependence and contractual justice” (2) and the distinctive contribution of the thesis (3).

1. Particularism of Egyptian law, on the international comparative level

Among international comparative traditions, the Egyptian legal system is considered to be a system belonging civil law tendency, just like French law. Indeed, the French influence in Egyptian Law, dates back to 1875, when the mixed courts were established in Egypt, set up at the time of the Khedive Ismail Pasha. This trend was renewed in 1936. The political intention at the time was a radical reform of the whole Egyptian legal system, starting primarily with the civil Code.

In 1936, the Ministry of Justice preferred to entrust the task to one judge: Professor Abdel-Razzak Al-Sanhoury, who had prepared his two doctoral theses in Lyon under the supervision of the great comparatist Édouard Lambert. He was assisted in his task of reforming the Egyptian system by his former supervisor. Eventually, the First Egyptian national Code of civil Law was adopted, and entered into force on October 15, 1949.

The Egyptian experience in civil codification used comparative law as an essential tool in the development of its legal rules. Egyptian law has nevertheless kept its tradition resulting from Muslim law, in particular following the fiqh doctrine of Al Imam Al Hanafi in matters relating to family law, disabilities, as well as inheritance.

Once implemented, this codification radiated in the Gulf countries, in particular in Kuwait, and in the Middle East, such as in Syria and Libya. Egyptian Law served as a bridge, or a gateway, for the civil law tendency, in particular the French model, towards the countries of the Gulf and the Middle East.

As presented, the Egyptian Law anchored the philosophy of autonomy of will in its law, like French law. “The contract is the law of the parties” is the dominant idea in contract law. This makes the idea of contractual justice a kind of myth, as would be developed in the next point.

2. “Dependence and Contractual Justice”, an idea to promote in comparative law

During our comparison of the Egyptian, English, and French legal systems, we had to address two types of difficulties: a methodological difficulty, as we were comparing legal systems of a totally different nature; and a philosophical difficulty as the contractual philosophy of the English, French, and Egyptian systems is dominated by the principle of autonomy of will.

The methodological difficulty: Comparing three legal systems

It was difficult to compare three completely different legal systems. Concepts that exist in one legal system do not existing at all in another one. Therefore, we looked for compromise, when we decided to use the functional method for our project. We compared elements that perform the same function in the different systems so at to show that beyond technical differences, our legal systems had developed solutions that were ultimately (functionally) equivalent. For example, the concept of “abus de dépendance” in French Law can be understood and compared to the “théorie d’exploitation” in Egyptian Law, and “economic duress”, “undue influence” in English Law.

The philosophical difficulty

The philosophical difficulty can be seen in two aspects. First, the three legal systems are dominated by autonomy of will, the major principle of contract law. This is opposed to any type of idea of contractual equilibrium. Secondly, the three legal systems seek to achieve justice in the contracts through substitutes that we consider as only defensive measures or corrective ones. These substitutes establish contractual balance in situations of dependency, proceeding one of two ways.

The first way is by sanctioning the imbalance between parties; more precisely, they sanction unfair terms causing imbalance. For instance, the three systems adopted legislative provisions penalizing unfair terms (France: articles 1170 and 1171 of the civil Code, as amended in 2016; Egypt: article 149 of the civil Code) or sanction unfair terms in adhesion contracts under common contract law (England: reasonableness test, incorporation test, and the sanctions of unfair contracts, and also limited liability clauses).

The second way is to sanction more directly the abuses that may result from the exploitation of a state of dependence. The mechanisms used to deal with these situations of abuse of will, at the comparative level, are varied. French law established a new vice of violence in 2016 which punishes abuse in situations of dependency (new article 1143 of the French civil Code). Egyptian law refused to expand the existing vice of violence but enshrined a vice of “exploitation” as the fourth defect of consent (article 129 of the Egyptian civil Code) in 1949 (with his first national civil Code). English law adopted casuistic solutions, especially matters concerning undue influence and economic duress.

In addition, the notion of cause, or henceforth the idea of the counterpart, often replaces the contractual equilibrium. Since 2016, French law gives it a new dimension by introducing the idea of contractual economy. However, this concept cannot replace contractual justice in our opinion, first of all, due to its nature: the cause (the consideration, in common law systems) cannot be considered quantitatively. The cause is only a condition of validity for the contract and cannot have other functions. Moreover, the cause disrupts the functioning of the lesion, which should, in principle, be the instrument devoted to the situation of contractual imbalances.

3. New principle of contractual justice for Egyptian law?

The first part of my research is devoted to the study of the concepts of dependence and contractual balance; a second one to the implementation of contractual balance in situations of dependency. Overall, the objective is to protect the contractually weak party, by establishing, in Egyptian Contract Law, a new article listing the major principles of the Egyptian Contract Law. Among these principles, we include contractual justice as a guiding principle of contract law.

In this way, judges could justify and base their decisions by relying on this principle of contractual justice. This principle would have the same force as the principle of the autonomy of will. This would change the whole philosophy of Egyptian contract law. This principle of contractual justice is based on “contractual solidarism”. Contractual solidarism arose in the 19th century alongside criticisms of the theory of autonomy of will. For example, Gounot devoted his thesis to a critical study of the principle of the autonomy of the will in 1912. In 1981, Jacques Ghestin (in his article “The useful and the just in contracts”) showed that the just and the useful are “two imperatives that the law (…) opposes to the full development of individual wills”. The useful characterizes the pursuit of the general interest and the just characterizes the maintenance of contractual justice among the “individual interests”. Therefore, in contract law, the just and the useful are opposed to the autonomy of the will and the binding force of agreements. Today, these ideas have been regained attention. For instance, Denis Mazeaud defines the theory of contractual solidarism as a theory according to which the contract can be considered as “a union of relatively balanced interests, an instrument of loyal cooperation, a work of mutual trust ”.

In this way, the proposed principle of contractual justice would act as a counterweight to that of contractual freedom. It would be offered as a standard allowing the judge to better fight against unfair dependency situations within the contract. This consecration would also revive the Egyptian theory of “exploitation” considered as a fourth vice of consent.

This objective will only see the light of the day if the principle of autonomy of will is completely weakened and ideas such as contractual solidarity, equity, balance and contractual justice are increasingly developed and strengthened.

This type of principle allows for an evolution of the general logic of contract law in such a way that the legal protection provided for weaker parties is neither a posteriori nor corrective, but rather an a priori and in a preventive way. This means that the law will not come only to sanction the contractual imbalance, but that contract law should include a standard or a general principle guiding its philosophy, in such a way as to prevent a contractual imbalance from occurring. This would protect the weaker party, and help achieve justice in contracts and between parties.

On a comparative level, this research would allow a transplant of certain interesting concepts and their modes of operation to Egyptian Law. The idea of contractual solidarism and justice is largely unrecognized in Egyptian law. So that there is ample opportunity for improving its knowledge among Egyptian academics, lawyers and judges.

This work will recall a doctrinal proposal aimed to suggest a general principle in the matter of unfair terms, in the sense of a general theory of contractual abuse, in Egypt by the Professor Hassan Gemei. It will, also, respond to a proposal, dating from 1967, in which, the Syrian justice minister Assaad Al-Kourany, on the occasion of the sixth conference of Arab lawyers, called for the extension of the rules of exploitation in the Egyptian and Syrian systems along the lines that were provided for in the preparatory work of the Egyptian civil Code.

Our proposal for a principle of contractual balance would thus allow Egyptian law to go hand in hand with the French law but also European doctrinal projects which nowadays deal with the guiding principles of contract law, such as Gandolfi draft and the principle of European contract law (PECL), and others [1]. In that way, my research seeks to foster recent reforms in Egyptian law, following on the work of the great comparative Professors Édouard Lambert and Al-Sanhoury.

Posted by Dr Yousra Chaaban (Jean Moulin Lyon 3; Ain Shams, Cairo).

The viva for this PhD entitled “Dependence and Contractual Justice in a Comparative Law Perspective” (Dépendance et équilibre contractuel-étude de droit comparé) was held in Lyon, France, October 2020


[1]           See GOUBINAT Marine, Les principes directeurs du droit des contrats, thèse, Université Grenoble Alpes, 2016, https://tel.archives-ouvertes.fr/tel-01392405/document

One thought on “Egyptian law and Contractual Justice, by Yousra Chaaban

Comments are closed.