🚧Compliance contract, compliance clauses

 1 Introduction ♦ Compliance Law has increased the number of obligations. However, although Tort Law is emerging and contracts are multiplying in practice, the relationship between compliance Law and Contract Law is not yet very visible (I). However, there are contracts whose sole purpose is to give concrete form to Compliance, which makes it a specific contract, influencing its implementation (II). Furthermore, there is much to learn from the diversity of compliance stipulations scattered throughout a wide range of contracts (III). 

I. THE CHALLENGE: IN COMPLIANCE OBLIGATIONS, FREEING UP CONTRACT LAW

2. "Regulations", the "primary" seat of compliance, as conformity ♦ When one reads the academic doctrine or grey literature about "compliance", it is above all "regulations" that is discussed📎!footnote-2746. The expression frequently used is "regulatory compliance"📎!footnote-2748. All presentations follow from it, for example to describe how the French so-called "Sapin 2" law of 2016 would have translated-pasted the US FCPA📎!footnote-2747 ; all discussions and ambitions fit into it, e.g. how to shape "blocking laws" to escape this grip of US regulation📎!footnote-2741 by enacting European regulations. Contracts have only a passive place there📎!footnote-2771 place, since they are subject to one or other of the regulatory power's holds📎!footnote-2742 , many emphasising that the legislative power, itself the object of a thousand lobbies, is in reality an economic and political power📎!footnote-2743. Lawyers and judges would have little place in this relationship of consenting obedience between the rule and the company📎!footnote-2749. 

3. The natural prism of the "regulatory obligation", resulting from the reduction of Compliance to conformity ♦ It is certain that if we define Compliance Law as the obligation for a company to "comply with the regulations applicable to it", a definition that is certainly commonly encountered, it is normal for the lawyer to study "regulatory obligations" first and foremost, since "compliance law" would therefore only consist of carrying out what the regulations require📎!footnote-2778. The focus is even more on regulatory obligations when the legislator matches its desire to be obeyed with a criminal sanction📎!footnote-2745. The association between sanctions and compliance is often made as if in a twin relationship. This is even more reason to reduce it.

4. Compliance as a tool of obedience, monumental goals as a space of wills ♦ But if we define in a more substantial way the Law of Compliance, which then gathers rules, institutions, decisions and methods towards specific goals, this branch of Law then receiving a teleological definition (like the whole of Economic Law), to take its full meaning in the "Monumental Goals" it pursues📎!footnote-2733, everything changes. Indeed, all these rules, so scattered and heavy with regulations and constantly changing soft law, have a great stability and unity. They give concrete expression, in Ex Ante terms, to the desire to detect and prevent systemic risks in order to ensure that in the future a disaster will not occur (collapse of the banking📎!footnote-2760, financial📎!footnote-2761, digital📎!footnote-2759, environmental📎!footnote-2817, etc.) so that human beings will not be crushed by it. This humanistic goal, served by these "negative monumental goals", appear even more when it comes to "positive monumental goals"📎!footnote-2734, the various legal techniques aiming to build a future that will be a better system for human beings than the one of today, with, for example, effective equality between human beings, principles of stability, respect for others or probity effective in a liberal economic system that is nevertheless maintained📎!footnote-2773. One may scoff at so much utopia📎!footnote-2773 but this is what Europe is setting up📎!footnote-2736. It is no longer a question of obtaining obedience and mechanical consents. It is a question of making a project, which has been wanted, and transform it into a reality. Now, companies and individuals can actively contribute to this, through what is their natural instrument for building a project for the future: the contract. Contract Law is therefore penetrating because "conformity" is only a tool in Compliance Law, which is based above all on will and not on obedience📎!footnote-2739. 

5. The presence of Contract Law in Compliance Law through the responsibility of companies arising from their commitments ♦ The movement that is now perceptible is the obligation of legal persons through the commitments they have made, apart from the obedience that everyone owes to the legal requirements, with judges obliging companies to do what they have committed to, regardless of the form that this commitment has taken. Particularly clear-cut cases in environmental and climate matters have led courts to impose on companies not new obligations or to perform regulatory obligations but, taking act of commitments they had made📎!footnote-2737. This responsibility is based on an obligation born of the will of the company itself which, in the liberal system in which we live, is not obliged to commit itself, but must on the one hand inform of the commitments it makes (extra-financial information📎!footnote-2775) and on the other hand keep its commitments, failing which it will be held responsible. Its "liability commitment" acted by the judges is then to be taken literally, since the courts condemn the company to do what it had said it would do, and not to pay for doing nothing. This "Ex Ante Liability" is a pillar of Compliance Law📎!footnote-2738, which relies on the company's will.

6. Contract law seems to have yet to be discovered ♦ But as everyone knows, even if liability tends to make the distinction between the contractual and the extra-contractual very porous, the legal notion of obligation will only take its full place in Compliance Law through the mechanism of the contract. In practice, there is a multitude of contracts. For a long time now, companies have been building up a stock of stipulations according to their type of activity, their type of co-contractor, the type of risk, following the method of risk mapping📎!footnote-2740, this another tool of Compliance Law. This activity is currently relatively unknown and little studied. Yet it has a bright future. Even more reason to study it. This is just a matter of mentioning a few basic ideas.

II. THE COMPLIANCE CONTRACT HYPOTHESIS

7. Entrusting a third party with the task of ensuring its "conformity" with a regulatory corpus: the "conformity contract" ♦ It is very common for a company, believing that its forces must be focused on its business, since complying with regulations is not one of them, to contract with service providers to ensure that it is in conformity with a regulatory body, for instance the European GDPR or the applicable texts on whistleblowing mechanism. Through this service contract, this company, often relying on its technological skills rather than its legal skills, will set up platforms and algorithms📎!footnote-2776, to ensure that its client co-contractor is "compliant" with an identified regulation. Compliance by design, which claims to integrate automatic compliance with regulations into the algorithmic infrastructure of companies, meets this demand for services.

8. Entrusting a third party with the task of contributing to the Monumental Goals for which the company is responsible: the "Compliance contract" ♦ In most cases, the company is aware that the legal system requires more than conformity, since companies must act effectively to achieve Monumental Goals📎!footnote-2765, for example about climate change or the empowerment of women, and requires less, since it is no question to obtain the effectiveness of "all the regulations applicable to the company", but only those that are relevant to these goals. To this aim, the company concludes service contracts, for example with service providers, in particular "trusted third parties", specialists who will multiply in the systems that are being set up📎!footnote-2766.

9. "Compliance" and "conformity", an essential service justifying the qualification of a "Compliance contract", a specific contract ♦ This can be considered as a specific contract. Indeed, in the examples given, the very purpose of the contract is the fulfilment by the company of its compliance obligation thanks to the service of a third party thus contractually obtained: compliance is the very purpose of the contract. In most cases, the parties call it expressly. If they do not do so, the judge can and should do so through his power of qualification.

10. The influence of the general definition of Compliance on the interpretation of the Compliance contract ♦ This qualification implies that the contract must be interpreted not only with regard to the will of the parties but also regarding Compliance Law, i.e. the laws whose observance is ensured or/and the monumental goals that are to be achieved by the contract.

11. The influence of the general definition of Compliance on the regime of the Compliance contract ♦ Compliance Law will influence the regime of this specific contract. Thus, the contract may transform an obligation of means into an obligation of result, if such a stipulation is not abusive for the debtor, but not the opposite if the legal obligation is of result, such as the obligation to map, for example.

12. The impossibility of transferring the 'personal liability' of the company to another legal person ♦ Moreover, as the contract is an instrument for someone for the performance by another one of its obligations, if these are of legal origin, this contract cannot transfer to this other one what the Conseil constitutionnel, French Constitutional Council, rightly designated, in relation to the duty of vigilance, which is the subject of so many clauses📎!footnote-2754, as a "personal responsibility" of the company📎!footnote-2755, which will itself be responsible for the good or bad performance by its co-contractor. Compliance Law cannot be totally delegated.

13. The evidential benefit of the compliance contract ♦ But in Compliance Law, the major issue for companies is evidentiary: companies need to document how they are fulfilling their compliance obligations, regardless of where they will stand in potential future litigation📎!footnote-2753. Contracts can have the beneficial effect of providing pools of evidence to demonstrate the "best efforts" done by the company.

III. THE MULTITUDE OF COMPLIANCE STIPULATIONS  AND OPEN QUESTIONS

14. Compliance stipulations inserted in contracts having another purpose ♦ More commonly, in many contracts, a stipulation indicates the obligation to comply with a regulation or refers to a "policy of respecting personal data" or to a "commitment to duty of vigilance", which will generate obligations. For example, an obligation for one to allow the other to enter his company to carry out "compliance audits"📎!footnote-2744. These clauses often operate by simple reference (to websites). The contractual obligations are heavily sanctioned, e.g. by termination, or the application of a penalty clause.

15. Conformity or Compliance stipulations to be assessed according to their purpose and effect ♦ In a teleological branch of Law as Compliance Law is, these clauses will have to be assessed according to their purpose and effect, under the dual consideration of both the purpose of the contract in which they are inserted, for example a distribution contract, and Compliance Law which theses stipulations embody. The possible inequality between the parties will have to be taken into consideration📎!footnote-2756.

16. Whoever is compelled to do less can compel himself to do more, not the other way round ♦ Compliance Law being usually of public order, parties may undertake to do more than the legal system requires of them, for example for the data protection, but a stipulation cannot allow them to evade the legal obligation to comply. In practice, the art of drafting clauses will be confronted with the art of judges to discern in these stipulations what adds to and what subtracts from Compliance Law. This supervision will be carried out upstream by the incentives that the legislator develops to produce contractual behaviour producing effects that coincide with the political general will📎!footnote-2772 , Law of Compliance thus moving from effectiveness to efficiency📎!footnote-2762.

17. Structural clauses for obtaining extraterritorial regulation outside regulated sectors ♦ Moreover, these clauses, of transmission of information📎footnote-2751, of audit, of secrecy📎!footnote-2752, of warning, etc., have a structuring nature, even more valuable as they operate in spaces which, notably because of their international and/or immaterial nature, are not in the legal sense of "sectors"📎!footnote-2764. To take up this distinction, which is so fruitful between the contract-exchange and the contract-organisation📎!footnote-2763 , these clauses do not operate an exchange but build a structure📎!footnote-2750 , in particular in value chains, as the contractualised duty of care o vigilance will show. Flaw-down clauses are an example of this📎!footnote-2777. Effectiveness clauses, supporting these clauses which are themselves tools of Compliance Law, can provide for dispute settlement methods, such as mediation📎!footnote-2768, conciliation or arbitration📎!footnote-2769, the reconciliation between Compliance Law and International Arbitration, the natural space for global conflicts, particularly climatic ones📎!footnote-2770, being in progress. Judges are beginning to have to assess the scope of stipulations that target compliance "policies"📎!footnote-2779. 

18 ♦ The relationship between Compliance and Contracts is just beginning.