Capacity and Authority to Sign: The Two Conditions Checked Before Any French Contract Binds

Capacity and authority to sign: the two conditions checked before any French contract binds

A French contract is only as strong as the signature at its foot. Before asking what the parties agreed, French law asks two prior questions. First, was each party capable of contracting at all: the Civil Code reserves incapacity for non-emancipated minors and protected adults, and legal persons face no statutory incapacity. Second, did the individual who physically signed have the power to commit the party named in the contract: a capable company is still not bound by a signatory who had no authority, or who exceeded the authority actually conferred.

The second question is where cross-border deals go wrong. Articles 1153 to 1161 of the Civil Code, as reorganised by the 2016 reform, govern representation: who may act for another, what happens when the representative had no power or misused it, when the appearance of authority saves the contract, and when a conflict of interest or self-dealing makes the act null. This article sets out the rules on capacity, the rules on power, the practical verification of a French corporate signatory, and the sanctions when authority was missing, all as applied by the Cour de cassation.

Where do you stand on the signature?

Capacity to contract: who is barred, and when it is assessed

The principle is stated in Article 1145 of the Civil Code: every person may contract, except in the cases of incapacity provided by law. Incapacity is therefore the exception, and it must rest on a legal text; a counterparty cannot be treated as incapable merely because it is inexperienced, foreign, or badly advised. Capacity is assessed at the day the contract is concluded, not at the day it is performed or challenged (Cass. civ., 17 sept. 2014, n° 13-11.891). A party capable on signing day remains bound even if its situation later changes, and a party incapable on signing day is protected even if it later recovers full capacity.

Legal persons face no incapacity. The Civil Code fixes the capacity of legal persons, and no legal provision enacts an incapacity against them. A French company, economic interest grouping or association is therefore never "incapable" in the technical sense. When a contract signed for a company fails, it fails for a different reason: not because the company could not contract, but because the individual who signed lacked the power to commit it, or acted outside the limits the law and the constitutional documents place on the representative. That distinction organises the whole subject, and it is why the practical due diligence on a French counterparty concentrates on authority rather than capacity.

Natural persons: two protected categories. Under Article 1146 of the Civil Code, the persons incapable of contracting are non-emancipated minors (mineurs non émancipés, minors who have not been granted adult status early) and protected adults (majeurs protégés, adults placed under a legal protection regime). Even they are not sealed off from contractual life: they may contract to the extent the law permits them to, and every minor and every protected adult may carry out alone the everyday acts authorised by law or usage. Where an act exceeds what the incapable person could do alone and its nullity is sought and obtained, the protective rules attached to each regime govern the consequences.

For a business counterparty the message is short. When the other side is a company, capacity will almost never be the issue. When the other side is an individual, a guarantor above all, the date of the contract fixes the analysis, and a signature given by a minor or a protected adult outside the acts the law allows them exposes the contract to annulment under the protection regimes. The heavier and more frequent risk, however, sits in the next section: the capable party whose signatory had no power.

Power to contract: capacity is not enough

The parties, even capable, are validly bound only if they also have the power to conclude the contract in question. French law separates the two conditions deliberately. Capacity asks whether the person may participate in legal life at all; power asks whether this person could commit this patrimony to this act. Two familiar illustrations show a capable adult without full power: a spouse cannot alone carry out an act of disposition over community property or over property of the other spouse, and a co-owner in undivided property (indivisaire) cannot alone dispose of the undivided asset. In both cases the signatory is fully capable, and the act still fails for want of power.

The structural rule follows from Article 1203 of the Civil Code: parties conclude validly only if they act for themselves, or if they are authorised to act for another. A person who presents itself to conclude a contract for someone else validly binds that person only if it is their representative by virtue of the law, of a court decision, or of a contract of mandate (mandat, the French agency contract, in practice a power of attorney). For natural persons the three sources map onto three regimes: legal representation of incapable persons, judicial authorisation for those who do not enjoy full power to represent, and conventional representation by mandate.

The other side must check, and the courts say so. Verifying that the signatory has power before signing is not a courtesy; the case law has turned it into a burden. The Cour de cassation has required of the party who later denounces the absence of power of the person it dealt with an elementary duty of verification of that person's power (Cass. 3e civ., 15 juin 2011, n° 10-21.085; Cass. com., 21 janv. 2014, n° 12-24.505; Cass. civ., 6 avr. 2016, n° 15-16.446). A party that signs first and investigates later will find the courts unsympathetic when it pleads that the signatory on the other side, or even the intermediary it dealt with, had no authority it never asked to see.

The interrogatory demand of Article 1158. The law also equips the doubting party. Under Article 1158 of the Civil Code, a party that doubts the extent of the power of a conventional representative may ask the represented party itself to confirm the power its interlocutor claims to hold. This written demand (the action interrogatoire, interrogatory demand) shifts the question to the only person who can answer it authoritatively, the principal. As will be seen below, a third party that had this tool available and did not use it can still attack the contract, but it must bear the consequences of its own carelessness.

Professionals who hold the pen are held to more. The notaire (civil-law notary) who receives a contract is bound to this verification by virtue of his mission, and he is not excused because another property professional intervened at the signature of a preliminary sale agreement (Cass. civ., 2 oct. 2013, n° 12-24.754). The verification of powers is part of what the authenticating officer owes, and it cannot be delegated to whoever else happens to be in the room.

Verifying who can sign for a French company

A party called to contract with a legal person has every interest in making sure of the powers of the individual who presents himself as its legal representative. The verification is documentary, and the documents differ by entity.

Companies, economic interest groupings and industrial or commercial public establishments. Where the legal person is a French company, a French economic interest grouping (GIE) or a public establishment of an industrial and commercial character, the checking party can require the representative to produce a K bis extract (extrait K bis, the official certificate of registration with the trade and companies registry) attesting to his quality as legal representative, or obtain the extract itself. The extract names the persons empowered to represent the entity, and obtaining it directly removes any doubt about the version presented.

Associations. Where the legal person is a French association, there is no K bis extract to ask for. The checking party must request the statutes, or the deliberation which invested the individual with the quality of legal representative. An association's representative validly binds it if he acts in conformity with its statutes, so the statutes are both the proof of his title and the measure of his power.

Delegated signatories. Where the act is not signed by the legal representative himself but by a person presenting itself as invested by a contract of mandate, two courses are open: interrogate the principal on the existence of the mandate, using the confirmation mechanism of Article 1158, or, after the event, invoke the existence of an apparent mandate (mandat apparent, apparent agency), the doctrine under which a principal is bound where the third party's belief in the agent's powers was legitimate. The first course is the one to take before signature; the second is a litigation position, not a compliance method.

The measure of the legal representative's power. The power to represent a legal person belongs to the legal representative, who is invested with it either by the law or by the statutes. For companies and economic interest groupings, the legal provisions governing each form determine who the legal representative is, and those provisions limit the power of representation to the acts that fall within the corporate purpose (objet social, the objects clause of the company's constitution). For legal persons not subject to particular legal provisions, such as associations, the representative validly binds the entity if he acts in conformity with its statutes. A counterparty on a significant transaction should therefore read two things together: the K bis extract, to identify the representative, and the statutes, to see what the entity is for and whether the transaction sits within it.

Sanctions: what happens when the signatory had no power

Article 1156 of the Civil Code organises the ordinary sanctions. The act carried out by a representative without power, or beyond his powers, is unenforceable against the represented party (inopposable, without effect against him), unless the third party contracting legitimately believed in the reality of the representative's powers, in particular because of the behaviour or the declarations of the represented party. This is apparent authority written into the Code: the principal who let the appearance arise, by conduct or by statements, is held to the contract as if the power had existed. To assess the legitimacy of the third party's belief, guidance is drawn from the solutions developed for the third party who dealt with an apparent agent under the apparent mandate doctrine.

Appearance has one firm limit. The Cour de cassation has refused to let appearance make an exception to the rules governing the representation of an incapable person (Cass. civ., 17 mai 2017, n° 15-24.840). The protection regimes for minors and protected adults are not displaced because the other side believed, however sincerely, that the person acting for the incapable had the necessary authority.

The third party's own attack. Where the third party did not know that the act was being carried out by a representative without power or beyond his powers, it may itself invoke the nullity of the contract (Article 1156, paragraph 2). Even the third party that failed to use the interrogatory demand of Article 1158 may still seek annulment, because a contract concluded in the name of a party who never consented is not valid; but that third party must bear the consequences of its own thoughtlessness or negligence and compensate the loss which its carelessness caused to its counterparty. The claim survives; the cost of not checking comes back as damages.

Ratification closes every route. Neither the unenforceability nor the nullity can any longer be invoked once the represented party has ratified the act (Article 1156, paragraph 3). Ratification is therefore the first question in any unauthorised-signature file: a principal that has performed, invoiced, taken delivery or otherwise adopted the contract may well have ratified it, and with ratification the defect disappears for everyone.

Companies answer to their own regime. There is strong reason to hold that Article 1156 does not apply to the lack or excess of power of the legal representative of a company. Company law provides specifically that the violation of the mandatory provisions of company law, such as those which frame the powers of the legal representative, can entail the nullity of the corporate decision taken in breach of them (Civil Code Article 1844-10, paragraph 3, as amended by ordonnance 2025-229 of 12 March 2025). Since the legislature took care to organise a particular regime of sanctions for companies, there is no reason to add the sanctions of the general law of contracts on top of it. What is settled is who may complain: the nullity of a contract founded on the absence of power of the representative is relative, and can therefore be demanded only by the represented party, that is, the company itself (Cass. 1e civ., 12 nov. 2015, n° 14-23.340). Being relative, that nullity can be confirmed, as is admitted for every relative nullity. A counterparty cannot use the signatory's lack of power to escape a contract the company itself is content to keep.

Does the signature bind the represented party?

Conflicts of interest, self-dealing and misused powers

Two further rules police not the existence of the power but the way it is used. They apply to every representation, whether the representative holds his power from the law, from a court decision or from a mandate.

Double representation and self-dealing. Under Article 1161 of the Civil Code, a representative may neither act on behalf of several parties to the contract whose interests are opposed, nor contract on his own account with the represented party. In those two situations the act carried out is null, unless the law authorises it, or unless the represented party authorised it in advance or ratified it afterwards. The rule reaches the agent who signs both sides of a sale for a buyer and a seller with opposed interests, and the agent who quietly makes himself the counterparty of his own principal. The escape routes are narrow and deliberate: a legal authorisation, or the informed consent of the principal, given before the act or by ratification after it.

Misuse of power. Article 1157 of the Civil Code expressly sanctions the representative who has diverted the powers granted to him (détournement de pouvoir, misuse of power) to the detriment of the represented party. The represented party may invoke the nullity of the act carried out, if the third party had knowledge of the misuse or could not have been unaware of it. Here the representative acted within the formal boundary of his power, which is what distinguishes the case from the excess of power sanctioned by Article 1156; the vice is the purpose, not the perimeter. The third party's position is decisive: a counterparty in good faith keeps its contract, while a counterparty that knew, or could not ignore, that the representative was serving himself at his principal's expense loses it. This sanction applies whether the representation is legal, judicial or conventional.

For deal management the two rules converge on one habit: where the same individual appears on both sides of a transaction, or stands to gain personally from it, obtain the express, documented authorisation of every principal involved before signature. An authorisation obtained afterwards is possible, since ratification cures the nullity of Article 1161, but it depends on the goodwill of a principal who by then knows exactly what was done in his name.

Frequently Asked Questions

This article is for general information only and reflects French law as published at the date shown above. It does not constitute legal advice. Always seek qualified advice before acting.