French Contract Law: What Every Foreign Business Needs to Know

French contract law: what every foreign business needs to know

French contract law was entirely rewritten by ordinance 2016-131 of 10 February 2016. The new body of rules, Articles 1100 to 1386-1 of the Code civil, has been in force since 1 October 2016, and the ratifying statute, law 2018-287 of 20 April 2018, amended some twenty provisions for contracts concluded from 1 October 2018.

The result is a modern, codified law of contract. It is also one in which the date of your signature can decide which set of rules a French court will apply to you.

This guide sets out the framework a foreign business actually needs:

• when a contract exists at all under French law;
• which regime applies to it in time;
• the three principles that dominate everything: freedom of contract, binding force and good faith;
• why the label you put on an agreement does not bind the judge;
• the statutory categories that change your rights;
• what happens to linked contracts, and where the general law gives way to special regimes.

Where does your French contract question sit?

When does a contract exist under French law?

A contract is an agreement of wills between two or more persons intended to create, modify, transfer or extinguish obligations (C. civ. Art. 1101). Two elements must coincide: a genuine meeting of the parties' wills, and a legal commitment a court could enforce. Where either is missing there is no contract, however complete the documents appear.

What surprises many foreign businesses is how little formality this requires. Unless a statute demands a writing, a French contract is consensual: it forms by the mere exchange of consents, whatever the mode of expression (C. civ. Art. 1109). The courts have found contracts in:

• an exchange of letters, or a telephone conversation;
• an exchange of emails containing all the elements required for the contract in question (Cass. 1e civ., 11 juill. 2018, n° 17-10.458);
• performance itself, which can prove the contract was concluded (Cass. com., 16 mai 2018, n° 17-14.602);
• conduct alone: a party that approved plans, paid advances and placed orders was held to have contracted with nothing signed (Cass. 1e civ., 8 oct. 1963, n° 60-10.501).

Intention to be bound: how courts read preliminary documents

In case of doubt, French courts presume the protagonists did not intend to bind themselves legally: the party claiming performance must prove the commitment (Cass. req., 13 déc. 1875). No single word is decisive; everything turns on formulation and context.

Two illustrations mark the line. A letter of intent drafted in the conditional, evoking interest in pursuing negotiations, creates no obligation (CA Paris, 8 déc. 2009, n° 08/21540). Yet a commitment expressly labelled purely moral, an engagement d'honneur, can bind where an unequivocal intention to be obliged appears from the file (Cass. com., 23 janv. 2007, n° 05-13.189).

Nor is there a contract without agreement on the essential obligation, the one that characterises the deal: an accord leaving the determining element open binds no one (Cass. com., 9 juin 2009, n° 08-10.350).

Signing "subject to notarial deed": binding or not?

A recurring trap is the agreement providing for réitération, re-execution before a notary or in a later formal contract. The default is that the first accord is already final and the later deed a formality. The parties are only unbound if they made the future deed a genuine condition of their commitment, and a bare statement that the act "will be reiterated" does not establish that (Cass. 3e civ., 17 juill. 1991; Cass. com., 25 sept. 2012, n° 11-24.524).

One law, three regimes: why the date of your contract matters

The reform of 10 February 2016 is expressly non-retroactive (Ord. 2016-131, Art. 9). Contracts concluded before 1 October 2016 remain governed by the law in force on the day they were signed, even where the new provisions are public policy (Cass. 1e civ., 19 sept. 2018, n° 17-24.347). Court actions commenced before that date are decided under the former law at every stage, appeal and cassation included.

The ratifying law of 20 April 2018 added a further layer: some of its changes apply only to acts concluded from 1 October 2018, while provisions declared interpretative reach back to 1 October 2016. Three regimes therefore coexist.

One nuance deserves attention: the statutory effects of a contract, those the law attaches regardless of the parties' will, are in principle governed by the law in force when they occur (Cass. 3e civ., 23 mai 2024, n° 22-24.191). For a business holding long-term agreements signed before the reform, an audit of which regime governs which contract decides which remedies exist at all.

Freedom of contract, binding force and good faith: the three pillars

Three provisions open the reformed law and dominate everything that follows.

• Freedom of contract: everyone is free to contract or not, to choose the other party and to determine the content and form of the contract, within the limits fixed by statute and public policy, the ordre public (C. civ. Art. 1102).
• Binding force: contracts legally formed take the place of statute for those who made them (C. civ. Art. 1103); the judge must respect the parties' common intention without distorting it.
• Good faith: contracts must be negotiated, formed and performed in good faith, and that duty is expressly public policy which no clause can exclude (C. civ. Art. 1104).

Good faith, bonne foi, is presumed (C. civ. Art. 2274); it is for the party alleging bad faith to prove it. In the courts' hands the duty means loyalty, cooperation, information, and restraint in exercising contractual prerogatives. Its breach is sanctioned in tort during negotiations and contractually during performance. What it does not do is turn the judge into a moral censor: only conduct injuring a legally protected interest is sanctioned.

Ordre public reaches further than common-law readers expect. The Code declares public policy, among others: the good-faith duty itself, the rules voiding an onerous contract whose counterpart is illusory or derisory and the prohibition on emptying the essential obligation of its substance (C. civ. Arts. 1169 and 1170), the sanction of significant imbalance in adhesion contracts (C. civ. Art. 1171), and the regimes of the penalty clause and grace periods (C. civ. Arts. 1231-5 and 1343-5). A contract also cannot override constitutionally protected freedoms, such as the freedom to terminate unilaterally a contract of indefinite duration (Cons. const., 9 nov. 1999, n° 99-419 DC).

The label on your contract does not bind the French judge

French lawyers call it qualification: determining whether an act is a contract and which named category it belongs to, since the category dictates the applicable regime. The parties may state a qualification, and that statement creates a presumption in its favour (Cass. com., 2 févr. 1988, n° 86-16.879). It does not bind the judge, who must give or restore to the facts their exact qualification (CPC Art. 12).

The moment your "consultancy agreement" functions like an employment contract, a French court can recharacterise it, and has done so where the label was a fraud on mandatory rules (Cass. ass. plén., 4 mars 1983, n° 81-15.290). The tool is the characteristic obligation, assessed at the date of conclusion (T. confl., 4 juill. 2016, n° 4055).

Parties who genuinely straddle two available categories can go further and impose their qualification on the judge, provided they say so expressly and the qualification is one they may freely dispose of (CPC Art. 12). Used carefully, it is a powerful drafting device; used to evade a mandatory statute, it is struck down.

The statutory categories that decide your rights

The Code civil sorts contracts into paired categories, and each pairing carries practical consequences that surface exactly when a deal goes wrong.

The classification with the most serious consequences is the contrat d'adhésion, which requires clauses both predetermined by one party and non-negotiable, read by the case law as not in fact negotiated:

• where a supplier's reservations and proposed amendments were simply ignored, the clauses were not negotiated (Cass. com., 3 mars 2015, n° 14-10.907);
• terms imposed by an online marketplace have been held necessarily non-negotiable;
• the party claiming the adhesion qualification bears the burden of establishing it.

Two further characterisations deserve a mention. Contracts concluded intuitu personae, in consideration of the person, restrict substitution and assignment. And the professional / non-professional distinction pulls some business actors into protective rules they do not expect: a company contracting outside any direct relationship with its activity can qualify as a non-professional, while an SCI borrowing to finance rental investment acts professionally (Cass. 1e civ., 28 juin 2023, n° 22-13.969).

Is your contract an adhesion contract under Article 1110?

Linked contracts: when one falls, the others fall with it

Complex operations rarely live in a single document. French law recognises that contracts necessary for one and the same operation are interdependent: where one disappears, the contracts whose performance it makes impossible lapse, caducité, as do those for which it was a determining condition of a party's consent, provided the party against whom lapse is invoked knew of the overall operation (C. civ. Art. 1186).

For contract chains built around a financial lease, the linkage is public policy: the courts strike as unwritten any clause irreconcilable with the interdependence (Cass. ch. mixte, 17 mai 2013, n° 11-22.768; Cass. com., 10 janv. 2024, n° 22-20.466).

Outside those mandatory cases, the parties decide, and the drafting rules are short:

• say expressly whether your contracts stand or fall together; silence is read as independence;
• a clause affirming independence yields if it contradicts the general economy of the operation (Cass. com., 24 avr. 2007, n° 06-12.443);
• name who bears restitution if a lapse unwinds performance.

When the general law of contract steps aside

The rules described here form the droit commun, the general law applicable to any contract, but only insofar as no special rule displaces them (C. civ. Art. 1105). Four special regimes matter to foreign businesses:

• Commercial contracts: substantively under the general law, the special rules being largely confined to freedom of proof against traders and the jurisdiction of the commercial courts;
• Administrative contracts: concluded by a public person for the public service or with exorbitant clauses, they obey an autonomous regime before the administrative courts;
• International contracts: can escape French law where the parties validly choose another governing law;
• Consumer contracts: contracts with consumers and non-professionals attract the protective machinery of the Consumer Code.

Before relying on any rule in this guide, check two things: which regime in time governs your contract, and whether a special regime displaces the general rule for your contract type.

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.