Business Contracts

Under Article 1984 of the Civil Code, “a mandate or power of attorney is an act by which one person empowers another to do something for and in the name of the principal”, while under Article 1710, a contract for services is a contract by which one of the parties, the contractor, undertakes to do something for the other, the client, in return for remuneration. Although they differ in certain respects, these two contracts have the same purpose, i.e. the performance of an obligation to do something, the content and scope of which are sometimes vague, and can be a source of confusion and lead to problems of characterization.

Insofar as it is the act by which one person gives another the power to do something for and on behalf of that person, the agency agreement is traditionally based on the criterion of representation, whereas, according to the Court of Cassation, a contract for works and services (contrat de louage d'ouvrage) does not automatically confer on the principal a mandate to represent the principal . Thus, according to the Court of Cassation, the agreement by which private individuals empower a real estate specialist to assign the construction of their house to the contractor of their choice, while specifying the type, plan and price of the said construction, is not a contract for services, but a agency agreement, insofar as it confers on him the right to perform a legal act on their behalf . Similarly, where an architect carries out legal formalities on behalf of the owner, or concludes or amends contracts for works, he is acting as an agent and thereby engages the owner . Real estate development contracts (contrat de promotion immobilière), governed by Article 1831-1 of the Civil Code, differ from contracts for services and construction contracts in that they involve a fee-based mandate entrusted to the developer, who is charged, for an agreed price and by means of contracts for work and services, with implementing a construction project, in return for a specific fee, independent of the agreed price, and with carrying out or arranging for the carrying out of all or part of the legal, administrative and financial transactions involved in the construction . On the other hand, a lawyer's duty to assist clients in legal proceedings gives rise to a contract for services, rather than an agency agreement, insofar as, under Article 412 of the Code of Civil Procedure, this entails the power and duty to advise the party and present its defense, without being under any obligation to do so .

Contracts for services and mandates also differ in the nature of the acts performed. While contracts for services exclude any power of proxy, they are also based on the implementation of material or intellectual acts, which distinguishes them from agency agreements, which inevitably involve the performance of a legal act . 

Where there are doubts as to the appropriate classification, the courts look at the role and missions of each of the contracting parties, in order to determine what, within the same project, falls within the scope of a contract for services and what falls within the scope of an agency agreement. 

Accordingly, an architect, bound to the client by a contract for services insofar as he oversees and directs the work, also acts as the client's representative when instructed to conclude works contracts on the owner's behalf . As a result, when the owner appoints an architect as project manager for the construction of a house, he is obliged to pay part of the cost of the work carried out by the undertaking to which the architect has entrusted said work: since the architect's mission is not limited to obtaining a building permit, this undertaking may have believed in good faith that the architect and apparent agent of the owner was entitled to inform him that he had been chosen to carry out the work, and to authorize him to begin it .On the other hand, an architect whose mission is to realize sketches for the construction of a building, and who delivers a significant amount of work following repeated requests from his client, is bound to the latter by a contract for works and services (contrat de louage d'ouvrage) .

A similar approach has been adopted by the Court of Cassation to define the legal framework applicable to travel agencies. Thus, a travel agency acts as a contractor if its role, which is not limited to that of a mere intermediary, is to organize in every detail a trip involving the use of many different means of transport, and to provide various services such as accommodation, food, excursions and entertainment .  A travel agency, on the other hand, acts as an agent whose role is limited to issuing airline tickets, so that its liability cannot be incurred in the absence of any fault, which in this case was not proven . 

Finally, an agency agreement and a contract for services are not subject to the same rules of evidence: the existence of a contract for services may be proven by any means, whereas in the case of a mandate agreement, testimonial evidence is admissible only under certain conditions .

Cass. 3e civ, 4 March 2021, LawLex202200003679JBJ, specifying that the mandate agreement, which is the act by which one person gives another the authority to carry out some action on his behalf and in his name, is only formed following acceptance by the mandatory. Civil Code, Art. 1984, para. 2: “The contract is only formed by the acceptance of the mandatory”.

Cass. 1re civ, 19 February 1968, LawLex202200003680JBJ.

Cass. 1re civ, 30 January 2007, LawLex202200008820JBJ.

Civil Code, Art. 1985, para. 1: “Agency may be granted by deed or by private agreement, even by letter. It may also be conferred orally but testimonial evidence is only accepted in accordance with the section entitled "Contracts or contractual obligations in general”.  

Cass. 3e civ, 8 January 1970, LawLex202200008822JBJ.

CA Rouen, 19 May 2021, LawLex202200004777JBJ.

CA Paris, 19 April 2022, LawLex202200004222JBJ.

Cass. 1re civ, 19 February 1968, LawLex202200003680JBJ; Cass. 3e civ, 8 January 1970, LawLex202200008822JBJ; CA Rouen, 19 May 2021, LawLex202200004777JBJ.

Cass. 3e civ., 28 January 1975, LawLex202200008821JBJ.  See previously, Cass. 3e civ., 8 January 1970, LawLex202200008822JBJ.

Cass. 3e civ, 8 March 1989, LawLex202200004775JBJ.

Cass. 1st civ. 17 December 1964, LawLex202200003924JBJ.

Cass. 1st civil, 27 October 1970, LawLex202200008819JBJ.

287. Agency agreement (contrat de mandat)