Business Contracts

Article 1178, paragraph 1, of the Civil Code states that “a contract which does not fulfil the conditions required for its validity is null and void”, given that the validity of a contract requires the consent of the parties, their capacity to contract, and a lawful and certain content (Art. 1128) . 
Article 1179, which enshrines the théorie des nullités, classifies invalidity as absolute where it …

Invalidity/cancellation of contract

Article 1178, paragraph 1, of the Civil Code states that “a contract which does not fulfil the conditions required for its validity is null and void”, given that the validity of a contract requires the consent of the parties, their capacity to contract, and a lawful and certain content (Art. 1128) . 

Article 1179, which enshrines the théorie des nullités, classifies invalidity as absolute where it sanctions the violation of a mandatory rule designed to safeguard the general interest (ordre public de direction), and relative, where the rule violated is designed to safeguard a private interest (ordre public de protection). 

The combined application of the above provisions means that a contract for services may be invalidated in the event of:

- lack of capacity on the part of one of the contracting parties;

- indeterminacy or illegality of the subject matter;

- violation of a mandatory rule of public policy (ordre public).

On the basis of vitiated consent, and in particular mistake as to the essential qualities of the thing sold, it has been ruled that a contract for services relating to the sale and installation of a fireplace insert must be cancelled, when the customer has acquired the appliance in the mistaken belief that it could provide sufficient main heating for his entire home, whereas this is not the case, and the performance of the heating installation, which was included in the contract, constituted a material condition, which was decisive for his consent . On the other hand, a service provider who fails to inform his customer that his undertaking has been deregistered does not withhold decisive information for the latter, within the meaning of Article 1112-1 of the Civil Code, nor does he commit fraud, justifying the invalidation of the contract for services.

As regards breaches of rules of public policy, the Law of 31 December 1975 on subcontracting contains a number of provisions which, if infringed, are punishable by invalidity, such as Article 14, which is intended to guarantee the payment of subcontractors. A subcontract must therefore be declared null and void if, in violation of this provision, a surety bond is not provided when the contract is signed, even if the subcontractor has received all the sums contractually due . Fraud may also justify annulment of the contract for services. However, the Court of Cassation has held that, while the discovery by project owners of invoices showing that the undertaking had paid the architect without their knowledge may justify doubts about the architect's integrity and even disciplinary sanctions, such invoices alone do not demonstrate the existence of a fraudulent agreement between the undertaking and the architect at the time the contract was concluded, which would justify the contract's invalidation . Similarly, the fact that the work was carried out, or was to have been carried out, on a building of which the project owner never acquired ownership does not authorize him to seek the invalidation of the contract for services, on a ground that he has not specified .

Article 1178 then states: “Invalidity is declared by the court, unless the parties have agreed otherwise. The cancelled contract is deemed never to have existed. Any services rendered are refunded in accordance with the conditions set out in Articles 1352 to 1352-9. Independently of the cancellation of the contract, the injured party may claim compensation for the damage suffered under the ordinary law of tort liability”.

As a result, the Court of Cassation has ruled that once the subcontract, which has been declared null and void, has been performed, and if the parties are to be put back in the same position they were in prior to such performance, the subcontractor is entitled to obtain restitution from the main contractor of the sums actually disbursed, without the value of the work being taken into account . In addition, irrespective of the cancellation of the contract, in the event of late completion  or non-compliance , the subcontractor may be ordered to pay damages to the main contractor, if it is found to have committed a fault directly related to the harm suffered by the contractor. 

Furthermore, the cancellation of a contract for the construction of a single-family home does not entitle the project owner to assert against the builder the benefit of the provisions of Article 555 of the Civil Code, which allows the owner of land to compel a third party to demolish a construction he has illegally built  .

Before the reform of contract law, cause was also a condition of contract validity, punishable on pain of invalidity. For an application, prior to the reform, of the invalidity of a contract for services for lack of cause, see CA Nîmes, 9 February 2012, LawLex202200010227JBJ, holding that the regular performance by a person who is not registered with the Order of Chartered Accountants, of the work of keeping, centralizing, opening, closing and supervising the accounts of a company to which he or she is not bound by an employment contract, constitutes the illegal exercise of this profession, so that the contract for services performed by such a person must be invalidated as lacking cause.

CA Limoges, 25 November 2010, LawLex202200006750JBJ.

Cass. 3e civ, 12 March 1997, LawLex202200004279JBJ, overruled a Court of Appeal for rejecting the subcontractor's claim for invalidity on the grounds that the annulment of the subcontract provided for in Article 14 of the Law of 31 December 1975 could only be successfully claimed by the subcontractor if he had not received full payment from the main contractor for his services as contractually stipulated, and that the harm that could result, for the subcontractor, from signing the subcontract at a loss was not causally linked to the absence of a surety bond, whereas the court was unable to establish the existence, at the time the subcontract was signed, of a surety commitment on the part of the main contractor.

Cass. 3e civ, 24 May 2018, LawLex202300002991JBJ.

CA Montpellier, 9 December 2021, LawLex202200010225JBJ.

Cass. 3e civ, 13 September 2006, LawLex202200003989JBJ.

Cass. 3e civ, 25 June 2013, LawLex202200003760JBJ.

Cass. 3e civ, 24 April 2013, LawLex202200006749JBJ.

Business Contracts

325. Invalidity/cancellation of contract

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

325. Invalidity/cancellation of contract

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise