Business Contracts

As stipulated in Article 1710 of the Civil Code, a contract for services is a bilateral contract for valuable consideration : the parties to a contract for services are mutually bound by their obligations, the client having to pay for the work commissioned and carried out by the contractor, who, in the event of non-payment, may enforce his right of retention on the goods in his possession.
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Payment of the works

As stipulated in Article 1710 of the Civil Code, a contract for services is a bilateral contract for valuable consideration : the parties to a contract for services are mutually bound by their obligations, the client having to pay for the work commissioned and carried out by the contractor, who, in the event of non-payment, may enforce his right of retention on the goods in his possession.

According to the Court of Cassation, payment of the price by the project owner presupposes completion of the work by remedying any defects . Accordingly, faulty workmanship found against the contractor and reported by the client during the course of the work may justify the refusal of payment or delay in payment of the sums claimed . Incomplete performance of the contractor's obligations carries the same consequences as poor performance, i.e. the possibility for the project owner to waive his obligation to pay as long as he does not actually obtain the performance due. However, in order to be entitled to invoke the exceptio non adimpleti contractus, the client must prove that the contractor's obligations have not been fulfilled. Thus, a project owner who refuses to pay for work that has not been completed, without providing objective and substantiated proof, does not have a legitimate interest in making an application for an expert appraisal, the purpose of which cannot be to compensate for his failure to provide proof . However, if the project owner does not dispute that the disputed work has been implemented in accordance with his instructions, the contractor is entitled to claim payment. Thus, when the amounts given in the work description are consistent with the various detailed items and the prices usually charged, but the project owner refutes the amount of the invoice without indicating how it would be excessive in relation to the services implemented, the project owner must pay the sum claimed by the contractor . In the event of formal notice to pay the principal, interest is automatically payable, provided there is no legal provision or contractual stipulation requiring the contractor to remind the project owner of the agreed interest rate . Furthermore, in a case where the project owner had paid a deposit in return for work not carried out by a contractor in receivership, the Court of Cassation has recognized that the project owner may, as security for the repayment of his deposit, invoke his right of retention against the lessor of a machine brought to the site and then abandoned by the defaulting contractor, provided that he can prove that he has a claim against the latter that is certain, of a fixed amount and due .

To remedy the project owner's failure to meet his payment obligations, the contractor can invoke the exceptio non adimpleti contractus, and either suspend performance of his obligations under the contract for services, or invoke his right of retention. To protect himself against the risk of non-payment, he may also stipulate in the contract a security deposit  in his favor, or any other contractual surety. Where he is the depositary of an item in performance of the contract for services, the contractor also benefits from the lien for the cost of preserving a movable item provided for in Article 2332, 2° of the Civil Code . Architects, contractors, bricklayers and other tradesmen previously enjoyed a property lien under former Article 2374, 4° of the same Code  , abolished as of 1 January 2022 by Ordinance 2021-1192 of 15 September 2021 reforming the law on sureties . Furthermore, for private works contracts involving real estate, where the sums involved can be substantial and the risks of non-payment are high for the contractor, the law has imposed an obligation on the project owner to guarantee payment . Under the first paragraph of Article 1799-1 of the Civil Code , the project owner who concludes a private works contract must guarantee payment of the sums due to the contractor, when these exceed a threshold set by decree approved by the Council of State. Article 1 of Decree No 99-658 of 30 July 1999 sets this threshold at EUR 12,000, before VAT, the sums due being taken to mean the price agreed under the contract, less any deposits and down-payments made when the contract was signed. The possibility of a future set-off against a claim by the project owner, even if this is certain in principle, does not relieve the project owner of the legal obligation to provide a guarantee of payment of the balance due on the contract .

Article 1799-1 of the Civil Code lays down the overriding principle that the project owner must guarantee the contractor payment of sums due under private works contracts as from the conclusion of the contract . Failing this, the contractor is entitled to discontinue work . The project owner cannot, therefore, claim to be discharged from his obligation  or demand that the contractor provide accounting documents for the implementation of said guarantee, even if these have been requested by the bank . 

The payment guarantee can be requested at any time, including at the end of the project, as long as the work has not been paid for , and even after the work has been completed by a contractor who has not been paid by the client . In other words, the warranty obligation, which begins as soon as the contract is signed, continues for the entire duration of the contract for services, and is only extinguished on the date of payment. Moreover, the parties may neither waive nor derogate from the obligation, as the provisions of Article 1799-1 of the Civil Code are a matter of public policy. Accordingly, a surety bond guaranteeing payment of sums in excess of EUR 12,000 due under a private works contract must not be subject to any condition that would have the effect of limiting its application .

Cass. 3e civ, 15 November 1968, LawLex202200009607JBJ, specifying that the project owner only owes payment of the balance of the price once the contractor has completed the work by eliminating the defects, where final receipt has not been established.

Having fallen into disuse - hence its abolition - this privilege implied the implementation of a burdensome and complex registration procedure, so that architects and similar professionals generally prefer to set up a contractual or legal lien.

This payment guarantee was instituted by Article 5 of Law No 94-475 of 10 June 1994 on the prevention and handling of difficulties faced by undertakings, which subsequently introduced Article 1799-1 of the Civil Code.

Civil Code, Art. 1799-1, para. 1: “The project owner who concludes a private works contract referred to in part 3 of Article 1779 must guarantee the contractor payment of the sums due when these exceed a threshold set by decree decree approved by the Council of the State”.

CA Rennes, 14 September 2017, LawLex202200009616JBJ.

Cass. 3e civ, 9 September 2009, LawLex202200009561JBJ.

CA Colmar, 8 March 2017, LawLex202200009601JBJ.

Cass. 3e civ, 13 January 2009, LawLex202200009606JBJ.

Cass. 3e civ, 7 April 2016, LawLex202200009559JBJ.

Cass. 3e civ, 13 October 2016, LawLex202200009564JBJ.

Cass. 3e civ,15 September 2016, LawLex202200003869JBJ.

Cass. 3e civ, 21 May 2003, LawLex202200006731JBJ.

Cass. 3e civ, 4 March 2021, LawLex202200009566JBJ.

CA Poitiers, 26 October 2012, LawLex202200004302JBJ.

CA Paris, 30 June 2010, LawLex202200004200JBJ.

Cass. 3e civ, 16 December 1987, LawLex202200008814JBJ.

Cass. com, 17 February 2021, LawLex202200001096JBJ.

Civil Code, Art. 2332: “In addition to those provided for by special laws, preferential claims on certain moveables are: (...) 2° The costs of preserving a moveable, on it (...)”.

Former Art. 2374, 4°, Civil Code, repealed: "The preferential creditors on immovables are : (... ) Architects, contractors, masons and other workmen employed to construct, rebuild or repair buildings, canals or any other works whatsoever, provided nevertheless that, by an expert appointed ex officio by the Judicial Court within the jurisdiction of which the buildings are located, a report has first been drawn up, for the purpose of ascertaining the state of the premises in relation to the works which the owner declares he intends to carry out, and that the works have been, within six months at most of their completion, received by an expert also appointed ex officio (...).

Business Contracts

297. Payment of the works

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Les notions juridiques connexes

297. Payment of the works

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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