Business Contracts

The agency agreement and the contract for services, both widely used in business, are defined in very general terms by the Civil Code. Whereas an agency agreement or power of attorney ("contrat de mandat" or "procuration") is an act by which one person empowers another to do something for and on behalf of the principal , a contract for works ("louage d'ouvrage") is a contract by which one party un …

Contract for services

The agency agreement and the contract for services, both widely used in business, are defined in very general terms by the Civil Code. Whereas an agency agreement or power of attorney ("contrat de mandat" or "procuration") is an act by which one person empowers another to do something for and on behalf of the principal , a contract for works ("louage d'ouvrage") is a contract by which one party undertakes to do something for the other, in return for a payment agreed between them . These loose definitions, from which a certain similarity emerges - both contracts involve an obligation to do something - have given rise to problems of characterization, which the courts have remedied by laying down distinguishing criteria.

Firstly, under an agency agreement, the agent performs a legal act on behalf of the principal, whereas under a contract for services, the contractor performs a material or intellectual service . An agreement between private individuals and a specialist able to provide them with a varied choice of homes with payment facilities, by which the former empowered the latter to entrust the construction of their home to the contractor of their choice, is not a contract for services but an agency agreement, insofar as it confers on the latter the power to represent them with a view to performing legal acts on their behalf . The Court of Cassation has held that a travel agency, whose role is to organize the details of a trip involving the use of many different means of transport, and to provide various services such as accommodation, meals, excursions and entertainment, is acting as a contractor and not merely as an intermediary .

However, a person can be both a contractor and an agent at the same time. In effect, the Court of Cassation has ruled that an architect, bound to the project owner by a contract for services in that he supervises and manages the work, also acts as an agent in relation to the latter, when his role is to conclude works contracts on behalf of the owner . In some cases, the contractor may even benefit from the “apparent” agency theory (théorie du mandat apparent). For example, the Court of Cassation has held that a project owner who commissions an architect to build a house must pay part of the cost of the work carried out by the undertaking to which the owner had entrusted the work, since the undertaking's mission was not limited to obtaining planning permission, and since the undertaking may have believed in good faith that the architect and apparent agent of the project owner was entitled to inform the owner that he had been chosen to carry out the work, and to authorize the owner to begin the work .

The main difference between an agency agreement and a contract for services lies in the mechanism of representation. According to the Court of Cassation, a contract for services concluded with a project manager does not automatically confer on the latter a power of attorney to represent the client . Real estate development, governed by Article 1831-1 of the Civil Code, differs from contracts for services and construction by the fact that it entails a remunerated representation contract entrusted to the developer, who is charged, for an agreed price and by means of contracts for services, with carrying out a construction program, in return for specific payment independent of the price, and with carrying out or arranging for the carrying out of all or part of the legal, administrative and financial operations involved in the construction .

 Similarly, according to the trial courts, legal assistance, as defined by Article 412 of the Code of Civil Procedure, which entails the power and duty to advise a party and present his/her defense without compulsion, is the result of a contract for services, unlike agency agreement, which, according to Articles 411 and 413 of the same code, entails the power and duty to carry out procedural acts and provide assistance on behalf of the principal, unless otherwise stipulated or agreed .

In this respect, the preliminary draft reform of the law of special contracts by the commission chaired by Professor STOFFEL-MUNCK proposes, in new Article 1755 paragraph 2, to add to the definition of a contract for services that “the work may be material or intellectual”.

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

Cass. 1re civ, 27 October 1970, LawLex202200008819JBJ; Cf. 30 January 2007, LawLex202200008820JBJ, holding that a travel agency acts as an agent, and not as a contractor, when its role is limited to issuing airline tickets, so that its liability cannot be incurred in the absence of a fault which cannot be proven.

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

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

Cass. 3e civ, 4 March 2021, LawLex202200003679JBJ.

CA Rouen, 19 May 2021, LawLex202200004777JBJ.

CA Paris, 19 April 2022, LawLex202200004222JBJ.

Business Contracts

465. Contract for services

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

465. Contract for services

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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