Business Contracts

Even if the drafters of the Civil Code, considering the agency agreement as a kind of amiable service, deemed it unpaid as a matter of principle, they nonetheless considered that agency agreements, which are unpaid by nature, could be remunerated by means of provisions governing the sums due to the agent as a result of the performance of his assignment. 
1) Onerous nature of agency 
Under Article  …

Payment of agent

Even if the drafters of the Civil Code, considering the agency agreement as a kind of amiable service, deemed it unpaid as a matter of principle, they nonetheless considered that agency agreements, which are unpaid by nature, could be remunerated by means of provisions governing the sums due to the agent as a result of the performance of his assignment. 

Under Article 1986 of the Civil Code: “An agency agreement is gratuitous unless otherwise agreed”. The assessment of whether an agency agreement is onerous is a matter for the courts . However, in order to reject a principal's claim for restitution of the sum paid to his agent as an advance on the sale price, a local court cannot hold that the sum was due to the agent for steps taken in the course of carrying out his agency agreement, when the agent has neither claimed that any remuneration had been agreed, nor that he had made any advances or incurred any expenses in carrying out his mission . 

According to settled case law, an agency agreement, which is free by nature, is presumed to be for remuneration when it is exercised by a person in the course of his or her usual profession  or when it is conferred on a person whose profession is to handle the affairs of others . Consequently, a court of appeal cannot reject a legal advisor's claim for fees on the grounds that there is nothing to define the scope of his agency, and that he does not provide proof of an agreement derogating from Article 1986 of the Civil Code, whereas an agency agreement conferred on a person whose usual profession is to deal with the affairs of others is presumed to be salaried . 

When the agency agreement is onerous, the parties generally stipulate the agent's remuneration contractually, either by fixing a specific amount in advance, or by referring to a percentage of the business to be carried out, or to a scale . In the absence of a contractual agreement, trial courts are free to assess the amount of remuneration due to an agent whose agency agreement has been implemented . In principle, they take into account the circumstances of the case, and the services rendered . Thus, in a case where the purchaser of a business was, by his own actions, the cause of his dispossession, the remuneration of the business agent through whom he dealt could be set in relation to the importance of the service rendered by the agent to the purchaser . A court of appeal may also refer to professional practices and fees previously paid by the principal to determine the agent's remuneration  .

Since the reform of contract law, Article 1165 of the Civil Code now stipulates that “in contracts for the provision of services, in the absence of agreement between the parties prior to performance, the price may be set by the creditor, who must justify the amount in the event of a dispute”. In the event of abuse in the unilateral fixing of this price, the court may be called upon to award damages and, where appropriate, to rescind the contract".

Under paragraph 1 of Article 1999 of the Civil Code, the principal must pay the agent “'his wages when promised” and, under paragraph 2 of the same text, he may not, unless the agent is at fault, dispense with this “even if the business has not been successful, nor reduce the amount of expenses and advances on the pretext that they could be less”. According to the Court of Cassation, it follows from article 1999, paragraph 2, that, in the absence of any fault on his part, the intermediary entrusted with the sale of shares may claim payment of the fees and rely on the penalty clause stipulated in the contract, once the transaction has actually been concluded, notwithstanding the fact that the parties to the deed have subsequently decided to rescind it . 

In the absence of any dispute on the part of the principal as to the amount of commission requested by the agent, trial courts are not required to determine whether or not this amount is justified . On the other hand, if the principal considers that no commission is owed to the agent, it is up to the former to demonstrate how the agreed remuneration, which he has accepted, is unreasonable and gives the agent an excessive benefit . He may also establish either that the latter has waived his right to remuneration , or the circumstances or fault, such as to enable the court to reduce the amount or exclude it . Thus, according to case law, an agent whose negligence has had the effect of preventing his principal from ensuring the intended use of his acquisition has committed a fault in the exercise of his agency agreement, such as to deprive him of his right to remuneration . Similarly, by interpreting the common intention of the parties in a necessary and sovereign manner, a court of appeal was able to consider that the parties had intended the signing of the deed of sale to be a condition of their final agreement and payment of the agent's commission, so that, in the absence of this condition precedent, the agent could not claim payment of the stipulated commission . Furthermore, in the Court of Cassation's view, there can be no commission in the event of abandonment. Accordingly, the Court of Cassation has ruled that a commission can only be paid to an intermediary if the deal has been successfully completed. This is not the case for a free-lance broker who, although he or she has taken steps to sell the land in question, has not, by his or her own admission, brought the deal to a successful conclusion . The agent's fault does not necessarily lead to the loss of remuneration. A court of appeal may, without contradicting itself, recognize the agent's right to remuneration, while considering that he has committed a fault in consideration of which it may reduce the amount of remuneration in a proportion to be determined by the court's discretion . 

The real estate agent's right to remuneration is subject to certain specific conditions. By virtue of article 6 of Law  No 70-9 of 2 January 1970 and Articles 72 and 73 of its implementing decree, a real estate agent may only claim commission or remuneration for a transaction covered by Article 1 of this law if, prior to any negotiation or commitment, he or she holds a written agency agreement, issued for this purpose by one of the parties and specifying the condition for determining the remuneration or commission  and the party who will be responsible for it , it being understood that if the parties to the sale commit themselves in a subsequent agreement to remunerate the real estate agent's services, this will only be valid if it is subsequent to the sale duly concluded . In the Court of Cassation's view, the principal's refusal to implement the sale with a person presented by his agent cannot be equated with the written deed containing the commitment of the parties to which Article 6, paragraph 3, of the Law of 2 January 1970 makes the right to commission subject, so that, in such a case, the real estate agent is entitled to damages, insofar as he proves a fault on the part of his principal which would have deprived him of the opportunity to realize the sale . Only an agency agreement given to the real estate agent can legally justify his remuneration, and not a simple visit order . However, according to the Court of Cassation, these protective provisions in favor of sellers and buyers do not apply to agreements between real estate agents . The fact that a real estate agent is entitled to remuneration does not preclude the court's power, under article 1999 of the Civil Code, to reduce or even cancel such remuneration, in consideration of faults committed by the intermediary in the performance of his duties . 

Even in the absence of fault on the part of the agent, the courts will readily, and have for a long time, used their power of review to reduce the remuneration stipulated by the parties . When the desired result has not been achieved, the failure of the transaction being due to a set of particular circumstances beyond the control of the parties, and the very reason for maintaining the agency agreement has ceased to exist, the trial courts, in the exercise of their discretionary power, may decide that the remuneration promised to the agent must be limited to the part of the contract performed . According to long-standing case law, the agent's salary may be reduced if it is disproportionate to the work performed and services rendered, and if the principal was not fully informed of both the extent of the service and the value of the remuneration awarded . On the other hand, a court of appeal may rule that the amount of the commission, reduced in the first instance, must be reinstated at the figure fixed by the parties' agreement, provided that a commission of 5% on the sale price is not excessive, that the agent has fully fulfilled his agency agreement and that the principal has not voiced any criticism regarding its performance . While trial courts are free to assess the amount of the agent's remuneration on the basis of the parties' agreements and the circumstances of the case, they cannot reduce the fee payable to a lawyer, if the amount is the result of an agreement concluded after the service has been rendered . In effect, the courts cannot reduce a sum that the principal has acknowledged owing to the agent, after the agency agreement has expired, by a subsequent act . An agreement on fees is thus binding when it has been freely negotiated, after a business agent has successfully completed the assignment entrusted to him by a client, and when the Court of Appeal in its discretion has found that the client was capable of assessing the value of the service rendered, with the result that his claim for restitution of part of the fees paid to his agent must be dismissed . 

In order to better guarantee the right to remuneration of the agent, to whom the courts also recognize a right of retention on objects and documents legitimately held in performance of his agency agreement until full payment of his remuneration claim  , the preliminary draft reform of the law on special contracts stipulates: “Once the mission has been accomplished, the principal is, in the case of an agency agreement for valuable consideration, obliged to pay his remuneration to the agent, whatever the terms and conditions” . The agreed remuneration may, however, be reduced by the court if it is manifestly disproportionate to the agent's diligence and the benefit of the service rendered. The reduction does not apply if, at the end of the agent's assignment, the principal knowingly accepts the amount claimed by the agent. Where the urgency of the situation has required the agent to take additional steps, the remuneration may be increased by the court, under the same conditions" .

Cass. 1re civ., 8 March 1977, LawLex202300013607JBJ, noting that a court of appeal may consider, in the exercise of its discretionary power to assess the evidence submitted to it, that the agency agreement between a radiologist and a person to whom he has entrusted the task of dealing with contractors, both for the installation of equipment in the clinic he owns and for the construction of villas, is of a non-salaried nature.

Cass. 1re civ, 4 May 2012, LawLex202200008599JBJ.

Cass. 1re civ, 19 January 2022, LawLex202300007957JBJ.

Cass. com. 3 March 1969, LawLex202300013695JBJ.

Cass. 1re civ, 24 September 2002, LawLex202300007959JBJ.

Cass. 1re civ. June 16 1998, LawLex202200008812JBJ, specifying that a judicial commissioner's waiver of his own fees, granted in his dealings with his clients, is unrelated to the mission entrusted by the latter to his agent, an expert in paintings, and is therefore unenforceable against the latter.

Cass. 1re civ, 22 May 1985, LawLex202300013018JBJ.

Cass. 1re civ, 5 May 1971, LawLex202300013613JBJ.

Cass. 3e civ, 1 December 1971, LawLex202300013614JBJ.

Cass. 1re civ. 21 July 1970, LawLex202200008809JBJ. Cf. Cass. 3e civ, 20 February 1973, LawLex202300007955JBJ, noting that, insofar as the customary commission is due only when the agent has fulfilled his agency agreement in its entirety and taken all due care, in this case the contractually agreed flat-rate commission remunerated him for all his efforts and care, and in this case, the contractually agreed lump-sum commission remunerated him for all his efforts and care, including the drafting of the private deed that was to bring his assignment to an end, and that the circumstances meant that, although he was not inactive, he was unable to bring his assignment to a successful conclusion, the Court of Appeal, exercising its discretion, was able to deem that he was not entitled to the full amount of his fees.

Cass. 1re civ, 13 March 1967, LawLex202300007962JBJ; 31 March 1971, LawLex202300013692JBJ, noting that trial courts may recognize an agent's right to remuneration, while considering that he has committed a fault in consideration of which there is reason to reduce the amount in a proportion which they have assessed at their sole discretion.

Cass. 1re civ, 9 November 1999, LawLex202300013609JBJ, holding that the agency agreement issued to a real estate agent, in application of the Hoguet Act of 2 January 1970 and its implementing decree, must include the conditions for determining the remuneration due to the agent.

Cass. 1re civ. 16 June 1998, LawLex202200008812JBJ, ruling that when the agent is a painting expert, for which he is normally remunerated by his clients, it is up to the principal to demonstrate that that agent has waived his fees.

Cass. 1re civ, 27 June 2006, LawLex202200008841JBJ, noting that a real estate agent who holds a sales agency agreement may not request or receive, directly or indirectly, commissions or remuneration from a person other than those mentioned as being liable for them in the agency agreement and in the parties' undertakings, so that a court of appeal cannot uphold the real estate agent's claim for payment of commission to the purchaser, even though the contract of sale contained no mention of commission and the purchaser had signed the acknowledgement of fees prior to the commitment of the parties.

Cass. 1re civ, 3 February 1993, LawLex202200008844JBJ.

Cass. 1re civ, 1 December 1987, LawLex202300013599JBJ.

Cass. 1re civ, 6 October 1993, LawLex202300013611JBJ.

Cass. 1re civ. 3 January 1996, LawLex202300013612JBJ.

Cass. 1re civ. 14 January 2016, LawLex202200008601JBJ.

Cass. com, 9 March 1976, LawLex202300013693JBJ, holding that a court of appeal has the sovereign power granted to trial courts to determine the salary due to an intermediary, so that it can legitimately take into account the circumstances of the case and the services rendered to reduce, where appropriate, the remuneration contractually provided for.

Cass. com, 21 December 1981, LawLex202300007958JBJ.

Cass. com. 23 January 1962, LawLex202300007955JBJ.

Cass. 1re civ, 2 June 1993, LawLex200500008261JBJ.

Cass. 1re civ, 11 February 1981, LawLex202300007954JBJ.

Cass. 1re civ. 2 april 1997, LawLex202300013696JBJ. Contra : Cass. 1re civ. 3 March 1998, LawLex202300013697JBJ, holding that Article 10 of the Law of 31 December 1971, according to which fees for representation, consultation, assistance, advice, drafting of private legal documents and pleadings are fixed in agreement with the client, does not prevent the court from reducing the fees initially agreed between the lawyer and his client when the latter are considered exorbitant in relation to the service rendered.

Cass. 1re civ., 19 January 1970, LawLex202300007961JBJ, specifying that, when a principal who had given his agent an exclusive mandate to sell his property with the promise of a 5% commission on the sale price obtained, refused to follow up after the agent had presented him with a buyer and sold his property to a third party, while acknowledging, in a subsequent deed, that he owed him a certain sum by way of flat-rate commission, sum could not be reduced by the court .

Cass. com. 18 November 1975, nLawLex202300013694JBJ.

Cass. 1re civ., 17 June 1969,LawLex202300013907JBJ, noting that the chartered accountant to whom the garage owner has entrusted the keeping of his accounts has a right of retention on the objects or documents legitimately held, until full payment of his fee claim.

Preliminary draft reform of contract law, Art. 2010.

Preliminary draft reform of contract law, Art. 2011.

Cass. 1re civ. 19 December 1989, LawLex202200008600JBJ.

Cass. com, 29 June 1981, LawLex202300007956JBJ, noting that a court of appeal may not consider that a real estate agent cannot be remunerated on the basis of his agency agreement to sell a business on the grounds that the order published in the Bulletin officiel du Service des Prix to which reference was made to determine the amount of his commission did not concern transactions involving such property, however, there is nothing to prevent the parties from referring to the scale of their choice, provided that it enables the exact amount of commission freely granted by the seller to be determined. 

Cass. 1re civ, 19 December 1989, LawLex202200008600JBJ.

Cass. 3e civ, 20 February 1973, LawLex202300007960JBJ.

Cass. com, 4 October 1971, LawLex202200008530JBJ.

Cass. 1re civ, 16 June 1998, LawLex202200008812JBJ, for the setting of fees for an expert in paintings in remuneration of the mission entrusted to him by a judicial commissioner.

Business Contracts

492. Payment of agent

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

492. Payment of agent

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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