Signing Contracts with a French Company

There are a number of conditions that need to be fulfilled so that a French contract may be considered valid. These conditions are listed in the French Civil Code that governs the Contract Law in France. Essential elements for a contract are:

-    the free and informed consent of the parties;
-    their ability to enter the agreement;
-    a certain determined object for the contract;
-    a lawful cause.

Foreign investors who choose to enter in contractual agreements with French natural or legal entities should seek legal advice and representation from a French lawyer to ensure that their best interests are observed in the agreement.

General characteristics and provisions

A contract is characterized by autonomy of the will. Parties are free to enter a contractual agreement. They may determine the content of the contract and the compulsory rules.

Contracts must be executed in good faith and they may be revoked only by mutual consent or for certain causes, as stipulated by law. Agreements produce effects only between the contracting parties and they should be interpreted according to the common intention of the parties.

Types of contracts

There are a number of types of contracts, as described in the French Civil Code:

- bilateral contracts: the contracting parties mutually bind themselves towards each other;

- unilateral contracts: only one of the parties is bound to the other party;

- benevolence contracts;

- specific contracts: sales, employment etc.;

- fixed-term contracts or contracts concluded for an indefinite period.

In France, investors need to draw up contracts when purchasing a property or a company. Also, according to the employment law, there are certain types of employment contracts.

Termination

Parties that wish to terminate a contract should apply for the termination in court. However, a non-judicial termination of the agreement occurs, amongst others, when the contract has a fixed term or the other party’s non-performance is fundamental.

The contract binds the parties to observe their obligations with reasonable care. The parties are liable for the non-performance of their tasks. However, a party is excused if it can prove that the non-performance was caused by an external cause (force majeure clause). Liability applies only for damages that were foreseen or could have been foreseen at the time of the contract.

If you need legal assistance or representation for signing contracts in France, our law firm in France can duly represent you in any legal matter. Contact our French lawyers for more information.