Fundamentals of French Contract Law: A Cornerstone for International Companies Doing Business in France

Freedom of Contract and Mutual Consent

French contract law is underpinned by the principle of freedom of contract (liberté contractuelle), as enshrined in Article 1102 of the French Civil Code (Code civil). This principle allows parties to freely agree on the content and form of their contracts, within the limits of the law. Furthermore, French law adheres to the principle of mutual consent (principe du consensualisme), meaning that a contract is legally binding whether concluded orally or in writing, unless a specific form is legally mandated. While some agreements can be verbal or through an exchange of correspondence, written contracts are generally advisable for evidentiary purposes.

Types of Written Contracts

French law distinguishes between two primary forms of written contracts: private deeds (actes sous seing privé) and authentic instruments (actes authentiques).  

• Private Deed: This is a contract drawn up and signed privately by the parties involved. It is binding on the signatories and their successors if the signatories acknowledge the deed and their signatures.  

• Authentic Instrument: This is a legal document that has been drafted and executed with the required formalities by a public official with the necessary competence and capacity, most commonly a notary (notaire) in the context of agreements. Notarial deeds benefit from a presumption of authenticity, which can only be challenged through a plea of forgery (inscription de faux).  

Parties may also choose to execute an attorney's deed (acte d'avocat), which is a private deed countersigned by one or more French attorneys. This form can enhance the enforceability of a contract.

When is a Written Contract Required?

While the principle of mutual consent prevails, certain types of contracts and legal documents must be in writing to be valid. These include, but are not limited to:

• Contracts transferring partnership interests in certain types of companies (Articles L.221-14 and L.223-17, French Commercial Code (Code de commerce)).  

• The assignment of contracts (Article 1216, Civil Code).  

• Land transfers (Articles 1589-2, Civil Code and L.526-9, Commercial Code).  

• Guarantees (cautionnements).  

• The articles of association (statuts) of a company (Article 1835, Civil Code).  

Furthermore, some contracts require the form of an authentic instrument for validity, such as certain types of donations and conventional mortgages (Articles 931 and 2416, Civil Code).  

Evidentiary Requirements

Even when a written form is not required for validity, it is often necessary for proving the existence, content, or performance of an agreement in case of a dispute. Generally, contracts involving sums exceeding EUR 1,500 must be evidenced in writing. However, commercial acts between traders can be proven by any means, unless otherwise stipulated by law (Article L.110-3, Commercial Code).  

Execution of Contracts by Companies

French law generally does not prescribe a specific form for companies to execute contracts via private deed. Unlike some other jurisdictions, there is no statutory requirement for multiple directors to sign or for signatures to be witnessed. The key is that the person signing on behalf of the company has the legal capacity and authority to do so (Article 1128, Civil Code). This authority is typically derived from the company's articles of association, resolutions of the board of directors, or a power of attorney. For authentic instruments, the usual formalities involving a notary apply.  

Stamping and Seals

In France, the concept of a formal company seal or stamp, carrying the same mandatory legal weight as in some other jurisdictions, is not a requirement for the validity of commercial contracts executed as private deeds. The emphasis is primarily on the authorized signature of the company's legal representative. However, for authentic instruments such as notarial deeds, the notary is a public official whose signature and seal authenticate the document. Additionally, in practice, particularly for voluminous contracts, a secure binding system such as "ASSEMBLACT®" may be used. This system binds the pages in a way that prevents substitution or addition, and the parties typically sign only the last page, with a specific notice indicating the use of this process. This serves as a form of securing the integrity of the entire document.  

Electronic Signatures

French law recognizes electronic signatures, granting them the same evidentiary weight as handwritten signatures if a reliable identification process is used, ensuring a link with the electronic document and guaranteeing its integrity (Article 1367, Civil Code). The eIDAS Regulation (EU/910/2014) further governs the recognition of electronic signatures within the European Union. While qualified electronic signatures currently meet the standard for a presumption of reliability, advanced electronic signatures are also recognized and used for certain corporate documents (Articles R.221-3 al.3 and R.223-26, al.3, Commercial Code).  

Conclusion

Understanding the fundamentals of French contract law, including the principles of freedom of contract and mutual consent, the different types of contractual forms, the requirements for written agreements, and the rules governing execution and electronic signatures, is essential for international companies conducting business in France. While this overview provides a foundational understanding, seeking expert legal counsel is crucial to navigate the complexities of specific transactions and ensure compliance with French law.