Contract formation explained by a lawyer in France: protect your business from disputes in several simple steps
Discover everything about contract formation in French law: essential conditions, steps, concrete examples for SME managers. Secure your commercial agreements with this comprehensive guide by a lawyer in Paris.
What is the formation of the contract?
La Formation of the contract refers to the set of steps through which an agreement of will between two or more parties becomes a legally binding commitment. In French law, it is based on the principle of consensualism : the simple exchange of an offer and an acceptance is enough to create the contract, without any particular formality for most cases. For you, SME managers, mastering this phase is crucial because it determines the validity of your commercial contracts, thus avoiding costly disputes with suppliers or customers.
Imagine that your company signs a supply contract with a new partner: if the training fails, the agreement could be cancelled, exposing your business to financial losses. Article 1101 of the Civil Code defines a contract as an agreement intended to create, modify, or terminate obligations, emphasizing its pivotal role in business life. This concept, refined by the 2016 ordinance, balances freedom of contract and legal security.
What are the four conditions for forming a contract?
Although article 1128 of the Civil Code states three cumulative conditions for the validity of a contract — consent, capacity and lawful and certain content —, doctrine and practice often distinguish four necessary items by integrating the shape as a substantial condition in some cases. These pillars ensure that your commercial contract is solid and enforceable. For an SME, neglecting one of them can transform a promising partnership into litigation before the commercial court.
Consent: the heart of contract formation
The consent must be free and enlightened, free of defects such as error, fraud or violence. Without him, there is no valid contract. For example, if a supplier deceives you about the quality of a product by hiding a known defect, you can invoke the Dol to cancel the agreement, as recalled by the Court of Cassation in several judgments on fraudulent practices.
Educational framework: Concrete example for SMEs
Your SME buys a machine from a seller who exaggerates its performance in order to conclude quickly. If this Error on substantial qualities is proven, the contract is void (art. 1132 Civil Code). Jurisprudence requires that the defect be decisive : without him, you would not have signed.
Capacity to contract: who can commit?
Each part must have the legal capacity. Minors, protected adults or legal persons outside the corporate purpose are deprived of it. For SME managers, always check the capacity of your counterparty: a company in formation signing a lease risks absolute nullity, as in a judgment of the Court of Cassation on January 19, 2022 (No. 20-13.719).
In practice, an SME concluding with an incapable auto-entrepreneur exposes the agreement to challenge. Legal persons act through their legal representatives, under penalty ofUltra vires.
Legal and certain content: object and cause at heart
The contents must be Lawful (in accordance with public order) and certain (determined or determinable). The object (promised benefit) must be possible and precise (art. 1163 Civil Code). For example, a sales contract without a fixed price is void. La cause (reason to engage) must be lawful: a corrupt pact is void.
Case law example : A clause imposing illegal remuneration (tax evasion) makes the entire contract void, thus protecting SMEs from commercial pitfalls.
Form: when does the written word come in?
Although consensual, some contracts requirewritten (donation, bond). For SME commercial contracts, article L. 110-3 of the Commercial Code favors use, but writing secures the evidence.
What are the 4 mandatory elements for a contract to be valid?
Les 4 mandatory elements intersect with the above conditions: consent, capacity, content, and form. Their meeting forms a contract. valid and enforceable. For your SMEs, a valid contract protects against refusal of execution: imagine a customer contesting a purchase order for a defect in form.
Jurisprudence insists on their rollup : miss one, and the deal falls apart. Doctrine of professors such as those at the University of French Law underlines that post-reform 2016, the Certain content replace the old object/cause duality for greater clarity.
The key stages of contract formation
The training follows a process: negotiations, offering, acceptance. The talks impose the Good faith (art. 1112 Civil Code): abusive breach exposes to damage.
Negotiations and preliminary contracts
Les talks prepare the agreement without engaging it. One framework contract sets the foundations for SMEs (e.g. recurring procurement). Example: synallagmatic promise to sell commercial premises, suspension of financing.
Example of a standard clause (based on current practice) :
“The promisor undertakes to conclude the sale at the price of €X, subject to the suspensive condition of obtaining a bank loan in 60 days.”
The offer: precise and firm
THEoffering (solicitation) sets out the essential terms. Revocable before acceptance, except for delay. For SMEs, a quote is often offered: “Delivery 100 units at €500/piece within 30 days.”
Jurisprudence: Cass. civ. 28 February 2006 valid tacit acceptance by execution.
Acceptance: pure and simple membership
THEacceptance must match the offer (art. 1118). Silence is refusal, except uses. Concrete example: a customer paying a quotation without reservations forms the contract.
Box: SME case
Your supplier sends an electronic offer; your acknowledgement of receipt + payment = contract formed at the time of issue.
Formation of an employment contract: specificities for SMEs
La Employment contract training Requires subordination, remuneration and work (art. L. 1221-1 Labour Code). Recommended writing for CDI/CDD >1 month.
What are the conditions for forming an employment contract?
Elementary : offer (promise to hire), acceptance (signed return). Free consent, capacity (majority). Contents: function, salary, duration. Example: SMEs hiring sales representatives — specific objective clause and limited non-competition clause.
What are the 4 types of employment contracts?
Others: part-time, intermittent.
Example of deal-training clause (SME HR practice): “The employee undertakes to stay 2 years post-training costing €5,000; otherwise reimbursement pro rata temporis.”
Formation and termination of the employment contract
La Formation: breach of an employment contract link hiring and ending: trial period (free break), then dismissal (fault/eco), resignation, contractual breakup.
For SMEs, anticipate: balance interests clause. Jurisprudence requires procedure (prior interview).
example : Termination of test without notice if <8 days, but justified if abuse.
FAQ: Answers to essential questions about contract formation
What is the formation of the contract?
It is the meeting of wills via offer/acceptance creating obligations (art. 1101 Civil Code).
What are the four conditions for forming a contract?
Consent, capacity, legal/certain content, form if required.
What are the 4 elements necessary for the formation of a contract?
Identical: cumulative validity basis.
What are the 4 mandatory elements for a contract to be valid?
Same base, guaranteeing opposability.
What are the conditions for forming an employment contract?
Subordination + remuneration + write often.
Employment contract training?
Same process, social specs.
What are the 4 types of employment contracts?
CDI, CDD, interim, work-study.
Training: breach of an employment contract?
Start with hiring, secure endings.
The subject of contracts is highly regulated by the Civil Code and evolving case law. The personalized advice of a lawyer is essential in order to anticipate risks specific to your SME and to draft tailor-made clauses.
Article written by Guillaume Leclerc, lawyer in commercial contracts and commercial litigation in Paris.
