As a construction lawyer in Paris, Maître Léa Scemama advises project owners, contractors and subcontractors in the negotiation, performance and litigation of their works contracts. A project depends first on the quality of the contract that frames it. Price, deadlines, retention money, subcontracting: each clause can become decisive the day the project runs into trouble.
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How we work, depending on your position
| You are | What we do | What you receive |
|---|---|---|
| The project owner | Drafting or reviewing the contract, locking down how extra works are treated, formal notice in the event of delay or abandonment, termination for the contractor's default | An enforceable contract, and an exit from the site that is organised rather than endured |
| The main contractor | Recovering unpaid interim applications, requesting the payment guarantee, defending against penalties and claims for extra works | A secured debt and, where appropriate, a lawful suspension of the works |
| A subcontractor | Checking the guarantee or the payment delegation, formal notice to the main contractor, direct action against the project owner | Recovery pursued on the strongest basis available |
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The nature of the works contract
The works contract is a contract for services, also known as hire of work, governed by articles 1710 and 1787 and following of the Civil Code. A distinction is drawn between private contracts, often built on the AFNOR NF P03-001 standard, and public contracts, subject to their own rules. In both cases the documentary basis matters: accepted quote, contract conditions, contractual schedule. A clear contract at the outset avoids most disputes.
Price and the fate of extra works
A lump-sum contract sets a global price for a defined work; a measured contract is paid by the quantity carried out. The most explosive issue remains extra works. In a lump-sum contract concluded with plans, article 1793 of the Civil Code is very strict: unplanned works are only due if they were authorised in writing and at an agreed price. It is by far the leading source of litigation.
The payment guarantee of article 1799-1
This is the most effective and the least used tool available to an unpaid contractor. A project owner entering into a private works contract must guarantee payment of the sums due once they exceed the threshold set by decree, that is 12,000 euros excluding tax. These provisions are a matter of public policy.
Failing any specific stipulation, payment is guaranteed by a joint and several surety given by a credit institution, a financing company, an insurance undertaking or a collective guarantee body.
For as long as no guarantee has been provided and the contractor remains unpaid for works carried out, it may suspend performance of the contract after a formal notice that has had no effect at the end of a fifteen-day period.
In other words, the contractor has a lawful means of pressure that does not expose it to a charge of abandoning the site, provided the formalities are followed to the letter.
Retention money and acceptance
At acceptance, the project owner may withhold five per cent of the sums due, under the Act of 16 July 1971. This retention money is placed in escrow, then released at the end of the completion-guarantee period, unless reservations remain. The contractor may replace it with a bank guarantee to be paid immediately. Acceptance crystallises everyone's rights and must be carefully formalised, reservations included.
The 5 % retention
The Act of 16 July 1971 allows the project owner to retain 5 % of the sums due, to secure the making good of the defects recorded at handover. Its regime has three requirements that practice regularly overlooks.
| Requirement | Effect |
|---|---|
| Stipulation in the contract | The retention must be provided for by the contract, it is not presumed |
| Escrow | The sums retained are held by an escrow agent accepted by both parties or appointed by the court, they do not stay in the project owner's account |
| Objection within the year | To keep the sums, the project owner must serve a reasoned objection on the escrow agent within one year of handover |
The practical consequence is severe: a project owner who has retained without placing the money in escrow risks having to hand it back, even where reservations remain unlifted. The contractor, for its part, may always substitute a bank guarantee for the retention and be paid immediately.
Subcontracting, a risky area
The Act of 31 December 1975 strictly governs subcontracting. The subcontractor must be accepted and its payment terms approved by the project owner. In a private contract it benefits from payment guarantees, a bond or a delegation, and a direct action against the project owner where the main contractor fails to pay. Neglecting this formalism exposes every party.
Subcontracting, the most formal ground of all
The Act of 31 December 1975 sets up three distinct protections, which must not be confused.
| Mechanism | What it requires | Sanction or effect |
|---|---|---|
| Acceptance of the subcontractor and approval of its payment terms, article 3 | The main contractor must obtain both from the project owner | Failing that, the main contractor cannot rely on the subcontract against the subcontractor |
| Personal and joint surety or payment delegation, article 14 | Compulsory in private contracts, provided by the main contractor | Absence of the guarantee makes the subcontract void, and only the subcontractor may invoke it |
| Direct action, article 12 | Formal notice to the main contractor left without effect for one month, with a copy to the project owner | The subcontractor is paid directly by the project owner, up to what the latter still owes |
A project owner who knows that a subcontractor is on site is not passive: it must give the main contractor formal notice to have the subcontractor accepted and its payment terms approved. Neglecting that obligation exposes it to paying twice.
The most common disputes
Unpaid invoices, abandonment, delays and penalties, defects, termination. For unpaid invoices, the action often combines with debt recovery tools; for defects, with the construction guarantees. Preserving evidence and acting quickly make the difference.
Frequently asked questions
Must I pay for extra works I did not order?
In a lump-sum contract, extra works are only due if authorised in writing and at an agreed price. A verbal or implied order is weak.
What is retention money?
A five per cent retention, held in escrow at acceptance, to cover the making good of any defects. It is released one year later, unless reservations remain.
Can my subcontractor claim payment directly from me?
Yes, under conditions. The 1975 Act gives it a direct action against the project owner where the main contractor has not paid it.
Works contracts are one of five regimes covered by our construction law services.
In the same area of law
- Decennial guarantee: the ten-year liability of the contractors on the site.
- Individual house building contract: the protective regime where a private individual has a house built.
- Property litigation: court-ordered expert reports and the time limits to act on a site.
Written by Maître Léa Scemama, avocate at the Paris Bar, Miraï Avocats. This page states the law applicable at its update date. It is general in nature and does not constitute advice tailored to a particular situation.