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Subcontracting in the French Construction industry

A preliminary distinction should be observed between the French legal concept of sous-traitance or subcontracting and that of cotraitance being co-contracting.

The subcontractor has no contractual relationship with the Matre dOuvrage (generally the owner of the building) and the chain of contractual relationships is vertical.

In other words, the building owner enters into a contractual relationship with the principal contractor which in turn has a separate contractual relationship with the subcontractor.

The cotraitant instead has a direct contractual relationship with the building owner and there may well be a considerable number of co-contractors each responsible for a different but complementary function or area of work on a particular site.

This note will concentrate solely on the subcontracting relationship.

1. Statutory protection of the subcontractor

The French legislator has over time sought to increase the amount of protection offered to subcontractors and the current legislative framework in this respect is provided by the Law of 31 December 1975.

This statute offers a number of guarantees to subcontractors on the hand relating to contractual agreements with private companies and individuals and on the other hand to contracts entered into with French state entities.

  • Contractual agreements with private companies and individuals
  • It is now a statutory requirement that the principal contractor should put in place a bank or similar guarantee in favour of the subcontractor or instead permit a delegation of payment whereby a direct recourse to the building is provided for.

    In the event that the main contractor were to fail to settle the amounts due to the subcontractor, notwithstanding a bank guarantee or a delegation of payment, then the subcontractor has a subsidiary statutory right to undertake direct Court proceedings against the Matre dOuvrage or building owner.

  • Contractual agreements with French state entities
  • In the event that the subcontractor, for whatever reason, fails to receive payment from the principal contractor, then the subcontractor has a statutory right to seek payment directly from the French state entity concerned.

2. Prior conditions required to obtain this protection

There are two principal conditions which are required by French law to be met by subcontractors in order to benefit from this statutory protection.

The first is that each individual subcontractor must have been accepted and approved in writing by the Matre dOuvrage i.e. usually the owner of the structure or building.

The second is that the building or structure owner must overtly and in writing approve the payment conditions which are set out in the subcontract agreement between the principal contractor and the subcontractor.

For specific queries relating to any subcontracting issue in a French building construction context, litigation or otherwise, please click here .