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Source : Cour de cassation – Base Open Data « Judilibre » & « Légifrance ».

Barreau de Paris Immobilier, sociétés, affaires Fiche CNB avocat.fr
Maître Reda KOHEN, avocat au Barreau de Paris
Maître Reda KOHEN
Avocat au Barreau de Paris

You Live Abroad and Your French Company Signs Contracts: Governing Law, Mandatory French Rules, Late Penalties and Enforcement From Abroad

You run your French company from London, New York, Dubai or Singapore. Your customers, suppliers and distributors are in France, and every deal lands on your desk as a contract to sign: a sales agreement, general terms sent by a supplier, a distribution deal, a services proposal. The question foreign founders always ask is the same: can I just sign the English version, choose my home courts, and deal with problems later? French law answers no. Even when you sign from abroad, contracts performed in France must respect French mandatory rules on general terms, payment deadlines, late penalties and jurisdiction clauses, and the court that will hear your dispute is decided by the two clauses most founders skim over: governing law and jurisdiction. This guide explains, in practical terms, what French law imposes on your commercial contracts, how to choose the court and the applicable law, how to sign remotely with a valid electronic signature, and how to get paid and enforce your rights without flying to France.

Before examining each rule, keep one principle in mind: French commercial courts judge your contract as a whole, and the file you present matters as much as the clause you invoke. A complete set of signed terms, dated invoices mentioning the payment deadline, proof that your general conditions were communicated before the order, and a formal notice sent promptly after the due date will carry your case whether you apply for a fast payment order or defend a claim. Most cross-border files that fail do not fail on the law; they fail because the foreign manager relied on oral understandings, unsigned drafts or message threads that a French judge cannot easily use. Build the paper trail at signing, and enforcement later becomes an administrative routine instead of a reconstruction exercise.

I. Your French Company Signs a Contract: What French Law Requires on Terms, Payment and Penalties

French contract law starts from a simple definition. Under the Civil Code, a contract is an agreement of wills between two or more persons intended to create, modify, transfer or extinguish obligations, and contracts legally formed take the place of law for those who made them. That binding force is real, but it is framed by mandatory provisions you cannot contract around, especially in business-to-business relations. Two consequences follow for a founder abroad: first, your general terms of sale matter more in France than in many common-law systems; second, payment deadlines and late penalties follow statutory rules that apply automatically when your contract is silent. If you are still choosing the vehicle that will sign these contracts, our overview of how to choose between an SAS, an SARL, a branch or a subsidiary in France explains which structure gives you the simplest signing authority from abroad.

A. Do You Need Written Terms and General Conditions (CGV) to Sell in France From Abroad?

In France, the CGV, or conditions generales de vente, are the general terms and conditions of sale that a seller applies to its professional customers: price lists, discounts, delivery terms, payment conditions, retention-of-title clauses and complaint periods. They are the equivalent of what an English-language business calls its standard terms and conditions or GTC. French commercial law gives them a central role: once general terms of sale are established, they constitute the single foundation of the commercial negotiation. In practice, this means your CGV are not background paperwork. They are the baseline from which every negotiation with a French distributor or customer starts, and any individually agreed term that departs from them must be documented as a special condition.

Three practical duties follow. First, any professional who establishes CGV must communicate them to any buyer who requests them for a professional activity, on a durable medium, and a failure to do so exposes the seller to an administrative fine of up to 75,000 euros for a company. Second, your invoices must state the agreed payment deadline and the late-penalty rate, because those penalties run automatically from the day after the due date. Third, when you contract with French professionals, keep in mind that the contract can only be changed later by mutual agreement: contracts may only be modified or revoked by the mutual consent of the parties, or on grounds authorised by law. A supplier who announces new prices by email without your acceptance does not amend the contract.

For a founder signing from abroad, four reflexes save most disputes. Put your company details on every contract: corporate name, legal form (SAS, the simplified joint-stock company, or SARL, the limited liability company), share capital, SIREN identification number and RCS registration, meaning registration with the Registre du commerce et des societes kept by the greffe, the registry office of the commercial court that issues your Kbis, the official certificate proving your company exists. State expressly which language version prevails when the contract exists in French and English, because the French judge works from the French text and interpretaion disputes over two equally authentic versions are expensive. Communicate your CGV before the order, not with the delivery note, and keep proof of that communication. Finally, never let a jurisdiction or penalty clause hide in small print at the back of the document: as explained below, a French court can strike a clause that the other party could not clearly see.

One warning about imbalance. French law punishes the abuse of superior bargaining power in commercial negotiation. The Commercial Code provides that a business is liable where it subjects its partner to obligations creating a significant imbalance in the rights and obligations of the parties: to subject or attempt to subject the other party to obligations creating a significant imbalance in the rights and obligations of the parties engages the liability of the author and obliges it to repair the harm caused. A foreign head office that imposes one-sided price-revision, automatic renewal or unlimited liability clauses on a small French distributor should therefore have each clause genuinely negotiated and documented, because a French court can rewrite the economics of the deal afterwards.

A further reflex concerns contract amendments during performance. Price-indexation, volume rebates and delivery rescheduling are often renegotiated by email in international groups, and managers assume the latest message governs. Under French law it does not, unless both sides clearly accepted the change, because only mutual consent amends the deal. Confirm every material change in a dated addendum, an avenant, signed with the same formalities as the original contract, and attach it to the same file. Your counsel, your accountant and, if needed, the court will then read one coherent story instead of piecing together months of correspondence.

B. How Do Late-Payment Penalties and Agreed Damages Work Under French Law?

Late payment is the most common cross-border dispute for foreign-run French companies, and French law is unusually protective of the creditor. If your contract says nothing, the statutory deadline is thirty days from receipt of the goods or performance of the service. Where the parties agree a deadline, the time agreed between the parties to pay the sums due may not exceed sixty days from the date of issue of the invoice, with a possible forty-five days end-of-month formula if it is expressly stipulated and not manifestly abusive toward the creditor. Any clause granting ninety or one-hundred-and-twenty days, common in some foreign groups, is unenforceable in France and exposes the debtor company to an administrative fine in addition to the penalties owed to you.

The penalties themselves run without any reminder. The statute states that late penalties are due without any reminder being necessary, from the day after the payment date shown on the invoice, at a rate that defaults to the European Central Bank refinancing rate plus ten percentage points unless your contract sets a different rate that may not fall below three times the legal interest rate. On top of these penalties, every professional in late payment automatically owes a flat recovery fee: the amount of the flat-rate compensation for recovery costs provided for in article L. 441-10 is set at 40 euros, and you may claim higher documented recovery costs on top of that flat sum. For a founder abroad, the lesson is operational: invoice with the deadline and the penalty rate printed on it, diary the due date, and send the formal notice, the mise en demeure, as soon as it passes, because interest accrues from then at the latest and your file for court starts on day one.

Alongside statutory penalties, French contracts routinely include a clause penale, a penalty clause fixing in advance the sum the defaulting party will pay. The Civil Code gives it full effect but lets the judge adjust it: where the contract stipulates that a party who fails to perform will pay a certain sum as damages, no greater or lesser sum may be awarded to the other party; nevertheless, the judge may, even of his own motion, moderate or increase the agreed penalty if it is manifestly excessive or derisory. Two details matter in practice. Where performance was partial, the judge may reduce the penalty in proportion to the benefit the partial performance brought you. And except in cases of definitive non-performance, the penalty is only incurred once the debtor has been given formal notice. Draft your penalty clauses as genuine pre-estimates, serve a mise en demeure before invoking them, and keep delivery and acceptance records proving the extent of non-performance.

Underneath both mechanisms sits the general law of contractual liability: the debtor is ordered, where appropriate, to pay damages either for non-performance of the obligation or for delay in performance, unless he shows that performance was prevented by force majeure. Force majeure in France means an event beyond control, unforeseeable and irresistible, and French courts interpret it narrowly: a price increase, a late sub-supplier or a cash shortage is not force majeure. If you want pandemic, energy or logistics risks allocated differently, write a tailored hardship clause rather than relying on the statutory defence.

II. Which Court, Which Law: Choosing Jurisdiction and Enforcing Your Contract From Abroad

The two most valuable lines of an international contract are the governing-law clause and the jurisdiction clause, and they answer two different questions. Governing law says which substantive rules decide the dispute; jurisdiction says which court, or which arbitral tribunal, hears it. The two can point to different countries: the Paris Commercial Court can apply Swiss or English law if your clause says so, and a French-law contract can be litigated in London if that is where you gave jurisdiction. For a founder whose assets, customers and evidence sit in France while you live abroad, these clauses decide the language, duration, cost and enforceability of any future case, so negotiate them with the same attention as price.

A. Can You Choose a Foreign Court or a Foreign Law for a French Contract?

Within purely domestic French deals between merchants, jurisdiction clauses are valid only under strict conditions. The Code of Civil Procedure states that any clause that directly or indirectly departs from the territorial jurisdiction rules is deemed unwritten unless it was agreed between persons who all contracted as merchants and was specified in a very apparent manner in the undertaking of the party against whom it is invoked. The Cour de cassation, France highest court for civil and commercial matters, enforces the prominence requirement concretely: in a 20 April 2017 decision on a jurisdiction clause printed in general terms of sale, it quashed the lower judgment because the court had found the clause merely readable and explicit without investigating, as it had been asked to do, whether that clause satisfied the requirements of article 48 of the Code of Civil Procedure with regard to the material conditions of its presentation, considering the typography of the text in which it appeared, and thereby failed to give a legal basis to its decision (Court of Cassation, Commercial Chamber, 20 April 2017, appeal no. 15-20.908). Print your jurisdiction clause in bold, in a separate paragraph, with the competent court named in full, and have the other party initial it.

Where your contract is international, European regulations take over. A jurisdiction clause designating the courts of an EU Member State is governed by the Brussels I bis Regulation, and the Cour de cassation recalls its mechanism in these terms: under this text, if the parties, regardless of their domicile, have agreed that a court or courts of a Member State are to have jurisdiction to settle disputes arising in connection with a particular legal relationship, those courts have jurisdiction, unless the validity of the jurisdiction agreement is null and void as to its substance under the law of that Member State (Court of Cassation, First Civil Chamber, 17 September 2025, appeal no. 23-16.150). That jurisdiction is exclusive unless you agree otherwise, so a clause giving jurisdiction to the Paris courts normally blocks proceedings started by your opponent in another Member State. Without any clause, the default is the domicile of the defendant, or in contract matters the place of delivery of goods or provision of services. Full texts are freely available on the EU official journal site for the Brussels I bis Regulation on jurisdiction and enforcement and the Rome I Regulation on the applicable law, which upholds your choice of governing law and, failing a choice, designates it through fixed connecting factors such as the habitual residence of the characteristic performer.

Three drafting consequences follow for your French company. First, always pair the two clauses: state the governing law and the competent court in two express sentences, and check they point where you actually want to litigate, because a French-law contract litigated abroad still needs foreign counsel and a foreign judgment enforced in France. Second, consider arbitration for high-value cross-border deals: an arbitral award circulates under the 1958 New York Convention in more than one hundred and seventy states, while a non-EU court judgment needs exequatur, a recognition procedure before the French courts, before seizure in France. Third, remember Paris practicalities: commercial disputes in the capital go to the Paris Commercial Court, proceedings are in French, and documentary evidence in English must be translated, so budget translation costs and a bilingual counsel from the start rather than discovering them mid-case.

B. How Do You Sign Remotely and Enforce the Contract Without Flying to France?

You can sign virtually every commercial contract without travelling. French law recognises the electronic signature on the same footing as ink where the process is reliable: the signature needed to perfect a legal act identifies its author and manifests his consent to the obligations arising from the act; where it is electronic, it consists in the use of a reliable identification process guaranteeing its link with the act to which it is attached. Reliability is presumed where the signature is created, the identity of the signatory assured and the integrity of the document guaranteed under conditions set by decree, which in practice means using a qualified provider under the EU eIDAS Regulation on electronic identification rather than a simple scanned image pasted into a PDF. For board-level acts of your SAS or SARL, check your articles of association: many allow written consultation or videoconference decisions, so the president or gerant, the legal manager, can sign from abroad once the internal decision is properly recorded.

Time limits then decide everything. Commercial obligations in France are subject to a five-year limitation period: obligations arising in the course of their trade between merchants, or between merchants and non-merchants, are subject to a five-year prescription unless subject to shorter special prescription periods. Five years runs fast when you manage from another continent, so calendar every disputed invoice from its due date, and interrupt prescription in time with a writ, an acknowledgement of debt or a court application rather than with reminder emails that do not stop the clock. Keep delivery notes, acceptance reports, timesheets and the complete email chain showing the mise en demeure, because French commercial courts decide on documents first and witness testimony carries little weight compared with common-law trials.

When the debtor does not pay, France offers a fast lane you can use from abroad through local counsel. For an undisputed invoice, the injonction de payer, an order-to-pay procedure before the commercial court, produces an enforceable order within weeks on documentary evidence alone, without a hearing, and the debtor who wants to fight must file an opposition that moves the case to a full trial. For contested or complex claims, your counsel files on the merits before the court designated by your jurisdiction clause, obtains judgment, and enforces through a commissaire de justice, the enforcement officer formerly called huissier, who can seize bank accounts and assets in France. If you already hold a judgment from another EU Member State, it circulates under Brussels I bis without exequatur; a judgment from outside the Union must first be recognised by the French courts before enforcement. In every scenario, the file you built at signing, clear CGV, printed payment terms, bold jurisdiction clause, reliable e-signature and dated formal notices, is what turns a cross-border dispute from a travel-heavy ordeal into a documentary procedure your counsel can run while you stay abroad.

Finally, organise representation before trouble starts. A standing mandate with a French business counsel, a certified translation contact for English exhibits, and up-to-date company documents, recent Kbis dated within three months, articles of association and the board decision appointing the signatory, mean your claim can be filed within days of a default instead of weeks. If your home country requires an apostille or legalisation for powers of attorney used abroad, prepare those formalities while relations are still calm. Speed matters twice: it preserves the five-year limitation period, and it signals to the debtor that non-payment leads to enforcement, which is often what brings a settlement without any hearing at all.

Conclusion

A contract signed by your French company from abroad is fully effective, provided it respects the French rules that no choice of law can exclude: communicated general terms as the foundation of negotiation, sixty-day maximum payment terms, automatic late penalties plus the forty-euro recovery fee, adjustable but powerful penalty clauses, and jurisdiction clauses printed so prominently that no court can miss them. Pair those domestic reflexes with an express governing-law clause, a designated court or arbitral tribunal, and a qualified electronic signature, and calendar the five-year limitation from each due date. Drafted this way, your contracts protect your cash flow on paper and, when a dispute comes, let your counsel enforce them in France while you run the business from wherever you live.

Source : Cour de cassation – Base Open Data « Judilibre » & « Légifrance ».

What our clients say

4,9274 Google reviews
kader ladjouzi
3 weeks ago

Best real estate and business lawyer in Paris. A compassionate and attentive lawyer, with a wonderful team. Thank you, Maître KOHEN

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Janou SAMUEL
1 month ago

Thank you to Maître KOHEN for his analyses of recent case law regarding fraudulent concealment in real estate sales. This reinforces my decision to pursue an action for rescission that I am considering after acquiring a house affected by serious defects intentionally concealed by the seller and not reported by the real estate agent; also defects (rising damp) characterized by progressive through-cracks and damp patches, not reported by the real estate agent… Worse, defects concealed by the latter or on his initiative under a coat of paint and polystyrene tiles glued to the ceiling of a bedroom. And said real estate agent was the drafter of the preliminary contract, which naturally contains no information regarding any of these defects. I would just add that, being 77 years old and suffering from cognitive impairment, I am certain the real estate agent thought I would not be able to uncover the deception and, above all, characterize fraudulent intent, let alone initiate legal proceedings given the complexity and length of the process... That is why I am opting for criminal proceedings, insofar as the intentional concealment of defects by the seller and then by the real estate agent

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Paul MALIK (powlo)
4 months ago

Maître Reda KOHEN assisted me in a dispute concerning a sale agreement with a defaulting party. He provided professional and responsive support, and I highly recommend him.

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Reply from the firm

Legal advice is only valuable if it arrives on time — delighted to have been there when needed. Thank you for your kind words.

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5 months ago

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Reply from the firm

The return of the security deposit is a more common rental dispute than one might think; glad that the situation was resolved quickly. Thank you for this feedback.

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5 months ago

Excellent support from Maître Kohen in a case combining business law and real estate law. Clear legal analysis from the first meeting, right through to the hearing. Professional and accessible lawyer, I highly recommend his firm in Paris 17.

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Reply from the firm

Cases at the intersection of business law and real estate law require a comprehensive overview — that's the core of the firm's practice, from the initial meeting to the hearing. Thank you for this precise recommendation.

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5 months ago

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Reply from the firm

Collecting unpaid rent requires a procedure handled from start to finish, without downtime — glad to have seen yours through to completion. Thank you for this testimonial.

Cha
5 months ago

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Reply from the firm

An irregular termination notice does not terminate a lease: delighted that the situation was resolved in a few days. Good luck with your studies.

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6 months ago

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Reply from the firm

Thank you very much, Miss Maazaz, for this feedback. Analytical rigor and responsiveness are essential commitments of our law firm specializing in real estate law in Paris, where each case requires a tailored approach. Delighted that we were able to achieve a favorable outcome. The firm remains at your disposal. Best regards.

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7 months ago

I called upon Maître Reda Kohen, a real estate lawyer in Paris, and I am fully satisfied with his support. Very professional, responsive and attentive. He quickly analyzed my case, clearly explained the legal strategy and effectively defended my interests. Thanks to his expertise and determination, we obtained a very favorable outcome. I highly recommend Maître Kohen to anyone looking for a real estate lawyer in Paris.

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Reply from the firm

A big thank you for this feedback. It is exactly this kind of return that gives full meaning to our commitment to real estate law in Paris. Your satisfaction is our best recommendation.

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7 months ago

Excellent real estate lawyer. Professional, responsive and attentive, he perfectly met my expectations and accompanied me with great seriousness throughout my case. I highly recommend his services.

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Reply from the firm

Thank you for this feedback. Real estate law in Paris requires constant attention, each situation is unique and deserves support that meets the mark. Your recommendation gives us great pleasure.

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2 days ago

Je tiens à remercier chaleureusement Maître Esther Cornu pour son professionnalisme, sa disponibilité et la qualité de son accompagnement. Dans le cadre d’un dossier particulièrement important pour mon avenir professionnel, elle a su faire preuve d’une grande réactivité, de rigueur et de pédagogie, en prenant le temps de répondre précisément à mes interrogations et de m’expliquer les différentes démarches juridiques. J’apprécie tout particulièrement la clarté de ses analyses, son sérieux et son implication dans le suivi de mon dossier. Un grand merci à Maître Esther Cornu pour son écoute et son accompagnement. Je recommande vivement !

Hamid Agouz
5 days ago

I was pleasantly surprised by the responsiveness of Monsieur Reda Cohen, who took the time to answer my questions regarding my case immediately. It has become so rare nowadays to find a lawyer who is so available, responsive, and attentive, even when it simply comes to answering inquiries. His answers are clear, precise, and reassuring. You can really feel that he takes the time to understand the situation and provide relevant answers. Beyond his excellent Google reviews, it is above all this availability and thoroughness that make all the difference. A huge thank you to Monsieur Reda Cohen for his professionalism and responsiveness. I highly recommend him!

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1 week ago

A huge thank you to Maître Esther Cornu from Kohen Avocats for her support during a particularly difficult time. Her attentiveness, empathy, and humanity touched me deeply. She was able to answer my questions with clarity and sensitivity, while demonstrating great professionalism and fully respecting the confidentiality of the case. Beyond her professional qualities, I met a deeply humane lawyer whose support made a real difference. I sincerely recommend her.

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Salon Sisters
1 week ago

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Djamel Haddouche
1 week ago

I am facing a dispute with my employer, and the support provided by Maître Hassan COHEN as well as Maître Esther Cornu is excellent. The answers are clear and well-thought-out, they genuinely listen, and interactions are very pleasant. Thank you again, I highly recommend.

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1 week ago

Excellent professional. I highly recommend for their dedication and expertise.

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2 weeks ago

A law firm that is attentive to its clients. Maître Kohen and his team are very, very professional and truly master their field.

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Amir
7 months ago

Excellent expertise in real estate law from Me Reda Kohen

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Reply from the firm

Thank you for this feedback. Real estate law is a field that leaves no room for approximation, and it is this high standard that guides our work. Your recognition honors us.

Krep Events Traiteur Breton
3 days ago

The article is very clear.

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