The principle of privity, and its exceptions
In principle a contract has effect only between those who concluded it. The client therefore has no contractual relationship with subcontractors.
Two major exceptions cross that barrier, and they bind the client without their having accepted them.
The subcontractor's direct action
The most powerful mechanism, and the least known to clients. It concerns the subcontractor's direct action.
An unpaid subcontractor may act directly against the client, without going through the main contractor with whom they contracted.
The limit is precise: the action reaches only what the client owes the contractor at the time the action is brought.
Three consequences.
What has already been paid escapes the action. A client up to date with payments is out of reach, which makes the payment schedule a protection.
The mechanism repeats at each level. The subcontractor is treated as a contractor, and the contractor as a client, towards the first's own subcontractors. The chain therefore passes down link by link.
The majority case law takes a broad view of the base, covering all sums owed to the contractor at the time of the action, and not only claims relating to the site concerned.
The recent evolution of the mechanism
A development that strengthens the coherence of the scheme. It concerns the statutory basis of the direct action.
The subcontractor's direct action traditionally rested on an older Civil Code provision on contracts for works. The recodification under way changes that numbering.
Since the book on obligations entered into force in January 2023, direct action has been integrated into the general law, an article establishing a general basis allowing statute to grant a creditor the right to claim performance from their debtor's debtor, up to what is owed to them.
That reform does not call the construction-specific regime into question, it makes it more legible.
| Mechanism | Who exercises it | Effect for the client |
|---|---|---|
| Direct action | The unpaid subcontractor | Payment into their hands, up to the sum owed |
| Joint and several liability | The social security or tax authority | Duty to withhold on payments |
| Privity of contract | General law principle | No direct link outside the exceptions |
How to respond to a direct action
Three precautions for the client.
Do not pay without the main contractor's agreement. Otherwise the contractor could complain of payment of a disputed claim and treat that payment as unenforceable against them.
Use consignment in case of disagreement. The client may lodge the sums owed with the competent public body or in a blocked account in the names of contractor and subcontractor. They are required to do so if the main contractor or the subcontractor so requests in writing.
Know the effect of insolvency proceedings. After the contractor's bankruptcy, direct action can no longer be brought, the claim no longer being available in their estate. It is not, however, impeded by the opening of judicial reorganisation.
Joint liability for social and tax debts
A second mechanism, of a different nature, whose financial stakes may be considerable. It concerns joint and several liability.
Anyone engaging a contractor with social or tax debts may be jointly liable for those debts, at the time the agreement is concluded or the invoice paid.
Three points to retain.
The withholding obligation is the remedy. Whoever complies with their withholding obligation on invoices escapes the joint liability mechanism.
Liability operates in cascade. It may fall successively on contractors involved at an earlier stage of the chain, where whoever engaged the subcontractor does not pay.
Checking is possible. Public databases show whether a counterparty is recorded as a debtor.
The two habits that protect
They are simple and suffice in most situations. These reflexes are adopted before the first payment.
Check before contracting and before paying, a counterparty's position being liable to change between the two.
Document payments and their allocation, the base of a direct action depending on what remains owed when it is brought.
What this means for a professional
Four rules.
Tell the client about these mechanisms, which they usually do not know.
Never pay a subcontractor without the main contractor's written agreement, or use consignment.
Make withholdings where due, the remedy being simpler than the defence.
Keep a current statement of sums outstanding, that statement determining the real exposure.
This article reflects rules and case law at the date of checking and serves professional orientation. It does not constitute legal advice and does not replace assessment of the individual case.