Executing contracts in France

PRACTICE NOTE

Reproduced from Practical Law, with the permission of the publishers. For further information visit uk.practicallaw.thomsonreuters.com

byPractical Law Corporate France and Antoine Tézenas du Montcel, Paul Jourdan-Nayrac, Etienne Chesneau and Abel Colomb

at Gide Loyrette Nouel

Status: Published: 19 February 2021 | Jurisdiction: France

This document is published by Practical Law and can be found at: uk.practicallaw.tr.com/W-025-0409

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An overview of the law and practice relating to the form execution of contracts under French law.

The note includes a summary of the different forms that contracts can take and when a private

deed or a notarial deed may be necessary. It also covers virtual closings and the use of electronic

signatures.

Scope of this note

If the parties to a transaction or other arrangement

are required by law, or otherwise agree, to record

their agreement in a written contract, the applicable

execution formalities will depend on the contractual

form adopted. French law makes a distinction between

contracts executed privately between the parties (actes

sous seing privé) and authentic instruments (actes

authentiques). In the case of the latter, additional

formalities apply, including, in some cases, the

requirement for authentication by a notary (notaire).

This note provides a general overview of the law and

practice relating to the execution of contracts. Itconsiders:

• When a written contract is required (see When is a

written contract required?).

• The differences between a private deed (acte sous

seing privé) and a notarial deed (acte notarié), which

are the main forms a written contract may take (see

Types of written contract).

• When a notarial deed, and therefore a notary, is

required (see When is a notary required?).

• The formalities for documents requiring a notary

(seeFormalities for notarisation).

• The use of an attorney’s deed (acte d’avocat), which is

a private deed that is countersigned by one or more

French attorneys (see Use of an attorney’s deed for

enforceability purposes).

• How companies, including overseas companies,

validly execute contracts (see How do companies

validly execute contracts?).

• The procedures for conducting virtual closings and

for applying electronic signatures to documents

(see Virtual signings and closings and Electronic

signatures).

When is a written contract

required?

The basic position in French law is that contractual

parties have freedom of contract (article 1102, Civil Code

(Code civil)). They are free to agree the content and form

of their contract, within the limits set by law (article1102,

Civil Code). French law also provides for a mutual

consent principle, whereby a contract is legally binding

whether concluded orally or in writing, unless the

law requires a particular form (article 1172, Civil Code).

Therefore, it is possible to conclude some agreements

verbally or by an exchange of correspondence (see

Counterparts).

In some cases, the party’s intent at the time of the

contract can be determined by the courts by reference

to the parties’ subsequent behaviour (French Supreme

Court (Cour de Cassation), Civil Chamber 1, 13 December

1988, 86-19.068, published in the Bulletin). However,

this will not apply if the terms of the contract are clear

and precise (article 1192, Civil Code).

In certain cases, the Civil Code requires a contract,

and other legal documents, to be in writing to make

them valid (see Contracts required to be in writing to

be valid). Some contracts also require a speciﬁc type

of written document, an authentic instrument (acte

authentique), as a condition of validity (see Authentic

instrument).

In addition, written form may be necessary to prove

the existence and contents of a contract, or questions

arising as to its performance, in court. See Contracts

that must be proved in writing.

Even if written form is not legally required, it is generally

advisable to put a contract in writing for evidentiary

reasons.

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Executing contracts in France

Contracts required to be in writing to

bevalid

Contracts that must be in writing to be valid include:

• Contracts transferring partnership interests (actes de

cession des parts sociales) in a private limited company

(société à responsabilité limitée) or in a general

partnership (société en nom collectif) (articles L.221-14

and L.223-17, Commercial Code (Code de commerce),

respectively).

• The assignment of contracts (article 1216, Civil Code).

• The assignment of receivables (article 1322, Civil Code).

• Retention of title clauses (article L.624-16, Commercial

Code).

• Fixed-term employment contracts (article L.1251-42,

Labour Code (Code du travail)).

• Land transfers (articles 1589-2, Civil Code and L.526-9,

Commercial Code).

• Guarantees (cautionnements). An individual who

enters into a private agreement as a guarantor with

a professional creditor has to include a speciﬁc

handwritten statement (mention) as a requirement for

the validity of the guarantee (article L.331-1, Consumer

Code (Code de la consommation)).

• The articles of association (statuts) of a company

(article 1835, Civil Code).

• Pledges (nantissements) (article L.142-3, Commercial

Code).

Included in this list are contracts that are speciﬁcally

required to be made in the form of a private or notarial

deed (see Private deed and Notarial deed: a type of

authentic instrument).

Contracts that must be proved in writing

Even if written form is not required for legal validity,

if a dispute arises as to the existence, contents or

performance of an agreement, a written contract may

be necessary for evidentiary purposes (for example, to

adduce it as evidence of a contract in court or for tax

purposes) (article 1364, Civil Code).

A contract relating to a sum or value exceeding

EUR1,500 must generally be proved in writing in the

form of a private or notarial deed (article 1359, Civil

Code). This general rule is subject to the following

exceptions:

• Commercial acts involving traders may be proved by

any means, unless otherwise provided by law (article

L.110-3, Commercial Code). The requirement for written

agreement is relaxed for commercial transactions,

in recognition of the fact that traders generally

require less contractual protection than, for example,

consumers and they need the ﬂexibility to conclude

agreements expediently.

• A written contract is not required for the purposes of

proof:

– if there is material or moral impossibility of

obtaining proof in writing;

– if it is customary not to have a written contract; or

– for cases where the written contract has been lost

following a force majeure.

(Article 1360, Civil Code.)

Article 1360 gives discretion to a judge to allow a

contract to be proved by other means. For example,

there may be moral impossibility of obtaining written

proof in the case of an agreement made between

family members.

• A written contract may be replaced for the purposes

of proof by a judicial confession (aveu judiciaire), a

decisive oath (serment décisoire) or a commencement

of proof in writing corroborated by another means of

proof (article 1361, Civil Code).

Any written evidence constitutes a “beginning of proof

in writing” (commencement de preuve par écrit), if it

originates from the person who is challenging the act,

or a person they represent, and renders the allegation

likely to be true (articles 1361 and 1362, Civil Code). This

exception gives a judge a wide discretion to allow a

document to be adduced in court as evidence, if it makes

it plausible that a contract was entered into by a party

who disputes this fact. A reference to a notarial deed

or private deed on a public register is deemed as the

beginning of proof in writing.

Why use a written contract in

commercial matters?

Despite the exception for commercial acts in article

L.110-3 of the Commercial Code, most corporate and

commercial contracts are documented in writing for

probative and enforceability purposes. Accordingly, a

contract will be entered into in writing either because

the law requires it or because the parties have agreed to

it for probative and enforceability purposes.

Types of written contract

Written contracts typically take one of the following

legal forms, which may be prescribed by law:

• A private deed. See Private deed.

• An authentic instrument. See Authentic instrument.

In addition, the parties may choose to execute an

attorney’s deed (acte d’avocat), which is a type of

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Executing contracts in France

private deed. Adopting this form can assist in the

enforceability of a contract. See Use of an attorney’s

deed for enforceability purposes.

Private deed

A private deed is a signed contract (or other legal act)

that is drawn up and agreed privately between its

parties. A private deed is binding on its parties (and

their heirs and successors in title), if one of the following

conditions is met:

• The signatories in question recognise the private

deed, including their signature.

• The private deed is legally considered as recognised.

This would include where the private deed has been

countersigned by the attorneys (avocats) of each party

or a by an attorney acting on behalf of both parties

(see Use of an attorney’s deed for enforceability

purposes).

(Articles 1372 and 1374, Civil Code.)

A party, or their heirs or successors in title, may

contest the authenticity of a private deed, if they do

not recognise its contents or their signature. If they

do so, the judge must follow a signature veriﬁcation

procedure to ascertain whether the document has

been drafted and signed by the person to whom it is

attributed (article 1373, Civil Code).

Authentic instrument

An authentic instrument is a legal document that has

been drawn up and executed with the required formalities

by a public ofﬁcial, who has the requisite competence and

capacity to act (article 1369, Civil Code). Most commonly,

agreements entered in authentic form are drawn up by

notaries who are public ofﬁcers (see Notarial deed: a type

of authentic instrument), provided that such agreements

are made in France and subject to French law.

Other public ofﬁcials, such judges and ofﬁcial keepers

of public registries, are also able to issue authentic

instruments, such as judgments and certiﬁcates of

vital record (for example, birth certiﬁcates). In addition,

bailiff deeds (actes d’huissier) that are executed under

a delegation of the law (for example, a court summons)

are classiﬁed as authentic instruments. However,

these types of documents are beyond the scope of this

note, which focuses on the main forms for executing a

contract, namely private and notarial deeds.

Notarial deed: a type of authentic instrument

A notarial deed is document that is classiﬁed under

French law as a type of authentic instrument. Notaries

are public ofﬁcials who can authenticate contracts and

other documents, certify the date of execution, preserve

deposited deeds, and deliver ofﬁcial or certiﬁed copies

(article 1, Ordinance No 45-2590 of 2 November 1945

(onthe status of the notary)).

A notarial deed is deemed to be authentic and its

validity can only be challenged by a plea of forgery

(inscription de faux) (article 1371, Civil Code).

If any of the required formalities for a public deed are

not observed (or the notary was not competent or

capable of acting), but the document has been signed

by the parties, the document takes effect as a private

deed (article 1370, Civil Code).

When is a notary required?

For certain types of contract and other legal acts,

French law requires the use of a notarial deed, or an

authentic instrument in general. For corporate law

matters, the use of notarial deeds is less common and

most transactions may be executed by private deed.

However, a notary is required, and beneﬁts from a

monopoly under French law, if real estate assets are

transferred as part of a deal (although this may not be

the case for the purposes of a deal relating to shares of

a company owning a real estate property).

Notarial deeds have executory force (force exécutoire).

This means they can be enforced directly by a bailiff

(huissier de justice) without the need to obtain a court

judgment (article 19, Notaries Act 1803 (Loi contenant

organisation du notariat (loi 25 ventôse an XI)) and

article 3, Law No 91-650 of 9 July 1991 (reforming the

civil procedure of execution)).

Notarial deeds (or authentic instruments in general) are

prescribed for the following types of contract:

• Certain types of donation, notably those relating to

real estate (article 931, Civil Code).

• Conventional mortgages (hypothèques

conventionnelles) (article 2416, Civil Code).

• Transfers of land that must be registered and the

creation or registration of limited rights in land in

general (article 4, Decree no 55-22 of 4 January 1955

(Land register reforms)).

• Certain types of ﬁducie, relating to jointly owned

property, rights or security interests (article 2012,

Civil Code). A ﬁducie is a French legal concept that

has similar characteristics to a common law trust.

• Marriage contracts and wills, if their authors

want these documents to be made as authentic

instruments with a certain date and to be kept and

registered by the notary. In the case of inheritances, if

at least one real estate asset is included in the legacy,

a meeting before a notary will also be necessary to

handle the property transfer.

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Executing contracts in France

Formalities for notarisation

A notarial deed is a legally binding document, such as a

contract, that is drafted by a notary. The parties (or their

authorised representatives) must sign the notarial deed

in the presence of the notary, who also signs it (article

10, Decree No 71-941 of 26 November 1971 (Notarial

Deeds). The notary must, in principle, authenticate the

instrument in person and read the deed to the parties to

ensure they understand its content, or else the authentic

instrument is invalid. However, if these formalities have

not been complied with, the document may still qualify

as a private deed, if it has been dated and executed by

all parties. In such a case, speciﬁc rules may apply to

prevent one party from avoiding its obligations purely

on the basis of the formal invalidity of the concerned

instrument.

For some types of notarial deed (for example, a revocation

of a will), the presence and signature of more than one

notary or witnesses is also required, to provide certainty

over its date of execution (article 9, Notaries Act).

Before executing the deed, the notary checks and

records the identity, nationality, capacity and domicile

of each party (article 5, Decree No 71-941). In exceptional

cases, information about the parties may be attested to

by two witnesses. See also Capacity and authority.

The notary advises the parties as to the scope and effect

of the deed, as well as other relevant information.

In terms of its contents, a notarial deed must:

• State the name and place of establishment of the

notary, the name and domicile of the witnesses,

the place where the deed is made and the date

on which each signature is afﬁxed. The notaries’

national regulation (règlement national du notariat)

expressly limits the locations where a notarial deed

can be executed (that is, in the notary’s ofﬁces, in

the ofﬁces of another notary, at the residence of one

of the parties to the notarial deed, in administrative

premises, in a court of law or in a hospital).

• Contain the names, surnames and domiciles of the

parties and of all the signatories of the deed.

• State that the deed has been read by the parties or

that it has been read to them.

• Have its appendices signed by the notary, for such

appendices to be part of the notarial deed.

(Article 6, Decree on Notarial Deeds No 71-941.)

There are also requirements as to the format of the

deed. For example, numbers must be stated in letters

the ﬁrst time they are cited (unless they are the result

of a calculation), as must the date of execution.

Abbreviations must be cited in full at least once in

thedocument (article 8, Decree on Notarial Deeds

No71-941). The document must be legible and not

contain unnecessary blank spaces, other than those

that have been identiﬁed and recorded by the notary at

the end of the deed (article 9, Decree on Notarial Deeds

No71-941). There are also compulsory statements,

which are not a condition of validity of the notarial deed,

but which are required to ﬁle such deed with the land

registry (service de la publicité foncière) and to ensure its

enforceability against third parties.

In addition to signing the execution block at the end of

the deed, the parties and the notary must in principle

initial each page. This is because any pages that have

not been initialled do not form part of the notarial deed

(article 14 al.4, Decree on Notarial Deeds No 71-941).

However, in practice, a patented binding system (for

example, “Assemblact”) is often used, which avoids the

need for the parties and the notary to initial each page.

Instead, only a few pages must be signed for the deed to

be validly executed.

Once the notarial deed has been executed, the notary

must keep the original document, referred to as the

“minute”, in their ofﬁce. If the parties require a copy, the

notary can issue authenticated copies of the minute.

The notary must also keep a record of the deeds they

hold. If a notarial deed is required to be ﬁled with a

public registry (such as the land registry or companies

and commercial register), this will be carried out by the

notary (article 26, Decree No 71-941 on Notarial Deeds).

As public ofﬁcials, notaries are also in charge of

collecting taxes, duties, rates and charges triggered

by the operation resulting from the notarial deed

(for instance, any transfer capital gains tax in case of

disposal of a real estate property, if applicable) and to

transfer them to the public treasury.

Use of an attorney’s deed for

enforceability purposes

The concept of an attorney’s deed (acte d’avocat)

was introduced in 2010 under Law no 2011-331 of 28

March 2011 on the modernisation of the judicial or

legal, and certain regulated professions. Although it is

never required by law, an attorney’s deed can be used

to increase the enforceability of a contract (unless a

notarial deed is prescribed by law, in which case this

form must be used).

An attorney’s deed is a private deed that has been

countersigned by the attorneys of each of the parties or

by one attorney acting on behalf of all of the parties. By

countersigning the deed, the attorney(s) certiﬁes that:

• They have fully informed the party or parties they

are advising of the legal consequences of the deed

(article66-3-1, Law no 71-1130 of 31 December 1971).

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Executing contracts in France

• The deed is authentic and also constitutes full proof of

the parties’ signatures, subject to a successful plea of

forgery (article 1374, Civil Code).

Therefore, it is very difﬁcult to challenge the authenticity

of an attorney’s deed.

Similar to the execution of a notarial deed, the attorney

must verify the identity of the parties and check their

capacity and authority to sign the document (see also

Capacity and authority). In accordance with professional

conduct rules, the attorney must keep an original copy

of the deed (in physical or electronic form).

Capacity and authority

In addition to considering the form of execution (whether

by private, attorney’s or notarial deed), it is important to

establish that:

• The counterparty has legal capacity to enter into the

contract.

• The person signing on behalf of the counterparty (for

example, a company or partnership) has the legal

authority to act in the name, and on behalf, of it and

to bind it to the contract.

Capacity

To have a valid contract, the parties to it must have

legal capacity to contract (article 1128, Civil Code). At

a high level, this means that physical persons must

not be deemed to lack capacity under the law (for

example, unemancipated minors do not have the

capacity to contract). For that reason, in a contract

where a person under the age of 18 is involved, their

legal representative must sign in their name. Also, legal

persons (for example, companies) must act within the

rules applicable to them, including their constitutional

documents (article 1145, Civil Code).

Authority

Those who sign a contract on behalf of a party must

have authority to represent that party, and they must

only act within the limits of that authority (article 1153,

Civil Code).

A company’s legal representatives are the managing

director (directeur général) and any deputy managing

director(s) (directeur général délégué) of a public limited

company (société anonyme), the chairperson (président)

of a simpliﬁed company limited by shares (société par

actions simpliﬁée) and the manager of a private limited

company (société à responsabilité limitée), respectively.

A legal representative of the company (a delegator)

may also delegate authority to another authorised

representative (a delegate). Usually, authority to act

will be granted through a speciﬁc power of attorney

(procuration), which relates to a speciﬁc transaction. In

this case, the delegate represents the delegator and not

the company itself.

Authority to act can also be granted more generally to an

area of the company’s business through a delegation of

power (délégation de pouvoir), under which the delegator

grants the delegate with the authority to perform certain

duties for and on behalf of the company.

If more than one natural persons contract with

each other, they cannot delegate authority to the

same representative to sign on their behalf if they

have conﬂicting interests. Similarly, the authorised

representative of a natural person cannot be party to

the agreement themselves. If a representative signs

on behalf of both parties or on their own account

as principal, the contract will be void, unless it is

authorised by law or authorised or ratiﬁed by the

principal they represent (article 1161, Civil Code). In

practice, standard wording in powers of attorneys

provide such authorisation.

How do companies validly execute

contracts?

Companies in general

In general, French law does not require companies to

execute contracts in a prescribed form. Unlike in some

other jurisdictions, for example in England and Wales,

there is no statutory requirement for more than one

director to sign certain commercial contracts or to have

their signature witnessed. However, if a document

requires notarisation, the usual formalities relating to

executing a notarial deed will apply.

For private deeds, a signature block in the following

form may be used:

[COMPANY NAME]

Seller

………………………………

By:

Duly authorised

representative

[COMPANY NAME]

Buyer

………………………………

By:

Duly authorised

representative

As stated above, the parties must have capacity to

execute the contract (see Capacity) and their legal

representatives must have authority to act (see

Authority). If these conditions are not met, the contract

will not be valid (article 1128, Civil Code). Therefore,

if a transaction is to be executed by notarised deed,

the notary will request proof of the parties’ capacity

and their representatives’ authority to sign (that is,

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the company’s articles of association, an excerpt from

the Companies and Commercial Register, a board

resolution, or a power of attorney, as applicable), as well

as proof of the signatories’ identities.

An attorney executing an attorney’s deed will ask for

similar proof of identity and capacity and authority to

execute the contract. Likewise, for transactions of a

signiﬁcant value, a counterparty is likely to request such

documents, even if the contract is executed as a private

deed without an attorney’s countersignature.

Overseas companies

No additional rules relating to the form of execution

apply to non-French companies. However, a document

executed by an overseas company will also need to

consider the requirements of the law of its country of

incorporation.

If foreign documents (private or notarial deeds or other

authentic instruments) need to be used or produced

in a French transaction (for example, foreign powers

of attorney), then, depending on the provisions of the

applicable international treaty, they may have undergo

one or both of the following processes:

• Translation by a certiﬁed translator.

• Legalisation or apostilisation (as relevant).

All authentic instruments, and therefore all notarial

deeds, must be issued in French (article 111, Ordinance

on the act of justice (known as the Villers Cotterêts

Ordinance) of 25 August 1539 and article 2, Decree of

2 Thermidor, Year II (20 July 1794)) and article 5, Law

no 94-665 of 4 August 1994 on the use of the French

language).

Counterparts and number of

originals

Counterparts

With the exception of the requirements for the

formalisation of certain private deeds (see Contracts

that must be proved in writing), French law does not

provide for anything speciﬁc that would prevent the

signing of a private deed in counterpart (that is, where

each party exchanges a copy of the contract with only

their signature added). However, for evidentiary reasons

relating to the exchange of consent, its validity is

questionable and therefore signing in counterpart does

not occur in practice. An alternative solution is generally

used which consists of an exchange of scanned copies

of the signature pages between the parties’ attorneys,

followed by the circulation of hard copy documents for

signature (see Virtual signings and closings).

Number of originals

Notarial deed

If the contract is executed as a notarial deed, the notarial

deed is drawn up by, and executed in the presence of, a

notary, who must authenticate both parties’ signatures.

Therefore, execution in counterpart is not relevant. The

original copy of the notarial deed must be kept in the

ofﬁce of said notary and must not be moved out of this

ofﬁce for at least seventy-ﬁve years.

Private deed

A private deed must be made in at least as many

originals as there are parties with a distinct interest,

unless the parties have agreed to deliver the sole

original document to a third party (article 1375 al.1,

Civil Code). If a private deed has to be registered for

tax purposes, an additional original is required for

submission to the tax authority. Each original must

mention the total number of originals (article 1375 al.2,

Civil Code). However, even if these requirements have

not been complied with, any signatory to the contract

who has performed it, even in part, cannot raise this as

an objection (article 1375 al.3, Civil Code).

Contracts executed electronically

For contracts executed electronically, the requirement as

to the number of originals is deemed to be satisﬁed, if :

• The parties can be duly identiﬁed, and the document

is drawn up and kept in conditions such as to

guarantee its integrity, in accordance with article 1366

of the Civil Code.

• The electronic signature involves the use of a reliable

identiﬁcation process that guarantees its link with the

deed to which it is attached, in accordance with article

1367 of the Civil Code.

• The method of storage allows each party to obtain a

hard copy or have access to it.

(Articles 1174 and 1375 al.4, Civil Code.)

Virtual signings and closings

A contract is a “meeting of minds” (accord de volonté)

between two or more people that is intended to create,

modify, transmit or extinguish obligations (article 1101,

Civil Code). In general, this “meeting of minds” may take

place physically or virtually (that is, with the parties

executing the contract in different physical locations).

Virtual exchange of private deeds

A private deed may be executed and exchanged

remotely by the parties without their simultaneous

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physical presence. For example, this may be achieved by

exchanging hard copy documents by registered post or

courier. Alternatively, the parties may exchange scanned

copies of the contract electronically. After the exchange

of scanned copies, the relevant hard copy documents

are circulated between the parties by registered post or

courier for execution. Then, original executed contracts

are delivered to the parties.

Although, in the case of a private deed, it is possible

to exchange signature pages only. It is considered

best practice to initial each page of the agreement for

evidentiary reasons (to avoid any page substitution).

Physical exchange of private deeds

Even if there is no legal requirement to have a physical

closing, parties often prefer this over a virtual closing.

This is particularly the case for high-value or otherwise

signiﬁcant or complex transactions. Having the parties

sign the contract in front of each other, and in the

presence of their lawyers, can provide reassurance

thatthe same version of the contract (and any

ancillaryagreements) has been executed properly

byboth parties.

French corporate lawyers usually use what is called “an

ASSEMBLACT®” to avoid the parties having to initial

each page of an agreement, and especially schedules,

which can be quite voluminous. This is a secure binding

system that allows the parties to sign only one page of

the contract (usually the last page). The following notice

is stamped on the contract:

En accord entre les parties, les présentes reliées

par le procédé ASSEMBLACT R.C. empêchant toute

substitution ou addition et sont seulement signées à

la dernière page).

(By agreement between the parties, these [pages] are

bound by the ASSEMBLACT R.C. process preventing

any substitution or addition and are only signed on the

last page.)

Electronic form of contract

If written form is required for the validity of a contract,

in most cases, a private deed can be drawn up as an

electronic document, exchanged by email, and stored

in electronic form, provided the following conditions are

satisﬁed:

• The party can be duly identiﬁed and the contract is

drawn up and kept in conditions such as to guarantee

its integrity.

• The electronic signature uses a reliable identiﬁcation

process (see Electronic signatures).

(Article 1174, Civil Code.)

In the case of a notarial deed (and authentic instruments

in general), additional provisions as to how it can be

drawn up and stored (see Virtual exchange of notarial

deeds).

If the conditions above are met, the electronic contract

may be admitted as proof that the contract was

executed (see Contracts that must be proved in writing).

Therefore, hardcopy originals will not be required. One

should not execute the contract again in hardcopy after

an exchange of duly executed electronic documents,

especially at a later date. To do so is likely to create

confusion as to the applicable execution date.

If the identity of the sender of an electronic contract

cannot be determined, or the electronic signature does

not use a sufﬁciently reliable identiﬁcation process,

the document may still constitute “beginning of proof

in writing”.

There are some exceptions to the general rule that

a contract may be executed in electronic form.

For example, private deeds relating to family and

inheritance law must usually be executed in physical

form. Exceptions also apply to personal or real securities

of a civil or commercial nature, except if they are entered

into by a person for the purposes of their profession

(article 1175, Civil Code).

Virtual exchange of notarial deeds

It is also possible for the parties to sign notarial deeds

electronically, provided certain conditions are met. An

electronic notarial deed must be securely signed and

bear the image of the notary’s seal (article 37, Decree

no71-941 on Notarial Deeds). The same article also

provides that transmission of an electronic notarial deed

and authentic copies must guarantee the integrity of the

document, the conﬁdentiality of the transmission, the

identity of the sender and that of the recipient.

However, the requirement for a notary to be physically

present at the signing still applies (article 10, Decree

No 71-941 on Notarial Deeds). Therefore, this presents a

challenge to a virtual exchange of a notarial deed.

It is possible to overcome this hurdle by engaging two

notaries (or more, but only rarely), so that each party can

sign the document electronically in separate locations

in the physical presence of a local notary (article 20,

Decree no 71-941 on Notarial Deeds). This process uses a

qualiﬁed signature process (see Electronic signatures)

and the exchange of information must be conducted

through a secure video conference system, through

which the identiﬁcation of the parties, the integrity and

conﬁdentiality of the content can be guaranteed.

Although this process has not been broadly used until

recently, there is now an increasing use of it, with most

8 Practical Law

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Executing contracts in France

parties preferring to sign in the presence of their own

notary. If this process is adopted, the deed will specify

that each of the two notaries shall exceptionally sign

the deed.

If one or more signatories cannot physically attend closing,

a common approach is to authorise someone else to sign

in their name and on their behalf, using an appropriate

proxy, which must be certiﬁed by a notary (using their seal)

or by a civil registrar (for instance, a mayor).

As a result of the 2019 novel coronavirus disease

(COVID-19) outbreak, on 3 April 2020 the French

government adopted emergency legislation in the

form of Decree no 2020-395 (authorising the notarial

deed remotely during the health emergency period).

Under this decree, any notary was allowed to draw up

a notarial deed in electronic format, even if one or all of

the parties or any other person contributing to the deed

are neither present nor represented. This decree expired

on 10 August 2020.

Decree no 2020-1422 20 November 2020 now

authorises signature by proxy. It is therefore possible to

grant an appropriate proxy by means of a secure video

conference system or a qualiﬁed electronic signature

process (see Electronic signatures) through which the

identiﬁcation of the relevant party and the integrity

and conﬁdentiality of the contents of the deed can be

guaranteed.

In this case, there is no need for such proxy to be further

certiﬁed by a notary or by a civil registrar. The agent

appointed by the proxy (who is normally a relative, the

notary themself or a clerk of their ofﬁce), must attend

and sign physically at closing in the presence of the

notary.

Electronic signatures

EU-level regulation

The Electronic Identification and Trust Services

Regulation (EU/910/2014) (eIDAS Regulation)

entered into force on 17 September 2014 and has

applied directly to the EU member states since

1 July 2016 (subject to transitional provisions).

The eIDAS Regulation introduced a new EU-wide

legal framework for the recognition of electronic

signatures, and a range of other trust services,

including electronic seals and timestamps.

The eIDAS Regulation deﬁnes three different categories

of electronic signature:

• (Simple) Electronic signature.

• Advanced electronic signature.

• Qualiﬁed electronic signature.

Electronic signature

This is deﬁned in Article 3(10) as “any data in electronic

form which is attached to or logically associated with other

data in electronic form and which is used by the signatory

to sign.” This broad deﬁnition allows an electronic

signature to take a wide variety of forms, such as:

• Typing the signatory’s name at the bottom of an email.

• A scanned manuscript signature.

• Clicking an icon on a website to conﬁrm an order.

Advanced electronic signature

This is a more sophisticated and secure form of

electronic signature which meets the following

requirements:

• It is uniquely linked to the signatory.

• It is capable of identifying the signatory.

• It is created using electronic signature creation data

that the signatory can, with a high level of conﬁdence,

use under their sole control.

• It is linked to the data signed therewith in such a way

that any subsequent change in the data is detectable.

(Articles 3(11) and 26, eIDAS Regulation.)

The advanced electronic signature is the most widely

used electronic signature in practice, as there is

currently no qualiﬁed electronic signature procedure

that is effective remotely. In complex M&A transactions,

the use of the advanced electronic signature remains

limited due to the time stamping of each electronic

signature, which makes the signature process difﬁcult to

coordinate. Its use has nevertheless increased and has

become more common in the context of COVID-19.

Qualiﬁed electronic signature

This is deﬁned as an advanced electronic signature that

is created by using a “qualiﬁed” trust service provider

to verify the signature and issue a qualiﬁed certiﬁcate

of electronic signature implemented via a “qualiﬁed”

electronic signature creation device (Articles 3(12) and

32, eIDAS Regulation). This type of electronic signature

provides the highest level of admissibility in the EU courts

and is automatically granted the equivalent legal effect of a

handwritten signature (that is, there is a legal presumption

of authenticity) (Article 25(2), eIDAS Regulation).

Article 25(1) of the eIDAS Regulation preserves the

legal admissibility of all three categories of electronic

signature, stating that an electronic signature shall not

be denied legal effect and admissibility as evidence

in legal proceedings solely on the grounds that it is

in an electronic form, or that it does not meet the

requirements for qualiﬁed electronic signatures.

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Executing contracts in France

Validity of electronic signatures

Although the eIDAS Regulation deals with the legal

status and recognition of electronic signatures, it does

not cover aspects related to the conclusion and validity

of contracts or other legal obligations where there are

formal requirements laid down by national or EU law

(Recital 21 and Article 2(1), eIDAS Regulation). Nor does it

address the legal effect of electronic signatures (Recital

49). Such matters continue to be governed by the

domestic laws of each member state.

France recognises the electronic signature under

article 1367 of the Civil Code. This provision states that

an electronic signature carries the same evidentiary

weight as a handwritten signature, if it uses a reliable

process of identiﬁcation, ensuring that it is linked with

the electronic document, and guaranteeing the integrity

of the document. At present, only qualiﬁed electronic

signatures meet this standard, and give rise to a

presumption of reliability (article 1, Decree no 2017-1416 of

28 September 2017 relating to electronic signatures).

However, advanced electronic signatures (or qualiﬁed

electronic signatures) can be used for certain corporate

documents, such as, minutes of shareholder resolutions

(Article R.221-3 al.3, Commercial Code) and digital

company registers, following amendments to the

Commercial Code introduced under Decree no 2019-

1118 of 31 October 2019, which came into force on

4November 2019.

For the electronic signature to be valid, it must meet

the advanced electronic signature condition under the

eIDAS Regulation (see Advanced electronic signature).

The dematerialised documents must also be electronically

dated by a means offering guarantee of proof

(ArticleR.223-26, al.3, Commercial Code).