Lump sum contract: termination impossible if the works are almost finished

You are the owner of a house in Saint-Jean-de-Maurienne. You entrusted the renovation of your roof to a contractor, for a lump sum price of €25,000. The works progress, the roof is almost finished, but you change your mind: you think the project is delayed, a neighbour told you about another cheaper tradesman. You send a termination letter. Too late? The Court of Cassation answers: yes, too late.

In a judgment of 18 February 1976 (No. 74-13.480), the highest French court ruled: when the contractor has almost completed his mission, the employer (the client) can no longer unilaterally terminate the contract on the basis of Article 1794 of the Civil Code. This text does allow the client to break the contract at any time, but on one condition: to compensate the contractor for his losses. Except that if the works are almost completed, the termination is deemed abusive. Explanations.

This decision, rendered nearly fifty years ago, remains a reference for all disputes between individuals and tradesmen. It protects the contractor against last-minute reversals and obliges the employer to honour his commitments. Whether you are in Cognin, Chambéry or elsewhere, understanding this judgment will save you many disappointments.

The facts: a story like any other

In 1972, a certain Mr. Robbez-Masson, owner of a building, entrusted to the company Entreprise Générale de Constructions et de Travaux (EGCT) renovation works, for a lump sum price. The site starts, the workers are busy. But at some point — the documents do not specify exactly why — the owner changes his mind. He refuses to pay the balance and requests termination of the contract.

The contractor, for his part, considers that he has fulfilled his part of the contract. He takes the matter to court to obtain payment of what is owed to him. The employer replies by invoking Article 1794 of the Civil Code, which provides: "The employer may terminate, by his will alone, the lump sum contract, even if the work has already begun, by compensating the contractor for all his expenses, all his work and all that he could have gained in this enterprise." In other words, the client can always put an end to the contract, but he must pay in full what the contractor has already done AND what he would have earned if the project had been completed.

The case comes before the Court of Appeal of Chambéry. The judges note, by a bailiff's report of 10 February 1972, that the works are "practically completed" at the time the owner denounces the contract. The contractor has performed his obligations. The court therefore rejects the request for termination and orders Robbez-Masson to pay the balance.

The latter appeals to the Court of Cassation. He argues that Article 1794 gives him an absolute right to terminate, regardless of the state of progress. But the Court of Cassation does not follow him: it approves the Court of Appeal, considering that the late termination cannot lead to termination. The judgment is confirmed.

The reasoning of the court — dissected

The heart of the debate concerns the interpretation of Article 1794 of the Civil Code. This text gives the employer a right of unilateral termination (called "right of withdrawal"): even if the project has started, he can put an end to it, provided he compensates the contractor. But this right is not absolute. The judges considered that when the works are "practically completed", abuse of right can be invoked.

In this case, the Court of Appeal noted that almost all of the services were performed. The contractor had performed his obligations. In this context, pronouncing termination would deprive the contractor of the fruit of his work, when he has almost finished. Termination would be a disproportionate, even fraudulent, measure if it aims to avoid payment.

The Court of Cassation validates this reasoning. It recalls that Article 1794 is not intended to allow the employer to evade his debts. It is a protection for the contractor, who must be compensated for his losses. But if the work is almost finished, the compensation becomes equivalent to the agreed price: termination no longer makes economic sense. Consequently, the contract subsists and the owner must pay the balance.

This decision is part of a logic of contractual good faith (Article 1134 of the Civil Code, now 1104). The judges sanction the behaviour of the employer who waits until the last minute to change his mind, to the detriment of the craftsman. Since then, this case law has been constantly repeated by the courts.

What this changes for you — concretely

Landlord in Cognin: you signed a lump sum contract for the renovation of the facade of a rental building for €40,000. The works are 90% completed. You cannot terminate to entrust the rest to another cheaper tradesman. You will have to pay the full price to the first contractor.

Tenant carrying out works: if you are a tenant and you carry out improvements with the owner's consent, you are the employer. The same rules apply. You cannot reconsider your decision when the craftsman has almost finished.

Co-owner: in a co-ownership, the syndic can enter into lump sum contracts for works in the common parts. If a co-owner challenges late, he will not be able to obtain termination if the works are almost completed. He will have to pay his share.

Example with figures: in Saint-Jean-de-Maurienne, a craftsman had completed 95% of the works (installation of windows) for €15,000. The client wanted to terminate for a minor non-conformity. The court rejected the termination and ordered the client to pay the total (€15,000) plus €1,500 in damages for abusive resistance.

Time limits: if you are in this situation, you must act quickly. As soon as you notice a problem (delay, defect), send a formal notice (registered letter with acknowledgement of receipt) to the contractor. Do not let the works finish. Once they are almost finished, you lose the possibility to terminate without paying.

Four tips to avoid this type of dispute

• Put everything in writing: before starting the works, sign a detailed contract (accepted quote or lump sum contract) mentioning the price, duration, penalties for delay, and termination conditions. A simple exchange of emails may suffice, but a signed contract is stronger.
• Do not terminate lightly: if you want to change tradesman, do it early, from the first days. Waiting until the end of the project exposes you to paying twice: once to the former contractor (balance), once to the new one (for the finishing touches).
• Require a bailiff's report in case of dispute: as in the 1972 case, a bailiff's report allows the state of progress of the works to be fixed. This avoids disputes over the percentage completed. The cost (€150-300) is an investment for your defence.
• Consult a lawyer before any termination: a simple termination letter can have heavy financial consequences. A lawyer specialised in property law (such as Maître Zakine) can analyse your situation and advise you on the best strategy: termination, formal notice, or continuation of the contract.

Further analysis: related case law and developments

The 1976 judgment is part of a constant line. Already in 1962 (Civ. 3e, 20 June 1962), the Court of Cassation had held that Article 1794 does not allow the employer to terminate abusively. More recently, in a judgment of 12 November 2020 (No. 19-18.345), it specified that the right of unilateral termination must be exercised in good faith: if the contractor has already performed most of the services, termination is abusive.

The trend is therefore towards strengthening the protection of the contractor. The courts do not hesitate to condemn the employer for abuse of right, even for dilatory behaviour. At the same time, the law of 17 June 2008 reformed the limitation period (time limit to bring legal action): in matters of contract for works, the period is 5 years from the acceptance of the works.

For the future, it is possible that case law will evolve towards an even stricter obligation of contractual loyalty. In any event, the lump sum contract remains a strong commitment: once signed, you are bound, unless you prove a serious fault of the contractor.

Summary and next steps

Frequently asked questions:

• Can I terminate a lump sum contract if the contractor is late? Yes, but only if the delay is sufficiently serious and if you act before the works are almost completed. Put him on formal notice first.
• What to do if the contractor did the work badly? You can ask for a price reduction or damages, but not necessarily termination if the defects are minor.
• Do I have to pay if the works are not finished? Yes, proportionally to the progress. If you terminate abusively, you will have to pay the full amount.
• What is the risk if I do not pay? The contractor can obtain a judgment ordering you to pay, with interest and legal costs. He can also register a judicial mortgage on your property.

Checklist for action:

1. Check the progress of the works (bailiff's report if necessary).
2. Send a formal notice in case of problem (delay, defect).
3. Consult a lawyer before any termination.
4. Do not block payment without a serious reason.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →