Securing a commercial contract: the essential clauses you must include

Business owners often ask us the same question: "is our contract solid?" Usually the contract exists — signed quickly, accepted for convenience — but it misses the essentials: who pays if something goes wrong, when can it be ended, what happens in a dispute? On every review, we find contracts that expose the company to real risk, not through bad faith by the counterparty, but through simple lack of foresight. A contract is not a weapon: it is a backup plan you hope never to use.

Quick answer. A robust commercial contract covers six points: scope and performance conditions; duration and termination; late-payment penalties and the penalty clause; limitation of liability; force majeure; and applicable law and dispute resolution. Each clause reduces uncertainty and protects a legitimate interest — the absence of just one can turn a disagreement into costly litigation.

Under French law, freedom of contract remains broad but has limits. Since the 2016 contract-law reform, the Civil Code requires more good faith and protects the weaker party. A contract between professionals, even an imbalanced one, is not automatically void; but a significant imbalance imposed by a commercial partner is sanctioned (Art. L442-1 of the Commercial Code), and judges have clear grounds to reform a manifestly unfair clause. Knowing the six essential clauses puts you back on an equal footing at the negotiating table.

It seems obvious, yet it is the most frequent omission. A contract must state what you deliver or do, when, where, to what standards, and what is included or excluded.

Our advice: write the scope as you would explain it to a peer, in the language of your trade. A judge will reinterpret a precise contract far less easily than a vague one where "intent" has been lost.

A contract without a termination clause is a contract with no way out. Yet circumstances change.

Always include: the initial term; whether it renews and the notice period; termination for breach (with a cure period); and post-contract obligations (return of goods, transition, confidentiality).

Common trap: a "one-year" contract with no renewal clause renews tacitly; if you miss the notice deadline, you are bound for another year, often on terms you had lost sight of.

Payment terms between professionals are framed (Art. L441-10 and L441-16 of the Commercial Code). The contract may specify them, but never more leniently to the buyer than the law allows.

In 2026, the reference rate for late-payment penalties is the ECB key rate plus 10 points, i.e. 12.15% in the first half-year, on top of the flat recovery fee of EUR 40 per invoice. These mentions are not optional: without a penalty clause in your terms, you will struggle to claim them later, even for an obvious delay. For the detail, see our article on payment terms and penalties.

The penalty clause (Art. 1231-5 of the Civil Code) sets compensation in advance for non-performance. Sample wording:

"In case of delivery delay, the supplier shall pay a penalty of 1% of the price per day of delay, capped at 10% of the total price."

The judge may moderate a penalty clause that is manifestly excessive or trivial against the actual loss. So set a proportionate penalty (0.5%–1% per day, capped at 10–15% of the contract) and place the cap where the prejudice becomes real for you.

This is a major protection, often misunderstood. Basic rule: a clause limiting or excluding liability is deemed unwritten if it deprives the essential obligation of its substance (Art. 1170 of the Civil Code).

• Acceptable: "liability limited to direct damages"; "cap equal to twelve months' fees".
• To avoid: "no liability for non-delivery" (hollows out the essential obligation); "no liability even for gross negligence".

The elements of a robust clause: scope (direct and foreseeable damages), a figured cap, explicit exclusions, and a time limit to act. The landmark Chronopost case set aside a clause that exempted the carrier from all liability, because it hollowed out the contract. Our lesson: a graduated limit (different caps by damage type) holds up better than a total exemption.

The legal definition (Art. 1218 of the Civil Code) covers an external, unforeseeable and irresistible event. It remains vague: the contract must specify what counts as force majeure for the relationship at hand.

For example, the following may be force majeure: war, terrorism, epidemic, natural disaster, prolonged interruption of public services. The following are not: a supplier's failure, a strike limited to the company, a labour shortage, or financial difficulties.

Also specify the consequences: suspension of deadlines during the event, and the option to terminate without damages if the impediment lasts beyond an agreed period.

If you deliver goods, who owns them until full payment? In principle, ownership transfers as soon as the parties agree (Art. 1196 of the Civil Code), before payment: the buyer can become owner without having paid.

The retention-of-title clause (Art. 2367 et seq. of the Civil Code) corrects this risk:

"The goods delivered remain the seller's property until full payment of the price and its accessories."

It lets you, in case of non-payment or insolvency, reclaim unpaid goods (subject to a reclamation procedure). For transformed or resold goods, an enhanced clause carries the reservation over to the resale price. This is ground to map out with legal counsel.

Public procurement#

Contracts with the State and local authorities fall under the Public Procurement Code: liability caps are often framed, force majeure narrowly defined. Build these constraints in from the drafting stage.

Relations between small and mid-sized firms#

Article L442-1 of the Commercial Code protects against the significant imbalance imposed by a partner in a position of strength. A very unfavourable unilateral clause can be challenged: document the inequality you bear.

Sale of a going concern#

You combine the six essential clauses with a reps & warranties clause, which covers undisclosed liabilities over a defined period after the sale.

• Index the penalties. The ECB key rate moves: aim for "the ECB key rate in force on the invoice date + 10 points" rather than a fixed rate.
• Balance the clauses. Judges scrutinise asymmetrical clauses more strictly; document reciprocity.
• Update force majeure. Many pre-2020 contracts ignore recent scenarios (energy shortage, IT outage): check that your wording covers them.

While supporting the combination of several construction SMEs, we reviewed a dozen contracts: most had no clearly stated termination clause, no liability cap, and ignored retention of title on supplied materials. Most potential disputes could have been avoided, not through legal combat, but by spending a few hours, at signature, on the six essential clauses.

Hayot Expertise advice. Before signing a material commercial contract, have it reviewed by your legal counsel or your accountant. A few hundred euros of prevention beats tens of thousands of euros of litigation. The six essential clauses form the legal infrastructure of your commercial relationship.

• Clear scope and perimeter: fewer misunderstandings.
• Duration and termination set out: you keep a way out.
• Indexed late-payment penalties (ECB + 10 points = 12.15% in 2026) plus the EUR 40 fee.
• A proportionate penalty clause: realistic protection, which a judge may moderate.
• A graduated liability cap: credible and effective.
• Enumerated force majeure and retention of title: you are covered on the unforeseen and the unpaid.

• Légifrance — Article 1231-5 of the Civil Code (penalty clause)
• Légifrance — Article 1170 of the Civil Code
• Légifrance — Article 1218 of the Civil Code (force majeure)
• Légifrance — Articles L441-10 and L441-16 of the Commercial Code
• Légifrance — Articles 2367 et seq. of the Civil Code (retention of title)

Current as of 8 June 2026. For any decision affecting your contractual liability, consult an adviser.