Everything you need to know about service contracts

The service contract is therefore an essential tool to master in many fields.

First and foremost, it differs from an employment contract in that the service provider is independent, which gives him or her freedom, but in return deprives him or her of the protective provisions of employment law.

Are you a business owner or do you want to go freelance? Here's everything you need to know about service contracts.

Conclusion of a service contract

When your company wants to use an external service provider for an activity, it is often necessary to sign a service contract.

Although the drafting of a written document is not a legal obligation, we can only recommend it, as this document constitutes proof in the event of a dispute. Prevention is better than cure!

Before signing the contract with your service provider, you need to carry out a number of checks. Don't forget to check that your co-contractor is registered with the RCS or the Craftsmen's Register, and that he has a certificate of professional liability.

Standard contents of a service contract

Service provision is a contractual technique that covers a vast field of activities, and it would be impossible to be exhaustive and cover them all. Nevertheless, the same stipulations can be found in all these contracts.

Thus, a service contract systematically or almost systematically includes :

• The identity of the parties: i.e. their name in the case of a natural person, and their corporate name in the case of a company. Also included are the SIREN number, address or registered office...
• The service to be provided.
• How the service is to be provided.
• The cost of the service; calculation and payment methods ...
• The duration of the contract: fixed-term or open-ended, whether the contract can be tacitly renewed or whether it requires express agreement.

Other clauses are optional, but almost as common: confidentiality clauses, intellectual property rights, disclaimers of liability and designation of the competent court in the event of a dispute.

Disputes arising from service contracts

Two major disputes are likely to arise with regard to service contracts: in the event of non-performance of an obligation by one of the two contracting parties, or in the event of requalification of the contract as a contract of employment.

Litigation concerning the non-performance of an obligation

When your service provider fails to perform his or her duties, or fails to do so satisfactorily, you can take legal action against him or her.

In a lawsuit of this kind, not all services are subject to the same regime. A distinction must be made between obligations of means and obligations of result.

To give you an example, a doctor is bound by an obligation of means: he mustdo his best to treat his patient.

Conversely, a garage owner has an obligation to repair the car, and must achieve this result.

When your service provider is bound by an obligation of result, all you have to do is show that the service has not been provided.

On the other hand, when your service provider has an obligation of means, you have less chance of winning a lawsuit, since you have to show that he didn't make enough effort, which is harder to prove.

When you sue your provider, here's what you can get:

• Refusing to pay your service provider
• Forcing the service provider to perform
• Get a price reduction
• Request contract termination

These penalties can be cumulative, and you can also claim additional damages.

The dangers of requalification as an employment contract

The main criterion for distinguishing between a contract of employment and a contract for the provision of services is independence. This means that there is a hierarchical and subordinate relationship between the employee and the employer, which is not the case in a service contract.

The risk for the customer is that the service provider will bring an action for requalification as an employment contract. An employment contract is subject to labor law, which is far more protective and advantageous for the service provider.

Business owners must therefore be vigilant to avoid any ambiguity. Judges have many elements at their disposal to rule on this requalification. Recently, the Paris industrial tribunal ruled that Uber drivers were bound by a contract of employment with the company, and not a contract for the provision of services. This example shows that requalification is becoming increasingly accepted.