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Clarification regarding the compensation to the subcontractor following a cancellation of the contract with the main contractor

Cass. 3e civ. 5 March 2020, n° 19-16.407, ECLI:FR:CCASS:2020:C300183

While the issue of compensation to the subcontractor after the cancellation of the contract with the main contractor was the subject of divergent views in the Courts of Appeal, the Court of Cassation has come to put the matter in order.

The Court of Cassation has clearly stated that the compensation due to the subcontractor corresponds to the actual amount of costs incurred on the site, whereas the amount envisaged in the contract was totally irrelevant.

It should be remembered that the nullity of the contract can occur even after the end of the construction, within the prescription period (5 years).

Thus, the court will be bound by rules that protect the subcontractor in assessing the amount of compensation. It is not allowed to take the price agreed in the contract as a reference, he must disregard the value of the work built by the subcontractor, in particular the defects, and concentrate on the expenses actually incurred by the subcontractor.

This does not preclude compensation for damage caused by the subcontractor on the site, but the Court of Cassation requires a strict distinction to be made between these two claims, in an interpretation that protects the interests of the subcontractor.

It is therefore important to avoid a nullification of the contract, which exposes to immediate costs higher than the contract price, and if this is necessary, to do so with a legal professional.