Non-Professional Status and the Consumer Code: Abandonment of the Direct Connection Criterion (Cass. 1re civ., 21 January 2026, No. 24-11.365)

French Supreme Court (Cour de cassation), First Civil Chamber, 21 January 2026, No. 24-11.365

What was the context of the dispute between the maintenance company and the OGEC?

What were the facts giving rise to the dispute?

The case originated in an apparently mundane commercial relationship: a Catholic school management body (OGEC), set up as an association under the French law of 1901, had entered into no fewer than thirty-six maintenance contracts covering photocopiers. This office equipment is indispensable to the daily running of any educational establishment, whether for reproducing teaching materials, administrative documents or communications with families.

These maintenance contracts contained a particular clause, common in this type of agreement: in the event of early termination at the client’s initiative, the service provider (SBI 84) reserved the right to collect termination fees. This stipulation is intended to compensate the provider for lost earnings, as it had anticipated a long-term contractual relationship and may have made an initial commercial effort in return for that commitment.

However, the OGEC decided to terminate these thirty-six contracts before their term. The precise reasons for this termination are not detailed in the judgment, but various motives can be imagined: dissatisfaction with the quality of service, discovery of more advantageous offers, reorganisation of the establishment, or financial difficulties requiring a reduction in costs.

Faced with this termination, SBI 84 logically claimed payment of the fees provided for by contract. The total amount claimed is not specified in the decision, but multiplied by thirty-six contracts, it must have represented a substantial sum, fully justifying the bringing of legal proceedings.

What defence strategy did the OGEC adopt?

Faced with this payment claim, the OGEC chose a bold but legally coherent line of defence: challenging the validity of the termination clauses by invoking their unfair nature. This strategy rested on a precise legal basis: the legislation protecting against unfair terms contained in the Consumer Code (code de la consommation).

But this protection is not universal: it benefits only consumers and non-professionals. The OGEC therefore had to clear a crucial preliminary hurdle: demonstrating that it held the status of non-professional at the time the maintenance contracts were entered into. Without that qualification, it would be impossible to bring down the disputed clauses.

The OGEC’s argument rested on a reasoning that was seductive in appearance: admittedly, the association carries on a professional teaching activity, but photocopier maintenance contracts have only an indirect, ancillary connection with that main activity. Photocopying documents is not teaching. Therefore, for these specific contracts, the OGEC should be regarded as a non-professional deserving the protection of consumer law.

This thesis was not without some basis in case law, since an old judgment of the French Supreme Court, delivered on 24 January 1995, had indeed adopted a “direct connection” criterion between the disputed contract and the main professional activity in order to assess non-professional status.

The Court of Appeal hearing the dispute received this argument favourably and recognised the OGEC as a non-professional, thus allowing it to invoke the unfair nature of the termination clauses. This decision naturally led SBI 84 to appeal on points of law, considering that the Court of Appeal had misapplied the notion of non-professional.

How has the notion of non-professional evolved in the case law?

What was the original definition of non-professional?

To understand the scope of the judgment of 21 January 2026, it is essential to place the notion of non-professional in its historical and legal context. This status originates in former Article L. 132-1 of the Consumer Code, in its wording prior to the Order of 14 March 2016 on consumer law.

This provision was initially intended to protect consumers against unfair terms inserted in contracts between professionals and consumers. But the legislature was aware that certain persons, without being consumers in the strict sense (that is, natural persons acting for private purposes), could find themselves in a position of weakness comparable to that of consumers vis-à-vis a professional.

This is how the legal category of “non-professional” came into being, intended primarily to protect legal entities which, although engaged in an economic activity, found themselves in a position of weakness in certain contractual relationships. The categories in mind included small associations, co-ownership associations (syndicats de copropriétaires), and very small businesses.

The case law of the French Supreme Court gradually forged the definition of non-professional. In its most classic and most coherent formulation, a non-professional was “a legal entity which does not act for the purposes of its professional activity”. This definition, recalled at paragraph 10 of the judgment of 21 January 2026, has the advantage of clarity and of symmetry with the definition of the consumer.

Indeed, a consumer is a natural person who acts for purposes that fall outside his commercial, industrial, craft or professional activity. By parallel, the non-professional is a legal entity which acts outside the scope of its professional activity. This conception rests on a simple logic: where a person, natural or legal, acts within the framework of its professional activity, it is deemed to have sufficient skills, experience and bargaining power not to need the special protection of consumer law.

What did the 1995 case law on the direct connection bring?

However, this clear and restrictive definition underwent a notable shift with a judgment of the First Civil Chamber of the French Supreme Court dated 24 January 1995 (No. 92-18.227). In that decision, the highest court introduced an additional criterion, that of a “direct connection” between the disputed contract and the legal entity’s professional activity.

According to this case law, a legal entity could be regarded as a non-professional for contracts that had no direct connection with its main professional activity. In other words, even if it was acting within the general framework of its professional activity, it could nevertheless benefit from protection against unfair terms for certain “peripheral” or “ancillary” contracts.

This approach had a certain intellectual appeal. It started from the observation that not all legal entities are equally equipped to negotiate all types of contracts. A teaching association, for example, certainly has the skill and experience to negotiate educational contracts, school leases, or employment contracts with teachers. But is it really in a position of strength to negotiate a complex IT equipment maintenance contract, an energy supply contract, or an insurance policy? For such “non-core” contracts, is it not in a position comparable to that of a private individual?

This case law thus opened a breach in the regime of protection of non-professionals, allowing legal entities to invoke that status occasionally for certain contracts, while being regarded as professionals for others.

Why did the French Supreme Court return to a stricter definition?

Despite its apparent generosity towards potentially vulnerable legal entities, this 1995 case law based on the direct connection criterion gradually revealed its limits and inconsistencies.

First, it introduced considerable complexity into the assessment of non-professional status. What is a “direct connection” with the professional activity? Did the contract have to concern the very object of the activity (teaching, for a school), or was it enough that it concerned a means necessary for that activity? Does an electricity supply contract, indispensable to the running of a school, have a direct connection with teaching? And a premises cleaning contract? The boundary became eminently subjective and a source of legal uncertainty.

Second, this conception created an asymmetry that was hard to justify between natural persons and legal entities. A natural person practising a liberal profession (lawyer, doctor, architect) could never invoke consumer status for a contract entered into in the course of his professional activity, even if that contract had only an indirect connection with his core business. Why would legal entities have benefited from a more favourable regime?

Finally, and above all, this case law failed to recognise the reality of the life of professional organisations. When a legal entity enters into a contract, even an ancillary one, for the purposes of its activity, it necessarily acts as a professional. It commits its organisation, mobilises its professional resources, and pursues its corporate purpose. Photocopier maintenance in a school is not a personal or recreational activity: it forms fully part of the professional management of the establishment.

This is why the French Supreme Court gradually abandoned this direct connection criterion in favour of a stricter and more coherent definition of non-professional. Several judgments began this movement of clarification, leading to the position adopted in the judgment of 21 January 2026.

What reasoning did the French Supreme Court follow in its 2026 judgment?

What exactly does the French Supreme Court criticise the Court of Appeal for?

The reasoning of the judgment of 21 January 2026 is remarkably lucid, which makes it a leading judgment destined to clarify the definition of non-professional.

The French Supreme Court begins by recalling, at paragraph 10 of its judgment, the definition of non-professional within the meaning of former Article L. 132-1 of the Consumer Code: “a legal entity which does not act for the purposes of its professional activity”. This formulation, already set out in several earlier decisions, is strongly reaffirmed.

Then, at paragraph 11, the Court notes that the Court of Appeal did not apply this definition. Instead of examining whether or not the OGEC was acting for the purposes of its professional activity in entering into the maintenance contracts, the Court of Appeal relied on the criterion of the direct connection between those contracts and the OGEC’s teaching activity.

In doing so, the Court of Appeal applied an erroneous definition, one that had been temporarily current following the judgment of 24 January 1995, but which no longer corresponds to the current case law. The French Supreme Court states clearly that the grounds adopted by the Court of Appeal are “inadequate” to justify its decision.

Paragraph 12 of the judgment logically quashes the appeal judgment. This quashing is accompanied by a referral to another Court of Appeal, which will have to re-examine the case applying the correct definition of non-professional.

What criterion does the Court require to be applied?

The criterion now imposed by the French Supreme Court is clear and functional: one must examine whether the legal entity acted “for the purposes of its professional activity”.

This criterion calls for several important clarifications:

First, it is a purposive criterion that looks at the objective pursued by the legal entity at the time the contract was entered into. Why did it enter into this contract? Was it to meet personal needs (a purely theoretical possibility for a legal entity) or for the purposes of its professional activity?

Second, the notion of “needs of the professional activity” must be understood broadly. It is not limited to the main corporate purpose of the legal entity, but encompasses all the needs necessary for the functioning of its activity. For an educational establishment, this includes not only contracts directly related to teaching (purchase of textbooks, sports equipment), but also all support contracts: electricity and water supply, building maintenance, maintenance of office equipment, insurance contracts, banking services, and so on.

Third, this criterion makes no distinction according to the legal entity’s degree of competence or expertise in the field concerned. It does not matter that the OGEC specialises in teaching and not in IT maintenance: where it enters into this contract to ensure the functioning of its establishment, it acts for the purposes of its professional activity.

Fourth, and this is undoubtedly the most important point, this criterion leads to systematic application for legal entities carrying on an economic activity. In practice, an association, a company, or any other legal entity that enters into a contract almost always does so for the purposes of its professional activity. It is extremely rare for a legal entity to enter into a contract for reasons unrelated to its corporate purpose and its functioning.

This strict interpretation aims to preserve the coherence of consumer law and to prevent the status of non-professional from becoming an instrument for systematically circumventing contractual commitments by legal entities.

What are the consequences of this quashing?

The quashing pronounced by the French Supreme Court entails several important procedural and substantive consequences.

Procedurally, the case is referred to another Court of Appeal (the court of referral) which will have to re-judge the entire dispute. This new court will be bound by the rule of law stated by the French Supreme Court: it will have to apply the strict definition of non-professional based on the criterion of the “needs of the professional activity”.

In concrete terms, the court of referral will have to ask itself the following question: in entering into the thirty-six photocopier maintenance contracts, was the OGEC acting or not for the purposes of its professional activity of teaching and school management?

There is little doubt about the answer, and this is indeed what the author of the scholarly commentary accompanying the judgment very clearly suggests: the OGEC was indeed acting for the purposes of its professional activity. Photocopiers are indispensable tools for the daily functioning of a school. They are used to reproduce teaching materials for teachers and pupils, administrative documents, circulars for families, and so on. By entering into maintenance contracts to ensure the proper functioning of this equipment, the OGEC was directly pursuing the fulfilment of its mission of managing the establishment.

Consequently, the OGEC should be classified as a professional and should not be able to benefit from protection against unfair terms. The termination clauses providing for fees should therefore be upheld, and the OGEC should be ordered to pay the sums claimed by SBI 84.

Substantively, this decision has a scope that goes well beyond the case at hand. It is a leading judgment intended to clarify definitively the definition of non-professional.

What is the practical scope of this decision for legal entities?

Do “ancillary” contracts allow a legal entity to claim non-professional status?

One of the major lessons of the judgment of 21 January 2026 concerns precisely the fate of so-called “ancillary” or “peripheral” contracts: those that do not concern the legal entity’s main activity but rather means necessary for that activity.

The French Supreme Court’s answer is unambiguous: the ancillary nature of a contract in relation to the main activity has no bearing on classification as a professional. Where a legal entity enters into a contract for the purposes of its professional activity, it acts as a professional, even if the contract concerns an area remote from its core business.

This solution puts an end to a litigation strategy that had developed in certain disputes: legal entities sought to rely on non-professional status for contracts relating to energy supply, telecommunications services, equipment maintenance, cleaning services, and so on, arguing that these contracts had only an indirect connection with their main activity.

From now on, this argument is doomed to fail. An educational establishment that enters into an electricity supply contract, a cultural association that takes out an audiovisual equipment rental contract, a service company that enters into an IT maintenance contract: all act as professionals if these contracts are entered into for the purposes of their activity.

This case law introduces a form of “functional unity” in the assessment of professional status: the whole of the legal entity’s activity, in all its dimensions (main activity and support activities), falls within its professional capacity.

There is, however, a theoretical limit to this principle: if a legal entity entered into a contract entirely unrelated to its professional activity, for purely personal reasons (for example, if the officers of an association entered into a contract in its name for their personal needs), it could then be regarded as a non-professional. But this scenario is both extremely rare and problematic, because it raises the question of the very regularity of such a commitment in light of the principle of speciality of legal entities.

Which legal entities are concerned by this case law?

The case law of the judgment of 21 January 2026 applies to all legal entities, whatever their legal form, where they carry on a professional activity.

Associations are at the forefront of the legal entities concerned. Contrary to a common misconception, associations that carry on an economic activity, even a non-profit one, are regarded as professionals where they enter into contracts for the purposes of that activity. This is precisely the case of the OGEC in the judgment under comment: although a non-profit association under the law of 1901, it carries on a professional activity of school management and must therefore be regarded as a professional.

Those concerned include in particular associations managing establishments (education, health, social care), sports associations that manage facilities, cultural associations that organise events, charitable associations that employ staff, and so on.

Commercial companies are also covered, including very small businesses. A micro-business or a small company that enters into a contract for the purposes of its activity cannot invoke non-professional status, even if it has limited bargaining capacity against a large group.

Economic interest groupings (groupements d’intérêt économique, GIE) and other structures for cooperation between businesses necessarily act for the purposes of professional activities and are therefore always regarded as professionals.

Public establishments and legal entities governed by public law may also be concerned when they enter into contracts in the course of their management, but consumer law is generally not applicable to them because of specific rules of public law.

Does this solution also apply to current law after the 2016 reform?

A legitimate question arises: the judgment of 21 January 2026 concerns the application of the law prior to the Order of 14 March 2016, but does its solution remain valid for contracts entered into under current law?

The answer is yes. Although the Order of 14 March 2016 recast the Consumer Code and introduced statutory definitions of the consumer and the non-professional, the case-law approach adopted in the judgment of 21 January 2026 remains fully applicable.

The notion of “professional purposes” used in the current text corresponds to that of “needs of the professional activity” used in the case law. This is merely a terminological variation with no different normative scope.

Consequently, the solution established in the judgment of 21 January 2026 applies fully to contracts entered into after the entry into force of the 2016 Order. A legal entity that enters into a contract for the purposes of its professional activity, even if that contract concerns an area remote from its main activity, must be regarded as a professional and cannot invoke protection against unfair terms.

This continuity in the case law is important because it ensures legal certainty and predictability of outcomes. Professionals who contract with legal entities can anticipate that their counterparties will generally not be able to invoke non-professional status to call contractual terms into question.

It should nevertheless be noted that there has been a terminological development: whereas the former law spoke of “unfair terms” for contracts entered into with non-professionals, current law (Article L. 212-1 of the Consumer Code) targets terms that “create a significant imbalance between the rights and obligations of the parties to the contract”. The legal regime nevertheless remains very close, and the case law on the classification of non-professionals retains all its relevance.

What litigation strategies can legal entities still consider?

Are there alternative protections to consumer law?

Given that the consumer law route is closed to most legal entities, it is legitimate to ask what alternative protections they can rely on in the event of an unbalanced or unfair contractual term.

Fortunately, the general law of contract offers several protection mechanisms which are not reserved for consumers or non-professionals and which can be invoked by any party to a contract, including professionals.

The general law of obligations is the first line of defence. Article 1171 of the Civil Code (code civil), introduced by the 2016 reform of contract law, provides that “in a standard-form contract, any term that creates a significant imbalance between the rights and obligations of the parties to the contract is deemed unwritten”. This provision applies to all standard-form contracts (contrats d’adhésion), that is, contracts whose general terms and conditions were drafted unilaterally by one of the parties without any possibility of negotiation.

Contrary to what one might think, Article 1171 is not reserved for relationships between professionals and consumers: it applies to all standard-form contracts, including between professionals. A professional legal entity that has entered into a standard-form contract containing a term creating a significant imbalance can therefore invoke Article 1171 to have that term set aside.

Note, however: Article 1171 expressly excludes from its scope terms relating to the main subject matter of the contract and to the adequacy of the price to the service. Moreover, the case law applies this article with a certain rigour and requires the demonstration of a genuinely significant imbalance, which may be harder to establish than under consumer law.

The general theory of defects of consent offers another route of protection. If a legal entity has been the victim of fraud (dol, that is, fraudulent practices that led it to contract), of substantial error, or of duress, it may seek annulment of the contract on the basis of Articles 1130 et seq. of the Civil Code. These mechanisms are applicable to all contracts, whatever the status of the parties.

Abuse of contractual right is also a legal basis that can be relied upon. If a party uses its contractual prerogatives abusively, with the sole aim of harming its counterparty or by manifestly exceeding the limits of the normal exercise of its rights, the judge may penalise this abuse and award damages.

These various legal bases should not be overlooked. Although they generally offer less systematic and less favourable protection than consumer law, they nevertheless make it possible to rebalance manifestly abusive situations, even in relationships between professionals.

How should legal entities approach their contractual relationships?

Given that most legal entities cannot rely on non-professional status, a preventive and rigorous approach to contract management becomes indispensable.

Contractual negotiation must be taken seriously, even for contracts that seem standardised. Do not hesitate to request changes to manifestly unbalanced terms, to ask for clarification of reciprocal commitments, or to refuse certain unfair stipulations. The mere attempt to negotiate, even an unsuccessful one, can be a useful element in later litigation to show that the contract was not negotiable (and therefore that it was a standard-form contract within the meaning of Article 1171 of the Civil Code).

Careful examination of the general terms and conditions before signing is crucial. Too often, general terms and conditions are signed without being genuinely read, even though they contain essential terms relating to the duration of the commitment, termination conditions, penalties, limitations of liability, and so on. A careful reading, ideally with the assistance of legal counsel, makes it possible to identify problematic terms and to request their amendment or clarification.

Documenting the contractual relationship can also prove valuable. Keeping email exchanges, comparative quotes and meeting minutes can later help to show that certain oral commitments were not honoured or that fraudulent practices were committed.

The use of model contracts negotiated at the level of professional federations or groupings can also be a relevant strategy. These model contracts are generally better balanced than the unilateral general terms and conditions proposed by a counterparty in a position of strength.

A mediation or conciliation clause inserted in the contract can facilitate the amicable settlement of disputes without having to start costly and uncertain court proceedings.

Finally, legal monitoring is essential. Legislative and case-law developments in contract law, consumer law and competition law may open up new possibilities for challenging unbalanced terms. Staying informed of these developments makes it possible to seize litigation opportunities or, better still, to anticipate risks and adapt one’s contractual practices accordingly.

Conclusion

The judgment of the French Supreme Court of 21 January 2026 marks a decisive turning point in the interpretation of the notion of non-professional and definitively ends a period of uncertainty in the case law.

The solution adopted is clear and coherent: a legal entity that enters into a contract for the purposes of its professional activity, whatever the nature of that contract and its degree of proximity to the main activity, must be regarded as a professional. The “direct connection” criterion introduced by case law from 1995 is definitively set aside in favour of a functional approach based on the purpose of the contract.

This solution has the advantage of simplicity and predictability. It avoids debates over whether a given contract has a sufficiently direct connection with the legal entity’s main activity. It also ensures symmetry between the regime for natural persons acting professionally and that for legal entities: in both cases, acting for the purposes of one’s professional activity excludes the protection of consumer law.

For legal entities that enter into contracts in the course of their activity, this case law demands heightened vigilance during the negotiation and conclusion of contracts. No longer able to count on having unfair terms annulled later by invoking non-professional status, they must carefully examine the contractual terms proposed, negotiate unbalanced terms, and keep precise documentation of their contractual relationships.

Fortunately, the general law of contract offers alternative protections which, while not as systematic as those of consumer law, nevertheless make it possible to penalise the most manifest contractual imbalances, notably through Article 1171 of the Civil Code applicable to standard-form contracts.

This development in the case law forms part of a broader movement of clarification and rationalisation of consumer law, whose specific protections are gradually being reserved for those who genuinely need them: consumers who are natural persons and, in exceptional and limited cases, certain legal entities acting outside any professional activity.

Banking and business law practitioners will have to integrate this case law into their advisory and litigation practice, steering their clients towards the legal bases that can genuinely be relied upon rather than towards an invocation of non-professional status that has now become illusory.

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