Commercial Dispute: Procedures and Legal Remedies

In a dispute between businesses, the outcome is rarely decided in court. It is decided well beforehand, on three elements: the quality of the evidence gathered during the course of the relationship, compliance with limitation periods, and the choice of procedure brought. A certain debt can be lost for lack of evidence; a perfectly documented debt can be lost for failing to act in time. This article follows the order in which these questions actually arise.

Before any proceedings: formal notice

A formal notice is not a mere courtesy before proceedings; it produces legal effects of its own. It triggers late payment interest, it marks the starting point of several time limits, and its absence can render a subsequent claim inadmissible where the contract or the law requires it.

To be effective, it must precisely identify the unperformed obligation, quantify the amount claimed, set a reasonable deadline for performance, and be sent by a means that allows its date of receipt to be established. An ordinary email reminder does not satisfy this last condition.

Amicable methods, often mandatory

Many commercial contracts include a prior conciliation or mediation clause. This is not a mere formality: bringing a matter before a judge without having complied with such a clause runs into a bar to proceedings, and the action is declared inadmissible. The first step, before issuing proceedings, is therefore to re-read the contract's provisions on dispute resolution.

Three routes coexist:

• Mediation, where a third party helps the parties build a solution themselves.
• Conciliation, similar in spirit, often conducted by a court-appointed conciliator.
• Arbitration, which results in an award having the authority of res judicata. It requires an arbitration clause, valid between traders, and its cost generally reserves it for significant matters.

An agreement reached through mediation can be approved by a judge, which gives it enforceable force. This is what distinguishes a properly constructed settlement from a mere moral commitment.

Judicial procedures depending on urgency and the extent of the dispute

The choice of procedure depends less on the amount than on the degree to which the debt is disputed.

The order for payment procedure is a non-adversarial, quick and low-cost procedure. The judge rules solely on the creditor's documents. Its weakness mirrors its strength: the debtor has one month to lodge an objection, which sends the matter to ordinary proceedings. It is therefore suited to debts that are unlikely to be disputed.

The interim payment order (référé provision) allows a payment on account to be obtained quickly where the obligation is not seriously disputable. This is the decisive criterion: even a weak but reasoned objection is enough to defeat the interim application. Used well, it settles the dispute in practice, as the payment on account often covers the entire debt.

The full trial procedure before the commercial court is required as soon as the dispute concerns the interpretation of the contract or the reality of its performance. It takes longer, but it alone finally resolves the disagreement.

The deadlines that cause debts to be lost

This is the point where businesses lose the most rights without realising it.

As a matter of principle, actions between businesses become time-barred after five years from the day on which the holder of the right knew or ought to have known the facts enabling them to act. Where the other contracting party is a consumer, the time limit applicable to the business's action is shorter. These distinctions and their starting points are detailed in our article on the limitation of commercial debts.

In addition to these time limits, there is the regime governing payment terms: the legal cap agreed between businesses, the late payment penalties due as of right without any need for a reminder, and the fixed compensation for recovery costs owed for each overdue invoice. These sums do not need to be claimed in order to be owed, but they must appear in the general terms and conditions to be easily enforced.

Evidence, which decides everything else

Between businesses, evidence is in principle unrestricted: it may be established by any means. This freedom is an advantage, provided something has actually been put together to produce.

In practice, three elements determine the outcome: the contract or the accepted general terms and conditions, proof of the order and delivery, and the history of exchanges. The sensitive point is almost always acceptance: producing general terms and conditions is not enough; it must be shown that the other party was aware of them and accepted them before entering into the commitment. Our article on the acceptance of general terms and conditions deals precisely with this point.

This is also why formalising commitments has direct defensive value. An electronically signed commercial contract provides the content, the date and the identity of the signatories all at once, within a set whose integrity can be demonstrated — precisely the three elements a defendant will seek to challenge. The evidential value of an electronic signature in the event of a dispute depends precisely on the quality of this body of evidence.

Usage scenarios

Unpaid invoice not disputed. The order for payment procedure is the most effective route. The file must contain the invoice, the purchase order or contract, proof of delivery, and the formal notice that went unanswered.

Customer disputing the quality of the service. The order for payment and interim procedures are ruled out as soon as the objection is reasoned. The full trial procedure is then required, and the focus shifts to proving that performance was compliant.

Commercial relationship abruptly terminated. The issue is no longer payment but notice. The length of the relationship and the volume of business determine the notice period that should have been given, and the loss is assessed on the margin lost during that period.

Frequently asked questions

Is a formal notice always required? It is not always required on pain of inadmissibility, but it triggers late payment interest and marks the starting point of several time limits. Dispensing with it weakens the case for no benefit.

What is the time limit for taking action between businesses? In principle, five years from knowledge of the facts enabling action to be taken. Specific time limits exist depending on the nature of the action and the status of the other contracting party.

Is the order for payment procedure always suitable? No. The debtor may lodge an objection within one month, which sends the matter to ordinary proceedings. It is only worthwhile if the debt is unlikely to be disputed.

What does a debt that is not seriously disputable mean? This is the condition for an interim payment order (référé provision). A reasoned objection, even if only partially well-founded, is enough to defeat the application, which must then be brought as a full trial procedure.

Is a prior mediation clause binding? Yes. Bringing a matter before a judge without having implemented it exposes the claimant to a bar to proceedings and to the inadmissibility of the action. The contract must be re-read before issuing any proceedings.

Does an exchange of emails constitute evidence? Between businesses, evidence is unrestricted and an email is admissible. Its weight depends on what it establishes: an agreement on price and subject matter carries more weight than an inconclusive discussion, and its date must be capable of being established.

Key takeaways

Three questions arise in order, and are dealt with in the reverse order of their apparent urgency. Limitation comes first: it extinguishes the right itself, and no quality of file can make up for an expired time limit. The contractual amicable settlement clause comes next: ignoring it renders the action inadmissible, whatever its merits. The choice of procedure comes last, depending on the degree to which the matter is disputed rather than on the amount.

Ahead of all this, evidence remains decisive. Between businesses, it is unrestricted, which is an advantage only for those who have put something together to produce. The cases that are won are those where the content of the commitment, its date and the identity of the person who made it cannot seriously be disputed.