Prescription of Commercial Claims: Time Limits and Rules

Prescription of Commercial Claims: What Every Business Leader Must Know

Extinctive prescription is one of the most feared legal mechanisms in debt recovery. When a commercial claim is not pursued within the legal time limit, the debtor can invoke prescription and be permanently freed from their payment obligation. Understanding the rules of prescription is therefore essential to protect your company's rights and safeguard its cash flow.

The Standard Limitation Period: 5 Years

Since the reform introduced by Law No. 2008-561 of 17 June 2008, Article L110-4 of the French Commercial Code sets the prescription period for obligations arising from commercial dealings between traders or between traders and non-traders at 5 years. This period aligns commercial prescription with the standard time limit provided for in Article 2224 of the French Civil Code.

This five-year period applies to the majority of commercial claims: unpaid invoices between professionals, service provisions, supply contracts, commercial commissions. The starting point runs from the day the rights holder knew or should have known the facts allowing them to exercise it, which generally corresponds to the invoice due date.

Specific Time Limits for Certain Claims

Numerous exceptions coexist with the standard time limit:

• 2 years for claims of professionals against consumers (Article L218-2 of the French Consumer Code)

• 1 year for payment actions against goods carriers (Article L133-6 French Commercial Code)

• 10 years for claims evidenced by an enforceable title (Article L111-4 of the French Code of Civil Enforcement Procedures)

• 5 years for commercial rent (Article 2224 French Civil Code)

• 3 years for bills of exchange and promissory notes (Article L511-78 French Commercial Code)

The precise classification of the claim therefore determines the applicable time limit. An error in analysis can result in irreversible loss of the right to take legal action.

Interruption and Suspension of Prescription

The limitation period is not fixed. Several events allow it to be interrupted, erasing the time already elapsed and starting a new period:

• Service of a summons in court, even in urgent proceedings (Article 2241 French Civil Code)

• An enforcement action such as seizure

• Acknowledgement of debt by the debtor (Article 2240), in writing or by partial payment

• A protective measure taken under the French Code of Civil Enforcement Procedures

Note: a simple formal notice letter, even if sent by registered mail, does not interrupt prescription. However, prescription can be suspended in the event of impossibility of action resulting from law, an agreement or force majeure (Article 2234 French Civil Code), as well as during mediation or conciliation proceedings (Article 2238).

Practical Strategies to Preserve Your Claims

To avoid prescription, adopt proactive management of your accounts receivable:

• Implement rigorous monitoring of due dates with automatic alerts in your accounting software

• Act at the first signs of non-payment: follow-ups within 15 days, formal notice within 30 days

• Favour interrupting actions: payment orders, summonses, rather than simple reminders

• Obtain written acknowledgement of debt from the debtor by negotiating a written payment plan

• Document all steps to prove interruption in case of dispute

Prescription is a matter of public order: the judge cannot raise it of their own motion (Article 2247 French Civil Code), but the debtor will systematically invoke it. Anticipating remains the best defence.